==============================================================================
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: October 26, 1995
(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 1995 Pass Through
Certificates, Series B1, B2 and Series B3 are being filed in connection with,
and incorporated by reference in, the Registrant's Registration Statement on
Form S-3 No. 33-56569, which was declared effective July 26, 1995.
Exhibit Description of Exhibit
- ------- ----------------------
1.b Underwriting Agreement relating to Federal Express
Corporation 1995 Pass Through Certificates Series B1,
Federal Express Corporation 1995 Pass Through
Certificates Series B2 and Federal Express Corporation
1995 Pass Through Certificates Series B3
4.a.1 Pass Through Trust Agreement dated as of February 1,
1993, as amended and restated as of October 1, 1995,
between Federal Express Corporation and NationsBank,
National Association (Carolinas)
4.a.2 Revised form of Pass Through Certificates
(included in Exhibit 4.a.3)
4.a.3 Forms of Series Supplements 1995-B1, 1995-B2 and 1995-B3
to the Pass Through Trust Agreement between Federal
Express Corporation and the Pass Through Trustee relating
to the Pass Through Certificates
4.c.1 Forms of Trust Indenture and Security Agreements (Federal
Express Corporation Trust Nos. N660FE, N661FE and N663FE,
respectively) between the Owner Trustee and the Indenture
Trustee relating to Equipment Trust Certificates (Federal
Express Corporation Trust Nos. N660FE, N661FE and N663FE,
respectively) in connection with the offering of Pass
Through Certificates
4.c.2 Forms of Equipment Trust Certificates
(included in Exhibit 4.c.1)
4.e.1 Forms of Participation Agreements (Federal Express
Corporation Trust Nos. N660FE, N661FE and N663FE,
respectively) among Federal Express Corporation, as
Lessee, the applicable Owner Participant, the Original
Loan Participants, the Indenture Trustee, the Owner
Trustee and the Pass Through Trustee relating to
Equipment Trust Certificates (Federal Express Corporation
Trust Nos. N660FE, N661FE and N663FE, respectively)
4.f Forms of Trust Agreements (Federal Express Corporation
Trust Nos. N660FE, N661FE and N663FE, respectively)
between the applicable Owner Participant and the Owner
Trustee relating to Equipment Trust Certificates (Federal
Express Corporation Trust Nos. N660FE, N661FE and N663FE,
respectively)
4.g Forms of Lease Agreements (Federal Express Corporation
Trust Nos. N660FE, N661FE and N663FE, respectively)
between the Owner Trustee, as Lessor, and Federal Express
Corporation, as Lessee, relating to Equipment Trust
Certificates (Federal Express Corporation Trust Nos.
N660FE, N661FE and N663FE, respectively)
5(b) Opinion of Dewey Ballantine, special counsel for the
Pass Through Trustee
8(b) Tax Opinion of Dewey Ballantine, special counsel for the
Pass Through Trustee (included under the caption "Certain
New York Taxes" in the Prospectus relating to Pass
Through Certificates) (included in Exhibit 5(b))
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/ JAMES S. HUDSON
------------------------------------
James S. Hudson
Vice President and Controller
(principal accounting officer)
Dated: October 30, 1995
EXHIBIT INDEX
Exhibit Description of Exhibit
- ------- ----------------------
1.b Underwriting Agreement relating to Federal Express
Corporation 1995 Pass Through Certificates Series B1,
Federal Express Corporation 1995 Pass Through
Certificates Series B2 and Federal Express Corporation
1995 Pass Through Certificates Series B3
4.a.1 Pass Through Trust Agreement dated as of February 1,
1993, as amended and restated as of October 1, 1995,
between Federal Express Corporation and NationsBank,
National Association (Carolinas)
4.a.2 Revised form of Pass Through Certificates
(included in Exhibit 4.a.3)
4.a.3 Forms of Series Supplements 1995-B1, 1995-B2 and 1995-B3
to the Pass Through Trust Agreement between Federal
Express Corporation and the Pass Through Trustee relating
to the Pass Through Certificates
4.c.1 Forms of Trust Indenture and Security Agreements (Federal
Express Corporation Trust Nos. N660FE, N661FE and N663FE,
respectively) between the Owner Trustee and the Indenture
Trustee relating to Equipment Trust Certificates (Federal
Express Corporation Trust Nos. N660FE, N661FE and N663FE,
respectively) in connection with the offering of Pass
Through Certificates
4.c.2 Forms of Equipment Trust Certificates
(included in Exhibit 4.c.1)
4.e.1 Forms of Participation Agreements (Federal Express
Corporation Trust Nos. N660FE, N661FE and N663FE,
respectively) among Federal Express Corporation, as
Lessee, the applicable Owner Participant, the Original
Loan Participants, the Indenture Trustee, the Owner
Trustee and the Pass Through Trustee relating to
Equipment Trust Certificates (Federal Express Corporation
Trust Nos. N660FE, N661FE and N663FE, respectively)
4.f Forms of Trust Agreements (Federal Express Corporation
Trust Nos. N660FE, N661FE and N663FE, respectively)
between the applicable Owner Participant and the Owner
Trustee relating to Equipment Trust Certificates (Federal
Express Corporation Trust Nos. N660FE, N661FE and N663FE,
respectively)
4.g Forms of Lease Agreements (Federal Express Corporation
Trust Nos. N660FE, N661FE and N663FE, respectively)
between the Owner Trustee, as Lessor, and Federal Express
Corporation, as Lessee, relating to Equipment Trust
Certificates (Federal Express Corporation Trust Nos.
N660FE, N661FE and N663FE, respectively)
5(b) Opinion of Dewey Ballantine, special counsel for the
Pass Through Trustee
8(b) Tax Opinion of Dewey Ballantine, special counsel for the
Pass Through Trustee (included under the caption "Certain
New York Taxes" in the Prospectus relating to Pass
Through Certificates) (included in Exhibit 5(b))
EXHIBIT 1.b
EXECUTION COPY
FEDERAL EXPRESS CORPORATION
1995 Pass Through Certificates, Series B1
1995 Pass Through Certificates, Series B2
1995 Pass Through Certificates, Series B3
UNDERWRITING AGREEMENT
October 26, 1995
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. 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 The Chase Manhattan Bank (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 February
1, 1993, as amended and restated as of October 1, 1995 (the "Basic
Agreement"), as supplemented for each series of pass through certificates
(the "Pass Through Certificates") to be purchased hereunder (each, a
"Series") 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 Certificates") which are to be issued as nonrecourse
obligations by certain owner trustees, each acting not in its individual
capacity but solely as owner trustee (each, an "Owner Trustee"), in connection
with separate leveraged lease transactions entered into or to be entered into
by the Company relating to three separate Airbus A300F4-605R aircraft (each,
an "Aircraft" and, collectively, the "Aircraft"). The proceeds from the sale
of the Equipment Certificates will be used to (i) finance a portion of the
purchase price to be paid by the Owner Trustee on behalf of the related Owner
Trust (or, in certain circumstances, by the Company) for one Aircraft bearing
U.S. Registration No. N663FE, unless the manufacturer fails to deliver such
Aircraft by December 29, 1995, and (ii) refinance the aggregate outstanding
principal amount of the Original Loan Certificates of the related Owner Trust
issued in connection with separate leveraged lease transactions relating to
two Aircraft bearing U.S. Registration Nos. N660FE and N661FE, respectively.
Each series of Equipment Certificates will be issued under a separate Trust
Indenture and Security Agreement between The Chase Manhattan Bank (National
Association), as Indenture Trustee (the "Indenture Trustee"), and the related
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 and the term "you" shall mean the Underwriter or Underwriters, if no
underwriting syndicate is purchasing the Offered Certificates, or the
representative or representatives of the Underwriters, if an underwriting
syndicate is purchasing the Offered Certificates, as indicated in Schedule I.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 33-56569) for the
registration of certain equipment trust certificates and 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
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 revised and restated prospectus relating to pass
through certificates covered by the above-referenced registration statement.
The term "Registration Statement" refers to such 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 revised and restated
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 Act 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
Certificates.
SECTION 1. Representations and Warranties of the Company.
(a) The Company represents and warrants to you and to each
Underwriter named in Schedule I, 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" within the meaning of Section 40102(a)(15) of Title 49 of
the United States Code, as amended (the "Transportation Code"), holding
an air operating certificate issued by the Secretary of Transportation
pursuant to Chapter 447 of the Transportation Code for aircraft capable
of carrying 10 or more individuals or 6,000 or more pounds of cargo, 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 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 or to those parts of the Registration Statement which
constitute Statements of Eligibility and Qualification of Trustees (Form
T-1) under the 1939 Act. 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 light of the circumstances
under which they were or are 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; 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 of this Agreement, each Pass Through Agreement
and the other Operative Agreements 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
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 Transportation
Code, 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 you 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 Certificates. The Equipment 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 Certificates and the other Operative Agreements
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) Additional Certifications. Any certificate signed by any
officer of the Company and delivered to you 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 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 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 you 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 either the Company's
offices in Memphis, Tennessee or the office of Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017, or at such other place as shall be
agreed upon by you and the Company, at 9:00 A.M., New York City time, on the
third 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 you and the
Company (such time and date being referred to as a "Closing Time"). Delivery
of the Offered Certificates shall be made for your account as specified in
Schedule II against payment by you 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 funds or other immediately available funds. Unless
otherwise indicated on Schedule II, such Offered Certificates shall be
registered in the name of Cede & Co., as nominee for The Depository Trust
Company, and in such denominations, as you may request in writing at least one
business day prior to the Closing Time. Such Offered Certificates, which may
be in temporary form, will be made available for examination and packaging by
you 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 you for your commitments and obligations
hereunder in respect of the Offered Certificates, including your undertakings
to distribute Offered Certificates, the Company will pay (or cause to be paid)
to you an amount equal to that percentage of the aggregate amount of each
series of Offered Certificates purchased by you as set forth in Exhibit A as
the underwriting discounts and commissions. Such payment shall be made
simultaneously with the payment by you 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.
SECTION 3. Covenants of the Company.
The Company covenants with each of you, and with each Underwriter
participating in the offering as follows:
(a) Prospectus Supplement. The Company has prepared a
Preliminary Prospectus containing such information as you 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 you 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 you
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
you 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 you 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 you as many signed and 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 you may reasonably
request. The Company will furnish to you as many copies of the Prospectus (as
amended or supplemented) as you shall reasonably request so long as you 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 you, 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 or the Closing Time, whichever is later,
(i) without your prior written consent, 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.
The Company will pay all expenses incident to the performance of
its obligations under this Agreement, 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, issuance and delivery of the Offered
Certificates;
(iv) the reasonable fees and disbursements of the Company's
accountants and counsel, of the Trustee, the Owner Trustees and the
Indenture Trustees and their respective counsel, and of any registrar,
paying agent and authenticating agent;
(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 your counsel, as
heretofore agreed.
If this Agreement is terminated by you in accordance with the
provisions of Section 5 or clause (i) of Section 9 hereof, the Company 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 you 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 herein, to the accuracy of the statements of the Company's officers
made in any certificate furnished pursuant to the provisions hereof, to the
performance and observance by the Company of all covenants and agreements
contained herein, or in Schedule II hereto, on its 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 (including for purposes of
this Section 5(a)(ii) any rating indicated by the Company as of the date of
this Agreement as the rating orally confirmed to the Company by any such
rating organization as the rating to be assigned to the Offered Certificates)
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 your attention
any facts that would cause you 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, you 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 you, to the effect set forth
in Exhibit B and the opinions of such counsel required to be delivered
pursuant to each Participation Agreement, dated as of such date, in form
and substance satisfactory to you, to the effect set forth in Exhibits
C-1 and C-2.
(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 you, to the effect as set forth in Exhibit D.
(3) Opinion of Counsel to the Underwriters. The opinion of
Vedder, Price, Kaufman & Kammholz, counsel to the Underwriters, with
respect to such matters as you may reasonably request.
(c) Officers' 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 you 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, except to the extent that such
representations and warranties expressly relate to an earlier date or later
date (in which case such representations and warranties are true and correct
on and as of such earlier date or will be true and correct on and as of such
later date, as the case may be), (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, you shall have received a letter from
Arthur Andersen LLP 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
you 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 Report 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 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;
(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 LLP 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 refunding or funding of the
related Equipment Certificates, as the case may be, shall have been satisfied;
the representations and warranties of the Company, the Owner Trustee, the Pass
Through Trustee and the Indenture Trustee 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 you shall have received certificates
of the Chief Financial Officer or the Treasurer of the Company and appropriate
officers of the respective Owner Trustees, Pass Through Trustees and Indenture
Trustees, dated as of the Closing Time, to such effect; and you 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 you,
and of such other documents furnished in connection with the fulfillment of
such conditions as you or your counsel may reasonably request.
(f) 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 you 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 you
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 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 you), 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),
or made in reliance upon the Statements of Eligibility and Qualification of
Trustees (Form T-1) under the 1939 Act filed as exhibits to the Registration
Statement; 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, at or prior to the written
confirmation of the sale of the Offered Certificates 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) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company 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, 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 such
Underwriters through you expressly for use in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto).
(c) 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 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 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 is
responsible for the balance; 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. 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, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company.
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 submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive each
delivery of and payment for any of the Offered Certificates.
SECTION 9. Termination of Agreement.
You 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 your judgment, 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 of the Underwriters.
If either 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 or any other
underwriters (the "Non-Defaulting Underwriters") shall have the right, but not
the obligation, within 24 hours thereafter, to make arrangements to purchase
all, but not less than all, of the Defaulted Certificates upon the terms
herein set forth; if, however, the Non-Defaulting Underwriters 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 Underwriters.
No action taken pursuant to this Section shall relieve a
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 Underwriters 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.
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: Marcus Colwell, with copies thereof directed to Vedder,
Price, Kaufman & Kammholz, 222 North LaSalle Street, Chicago, Illinois 60601,
Attention: Jennifer R. Evans. 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 1980 Nonconnah Drive, 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.
SECTION 12. Parties.
This Agreement shall inure to the benefit of and be binding upon
you and the Company and any Underwriter who becomes a party hereto and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any hereon, 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 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.
* * *
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between you and the Company in accordance with its terms.
Very truly yours,
FEDERAL EXPRESS CORPORATION
By: /s/ Robert D. Henning
_________________________
Robert D. Henning
Managing Director,
Structured Finance
CONFIRMED AND ACCEPTED, as of
the date first above written:
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
By: Goldman, Sachs & Co.
By: /s/ Marcus Colwell
_______________________________
Name: Marcus Colwell
Title: Vice President
Acting on behalf of themselves and the
other named Underwriters
Exhibit A
FEDERAL EXPRESS CORPORATION
1995 Pass Through Certificates, Series B1
1995 Pass Through Certificates, Series B2
1995 Pass Through Certificates, Series B3
<TABLE>
<CAPTION>
1995 Pass
Through Final Underwriting
Certificates Purchase Interest Distribution Aggregate Discounts and
Designation Price Rate Date Amounts Commissions
- ------------ ---------- -------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C>
Series B1 $ 8,156,000 6.05% 3/19/1996 $ 8,156,000 0.65%
Series B2 135,546,000 7.11% 1/2/2014 135,546,000 0.65%
Series B3 51,102,000 7.58% 7/2/2019 51,102,000 0.65%
------------ ------------
TOTAL $194,804,000 $194,804,000 $1,266,226
============ ============
</TABLE>
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 person having a beneficial interest in a
Pass Through Certificate will be treated as the owner of a pro rata undivided
interest in each of the Equipment Certificates and any other property held in
the related Pass Through Trust. 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 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 Participation Agreements and the Indentures,
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
fourth paragraph under the caption "Description of the Equipment
Certificates - Security" and in the Prospectus Supplement in the ninth
paragraph under the caption "Description of the Equipment
Certificates - Remedies," insofar as such statements constitute a
description of Section 1110 of the Bankruptcy Code as such Section would be
applicable to the Equipment Certificates, fairly summarize the material
provisions of such Section as such Section would be applicable to the
Equipment 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 (except
for the financial statements and other financial information set forth or
incorporated by reference therein, 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 and the prospectus included
therein (except for the financial statements and other financial
information set forth or incorporated by reference therein and the
Statement of Eligibility and Qualification (Form T-1) under the 1939 Act of
The Chase Manhattan Bank (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 the Closing
Time, either the Registration Statement or the Prospectus (except for the
financial statements and other financial information set forth or
incorporated by reference therein, as to which we are not called upon to
express a belief), contains an untrue statement of a material fact 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.
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 Law
of the State of Delaware.
(b) We express no opinion as to the scope, effect or other
matters arising under the Transportation Code, 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-1
[Letterhead of Davis Polk & Wardwell]
October 31, 1995
To each of the parties
named on the Schedule hereto
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
No. [N660FE] [N661FE]), dated as of [September 1] [October 1], 1995, as
amended and restated as of October 26, 1995 (the "Participation Agreement", as
originally executed, the "Original Participation Agreement") among Federal
Express, as Lessee, [Chrysler Capital Corporation] [Nationsbank, N.A.], as
Owner Participant, the entities listed on Schedule I to the Original
Participation Agreement as Original Loan Participants, NBD Bank, as Owner
Trustee, The Chase Manhattan Bank (National Association), as Indenture Trustee
and The Chase Manhattan Bank (National Association), as Pass Through Trustee.
Unless otherwise defined herein, capitalized terms used herein shall have the
meanings assigned thereto in the Participation Agreement. This opinion is
being delivered pursuant to Section 4.01(l)(i) of the Participation Agreement.
Pursuant to the Original Participation Agreement, the Owner
Participant and the Original Loan Participants participated in the payment of
the Purchase Price of one Airbus A300F4-605R Aircraft which was purchased by
the Owner Trustee pursuant to AVSA's FAA Bill of Sale and AVSA's Warranty Bill
of Sale, subjected to the Lien of the Original Indenture and leased to Federal
Express under the Original Lease. The Participation Agreement provides, among
other things, for the refinancing of the Original Loan Certificates 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 Original Participation Agreement, the Original Trust Agreement, the
Original Lease, the Lease Supplement, the Original Indenture, the Indenture
and Security Agreement Supplement, the Purchase Agreement, the Purchase
Agreement Assignment, the AVSA Consent and Agreement, the Consent and
Agreement, the Engine Consent, the Airbus Guaranty, the Original Loan
Certificates, the Certificates, the Pass Through Certificates, the Pass
Through Agreement, each Series Supplement, the Participation Agreement, the
Indenture, the Lease and the Trust Agreement. 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 such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies.
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, the Original 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 FAA pursuant to Section 44107
of the Transportation Code, no filing or recording of any document or
other action was or 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 Transportation Code being subject to the due and timely filing for
recording of (A) the Lease, with the Indenture attached as an exhibit,
(B) the Indenture and (C) the Trust Agreement.
3. The execution, delivery and performance of the Original
Participation Agreement, the Participation Agreement, the Original Trust
Agreement, the Trust Agreement, the Original Indenture, the Indenture,
the Indenture and Security Agreement Supplement, the Original Lease, the
Lease and the Lease Supplement by the Owner Trustee in its individual or
trust capacity, as the case may be, and the issuance, execution,
delivery and performance of the Certificates by the Owner Trustee in its
trust capacity 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 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 or performance of the taking of
any other action, the conduct of any other business or the exercise of
any other powers by NBD Bank, in its individual or in a trust capacity
in the State of New York not related to the transactions contemplated by
the Original Agreements or the Operative Agreements. We have assumed
that NBD Bank has made the filings necessary to comply with Section
131.3 of the Banking Law of the State of New York. However, we express
no opinion as to whether NBD Bank is required to comply with said
Section 131.3.
4. (a) Each of the Original Agreements and 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 by Federal
Express of each of the Original Agreements and each of the Operative
Agreements to which Federal Express is 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 5(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 Original Agreements or the Operative Agreements.
5. Assuming (i) the due authorization, execution and delivery
of the Original Agreements, the Operative Agreements, the Pass Through
Agreement and each Series Supplement by each of the parties to each such
document (other than Federal Express), (ii) that the execution, delivery
and performance by each of the Operative Agreements by each of the
parties thereto will not violate the respective parties' constituent
documents, (iii) 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, (iv) that the Original Loan Certificates are
delivered by the Original Loan Participants to the Indenture Trustee for
cancellation and are cancelled, (v) 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 (vi) that the form of each Operative
Agreement 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 Operative Agreement in form constitutes a
legal, valid and binding agreement of each party thereto enforceable
against each such party in accordance with its terms; (B) the Original
Indenture created, and the Indenture creates, for the benefit of the
Holders the security interest in the Trust Indenture Estate that they
purport to create; (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; (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. The opinions set forth in
this paragraph 5 are subject to the due recording with the FAA of the
Lease, with the Indenture attached as an exhibit, the Indenture and the
Trust Agreement.
6. All the properties which are part of the Trust Indenture
Estate (including all right, title and interest of the Owner Trustee
pledged and mortgaged by it pursuant to the Indenture 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 to the
due and timely filing, or where appropriate, recording of those
documents referred to in paragraph 2 above and the financing statements
referred to in Section 4.01(f) of the Participation Agreement), and the
beneficial interests of the Owner Participant under the Trust Agreement
in and to such properties are subject, to the extent provided in the
Indenture, to the Lien of the Indenture in favor of the Holders of the
Certificates issued and to be issued under the Indenture.
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, or where appropriate, recording in accordance with the
Transportation Code of the documents referred to in paragraph 2 above.
We express no opinion 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 (6) and (7) of
Section 40102(a) of the Transportation Code.
8. Federal Express' 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. It is not necessary, in connection with the creation of the
beneficial interest of the Owner Participant of 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.
10. The provisions of Section 1110 of the United States
Bankruptcy Code will apply to the Aircraft for the benefit of the
Indenture Trustee.
The foregoing opinions are subject to the following qualifications:
(a) To the extent that this opinion relates to matters involving
Federal aviation law, we have relied, with your consent, without
independent investigation and verification and subject to the
assumptions and qualifications contained therein, upon the opinion of
Daugherty, Fowler & Peregrin to be delivered to you and dated the date
hereof. We have also relied, with your consent, on the opinion dated
the date hereof of George W. Hearn, Vice President-Law of Federal
Express, for purposes of the matters stated in paragraph 4(a) above and
as to all matters of Tennessee law. Such opinions are satisfactory to
us in form and scope and we believe that you and we are justified in
relying thereon.
(b) 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, the
laws of the United States and the General Corporation Law of the State
of Delaware.
(c) The opinion contained in paragraph 5 above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity 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.
(d) This opinion is rendered solely to you at Federal Express'
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 without our prior written consent.
(e) We rendered an opinion dated [September 20] [October 26],
1995 (the "Delivery Opinion"), a copy of which is attached hereto, in
connection with the financing and acquisition of the Aircraft on such
date. We hereby consent and agree that the addressees hereto who were
not addressees to the Delivery Opinion may rely on the Delivery Opinion
as fully and with the same force and effect as if such addressees were
originally named therein on the date of the Delivery Opinion.
Very truly yours,
SCHEDULE
--------
Owner Trustee
- -------------
NBD Bank
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
Owner Participant
- -----------------
[Chrysler Capital Corporation]
[Nationsbank, N.A.]
Original Loan Participants
- --------------------------
The Entities listed on Schedule I to the Participation Agreement as Original
Loan Participants
Lessee
- ------
Federal Express Corporation
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
Underwriters
- ------------
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Exhibit C-2
[Letterhead of Davis Polk & Wardwell]
October 31, 1995
To each of the parties
named on the Schedule hereto
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
No. N663FE), dated as of October 26, 1995 (the "Participation Agreement")
among Federal Express, as Lessee, Chrysler Capital Corporation, as Owner
Participant, NBD Bank, as Owner Trustee, The Chase Manhattan Bank (National
Association), as Indenture Trustee and The Chase Manhattan Bank (National
Association), as Pass Through Trustee. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings assigned thereto in the
Participation Agreement. This opinion is being delivered pursuant to Section
4.01(k)(v) of the Participation Agreement.
The Participation Agreement provides, among other things, for the
financing on the Delivery Date of a portion of the Owner Trustee's payment of
the Purchase Price of one Airbus A300F4-605R Aircraft using the proceeds from
the public offering of the Pass Through Certificates. On the Certificate
Closing Date, 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
executed counterparts of the Operative Agreements to be delivered on the
Certificate Closing Date (the "Certificate Closing Date Documents"), the Pass
Through Certificates, the Pass Through Agreement, each Series Supplement and
the forms of the Operative Agreements to be delivered on the Delivery Date.
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 such examination, we have assumed the genuineness
of all signatures and the authenticity of all documents submitted to us as
originals and the conformity with the originals of all documents submitted to
us as copies.
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
Certificate Closing Date Documents (other than the Certificates) 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 violate, and fully comply 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 or performance of the taking of
any other action, the conduct of any other business or the exercise of
any other powers by NBD Bank, in its individual or in a trust capacity
in the State of New York not related to the transactions contemplated by
the Certificate Closing Date Documents. We have assumed that NBD Bank
has made the filings necessary to comply with Section 131.3 of the
Banking Law of the State of New York. However, we express no opinion as
to whether NBD Bank is required to comply with said Section 131.3.
2. (a) Each of the Certificate Closing Date Documents to
which Federal Express is a party has been duly authorized, executed and
delivered by Federal Express. Each of the Operative Agreements to which
Federal Express is to be a party and which are to be delivered on the
Delivery Date has been authorized by Federal Express.
(b) The execution, delivery and performance by Federal
Express of each of the Certificate Closing Date Documents to which
Federal Express is 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 2(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 Certificate Closing Date Documents.
3. Assuming (i) the due authorization, execution and delivery
of the Certificate Closing Date Documents, the Pass Through Agreement
and each Series Supplement by each of the parties to each such document
(other than Federal Express), (ii) that the execution, delivery,
performance by each of such Certificate Closing Date Documents by each
of the parties thereto will not violate the respective parties'
constituent documents, (iii) 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, (iv) 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 (v) that the
form of each such Certificate Closing Date Documents 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 Certificate Closing Date Documents in form 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 they purport to create; (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 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.
4. Federal Express' 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.
5. It is not necessary, in connection with the creation of the
beneficial interest of the Owner Participant of 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.
The foregoing opinions are subject to the following qualifications:
(a) For purposes of the matters stated in paragraph 2(a) above
and as to all matters of Tennessee law, we have relied, with your
consent, on the opinion dated the date hereof of George W. Hearn, Vice
President - Law of Federal Express.
(b) 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, the
laws of the United States and the General Corporation Law of the State
of Delaware.
(c) The opinion contained in paragraph 3 above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity 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.
(d) This opinion is rendered solely to you at Federal Express'
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 without our prior written consent.
Very truly yours,
SCHEDULE
--------
Owner Trustee
- -------------
NBD Bank
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
Owner Participant
- -----------------
Chrysler Capital Corporation
Lessee
- ------
Federal Express Corporation
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
Underwriters
- ------------
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Exhibit D
Form of Opinion of Company Counsel
----------------------------------
October 31, 1995
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
c/o GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
Re: Federal Express Corporation
1995 Pass Through Certificates,
Series B1, B2 and B3 (the "Offered Certificates")
-------------------------------------------------
Ladies and Gentlemen:
This opinion is directed to the Underwriters pursuant to Section 5(b)(2)
of the Underwriting Agreement dated October 26, 1995 (the "Underwriting
Agreement"), among the Company 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 Vice President-Law 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, validly
existing and 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 "citizen of the United States"
within the meaning of Section 40102(a)(15) of Title 49 of the United
States Code, as amended, holding an air operating certificate issued
by the Secretary of Transportation pursuant to Chapter 447 of Title
49 of the United States Code, as amended, for aircraft capable of
carrying 10 or more individuals or 6,000 or more pounds of cargo; 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
non-assessable, 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 can express no opinion at this time concerning the Company's liability
(if any) or the effect of any adverse determination upon the business,
condition (financial or otherwise) or operations of the Company), 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 the Company
or the ability of the Company to perform its obligations under the Pass
Through Agreements and the other Operative Agreements to which the
Company is a party;
(iv) The Pass Through Agreements and the other Operative
Agreements to which the Company is a party have been duly and validly
authorized, executed and delivered by the Company;
(v) The Equipment 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, the Pass Through Agreements, the Participation
Agreements and the other 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) 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 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, the Pass Through Agreements and the Operative
Agreements to which the Company is a party, the consummation by the
Company of the transactions therein contemplated and
compliance with the terms of the Underwriting Agreement, the Pass
Through Agreements 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 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 Agreements, the Offered
Certificates, the Leases, the Participation Agreements and the
Indentures, 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 contemplated or the valid
authorization, execution, delivery and performance by the Company of
the Underwriting Agreement, the Pass Through Agreements and the other
Operative Agreements to which the Company is a party or the
consummation by the Company of the transactions contemplated
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) The Underwriting 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.
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.
_________________________________
George W. Hearn
Vice President-Law
Schedule I
to
Underwriting
Agreement
Dated: October 26, 1995
FEDERAL EXPRESS CORPORATION
1995 Pass Through Certificates, Series B1
1995 Pass Through Certificates, Series B2
1995 Pass Through Certificates, Series B3
<TABLE>
<CAPTION>
Aggregate Aggregate Aggregate
Amount of Amount of Amount of Total
Series B1 Series B2 Series B3 Aggregate
Pass Through Pass Through Pass Through Amount to
Underwriters Certificates Certificates Certificates Be Purchased
- ------------ -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
GOLDMAN, SACHS & CO. $2,720,000 $45,182,000 $17,034,000 $64,936,000
J.P. MORGAN SECURITIES INC. $2,718,000 $45,182,000 $17,034,000 $64,934,000
MORGAN STANLEY & CO.
INCORPORATED $2,718,000 $45,182,000 $17,034,000 $64,934,000
</TABLE>
Schedule II
to
Underwriting
Agreement
Dated: October 26, 1995
FEDERAL EXPRESS CORPORATION
1995 Pass Through Certificates, Series B1
1995 Pass Through Certificates, Series B2
1995 Pass Through Certificates, Series B3
To: Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Re: Underwriting Agreement dated October 26, 1995
Title of Offered Certificates: 1995 Pass Through Certificates, Series B1
1995 Pass Through Certificates, Series B2
1995 Pass Through Certificates, Series B3
Current ratings: BBB+/A3
Interest rate: Series B1..... 6.05%
Series B2.......7.11%
Series B3..... 7.58%
Interest payable: March 19, 1996 and thereafter each January 2 and July 2
commencing on July 2, 1996
Public offering price: 100%, plus accrued interest from October 31, 1995
Closing date, time and
location: October 31, 1995, 9:00 A.M., New York City time
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Location for checking Offered Certificates: New York, New York
Listing requirement: None
Other terms and
conditions: The Offered Certificates will be issued in fully registered,
book-entry only form through the facilities of The Depository
Trust Company, and each Series of the Offered Certificates shall
be represented by a separate global certificate.
Exceptions, if any, to Section 3(i) of the
Underwriting Agreement: None
* * *
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
By: Goldman, Sachs & Co.
By: /s/ Marcus Colwell
______________________________
Name: Marcus Colwell
Title:Vice President
Acting on behalf of themselves and the
other named Underwriters
Accepted:
FEDERAL EXPRESS CORPORATION
By: /s/ Robert D. Henning
____________________________________
Robert D. Henning
Managing Director, Structured Finance
EXHIBIT 4.a.1
PASS THROUGH TRUST AGREEMENT
Dated as of
February 1, 1993
Amended and Restated as of October 1, 1995
between
NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS),
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)....................................................................*
(*)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).......................................................................*
(*)* Intentionally deleted.
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
- --------------
*Intentionally deleted.
Page
TABLE OF CONTENTS
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE I
DEFINITIONS
ARTICLE II
ISSUANCE OF PASS THROUGH CERTIFICATES;
ACQUISITION OF EQUIPMENT CERTIFICATES
SECTION 2.01. Amount Unlimited; Issuable in Series; Series Supplements. 11
SECTION 2.02. Acquisition of Equipment Certificates.................... 13
SECTION 2.03. Initial Certificateholders as Grantors................... 15
SECTION 2.04. Limitation of Powers..................................... 15
SECTION 2.05. Execution of Pass Through Certificates................... 16
SECTION 2.06. Certificate of Authentication............................ 16
SECTION 2.07. Form and Denomination of Pass Through Certificates....... 17
SECTION 2.08. Registration, Transfer and Exchange...................... 17
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Pass
Through Certificates................................... 18
SECTION 2.10. Cancellation of Pass Through Certificates; Destruction
Thereof................................................ 19
SECTION 2.11. Temporary Pass Through Certificates...................... 20
SECTION 2.12. Pass Through Certificates Issuable in the Form of a
Registered Global Certificate............................ 20
ARTICLE III
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01. Covenants of the Company................................. 22
SECTION 3.02. Offices for Payments; Registrar.......................... 23
SECTION 3.03. Representations and Warranties of the Pass Through
Trustee............................................... .24
SECTION 3.04. Paying Agents............................................ 25
SECTION 3.05. No Representations or Warranties as to Documents......... 25
SECTION 3.06. Payments from Trust Property Only........................ 26
SECTION 3.07. Limitation of the Company's Liability.................... 26
ARTICLE IV
CERTIFICATEHOLDER LISTS AND REPORTS BY THE
COMPANY AND THE PASS THROUGH TRUSTEE
SECTION 4.01. Certificateholder Lists; Ownership of Pass Through
Certificates........................................... 26
SECTION 4.02. Disclosure of Certificateholder Lists.................... 27
SECTION 4.03. Reports by the Company................................... 27
SECTION 4.04. Reports by the Pass Through Trustee...................... 28
ARTICLE V
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY
SECTION 5.01. Certificate Account and Special Payments Account......... 28
SECTION 5.02. Distributions from Certificate Account and Special
Payments Account....................................... 29
SECTION 5.03. Statements to Certificateholders......................... 30
SECTION 5.04. Investment of Special Payment Moneys..................... 31
SECTION 5.05. Withholding Taxes........................................ 31
ARTICLE VI
CONCERNING THE CERTIFICATEHOLDERS
SECTION 6.01. Evidence of Action Taken by Certificateholders........... 32
SECTION 6.02. Proof of Execution of Instruments and of Holding of
Certificates........................................... 32
SECTION 6.03. Certificateholders to Be Treated as Owners............... 33
SECTION 6.04. Pass Through Certificates Owned by the Company and
Related Owner Trustees Deemed Not Outstanding.......... 33
SECTION 6.05. Right of Revocation of Action Taken...................... 34
SECTION 6.06. ERISA Plan Prohibition................................... 34
ARTICLE VII
REMEDIES OF PASS THROUGH TRUSTEE
AND CERTIFICATEHOLDERS
SECTION 7.01. Events of Default........................................ 35
SECTION 7.02. Incidents of Sale of Equipment Certificates.............. 36
SECTION 7.03. Pass Through Trustee May Prove Debt...................... 36
SECTION 7.04. Remedies Cumulative...................................... 37
SECTION 7.05. Suits for Enforcement.................................... 37
SECTION 7.06. Discontinuance of Proceedings............................ 38
SECTION 7.07. Limitations on Suits by Certificateholders............... 38
SECTION 7.08. Unconditional Right of Certificateholders to Receive
Principal, Interest and Premium, and to Institute
Certain Suits.......................................... 39
SECTION 7.09. Control by Certificateholders............................ 39
SECTION 7.10. Waiver of Past Events of Default......................... 40
SECTION 7.11. Notice of Pass Through Defaults.......................... 40
ARTICLE VIII
CONCERNING THE PASS THROUGH TRUSTEE
SECTION 8.01. Acceptance by Pass Through Trustee....................... 41
SECTION 8.02. Pass Through Trustee's Liens............................. 41
SECTION 8.03. Certain Rights of the Pass Through Trustee............... 41
SECTION 8.04. Pass Through Trustee Not Responsible for Recitals........ 43
SECTION 8.05. Pass Through Trustee and Agents May Hold Pass Through
Certificates; Collections.............................. 43
SECTION 8.06. Moneys Held by Pass Through Trustee...................... 43
SECTION 8.07. Right of Pass Through Trustee to Rely on Officer's
Certificate............................................ 43
SECTION 8.08. Compensation............................................. 44
ARTICLE IX
INDEMNIFICATION OF
PASS THROUGH TRUSTEE BY THE COMPANY
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............................................... 47
SECTION 10.03. Acceptance of Appointment by Successor Trustee.......... 47
SECTION 10.04. Merger, Conversion, Consolidation or Succession to
Business of Pass Through Trustee...................... 49
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....................... 54
SECTION 11.04. Documents to Be Given to Trustee........................ 54
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....................... 55
SECTION 11.08. Amendments, Waivers, etc., of Related Indenture
Documents............................................. 55
ARTICLE XII
TERMINATION OF PASS THROUGH TRUSTS;
UNCLAIMED MONEYS
SECTION 12.01. Termination of Pass Through Trusts...................... 56
SECTION 12.02. Application by Pass Through Trustee of Funds Deposited
for Payment of Pass Through Certificates.............. 56
SECTION 12.03. Repayment of Moneys Held by Paying Agent................ 57
SECTION 12.04. Transfer of Moneys Held by Pass Through Trustee and
Paying Agent Unclaimed for Two Years and Eleven
Months................................................ 57
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Capacity in Which Acting................................ 57
SECTION 13.02. No Legal Title to Trust Property in Certificateholders.. 57
SECTION 13.03. Certificates Nonassessable and Fully Paid............... 58
SECTION 13.04. Pass Through Agreement for the Benefit of the Company,
the Pass Through Trustee and the Certificateholders... 58
SECTION 13.05. Limitation on Rights of Certificateholders.............. 58
SECTION 13.06. Notices................................................. 58
SECTION 13.07. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein.................... 59
SECTION 13.08. Conflict of Any Provision of Pass Through Agreement with
the Trust Indenture Act............................... 60
SECTION 13.09. Severability............................................ 61
SECTION 13.10. No Oral Modifications or Continuing Waivers............. 61
SECTION 13.11. Successors and Assigns.................................. 61
SECTION 13.12. Headings................................................ 61
SECTION 13.13. Normal Commercial Relations............................. 61
SECTION 13.14. Governing Law; Counterpart Form......................... 61
SECTION 13.15. Distributions Due on Days Other than Business Days...... 62
EXHIBIT A Form of Pass Through Certificate
PASS THROUGH TRUST AGREEMENT
PASS THROUGH TRUST AGREEMENT dated as of February 1, 1993, as amended
and restated as of October 1, 1995, between FEDERAL EXPRESS CORPORATION, a
Delaware corporation (the "Company"), and NATIONSBANK, NATIONAL ASSOCIATION
(CAROLINAS) (formerly known as NationsBank of South Carolina, National
Association), a national banking association organized under the laws of the
United States of America, as Pass Through Trustee (together with any successor
hereunder or under any Pass Through Trust as herein provided, 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, the Company and NationsBank, National Association (Carolinas)
are parties to a Pass Through Trust Agreement dated as of February 1, 1993;
WHEREAS, from time to time the Company will enter into a Series
Supplement with the Pass Through Trustee named therein 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 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 Certificates
in trust as Trust Property for the benefit of the Certificateholders of such
Series;
WHEREAS, to facilitate the sale of Equipment Certificates to, and the
purchase of Equipment 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 amended or 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;
WHEREAS, NationsBank, National Association (Carolinas), as Pass
Through Trustee, and the Company wish to effect certain corrections and
supplements, none of which is material or adversely affects the interests of
the Certificateholders of any Series, to this Pass Through Agreement as
originally executed and delivered;
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto
that the Pass Through Agreement as originally executed and delivered is hereby
amended and restated to read 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 as amended and restated hereby have the respective meanings
specified in this Section, as may be further amended or supplemented by the
provisions of the Series Supplement for a particular Series. All other terms
used in this Pass Through Agreement as so amended and restated 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 clearly 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 as amended and restated. 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
amended and restated 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 amended and restated. 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 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) hereof and the related Series Supplement.
"Certificateholder" means, for any Series, the Person who is 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 in the city in 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.
"Cut-off Date for Pass Through Trust" means, for any Pass Through
Trust, the date specified as such in the related Series Supplement, provided
that in no event shall such Cut-off Date for Pass Through Trust be later than
90 days after the creation of such Pass Through Trust.
"Delivery Date" means, for any Pass Through Trust, the date specified
in the related Series Supplement for the purchase of the related Equipment
Certificates, which date may be delayed for any such Equipment Certificates as
provided in Section 2.02 hereof.
"Delayed Delivery Notice" means, for any Pass Through Trust, a
certificate signed by a Responsible Officer of the Company (i) requesting that
the Pass Through Trustee temporarily delay purchase of any related Equipment
Certificates to a date later than the applicable Issuance Date, (ii) stating
the amount of the purchase price of each such Equipment Certificate and the
aggregate purchase price of all such Equipment Certificates, (iii) stating the
reasons for such delay and (iv) with respect to any Participation Agreement
for such delayed Equipment Certificates, either (1) setting or resetting the
Delivery Date (which shall be on or prior to the applicable Cut-off Date for
Pass Through Trust), or (2) indicating that such Delivery Date will be set by
subsequent written notice not less than one Business Day prior to such new
Delivery Date (which shall be on or prior to the applicable Cut-off Date for
Pass Through Trust).
"Delayed ECs" means, for any Pass Through Trust, any Equipment
Certificates that are the subject of a Delayed Delivery Notice.
"Deposit Trust" means a separate trust created pursuant to a Deposit
Trust Agreement.
"Deposit Trust Account" means, for any Deposit Trust, the deposit
account established and maintained for such Deposit Trust pursuant to the
related Deposit Trust Agreement.
"Deposit Trust Agreement" means an agreement in form and substance
reasonably satisfactory to the Company and the Pass Through Trustee for the
purposes described in Section 2.02 hereof, between the Company, as depositor,
the Pass Through Trustee and the Deposit Trustee.
"Deposit Trust Funds" means, for any Delayed ECs, an amount equal to
the purchase price of such Delayed ECs.
"Deposit Trustee" means, for any Deposit Trust, the Person,
acceptable to the Pass Through Trustee, defined as such in the related Deposit
Trust Agreement.
"Depository" means, for any Series, the depository of the Registered
Global Certificate, if any, representing the Pass Through Certificates of such
Series and any successor to such depository appointed by the Company pursuant
hereto. Such depository initially shall be The Depository Trust Company, a
New York corporation, or any successor thereto registered under the Exchange
Act or other applicable statute or regulation.
"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 Certificate" means, for any Pass Through Trust, any of the
Equipment Trust Certificates or Equipment Purchase Certificates, issued
pursuant to an Indenture and described in, or on a schedule attached to, the
Series Supplement for such Pass Through Trust.
"Equipment Purchase Certificate" means, for any Pass Through Trust,
any "Equipment Purchase Certificate," as such term is defined in the related
Indenture, issued by the Company pursuant to an 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.
"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 (i) for any Equipment Trust Certificate, the trust
indenture and security agreement among the Indenture Trustee, the Owner
Trustee and, if applicable, the Company pursuant to which such Equipment Trust
Certificate is issued and (ii) for any Equipment Purchase Certificate, the
trust indenture and security agreement between the Indenture Trustee and the
Company pursuant to which such Equipment Purchase Certificate is issued, in
each case as such agreement may be modified, supplemented or amended from time
to time in accordance with the related Indenture Documents.
"Indenture Default" means, for any Indenture, any event or condition
defined as a "Default" under such Indenture.
"Indenture Documents" means (i) for any Equipment Trust Certificate,
the related Indenture, the related Trust Agreement and Lease, in each case as
defined in such Indenture, and the related Participation Agreement and (ii)
for any Equipment Purchase Certificate, the related Indenture, the related
Indenture Addendum, as defined in such Indenture, and the related
Participation Agreement.
"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 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 on which a Scheduled Payment is to
be made 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.
"Officer's 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 hereof.
"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 hereof;
(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 hereof 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 (i) 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 (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 and (ii) for
any Equipment Purchase Certificate, the agreement among the Company, the
Indenture Trustee and the Pass Through Trustee that is defined as the
"Transfer Agreement" in the related Indenture and pursuant to which the Pass
Through Trustee agrees to purchase such Equipment Purchase Certificate from
the Banks (as defined in such Participation Agreement).
"Pass Through Agreement," "this Pass Through Agreement" and other like
words mean this Pass Through Trust Agreement as amended and restated hereby and
as the same may be further 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 the institution executing this Pass
Through Agreement as Pass Through Trustee, or its successor in interest, and
any successor or other trustee appointed as provided herein; provided that if
the same institution is not acting as the Pass Through Trustee in respect of
all Series, the phrase "the Pass Through Trustee" shall, unless the context
otherwise requires, mean, as to any Series, the institution named in the
applicable Series Supplement as Pass Through Trustee in respect of such
Series, or its successor in interest and any successor or other trustee
appointed as provided herein.
"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
Certificates that constitute Trust Property of such Pass Through Trust on such
date plus the amount of the principal payments on such Equipment Certificates
held by the Pass Through Trustee and not yet distributed plus the amount of
any moneys transferred to the Company and deposited in the related Deposit
Trust Account (other than earnings thereon and without giving effect to any
losses on investments thereof). 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 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
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.
"Registered Global Certificate" means, for any Series, each Pass
Through Certificate, if any, issued to the Depository in accordance with
Article II hereof and bearing the legend prescribed in Section 2.12(a) 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 Certificate that
constitutes Trust Property thereof, and "Related Indenture Trustees" means all
such Indenture Trustees for all such Equipment 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 Office.
"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 Certificate that constitutes Trust Property thereof
to be made in the amounts and on the date set forth for such payment in such
Equipment 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 specified in the related Series Supplement for the distribution of any
Special Payment 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 Certificate that constitutes Trust Property thereof, any proceeds
from the sale of such Equipment Certificate pursuant to Article VII hereof or
any payment by the Company pursuant to the last two paragraphs of Section
2.02(b) hereof.
"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) hereof and the related Series Supplement.
"Specified Investments" has, for any Deposit Trust, the meaning set
forth for such term in the related Deposit Trust Agreement.
"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 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 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(a) hereof, 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 Cut-off Date for Pass Through Trust;
(5) the related Regular Distribution Dates;
(6) the related Special Distribution Dates;
(7) if other than as provided in Section 3.02 hereof, the Registrar
or the Paying Agent for such Series, including any Co-Registrar or
additional Paying Agent;
(8) if other than as provided in Section 2.07 hereof, the
denominations in which the Pass Through Certificates of such Series are
issuable;
(9) the specific form of the Pass Through Certificates of such
Series and whether or not the Pass Through Certificates of such Series are
to be issued as one or more Registered Global Certificates and if the Pass
Through Certificates are to be issued as one or more Registered Global
Certificates, the Depository for the Registered Global Certificates and the
Letter of Representations;
(10) a description of the Equipment Certificates to be acquired by
and held in the related Pass Through Trust and of the related Indenture
Documents;
(11) 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;
(12) whether the Pass Through Certificates are eligible for purchase
by ERISA Plans (as defined in Section 6.06 hereof) and, if applicable, any
restrictions on purchases of Pass Through Certificates by ERISA Plans;
(13) the acceptance of appointment by the institution named to act
as Pass Through Trustee with respect to such Series if different from the
institution executing this Pass Through Agreement or its successor; and
(14) 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 Certificates. (a) 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) hereof shall equal in the aggregate the aggregate principal amount of
the Equipment 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 Certificates and, concurrently therewith, the Pass Through Trustee
shall purchase, pursuant to the terms and conditions of the Participation
Agreements, the Equipment Certificates (except Delayed ECs, if any) at a
purchase price equal to the amount of such consideration so received. Except
as provided in Sections 2.08 and 2.09 hereof, 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
subsection (a). The provisions of this subsection (a) are subject to the
provisions of subsection (b) below.
(b) If, on or prior to an Issuance Date, the Company delivers to the
Pass Through Trustee a Delayed Delivery Notice relating to one or more Delayed
ECs, the Pass Through Trustee shall postpone the purchase of the specified
Delayed ECs, the Company, the Pass Through Trustee and the Deposit Trustee
shall form a Deposit Trust, the Pass Through Trustee shall transfer to the
Company the Deposit Trust Funds relating to such Delayed ECs and the Company
shall deposit such Deposit Trust Funds into the Deposit Trust Account for such
Deposit Trust. The Deposit Trust Funds so deposited shall be invested
pursuant to the related Deposit Trust Agreement by the Deposit Trustee at the
direction and risk of, and for the benefit of, the Company in Specified
Investments. The Company agrees that withdrawals shall be made from any
Deposit Trust Account only as provided in the related Deposit Trust Agreement.
Upon notice from the Company on one or more occasions that any Delayed
ECs are available for purchase and upon the satisfaction of the closing
conditions specified in the applicable Participation Agreements and the
related Series Supplement on or prior to the related Cut-off Date for Pass
Through Trust, the Company shall cause the related Deposit Trust Funds to be
withdrawn from the related Deposit Trust Account and paid to the Pass Through
Trustee, free and clear of any Lien under the Deposit Trust Agreement, and the
Pass Through Trustee shall purchase the applicable Delayed ECs with such
Deposit Trust Funds. The purchase price for such Delayed ECs shall equal the
principal amount of such Delayed ECs.
On the Initial Regular Distribution Date for any Pass Through Trust
for which Delayed ECs are purchased pursuant to this subsection, the Company
shall pay, in immediately available funds, to the Pass Through Trustee an
amount equal to the interest that would have accrued on any Delayed ECs
purchased after the related Issuance Date as if such Delayed ECs had been
purchased on such Issuance Date, from such Issuance Date to, but not
including, the date of the purchase of such Delayed ECs for such Pass Through
Trust.
If the Company notifies the Pass Through Trustee prior to any Cut-off
Date for Pass Through Trust that any related Delayed ECs will not be issued on
or prior to such Cut-off Date for Pass Through Trust for any reason, on the
next Special Distribution Date for such Pass Through Trust occurring more than
20 days following the date of such notice (i) the Company shall (A) pay to the
Pass Through Trustee for deposit in the related Special Payments Account, in
immediately available funds, an amount equal to the interest that would have
accrued on the Delayed ECs designated in such notice at a rate equal to the
interest rate applicable to the related Series from the related Issuance Date
to, but not including, such Special Distribution Date and (B) cause an amount
equal to the amount of Deposit Trust Funds that would have been used to
purchase such Delayed ECs to be withdrawn from the related Deposit Trust
Account and paid to the Pass Through Trustee, free and clear of any Lien under
the Deposit Trust Agreement, and (ii) the Pass Through Trustee shall deposit
in the related Special Payments Account, upon receipt from the Deposit Trustee
pursuant to the related Deposit Trust Agreement, the amount received pursuant
to clause (i)(B) above, and the amount paid by the Company pursuant to clause
(i)(A) above, and such amounts shall be distributed as a Special Payment in
accordance with the provisions hereof.
If, on the Cut-off Date for Pass Through Trust for any Pass Through
Trust, an amount equal to less than all of the Deposit Trust Funds (other than
Deposit Trust Funds referred to in the immediately preceding paragraph) has
been used to purchase related Delayed ECs, on the next Special Distribution
Date for such Pass Through Trust occurring more than 20 days following such
Cut-off Date for Pass Through Trust (i) the Company shall (A) pay to the Pass
Through Trustee for deposit in the related Special Payments Account, in
immediately available funds, an amount equal to the interest that would have
accrued on such Delayed ECs contemplated to be purchased with such unused
Deposit Trust Funds (other than any Deposit Trust Funds referred to in the
immediately preceding paragraph) but not so purchased at a rate equal to the
interest rate applicable to the related Series from the related Issuance Date
to, but not including, such Special Distribution Date and (B) cause such
unused Deposit Trust Funds in the amount that would have been used to purchase
such Delayed ECs to be withdrawn from the related Deposit Trust Account and
paid to the Pass Through Trustee, free and clear of any Lien under the Deposit
Trust Agreement, and (ii) the Pass Through Trustee shall deposit in such
Special Payments Account, upon receipt from the Deposit Trustee pursuant to
the related Deposit Trust Agreement, such unused Deposit Trust Funds received
pursuant to clause (i)(B) above, and the amount paid by the Company pursuant
to clause (i)(A) above, and such amounts shall be distributed as a Special
Payment in accordance with the provisions hereof.
SECTION 2.03. Initial Certificateholders as Grantors. By its
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
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 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 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 and Denomination 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 minimum denominations of $1,000
and integral multiples 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 the Depository or 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 hereof 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 II. 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.
Subject to the provisions of Section 2.12 hereof, any Pass Through
Certificate or Pass Through Certificates may be exchanged for a Pass Through
Certificate or Pass Through Certificates of the same Series 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 hereof, 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.
Resales or other transfers of Pass Through Certificates represented
by a Registered Global Certificate will be conducted in accordance with the
provisions of this Pass Through Agreement, including without limitation
Section 6.06 hereof, and the rules and procedures of the Depository applicable
to U.S. corporate pass through certificates and without notice to, or action
by the Pass Through Trustee.
Neither the Company nor the Pass Through Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Registered
Global Certificate or for maintaining, supervising or reviewing any records
relating to such beneficial interests.
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 in 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 hereof
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 2.09 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 hereof, 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 and this Pass Through Agreement as definitive Pass Through
Certificates of the applicable Series.
SECTION 2.12. Pass Through Certificates Issuable in the Form of a
Registered Global Certificate. For any Series, at the sole option of the
Company as set forth in the related Series Supplement, this Section 2.12 shall
apply to such Series or may be amended with respect to any Series, and to the
extent that the provisions of this Section 2.12 conflict with any other
provisions of this Pass Through Agreement, the provisions of this Section 2.12
shall control.
(a) If the Company shall establish pursuant to Section 2.01 hereof
that the Pass Through Certificates of a particular Series are to be issued in
whole in the form of a Registered Global Certificate, then the Pass Through
Trustee shall, in accordance with this Article II, execute, authenticate and
deliver, one Registered Global Certificate which (i) shall represent, and
shall be denominated in an amount equal to, the aggregate Fractional Undivided
Interests of all of the Pass Through Certificates in the related Pass Through
Trust, (ii) shall be registered in the name of the Depository or its nominee,
(iii) shall be delivered by the Pass Through Trustee to the Depository or
pursuant to the Depository's instruction, and (iv) shall bear a legend
substantially to the following effect: "Unless this Registered Global
Certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Pass Through Trustee or
its agent for registration of transfer, exchange or payment, and any
Registered Global Certificate issued is registered in the name of Cede & Co.
or in such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein." No Person
acquiring a beneficial interest in a Pass Through Certificate will be entitled
to receive a definitive Pass Through Certificate representing such Person's
interest in the Pass Through Trust, except as provided in subsection (d) below.
(b) Notwithstanding any other provision of this Section 2.12 or of
Section 2.08 hereof, the Registered Global Certificate for any Series may be
transferred, in whole but not in part and in the manner provided in Section
2.08 hereof, by the Depository to a nominee of such Depository or by a nominee
of such Depository to such Depository or another nominee of such Depository or
by such Depository or any such nominee to a successor Depository selected or
approved by the Company upon notice to the Pass Through Trustee or to a
nominee of such successor Depository.
(c) The Depository shall be an organization registered as a clearing
agency under the Exchange Act and any other applicable statute or regulation.
(d) If at any time the Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Series or if at any
time the Depository for such Series shall no longer be eligible under
subsection (c) above, and a successor Depository is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, this Section 2.12 shall no longer be
applicable to the Pass Through Certificates of such Series and the Pass
Through Trustee will execute, authenticate and deliver Pass Through
Certificates of such Series in definitive registered form without coupons, in
authorized denominations, and in an aggregate Fractional Undivided Interest in
the related Pass Through Trust equal to the Fractional Undivided Interest in
the related Pass Through Trust of the Registered Global Certificate then
outstanding in exchange for such Registered Global Certificate. In addition,
the Company may at any time and in its sole discretion determine that the Pass
Through Certificates of any Series shall no longer be represented by a
Registered Global Certificate and that the provisions of this Section 2.12
shall no longer apply to such Pass Through Certificates. In such event the
Pass Through Trustee, upon receipt of an Officer's Certificate evidencing such
determination by the Company, will notify the Depository of the availability
of such Pass Through Certificates in definitive form and will execute,
authenticate and deliver, Pass Through Certificates of such Series in
definitive registered form without coupons, in authorized denominations and in
an aggregate Fractional Undivided Interest in the related Pass Through Trust
equal to the Fractional Undivided Interest in the related Pass Through Trust
of the Registered Global Certificate then outstanding in exchange for such
Registered Global Certificate. Upon the exchange of the Registered Global
Certificate for such Pass Through Certificates in definitive registered form
without coupons, in authorized denominations, such Registered Global
Certificate shall be cancelled by the Pass Through Trustee. Such Pass Through
Certificates in definitive registered form issued in exchange for the
Registered Global Certificate pursuant to this subsection (d) shall be
registered in such names and in such authorized denominations as the
Depository shall instruct the Pass Through Trustee. The Pass Through Trustee
shall deliver such Pass Through Certificates to the Persons in whose names
such Pass Through Certificates are so registered. Upon the issuance of Pass
Through Certificates in definitive registered form without coupons, the Pass
Through Trustee shall recognize the Person in whose name such definitive Pass
Through Certificates are registered in the Register from time to time as
Certificateholders hereunder.
(e) As long as the Pass Through Certificates of a Series are
represented by a Registered Global Certificate, all distributions for such
Series shall be made to the holder of such Registered Global Certificate as
the Certificateholder of such Series, or to such Persons as such holder may
designate, by wire transfer of immediately available funds on the date such
distributions are due, and the Company shall or shall cause the Pass Through
Trustee to provide to the Depository any notices referred to in the related
Letter of Representations in accordance with such Letter of Representations.
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 3.01, 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 hereunder and
under 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 3.01 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 3.01 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 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 at 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 or a bank
or trust company organized or chartered under the law of a State of the
United States of America and duly organized under the laws of the United
States of America or such State, as the case may be, holding a valid
certificate to do business as a national banking association or a bank or
trust company under the State of the United States of America where it is
organized or chartered, as the case may be, 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 the law of the State of the United
States of America where it is located or regulation relating to its banking
or trust powers or any judgment or order applicable to or binding on the
Pass Through Trustee and will not contravene or result in any breach of, or
constitute any default under its charter 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
governmental authority or agency of the United States of America or the
State of the United States of America where it is located 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 may be 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 executed by such Pass Through Trustee
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 applicable 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 3.04,
(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 Certificates that constitute Trust
Property of such Pass Through Trust is not paid when the same is due and
payable.
Anything in this Section 3.04 to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section 3.04 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 or distributions to be made to Certificateholders
of any Series under the related Series Supplement 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 in respect of such Series
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 of each Series, 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 of each Series, a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section
5.04 hereof. 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 Certificate
to the applicable Related Indenture Trustee on the date of its stated final
maturity, or on such earlier date as such Equipment 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
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) hereof 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 hereof 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
Certificates or realized upon the sale of any such Equipment 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) hereof 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 hereof 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 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) hereof, 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 hereof);
(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 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 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 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 V 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
hereof, 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 mail 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 Certificates;
(ii) the amount of such distribution allocable to interest on the
related Equipment 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 5.03 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) hereof
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 hereof. 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 hereof 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 5.04, 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 of any Series, 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. The Pass Through Trustee agrees to act as such withholding agent
and, in connection therewith, whenever any taxes or similar charges are
required to be withheld with respect to any amounts payable in respect of the
Pass Through Certificates of such Series, to withhold such amounts and timely
pay the same to the appropriate authority in the name of and on behalf of the
Certificateholders of such Series, that it will file any necessary withholding
tax returns or statements when due, and that, as promptly as possible after
the payment thereof, it will deliver to each such Certificateholder
appropriate documentation showing the payment thereof, together with such
additional documentary evidence as any such Certificateholder of such Series
may reasonably request from time to time. The Pass Through Trustee agrees to
file any other information reports as it may be required to file under law.
Notwithstanding any provision to the contrary herein, if the Company is
required to pay any withholding tax or any interest or penalty thereon, or to
indemnify an Owner Participant or Owner Trustee pursuant to Section 8.01(c) of
any related Participation Agreement with respect to the Pass Through Trustee's
failure to withhold with respect to any Certificateholder, 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 hereof) conclusive in favor of the Pass Through
Trustee, if made in the manner provided in this Article VI.
(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 hereof, 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 hereof, 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 promptly shall furnish to
the Pass Through Trustee an Officer's 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
6.04, an "obligor" on such Pass Through Certificates shall include any obligor
or any Affiliate of any such obligor on any Equipment 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 hereof, 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 outstanding 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 VI, 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. If the Pass Through Certificates are
not described in the applicable Series Supplement as being eligible for
purchase by ERISA Plans, 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
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 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
Certificates in favor of directing the applicable Related Indenture Trustee to
declare the unpaid principal of such Equipment Certificates then outstanding,
together with interest accrued but unpaid thereon and all other amounts due
under such Equipment 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 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 may, 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 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 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 Certificates pursuant to this Section 7.01,
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 Certificates, so as to provide for the payment in full of all
amounts due on such Equipment Certificates with respect to the related Series.
Notwithstanding the foregoing, any action taken by the Pass Through Trustee
under this Section 7.01 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 Certificates. Upon any
sale of all or any part of the Equipment 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 Certificates, and upon compliance
with the terms of sale, may hold, retain, possess and dispose of such
Equipment 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 hereof.
SECTION 7.03. Pass Through Trustee May Prove Debt. If any amount
payable under any Equipment 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 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, in the case of an Equipment Trust Certificate, or
the Company, in the case of an Equipment Purchase Certificate, or other
obligor upon such Equipment Certificate and collect in the manner provided by
law out of the property of such Owner Trustee, or the Company or such other
obligor upon such Equipment 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 or to any of the Certificateholders
of any Series 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, if any, or the Company, as the case may be, 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 hereof.
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, if any, 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 hereof; 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 7.07, 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.
Notwithstanding 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 hereof on or after the respective
due dates set forth in such Series Supplement, or, subject to Section 7.07
hereof, 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 hereof.
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 or the related Series Supplement 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 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 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 hereof 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 Certificates held by any Pass Through Trust and the
consequent failure to distribute any related Scheduled Payment or Special
Payment pursuant to Article V hereof 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 Certificates to be acquired as Trust Property
of such Pass Through Trust pursuant to the applicable Participation Agreements
and Section 2.02 hereof, 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 (i) 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, or (ii) against it as Pass Through Trustee hereunder or in its
individual capacity which arise out of the negligence or willful misconduct of
the Pass Through Trustee as such negligence or willful misconduct shall be
determined by a final decision of a court of competent jurisdiction.
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 hereunder or 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 Sections 2.05 and 2.06 hereof,
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 hereof, 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 Officer's
Certificate. Subject to Section 8.03 hereof, 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 Officer's 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) incurred 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, warranty or covenant set forth in Sections 3.03(iv) and 8.02
hereof, 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 hereof 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, if any, 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, if
any, 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 by a Majority in Interest of Certificateholders 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 hereof 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 hereof. 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 of America 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 10.02, 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 10.02 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
hereof.
SECTION 10.03. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 10.01 hereof 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 hereof, 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 hereof.
If a successor trustee is appointed with respect to one or more (but
not all) of the Pass Through Trusts created pursuant to this Pass Through
Agreement, the predecessor trustee and each successor trustee with respect to
such Pass Through Trusts shall execute and deliver a supplemental agreement
hereto which shall be sufficient with respect to each such Pass Through Trust
to effect the removal of any predecessor trustee retiring and to vest the
successor trustee with all rights, powers, duties and obligations of its
predecessor under each such Pass Through Trust as to which the predecessor
Pass Through Trustee is retiring, as if such successor trustee was originally
named as Pass Through Trustee hereunder or under the applicable Series
Supplement, and shall add to or change any of the provisions of this Pass
Through Agreement and the applicable Series Supplement as shall be necessary
to provide for or facilitate the administration of such Pass Through Trust
hereunder by more than one Pass Through Trustee.
An institution satisfying the criteria specified in Section 10.02
hereof may be appointed, including pursuant to the relevant Series Supplement,
as the Pass Through Trustee in respect of any Series issued or proposed to be
issued if such institution shall execute and deliver to the Company with
respect to the relevant Pass Through Trust an instrument (which may be the
relevant Series Supplement) accepting such appointment and shall thereupon
become vested with all the rights, powers, trusts and duties of the Pass
Through Trustee in respect of such Pass Through Trust.
It is understood that except as provided in Section 10.05 hereof
nothing herein or in any supplemental agreement or Series Supplement shall
constitute any Pass Through Trustee a co-trustee of any Pass Through Trustee
and that each Pass Through Trustee may be the Pass Through Trustee of one or
more separate Pass Through Trusts.
No institution shall accept appointment as a Pass Through Trustee as
provided in this Section 10.03 unless at the time of such acceptance such
institution shall be eligible under the provisions of Article X hereof to act
as trustee of the relevant Pass Through Trust.
Upon acceptance of appointment by a successor trustee as provided in
this Section 10.03, 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
hereof.
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 hereof 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 hereof; 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 and duties 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) hereof;
(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 modify any other provision 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 under
this Pass Through Agreement by the Pass Through Trustee or a successor
trustee with respect to one or more Pass Through Trusts 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 hereof;
(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 11.01 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 hereof.
SECTION 11.02. Supplemental Agreements With Consent of
Certificate-holders. 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 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 11.02 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 11.02 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 11.02, 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 hereof, may
receive an Officer's 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 XI 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 XI 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
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 hereof, the Pass Through Trustee shall, as the holder
of such Equipment 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 hereof, 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 created by this Pass Through Agreement as supplemented by a
related Series Supplement, 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 hereof.
SECTION 12.02. Application by Pass Through Trustee of Funds Deposited
for Payment of Pass Through Certificates. Subject to Section 12.04 hereof, all
moneys deposited with the Pass Through Trustee for payment pursuant to Section
12.01 hereof 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 hereof, 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 this Pass Through Agreement or 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 or the applicable Series Supplement with respect
to any Pass Through Trust, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this Pass
Through Agreement or such Series Supplement to be made, given, furnished or
filed with respect to such Pass Through Trust shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telex or telecopy, and (i) if
to NationsBank, National Association (Carolinas) (formerly known as
NationsBank of South Carolina, National Association), as 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 office at 2007 Corporate Avenue, Memphis, Tennessee
38132 (telecopier (901) 395-4758), Attention: Vice President and Treasurer,
with a copy to Senior Vice President and General Counsel at 1980 Nonconnah
Drive, Memphis, Tennessee 38132 (telecopier (901) 395-4758), and as to any
Series, as otherwise specified in the Series Supplement related thereto. The
Company or the Pass Through Trustee as to any Series, by notice to the other,
may designate additional or different addresses for subsequent notices or
communications. 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 Officer's 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) hereof 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 ____ day of October, 1995 by their
respective officers 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, NATIONAL ASSOCIATION
(CAROLINAS),
not in its individual capacity,
except as otherwise expressly
provided herein, but solely
as Pass Through Trustee
By: _________________________________
Name:
Title:
FEDERAL EXPRESS CORPORATION
By: _________________________________
Name: Robert D. Henning
Title: Assistant Treasurer and Managing
Director - Structured Finance
Exhibit A
to
Pass Through Agreement
FORM OF PASS THROUGH CERTIFICATE
[THIS IS A REGISTERED GLOBAL CERTIFICATE REFERRED TO IN
SECTION 2.12 OF THE WITHIN-MENTIONED AGREEMENT.
Unless this pass through certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Pass Through Trustee or its agent for registration or
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.](1)
- ----------
(1) This paragraph is required only if the Pass Through Certificates are to
be represented by the Registered Global Certificates.
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 199__ - __
199_ Pass Through Certificate, Series ___
CUSIP ______
Final Regular Distribution Date: _______
evidencing a fractional undivided interest in a pass through trust,
the property of which includes certain Equipment Certificates.
Certificate No. _______
$___________ 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 _________, as pass through
trustee (the "Pass Through Trustee"), pursuant to the Pass Through Trust
Agreement dated as of February 1, 1993, as amended and restated as of October
1, 1995 (the "Pass Through Agreement"), as supplemented by Series Supplement
__ thereto dated ____________, 199_ (the "Series Supplement") between the Pass
Through Trustee and Federal Express Corporation, a corporation incorporated
under Delaware law (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 related 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 related 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
Certificates (the "Equipment Certificates"). Each series of Equipment
(1)This paragraph is required only if the Pass Through Certificates are to be
represented by the Registered Global Certificate.
Certificates is secured by a security interest in (A) an aircraft leased to or
owned by the Company and, in the case of a leased aircraft, an assignment of
the rights of the Related Owner Trustee with respect to such aircraft,
including the right to receive rent and other amounts payable under the
related Lease or Indenture with respect to such aircraft or (B) a collateral
account holding securities purchased with the proceeds of the sale of such
series of Equipment Certificates. The Certificateholders 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.
The Pass Through Certificates represent fractional undivided
interests in the Pass Through Trust and the Trust Property, and have no
rights, benefits or interest 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 related Series Supplement, from funds then available to the Pass
Through Trustee, there will be distributed on each ______ and _____ (a
"Regular Distribution Date"), commencing on _______, __, 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 Certificates
due on such Regular Distribution Date, the receipt of which has been confirmed
by the Pass Through Trustee, 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 related Series
Supplement, if Special Payments on the Equipment 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
Certificates, the receipt of which has been confirmed by the Pass Through
Trustee, 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 related 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 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 related 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, SERIES 199__-__
By: ______________________,
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 related Series Supplement.
______________________,
as Pass Through Trustee
By: ______________________
Authorized Signatory
(*) Subject to revision as set forth in Section 6.06 hereof.
[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 related 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 related 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 related 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 related Series Supplement
and reference is made to the Pass Through Agreement and related Series
Supplement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Pass
Through Agreement may be examined during normal business hours at the
principal office of the Pass Through Trustee, and at such other places, if any,
designated by the Pass Through Trustee, by any Certificateholder upon request.
As of the date of issuance of this Pass Through Certificate, and
assuming that all proceeds are used to purchase the Equipment Certificates on
or before ___________, 199_ and that no prepayment or default
in respect of the Equipment Certificates shall occur, the aggregate scheduled
repayments of principal on the Equipment 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 on
Distribution Date Equipment Certificates Pool Factor
- ----------------------- ------------------------ -------------
$ 0.0000000
The Pass Through Agreement and related Series Supplement permits, 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 related Series Supplement also permits 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 related 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 at the
facilities or agencies maintained by 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 related Series Supplement and subject to
certain limitations set forth therein, 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 may 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 related 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 related Series Supplement and the disposition of all property
held as part of the Trust Property.
EXHIBIT 4.a.3
__________________________________________________________________________
SERIES SUPPLEMENT 1995-B1
Dated October 31, 1995
Between
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
to
PASS THROUGH TRUST AGREEMENT
Dated as of February 1, 1993
As Amended and Restated as of October 1, 1995
$8,156,000
Federal Express Corporation
Pass Through Trust, 1995-B1
Federal Express Corporation
1995 Pass Through Certificates,
Series B1
__________________________________________________________________________
TABLE OF CONTENTS
Page
RECITALS............................................................. 1
ARTICLE I
CERTAIN DEFINITIONS
ARTICLE II
DESIGNATIONS; TRUST FORMATION;
ISSUANCE OF PASS THROUGH CERTIFICATES
SECTION 2.01. Designations; Aggregate Amount................... 4
SECTION 2.02. Declaration of Trust; Authorization.............. 5
SECTION 2.03. Issuance of Pass Through Certificates............ 5
SECTION 2.04. Purchase of Equipment Certificates............... 5
SECTION 2.05. Representations and Warranties of the Company.... 5
SECTION 2.06. Conditions Precedent............................. 6
SECTION 2.07. Acceptance of Appointment of Pass Through
Trustee........................................ 6
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS;
CONCERNING AUTHENTICATING AGENT, PAYING AGENT AND REGISTRAR
AND THE CERTIFICATEHOLDERS
SECTION 3.01. Distribution Dates............................... 6
SECTION 3.02. Record Dates..................................... 7
SECTION 3.03. Certificate Account and Special Payments Account. 7
SECTION 3.04. Form of Pass Through Certificates................ 7
SECTION 3.05. Indenture Documents.............................. 7
SECTION 3.06. Appointment of Authenticating Agent; Paying
Agent and Registrar............................ 7
SECTION 3.07. Predelivery Funding.............................. 8
SECTION 3.08. ERISA............................................ 9
SECTION 3.09. Registered Global Certificate.................... 9
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart Form.................. 9
SECTION 4.02. Reports by the Company........................... 9
SECTION 4.03. Modification and Ratification of Pass Through
Agreement...................................... 10
SECTION 4.04. Termination...................................... 10
EXHIBIT A Form of Pass Through Certificate
SCHEDULE I Equipment Certificates; Related Indenture Documents
SERIES SUPPLEMENT 1995-B1
SERIES SUPPLEMENT 1995-B1, dated October 31, 1995 (this "Series
Supplement"), between FEDERAL EXPRESS CORPORATION, a Delaware corporation (the
"Company") and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national
banking association organized under the laws of the United States of America,
as Pass Through Trustee (the "Pass Through Trustee"), to the Pass Through
Trust Agreement, dated as of February 1, 1993, as amended and restated as of
October 1, 1995 (the "Pass Through Agreement"), between the Company and
NationsBank, National Association (Carolinas) (formerly known as NationsBank
of South Carolina, National Association), a national banking association.
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, appointing an institution to act as Pass Through Trustee if different
from the institution executing the Pass Through Agreement, 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 Certificates to be issued and sold to the
Pass Through Trustee, and the Pass Through Trustee has agreed to purchase the
Equipment 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
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 Certificates
to, and the purchase of the Equipment 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 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, 1995-B1, or the Federal
Express Corporation 1995 Pass Through Certificates, Series B1, as the case may
be, whether or not expressly so stated herein.
"Aircraft" means each of the three Airbus A300F4-605R
aircraft, including the Engines (as such term is defined in the related
Participation Agreement) relating thereto, leased, or to be leased, by the
Owner Trustee to the Company pursuant to one of three separate Leases
(or, in the case of the aircraft in respect of Federal Express Corporation
Trust No. N663FE, to be purchased by the Company as provided, and under the
circumstances specified, in Section 3.07 hereof) and, collectively,
means all of the foregoing.
"Authenticating Agent" has the meaning set forth in Section 3.06
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.
"Collateral Account" means the Collateral Account
established pursuant to the Indenture for Federal Express Corporation
Trust No. N663FE into which the proceeds of sale of the related Equipment
Trust Certificates will be deposited.
"Cut-off Date for Pass Through Trust" is inapplicable.
"Delivery Date" means, for any Equipment Certificates, the
Refunding Date (as such term is defined in the related Participation Agreement)
for such Equipment Certificates.
"Equipment 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
3.06 hereof.
"Record Date" means any Record Date specified in Section 3.02
hereof.
"Registrar" means the Person specified as such in Section 3.06
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 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
October 26, 1995 among the Company and Goldman, Sachs & Co., J.P. Morgan
Securities Inc. and Morgan Stanley & Co. Incorporated.
ARTICLE II
DESIGNATIONS; 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, 1995-B1 (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 1995 Pass Through Certificates, Series B1 (herein sometimes called
the "Series B1 Pass Through Certificates"). The Series B1 Pass Through
Certificates shall be the only instruments evidencing a fractional undivided
interest in such Pass Through Trust.
Except as provided in Sections 2.08, 2.09 and 2.11 of the Pass
Through Agreement, the aggregate amount of Series B1 Pass Through Certificates
that may be authenticated, delivered and outstanding under this Series
Supplement is limited to $8,156,000.
SECTION 2.02. Declaration of Trust; Authorization. Each
initial Certificateholder, by its acceptance of any Series B1 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
B1 Pass Through Certificates and (ii) the Pass Through Trustee shall deliver
the Series B1 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 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 Certificates
upon the satisfaction or waiver of the conditions for such purchase by the Pass
Through Trustee set forth in the related Participation Agreement.
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 B1 Pass Through
Certificates.
SECTION 2.07. Acceptance of Appointment of Pass Through
Trustee. Chase represents and warrants that it is qualified to serve as
Pass Through Trustee and satisfies the criteria specified in Section 10.02
of the Pass Through Agreement for eligibility as a Pass Through Trustee.
Chase hereby agrees to serve as Pass Through Trustee for the Pass Through
Certificates and acknowledges its appointment as Pass Through Trustee in
accordance with the provisions of, and subject to all of the terms and
conditions set forth in, the Pass Through Agreement and this related Series
Supplement upon the execution and delivery of this Series Supplement.
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS;
CONCERNING AUTHENTICATING AGENT, PAYING AGENT AND REGISTRAR
AND THE CERTIFICATEHOLDERS
SECTION 3.01. Distribution Dates. The Regular Distribution
Date is March 19, 1996. The Special Distribution Date for any month in
which a Special Payment is to be distributed will be the second 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 Certificate pursuant to Section 6.02(a)(i), 6.02(a)(v) or, in the
case of the Indenture in respect of Federal Express Corporation Trust No.
N663FE, 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 Date for the Regular
Distribution Date is March 4, 1996, 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 B1 Pass Through
Certificates will be substantially in the form of Exhibit A hereto. The
Series B1 Pass Through Certificates will be issued pursuant to a book-entry
system in the form of one Registered Global Certificate and subject to the
conditions set forth in the Letter of Representations among the Company, the
Pass Through Trustee and The Depository Trust Company.
SECTION 3.05. Indenture Documents. The related Indenture
Documents are listed in Schedule I hereto.
SECTION 3.06. 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 B1 Pass Through Certificates initially shall be The Chase Manhattan
Bank (National Association) ("Chase"), 4 Chase Metrotech Center, 3rd Floor,
Brooklyn, New York 11245. Chase hereby represents and warrants to the Company
that it is qualified to serve as Paying Agent, Registrar and Authenticating
Agent under the provisions of, and subject to all of the terms and conditions
set forth in, the Pass Through Agreement and this related Series Supplement.
SECTION 3.07. Predelivery Funding. During the period between
the date of issuance of Equipment Certificates by the Owner Trustee in respect
of Federal Express Corporation Trust No. N663FE and the delivery date of the
related Aircraft, such Equipment Certificates will not be secured by such
Aircraft or the related Lease, but will be secured by the Collateral Account.
Pursuant to the related Indenture, the Owner Trustee will deposit the proceeds
from the sale of the related Equipment Certificates into the Collateral
Account for the benefit of the related Indenture Trustee. Sums deposited in
the Collateral Account will be invested in direct obligations of the United
States of America or obligations fully guaranteed by the United States of
America and the Company will pay to the Indenture Trustee on demand any losses
on such investments. On the delivery date of such Aircraft, upon satisfaction
or waiver of the conditions to the Indenture Trustee's release of amounts in
the Collateral Account, the Indenture Trustee will release such amounts. Such
amounts will be applied by the Indenture Trustee in accordance with the
related Participation Agreement to pay a portion of the purchase price for
such Aircraft on the delivery date thereof.
The Company will pay to the Indenture Trustee on such delivery
date the excess, if any, of the portion of the purchase price for such Aircraft
required to be paid by the Indenture Trustee over the amounts released from the
Collateral Account net of investment earnings (which will be paid to the
Company). The Company is obligated to cause the proceeds of the Equipment
Certificates to be utilized to acquire such Aircraft in all circumstances
other than the failure of the manufacturer to deliver such Aircraft.
Accordingly, if the related Owner Participant does not make available its
portion of the purchase price on the delivery date of such Aircraft or the
Company does not enter into the related Lease on or prior to December 29, 1995
for any reason other than the failure of the manufacturer to deliver such
Aircraft, the Company will purchase such Aircraft and assume on a fully
recourse basis all of the obligations of the Owner Trustee under the related
Equipment Certificates pursuant to an indenture containing terms substantially
identical to those contained in the Leases and Indentures in respect of
Federal Express Corporation Trust No. N660FE and Federal Express Corporation
Trust No. N661FE. In such case, the Indenture Trustee will release the
amounts in the Collateral Account to the Company to pay a portion of the
purchase price for such Aircraft.
SECTION 3.08. ERISA. Any Person who is, or who in acquiring a
Pass Through Certificate is or may be using the assets of, an employee benefit
plan subject to Title I of The Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or an individual retirement account or plan subject to
Section 4975 of the Code, or any trust established under any such plan or
account, may acquire or hold any of the Pass Through Certificates, if such
Person determines either that an administrative or a statutory exemption from
the prohibited transaction rules under Section 406 of ERISA and Section 4975
of the Code is applicable to its purchase and holding of a Pass Through
Certificate or that its purchase and holding of a Pass Through Certificate
will not result in a prohibited transaction under Section 406 of ERISA and
Section 4975 of the Code.
SECTION 3.09. Registered Global Certificate. The Series B1
Pass Through Certificates are to be issued in whole in the form of a
Registered Global Certificate, and Section 2.12 of the Pass Through Agreement
shall, accordingly, be applicable. The Depository for the Registered Global
Certificate and the Letter of Representations is The Depository Trust Company.
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 B1 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 George Pataki, 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 thereunto duly authorized, all on
the day and year first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________
Name: Robert D. Henning
Title:Assistant Treasurer and Managing
Director - Structured Finance
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Pass Through Trustee
By: _________________________________________
Name:
Title:
Exhibit A
to
Series Supplement
FORM OF PASS THROUGH CERTIFICATE
THIS IS A REGISTERED GLOBAL CERTIFICATE REFERRED TO IN
SECTION 2.12 OF THE PASS THROUGH TRUST AGREEMENT.
Unless this pass through certificate is presented by an
authorized representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Pass Through Trustee or its agent for
registration or transfer, exchange or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE THEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 1995-B1
1995 Pass Through Certificate, Series B1
CUSIP 31331F-AM3
Final Regular Distribution Date: March 19, 1996
evidencing a fractional undivided interest in a pass through trust,
the property of which includes certain Equipment Certificates.
Certificate No. _______
Applicable interest rate on Equipment Certificates held in
Pass Through Trust, 1995-B1: 6.05%.
$___________ Fractional Undivided Interest representing _______ of the Pass
Through Trust per $1,000 face amount.
THIS CERTIFIES THAT CEDE & CO., for value received, is the
registered owner of a $_________ (_____________ dollars) Fractional Undivided
Interest in the Federal Express Corporation Pass Through Trust, 1995-B1 (the
"Pass Through Trust") created and declared by The Chase Manhattan Bank
(National Association), as pass through trustee (the "Pass Through Trustee"),
pursuant to the Pass Through Trust Agreement dated as of February 1, 1993, as
amended and restated as of October 1, 1995 (the "Pass Through Agreement"), as
supplemented by Series Supplement 1995-B1 thereto dated October 31, 1995 (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 1995 Pass
Through Certificates, Series B1." 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 Certificates (the "Equipment
Certificates"). Each series of Equipment Certificates is secured by a security
interest in (A) an aircraft leased to or owned by the Company and, in the case
of a leased aircraft, an assignment of the rights of the Related Owner Trustee
with respect to such aircraft, including the right to receive rent and other
amounts payable under the related Lease or Indenture with respect to such
aircraft or (B) a collateral account holding securities purchased with the
proceeds of the sale of such series of Equipment Certificates. The
Certificateholders 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 March 19, 1996 (the "Regular
Distribution Date"), 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 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
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 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
second 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.
Any Person who is, or who in acquiring this Pass Through
Certificate is or may be using the assets of, an employee benefit plan subject
to Title I of The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or an individual retirement account or plan subject to Section 4975
of the Code, or any trust established under any such plan or account, may
acquire or hold any of the Pass Through Certificates, if such Person
determines either that an administrative or a statutory exemption from the
prohibited transaction rules under Section 406 of ERISA and Section 4975 of
the Code is applicable to its purchase and holding of this Pass Through
Certificate or that its purchase and holding of this Pass Through Certificate
will not result in a prohibited transaction under Section 406 of ERISA and
Section 4975 of the Code.
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, 1995-B1
By: THE CHASE MANHATTAN BANK
(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.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
as Pass Through Trustee
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
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 or default in respect of payment on the Equipment
Certificates shall occur, the aggregate scheduled repayments of principal on
the Equipment 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, 1995-B1
Scheduled Principal
Payments on
Regular Equipment Trust
Distribution Date Certificates Pool Factor
----------------- --------------------------- -----------
March 19, 1996 $ 8,156,000 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 may 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, 1995-B1
Equipment Certificates;
Related Indenture Documents
1. Equipment Trust Certificates (Federal Express Corporation Trust No.
N660FE):
Interest Rate: 6.05%
Maturity: March 19, 1996
Principal Amount: $3,668,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N660FE) dated as of September 1, 1995, amended and restated as of
October 26, 1995, between NBD Bank, as Owner Trustee, and The Chase
Manhattan Bank (National Association), as Indenture Trustee;
Trust Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995, between NBD Bank, as
Owner Trustee, and The Chase Manhattan Bank (National Association), as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N660FE)
dated as of September 1, 1995, amended and restated as of October 26, 1995,
among Federal Express Corporation, as Lessee, Chrysler Capital Corporation,
as Owner Participant, NBD Bank, as Owner Trustee, The Chase Manhattan Bank
(National Association), as Indenture Trustee, The Chase Manhattan Bank
(National Association), as Pass Through Trustee and The Chase Manhattan
Bank (National Association), Bank of America NT & SA, CIBC Inc. and The
First National Bank of Chicago, as Original Loan Participants;
Trust Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, amended and restated as of October 26, 1995, between
Chrysler Capital Corporation, as Owner Participant and NBD Bank, as Owner
Trustee;
Lease Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, amended and restated as of October 26, 1995, between NBD
Bank, as Owner Trustee and Lessor, and Federal Express Corporation, as
Lessee; and
Lease Supplement No. 1 (Federal Express Corporation Trust No. N660FE) dated
September 20, 1995, between NBD Bank, as Owner Trustee and Lessor, and
Federal Express Corporation, as Lessee.
2. Equipment Trust Certificates (Federal Express Corporation Trust No.
N661FE):
N/A
3. Equipment Trust Certificates (Federal Express Corporation Trust No.
N663FE):
Interest Rate: 6.05%
Maturity: March 19, 1996
Principal Amount: $4,488,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N663FE) dated as of October 26, 1995, between NBD Bank, as Owner
Trustee, and The Chase Manhattan Bank (National Association), as Indenture
Trustee;
Participation Agreement (Federal Express Corporation Trust No. N663FE)
dated as of October 26, 1995, among Federal Express Corporation, as Lessee,
Chrysler Capital Corporation, as Owner Participant, NBD Bank, as Owner
Trustee, The Chase Manhattan Bank (National Association), as Indenture
Trustee and The Chase Manhattan Bank (National Association), as Pass
Through Trustee;
Trust Agreement (Federal Express Corporation Trust No. N663FE) dated as of
October 26, 1995, between Chrysler Capital Corporation, as Owner
Participant and NBD Bank, as Owner Trustee; and
Lease Agreement (Federal Express Corporation Trust No. N663FE) dated as of
October 26, 1995, between NBD Bank, as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee.
__________________________________________
SERIES SUPPLEMENT 1995-B2
Dated October 31, 1995
Between
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
to
PASS THROUGH TRUST AGREEMENT
Dated as of February 1, 1993
As Amended and Restated as of October 1, 1995
$135,546,000
Federal Express Corporation
Pass Through Trust, 1995-B2
Federal Express Corporation
1995 Pass Through Certificates,
Series B2
__________________________________________
TABLE OF CONTENTS
Page
RECITALS............................................................. 1
ARTICLE I
CERTAIN DEFINITIONS
ARTICLE II
DESIGNATIONS; TRUST FORMATION;
ISSUANCE OF PASS THROUGH CERTIFICATES
SECTION 2.01. Designations; Aggregate Amount................... 4
SECTION 2.02. Declaration of Trust; Authorization.............. 5
SECTION 2.03. Issuance of Pass Through Certificates............ 5
SECTION 2.04. Purchase of Equipment Certificates............... 5
SECTION 2.05. Representations and Warranties of the Company.... 5
SECTION 2.06. Conditions Precedent............................. 6
SECTION 2.07. Acceptance of Appointment of Pass Through
Trustee........................................ 6
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS;
CONCERNING AUTHENTICATING AGENT, PAYING AGENT AND REGISTRAR
AND THE CERTIFICATEHOLDERS
SECTION 3.01. Distribution Dates............................... 6
SECTION 3.02. Record Dates..................................... 7
SECTION 3.03. Certificate Account and Special Payments Account. 7
SECTION 3.04. Form of Pass Through Certificates................ 7
SECTION 3.05. Indenture Documents.............................. 7
SECTION 3.06. Appointment of Authenticating Agent; Paying
Agent and Registrar.......................... 7
SECTION 3.07. Predelivery Funding.............................. 8
SECTION 3.08. ERISA............................................ 9
SECTION 3.09. Registered Global Certificate.................... 9
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart Form.................. 9
SECTION 4.02. Reports by the Company........................... 9
SECTION 4.03. Modification and Ratification of Pass Through
Agreement.................................. 10
SECTION 4.04. Termination...................................... 10
EXHIBIT A Form of Pass Through Certificate
SCHEDULE I Equipment Certificates; Related Indenture Documents
SERIES SUPPLEMENT 1995-B2
SERIES SUPPLEMENT 1995-B2, dated October 31, 1995 (this "Series
Supplement"), between FEDERAL EXPRESS CORPORATION, a Delaware corporation (the
"Company") and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national
banking association organized under the laws of the United States of America,
as Pass Through Trustee (the "Pass Through Trustee"), to the Pass Through
Trust Agreement, dated as of February 1, 1993, as amended and restated as of
October 1, 1995 (the "Pass Through Agreement"), between the Company and
NationsBank, National Association (Carolinas) (formerly known as NationsBank
of South Carolina, National Association), a national banking association.
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, appointing an institution to act as Pass Through Trustee if different
from the institution executing the Pass Through Agreement, 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 Certificates to be issued and sold to the
Pass Through Trustee, and the Pass Through Trustee has agreed to purchase the
Equipment 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
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 Certificates
to, and the purchase of the Equipment 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 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, 1995-B2, or the Federal
Express Corporation 1995 Pass Through Certificates, Series B2, as the case may
be, whether or not expressly so stated herein.
"Aircraft" means each of the three Airbus A300F4-605R
aircraft, including the Engines (as such term is defined in the related
Participation Agreement) relating thereto, leased, or to be leased, by the
Owner Trustee to the Company pursuant to one of three separate Leases
(or, in the case of the aircraft in respect of Federal Express Corporation
Trust No. N663FE, to be purchased by the Company as provided, and under the
circumstances specified, in Section 3.07 hereof) and, collectively, means
all of the foregoing.
"Authenticating Agent" has the meaning set forth in Section 3.06
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.
"Collateral Account" means the Collateral Account
established pursuant to the Indenture for Federal Express Corporation
Trust No. N663FE into which the proceeds of sale of the related Equipment
Trust Certificates will be deposited.
"Cut-off Date for Pass Through Trust" is inapplicable.
"Delivery Date" means, for any Equipment Certificates, the
Refunding Date (as such term is defined in the related Participation Agreement)
for such Equipment Certificates.
"Equipment 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
3.06 hereof.
"Record Date" means any Record Date specified in Section 3.02
hereof.
"Registrar" means the Person specified as such in Section 3.06
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 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
October 26, 1995 among the Company and Goldman, Sachs & Co., J.P. Morgan
Securities Inc. and Morgan Stanley & Co. Incorporated.
ARTICLE II
DESIGNATIONS; 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, 1995-B2 (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 1995 Pass Through Certificates, Series B2 (herein sometimes
called the "Series B2 Pass Through Certificates"). The Series B2 Pass
Through Certificates shall be the only instruments evidencing a fractional
undivided interest in such Pass Through Trust.
Except as provided in Sections 2.08, 2.09 and 2.11 of the Pass
Through Agreement, the aggregate amount of Series B2 Pass Through Certificates
that may be authenticated, delivered and outstanding under this Series
Supplement is limited to $135,546,000.
SECTION 2.02. Declaration of Trust; Authorization. Each
initial Certificateholder, by its acceptance of any Series B2 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
B2 Pass Through Certificates and (ii) the Pass Through Trustee shall deliver
the Series B2 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 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 Certificates
upon the satisfaction or waiver of the conditions for such purchase by the Pass
Through Trustee set forth in the related Participation Agreement.
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 B2 Pass Through
Certificates.
SECTION 2.07. Acceptance of Appointment of Pass Through
Trustee. Chase represents and warrants that it is qualified to serve as Pass
Through Trustee and satisfies the criteria specified in Section 10.02 of the
Pass Through Agreement for eligibility as a Pass Through Trustee. Chase hereby
agrees to serve as Pass Through Trustee for the Pass Through Certificates and
acknowledges its appointment as Pass Through Trustee in accordance with the
provisions of, and subject to all of the terms and conditions set forth in,
the Pass Through Agreement and this related Series Supplement upon the
execution and delivery of this Series Supplement.
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS;
CONCERNING AUTHENTICATING AGENT, PAYING AGENT AND REGISTRAR
AND THE CERTIFICATEHOLDERS
SECTION 3.01. Distribution Dates. The Regular Distribution
Dates are March 19, 1996 and thereafter on each January 2 and July 2,
commencing on July 2, 1996. The Special Distribution Date for any month in
which a Special Payment is to be distributed will be the second 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 Certificate pursuant to Section 6.02(a)(i), 6.02(a)(v) or, in the
case of the Indenture in respect of Federal Express Corporation Trust No.
N663FE, 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 4, 1996, December 18 and June 17, 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 B2 Pass Through
Certificates will be substantially in the form of Exhibit A hereto. The
Series B2 Pass Through Certificates will be issued pursuant to a book-entry
system in the form of one Registered Global Certificate and subject to the
conditions set forth in the Letter of Representations among the Company, the
Pass Through Trustee and The Depository Trust Company.
SECTION 3.05. Indenture Documents. The related Indenture
Documents are listed in Schedule I hereto.
SECTION 3.06. 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 B2 Pass Through Certificates initially shall be The Chase Manhattan
Bank (National Association) ("Chase"), 4 Chase Metrotech Center, 3rd Floor,
Brooklyn, New York 11245. Chase hereby represents and warrants to the Company
that it is qualified to serve as Paying Agent, Registrar and Authenticating
Agent under the provisions of, and subject to all of the terms and conditions
set forth in, the Pass Through Agreement and this related Series Supplement.
SECTION 3.07. Predelivery Funding. During the period between
the date of issuance of Equipment Certificates by the Owner Trustee in respect
of Federal Express Corporation Trust No. N663FE and the delivery date of the
related Aircraft, such Equipment Certificates will not be secured by such
Aircraft or the related Lease, but will be secured by the Collateral Account.
Pursuant to the related Indenture, the Owner Trustee will deposit the proceeds
from the sale of the related Equipment Certificates into the Collateral
Account for the benefit of the related Indenture Trustee. Sums deposited in
the Collateral Account will be invested in direct obligations of the United
States of America or obligations fully guaranteed by the United States of
America and the Company will pay to the Indenture Trustee on demand any losses
on such investments. On the delivery date of such Aircraft, upon satisfaction
or waiver of the conditions to the Indenture Trustee's release of amounts in
the Collateral Account, the Indenture Trustee will release such amounts. Such
amounts will be applied by the Indenture Trustee in accordance with the
related Participation Agreement to pay a portion of the purchase price for
such Aircraft on the delivery date thereof.
The Company will pay to the Indenture Trustee on such delivery
date the excess, if any, of the portion of the purchase price for such Aircraft
required to be paid by the Indenture Trustee over the amounts released from the
Collateral Account net of investment earnings (which will be paid to the
Company). The Company is obligated to cause the proceeds of the Equipment
Certificates to be utilized to acquire such Aircraft in all circumstances
other than the failure of the manufacturer to deliver such Aircraft.
Accordingly, if the related Owner Participant does not make available its
portion of the purchase price on the delivery date of such Aircraft or the
Company does not enter into the related Lease on or prior to December 29, 1995
for any reason other than the failure of the manufacturer to deliver such
Aircraft, the Company will purchase such Aircraft and assume on a fully
recourse basis all of the obligations of the Owner Trustee under the related
Equipment Certificates pursuant to an indenture containing terms substantially
identical to those contained in the Leases and Indentures in respect of
Federal Express Corporation Trust No. N660FE and Federal Express Corporation
Trust No. N661FE. In such case, the Indenture Trustee will release the
amounts in the Collateral Account to the Company to pay a portion of the
purchase price for such Aircraft.
SECTION 3.08. ERISA. Any Person who is, or who in acquiring a
Pass Through Certificate is or may be using the assets of, an employee benefit
plan subject to Title I of The Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or an individual retirement account or plan subject to
Section 4975 of the Code, or any trust established under any such plan or
account, may acquire or hold any of the Pass Through Certificates, if such
Person determines either that an administrative or a statutory exemption from
the prohibited transaction rules under Section 406 of ERISA and Section 4975
of the Code is applicable to its purchase and holding of a Pass Through
Certificate or that its purchase and holding of a Pass Through Certificate
will not result in a prohibited transaction under Section 406 of ERISA and
Section 4975 of the Code.
SECTION 3.09. Registered Global Certificate. The Series B2
Pass Through Certificates are to be issued in whole in the form of a
Registered Global Certificate, and Section 2.12 of the Pass Through Agreement
shall, accordingly, be applicable. The Depository for the Registered Global
Certificate and the Letter of Representations is The Depository Trust Company.
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 B2 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 George Pataki, 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 thereunto duly authorized, all on
the day and year first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________
Name: Robert D. Henning
Title:Assistant Treasurer and Managing
Director - Structured Finance
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Pass Through Trustee
By: _________________________________________
Name:
Title:
Exhibit A
to
Series Supplement
FORM OF PASS THROUGH CERTIFICATE
THIS IS A REGISTERED GLOBAL CERTIFICATE REFERRED TO IN
SECTION 2.12 OF THE PASS THROUGH TRUST AGREEMENT.
Unless this pass through certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Pass Through Trustee or its agent for registration or
transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 1995-B2
1995 Pass Through Certificate, Series B2
CUSIP 31331F-AN1
Final Regular Distribution Date: January 2, 2014
evidencing a fractional undivided interest in a pass through trust,
the property of which includes certain Equipment Certificates.
Certificate No. _______
Applicable interest rate on Equipment Certificates held in
Pass Through Trust, 1995-B2: 7.11%.
$___________ Fractional Undivided Interest representing _______ of the Pass
Through Trust per $1,000 face amount.
THIS CERTIFIES THAT CEDE & CO., for value received, is the
registered owner of a $_________ (_____________ dollars) Fractional Undivided
Interest in the Federal Express Corporation Pass Through Trust, 1995-B2 (the
"Pass Through Trust") created and declared by The Chase Manhattan Bank
(National Association), as pass through trustee (the "Pass Through Trustee"),
pursuant to the Pass Through Trust Agreement dated as of February 1, 1993, as
amended and restated as of October 1, 1995 (the "Pass Through Agreement"), as
supplemented by Series Supplement 1995-B2 thereto dated October 31, 1995 (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 1995 Pass
Through Certificates, Series B2." 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 Certificates (the "Equipment
Certificates"). Each series of Equipment Certificates is secured by a security
interest in (A) an aircraft leased to or owned by the Company and, in the case
of a leased aircraft, an assignment of the rights of the Related Owner Trustee
with respect to such aircraft, including the right to receive rent and other
amounts payable under the related Lease or Indenture with respect to such
aircraft or (B) a collateral account holding securities purchased with the
proceeds of the sale of such series of Equipment Certificates. The
Certificateholders 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 March 19, 1996 and thereafter on
each January 2 and July 2 (a "Regular Distribution Date"), commencing on July
2, 1996, 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 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
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 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
second 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.
Any Person who is, or who in acquiring this Pass Through
Certificate is or may be using the assets of, an employee benefit plan subject
to Title I of The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or an individual retirement account or plan subject to Section 4975
of the Code, or any trust established under any such plan or account, may
acquire or hold any of the Pass Through Certificates, if such Person
determines either that an administrative or a statutory exemption from the
prohibited transaction rules under Section 406 of ERISA and Section 4975 of
the Code is applicable to its purchase and holding of this Pass Through
Certificate or that its purchase and holding of this Pass Through Certificate
will not result in a prohibited transaction under Section 406 of ERISA and
Section 4975 of the Code.
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, 1995-B2
By: THE CHASE MANHATTAN BANK
(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.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
as Pass Through Trustee
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
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 or default in respect of payment on the Equipment
Certificates shall occur, the aggregate scheduled repayments of principal on
the Equipment 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, 1995-B2
Scheduled Principal
Payments on
Regular Equipment Trust
Distribution Dates Certificates Pool Factor
----------------- ------------------- -----------
March 19, 1996 $ 0 1.0000000
July 2, 1996 1,468,701 0.9891646
January 2, 1997 0 0.9891646
July 2, 1997 3,234,655 0.9653007
January 2, 1998 0 0.9653007
July 2, 1998 3,464,639 0.9397401
January 2, 1999 3,345,715 0.9150568
July 2, 1999 1,309,200 0.9053981
January 2, 2000 2,736,954 0.8852060
July 2, 2000 1,402,284 0.8748606
January 2, 2001 3,215,530 0.8511378
July 2, 2001 1,235,021 0.8420263
January 2, 2002 9,821,883 0.7695647
July 2, 2002 5,548,250 0.7286321
January 2, 2003 0 0.7286321
July 2, 2003 194,352 0.7271983
January 2, 2004 890,616 0.7206277
July 2, 2004 0 0.7206277
January 2, 2005 5,108,758 0.6829375
July 2, 2005 0 0.6829375
January 2, 2006 4,227,972 0.6517453
July 2, 2006 0 0.6517453
January 2, 2007 5,029,579 0.6146392
July 2, 2007 0 0.6146392
January 2, 2008 8,032,528 0.5553787
July 2, 2008 0 0.5553787
January 2, 2009 8,579,307 0.4920843
July 2, 2009 0 0.4920843
January 2, 2010 9,969,033 0.4185371
July 2, 2010 0 0.4185371
January 2, 2011 12,211,259 0.3284476
July 2, 2011 0 0.3284476
January 2, 2012 13,790,469 0.2267075
July 2, 2012 0 0.2267075
January 2, 2013 14,807,114 0.1174670
July 2, 2013 0 0.1174670
January 2, 2014 15,922,181 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 may 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, 1995-B2
Equipment Certificates;
Related Indenture Documents
1. Equipment Trust Certificates (Federal Express Corporation Trust No.
N660FE):
Interest Rate: 7.11%
Maturity: January 2, 2014
Principal Amount: $44,526,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N660FE) dated as of September 1, 1995, amended and restated as of
October 26, 1995, between NBD Bank, as Owner Trustee, and The Chase
Manhattan Bank (National Association), as Indenture Trustee;
Trust Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995, between NBD Bank, as
Owner Trustee, and The Chase Manhattan Bank (National Association), as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N660FE)
dated as of September 1, 1995, amended and restated as of October 26, 1995,
among Federal Express Corporation, as Lessee, Chrysler Capital Corporation,
as Owner Participant, NBD Bank, as Owner Trustee, The Chase Manhattan Bank
(National Association), as Indenture Trustee, The Chase Manhattan Bank
(National Association), as Pass Through Trustee and The Chase Manhattan
Bank (National Association), Bank of America NT & SA, CIBC Inc. and The
First National Bank of Chicago, as Original Loan Participants;
Trust Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, amended and restated as of October 26, 1995, between
Chrysler Capital Corporation, as Owner Participant and NBD Bank, as Owner
Trustee;
Lease Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, amended and restated as of October 26, 1995, between NBD
Bank, as Owner Trustee and Lessor, and Federal Express Corporation, as
Lessee; and
Lease Supplement No. 1 (Federal Express Corporation Trust No. N660FE) dated
September 20, 1995, between NBD Bank, as Owner Trustee and Lessor, and
Federal Express Corporation, as Lessee.
2. Equipment Trust Certificates (Federal Express Corporation Trust No.
N661FE):
Interest Rate: 7.11%
Maturity: January 2, 2014
Principal Amount: $44,715,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N661FE) dated as of October 15, 1995, amended and restated as of
October 26, 1995, between NBD Bank, as Owner Trustee, and The Chase
Manhattan Bank (National Association), as Indenture Trustee;
Trust Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N661FE) dated October 25, 1995, between NBD Bank, as
Owner Trustee, and The Chase Manhattan Bank (National Association), as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N661FE)
dated as of October 1, 1995, amended and restated as of October 26, 1995,
among Federal Express Corporation, as Lessee, NationsBank, N.A., as Owner
Participant, NBD Bank, as Owner Trustee, The Chase Manhattan Bank (National
Association), as Indenture Trustee, The Chase Manhattan Bank (National
Association), as Pass Through Trustee and The Chase Manhattan Bank
(National Association), Bank of America NT & SA, CIBC Inc. and The First
National Bank of Chicago, as Original Loan Participants;
Trust Agreement (Federal Express Corporation Trust No. N661FE) dated as of
October 1, 1995, amended and restated as of October 26, 1995, between
NationsBank, N.A., as Owner Participant and NBD Bank, as Owner Trustee;
Lease Agreement (Federal Express Corporation Trust No. N661FE) dated as of
October 15, 1995, amended and restated as of October 26, 1995, between NBD
Bank, as Owner Trustee and Lessor, and Federal Express Corporation, as
Lessee; and
Lease Supplement No. 1 (Federal Express Corporation Trust No. N661FE) dated
October 25, 1995, between NBD Bank, as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee.
3. Equipment Trust Certificates (Federal Express Corporation Trust No.
N663FE):
Interest Rate: 7.11%
Maturity: January 2, 2014
Principal Amount: $46,305,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N663FE) dated as of October 26, 1995, between NBD Bank, as Owner
Trustee, and The Chase Manhattan Bank (National Association), as Indenture
Trustee;
Participation Agreement (Federal Express Corporation Trust No. N663FE)
dated as of October 26, 1995, among Federal Express Corporation, as Lessee,
Chrysler Capital Corporation, as Owner Participant, NBD Bank, as Owner
Trustee, The Chase Manhattan Bank (National Association), as Indenture
Trustee and The Chase Manhattan Bank (National Association), as Pass
Through Trustee;
Trust Agreement (Federal Express Corporation Trust No. N663FE) dated as of
October 26, 1995, between Chrysler Capital Corporation, as Owner
Participant and NBD Bank, as Owner Trustee; and
Lease Agreement (Federal Express Corporation Trust No. N663FE) dated as of
October 26, 1995, between NBD Bank, as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee.
__________________________________________
SERIES SUPPLEMENT 1995-B3
Dated October 31, 1995
Between
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
to
PASS THROUGH TRUST AGREEMENT
Dated as of February 1, 1993
As Amended and Restated as of October 1, 1995
$51,102,000
Federal Express Corporation
Pass Through Trust, 1995-B3
Federal Express Corporation
1995 Pass Through Certificates,
Series B3
__________________________________________
TABLE OF CONTENTS
Page
RECITALS............................................................. 1
ARTICLE I
CERTAIN DEFINITIONS
ARTICLE II
DESIGNATIONS; TRUST FORMATION;
ISSUANCE OF PASS THROUGH CERTIFICATES
SECTION 2.01. Designations; Aggregate Amount................... 4
SECTION 2.02. Declaration of Trust; Authorization.............. 5
SECTION 2.03. Issuance of Pass Through Certificates............ 5
SECTION 2.04. Purchase of Equipment Certificates............... 5
SECTION 2.05. Representations and Warranties of the Company.... 5
SECTION 2.06. Conditions Precedent............................. 6
SECTION 2.07. Acceptance of Appointment of Pass Through
Trustee.......................................... 6
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS;
CONCERNING AUTHENTICATING AGENT, PAYING AGENT AND REGISTRAR
AND THE CERTIFICATEHOLDERS
SECTION 3.01. Distribution Dates............................... 6
SECTION 3.02. Record Dates..................................... 7
SECTION 3.03. Certificate Account and Special Payments Account. 7
SECTION 3.04. Form of Pass Through Certificates................ 7
SECTION 3.05. Indenture Documents.............................. 7
SECTION 3.06. Appointment of Authenticating Agent; Paying
Agent and Registrar.......................... 7
SECTION 3.07. Predelivery Funding.............................. 8
SECTION 3.08. ERISA............................................ 9
SECTION 3.09. Registered Global Certificate.................... 9
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart Form.................. 9
SECTION 4.02. Reports by the Company........................... 9
SECTION 4.03. Modification and Ratification of Pass Through
Agreement.................................. 10
SECTION 4.04. Termination...................................... 10
EXHIBIT A Form of Pass Through Certificate
SCHEDULE I Equipment Certificates; Related Indenture Documents
SERIES SUPPLEMENT 1995-B3
SERIES SUPPLEMENT 1995-B3, dated October 31, 1995 (this "Series
Supplement"), between FEDERAL EXPRESS CORPORATION, a Delaware corporation (the
"Company") and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national
banking association organized under the laws of the United States of America,
as Pass Through Trustee (the "Pass Through Trustee"), to the Pass Through
Trust Agreement, dated as of February 1, 1993, as amended and restated as of
October 1, 1995 (the "Pass Through Agreement"), between the Company and
NationsBank, National Association (Carolinas) (formerly known as NationsBank
of South Carolina, National Association), a national banking association.
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, appointing an institution to act as Pass Through Trustee if different
from the institution executing the Pass Through Agreement, 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 Certificates to be issued and sold to the
Pass Through Trustee, and the Pass Through Trustee has agreed to purchase the
Equipment 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
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 Certificates
to, and the purchase of the Equipment 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 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, 1995-B3, or the Federal
Express Corporation 1995 Pass Through Certificates, Series B3, as the case may
be, whether or not expressly so stated herein.
"Aircraft" means each of the three Airbus A300F4-605R
aircraft, including the Engines (as such term is defined in the related
Participation Agreement) relating thereto, leased, or to be leased, by the
Owner Trustee to the Company pursuant to one of three separate Leases
(or, in the case of the aircraft in respect of Federal Express Corporation
Trust No. N663FE, to be purchased by the Company as provided, and under the
circumstances specified, in Section 3.07 hereof) and,
collectively, means all of the foregoing.
"Authenticating Agent" has the meaning set forth in Section 3.06
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.
"Collateral Account" means the Collateral Account
established pursuant to the Indenture for Federal Express Corporation
Trust No. N663FE into which the proceeds of sale of the related Equipment
Trust Certificates will be deposited.
"Cut-off Date for Pass Through Trust" is inapplicable.
"Delivery Date" means, for any Equipment Certificates, the
Refunding Date (as such term is defined in the related Participation Agreement)
for such Equipment Certificates.
"Equipment 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
3.06 hereof.
"Record Date" means any Record Date specified in Section 3.02
hereof.
"Registrar" means the Person specified as such in Section 3.06
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 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
October 26, 1995 among the Company and Goldman, Sachs & Co., J.P. Morgan
Securities Inc. and Morgan Stanley & Co. Incorporated.
ARTICLE II
DESIGNATIONS; 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, 1995-B3 (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 1995 Pass Through Certificates, Series B3 (herein sometimes called
the "Series B3 Pass Through Certificates"). The Series B3 Pass Through
Certificates shall be the only instruments evidencing a fractional undivided
interest in such Pass Through Trust.
Except as provided in Sections 2.08, 2.09 and 2.11 of the Pass
Through Agreement, the aggregate amount of Series B3 Pass Through Certificates
that may be authenticated, delivered and outstanding under this Series
Supplement is limited to $51,102,000.
SECTION 2.02. Declaration of Trust; Authorization. Each
initial Certificateholder, by its acceptance of any Series B3 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
B3 Pass Through Certificates and (ii) the Pass Through Trustee shall deliver
the Series B3 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 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 Certificates
upon the satisfaction or waiver of the conditions for such purchase by the Pass
Through Trustee set forth in the related Participation Agreement.
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 B3 Pass Through
Certificates.
SECTION 2.07. Acceptance of Appointment of Pass Through
Trustee. Chase represents and warrants that it is qualified to serve as Pass
Through Trustee and satisfies the criteria specified in Section 10.02 of the
Pass Through Agreement for eligibility as a Pass Through Trustee. Chase hereby
agrees to serve as Pass Through Trustee for the Pass Through Certificates and
acknowledges its appointment as Pass Through Trustee in accordance with the
provisions of, and subject to all of the terms and conditions set forth in,
the Pass Through Agreement and this related Series Supplement upon the
execution and delivery of this Series Supplement.
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS;
CONCERNING AUTHENTICATING AGENT, PAYING AGENT AND REGISTRAR
AND THE CERTIFICATEHOLDERS
SECTION 3.01. Distribution Dates. The Regular Distribution Dates are
March 19, 1996 and thereafter on each January 2 and July 2, commencing on
July 2, 1996. The Special Distribution Date for any month in which a
Special Payment is to be distributed will be the second 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 Certificate pursuant to Section 6.02(a)(i), 6.02(a)(v) or, in the
case of the Indenture in respect of Federal Express Corporation Trust No.
N663FE, 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 4, 1996, December 18 and June 17, 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 B3 Pass Through
Certificates will be substantially in the form of Exhibit A hereto. The
Series B3 Pass Through Certificates will be issued pursuant to a book-entry
system in the form of one Registered Global Certificate and subject to the
conditions set forth in the Letter of Representations among the Company, the
Pass Through Trustee and The Depository Trust Company.
SECTION 3.05. Indenture Documents. The related Indenture
Documents are listed in Schedule I hereto.
SECTION 3.06. 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 B3 Pass Through Certificates initially shall be The Chase Manhattan
Bank (National Association) ("Chase"), 4 Chase Metrotech Center, 3rd Floor,
Brooklyn, New York 11245. Chase hereby represents and warrants to the Company
that it is qualified to serve as Paying Agent, Registrar and Authenticating
Agent under the provisions of, and subject to all of the terms and conditions
set forth in, the Pass Through Agreement and this related Series Supplement.
SECTION 3.07. Predelivery Funding. During the period between
the date of issuance of Equipment Certificates by the Owner Trustee in respect
of Federal Express Corporation Trust No. N663FE and the delivery date of the
related Aircraft, such Equipment Certificates will not be secured by such
Aircraft or the related Lease, but will be secured by the Collateral Account.
Pursuant to the related Indenture, the Owner Trustee will deposit the proceeds
from the sale of the related Equipment Certificates into the Collateral
Account for the benefit of the related Indenture Trustee. Sums deposited in
the Collateral Account will be invested in direct obligations of the United
States of America or obligations fully guaranteed by the United States of
America and the Company will pay to the Indenture Trustee on demand any losses
on such investments. On the delivery date of such Aircraft, upon satisfaction
or waiver of the conditions to the Indenture Trustee's release of amounts in
the Collateral Account, the Indenture Trustee will release such amounts. Such
amounts will be applied by the Indenture Trustee in accordance with the
related Participation Agreement to pay a portion of the purchase price for
such Aircraft on the delivery date thereof.
The Company will pay to the Indenture Trustee on such delivery
date the excess, if any, of the portion of the purchase price for such Aircraft
required to be paid by the Indenture Trustee over the amounts released from the
Collateral Account net of investment earnings (which will be paid to the
Company). The Company is obligated to cause the proceeds of the Equipment
Certificates to be utilized to acquire such Aircraft in all circumstances
other than the failure of the manufacturer to deliver such Aircraft.
Accordingly, if the related Owner Participant does not make available its
portion of the purchase price on the delivery date of such Aircraft or the
Company does not enter into the related Lease on or prior to December 29, 1995
for any reason other than the failure of the manufacturer to deliver such
Aircraft, the Company will purchase such Aircraft and assume on a fully
recourse basis all of the obligations of the Owner Trustee under the related
Equipment Certificates pursuant to an indenture containing terms substantially
identical to those contained in the Leases and Indentures in respect of
Federal Express Corporation Trust No. N660FE and Federal Express Corporation
Trust No. N661FE. In such case, the Indenture Trustee will release the
amounts in the Collateral Account to the Company to pay a portion of the
purchase price for such Aircraft.
SECTION 3.08. ERISA. Any Person who is, or who in acquiring a
Pass Through Certificate is or may be using the assets of, an employee benefit
plan subject to Title I of The Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or an individual retirement account or plan subject to
Section 4975 of the Code, or any trust established under any such plan or
account, may acquire or hold any of the Pass Through Certificates, if such
Person determines either that an administrative or a statutory exemption from
the prohibited transaction rules under Section 406 of ERISA and Section 4975
of the Code is applicable to its purchase and holding of a Pass Through
Certificate or that its purchase and holding of a Pass Through Certificate
will not result in a prohibited transaction under Section 406 of ERISA and
Section 4975 of the Code.
SECTION 3.09. Registered Global Certificate. The Series B3
Pass Through Certificates are to be issued in whole in the form of a
Registered Global Certificate, and Section 2.12 of the Pass Through Agreement
shall, accordingly, be applicable. The Depository for the Registered Global
Certificate and the Letter of Representations is The Depository Trust Company.
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 B3 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 George Pataki, 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 thereunto duly authorized, all on
the day and year first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________
Name: Robert D. Henning
Title:Assistant Treasurer and Managing
Director - Structured Finance
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Pass Through Trustee
By: _________________________________________
Name:
Title:
Exhibit A
to
Series Supplement
FORM OF PASS THROUGH CERTIFICATE
THIS IS A REGISTERED GLOBAL CERTIFICATE REFERRED TO IN
SECTION 2.12 OF THE PASS THROUGH TRUST AGREEMENT.
Unless this pass through certificate is presented by an
authorized representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Pass Through Trustee or its agent for
registration or transfer, exchange or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE THEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 1995-B3
1995 Pass Through Certificate, Series B3
CUSIP 31331F-AP6
Final Regular Distribution Date: July 2, 2019
evidencing a fractional undivided interest in a pass through trust,
the property of which includes certain Equipment Certificates.
Certificate No. _______
Applicable interest rate on Equipment Certificates held in
Pass Through Trust, 1995-B3: 7.58%.
$___________ Fractional Undivided Interest representing _______ of the Pass
Through Trust per $1,000 face amount.
THIS CERTIFIES THAT CEDE & CO., for value received, is the
registered owner of a $_________ (_____________ dollars) Fractional Undivided
Interest in the Federal Express Corporation Pass Through Trust, 1995-B3 (the
"Pass Through Trust") created and declared by The Chase Manhattan Bank
(National Association), as pass through trustee (the "Pass Through Trustee"),
pursuant to the Pass Through Trust Agreement dated as of February 1, 1993, as
amended and restated as of October 1, 1995 (the "Pass Through Agreement"), as
supplemented by Series Supplement 1995-B3 thereto dated October 31, 1995 (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 1995 Pass
Through Certificates, Series B3." 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 Certificates (the "Equipment
Certificates"). Each series of Equipment Certificates is secured by a security
interest in (A) an aircraft leased to or owned by the Company and, in the case
of a leased aircraft, an assignment of the rights of the Related Owner Trustee
with respect to such aircraft, including the right to receive rent and other
amounts payable under the related Lease or Indenture with respect to such
aircraft or (B) a collateral account holding securities purchased with the
proceeds of the sale of such series of Equipment Certificates. The
Certificateholders 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 March 19, 1996 and thereafter on
each January 2 and July 2 (a "Regular Distribution Date"), commencing on July
2, 1996, 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 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
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 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
second 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.
Any Person who is, or who in acquiring this Pass Through
Certificate is or may be using the assets of, an employee benefit plan subject
to Title I of The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or an individual retirement account or plan subject to Section 4975
of the Code, or any trust established under any such plan or account, may
acquire or hold any of the Pass Through Certificates, if such Person
determines either that an administrative or a statutory exemption from the
prohibited transaction rules under Section 406 of ERISA and Section 4975 of
the Code is applicable to its purchase and holding of this Pass Through
Certificate or that its purchase and holding of this Pass Through Certificate
will not result in a prohibited transaction under Section 406 of ERISA and
Section 4975 of the Code.
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, 1995-B3
By: THE CHASE MANHATTAN BANK
(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.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
as Pass Through Trustee
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
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 or default in respect of payment on the Equipment
Certificates shall occur, the aggregate scheduled repayments of principal on
the Equipment 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, 1995-B3
Scheduled Principal
Payments on
Regular Equipment Trust
Distribution Dates Certificates Pool Factor
----------------- ------------------- ------------
March 19, 1996 $ 0 1.0000000
July 2, 1996 0 1.0000000
January 2, 1997 0 1.0000000
July 2, 1997 0 1.0000000
January 2, 1998 0 1.0000000
July 2, 1998 0 1.0000000
January 2, 1999 0 1.0000000
July 2, 1999 0 1.0000000
January 2, 2000 0 1.0000000
July 2, 2000 0 1.0000000
January 2, 2001 0 1.0000000
July 2, 2001 0 1.0000000
January 2, 2002 0 1.0000000
July 2, 2002 0 1.0000000
January 2, 2003 0 1.0000000
July 2, 2003 0 1.0000000
January 2, 2004 0 1.0000000
July 2, 2004 0 1.0000000
January 2, 2005 0 1.0000000
July 2, 2005 0 1.0000000
January 2, 2006 0 1.0000000
July 2, 2006 0 1.0000000
January 2, 2007 0 1.0000000
July 2, 2007 0 1.0000000
January 2, 2008 0 1.0000000
July 2, 2008 0 1.0000000
January 2, 2009 0 1.0000000
July 2, 2009 0 1.0000000
January 2, 2010 0 1.0000000
July 2, 2010 0 1.0000000
January 2, 2011 0 1.0000000
July 2, 2011 0 1.0000000
January 2, 2012 0 1.0000000
July 2, 2012 0 1.0000000
January 2, 2013 0 1.0000000
July 2, 2013 0 1.0000000
January 2, 2014 0 1.0000000
July 2, 2014 0 1.0000000
January 2, 2015 0 1.0000000
July 2, 2015 0 1.0000000
January 2, 2016 5,273,259 0.8968091
July 2, 2016 0 0.8968091
January 2, 2017 14,480,934 0.6134360
July 2, 2017 160,095 0.6103032
January 2, 2018 18,100,191 0.2561058
July 2, 2018 560,311 0.2451413
January 2, 2019 12,129,446 0.0077837
July 2, 2019 397,764 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 may 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, 1995-B3
Equipment Certificates;
Related Indenture Documents
1. Equipment Trust Certificates (Federal Express Corporation Trust No.
N660FE):
Interest Rate: 7.58%
Maturity: July 2, 2018
Principal Amount: $17,806,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N660FE) dated as of September 1, 1995, amended and restated as of
October 26, 1995, between NBD Bank, as Owner Trustee, and The Chase
Manhattan Bank (National Association), as Indenture Trustee;
Trust Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995, between NBD Bank, as
Owner Trustee, and The Chase Manhattan Bank (National Association), as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N660FE)
dated as of September 1, 1995, amended and restated as of October 26, 1995,
among Federal Express Corporation, as Lessee, Chrysler Capital Corporation,
as Owner Participant, NBD Bank, as Owner Trustee, The Chase Manhattan Bank
(National Association), as Indenture Trustee, The Chase Manhattan Bank
(National Association), as Pass Through Trustee and The Chase Manhattan
Bank (National Association), Bank of America NT & SA, CIBC Inc. and The
First National Bank of Chicago, as Original Loan Participants;
Trust Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, amended and restated as of October 26, 1995, between
Chrysler Capital Corporation, as Owner Participant and NBD Bank, as Owner
Trustee;
Lease Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, amended and restated as of October 26, 1995, between NBD
Bank, as Owner Trustee and Lessor, and Federal Express Corporation, as
Lessee; and
Lease Supplement No. 1 (Federal Express Corporation Trust No. N660FE) dated
September 20, 1995, between NBD Bank, as Owner Trustee and Lessor, and
Federal Express Corporation, as Lessee.
2. Equipment Trust Certificates (Federal Express Corporation Trust No.
N661FE):
Interest Rate: 7.58%
Maturity: January 2, 2019
Principal Amount: $18,089,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N661FE) dated as of October 15, 1995, amended and restated as of
October 26, 1995, between NBD Bank, as Owner Trustee, and The Chase
Manhattan Bank (National Association), as Indenture Trustee;
Trust Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N661FE) dated October 25, 1995, between NBD Bank, as
Owner Trustee, and The Chase Manhattan Bank (National Association), as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N661FE)
dated as of October 1, 1995, amended and restated as of October 26, 1995,
among Federal Express Corporation, as Lessee, NationsBank, N.A., as Owner
Participant, NBD Bank, as Owner Trustee, The Chase Manhattan Bank (National
Association), as Indenture Trustee, The Chase Manhattan Bank (National
Association), as Pass Through Trustee and The Chase Manhattan Bank
(National Association), Bank of America NT & SA, CIBC Inc. and The First
National Bank of Chicago, as Original Loan Participants;
Trust Agreement (Federal Express Corporation Trust No. N661FE) dated as of
October 1, 1995, amended and restated as of October 26, 1995, between
NationsBank, N.A., as Owner Participant and NBD Bank, as Owner Trustee;
Lease Agreement (Federal Express Corporation Trust No. N661FE) dated as of
October 15, 1995, amended and restated as of October 26, 1995, between NBD
Bank, as Owner Trustee and Lessor, and Federal Express Corporation, as
Lessee; and
Lease Supplement No. 1 (Federal Express Corporation Trust No. N661FE)
dated October 25, 1995, between NBD Bank, as Owner Trustee and Lessor,
and Federal Express Corporation, as Lessee.
3. Equipment Trust Certificates (Federal Express Corporation Trust No.
N663FE):
Interest Rate: 7.58%
Maturity: July 2, 2019
Principal Amount: $15,207,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N663FE) dated as of October 26, 1995, between NBD Bank, as Owner
Trustee, and The Chase Manhattan Bank (National Association), as Indenture
Trustee;
Participation Agreement (Federal Express Corporation Trust No. N663FE)
dated as of October 26, 1995, among Federal Express Corporation, as Lessee,
Chrysler Capital Corporation, as Owner Participant, NBD Bank, as Owner
Trustee, The Chase Manhattan Bank (National Association), as Indenture
Trustee and The Chase Manhattan Bank (National Association), as Pass
Through Trustee;
Trust Agreement (Federal Express Corporation Trust No. N663FE) dated as of
October 26, 1995, between Chrysler Capital Corporation, as Owner
Participant and NBD Bank, as Owner Trustee; and
Lease Agreement (Federal Express Corporation Trust No. N663FE) dated as
of October 26, 1995, between NBD Bank, as Owner Trustee and Lessor, and
Federal Express Corporation, as Lessee.
EXHIBIT 4.c.1
TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust No. N660FE)
Dated as of September 1, 1995
Amended and Restated as of October 26, 1995
between
NBD BANK,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 759, REGISTRATION NO. N660FE
TABLE OF CONTENTS
Page
Initial Recitals......................................................... 1
Granting Clause.......................................................... 2
Habendum Clause.......................................................... 5
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.............................................. 7
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES
SECTION 2.01. Authentication and Delivery of Certificates.............. 8
SECTION 2.02. Execution of Certificates................................ 8
SECTION 2.03. Certificate of Authentication............................ 8
SECTION 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest.......................... 9
SECTION 2.05. Payments from Trust Indenture Estate Only................ 10
SECTION 2.06. Registration, Transfer and Exchange...................... 11
SECTION 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates............................................. 12
SECTION 2.08. Cancellation of Certificates; Destruction Thereof........ 13
SECTION 2.09. Temporary Certificates................................... 13
SECTION 2.10. Termination of Interest in Trust Indenture Estate........ 14
SECTION 2.11. Certificates in Respect of Replacement Aircraft.......... 14
SECTION 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements..................................... 14
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Make-Whole Premium and Interest.... 15
SECTION 3.02. Offices for Payments, etc................................ 15
SECTION 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee.................................................. 15
SECTION 3.04. Paying Agents............................................ 15
SECTION 3.05. Covenants of NBD and the Owner Trustee................... 16
SECTION 3.06. [Intentionally Left Blank.].............................. 17
SECTION 3.07. Disposal of Trust Indenture Estate....................... 17
SECTION 3.08. No Representations or Warranties as to Aircraft or
Documents................................................ 17
SECTION 3.09. Further Assurances; Financing Statements................. 17
ARTICLE IV
HOLDER LISTS
SECTION 4.01. Holder Lists; Ownership of Certificates.................. 18
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 5.01. Interim Rent and Basic Rent Distribution................. 18
SECTION 5.02. Event of Loss and Replacement; Prepayment................ 19
SECTION 5.03. Payment After Indenture Event of Default, etc............ 19
SECTION 5.04. Certain Payments......................................... 20
SECTION 5.05. Other Payments........................................... 21
SECTION 5.06. Payments to Owner Trustee................................ 21
SECTION 5.07. Application of Payments.................................. 21
SECTION 5.08. Investment of Amounts Held by Indenture Trustee.......... 22
SECTION 5.09. Withholding Taxes........................................ 22
ARTICLE VI
PREPAYMENT OF CERTIFICATES
SECTION 6.01. No Prepayment Prior to Maturity.......................... 23
SECTION 6.02. Prepayment of Certificates............................... 23
SECTION 6.03. Notice of Prepayment to Holders.......................... 25
SECTION 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price.................................................... 25
SECTION 6.05. Certificates Payable on Prepayment Date.................. 26
SECTION 6.06. Mandatory Sinking Fund Redemption........................ 26
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
SECTION 7.01. Indenture Event of Default............................... 28
SECTION 7.02. Remedies................................................. 30
SECTION 7.03. Return of Aircraft, etc.................................. 32
SECTION 7.04. Indenture Trustee May Prove Debt......................... 35
SECTION 7.05. Remedies Cumulative...................................... 37
SECTION 7.06. Suits for Enforcement.................................... 37
SECTION 7.07. Discontinuance of Proceedings............................ 37
SECTION 7.08. Limitations on Suits by Holders.......................... 38
SECTION 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute
Certain Suits............................................ 38
SECTION 7.10. Control by Holders....................................... 38
SECTION 7.11. Waiver of Past Indenture Default......................... 39
SECTION 7.12. Notice of Indenture Default.............................. 39
SECTION 7.13. Waiver of Appraisement, etc.; Laws....................... 40
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
SECTION 8.01. Certain Rights of Owner Trustee and Owner Participant.... 40
SECTION 8.02. Owner Participant's Right to Elect to Prepay or Purchase
the Certificates......................................... 43
SECTION 8.03. Certain Rights of Owner Participant...................... 45
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
SECTION 9.01. Acceptance of Trusts..................................... 46
SECTION 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an
Indenture Event of Default............................... 46
SECTION 9.03. Certain Rights of the Indenture Trustee.................. 49
SECTION 9.04. Indenture Trustee Not Responsible for Recitals,
Disposition of Certificates or Application of Proceeds
Thereof ................................................. 50
SECTION 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc......................................... 50
SECTION 9.06. Moneys Held by Indenture Trustee......................... 50
SECTION 9.07. Right of Indenture Trustee to Rely on Officers'
Certificate, etc......................................... 50
SECTION 9.08. Replacement Airframes and Replacement Engines............ 51
SECTION 9.09. Indenture and Security Agreement Supplement for
Replacements............................................. 54
SECTION 9.10. Effect of Replacement.................................... 54
SECTION 9.11. Compensation............................................. 54
ARTICLE X
CONCERNING THE HOLDERS
SECTION 10.01. Evidence of Action Taken by Holders..................... 55
SECTION 10.02. Proof of Execution of Instruments and of Holding of
Certificates............................................ 55
SECTION 10.03. Holders to Be Treated as Owners......................... 55
SECTION 10.04. Certificates Owned by Owner Trustee and the Lessee
Deemed Not Outstanding.................................. 56
SECTION 10.05. Right of Revocation of Action Taken..................... 57
SECTION 10.06. ERISA................................................... 57
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
SECTION 12.01. Notice of Successor Owner Trustee....................... 58
SECTION 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor................................ 59
SECTION 12.03. Persons Eligible for Appointment as Indenture Trustee... 60
SECTION 12.04. Acceptance of Appointment by Successor Trustee.......... 60
SECTION 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee... ....................... 61
SECTION 12.06. Appointment of Separate Trustees........................ 61
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 13.01. Supplemental Indentures Without Consent of Holders...... 63
SECTION 13.02. Supplemental Indentures With Consent of Holders......... 65
SECTION 13.03. Effect of Supplemental Indenture........................ 66
SECTION 13.04. Documents to Be Given to Indenture Trustee.............. 67
SECTION 13.05. Notation on Certificates in Respect of Supplemental
Indentures.............................................. 67
SECTION 13.06. No Request Necessary for Lease Supplement or Indenture
and Security Agreement Supplement... ................... 67
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture............................................... 67
SECTION 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates................................. 69
SECTION 14.03. Repayment of Moneys Held by Paying Agent................ 69
SECTION 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven Months......... 69
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Capacity in Which Acting................................ 69
SECTION 15.02. No Legal Title to Trust Indenture Estate in Holders..... 70
SECTION 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding................................................. 70
SECTION 15.04. Indenture for Benefit of Owner Trustee, Indenture
Trustee, Owner Participant and Holders. ................ 70
SECTION 15.05. No Action Contrary to the Lessee's Rights Under
the Lease............................................... 70
SECTION 15.06. Notices................................................. 70
SECTION 15.07. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein...................... 71
SECTION 15.08. Severability............................................ 72
SECTION 15.09. No Oral Modifications or Continuing Waivers............. 72
SECTION 15.10. Successors and Assigns.................................. 73
SECTION 15.11. Headings................................................ 73
SECTION 15.12. Normal Commercial Relations............................. 73
SECTION 15.13. Governing Law; Counterparts............................. 73
Exhibit A -- Form of Indenture and Security Agreement Supplement
Exhibit B -- Form of Certificate
Schedule I -- [Intentionally Left Blank]
Schedule II -- Definitions
Schedule III -- Description of Original Indenture
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N660FE)
TRUST INDENTURE AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION
TRUST NO. N660FE) dated as of September 1, 1995, as amended and restated as of
October 26, 1995 (the "Indenture"), between NBD Bank, a Michigan banking
corporation, not in its individual capacity, except as otherwise specifically
set forth herein (when acting in such individual capacity, "NBD"), but solely
as owner trustee (the "Owner Trustee") under the Trust Agreement, as defined
herein, and The Chase Manhattan Bank (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 set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and NBD entered into the Original
Trust Agreement whereby, among other things, the Owner Trustee declared a
certain trust for the use and benefit of the Owner Participant, subject,
however, to the Lien of the Original Indenture;
WHEREAS, the Owner Trustee and the Indenture Trustee entered into the
Original Indenture for the benefit and security of the Original Loan
Participants and pursuant to which the Owner Trustee issued to the Original
Loan Participants the Original Loan Certificates as evidence of the loan made
by the Original Loan Participants to the Owner Trustee, the proceeds of which
were used by the Owner Trustee to pay a portion of the Purchase Price for the
Aircraft;
WHEREAS, the Original Indenture was recorded by the FAA and
assigned a Conveyance Number as more particularly described on Schedule III
attached hereto;
WHEREAS, pursuant to Section 15 of the Original Participation
Agreement, the parties hereto desire to refinance the Original Loan
Certificates with the proceeds of the Certificates to be issued hereunder;
WHEREAS, in connection with the refinancing of the Original Loan
Certificates, the parties hereto desire to amend and restate the Original
Indenture in its entirety as this Indenture sets forth, in order to provide,
among other things, (i) for the issuance by the Owner Trustee of the
Certificates, as provided in the Participation Agreement, and (ii) for the
assignment, mortgage and pledge by the Owner Trustee to the Indenture Trustee,
as part of the Trust Indenture Estate hereunder, among other things, of
certain of the Owner Trustee's right, title and interest in and to 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 NBD, prior to the execution and
delivery of this Indenture, entered into the Trust Agreement whereby the
Original Trust Agreement was amended and restated 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 by the Owner Trustee, and authenticated, issued and delivered
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.
NOW, THEREFORE, the parties agree that such Original Indenture be and
the same is hereby amended and restated to read in its entirety as follows:
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 the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of 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 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 first priority security interest in and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
grant a first priority 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 mortgage 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 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, subject
always to the rights granted to the Owner Trustee or the Owner Participant
hereunder and to the other terms and conditions of this Indenture:
(1) The Airframe, as the same is more particularly described in the
Indenture and Security Agreement Supplement and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture; 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
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) The Lease and all Rent thereunder, including, without limitation,
all amounts of Interim Rent, 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;
(3) The Purchase Agreement, the Purchase Agreement Assignment, the
AVSA Consent and Agreement, the Consent and Agreement, the Consent and
Guaranty, the GTA, the Engine Warranty Assignment and the Engine Consent,
AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty and
the Participation Agreement (to the extent of amounts payable to the Owner
Trustee thereunder) (collectively, and together with the Lease, the Trust
Agreement and the Certificates, the "Indenture Documents"), 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 any of
the foregoing documents and instruments;
(4) 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;
(5) 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;
(6) 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
Section 13 of the Lease, but excluding any insurance maintained by the Lessee
and not required under Section 13 of the Lease; and
(7) All proceeds of the foregoing.
Notwithstanding the foregoing provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, 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 and
(B) to adjust Interim Rent, Basic Rent and the percentages relating to
Stipulated Loss Value and Termination Value and the EBO Price as provided in
Section 3.04 of the Lease and Section 15.01 of the Participation Agreement,
(C) 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, (D) 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, (E) to retain the right of "Lessor" to determine the
Fair Market Rental or Fair Market Value pursuant to Article 4 of the Lease,
(F) 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 (G) 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) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have the
rights separately but not to the exclusion of the other (agreement of both
required in the case of clause (E) below), (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 (provided that if an Indenture Event of
Default shall be continuing, no inspection right of the Owner Trustee shall
interfere with the efforts of the Indenture Trustee to exercise remedies under
the Lease or this Indenture), (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 default
under Section 16.01 of the Lease and to declare the Lease in default in
respect thereof, and (E) the right to consent to changes to the list of
countries on Schedule III to the Participation Agreement;
(iii)(A) 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, 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 and to exercise all rights, elections and
options of the Lessor in connection with the return of the Aircraft pursuant
to express provisions of the Operative Agreements, and (B) so long as no
Indenture Event of Default not constituting an 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, jointly with the Indenture
Trustee (agreement of both not being required), to further assurances and
financial information from the Lessee pursuant to Section 19.01 of the Lease
(other than the right to receive any funds to be delivered to the "Lessor"
under the Lease (except funds delivered with respect to Excepted Payments) and
under the Purchase Agreement;
(iv) at all times the Owner Trustee shall have the right as Lessor,
but not to the exclusion of the Indenture Trustee, to seek specific
performance of the covenants of the Lessee under the Lease relating to the
protection, insurance, maintenance, possession and use of the Aircraft; and
(v) at all times the Owner Trustee and the Owner Participant shall
have the rights granted to them under Articles VI, VIII and X and Section 7.02
hereof.
(b) 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.
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.
Effective upon the occurrence and continuance of an Indenture Event of
Default, 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 Interim Rent, 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 is directed to make all payments of Rent
(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.
The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect and shall not have been terminated pursuant
to Section 14.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except in
respect of Excepted Payments or otherwise as provided in or permitted by this
Indenture, accept any payment from the Lessee or any sublessee (other than
Excepted Payments), 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 and the chattel paper original counterpart of the Lease.
It is hereby further covenanted and agreed by and between the parties
as follows:
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 NBD. 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 NBD 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 NBD, 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 NBD; 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 NBD, 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 NBD 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 Certificate 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 Refunding 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 Administration of
the Indenture Trustee or at any office or agency maintained for such
purpose pursuant to Section 3.02 hereof in immediately available funds
prior to 10:30 A.M. (New York time) on the due date thereof and the
Indenture Trustee shall remit all such amounts received by it to the
Holders at such account or accounts at such financial institution or
institutions as the Holders shall have designated to the Indenture Trustee
in writing, in immediately available funds, such payment to be made if the
payment was received prior to 10:30 A.M. New York time by the Indenture
Trustee on any Business Day, by 12:00 noon New York time on such Business
Day; otherwise, the Indenture Trustee shall make payment promptly, but not
later than 11:00 A.M. New York time on the next succeeding Business Day;
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. If any
amount payable under the Certificates, or under this 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.
The Holder at the close of business on any Record Date with respect
to any Payment Date shall be entitled to receive the interest if any payable
on such Payment Date notwithstanding any transfer or exchange of such
Certificate subsequent to the Record Date and prior to such Payment Date,
except if and to the extent the Owner Trustee shall default in the payment of
the interest due on such Payment Date, in which case such defaulted interest
shall be paid to the Holder at the close of business on a subsequent Record
Date (which shall be not less than five (5) or more than fifteen (15) Business
Days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Owner Trustee to the Holders not
less than fifteen (15) days preceding such subsequent Record Date.
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 of the type
described in Section 5.01 hereof to the extent actually received by the
Indenture Trustee 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 described in Section 5.01 hereof to the extent actually received by the
Indenture Trustee) to the extent available for distribution to it as provided
herein and that neither the Owner Participant, the Owner Trustee, NBD 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 NBD, the Owner Trustee or the Indenture
Trustee.
NBD 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 NBD'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 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, and (3) the
Indenture Trustee actually receives any Recourse Amount which reflects any
payment by the Owner Participant on account of (2) above, then the Indenture
Trustee shall promptly refund to the Owner Participant such Recourse Amount.
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, or from
retaining any amount paid by the Owner Participant under Sections 5.01, 8.02
and 8.03 hereof.
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 period of 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,
principal amount and interest rate and in authorized denominations for an
equal aggregate principal amount; provided, that such Certificate being
transferred shall be cancelled in accordance with Section 2.08 hereof
simultaneously with the issuance of the new Certificate.
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 15.01 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 NBD, the Indenture Trustee shall authenticate and deliver, a
new Certificate of like Maturity, principal amount and interest rate as the
Certificate being replaced, 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 the 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 required by them to indemnify and defend
and to hold each of them harmless and 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 incurred in connection 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
hold 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 destroy cancelled Certificates held
by it and deliver a certificate of destruction to the Owner Trustee. 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 NBD, 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, temporary 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 shall have been paid in full.
SECTION 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture and Security Agreement Supplement
covering a replacement airframe and/or Replacement Engine, as provided in
Section 9.09 hereof, each Certificate shall be deemed to have been issued in
connection with such replacement airframe and/or 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 airframe and/or 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 7.11 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 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, subject to Section 2.05
hereof, 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 Administration (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 and (b) a facility or agency in New York, New York where the
Certificates may be presented for registration of transfer and for exchange
and for prepayment 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 notwithstanding, 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 NBD and the Owner Trustee.
(a) NBD hereby covenants and agrees to perform its covenants set
forth in Sections 7.04(b) and 7.04(c) of the Participation Agreement.
(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 or
an Event of Loss, the Owner Trustee will give prompt written notice of such
Indenture Event of Default, Indenture Default 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 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 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 or assume 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 take action to
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
Airframe or 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 INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR NBD NOR
THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, WORKMANSHIP,
VALUE, CONDITION, DESIGN, COMPLIANCE WITH SPECIFICATIONS, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR USE OR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE
WHATSOEVER, except that NBD warrants that on the Delivery Date (a) the Owner
Trustee shall have received whatever title was conveyed to it by the Lessee,
and (b) the Aircraft shall be free and clear of Lessor's Liens attributable to
NBD. Neither NBD, 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 NBD, the Indenture Trustee and the Owner Participant made under
this Indenture 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 ten (10)
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. Interim Rent and Basic Rent Distribution. Except as
otherwise provided in Section 5.03 hereof, each installment of Interim Rent
and Basic Rent, any amount paid by the Owner Participant under Section 2.03 of
the Participation Agreement, any payment of interest on overdue installments
of Interim Rent and Basic Rent and any payment received by the Indenture
Trustee pursuant to Section 8.03(a) hereof shall be distributed by the
Indenture Trustee no later than the time herein provided 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.
SECTION 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft (including pursuant to Section 11.03(e) of the Lease, but, in the
case of said Section 11.03(e), subject to the time limits specified therein)
or as the result of, or in connection with 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 (without giving effect to the parenthetical at
the end thereof), and third, as provided in clause "third" of Section 5.03
hereof; provided that if a replacement airframe shall be substituted for an
Airframe subject to an Event of Loss as provided in Section 11.03 of the Lease
and Section 9.08 hereof, any proceeds which result from such Event of Loss and
are paid to the Indenture Trustee shall be held by the Indenture Trustee as
part of the Trust Indenture Estate and, unless otherwise applied pursuant to
Section 5.01 or 5.03 hereof, such proceeds shall be released to the Lessee
upon the release of such damaged Airframe and the replacement thereof as
herein provided.
(b) Any amounts received directly or indirectly from any
governmental authority, insurer or other party pursuant to any provision of
Article 11 or 13 of the Lease as the result of loss or damage not
constituting an Event of Loss (x) 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 an Event of
Default shall have occurred and be continuing or (y) are pledged to the
Lessor as security in connection with an Event of Loss in accordance with
Section 11.03(e) of the Lease, 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 Article 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 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 Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof,
all payments (other than Excepted 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, or (b) after the Certificates shall have
become due and payable as provided in Section 7.02(b) or (c) hereof, 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, 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, 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 (it being understood that amounts payable hereunder
shall not include Make-Whole Premium); 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,
any Excepted 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
(including without limitation Section 9 of the Lease) 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, 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, 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 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); provided that,
solely for the purpose of determining whether an Indenture Event of Default
shall have occurred and be continuing, each such payment shall be deemed
applied in the following order of priority: first, in the manner provided in
clause "first" above, second, in the manner provided in clause "third" above,
third, in the manner provided in clause "second" above and fourth, in the
manner provided in clause "fourth" above.
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
by the Indenture Trustee 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 (and in the absence of written
direction by the Lessee, the Indenture Trustee shall invest such monies in
direct obligations of the United States of America) 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 or any investment sold 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 Lessee, unless the
Lessee 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. Notwithstanding any provision to
the contrary in Sections 5.01 through 5.05 hereof and subject to Article 8 of
the Participation Agreement, if the Lessee is required to pay any such Tax, or
any interest or penalty thereon, or to indemnify the Owner Participant or the
Owner Trustee with respect thereto pursuant to Section 8.01(c) of the
Participation Agreement, the Lessee shall be entitled to receive any payments
otherwise distributable to the Holder of any Certificate who was subject to
such Tax pursuant to Sections 5.01 to 5.05 hereof until the foregoing amounts
shall have been recovered in full by the Lessee.
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 pursuant to Section 11.03 of the Lease and Section 9.08
hereof replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) 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) Pursuant to Section 15.01 of the Participation Agreement in
connection with a refinancing of the Certificates.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject to the terms of Section
4.02(a) or 10.01 of the Lease or Section 15 of the Participation Agreement, as
the case may be, shall give irrevocable (subject to Section 6.02(c) hereof)
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 date 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)(v) above, the Certificates
shall be prepaid on the effective date of the Refinancing. The day on which
the Certificates are to be prepaid pursuant to this Section 6.01(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 (i) of the first sentence of
Section 8.02(a) hereof is applicable) or, if such prepayment is made on or
after the applicable Premium Termination Date, 6.02(a)(ii), 6.02(a)(iii)
(if clause (ii) of the first sentence of Section 8.02(a) hereof is
applicable), 6.02(a)(iv) or 6.02(a)(v) above, the sum of (A) the aggregate
principal amount of such Certificates then Outstanding, (B) accrued
interest on the Certificates to the Prepayment Date and (C) all other
aggregate sums due the Indenture Trustee hereunder or under the
Participation Agreement or the Lease, but excluding any Make-Whole Premium
or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date, in the event of a prepayment of the Certificates pursuant
to Section 6.02(a)(ii), 6.02(a)(iii) (if clause (ii) of the first sentence
of Section 8.02(a) hereof is applicable), 6.02(a)(iv) or 6.02(a)(v) 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 with respect to which the Premium Termination Date therefor
has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price"); provided that in no event shall
a Make-Whole Premium be payable in respect of the Certificates with a Maturity
of March 19, 1996.
(c) If, pursuant to the last paragraph of Section 10.01(f) of the
Lease, no Termination Date shall occur, or if, pursuant to Section 4.02(a) of
the Lease, the Lessee revokes its notice of election to purchase, or if no
refinancing shall occur pursuant to Section 15.01 of the Participation
Agreement, the Lessee shall give notice thereof to the Indenture Trustee, and
the prepayment proposed to be effected in respect thereof 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. Any notice of prepayment given by the Owner
Trustee may be revoked by the Owner Trustee at any time on or before the
Prepayment Date by prompt notice to the Holders except as otherwise provided
in 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 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 cash or
Permitted Investments (marked-to-market net of all costs and expenses of
liquidation thereof) by the Indenture Trustee in immediately available funds
and deposited for the purpose, pay to the Indenture Trustee an amount equal to
the difference between (a) the amount then so held 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 (A) if the Owner
Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise provided
in the Lease) 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 March 19, 1996 shall be subject to redemption in whole on
March 19, 1996. The Certificates with a Maturity of January 2, 2014 and the
Certificates with a Maturity of July 2, 2018 shall be subject to partial
redemption, at the aggregate principal amount set forth for the Certificates
of the respective Maturity, on a pro rata basis, on each date specified in
this Section (a "Sinking Fund Redemption Date") for such payment on the
Certificates of such Maturity. 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 Certificates
Sinking Fund with a Maturity with a Maturity
Redemption Date of January 2, 2014 of July 2, 2018
--------------- ------------------ ---------------
July 2, 1996 $ 481,269 $ 0
January 2, 1997 0 0
July 2, 1997 1,050,463 0
January 2, 1998 0 0
July 2, 1998 1,125,151 0
January 2, 1999 1,677,277 0
July 2, 1999 0 0
January 2, 2000 1,373,222 0
July 2, 2000 0 0
January 2, 2001 1,474,457 0
July 2, 2001 0 0
January 2, 2002 3,116,825 0
July 2, 2002 1,812,930 0
January 2, 2003 0 0
July 2, 2003 0 0
January 2, 2004 437,749 0
July 2, 2004 0 0
January 2, 2005 1,519,461 0
July 2, 2005 0 0
January 2, 2006 1,322,518 0
July 2, 2006 0 0
January 2, 2007 1,794,582 0
July 2, 2007 0 0
January 2, 2008 2,744,381 0
July 2, 2008 0 0
January 2, 2009 2,392,727 0
July 2, 2009 0 0
January 2, 2010 3,396,662 0
July 2, 2010 0 0
January 2, 2011 4,224,375 0
July 2, 2011 0 0
January 2, 2012 4,535,799 0
July 2, 2012 0 0
January 2, 2013 4,870,182 0
July 2, 2013 0 0
January 2, 2014 5,175,970 0
July 2, 2014 0 0
January 2, 2015 0 0
July 2, 2015 0 0
January 2, 2016 0 5,273,259
July 2, 2016 0 0
January 2, 2017 0 5,873,547
July 2, 2017 0 160,095
January 2, 2018 0 6,102,223
July 2, 2018 0 396,876
------------- -------------
Total $ 44,526,000 $ 17,806,000
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
SECTION 7.01. Indenture Event of Default. "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 notify the
Indenture Trustee in writing that such failure shall constitute an
Indenture Event of Default); or
(ii) the failure of the Owner Trustee other than by reason of a
Default or an Event of Default (i) to pay principal, interest or
Make-Whole Premium, if any, on any Certificate when due, and such failure
shall have continued unremedied for ten (10) Business Days after the
date when due or (ii) to pay any other amounts hereunder or under the
Certificates when due and such failure shall have continued unremedied
for a period of twenty (20) days after the Owner Trustee and the Owner
Participant shall receive written demand therefor from the Indenture
Trustee or by the Holders of not less than 25% in aggregate principal
amount of Outstanding Certificates; or
(iii)(A) any representation or warranty made by NBD, the Owner
Trustee, the Owner Participant or any Owner Participant Guarantor or any
Owner Trustee Guarantor, in any Operative Agreement or in any
certificate of NBD, the Owner Trustee, the Owner Participant, or any
Owner Participant Guarantor 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 in any
respect material to the Holders and if such misrepresentation is capable
of being corrected as of a subsequent date and if such correction is
being sought diligently, and 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 the Owner Trustee
and the Owner Participant by the Indenture Trustee or by a Majority in
Interest of Holders; or
(B) any (x) covenant made by the Owner Trustee in the fifth
paragraph following the Habendum Clause hereof or Section 3.05(b)(iii)
hereof or Section 7.02(b) or 7.04(b) of the Participation Agreement shall
be breached in any respect, (y) covenant made by the Owner Participant in
Section 7.02(c), 7.03(c), 7.03(d) or 7.13 of the Participation Agreement
shall be breached in any respect or (z) other covenant made by the Owner
Trustee, in its individual capacity or as Owner Trustee, or by any Owner
Trustee Guarantor, or by the Owner Participant or any Owner Participant
Guarantor in any Operative Agreement shall be breached in any respect 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
(iv) the Owner Trustee, the Lessor's Estate, any Owner Trustee
Guarantor, the Owner Participant or any Owner Participant Guarantor shall
file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(v) an order for relief shall be entered in respect of the Owner
Trustee or any Owner Trustee Guarantor or the Owner Participant or any
Owner Participant Guarantor or the Lessor's Estate 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 Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or any Owner
Participant Guarantor or the Lessor's Estate shall file any answer
admitting or not contesting the material allegations of a petition filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or any Owner Participant Guarantor or the Lessor's Estate in
any proceeding referred to in clause (vi) below or seek or consent or
acquiesce in the appointment of any trustee, custodian, receiver or
liquidator of the Owner Trustee or any Owner Trustee Guarantor or the
Owner Participant or any Owner Participant Guarantor or the Lessor's
Estate, as the case may be, or of all or any substantial part of its
properties; or
(vi) without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or any Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered constituting an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or if any such petition shall be filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or any Owner Participant Guarantor or the Lessor's Estate, as
the case may be, and such petition shall not be dismissed within 90 days,
or if, without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or any Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered appointing a trustee, custodian, receiver or liquidator of the
Owner Trustee or any Owner Trustee Guarantor or the Owner Participant or
any Owner Participant Guarantor or the Lessor's Estate, as the case may be,
or of all or any substantial part of the properties of the Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or any Owner
Participant Guarantor or the Lessor's Estate, as the case may be, and such
order shall not be dismissed within 90 days; or
(vii) any Owner Trustee Guaranty or any Owner Participant Guaranty
shall cease to be a valid and enforceable obligation of any Owner Trustee
Guarantor or any Owner Participant Guarantor, as the case may be, or
otherwise shall not be in full force and effect.
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 clause (i) of
Section 7.01 hereof, exercise any and all of the remedies pursuant to Article
17 of the Lease; provided that such exercise of remedies shall not occur until
after the latest date on which the Owner Trustee may cure the related Event of
Default pursuant to Section 8.03 hereof. 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 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.
Notwithstanding the foregoing, it is understood and agreed that if
the Indenture Trustee shall proceed to foreclose the Lien of this
Indenture, it shall substantially simultaneously therewith, to the extent
the Indenture Trustee is then entitled to do so hereunder and under the
Lease, and is not then stayed or otherwise prevented from doing so, proceed
(to the extent it has not already done so) to declare the Lease in default
and commence the exercise in good faith of one or more of the significant
remedies under Section 17 of the Lease (as the Indenture Trustee determines
in its sole discretion). It is further understood and agreed that if the
Indenture Trustee is unable to exercise one or more remedies under Section
17 of the Lease because of any stay or operation or law or otherwise, the
Indenture Trustee shall not be entitled to foreclose the Lien of this
Indenture (A) until the earlier of (i) 60 days from the date of any such
stay or applicable order under Section 1110 of the Bankruptcy Code
including any extension consented to by the Indenture Trustee or the
Holders of Certificates of such period permitted under Section 1110(b) of
the Bankruptcy Code and (ii) the date of actual repossession of the
Aircraft by the Indenture Trustee or (B) if the Lessee has agreed to
perform or assume the Lease and no Event of Default other than as specified
in Section 16.01(e), (f) or (g) of the Lease shall be continuing. For the
avoidance of doubt, it is expressly understood and agreed that except as
aforesaid the above-described inability of the Indenture Trustee to
exercise any right or remedy under the Lease shall in no event and under no
circumstances prevent the Indenture Trustee from exercising all of its
rights, powers and remedies under this Indenture, including, without
limitation, this Article VII. The Indenture Trustee further agrees that
notice of intent to foreclose shall be given to the Owner Trustee at the
earlier of the commencement of any proceeding or at least 30 days prior to
the consummation of foreclosure of the Lien of this Indenture.
(b) If an Indenture Event of Default under clause (iv), (v) or (vi)
of Section 7.01 hereof shall occur and be continuing, the unpaid principal of
all Outstanding Certificates, together with interest accrued but unpaid
thereon and all other amounts due thereunder, but without Make-Whole Premium,
shall immediately become due and payable, without presentment, 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 to the Owner Trustee and the
Lessee, declare the principal of all the Certificates to be due and payable,
whereupon the unpaid principal amount of all Outstanding Certificates,
together with accrued interest thereon and all other amounts due thereunder,
but without Make-Whole Premium, 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 not less
than 50% in aggregate principal amount of Outstanding Certificates, by notice
to the Indenture Trustee, the Owner Trustee and 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 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 Aircraft, 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 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 under this Indenture.
Subject to the foregoing, if the Owner Trustee shall for any reason fail to
execute and deliver such documents after such request by the Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee or an agent or representative designated by 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 or
an agent or representative designated by the Indenture Trustee, to the entry
of which judgment the Owner Trustee hereby specifically consents, and (ii)
pursue all or part of such Trust Indenture Estate wherever it may be found and
enter any of the premises of the Lessee or the Owner Trustee wherever such
Trust Indenture Estate may be or be supposed to be and search for such Trust
Indenture Estate and take possession of and remove such Trust Indenture
Estate. All expenses of obtaining such judgment or of pursuing, searching for
and taking such Trust Indenture Estate shall, until paid, be secured by the
Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Trust Indenture Estate, make all such
expenditures for maintenance, insurance and repairs to and of such Trust
Indenture Estate, as the Indenture Trustee may reasonably deem proper. In
each case subject to Section 7.02 hereof, 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 to exercise all rights and
powers of the Owner Participant and the Owner Trustee relating to the Trust
Indenture Estate, as the Indenture Trustee may reasonably deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, insurance, use, operation, storage, leasing, control, management
or disposition of all or any part of the Trust Indenture Estate as the
Indenture Trustee may determine. Further, the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Trust Indenture Estate
other than Excepted Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
under this Indenture. Such tolls, 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 all maintenance and repairs, and to make all payments
which the Indenture Trustee may be required or may reasonably elect to make
for any taxes, assessments, insurance or other proper charges upon the Trust
Indenture Estate (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 the Lessee), 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 for such
purposes by the Indenture Trustee; provided, that any excess amounts shall be
promptly distributed in accordance with Section 5.03 hereof.
(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 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 to
the highest bidder, with or without demand, advertisement or notice, except
that in respect of any private sale 20 days prior notice will be provided,
for cash or, with the consent of the Owner Trustee, which shall not be
unreasonably withheld, 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 exercising reasonable commercial discretion may
determine; provided, that any such action shall be at the time lawful and
that all mandatory legal requirements shall be complied with. Any notice
required pursuant to the terms hereof 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 not be obligated to make any
sale pursuant to such notice. 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 effective upon the
occurrence and continuance of an Indenture Event of Default, 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 proceedings 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 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
Owner Trustee or its property, or in case of any other comparable judicial
proceedings relative to the Owner Trustee, or to the creditors or property of
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 rights to assert claims under this
Indenture, or under any of the Certificates, may be enforced by the
Indenture Trustee without the possession of such Certificates on any trial
or other 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, as provided herein.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Certificates, and it shall not be
necessary to make any Holders parties to such proceedings.
SECTION 7.05. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee in this Indenture shall be cumulative
and shall be in addition to every other right, power and remedy specifically
given herein 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
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
be construed to be a waiver of the right to exercise at the same time or later
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 in any such default.
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 to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture 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 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 the Owner Trustee, the Indenture
Trustee, the Owner Participant, the Holders and the Lessee shall, subject
to any binding determination in such proceeding, be restored to their
former positions and rights under this Indenture 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 to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Indenture Trustee written notice that an
Indenture Event of Default shall then have occurred and be continuing, 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, except in the manner provided herein 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 and any provision of 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; 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.
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 of this Indenture 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 any 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 except in the case of a default in the payment of the
principal of or interest on any Certificate, 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 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 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 Indenture
Documents may not modify, amend or supplement any of said agreements, 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 any Holder.
(b) Subject to the provisions of subsection (c) of this Section
8.01, the respective parties to the Indenture Documents, 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 give any
waiver 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 waiver 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 as in effect on the effective date hereof: 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 3.05, Section
3.06 (except insofar as it relates to the address or account information
of the Owner Trustee or the Indenture Trustee) (other than as such
Sections 3.03, 3.05 and 3.06 may be amended pursuant to Section 3.04 of
the Lease as in effect on the effective date hereof), 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 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, Section 26.03 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 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 and any other
Indenture Document (other than the Lease and the Participation 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 in effect on the effective date hereof:
Articles 6, 8 and 9 and Section 10.01(b) (insofar as such Articles 6, 8 and
9 and Section 10.01(b) relate to the Indenture Trustee, the Pass Through
Trustee and the Holders), Article 7 and Sections 15.01 and 17.11 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); and
(4) 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 Interim Rent, 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 (subject in any event to Section 3.05 of the
Lease) 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 (subject in any event to Section 3.05 of the
Lease) upon termination of the Lease with respect to the Aircraft payable
under, or as provided in, the Lease as in effect on the effective date
hereof, or reduce the amount of any installment of Interim Rent, 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 Interim Rent, 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 as
in effect on the effective date hereof 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 in effect on the effective
date hereof 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 Interim Rent, 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
(subject in any event to Section 3.05 of the Lease) 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
(subject in any event to Section 3.05 of the Lease) of the Lease with
respect to the Aircraft, payable under, or as provided in, the Lease as in
effect on the effective date hereof, except for any such assignment
pursuant to Section 2.12 hereof, and except as provided in the Lease as in
effect on the effective date hereof.
(d) At all times so long as this Indenture is in effect, the consent
of the Owner Trustee (at the direction of the Owner Participant) shall be
required in order (i) to amend, modify or supplement the Lease or any other
Operative Document to which the Owner Trustee is a party or to waive
compliance by the Lessee with any of its obligations thereunder and (ii) to
grant any consent requested under the Lease.
Notwithstanding the foregoing, but subject always to the provision of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Article 17 (other than with respect to Excepted
Payments) thereof and (B) subject only to the provisions of this Indenture
exercise the remedies set forth in such Article 17 of the Lease (other than in
connection with Excepted Payments) and in Article 7 hereof.
Nothing in this Indenture shall be deemed to prohibit the Owner
Participant or the Owner Trustee from making demand on the Lessee for, or from
commencing an action at law to obtain the payment of, or from receiving
payment of, any Excepted Payment; provided, however, that if the Owner Trustee
is proceeding under the Lease, the Owner Trustee shall proceed pursuant to
Section 17.01(a)(v), and only Section 17.01(a)(v), of the Lease.
SECTION 8.02. Owner Participant's Right to Elect to Prepay or
Purchase the Certificates. (a) If (i) an Event of Default shall have occurred
and be continuing for more than 180 days or the Certificates shall have become
due and payable pursuant to Section 7.02(b) or (c) hereof or (ii) an Event of
Default shall have occurred and be continuing for not more than 180 days and
the Certificates shall not have become due and payable pursuant to Section
7.02(b) or (c) hereof, 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 15 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 15 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
applicable to each Outstanding Certificate (if such purchase occurs prior
to the Premium Termination Date for such Outstanding Certificate) in the
case of a purchase pursuant to clause (a)(ii) 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 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 and this Indenture 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 purchase
date, 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 and this Indenture arising 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 Interim Rent and
Basic Rent, and (B) the Owner Trustee shall have paid or caused to be paid on
or prior to the date which is 15 Business Days after such Event of Default 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 Interim Rent and Basic Rent or of interest on account
of such installment's being overdue shall not constitute or result in an
Indenture Event of Default under this Indenture 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 exercise any rights and powers or pursue any remedies pursuant to
Article 17 of the Lease or otherwise except as set forth in this Indenture,
and 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 Event of Default, and any right to any
interest in respect of the same, and shall be entitled to any payment of
Interim Rent and 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 Interim Rent and 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 Interim Rent and Basic Rent and (B) 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 date which is 15 Business Days after
such Event of Default, 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 or result in
an Indenture Event of Default under this Indenture 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 exercise any rights and powers or pursue
any remedies pursuant to Article 17 of the Lease or otherwise except as set
forth in this Indenture, and 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, plus any interest
due, 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(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 in its
individual capacity 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. So long as an
Indenture Event of Default has occurred and 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 agrees that it will execute and the Owner
Trustee agrees that it 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 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, after the latest date on which the Owner Trustee may cure such Event of
Default pursuant to Section 8.03 hereof, 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 Indenture Trustee's
Liens on any part of 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 furnished 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, 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, direction, order or demand of the Owner Trustee
mentioned herein shall be sufficiently evidenced by an Officers'
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 investigation 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 costs,
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 Officers' 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 Airframes and Replacement Engines. At any
time and from time to time any Airframe or Engine which has been subject to an
Event of Loss and may, or is required to, be replaced under Section 10.03,
11.03 or 11.04 of the Lease by a replacement airframe or Replacement Engine,
as the case may be, 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 Airframe and/or 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 Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or
other applicable registration information) and manufacturer's
serial number;
(ii) a description of the replacement airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the replacement airframe the Owner Trustee
will be the legal owner of and have good and marketable title to
such replacement airframe free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease, that such replacement
airframe will on such date be in at least as good operating
condition and repair as required by the terms of the Lease, and
that such replacement airframe has been or, substantially
concurrently with such replacement, will be duly registered in the
name of the Owner Trustee under the Aviation Act or under the law
then applicable to the registration of the Airframe subject to the
Event of Loss and that an airworthiness certificate has been duly
issued under the Aviation Act (or such other applicable law) with
respect to such replacement airframe and that such registration
and certificate is, or will be, in full force and effect, and that
the Lessee will have the full right and authority to use such
replacement airframe;
(iv) that the insurance required by Article 13 of the Lease is in
full force and effect with respect to such replacement airframe
and all premiums then due thereon have been paid in full;
(v) that the replacement airframe is of the same or an improved
make or model as the Airframe requested to be released from this
Indenture;
(vi) that the value of the replacement airframe as of the date of
such certificate is not less than the value of the Airframe
requested to be released (assuming such Airframe was in the
condition and repair required to be maintained under the Lease);
(vii) that no Event of Default has occurred and is continuing or
would result from the making and granting of the request for
release and the addition of a replacement airframe;
(viii) that the release of the Airframe subject to the Event of
Loss will not impair the security of the Indenture in
contravention of any of the provisions of this Indenture;
(ix) that upon such replacement, the Lien of this Indenture will
apply to the replacement airframe and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x) that each of the conditions specified in Section 11.03 of the
Lease with respect to such replacement airframe has been satisfied.
B. With respect to the replacement of any Engine:
(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 such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(vii) that each of the conditions specified in Section 10.03,
11.03 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 airframe or Replacement Engine to be received
as consideration for the Airframe or 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
airframe or Replacement Engine, and an Indenture and Security Agreement
Supplement subjecting such replacement airframe or Replacement Engine to the
Trust Agreement and to the Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing satisfactory to the Indenture Trustee and the Owner Trustee
confirming the accuracy of the information set forth in clause (2)A.(vi) of
this Section 9.08.
(5) 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 airframe or Replacement Engine has been validly
subjected to the Lien of this Indenture and covered by the Lease, the
instruments subjecting such replacement airframe or 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 Aviation 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 the Lien of
this Indenture on such replacement airframe or Replacement Engine and the
Indenture Trustee would be entitled to the benefits of Section 1110 of the
Bankruptcy Code with respect to such replacement airframe or 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 airframe or 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 Section 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 Airframe or Engine being
replaced from the Lien of this Indenture.
SECTION 9.10. Effect of Replacement. In the event of the
substitution of a replacement airframe or 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 Airframe or Engine or Engines
being replaced shall be applicable to such replacement airframe or Replacement
Engine or Engines with the same force and effect as if such replacement
airframe or Replacement Engine or Engines were the same Airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine or
Engines being replaced.
SECTION 9.11. Compensation. The Owner Trustee covenants and agrees
to pay, and the Indenture 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 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, 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, NBD or 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
shall 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 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, NBD, the Lessee or by any Affiliate
thereof 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, NBD or
the Lessee 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, NBD or the Owner
Participant or by any Affiliate thereof, 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, NBD 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, NBD
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,
NBD, or the Owner Participant are actually named in the Register. Upon
request of the Indenture Trustee, the Owner Trustee, the Owner Participant,
NBD and the Lessee shall furnish to the Indenture Trustee promptly an
Officers' Certificate listing and identifying all Certificates, if any, known
by the Owner Trustee, the Owner Participant, NBD 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 Officers' 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 Administration 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. Any Person who is, or who in acquiring the
Certificates is or may be using the assets of, an employee benefit plan
subject to Title I of ERISA, or an individual retirement account or plan
subject to Section 4975 of the Code, or any trust established under any such
plan or account, may acquire or hold any of the Certificates, if such Person
determines either that an administrative or a statutory exemption from the
prohibited transaction rules under Section 406 of ERISA and Section 4975 of
the Code is applicable to its purchase and holding of the Certificates or that
its purchase and holding of the Certificates will not result in a prohibited
transaction under Section 406 of ERISA and Section 4975 of the Code.
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, 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 otherwise 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 or general tax 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 of such action 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 30 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 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, any 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 (i)(x) a bank or trust company organized and doing business under
the laws of the United States of America or any state or the District of
Columbia having a combined capital and surplus of at least $100,000,000 or
(y) a bank or trust company whose obligations hereunder are fully
guaranteed by a direct or indirect parent thereof having a combined capital
and surplus of at least $100,000,000 and (ii) a Citizen of the United
States authorized under applicable law to exercise corporate trust powers
and 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, in form and substance
reasonably satisfactory to the Owner Trustee, 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 liable either personally or in its
capacity as such trustee, 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 right 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 airframe or
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
airframe or 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.
Any supplemental indenture may be executed without the consent of the
Holders of Outstanding Certificates, notwithstanding any of the provisions of
Section 13.02 hereof.
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 and every 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
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 (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 deprive any
Holder of the benefit of the Lien of this Indenture 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 Officers' 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 in accordance with the terms
and conditions of the Lease to subject a replacement airframe or
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 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 deposited with the Indenture Trustee as
trust funds 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 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 in the case of (c) above 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 (covering such matters reasonably requested by, and in form and
substance reasonably satisfactory to, the Indenture Trustee) 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 Indenture
Trustee hereunder 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.
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 (or, if the Trust Agreement shall no longer be in effect, to the
Owner Participant) 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 (or the
Owner Participant) 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 NBD (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, and, in the case of NBD (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
NBD, 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. Upon termination of this Indenture pursuant to Article XIV
hereof, the Indenture Trustee in connection with the satisfaction of the
Indenture shall return to the Owner Trustee all property (and related
documents and instruments) constituting or evidencing the Trust Indenture
Estate.
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, 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 611 Woodward Avenue, Detroit, Michigan 48226, Attention:
Corporate Trust Department (facsimile: (313) 225-3420) (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 4 Chase
Metrotech Center, 3rd Floor, Brooklyn, New York 11245 (facsimile: (718)
242-3529), Attention: Corporate Trust 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 in Section 14.01 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. Officers' 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
Officers' 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 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 NBD 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 NBD, upon the certificate, statement or
opinion of or representations by an officer or officers of the Lessee or NBD,
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
NBD 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; Counterparts. 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 October, 1995 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.
NBD BANK,
not in its individual capacity,
but solely as Owner Trustee,
By_________________________________
Name:
Title:
THE CHASE MANHATTAN
(NATIONAL ASSOCIATION),
not in its individual capacity,
but solely as Indenture Trustee,
By_________________________________
Name:
Title:
Exhibit A
to
Trust Indenture and Security Agreement
--------------------------------------
Indenture and Security Agreement Supplement
Indenture and Security Agreement Supplement (Federal Express
Corporation Trust No. N660FE) dated ________, ____, of NBD BANK, a national
banking 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, 1995 as amended and restated as of October 26, 1995 (as at any
time amended, herein called the "Trust Agreement") between NBD Bank and the
Owner Participant named therein.
W I T N E S 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, Mortgage and Security Agreement (Federal
Express Corporation Trust No. N660FE) dated as of September 1, 1995 (herein
called the "Original Indenture") between the Owner Trustee and The Chase
Manhattan Bank (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 airframe or Replacement Engine
included in the Trust Indenture Estate, and shall specifically mortgage such
Aircraft, replacement airframe or Replacement Engine, as the case may be, to
the Indenture Trustee.
WHEREAS, the Original Indenture dated as of September 1, 1995 which
together with the Indenture and Security Agreement Supplement No. 1 (Federal
Express Corporation Trust No. N660FE) dated September 20, 1995 (the Original
Indenture being attached to and made a part of such Indenture and Security
Agreement Supplement and filed therewith) have been duly recorded pursuant to
Subtitle VII of Title 49 of the United States Code on September 21, 1995 as one
document and have been assigned Conveyance No. 2A267705.
WHEREAS, the Original Indenture, as amended and restated by the Trust
Indenture and Security Agreement dated as of October 26, 1995 (herein called
the "Indenture"), was duly recorded pursuant to Subtitle VII of Title 49 of
the United States Code on ______________ and 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 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 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, and subject to all of the terms, conditions,
provisions and limitations set forth in 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) aircraft 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 aircraft 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,
and subject to all of the terms, conditions. provisions and limitations set
forth in the Indenture, all of the estate, right, title and interest of the
Owner Trustee in, to and under the 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.
NBD BANK,
not in its individual capacity,
but solely as Owner Trustee,
By_________________________________
Name:
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 No. N660FE)
NBD BANK
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
(Federal Express Corporation Trust No. N660FE)
dated as of September 1, 1995
as amended and restated as of October 26, 1995
Interest Rate Maturity
- ------------- --------
NBD Bank, a Michigan banking corporation, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the
"Owner Trustee") under that certain Trust Agreement (Federal Express
Corporation Trust No. N660FE) dated as of September 1, 1995 as amended and
restated as of October 26, 1995, between the Owner Participant named therein
and NBD Bank (herein as such Trust Agreement may be amended or supplemented
from time to time called the "Trust Agreement"), hereby promises to pay to The
Chase Manhattan Bank (National Association), as Pass Through Trustee, or its
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, on March 19, 1996 and
thereafter semiannually on each January 2 and July 2, on said principal sum in
like coin or currency at the rate per annum set forth above from the March 19,
January 2 or the July 2, 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 December 18 or June 17 and before the following January 2 or July 2,
as the case may be, this Certificate shall bear interest from such January 2 or
July 2; provided that, if the Owner Trustee shall default in the payment of
interest due on such January 2 or July 2, then this Certificate shall bear
interest from the next preceding January 2 or July 2 to which interest on this
Certificate has been paid or duly provided for. The interest so payable on
any January 2 or July 2 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 December 18 or June 17 preceding
such January 2 or July 2, 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 The Chase Manhattan Bank (National
Association) (the "Indenture Trustee") maintained for such purpose in
immediately available funds prior to 10:30 A.M. (New York time) on the due
date thereof and the Indenture Trustee shall remit all such amounts received
by it to the Holders at such account or accounts at such financial institution
or institutions as the Holders shall have designated to the Indenture Trustee
in writing, in immediately available funds, such payment to be made if the
payment was received prior to 10:30 A.M. New York time by the Indenture
Trustee on any Business Day, by 12:00 noon New York time on such Business Day;
otherwise, the Indenture Trustee shall make payment promptly, but not later
than 11:00 A.M. New York time on the next succeeding Business Day; provided
that, at the option of the Indenture Trustee or its Paying Agent, interest may
be paid by mailing a check therefor payable to or upon the written order of
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.
NBD Bank and The Chase Manhattan Bank (National Association) are not
acting individually hereunder, but solely as Owner Trustee and Indenture
Trustee, respectively.
Any Person who is, or who in acquiring the Certificates is or may be
using the assets of, an employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code,
or any trust established under any such plan or account, may acquire or hold
any of the Certificates, if such Person determines either that an
administrative or a statutory exemption from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code is applicable to its
purchase and holding of the Certificates or that its purchase and holding of
the Certificates will not result in a prohibited transaction under Section 406
of ERISA and Section 4975 of the Code.
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 No. N660FE) dated as of September 1, 1995
as amended and restated as of October 26, 1995 (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 No. N660FE) limited in
aggregate initial principal amount to $66,000,000 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
- -------- --------- -------------
March 19, 1996 $ 3,668,000 6.05%
January 2, 2014 $44,526,000 7.11%
July 2, 2018 $17,806,000 7.58%
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 given to them in the Indenture.
The principal amounts of the Certificates are payable as follows. The
Certificates with a Maturity of March 19, 1996 are subject to redemption in
whole on March 19, 1996, the Certificates with a Maturity of January 2, 2014
are subject to redemption in part, pro rata (based on the face amount
thereof), commencing on July 2, 1996 and the Certificates with a Maturity of
July 2, 2018 are subject to redemption in part, pro rata (based on the face
amount thereof), commencing on January 2, 2016, 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 Certificates
Sinking Fund with a Maturity with a Maturity
Redemption Date of January 2, 2014 of July 2, 2018
---------------- ------------------ -----------------
July 2, 1996 $ 481,269 $ 0
January 2, 1997 0 0
July 2, 1997 1,050,463 0
January 2, 1998 0 0
July 2, 1998 1,125,151 0
January 2, 1999 1,677,277 0
July 2, 1999 0 0
January 2, 2000 1,373,222 0
July 2, 2000 0 0
January 2, 2001 1,474,457 0
July 2, 2001 0 0
January 2, 2002 3,116,825 0
July 2, 2002 1,812,930 0
January 2, 2003 0 0
July 2, 2003 0 0
January 2, 2004 437,749 0
July 2, 2004 0 0
January 2, 2005 1,519,461 0
July 2, 2005 0 0
January 2, 2006 1,322,518 0
July 2, 2006 0 0
January 2, 2007 1,794,582 0
July 2, 2007 0 0
January 2, 2008 2,744,381 0
July 2, 2008 0 0
January 2, 2009 2,392,727 0
July 2, 2009 0 0
January 2, 2010 3,396,662 0
July 2, 2010 0 0
January 2, 2011 4,224,375 0
July 2, 2011 0 0
January 2, 2012 4,535,799 0
July 2, 2012 0 0
January 2, 2013 4,870,182 0
July 2, 2013 0 0
January 2, 2014 5,175,970 0
July 2, 2014 0 0
January 2, 2015 0 0
July 2, 2015 0 0
January 2, 2016 0 5,273,259
July 2, 2016 0 0
January 2, 2017 0 5,873,547
July 2, 2017 0 160,095
January 2, 2018 0 6,102,223
July 2, 2018 0 396,876
------------- -------------
Total $ 44,526,000 $ 17,806,000
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 neither the Owner Participant, the
Owner Trustee, NBD Bank nor 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 NBD Bank, the Owner Trustee and the Indenture Trustee.
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 pursuant to Section 11.03 of the Lease and Section 9.08 of
the Indenture replacement equipment is substituted therefor).
(ii)If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and the Lessee shall not have revoked
such notice or effected an assumption of the Certificates as provided in
Section 2.12 of the Indenture).
(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) Pursuant to Section 15.01 of the Participation Agreement in
connection with a Refinancing of the Certificates.
In the case of a prepayment of the Certificates pursuant to clauses
(ii), (iv) and (v) above, the Lessee, in accordance with and subject to the
terms (including timing of notice) of Section 4.02(a) or 10.01 of the Lease or
Section 15 of the Participation Agreement, as the case may be, shall give
irrevocable (subject to Section 6.02(c) of the Indenture) 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
clause (v) above, the Certificates shall be prepaid on the effective date of
the Refinancing. 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 pursuant to
clause (i), (iii) (if clause (i) of the first sentence of Section 8.02(a)
of the Indenture is applicable) or, if such prepayment is made on or after
the applicable Premium Termination Date, clause (ii), (iii) (if clause (ii)
of the first sentence of Section 8.02(a) of the Indenture is applicable),
(iv) or (v) above, the sum of (A) the aggregate principal amount of such
Certificates then Outstanding, (B) accrued interest on the Certificates to
the Prepayment Date and (C) all other aggregate sums due the Indenture
Trustee under the Indenture or under the Participation Agreement or the
Lease, but excluding any Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date, in the event of a prepayment of the Certificates pursuant
to clause (ii), (iii) (if clause (ii) of the first sentence of Section
8.02(a) of the Indenture is applicable), (iv) or (v) 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 with
respect to which the Premium Termination Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price"); provided that in no event shall
a Make-Whole Premium be payable in respect of the Certificates with a Maturity
of March 19, 1996.
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
Interim Rent and Basic Rent payments under the Lease, but the Owner Trustee
and the Owner Participant, collectively, may not cure more than three
consecutive such failures or more than six such failures in total. The Owner
Trustee or the Owner Participant may cure any other default by the Lessee in
the performance of its obligations under the Lease.
(A) If an Event of Default shall have occurred and be continuing for
more than 180 days or the Certificates shall have been accelerated or (B) an
Event of Default shall have occurred and be continuing for not more than 180
days and the Certificates shall not have been accelerated, 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
Outstanding 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 on such
amount to the date of purchase and any Make-Whole Premium applicable
to each Outstanding Certificate, if such purchase occurs prior to the
Premium Termination Date for such Outstanding Certificate, (in the
case of a purchase pursuant to clause (ii) of the first sentence 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 shall 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 No. N660FE) to be duly executed
in its corporate name by its officer thereunto duly authorized.
Dated: NBD BANK,
not in its individual capacity,
but solely as Owner Trustee
By ___________________________
Name:
Title:
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust Certificates (Federal Express
Corporation Trust No. N660FE) referred to in the within mentioned Indenture.
Dated: THE CHASE MANHATTAN BANK
(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 the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require. In the
case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
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 other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. In the case
of amounts payable to the Lessor, the Owner Participant, or any corporate
Affiliate 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.
Agent. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns as Agent for the Original Loan Participants
pursuant to Article 16 of the Original Participation Agreement.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty dated the Delivery Date executed by the
Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe (or any permitted substitute airframe)
together with the two Engines (or any Replacement Engine or Engines) whether
or not any of such initial or Replacement Engines may from time to time be
installed on such Airframe or may be installed on any other airframe or on any
other aircraft, including any aircraft substituted pursuant to Section 11.03
of the Lease.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines
or engines from time to time installed thereon) leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having
the United States FAA Registration Number and manufacturer's serial number
specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any replacement airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Amendment No. 1 to the Original Tax Indemnity Agreement. Amendment
No. 1 to the Original Tax Indemnity Agreement, dated as of October 26, 1995.
Ancillary Agreement. Any written agreement of the Lessee to which
the Lessor is a party or to which the Lessor has consented in writing
entered into on the Delivery Date or the Refunding Date or any date
thereafter in connection with the transactions contemplated by the
Operative Agreements, as such agreement may be amended and supplemented
from time to time with the consent of the Lessor and delivered to the Owner
Trustee, the Indenture Trustee, the Pass Through Trustee and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N660FE), dated September 20, 1995 among the Lessee, the
Owner Trustee, not in its individual capacity, but solely as Owner Trustee,
the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant (with a copy of such report to the Lessee) on the
Delivery Date pursuant to Section 4.01(n) of the Original Participation
Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France, and its successors and assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as of
September 1, 1995, executed by AVSA, as the same may be amended, modified or
supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and dated the
Delivery Date.
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 either does or with the giving of notice or lapse of
time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft throughout
the Basic Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 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 July 2, 2020, 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.
Breakage Costs. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Business Day. Any day on which commercial banks are not
authorized or required to close in New York, New York and Memphis,
Tennessee, and after the Lien of the Indenture is discharged, Detroit,
Michigan.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N660FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
refunding of the Original Loan Certificates.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Commencement Date. July 2, 1996.
Consent and Agreement. The Consent and Agreement dated as of
September 1, 1995 executed by the Manufacturer, as the same may be amended,
modified or supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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 Participant
and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner
Trustee located at 611 Woodward Avenue, Detroit, Michigan 48226, or such
other office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in
writing to the Lessee, the Owner Participant and the Indenture Trustee.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
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 Date. September 20, 1995.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts related thereto. 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.
The term "Engines" means, as of any date of determination, both Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of September 1, 1995,
executed by the Engine Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N660FE), dated as of September 1, 1995 between
the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 90 days due to theft or disappearance or such longer
period, not to exceed 90 days from the end of such initial 90-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by 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,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine as of the end of the Lease Term 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
A300F-600 series aircraft equipped with engines of the same make and model as
the Engines for a period not to exceed six (6) consecutive months, unless the
Lessee, prior to the expiration of such six (6) month period, shall be
diligently carrying forward in a similar manner as are then being carried
forward with respect to other aircraft of the Lessee so as to not discriminate
against the Aircraft by reason of its leased status, all steps which are
necessary or desirable to permit the normal use of the Aircraft or Airframe
or, in any event, if such use of the Aircraft or the Airframe shall have been
prohibited for a period of eighteen (18) consecutive months or until the end
of the Term, if earlier. The date of such Event of Loss shall be (s) the 91st
day or the 180th day, as the case may be, following loss of such property or
its use due to theft or disappearance (or the end of the Term or the Lessee's
abandonment of diligent efforts to recover such property, if earlier); (t) the
61st day following the date of any destruction, damage beyond economic repair
or rendition of such property permanently unfit for normal use; (u) the date
of any insurance settlement on the basis of a total loss or constructive or
compromised total loss; (v) the date of any condemnation, confiscation,
seizure or requisition of title of such property; (w) the 181st day following
condemnation, confiscation, seizure or requisition for use of such property by
a foreign government referred to in clause (iii)(2)(A) above (or the end of
the Term or the date of any insurance settlement described therein, if earlier
than such 181st day); (x) the last day of the Term in the case of requisition
for use of such property by the Government; (y) the last day of the six (6)
month or eighteen (18) month period, referred to in clause (iv) above (or if
earlier, the end of the Term or abandonment of the Lessee's efforts to restore
the normal use of the Aircraft). 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. If an Event of Loss described in any of clauses (i)
(A), (iii) or (iv) above shall occur, Lessor may elect, within 30 days
following the date upon which such Event of Loss is deemed to have occurred,
to waive such Event of Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments
(and interest thereon to the extent provided in the Operative Agreements)
paid or payable by the Lessee in respect of the Owner Participant, the
Owner Trustee in its individual capacity or any of their respective
successors, permitted assigns, directors, officers, employees, servants and
agents or Affiliates, pursuant to the Participation Agreement or any
indemnity hereafter granted to the Owner Participant or the Owner Trustee
in its individual capacity pursuant to the Lease or the Participation
Agreement, (ii) proceeds of public liability insurance (or government
indemnities in lieu thereof) in respect of the Aircraft payable as a result
of insurance claims paid for the benefit of, or losses suffered by, the
Owner Trustee or the Indenture Trustee in their respective individual
capacities or by the Owner Participant, or their respective successors,
permitted assigns or Affiliates, (iii) proceeds of insurance maintained
with respect to the Aircraft by the Owner Participant (whether directly or
through the Owner Trustee) maintained in accordance with Section 13.05 of
the Lease but not required under Section 13 of the Lease, (iv) payments of
Supplemental Rent by the Lessee in respect of any amounts payable under the
Tax Indemnity Agreement, (v) payments constituting increases in Interim
Rent or Basic Rent attributable to payments arising pursuant to Section 5
of the Tax Indemnity Agreement and (vi) any right to demand, collect or
otherwise receive and enforce the payment of any amount described in
clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee
has exercised its option to renew the Lease pursuant to the second
paragraph of Section 4.01(a) thereof and with respect to which the
conditions set forth in the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other
property) is unencumbered by the 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;
provided that in connection with any determination pursuant to or for the
purposes of Article 17 of the Lease, the Aircraft shall be appraised on an
"as is, where is" basis. Fair Market Value shall be determined in
accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed Renewal
Term equal to 50% of the average actual semi-annual Basic Rent payable during
the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as of
September 1, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between
the Engine Manufacturer and the Lessee related to the purchase by the
Lessee of the Engines as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
General Terms Agreement relates to the Engines, to the extent assigned to
the Owner Trustee pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as Owner
Trustee and Lessor, the Agent (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Owner Participant, the Original
Loan Participants (to the extent set forth in Articles 8 and 9 of the Original
Participation Agreement), the Indenture Trustee, in its individual capacity
and as trustee, any Owner Participant Guarantor, 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 and the Trust Indenture Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N660FE) dated as of September 1, 1995, as
amended and restated as of October 26, 1995, between the Lessor and the
Indenture Trustee, as supplemented by the Indenture and Security Agreement
Supplement, and as said Indenture may from time to time be further
supplemented or amended, including any amendment or supplement thereto entered
into from time to time pursuant to the applicable provisions of the Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N660FE) dated September 20, 1995, as such Indenture and Security Agreement
Supplement shall be amended or supplemented from time to time and any other
supplement to the Indenture, substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event or condition which with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture Estate 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 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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft throughout
the Interim Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant Payment
Date and ending at the end of the day immediately preceding the Commencement
Date.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N660FE) dated as of September 1, 1995, as amended and restated as of October
26, 1995, entered into by the Lessor and the Lessee concurrently with the
execution and delivery of the Indenture, 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 one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995, as such Lease
Supplement shall be amended or supplemented from time to time and any other
supplement to the Lease, substantially in the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of
Sale, the Airbus Guaranty, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the AVSA Consent and Agreement, the
Consent and Guaranty (to the extent assigned by the Purchase Agreement
Assignment), the GTA, the Engine Warranty Assignment, the Engine Consent, any
warranty with respect to the Airframe and the Engines, all amounts of Interim
Rent, Basic Rent and Supplemental Rent, including without limitation,
insurance proceeds (other than insurance proceeds payable to or for the
benefit of the Owner Trustee 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) not include any
Excepted Payment and (ii) include all property intended to be subjected to the
Indenture by the Granting Clause thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust Indenture
Estate arising as a result of (i) claims against 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)
acts or omissions 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 or expressly prohibited under
the Operative Agreements and any act or omission of the Owner Participant
which 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, Owner Participant, Lessor's Estate or the trust created by the
Trust Agreement which are not required to be indemnified against by the Lessee
pursuant to the Participation Agreement by reason of Section 8.01(b) or
9.01(b) thereof and which are not required to be indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement, or (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 other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
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 Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of
(i) the present values of all remaining scheduled payments of such principal
amount or portion thereof 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 the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
unpaid principal amount of such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of the
Lease, discounted at a rate per semi-annual period equal to the Debt Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, if any, the Owner Trustee
Guaranty, if any, any Ancillary Agreement entered into by or with the written
consent of the Indenture Trustee, which by its terms is an Operative
Agreement, the Certificates outstanding at the time of reference, the
Indenture, the Indenture and Security Agreement Supplement, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the Engine Consent and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Original Agreements. The documents and instruments delivered on the
Delivery Date in connection with the transactions contemplated by the Original
Participation Agreement.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N660FE) dated as of September
1, 1995 between the Owner Trustee and the Indenture Trustee, which together
with the Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995 attached thereto was
recorded as one instrument by the FAA on September 21, 1995 and assigned
Conveyance Number 2A267705.
Original Lease. The Lease Agreement (Federal Express Corporation
Trust No. N660FE) dated as of September 1, 1995 between the Owner Trustee as
lessor, and the Lessee, which together with Lease Supplement No. 1 (Federal
Express Corporation Trust No. N660FE) dated September 20, 1995 attached
thereto was recorded as one instrument by the FAA on September 21, 1995 and
assigned Conveyance Number 2A267706.
Original Loan Certificates. The loan certificates issued on the
Delivery Date to the Original Loan Participants.
Original Loan Participants. The entities listed on Schedule I to the
Original Participation Agreement and their successors and assigns (other than
any assignees in connection with the Refunding Date).
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N660FE) among the Lessee, the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Original Loan
Participants as it was originally executed as of September 1, 1995.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N660FE) between the Lessee and the
Owner Participant as it was originally executed as of September 1, 1995.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N660FE) between the Owner Participant and the Owner
Trustee as it was originally executed as of September 1, 1995 and filed with
the FAA on September 20, 1995.
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.
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, its right, title and
interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Amount. The amount described in Section 2.03 of
the Participation Agreement and set forth on Schedule II to the Lease.
Owner Participant Guarantor. The provider of an Owner Participant
Guaranty.
Owner Participant Guaranty. Any guaranty delivered in compliance
with Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement, and its successors and permitted
assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Interim Rent, Basic
Rent, Stipulated Loss Value and Termination Value percentages or the EBO
Price, as the case may be, as such assumptions may be adjusted for events
which have been the basis of adjustments to Rent pursuant to Section 3.04 of
the Lease.
Participation Agreement. The Participation Agreement (Federal
Express Corporation Trust No. N660FE), dated as of September 1, 1995, as
amended and restated as of October 26, 1995, among the Lessee, the Original
Loan Participants, the Owner Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as owner trustee, the
Owner Participant, the Indenture Trustee not in its individual capacity
except as otherwise expressly provided therein, but solely as indenture
trustee and the Pass Through Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as pass through
trustee, 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, prior to replacement thereof in accordance with the Lease, which may be
removed therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
February 1, 1993, as amended and restated as of October 1, 1995 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 1995 Pass Through
Certificates, Series B1, 1995 Pass Through Certificates, Series B2 or 1995
Pass Through Certificates, Series B3, 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 Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust, 1995-B1,
Federal Express Pass Through Trust, 1995-B2 or Federal Express Pass Through
Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. The Owner Participant Payment Date, and each January 2
and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date and
ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates having a
Maturity in 2014, November 7, 2007 and with respect to the Certificates having
a Maturity in 2018, October 7, 2017.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase
Agreement, dated as of July 3, 1991 between AVSA and the Lessee, including
all exhibits, appendices and letter agreements attached thereto as
originally executed or as modified, amended or supplemented in accordance
with the terms thereof, but only to the extent that the foregoing relates
to the Aircraft and to the extent assigned pursuant to the Purchase
Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N660FE), dated as of September 1, 1995
between the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the Owner
Participant Payment Date, December 18 for January 2 Payment Dates and June 17
for July 2 Payment Dates, whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least ten (10) Business Days
prior to such expected Refunding Date.
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.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
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 or more terms 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 Interim
Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July 2,
1996.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) manufactured after October 22,
1994 of the same or of equal or greater value, remaining useful life and
utility as the Engine being replaced, together with all Parts relating to such
engine; provided, however, that if such replacement engine is not a General
Electric CF6-80C2-A5F engine, such replacement engine must then be commonly
used in the commercial aviation industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or Corporate
Trust Administration, as the case may be, designated by such Person to perform
obligations under the Operative Agreements, with respect to the Owner
Participant, the president or any vice president with direct responsibility
for the transactions contemplated by the Operative Agreements, and with
respect to any other party, any corporate officer or (except in the case of
the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be executed and
delivered by the Lessee and the Pass Through Trustee, the Series Supplement
1995-B2 to be executed and delivered by the Lessee and the Pass Through
Trustee or the Series Supplement 1995-B3 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.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Term, the amount determined by multiplying the Purchase Price
by the percentage set forth in Schedule III of the Lease under the heading
"Stipulated Loss Value Factor" opposite such date (as such Schedule III may be
adjusted from time to time as provided in Section 3.04 of the Lease), and
during any Renewal Term, the amount determined pursuant to Section 4.01(b) of
the Lease. Notwithstanding any other provisions of the Lease or the
Participation Agreement or the Indenture, each Stipulated Loss Value shall be,
under any circumstances and in any event, an amount, together with so much of
the arrears portion of Interim Rent and Basic Rent due and owing through the
date of payment of Stipulated Loss Value as does not constitute an Excepted
Payment, at least sufficient to pay in full as of such date of payment the
aggregate unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on Schedule
III of the Lease, for dates other than Rent Payment Dates on which arrears
Interim Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent and,
accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
Substantial Authority. For Federal income tax purposes, shall have
the meaning applicable for purposes of Section 6662 of the Code and relevant
Treasury regulations.
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 any Ancillary Agreement
or any other Operative Agreement to the Lessor, the Owner Participant or
others, including, without limitation, payments of Stipulated Loss Value, EBO
Price and amounts calculated by reference to Termination Value and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement or the Tax Indemnity
Agreement or any other Operative Agreement, but excluding Interim Rent and
Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Original Tax Indemnity Agreement as
amended by Amendment No. 1 to the Original Tax Indemnity Agreement, as from
time to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Preliminary Term, the Interim Term and the Basic Term of
the lease for the Aircraft under the Lease and, if renewed pursuant to Section
4.01 of the Lease, each Renewal Term for the Aircraft for which the Lease is
renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease, and in the
case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling on
July 2, 2008 or January 2, 2012, (ii) Section 4.02(a)(D) or (E) of the Lease,
a Rent Payment Date that is on or after the fifth anniversary of the
Commencement Date and (iii) Section 4.02(a)(F) of the Lease, January 2, 2015.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code (which,
among other things, recodified the Federal Aviation Act of 1958, as amended
to the time of such recodification), as amended and in effect on the date
of the Lease or as subsequently amended, or any successor or substituted
legislation at the time in effect and applicable, and the regulations
promulgated pursuant thereto.
Treasury Yield. (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N660FE), dated as of September 1, 1995, as amended and restated as
of October 26, 1995, between the Owner Participant and the Owner Trustee in
its individual capacity, as from time to time modified, amended or
supplemented pursuant to its applicable provisions and in accordance with the
Operative Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the Underwriting
Agreement.
Underwriting Agreement. The Underwriting Agreement dated October 26,
1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
SCHEDULE III
DESCRIPTION OF ORIGINAL INDENTURE
Trust Indenture, Mortgage and Security Agreement (Federal Express
Corporation Trust No. N660FE) dated as of September 1, 1995 between NBD Bank,
as owner trustee under Trust Agreement (Federal Express Corporation Trust No.
N660FE) dated as of September 1, 1995, and The Chase Manhattan Bank (National
Association), as indenture trustee, recorded by the Federal Aviation
Administration on September 21, 1995 and assigned Conveyance No. 2A267705, as
supplemented by the following described instrument:
FAA FAA
Date of Recording Conveyance
Instrument Instrument Date Number
- ---------- ---------- --------- ----------
Indenture and Security
Agreement Supplement No. 1
(Federal Express Corporation
Trust No. N660FE) 09/20/95 09/21/95 2A267705
=============================================================================
TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust No. N661FE)
Dated as of October 15, 1995
Amended and Restated as of October 26, 1995
between
NBD BANK,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 760, REGISTRATION NO. N661FE
=============================================================================
TABLE OF CONTENTS
Page
Initial Recitals......................................................... 1
Granting Clause.......................................................... 2
Habendum Clause.......................................................... 5
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.............................................. 7
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES
SECTION 2.01. Authentication and Delivery of Certificates.............. 8
SECTION 2.02. Execution of Certificates................................ 8
SECTION 2.03. Certificate of Authentication............................ 8
SECTION 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest........................ 9
SECTION 2.05. Payments from Trust Indenture Estate Only................ 10
SECTION 2.06. Registration, Transfer and Exchange...................... 11
SECTION 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates........................................... 12
SECTION 2.08. Cancellation of Certificates; Destruction Thereof........ 13
SECTION 2.09. Temporary Certificates................................... 13
SECTION 2.10. Termination of Interest in Trust Indenture Estate........ 14
SECTION 2.11. Certificates in Respect of Replacement Aircraft.......... 14
SECTION 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements.................................. 14
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Make-Whole Premium and Interest.... 15
SECTION 3.02. Offices for Payments, etc................................ 15
SECTION 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee................................................ 15
SECTION 3.04. Paying Agents............................................ 15
SECTION 3.05. Covenants of NBD and the Owner Trustee................... 16
SECTION 3.06. [Intentionally Left Blank.].............................. 17
SECTION 3.07. Disposal of Trust Indenture Estate....................... 17
SECTION 3.08. No Representations or Warranties as to Aircraft or
Documents.............................................. 17
SECTION 3.09. Further Assurances; Financing Statements................. 17
ARTICLE IV
HOLDER LISTS
SECTION 4.01. Holder Lists; Ownership of Certificates.................. 18
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 5.01. Interim Rent and Basic Rent Distribution................. 18
SECTION 5.02. Event of Loss and Replacement; Prepayment................ 19
SECTION 5.03. Payment After Indenture Event of Default, etc............ 19
SECTION 5.04. Certain Payments......................................... 20
SECTION 5.05. Other Payments........................................... 21
SECTION 5.06. Payments to Owner Trustee................................ 21
SECTION 5.07. Application of Payments.................................. 21
SECTION 5.08. Investment of Amounts Held by Indenture Trustee.......... 22
SECTION 5.09. Withholding Taxes........................................ 22
ARTICLE VI
PREPAYMENT OF CERTIFICATES
SECTION 6.01. No Prepayment Prior to Maturity.......................... 23
SECTION 6.02. Prepayment of Certificates............................... 23
SECTION 6.03. Notice of Prepayment to Holders.......................... 25
SECTION 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price.................................................. 25
SECTION 6.05. Certificates Payable on Prepayment Date.................. 25
SECTION 6.06. Mandatory Sinking Fund Redemption........................ 26
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
SECTION 7.01. Indenture Event of Default............................... 28
SECTION 7.02. Remedies................................................. 30
SECTION 7.03. Return of Aircraft, etc.................................. 32
SECTION 7.04. Indenture Trustee May Prove Debt......................... 35
SECTION 7.05. Remedies Cumulative...................................... 37
SECTION 7.06. Suits for Enforcement.................................... 37
SECTION 7.07. Discontinuance of Proceedings............................ 37
SECTION 7.08. Limitations on Suits by Holders.......................... 38
SECTION 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute
Certain Suits.......................................... 38
SECTION 7.10. Control by Holders....................................... 38
SECTION 7.11. Waiver of Past Indenture Default......................... 39
SECTION 7.12. Notice of Indenture Default.............................. 39
SECTION 7.13. Waiver of Appraisement, etc.; Laws....................... 40
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
SECTION 8.01. Certain Rights of Owner Trustee and Owner Participant.... 40
SECTION 8.02. Owner Participant's Right to Elect to Prepay or Purchase
the Certificates....................................... 44
SECTION 8.03. Certain Rights of Owner Participant...................... 45
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
SECTION 9.01. Acceptance of Trusts..................................... 46
SECTION 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an
Indenture Event of Default............................. 47
SECTION 9.03. Certain Rights of the Indenture Trustee.................. 49
SECTION 9.04. Indenture Trustee Not Responsible for Recitals, Disposi-
tion of Certificates or Application of Proceeds Thereof 50
SECTION 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc....................................... 50
SECTION 9.06. Moneys Held by Indenture Trustee......................... 50
SECTION 9.07. Right of Indenture Trustee to Rely on Officers'
Certificate, etc....................................... 50
SECTION 9.08. Replacement Airframes and Replacement Engines............ 51
SECTION 9.09. Indenture and Security Agreement Supplement for
Replacements........................................... 54
SECTION 9.10. Effect of Replacement.................................... 54
SECTION 9.11. Compensation............................................. 54
ARTICLE X
CONCERNING THE HOLDERS
SECTION 10.01. Evidence of Action Taken by Holders..................... 55
SECTION 10.02. Proof of Execution of Instruments and of Holding of
Certificates.......................................... 55
SECTION 10.03. Holders to Be Treated as Owners......................... 56
SECTION 10.04. Certificates Owned by Owner Trustee and the Lessee
Deemed Not Outstanding................................ 56
SECTION 10.05. Right of Revocation of Action Taken..................... 57
SECTION 10.06. ERISA................................................... 57
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
SECTION 12.01. Notice of Successor Owner Trustee....................... 59
SECTION 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor.............................. 59
SECTION 12.03. Persons Eligible for Appointment as Indenture Trustee... 60
SECTION 12.04. Acceptance of Appointment by Successor Trustee.......... 61
SECTION 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee......................... 61
SECTION 12.06. Appointment of Separate Trustees........................ 62
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 13.01. Supplemental Indentures Without Consent of Holders...... 64
SECTION 13.02. Supplemental Indentures With Consent of Holders......... 66
SECTION 13.03. Effect of Supplemental Indenture........................ 67
SECTION 13.04. Documents to Be Given to Indenture Trustee.............. 67
SECTION 13.05. Notation on Certificates in Respect of Supplemental
Indentures............................................ 67
SECTION 13.06. No Request Necessary for Lease Supplement or Indenture
and Security Agreement Supplement..................... 67
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture............................................. 68
SECTION 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates............................... 69
SECTION 14.03. Repayment of Moneys Held by Paying Agent................ 69
SECTION 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven Months....... 69
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Capacity in Which Acting................................ 70
SECTION 15.02. No Legal Title to Trust Indenture Estate in Holders..... 70
SECTION 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding............................................... 70
SECTION 15.04. Indenture for Benefit of Owner Trustee, Indenture
Trustee, Owner Participant and Holders................ 71
SECTION 15.05. No Action Contrary to the Lessee's Rights Under the
Lease................................................. 71
SECTION 15.06. Notices................................................. 71
SECTION 15.07. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein.................... 72
SECTION 15.08. Severability............................................ 73
SECTION 15.09. No Oral Modifications or Continuing Waivers............. 73
SECTION 15.10. Successors and Assigns.................................. 73
SECTION 15.11. Headings................................................ 73
SECTION 15.12. Normal Commercial Relations............................. 73
SECTION 15.13. Governing Law; Counterparts............................. 74
Exhibit A -- Form of Indenture and Security Agreement Supplement
Exhibit B -- Form of Certificate
Schedule I -- [Intentionally Left Blank]
Schedule II -- Definitions
Schedule III -- Description of Original Indenture
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N661FE)
TRUST INDENTURE AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION
TRUST NO. N661FE) dated as of October 15, 1995, as amended and restated as of
October 26, 1995 (the "Indenture"), between NBD Bank, a Michigan banking
corporation, not in its individual capacity, except as otherwise specifically
set forth herein (when acting in such individual capacity, "NBD"), but solely
as owner trustee (the "Owner Trustee") under the Trust Agreement, as defined
herein, and The Chase Manhattan Bank (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 set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and NBD entered into the Original
Trust Agreement whereby, among other things, the Owner Trustee declared a
certain trust for the use and benefit of the Owner Participant, subject,
however, to the Lien of the Original Indenture;
WHEREAS, the Owner Trustee and the Indenture Trustee entered into the
Original Indenture for the benefit and security of the Original Loan
Participants and pursuant to which the Owner Trustee issued to the Original
Loan Participants the Original Loan Certificates as evidence of the loan made
by the Original Loan Participants to the Owner Trustee, the proceeds of which
were used by the Owner Trustee to pay a portion of the Purchase Price for the
Aircraft;
WHEREAS, the Original Indenture was recorded by the FAA and
assigned a Conveyance Number as more particularly described on Schedule III
attached hereto;
WHEREAS, pursuant to Section 15 of the Original Participation
Agreement, the parties hereto desire to refinance the Original Loan
Certificates with the proceeds of the Certificates to be issued hereunder;
WHEREAS, in connection with the refinancing of the Original Loan
Certificates, the parties hereto desire to amend and restate the Original
Indenture in its entirety as this Indenture sets forth, in order to provide,
among other things, (i) for the issuance by the Owner Trustee of the
Certificates, as provided in the Participation Agreement, and (ii) for the
assignment, mortgage and pledge by the Owner Trustee to the Indenture Trustee,
as part of the Trust Indenture Estate hereunder, among other things, of
certain of the Owner Trustee's right, title and interest in and to 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 NBD, prior to the execution and
delivery of this Indenture, entered into the Trust Agreement whereby the
Original Trust Agreement was amended and restated 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 by the Owner Trustee, and authenticated, issued and delivered
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.
NOW, THEREFORE, the parties agree that such Original Indenture be and
the same is hereby amended and restated to read in its entirety as follows:
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 the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of 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 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 first priority security interest in and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
grant a first priority 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 mortgage 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 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, subject
always to the rights granted to the Owner Trustee or the Owner Participant
hereunder and to the other terms and conditions of this Indenture:
(1) The Airframe, as the same is more particularly described in the
Indenture and Security Agreement Supplement and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture; 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
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) The Lease and all Rent thereunder, including, without limitation,
all amounts of Interim Rent, 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;
(3) The Purchase Agreement, the Purchase Agreement Assignment, the
AVSA Consent and Agreement, the Consent and Agreement, the Consent and
Guaranty, the GTA, the Engine Warranty Assignment and the Engine Consent,
AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty and
the Participation Agreement (to the extent of amounts payable to the Owner
Trustee thereunder) (collectively, and together with the Lease, the Trust
Agreement and the Certificates, the "Indenture Documents"), 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 any of
the foregoing documents and instruments;
(4) 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;
(5) 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;
(6) 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
Section 13 of the Lease, but excluding any insurance maintained by the Lessee
and not required under Section 13 of the Lease; and
(7) All proceeds of the foregoing.
Notwithstanding the foregoing provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, 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 and
(B) to adjust Interim Rent, Basic Rent and the percentages relating to
Stipulated Loss Value and Termination Value and the EBO Price as provided in
Section 3.04 of the Lease and Section 15.01 of the Participation Agreement,
(C) 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, (D) 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, (E) to retain the right of "Lessor" to determine the
Fair Market Rental or Fair Market Value pursuant to Article 4 of the Lease,
(F) 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 (G) 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) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have the
rights separately but not to the exclusion of the other (agreement of both
required in the case of clause (E) below), (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 (provided that if an Indenture Event of
Default shall be continuing, no inspection right of the Owner Trustee shall
interfere with the efforts of the Indenture Trustee to exercise remedies under
the Lease or this Indenture), (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 default
under Section 16.01 of the Lease and to declare the Lease in default in
respect thereof, and (E) the right to consent to changes to the list of
countries on Schedule III to the Participation Agreement;
(iii)(A) 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, 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 and to exercise all rights, elections and
options of the Lessor in connection with the return of the Aircraft pursuant
to express provisions of the Operative Agreements, and (B) so long as no
Indenture Event of Default not constituting an 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, jointly with the Indenture
Trustee (agreement of both not being required), to further assurances and
financial information from the Lessee pursuant to Section 19.01 of the Lease
(other than the right to receive any funds to be delivered to the "Lessor"
under the Lease (except funds delivered with respect to Excepted Payments) and
under the Purchase Agreement;
(iv) at all times the Owner Trustee shall have the right as Lessor,
but not to the exclusion of the Indenture Trustee, to seek specific
performance of the covenants of the Lessee under the Lease relating to the
protection, insurance, maintenance, possession and use of the Aircraft; and
(v) at all times the Owner Trustee and the Owner Participant shall
have the rights granted to them under Articles VI, VIII and X and Section 7.02
hereof.
(b) 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.
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.
Effective upon the occurrence and continuance of an Indenture
Event of Default, 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 Interim Rent, 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 is directed to make all payments of Rent
(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.
The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect and shall not have been terminated pursuant
to Section 14.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except in
respect of Excepted Payments or otherwise as provided in or permitted by this
Indenture, accept any payment from the Lessee or any sublessee (other than
Excepted Payments), 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 and the chattel paper original counterpart of the Lease.
It is hereby further covenanted and agreed by and between the parties
as follows:
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 NBD. 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 NBD 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 NBD, 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 NBD; 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 NBD, 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 NBD 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 Certificate 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 Refunding 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 Administration of
the Indenture Trustee or at any office or agency maintained for such
purpose pursuant to Section 3.02 hereof in immediately available funds
prior to 10:30 A.M. (New York time) on the due date thereof and the
Indenture Trustee shall remit all such amounts received by it to the
Holders at such account or accounts at such financial institution or
institutions as the Holders shall have designated to the Indenture Trustee
in writing, in immediately available funds, such payment to be made if the
payment was received prior to 10:30 A.M. New York time by the Indenture
Trustee on any Business Day, by 12:00 noon New York time on such Business
Day; otherwise, the Indenture Trustee shall make payment promptly, but not
later than 11:00 A.M. New York time on the next succeeding Business Day;
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. If any
amount payable under the Certificates, or under this 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.
The Holder at the close of business on any Record Date with respect
to any Payment Date shall be entitled to receive the interest if any payable
on such Payment Date notwithstanding any transfer or exchange of such
Certificate subsequent to the Record Date and prior to such Payment Date,
except if and to the extent the Owner Trustee shall default in the payment of
the interest due on such Payment Date, in which case such defaulted interest
shall be paid to the Holder at the close of business on a subsequent Record
Date (which shall be not less than five (5) or more than fifteen (15) Business
Days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Owner Trustee to the Holders not
less than fifteen (15) days preceding such subsequent Record Date.
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 of the type
described in Section 5.01 hereof to the extent actually received by the
Indenture Trustee 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 described in Section 5.01 hereof to the extent actually received by the
Indenture Trustee) to the extent available for distribution to it as provided
herein and that neither the Owner Participant, the Owner Trustee, NBD 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 NBD, the Owner Trustee or the Indenture
Trustee.
NBD 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 NBD'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 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, and (3) the
Indenture Trustee actually receives any Recourse Amount which reflects any
payment by the Owner Participant on account of (2) above, then the Indenture
Trustee shall promptly refund to the Owner Participant such Recourse Amount.
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, or from
retaining any amount paid by the Owner Participant under Sections 5.01, 8.02
and 8.03 hereof.
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 period of 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,
principal amount and interest rate and in authorized denominations for an
equal aggregate principal amount; provided, that such Certificate being
transferred shall be cancelled in accordance with Section 2.08 hereof
simultaneously with the issuance of the new Certificate.
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 15.01 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 NBD, the Indenture Trustee shall authenticate and deliver, a
new Certificate of like Maturity, principal amount and interest rate as the
Certificate being replaced, 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 the 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 required by them to indemnify and defend
and to hold each of them harmless and 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 incurred in connection 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
hold 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 destroy cancelled Certificates held
by it and deliver a certificate of destruction to the Owner Trustee. 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 NBD, 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, temporary 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 shall have been paid in full.
SECTION 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture and Security Agreement Supplement
covering a replacement airframe and/or Replacement Engine, as provided in
Section 9.09 hereof, each Certificate shall be deemed to have been issued in
connection with such replacement airframe and/or 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 airframe and/or 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 7.11 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 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, subject to Section 2.05
hereof, 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 Administration (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 and (b) a facility or agency in New York, New York where the
Certificates may be presented for registration of transfer and for exchange
and for prepayment 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 notwithstanding, 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 NBD and the Owner Trustee.
(a) NBD hereby covenants and agrees to perform its covenants set
forth in Sections 7.04(b) and 7.04(c) of the Participation Agreement.
(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 or an Event of Loss, the Owner Trustee will give prompt written
notice of such Indenture Event of Default, Indenture Default 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 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 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 or assume 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 take action to
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
Airframe or 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 INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR NBD NOR
THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, WORKMANSHIP,
VALUE, CONDITION, DESIGN, COMPLIANCE WITH SPECIFICATIONS, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR USE OR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE
WHATSOEVER, except that NBD warrants that on the Delivery Date (a) the Owner
Trustee shall have received whatever title was conveyed to it by the Lessee,
and (b) the Aircraft shall be free and clear of Lessor's Liens attributable to
NBD. Neither NBD, 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 NBD, the Indenture Trustee and the Owner Participant made under
this Indenture 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 ten (10)
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. Interim Rent and Basic Rent Distribution. Except as
otherwise provided in Section 5.03 hereof, each installment of Interim Rent
and Basic Rent, any amount paid by the Owner Participant under Section 2.03 of
the Participation Agreement, any payment of interest on overdue installments
of Interim Rent and Basic Rent and any payment received by the Indenture
Trustee pursuant to Section 8.03(a) hereof shall be distributed by the
Indenture Trustee no later than the time herein provided 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.
SECTION 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft (including pursuant to Section 11.03(e) of the Lease, but, in the
case of said Section 11.03(e), subject to the time limits specified therein)
or as the result of, or in connection with 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 (without giving effect to the parenthetical at
the end thereof), and third, as provided in clause "third" of Section 5.03
hereof; provided that if a replacement airframe shall be substituted for an
Airframe subject to an Event of Loss as provided in Section 11.03 of the Lease
and Section 9.08 hereof, any proceeds which result from such Event of Loss and
are paid to the Indenture Trustee shall be held by the Indenture Trustee as
part of the Trust Indenture Estate and, unless otherwise applied pursuant to
Section 5.01 or 5.03 hereof, such proceeds shall be released to the Lessee
upon the release of such damaged Airframe and the replacement thereof as
herein provided.
(b) Any amounts received directly or indirectly from any
governmental authority, insurer or other party pursuant to any provision of
Article 11 or 13 of the Lease as the result of loss or damage not
constituting an Event of Loss (x) 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 an Event of
Default shall have occurred and be continuing or (y) are pledged to the
Lessor as security in connection with an Event of Loss in accordance with
Section 11.03(e) of the Lease, 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 Article 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 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 Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof,
all payments (other than Excepted 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, or (b) after the Certificates shall have
become due and payable as provided in Section 7.02(b) or (c) hereof, 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, 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, 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 (it being understood that amounts
payable hereunder shall not include Make-Whole Premium); 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,
any Excepted 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
(including without limitation Section 9 of the Lease) 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, 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, 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 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); provided that,
solely for the purpose of determining whether an Indenture Event of Default
shall have occurred and be continuing, each such payment shall be deemed
applied in the following order of priority: first, in the manner provided in
clause "first" above, second, in the manner provided in clause "third" above,
third, in the manner provided in clause "second" above and fourth, in the
manner provided in clause "fourth" above.
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 by the Indenture Trustee 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 (and in the
absence of written direction by the Lessee, the Indenture Trustee shall
invest such monies in direct obligations of the United States of America)
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 or any investment sold 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 Lessee, unless the
Lessee 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. Notwithstanding any provision to
the contrary in Sections 5.01 through 5.05 hereof and subject to Article 8 of
the Participation Agreement, if the Lessee is required to pay any such Tax, or
any interest or penalty thereon, or to indemnify the Owner Participant or the
Owner Trustee with respect thereto pursuant to Section 8.01(c) of the
Participation Agreement, the Lessee shall be entitled to receive any payments
otherwise distributable to the Holder of any Certificate who was subject to
such Tax pursuant to Sections 5.01 to 5.05 hereof until the foregoing amounts
shall have been recovered in full by the Lessee.
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 pursuant to Section 11.03 of the Lease and Section 9.08
hereof replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) 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) Pursuant to Section 15.01 of the Participation Agreement in
connection with a refinancing of the Certificates.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject to the terms of Section
4.02(a) or 10.01 of the Lease or Section 15 of the Participation Agreement, as
the case may be, shall give irrevocable (subject to Section 6.02(c) hereof)
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 date 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)(v) above, the Certificates
shall be prepaid on the effective date of the Refinancing. The day on which
the Certificates are to be prepaid pursuant to this Section 6.01(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 (i) of the first sentence of
Section 8.02(a) hereof is applicable) or, if such prepayment is made on or
after the applicable Premium Termination Date, 6.02(a)(ii), 6.02(a)(iii)
(if clause (ii) of the first sentence of Section 8.02(a) hereof is
applicable), 6.02(a)(iv) or 6.02(a)(v) above, the sum of (A) the aggregate
principal amount of such Certificates then Outstanding, (B) accrued
interest on the Certificates to the Prepayment Date and (C) all other
aggregate sums due the Indenture Trustee hereunder or under the
Participation Agreement or the Lease, but excluding any Make-Whole Premium
or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date, in the event of a prepayment of the Certificates pursuant
to Section 6.02(a)(ii), 6.02(a)(iii) (if clause (ii) of the first sentence
of Section 8.02(a) hereof is applicable), 6.02(a)(iv) or 6.02(a)(v) 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 with respect to which the Premium Termination Date therefor
has not occurred
(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 paragraph of Section 10.01(f) of the
Lease, no Termination Date shall occur, or if, pursuant to Section 4.02(a) of
the Lease, the Lessee revokes its notice of election to purchase, or if no
refinancing shall occur pursuant to Section 15.01 of the Participation
Agreement, the Lessee shall give notice thereof to the Indenture Trustee, and
the prepayment proposed to be effected in respect thereof 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. Any notice of prepayment given by the Owner
Trustee may be revoked by the Owner Trustee at any time on or before the
Prepayment Date by prompt notice to the Holders except as otherwise provided
in 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 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 cash or Permitted Investments (marked-to-market
net of all costs and expenses of liquidation thereof) by the Indenture
Trustee in immediately available funds and deposited for the purpose, pay
to the Indenture Trustee an amount equal to the difference between (a) the
amount then so held 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 (A) if the Owner
Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise provided
in the Lease) 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 January 2, 2014 and the Certificates with a
Maturity of January 2, 2019 shall be subject to partial redemption, at the
aggregate principal amount set forth for the Certificates of the respective
Maturity, on a pro rata basis, on each date specified in this Section (a
"Sinking Fund Redemption Date") for such payment on the Certificates of
such Maturity. 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 Certificates
Sinking Fund with a Maturity of with a Maturity of
Redemption Date January 2, 2014 January 2, 2019
_______________ __________________ __________________
July 2, 1996 $510,868 $0
January 2, 1997 0 0
July 2, 1997 1,141,159 0
January 2, 1998 0 0
July 2, 1998 1,222,295 0
January 2, 1999 0 0
July 2, 1999 1,309,200 0
January 2, 2000 0 0
July 2, 2000 1,402,284 0
January 2, 2001 276,806 0
July 2, 2001 1,235,021 0
January 2, 2002 3,632,348 0
July 2, 2002 1,936,583 0
January 2, 2003 0 0
July 2, 2003 194,352 0
January 2, 2004 0 0
July 2, 2004 0 0
January 2, 2005 2,086,977 0
July 2, 2005 0 0
January 2, 2006 1,594,926 0
July 2, 2006 0 0
January 2, 2007 1,454,904 0
July 2, 2007 0 0
January 2, 2008 2,558,408 0
July 2, 2008 0 0
January 2, 2009 2,425,322 0
July 2, 2009 0 0
January 2, 2010 2,533,830 0
July 2, 2010 0 0
January 2, 2011 3,650,619 0
July 2, 2011 0 0
January 2, 2012 4,598,732 0
July 2, 2012 0 0
January 2, 2013 4,937,754 0
July 2, 2013 0 0
January 2, 2014 6,012,612 0
July 2, 2014 0 0
January 2, 2015 0 0
July 2, 2015 0 0
January 2, 2016 0 0
July 2, 2016 0 0
January 2, 2017 0 5,757,627
July 2, 2017 0 0
January 2, 2018 0 6,212,676
July 2, 2018 0 0
January 2, 2019 0 6,118,697
-------------------- --------------------
Total $ 44,715,000 $ 18,089,000
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
SECTION 7.01. Indenture Event of Default. "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 notify the
Indenture Trustee in writing that such failure shall constitute an
Indenture Event of Default); or
(ii) the failure of the Owner Trustee other than by reason of a
Default or an Event of Default (i) to pay principal, interest or
Make-Whole Premium, if any, on any Certificate when due, and such
failure shall have continued unremedied for ten (10) Business Days
after the date when due or (ii) to pay any other amounts hereunder or
under the Certificates when due and such failure shall have continued
unremedied for a period of thirty (30) days after the Owner Trustee and
the Owner Participant shall receive written demand therefor from the
Indenture Trustee or by the Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates; or
(iii)(A) any representation or warranty made by NBD, the Owner
Trustee, the Owner Participant or any Owner Participant Guarantor or any
Owner Trustee Guarantor, in any Operative Agreement or in any
certificate of NBD, the Owner Trustee, the Owner Participant, or any
Owner Participant Guarantor 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 in any
respect material to the Holders and if such misrepresentation is capable
of being corrected as of a subsequent date and if such correction is
being sought diligently, and 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 the Owner Trustee
and the Owner Participant by the Indenture Trustee or by a Majority in
Interest of Holders; or
(B) any (x) covenant made by the Owner Trustee in the fifth
paragraph following the Habendum Clause hereof or Section 3.05(b)(iii)
hereof or Section 7.02(b) or 7.04(b) of the Participation Agreement
shall be breached in any respect, (y) covenant made by the Owner
Participant in Section 7.02(c), 7.03(c), 7.03(d) or 7.13 of the
Participation Agreement shall be breached in any respect or (z) other
covenant made by the Owner Trustee, in its individual capacity or as
Owner Trustee, or by any Owner Trustee Guarantor, or by the Owner
Participant or any Owner Participant Guarantor in any Operative
Agreement shall be breached in any respect 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
(iv) the Owner Trustee, the Lessor's Estate, any Owner Trustee
Guarantor, the Owner Participant or any Owner Participant Guarantor shall
file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(v) an order for relief shall be entered in respect of the Owner
Trustee or any Owner Trustee Guarantor or the Owner Participant or any
Owner Participant Guarantor or the Lessor's Estate 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 Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or any Owner
Participant Guarantor or the Lessor's Estate shall file any answer
admitting or not contesting the material allegations of a petition filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or any Owner Participant Guarantor or the Lessor's Estate in
any proceeding referred to in clause (vi) below or seek or consent or
acquiesce in the appointment of any trustee, custodian, receiver or
liquidator of the Owner Trustee or any Owner Trustee Guarantor or the
Owner Participant or any Owner Participant Guarantor or the Lessor's
Estate, as the case may be, or of all or any substantial part of its
properties; or
(vi) without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or any Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered constituting an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or if any such petition shall be filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or any Owner Participant Guarantor or the Lessor's Estate, as
the case may be, and such petition shall not be dismissed within 90 days,
or if, without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or any Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered appointing a trustee, custodian, receiver or liquidator of the
Owner Trustee or any Owner Trustee Guarantor or the Owner Participant or
any Owner Participant Guarantor or the Lessor's Estate, as the case may be,
or of all or any substantial part of the properties of the Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or any Owner
Participant Guarantor or the Lessor's Estate, as the case may be, and such
order shall not be dismissed within 90 days; or
(vii) any Owner Trustee Guaranty or any Owner Participant Guaranty
shall cease to be a valid and enforceable obligation of any Owner Trustee
Guarantor or any Owner Participant Guarantor, as the case may be, or
otherwise shall not be in full force and effect.
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 clause (i) of
Section 7.01 hereof, exercise any and all of the remedies pursuant to Article
17 of the Lease; provided that such exercise of remedies shall not occur until
after the latest date on which the Owner Trustee may cure the related Event of
Default pursuant to Section 8.03 hereof. 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 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.
Notwithstanding the foregoing, it is understood and agreed that if
the Indenture Trustee shall proceed to foreclose the Lien of this
Indenture, it shall substantially simultaneously therewith, to the extent
the Indenture Trustee is then entitled to do so hereunder and under the
Lease, and is not then stayed or otherwise prevented from doing so, proceed
(to the extent it has not already done so) to declare the Lease in default
and commence the exercise in good faith of one or more of the significant
remedies under Section 17 of the Lease (as the Indenture Trustee determines
in its sole discretion). It is further understood and agreed that if the
Indenture Trustee is unable to exercise one or more remedies under Section
17 of the Lease because of any stay or operation or law or otherwise, the
Indenture Trustee shall not be entitled to foreclose the Lien of this
Indenture (A) until the earlier of (i) 60 days from the date of any such
stay or applicable order under Section 1110 of the Bankruptcy Code
including any extension consented to by the Indenture Trustee or the
Holders of Certificates of such period permitted under Section 1110(b) of
the Bankruptcy Code and (ii) the date of actual repossession of the
Aircraft by the Indenture Trustee or (B) if the Lessee has agreed to
perform or assume the Lease and no Event of Default other than as specified
in Section 16.01(e), (f) or (g) of the Lease shall be continuing. For the
avoidance of doubt, it is expressly understood and agreed that except as
aforesaid the above-described inability of the Indenture Trustee to
exercise any right or remedy under the Lease shall in no event and under no
circumstances prevent the Indenture Trustee from exercising all of its
rights, powers and remedies under this Indenture, including, without
limitation, this Article VII. The Indenture Trustee further agrees that
notice of intent to foreclose shall be given to the Owner Trustee at the
earlier of the commencement of any proceeding or at least 30 days prior to
the consummation of foreclosure of the Lien of this Indenture.
(b) If an Indenture Event of Default under clause (iv), (v) or (vi)
of Section 7.01 hereof shall occur and be continuing, the unpaid principal of
all Outstanding Certificates, together with interest accrued but unpaid
thereon and all other amounts due thereunder, but without Make-Whole Premium,
shall immediately become due and payable, without presentment, 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 to the Owner Trustee and the
Lessee, declare the principal of all the Certificates to be due and payable,
whereupon the unpaid principal amount of all Outstanding Certificates,
together with accrued interest thereon and all other amounts due thereunder,
but without Make-Whole Premium, 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 not less
than 50% in aggregate principal amount of Outstanding Certificates, by notice
to the Indenture Trustee, the Owner Trustee and 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 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 Aircraft, 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 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 under this Indenture.
Subject to the foregoing, if the Owner Trustee shall for any reason fail to
execute and deliver such documents after such request by the Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee or an agent or representative designated by 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 or
an agent or representative designated by the Indenture Trustee, to the entry
of which judgment the Owner Trustee hereby specifically consents, and (ii)
pursue all or part of such Trust Indenture Estate wherever it may be found and
enter any of the premises of the Lessee or the Owner Trustee wherever such
Trust Indenture Estate may be or be supposed to be and search for such Trust
Indenture Estate and take possession of and remove such Trust Indenture
Estate. All expenses of obtaining such judgment or of pursuing, searching for
and taking such Trust Indenture Estate shall, until paid, be secured by the
Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Trust Indenture Estate, make all such
expenditures for maintenance, insurance and repairs to and of such Trust
Indenture Estate, as the Indenture Trustee may reasonably deem proper. In
each case subject to Section 7.02 hereof, 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 to exercise all rights and
powers of the Owner Participant and the Owner Trustee relating to the Trust
Indenture Estate, as the Indenture Trustee may reasonably deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, insurance, use, operation, storage, leasing, control, management
or disposition of all or any part of the Trust Indenture Estate as the
Indenture Trustee may determine. Further, the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Trust Indenture Estate
other than Excepted Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
under this Indenture. Such tolls, 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 all maintenance and repairs, and to make all payments
which the Indenture Trustee may be required or may reasonably elect to make
for any taxes, assessments, insurance or other proper charges upon the Trust
Indenture Estate (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 the Lessee), 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 for such
purposes by the Indenture Trustee; provided, that any excess amounts shall be
promptly distributed in accordance with Section 5.03 hereof.
(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 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 to
the highest bidder, with or without demand, advertisement or notice, except
that in respect of any private sale 20 days prior notice will be provided,
for cash or, with the consent of the Owner Trustee, which shall not be
unreasonably withheld, 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 exercising reasonable commercial discretion may
determine; provided, that any such action shall be at the time lawful and
that all mandatory legal requirements shall be complied with. Any notice
required pursuant to the terms hereof 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 not be obligated to make any
sale pursuant to such notice. 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 effective upon the
occurrence and continuance of an Indenture Event of Default, 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 proceedings 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 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
Owner Trustee or its property, or in case of any other comparable judicial
proceedings relative to the Owner Trustee, or to the creditors or property of
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 rights to assert claims under this
Indenture, or under any of the Certificates, may be enforced by the
Indenture Trustee without the possession of such Certificates on any trial
or other 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, as provided herein.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Certificates, and it shall not be
necessary to make any Holders parties to such proceedings.
SECTION 7.05. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee in this Indenture shall be cumulative
and shall be in addition to every other right, power and remedy specifically
given herein 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
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
be construed to be a waiver of the right to exercise at the same time or later
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 in any such default.
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 to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture 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 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 the Owner Trustee, the Indenture
Trustee, the Owner Participant, the Holders and the Lessee shall, subject
to any binding determination in such proceeding, be restored to their
former positions and rights under this Indenture 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 to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Indenture Trustee written notice that an
Indenture Event of Default shall then have occurred and be continuing, 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, except in the manner provided herein 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 and any provision of 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; 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.
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 of this Indenture 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 any 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 except in the case of a default in the payment of the
principal of or interest on any Certificate, 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 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 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 Indenture
Documents may not modify, amend or supplement any of said agreements, 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 any Holder.
(b) Subject to the provisions of subsection (c) of this Section
8.01, the respective parties to the Indenture Documents, 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 give any
waiver 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 waiver 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 as in effect on the effective date hereof: 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 3.05, Section
3.06 (except insofar as it relates to the address or account information
of the Owner Trustee or the Indenture Trustee) (other than as such
Sections 3.03, 3.05 and 3.06 may be amended pursuant to Section 3.04 of
the Lease as in effect on the effective date hereof), 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 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, Section 26.03 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 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 and any other
Indenture Document (other than the Lease and the Participation 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 in effect on the effective date hereof:
Articles 6, 8 and 9 and Section 10.01(b) (insofar as such Articles 6, 8 and
9 and Section 10.01(b) relate to the Indenture Trustee, the Pass Through
Trustee and the Holders), Article 7 and Sections 15.01 and 17.11 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); and
(4) 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 Interim Rent, 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 (subject in any event to Section 3.05 of the
Lease) 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 (subject in any event to Section 3.05 of the
Lease) upon termination of the Lease with respect to the Aircraft payable
under, or as provided in, the Lease as in effect on the effective date
hereof, or reduce the amount of any installment of Interim Rent, 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 Interim Rent, 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 as
in effect on the effective date hereof 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 in effect on the effective
date hereof 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 Interim Rent, 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
(subject in any event to Section 3.05 of the Lease) 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
(subject in any event to Section 3.05 of the Lease) of the Lease with
respect to the Aircraft, payable under, or as provided in, the Lease as in
effect on the effective date hereof, except for any such assignment
pursuant to Section 2.12 hereof, and except as provided in the Lease as in
effect on the effective date hereof.
(d) At all times so long as this Indenture is in effect, the consent
of the Owner Trustee (at the direction of the Owner Participant) shall be
required in order (i) to amend, modify or supplement the Lease or any other
Operative Document to which the Owner Trustee is a party or to waive
compliance by the Lessee with any of its obligations thereunder and (ii) to
grant any consent requested under the Lease.
Notwithstanding the foregoing, but subject always to the provision of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Article 17 (other than with respect to Excepted
Payments) thereof and (B) subject only to the provisions of this Indenture
exercise the remedies set forth in such Article 17 of the Lease (other than in
connection with Excepted Payments) and in Article 7 hereof.
Nothing in this Indenture shall be deemed to prohibit the Owner
Participant or the Owner Trustee from making demand on the Lessee for, or from
commencing an action at law to obtain the payment of, or from receiving
payment of, any Excepted Payment; provided, however, that if the Owner Trustee
is proceeding under the Lease, the Owner Trustee shall proceed pursuant to
Section 17.01(a)(v), and only Section 17.01(a)(v), of the Lease.
SECTION 8.02. Owner Participant's Right to Elect to Prepay or
Purchase the Certificates. (a) If (i) an Event of Default shall have occurred
and be continuing for more than 180 days or the Certificates shall have become
due and payable pursuant to Section 7.02(b) or (c) hereof or (ii) an Event of
Default shall have occurred and be continuing for not more than 180 days and
the Certificates shall not have become due and payable pursuant to Section
7.02(b) or (c) hereof, 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 15 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 15 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
applicable to each Outstanding Certificate (if such purchase occurs prior
to the Premium Termination Date for such Outstanding Certificate) in the
case of a purchase pursuant to clause (a)(ii) 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 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 and this Indenture 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 purchase
date, 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 and this Indenture arising 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 Interim Rent and
Basic Rent, and (B) the Owner Trustee shall have paid or caused to be paid on
or prior to the date which is 15 Business Days after such Event of Default 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 Interim Rent and Basic Rent or of interest on account
of such installment's being overdue shall not constitute or result in an
Indenture Event of Default under this Indenture 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 exercise any rights and powers or pursue any remedies pursuant to
Article 17 of the Lease or otherwise except as set forth in this Indenture,
and 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 Event of Default, and any right to any
interest in respect of the same, and shall be entitled to any payment of
Interim Rent and 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 Interim Rent and 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 Interim Rent and Basic Rent and (B) 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 date which is 15 Business Days after
such Event of Default, 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 or result in
an Indenture Event of Default under this Indenture 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 exercise any rights and powers or pursue
any remedies pursuant to Article 17 of the Lease or otherwise except as set
forth in this Indenture, and 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, plus any interest
due, 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(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 in its
individual capacity 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. So long as an
Indenture Event of Default has occurred and 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 agrees that it will execute and the Owner
Trustee agrees that it 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 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, after the latest date on which the Owner Trustee may cure such Event of
Default pursuant to Section 8.03 hereof, 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 Indenture Trustee's
Liens on any part of 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 furnished 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, 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, direction, order or demand of the Owner Trustee
mentioned herein shall be sufficiently evidenced by an Officers'
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 investigation 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 costs,
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 Officers' 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 Airframes and Replacement Engines. At any
time and from time to time any Airframe or Engine which has been subject to an
Event of Loss and may, or is required to, be replaced under Section 10.03,
11.03 or 11.04 of the Lease by a replacement airframe or Replacement Engine,
as the case may be, 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 Airframe and/or 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 Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or
other applicable registration information) and manufacturer's
serial number;
(ii) a description of the replacement airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the replacement airframe the Owner Trustee
will be the legal owner of and have good and marketable title to
such replacement airframe free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease, that such replacement
airframe will on such date be in at least as good operating
condition and repair as required by the terms of the Lease, and
that such replacement airframe has been or, substantially
concurrently with such replacement, will be duly registered in the
name of the Owner Trustee under the Aviation Act or under the law
then applicable to the registration of the Airframe subject to the
Event of Loss and that an airworthiness certificate has been duly
issued under the Aviation Act (or such other applicable law) with
respect to such replacement airframe and that such registration
and certificate is, or will be, in full force and effect, and that
the Lessee will have the full right and authority to use such
replacement airframe;
(iv) that the insurance required by Article 13 of the Lease is in
full force and effect with respect to such replacement airframe
and all premiums then due thereon have been paid in full;
(v) that the replacement airframe is of the same or an improved
make or model as the Airframe requested to be released from this
Indenture;
(vi) that the value of the replacement airframe as of the date of
such certificate is not less than the value of the Airframe
requested to be released (assuming such Airframe was in the
condition and repair required to be maintained under the Lease);
(vii) that no Event of Default has occurred and is continuing or
would result from the making and granting of the request for
release and the addition of a replacement airframe;
(viii) that the release of the Airframe subject to the Event of Loss
will not impair the security of the Indenture in contravention of any
of the provisions of this Indenture;
(ix) that upon such replacement, the Lien of this Indenture will
apply to the replacement airframe and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x) that each of the conditions specified in Section 11.03 of the
Lease with respect to such replacement airframe has been satisfied.
B. With respect to the replacement of any Engine:
(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 such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(vii) that each of the conditions specified in Section 10.03,
11.03 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 airframe or Replacement Engine to be received
as consideration for the Airframe or 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
airframe or Replacement Engine, and an Indenture and Security Agreement
Supplement subjecting such replacement airframe or Replacement Engine to the
Trust Agreement and to the Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing satisfactory to the Indenture Trustee and the Owner Trustee
confirming the accuracy of the information set forth in clause (2)A.(vi) of
this Section 9.08.
(5) 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 airframe or Replacement Engine has been validly
subjected to the Lien of this Indenture and covered by the Lease, the
instruments subjecting such replacement airframe or 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 Aviation 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 the Lien of
this Indenture on such replacement airframe or Replacement Engine and the
Indenture Trustee would be entitled to the benefits of Section 1110 of the
Bankruptcy Code with respect to such replacement airframe or 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 airframe or 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 Section 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 Airframe or Engine being
replaced from the Lien of this Indenture.
SECTION 9.10. Effect of Replacement. In the event of the
substitution of a replacement airframe or 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 Airframe or Engine or Engines
being replaced shall be applicable to such replacement airframe or Replacement
Engine or Engines with the same force and effect as if such replacement
airframe or Replacement Engine or Engines were the same Airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine or
Engines being replaced.
SECTION 9.11. Compensation. The Owner Trustee covenants and agrees
to pay, and the Indenture 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 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, 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, NBD or 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
shall 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 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, NBD, the Lessee or by any Affiliate
thereof 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, NBD or
the Lessee 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, NBD or the Owner
Participant or by any Affiliate thereof, 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, NBD 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, NBD
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,
NBD, or the Owner Participant are actually named in the Register. Upon
request of the Indenture Trustee, the Owner Trustee, the Owner Participant,
NBD and the Lessee shall furnish to the Indenture Trustee promptly an
Officers' Certificate listing and identifying all Certificates, if any, known
by the Owner Trustee, the Owner Participant, NBD 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 Officers' 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 Administration 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. Any Person who is, or who in acquiring the
Certificates is or may be using the assets of, an employee benefit plan
subject to Title I of ERISA, or an individual retirement account or plan
subject to Section 4975 of the Code, or any trust established under any such
plan or account, may acquire or hold any of the Certificates, if such Person
determines either that an administrative or a statutory exemption from the
prohibited transaction rules under Section 406 of ERISA and Section 4975 of
the Code is applicable to its purchase and holding of the Certificates or that
its purchase and holding of the Certificates will not result in a prohibited
transaction under Section 406 of ERISA and Section 4975 of the Code.
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, 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 otherwise 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 or general tax 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 of such action 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 30 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 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, any 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 (i)(x) a bank or trust company organized and doing business under
the laws of the United States of America or any state or the District of
Columbia having a combined capital and surplus of at least $100,000,000 or
(y) a bank or trust company whose obligations hereunder are fully
guaranteed by a direct or indirect parent thereof having a combined capital
and surplus of at least $100,000,000 and (ii) a Citizen of the United
States authorized under applicable law to exercise corporate trust powers
and 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, in form and substance
reasonably satisfactory to the Owner Trustee, 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 liable either personally or in its
capacity as such trustee, 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 right 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 airframe or
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
airframe or 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.
Any supplemental indenture may be executed without the consent of the
Holders of Outstanding Certificates, notwithstanding any of the provisions of
Section 13.02 hereof.
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 and every 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
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 (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 deprive any
Holder of the benefit of the Lien of this Indenture 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 Officers' 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 in accordance with the terms
and conditions of the Lease to subject a replacement airframe or
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 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 deposited with the Indenture Trustee as
trust funds 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 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 in the case of (c) above 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 (covering such matters reasonably requested by, and in form and
substance reasonably satisfactory to, the Indenture Trustee) 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 Indenture
Trustee hereunder 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.
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 (or, if the Trust Agreement shall no longer be in effect, to the
Owner Participant) 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 (or the
Owner Participant) 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 NBD (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, and, in the case of NBD (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 NBD,
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. Upon
termination of this Indenture pursuant to Article XIV hereof, the Indenture
Trustee in connection with the satisfaction of the Indenture shall return to
the Owner Trustee all property (and related documents and instruments)
constituting or evidencing the Trust Indenture Estate.
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, 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 611 Woodward Avenue,
Detroit, Michigan 48226, Attention: Corporate Trust Department (facsimile:
(313) 225-3420) (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 4 Chase Metrotech Center, 3rd Floor, Brooklyn, New York 11245 (facsimile:
(718) 242-3529), Attention: Corporate Trust 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 in Section 14.01 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. Officers' 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
Officers' 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 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 NBD 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 NBD, upon the certificate, statement or
opinion of or representations by an officer or officers of the Lessee or NBD,
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
NBD 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; Counterparts. 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 October, 1995 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.
NBD BANK,
not in its individual capacity,
but solely as Owner Trustee,
By_________________________________
Name:
Title:
THE CHASE MANHATTAN
(NATIONAL ASSOCIATION),
not in its individual capacity,
but solely as Indenture Trustee,
By_________________________________
Name:
Title:
Exhibit A
to
Trust Indenture and Security Agreement
Indenture and Security Agreement Supplement
Indenture and Security Agreement Supplement (Federal Express
Corporation Trust No. N661FE) dated ________, ____, of NBD BANK, a national
banking association, not in its individual capacity but solely as owner
trustee (herein called the "Owner Trustee") under the Trust Agreement dated as
of October 1, 1995 as amended and restated as of October 26, 1995 (as at any
time amended, herein called the "Trust Agreement") between NBD Bank and the
Owner Participant named therein.
W I T N E S 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, Mortgage and Security Agreement
(Federal Express Corporation Trust No. N661FE) dated as of October 15,
1995 (herein called the "Original Indenture") between the Owner Trustee and
The Chase Manhattan Bank (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 airframe or Replacement Engine included in the Trust Indenture
Estate, and shall specifically mortgage such Aircraft, replacement airframe
or Replacement Engine, as the case may be, to the Indenture Trustee.
WHEREAS, the Original Indenture dated as of October 15, 1995 which
together with the Indenture and Security Agreement Supplement No. 1 (Federal
Express Corporation Trust No. N661FE) dated October 25, 1995 (the Original
Indenture being attached to and made a part of such Indenture and Security
Agreement Supplement and filed therewith) have been duly recorded pursuant to
Subtitle VII of Title 49 of the United States Code on October 25, 1995 as
one document and have been assigned Conveyance No. 2A267994.
WHEREAS, the Original Indenture, as amended and restated by the Trust
Indenture and Security Agreement dated as of October 26, 1995 (herein called
the "Indenture"), was duly recorded pursuant to Subtitle VII of Title 49 of
the United States Code on ______________ and 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 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 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, and subject to all of the terms, conditions,
provisions and limitations set forth in 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) aircraft 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 aircraft 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,
and subject to all of the terms, conditions. provisions and limitations set
forth in the Indenture, all of the estate, right, title and interest of the
Owner Trustee in, to and under the 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.
NBD BANK,
not in its individual capacity,
but solely as Owner Trustee,
By_________________________________
Name:
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 No. N661FE)
NBD BANK
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
(Federal Express Corporation Trust No. N661FE)
dated as of October 1, 1995
as amended and restated as of October 26, 1995
Interest Rate Maturity
_____________ ________
NBD Bank, a Michigan banking corporation, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the
"Owner Trustee") under that certain Trust Agreement (Federal Express
Corporation Trust No. N661FE) dated as of October 1, 1995 as amended and
restated as of October 26, 1995, between the Owner Participant named therein
and NBD Bank (herein as such Trust Agreement may be amended or supplemented
from time to time called the "Trust Agreement"), hereby promises to pay to The
Chase Manhattan Bank (National Association), as Pass Through Trustee, or its
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, on March 19, 1996 and
thereafter semiannually on each January 2 and July 2, on said principal sum in
like coin or currency at the rate per annum set forth above from the March 19,
January 2 or the July 2, 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 December 18 or June 17 and before the following January 2 or July 2,
as the case may be, this Certificate shall bear interest from such January 2
or July 2; provided that, if the Owner Trustee shall default in the payment of
interest due on such January 2 or July 2, then this Certificate shall bear
interest from the next preceding January 2 or July 2 to which interest on this
Certificate has been paid or duly provided for. The interest so payable on
any January 2 or July 2 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 December 18 or June 17 preceding
such January 2 or July 2, 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 The Chase Manhattan Bank (National
Association) (the "Indenture Trustee") maintained for such purpose in
immediately available funds prior to 10:30 A.M. (New York time) on the due
date thereof and the Indenture Trustee shall remit all such amounts received
by it to the Holders at such account or accounts at such financial institution
or institutions as the Holders shall have designated to the Indenture Trustee
in writing, in immediately available funds, such payment to be made if the
payment was received prior to 10:30 A.M. New York time by the Indenture
Trustee on any Business Day, by 12:00 noon New York time on such Business Day;
otherwise, the Indenture Trustee shall make payment promptly, but not later
than 11:00 A.M. New York time on the next succeeding Business Day; provided
that, at the option of the Indenture Trustee or its Paying Agent, interest may
be paid by mailing a check therefor payable to or upon the written order of
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.
NBD Bank and The Chase Manhattan Bank (National Association) are not
acting individually hereunder, but solely as Owner Trustee and Indenture
Trustee, respectively.
Any Person who is, or who in acquiring the Certificates is or may be
using the assets of, an employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code,
or any trust established under any such plan or account, may acquire or hold
any of the Certificates, if such Person determines either that an
administrative or a statutory exemption from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code is applicable to its
purchase and holding of the Certificates or that its purchase and holding of
the Certificates will not result in a prohibited transaction under Section 406
of ERISA and Section 4975 of the Code.
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 No. N661FE) dated as of October 15, 1995 as
amended and restated as of October 26, 1995 (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 No. N661FE) limited in aggregate initial
principal amount to $62,804,000 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
________ _________ _____________
January 2, 2014 $44,715,000 7.11%
January 2, 2019 $18,089,000 7.58%
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 given to them in the Indenture.
The principal amounts of the Certificates are payable as follows.
The Certificates with a Maturity of January 2, 2014 are subject to redemption
in part, pro rata (based on the face amount thereof) commencing on July 2,
1996 and the Certificates with a Maturity of January 2, 2019 are subject to
redemption in part, pro rata (based on the face amount thereof), commencing on
January 2, 2017, 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 Certificates
Sinking Fund with a Maturity of with a Maturity of
Redemption Date January 2, 2014 January 2, 2019
_______________ __________________ __________________
July 2, 1996 $510,868 $0
January 2, 1997 0 0
July 2, 1997 1,141,159 0
January 2, 1998 0 0
July 2, 1998 1,222,295 0
January 2, 1999 0 0
July 2, 1999 1,309,200 0
January 2, 2000 0 0
July 2, 2000 1,402,284 0
January 2, 2001 276,806 0
July 2, 2001 1,235,021 0
January 2, 2002 3,632,348 0
July 2, 2002 1,936,583 0
January 2, 2003 0 0
July 2, 2003 194,352 0
January 2, 2004 0 0
July 2, 2004 0 0
January 2, 2005 2,086,977 0
July 2, 2005 0 0
January 2, 2006 1,594,926 0
July 2, 2006 0 0
January 2, 2007 1,454,904 0
July 2, 2007 0 0
January 2, 2008 2,558,408 0
July 2, 2008 0 0
January 2, 2009 2,425,322 0
July 2, 2009 0 0
January 2, 2010 2,533,830 0
July 2, 2010 0 0
January 2, 2011 3,650,619 0
July 2, 2011 0 0
January 2, 2012 4,598,732 0
July 2, 2012 0 0
January 2, 2013 4,937,754 0
July 2, 2013 0 0
January 2, 2014 6,012,612 0
July 2, 2014 0 0
January 2, 2015 0 0
July 2, 2015 0 0
January 2, 2016 0 0
July 2, 2016 0 0
January 2, 2017 0 5,757,627
July 2, 2017 0 0
January 2, 2018 0 6,212,676
July 2, 2018 0 0
January 2, 2019 0 6,118,697
-------------------- --------------------
Total $ 44,715,000 $ 18,089,000
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 neither the Owner Participant, the
Owner Trustee, NBD Bank nor 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 NBD Bank, the Owner Trustee and the Indenture Trustee.
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 pursuant to Section 11.03 of the Lease and Section 9.08 of
the Indenture replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and the Lessee shall not have revoked
such notice or effected an assumption of the Certificates as provided in
Section 2.12 of the Indenture).
(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) Pursuant to Section 15.01 of the Participation Agreement in
connection with a Refinancing of the Certificates.
In the case of a prepayment of the Certificates pursuant to clauses
(ii), (iv) and (v) above, the Lessee, in accordance with and subject to the
terms (including timing of notice) of Section 4.02(a) or 10.01 of the Lease or
Section 15 of the Participation Agreement, as the case may be, shall give
irrevocable (subject to Section 6.02(c) of the Indenture) 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
clause (v) above, the Certificates shall be prepaid on the effective date of
the Refinancing. 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 pursuant to
clause (i), (iii) (if clause (i) of the first sentence of Section 8.02(a)
of the Indenture is applicable) or, if such prepayment is made on or after
the applicable Premium Termination Date, clause (ii), (iii) (if clause (ii)
of the first sentence of Section 8.02(a) of the Indenture is applicable),
(iv) or (v) above, the sum of (A) the aggregate principal amount of such
Certificates then Outstanding, (B) accrued interest on the Certificates to
the Prepayment Date and (C) all other aggregate sums due the Indenture
Trustee under the Indenture or under the Participation Agreement or the
Lease, but excluding any Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date, in the event of a prepayment of the Certificates pursuant
to clause (ii), (iii) (if clause (ii) of the first sentence of Section
8.02(a) of the Indenture is applicable), (iv) or (v) 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 with
respect to which the Premium Termination Date therefor has not occurred
(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
Interim Rent and Basic Rent payments under the Lease, but the Owner Trustee
and the Owner Participant, collectively, may not cure more than three
consecutive such failures or more than six such failures in total. The Owner
Trustee or the Owner Participant may cure any other default by the Lessee in
the performance of its obligations under the Lease.
(A) If an Event of Default shall have occurred and be continuing for
more than 180 days or the Certificates shall have been accelerated or (B) an
Event of Default shall have occurred and be continuing for not more than 180
days and the Certificates shall not have been accelerated, 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
Outstanding 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 on such
amount to the date of purchase and any Make-Whole Premium applicable
to each Outstanding Certificate, if such purchase occurs prior to the
Premium Termination Date for such Outstanding Certificate, (in the
case of a purchase pursuant to clause (ii) of the first sentence 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 shall 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 No. N661FE) to be duly executed
in its corporate name by its officer thereunto duly authorized.
Dated: NBD BANK,
not in its individual capacity,
but solely as Owner Trustee
By ___________________________
Name:
Title:
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust Certificates (Federal Express
Corporation Trust No. N661FE) referred to in the within mentioned Indenture.
Dated: THE CHASE MANHATTAN BANK
(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 the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require. In the
case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
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 other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. In the case
of amounts payable to the Lessor, the Owner Participant, or any corporate
Affiliate 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.
Agent. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns as Agent for the Original Loan Participants
pursuant to Article 16 of the Original Participation Agreement.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty dated the Delivery Date executed by
the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe (or any permitted substitute airframe)
together with the two Engines (or any Replacement Engine or Engines) whether
or not any of such initial or Replacement Engines may from time to time be
installed on such Airframe or may be installed on any other airframe or on any
other aircraft, including any aircraft substituted pursuant to Section 11.03
of the Lease.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines
or engines from time to time installed thereon) leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having
the United States FAA Registration Number and manufacturer's serial number
specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any replacement airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Amendment No. 1 to the Original Tax Indemnity Agreement. Amendment
No. 1 to the Original Tax Indemnity Agreement, dated as of October 26, 1995.
Ancillary Agreement. Any written agreement of the Lessee to which
the Lessor is a party or to which the Lessor has consented in writing
entered into on the Delivery Date or the Refunding Date or any date
thereafter in connection with the transactions contemplated by the
Operative Agreements, as such agreement may be amended and supplemented
from time to time with the consent of the Lessor and delivered to the Owner
Trustee, the Indenture Trustee, the Pass Through Trustee and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N661FE), dated October 25, 1995 among the Lessee, the
Owner Trustee, not in its individual capacity, but solely as Owner Trustee,
the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant (with a copy of such report to the Lessee) on the
Delivery Date pursuant to Section 4.01(n) of the Original Participation
Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France, and its successors and assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as of
October 15, 1995, executed by AVSA, as the same may be amended, modified or
supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and dated the
Delivery Date.
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 either does or with the giving of notice or lapse of
time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft throughout
the Basic Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 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 July 2, 2020, 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.
Breakage Costs. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Business Day. Any day on which commercial banks are not
authorized or required to close in New York, New York and Memphis,
Tennessee, and after the Lien of the Indenture is discharged, Detroit,
Michigan.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N661FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
refunding of the Original Loan Certificates.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Commencement Date. July 2, 1996.
Consent and Agreement. The Consent and Agreement dated as of October
15, 1995 executed by the Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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 Participant
and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner
Trustee located at 611 Woodward Avenue, Detroit, Michigan 48226, or such
other office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in
writing to the Lessee, the Owner Participant and the Indenture Trustee.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
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 Date. October 25, 1995.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts related thereto. 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.
The term "Engines" means, as of any date of determination, both Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of October 15, 1995,
executed by the Engine Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment
(Federal Express Corporation Trust No. N661FE), dated as of October 15,
1995 between the Lessor and the Lessee, as the same may be amended,
modified or supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use
(A) for a period in excess of 60 days due to theft or disappearance or such
longer period, not to exceed 180 days from the end of such initial 60-day
period, if and so long as the location of such property is known to the
Lessee and the Lessee is diligently pursuing recovery of such property, or
to the end of the Term, if less (unless such theft or disappearance
constitutes an Event of Loss pursuant to (i)(B) or (ii) hereof) or (B) for
a period in excess of 60 days due to the destruction, damage beyond
economic repair or rendition of such property permanently unfit for normal
use by 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, or (2)
condemnation, confiscation, or seizure of, or requisition or taking of, use
of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the
date of return of the Aircraft, if shorter, so long as the Lessor receives
at least six months notice of such date of return) beyond the end of the
Term in the event that the Aircraft, the Airframe or any Engine as of the
end of the Lease Term 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 A300F-600 series
aircraft equipped with engines of the same make and model as the Engines
for a period of twelve (12) consecutive months, unless the Lessee, prior to
the expiration of such twelve (12) 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 of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if
earlier. The date of such Event of Loss shall be (s) the 61st day or the
241st day, as the case may be, following loss of such property or its use
due to theft or disappearance (or the end of the Term or the Lessee's
abandonment of diligent efforts to recover such property, if earlier); (t)
the 61st day following the date of any destruction, damage beyond economic
repair or rendition of such property permanently unfit for normal use; (u)
the date of any insurance settlement on the basis of a total loss or
constructive or compromised total loss; (v) the date of any condemnation,
confiscation, seizure or requisition of title of such property; (w) the
181st day following condemnation, confiscation, seizure or requisition for
use of such property by a foreign government referred to in clause
(iii)(2)(A) above (or the end of the Term or the date of any insurance
settlement described therein, if earlier than such 181st day); (x) the
last day of the Term in the case of requisition for use of such property by
the Government; (y) the last day of the 12 month or 24 month period,
referred to in clause (iv) above (or if earlier, the end of the Term or
abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). 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.
If an Event of Loss described in any of clauses (i) (A), (iii) or (iv)
above shall occur, Lessor may elect, within 30 days following the date upon
which such Event of Loss is deemed to have occurred, to waive such Event of
Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments
(and interest thereon to the extent provided in the Operative Agreements)
paid or payable by the Lessee in respect of the Owner Participant, the
Owner Trustee in its individual capacity or any of their respective
successors, permitted assigns, directors, officers, employees, servants and
agents or Affiliates, pursuant to the Participation Agreement or any
indemnity hereafter granted to the Owner Participant or the Owner Trustee
in its individual capacity pursuant to the Lease or the Participation
Agreement, (ii) proceeds of public liability insurance (or government
indemnities in lieu thereof) in respect of the Aircraft payable as a result
of insurance claims paid for the benefit of, or losses suffered by, the
Owner Trustee or the Indenture Trustee in their respective individual
capacities or by the Owner Participant, or their respective successors,
permitted assigns or Affiliates, (iii) proceeds of insurance maintained
with respect to the Aircraft by the Owner Participant (whether directly or
through the Owner Trustee) maintained in accordance with Section 13.05 of
the Lease but not required under Section 13 of the Lease, (iv) payments of
Supplemental Rent by the Lessee in respect of any amounts payable under the
Tax Indemnity Agreement, (v) payments constituting increases in Interim
Rent or Basic Rent attributable to payments arising pursuant to Section 5
of the Tax Indemnity Agreement and (vi) any right to demand, collect or
otherwise receive and enforce the payment of any amount described in
clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee
has exercised its option to renew the Lease pursuant to the second paragraph
of Section 4.01(a) thereof and with respect to which the conditions set forth
in the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other property) is
unencumbered by the Lease. 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed Renewal
Term equal to 50% of the average actual semi-annual Basic Rent payable during
the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as of
October 15, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between
the Engine Manufacturer and the Lessee related to the purchase by the
Lessee of the Engines as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
General Terms Agreement relates to the Engines, to the extent assigned to
the Owner Trustee pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as Owner
Trustee and Lessor, the Agent (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Owner Participant, the Original
Loan Participants (to the extent set forth in Articles 8 and 9 of the Original
Participation Agreement), the Indenture Trustee, in its individual capacity
and as trustee, any Owner Participant Guarantor, 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 and the Trust Indenture Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N661FE) dated as of October 15, 1995, as amended
and restated as of October 26, 1995, between the Lessor and the Indenture
Trustee, as supplemented by the Indenture and Security Agreement Supplement,
and as said Indenture may from time to time be further supplemented or
amended, including any amendment or supplement thereto entered into from time
to time pursuant to the applicable provisions of the Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N661FE) dated October 25, 1995, as such Indenture and Security Agreement
Supplement shall be amended or supplemented from time to time and any other
supplement to the Indenture, substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event or condition which with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture Estate 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 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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft throughout
the Interim Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant Payment
Date and ending at the end of the day immediately preceding the Commencement
Date.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N661FE) dated as of October 15, 1995, as amended and restated as of October
26, 1995, entered into by the Lessor and the Lessee concurrently with the
execution and delivery of the Indenture, 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 one or more Lease
Supplements entered into pursuant to the applicable provisions of the
Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N661FE) dated October 25, 1995, as such Lease Supplement
shall be amended or supplemented from time to time and any other supplement to
the Lease, substantially in the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of
the Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of
Sale, the Airbus Guaranty, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the AVSA Consent and Agreement, the
Consent and Guaranty (to the extent assigned by the Purchase Agreement
Assignment), the GTA, the Engine Warranty Assignment, the Engine Consent, any
warranty with respect to the Airframe and the Engines, all amounts of Interim
Rent, Basic Rent and Supplemental Rent, including without limitation,
insurance proceeds (other than insurance proceeds payable to or for the
benefit of the Owner Trustee 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) not include any
Excepted Payment and (ii) include all property intended to be subjected to the
Indenture by the Granting Clause thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust
Indenture Estate arising as a result of (i) claims against 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) acts or omissions 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 or
expressly prohibited under the Operative Agreements and any act or omission
of the Owner Participant which 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, Owner Participant, Lessor's
Estate or the trust created by the Trust Agreement which are not required
to be indemnified against by the Lessee pursuant to the Participation
Agreement by reason of Section 8.01(b) or 9.01(b) thereof and which are not
required to be indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement, or (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 other than a transfer of the
Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
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 Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of
(i) the present values of all remaining scheduled payments of such principal
amount or portion thereof 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 the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
unpaid principal amount of such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of the
Lease, discounted at a rate per semi-annual period equal to the Debt Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, if any, the Owner Trustee
Guaranty, if any, any Ancillary Agreement entered into by or with the written
consent of the Indenture Trustee, which by its terms is an Operative
Agreement, the Certificates outstanding at the time of reference, the
Indenture, the Indenture and Security Agreement Supplement, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the Engine Consent and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Original Agreements. The documents and instruments delivered on the
Delivery Date in connection with the transactions contemplated by the Original
Participation Agreement.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N661FE) dated as of October
15, 1995 between the Owner Trustee and the Indenture Trustee, which together
with the Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N661FE) dated October 25, 1995 attached thereto was
recorded as one instrument by the FAA on October 25, 1995 and assigned
Conveyance Number 2A267994.
Original Lease. The Lease Agreement (Federal Express Corporation
Trust No. N661FE) dated as of October 15, 1995 between the Owner Trustee as
lessor, and the Lessee, which together with Lease Supplement No. 1 (Federal
Express Corporation Trust No. N661FE) dated October 25, 1995 attached thereto
was recorded as one instrument by the FAA on October 25, 1995 and assigned
Conveyance Number 2A267995.
Original Loan Certificates. The loan certificates issued on the
Delivery Date to the Original Loan Participants.
Original Loan Participants. The entities listed on Schedule I to the
Original Participation Agreement and their successors and assigns (other than
any assignees in connection with the Refunding Date).
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N661FE) among the Lessee, the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Original Loan
Participants as it was originally executed as of October 1, 1995.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N661FE) between the Lessee and the
Owner Participant as it was originally executed as of October 15, 1995.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N661FE) between the Owner Participant and the Owner
Trustee as it was originally executed as of October 1, 1995 and filed with the
FAA on October 25, 1995.
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.
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, its right, title and
interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Amount. The amount described in Section 2.03 of
the Participation Agreement and set forth on Schedule II to the Lease.
Owner Participant Guarantor. The provider of an Owner Participant
Guaranty.
Owner Participant Guaranty. Any guaranty delivered in compliance
with Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement, and its successors and permitted
assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Interim Rent, Basic
Rent, Stipulated Loss Value and Termination Value percentages or the EBO
Price, as the case may be, as such assumptions may be adjusted for events
which have been the basis of adjustments to Rent pursuant to Section 3.04 of
the Lease.
Participation Agreement. The Participation Agreement (Federal
Express Corporation Trust No. N661FE), dated as of October 1, 1995, as
amended and restated as of October 26, 1995, among the Lessee, the Original
Loan Participants, the Owner Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as owner trustee, the
Owner Participant, the Indenture Trustee not in its individual capacity
except as otherwise expressly provided therein, but solely as indenture
trustee and the Pass Through Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as pass through
trustee, 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, prior to replacement thereof in accordance with the Lease, which may be
removed therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
February 1, 1993, as amended and restated as of October 1, 1995 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 1995 Pass Through
Certificates, Series B1, 1995 Pass Through Certificates, Series B2 or 1995
Pass Through Certificates, Series B3, 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 Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust, 1995-B1,
Federal Express Pass Through Trust, 1995-B2 or Federal Express Pass Through
Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. The Owner Participant Payment Date, and each January 2
and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date and
ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates having a
Maturity in 2014, November 7, 2007 and with respect to the Certificates having
a Maturity in 2019, October 7, 2017.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase
Agreement, dated as of July 3, 1991 between AVSA and the Lessee, including
all exhibits, appendices and letter agreements attached thereto as
originally executed or as modified, amended or supplemented in accordance
with the terms thereof, but only to the extent that the foregoing relates
to the Aircraft and to the extent assigned pursuant to the Purchase
Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N661FE), dated as of October 15, 1995
between the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the Owner
Participant Payment Date, December 18 for January 2 Payment Dates and June 17
for July 2 Payment Dates, whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least three (3) Business Days
prior to such expected Refunding Date.
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.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
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 or more terms 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 Interim
Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July 2,
1996.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) manufactured after October 22,
1994 of the same or of equal or greater value, remaining useful life and
utility as the Engine being replaced, together with all Parts relating to such
engine; provided, however, that if such replacement engine is not a General
Electric CF6-80C2-A5F engine, such replacement engine must then be commonly
used in the commercial aviation industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or Corporate
Trust Administration, as the case may be, designated by such Person to perform
obligations under the Operative Agreements, with respect to the Owner
Participant, the president or any vice president with direct responsibility
for the transactions contemplated by the Operative Agreements, and with
respect to any other party, any corporate officer or (except in the case of
the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be executed and
delivered by the Lessee and the Pass Through Trustee, the Series Supplement
1995-B2 to be executed and delivered by the Lessee and the Pass Through
Trustee or the Series Supplement 1995-B3 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.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Term, the amount determined by multiplying the Purchase Price
by the percentage set forth in Schedule III of the Lease under the heading
"Stipulated Loss Value Factor" opposite such date (as such Schedule III may be
adjusted from time to time as provided in Section 3.04 of the Lease), and
during any Renewal Term, the amount determined pursuant to Section 4.01(b) of
the Lease. Notwithstanding any other provisions of the Lease or the
Participation Agreement or the Indenture, each Stipulated Loss Value shall be,
under any circumstances and in any event, an amount, together with so much of
the arrears portion of Interim Rent and Basic Rent due and owing through the
date of payment of Stipulated Loss Value as does not constitute an Excepted
Payment, at least sufficient to pay in full as of such date of payment the
aggregate unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on Schedule
III of the Lease, for dates other than Rent Payment Dates on which arrears
Interim Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent and,
accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
Substantial Authority. For Federal income tax purposes, shall have
the meaning applicable for purposes of Section 6662 of the Code and relevant
Treasury regulations.
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 any Ancillary Agreement
or any other Operative Agreement to the Lessor, the Owner Participant or
others, including, without limitation, payments of Stipulated Loss Value, EBO
Price and amounts calculated by reference to Termination Value and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement or the Tax Indemnity
Agreement or any other Operative Agreement, but excluding Interim Rent and
Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Original Tax Indemnity Agreement as
amended by Amendment No. 1 to the Original Tax Indemnity Agreement, as from
time to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Preliminary Term, the Interim Term and the Basic Term of
the lease for the Aircraft under the Lease and, if renewed pursuant to Section
4.01 of the Lease, each Renewal Term for the Aircraft for which the Lease is
renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease, and in the
case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling on
July 2, 2011 or July 2, 2013, (ii) Section 4.02(a)(D) or (E) of the Lease, a
Rent Payment Date that is on or after the fifth anniversary of the
Commencement Date and (iii) Section 4.02(a)(F) of the Lease, July 2, 2015.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code (which,
among other things, recodified the Federal Aviation Act of 1958, as amended
to the time of such recodification), as amended and in effect on the date
of the Lease or as subsequently amended, or any successor or substituted
legislation at the time in effect and applicable, and the regulations
promulgated pursuant thereto.
Treasury Yield. (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N661FE), dated as of October 1, 1995, as amended and restated as of
October 26, 1995, between the Owner Participant and the Owner Trustee in its
individual capacity, as from time to time modified, amended or supplemented
pursuant to its applicable provisions and in accordance with the Operative
Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the Underwriting
Agreement.
Underwriting Agreement. The Underwriting Agreement dated October 26,
1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
SCHEDULE III
DESCRIPTION OF ORIGINAL INDENTURE
Trust Indenture, Mortgage and Security Agreement (Federal Express
Corporation Trust No. N661FE) dated as of October 15, 1995 between NBD Bank,
as owner trustee under Trust Agreement (Federal Express Corporation Trust No.
N661FE) dated as of October 1, 1995, and The Chase Manhattan Bank (National
Association), as indenture trustee, recorded by the Federal Aviation
Administration on October 25, 1995 and assigned Conveyance No. 2A267994, as
supplemented by the following described instrument:
FAA FAA
Date of Recording Conveyance
Instrument Instrument Date Number
__________ __________ _________ __________
Indenture and Security Agreement
Supplement No. 1
(Federal Express Corporation
Trust No. N661FE) 10/25/95 10/25/95 2A267994
=============================================================================
TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust No. N663FE)
Dated as of October 26, 1995
between
NBD BANK,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 766, REGISTRATION NO. N663FE
=============================================================================
TABLE OF CONTENTS
Page
Initial Recitals........................................................... 1
Granting Clause............................................................ 2
Habendum Clause............................................................ 5
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.............................................. 7
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
SECTION 2.01. Authentication and Delivery of Certificates.............. 8
SECTION 2.02. Execution of Certificates................................ 8
SECTION 2.03. Certificate of Authentication............................ 8
SECTION 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest........................ 9
SECTION 2.05. Payments from Trust Indenture Estate Only................ 10
SECTION 2.06. Registration, Transfer and Exchange...................... 11
SECTION 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates........................................... 12
SECTION 2.08. Cancellation of Certificates; Destruction Thereof........ 13
SECTION 2.09. Temporary Certificates................................... 14
SECTION 2.10. Termination of Interest in Trust Indenture Estate........ 14
SECTION 2.11. Certificates in Respect of Replacement Aircraft.......... 14
SECTION 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements................................... 15
SECTION 2.13. Establishment of Collateral Account...................... 15
SECTION 2.14. Investment of Funds on Deposit in the Collateral Account. 15
SECTION 2.15. Release of Debt Portion on Delivery Date................. 16
SECTION 2.16. Cut-Off Date............................................. 16
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Make-Whole Premium and Interest.... 17
SECTION 3.02. Offices for Payments, etc................................ 17
SECTION 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee................................................ 17
SECTION 3.04. Paying Agents............................................ 18
SECTION 3.05. Covenants of NBD and the Owner Trustee................... 18
SECTION 3.06. [Intentionally Left Blank.].............................. 19
SECTION 3.07. Disposal of Trust Indenture Estate....................... 19
SECTION 3.08. No Representations or Warranties as to Aircraft or
Documents.............................................. 19
SECTION 3.09. Further Assurances; Financing Statements................. 19
ARTICLE IV
HOLDER LISTS
SECTION 4.01. Holder Lists; Ownership of Certificates.................. 20
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 5.01. Interim Rent and Basic Rent Distribution................. 20
SECTION 5.02. Event of Loss and Replacement; Prepayment................ 21
SECTION 5.03. Payment After Indenture Event of Default, etc............ 22
SECTION 5.04. Certain Payments......................................... 23
SECTION 5.05. Other Payments........................................... 23
SECTION 5.06. Payments to Owner Trustee................................ 23
SECTION 5.07. Application of Payments.................................. 23
SECTION 5.08. Investment of Amounts Held by Indenture Trustee.......... 24
SECTION 5.09. Withholding Taxes........................................ 25
ARTICLE VI
PREPAYMENT OF CERTIFICATES
SECTION 6.01. No Prepayment Prior to Maturity.......................... 25
SECTION 6.02. Prepayment of Certificates............................... 25
SECTION 6.03. Notice of Prepayment to Holders.......................... 27
SECTION 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price.................................................. 27
SECTION 6.05. Certificates Payable on Prepayment Date.................. 28
SECTION 6.06. Mandatory Sinking Fund Redemption........................ 28
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
SECTION 7.01. Indenture Event of Default............................... 30
SECTION 7.02. Remedies................................................. 32
SECTION 7.03. Return of Aircraft, etc.................................. 34
SECTION 7.04. Indenture Trustee May Prove Debt......................... 37
SECTION 7.05. Remedies Cumulative...................................... 39
SECTION 7.06. Suits for Enforcement.................................... 39
SECTION 7.07. Discontinuance of Proceedings............................ 40
SECTION 7.08. Limitations on Suits by Holders.......................... 40
SECTION 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute
Certain Suits.......................................... 40
SECTION 7.10. Control by Holders....................................... 41
SECTION 7.11. Waiver of Past Indenture Default......................... 41
SECTION 7.12. Notice of Indenture Default.............................. 42
SECTION 7.13. Waiver of Appraisement, etc.; Laws....................... 42
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
SECTION 8.01. Certain Rights of Owner Trustee and Owner Participant.... 43
SECTION 8.02. Owner Participant's Right to Elect to Prepay or Purchase
the Certificates....................................... 46
SECTION 8.03. Certain Rights of Owner Participant...................... 47
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
SECTION 9.01. Acceptance of Trusts..................................... 49
SECTION 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an
Indenture Event of Default............................. 49
SECTION 9.03. Certain Rights of the Indenture Trustee.................. 51
SECTION 9.04. Indenture Trustee Not Responsible for Recitals, Disposi-
tion of Certificates or Application of Proceeds Thereof 52
SECTION 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc....................................... 53
SECTION 9.06. Moneys Held by Indenture Trustee......................... 53
SECTION 9.07. Right of Indenture Trustee to Rely on Officers'
Certificate, etc....................................... 53
SECTION 9.08. Replacement Airframes and Replacement Engines............ 53
SECTION 9.09. Indenture and Security Agreement Supplement for
Replacements........................................... 56
SECTION 9.10. Effect of Replacement.................................... 57
SECTION 9.11. Compensation............................................. 57
ARTICLE X
CONCERNING THE HOLDERS
SECTION 10.01. Evidence of Action Taken by Holders...................... 57
SECTION 10.02. Proof of Execution of Instruments and of Holding of
Certificates........................................... 58
SECTION 10.03. Holders to Be Treated as Owners.......................... 58
SECTION 10.04. Certificates Owned by Owner Trustee and the Lessee Deemed
Not Outstanding........................................ 58
SECTION 10.05. Right of Revocation of Action Taken...................... 59
SECTION 10.06. ERISA.................................................... 60
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
SECTION 12.01. Notice of Successor Owner Trustee........................ 61
SECTION 12.02. Resignation and Removal of Indenture Trustee; Appointment
of Successor........................................... 61
SECTION 12.03. Persons Eligible for Appointment as Indenture Trustee.... 62
SECTION 12.04. Acceptance of Appointment by Successor Trustee........... 63
SECTION 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee.......................... 64
SECTION 12.06. Appointment of Separate Trustees......................... 64
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 13.01. Supplemental Indentures Without Consent of Holders....... 66
SECTION 13.02. Supplemental Indentures With Consent of Holders.......... 68
SECTION 13.03. Effect of Supplemental Indenture......................... 69
SECTION 13.04. Documents to Be Given to Indenture Trustee............... 69
SECTION 13.05. Notation on Certificates in Respect of Supplemental
Indentures............................................. 69
SECTION 13.06. No Request Necessary for Lease Supplement or Indenture
and Security Agreement Supplement...................... 70
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture.............................................. 70
SECTION 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates................................ 71
SECTION 14.03. Repayment of Moneys Held by Paying Agent................. 72
SECTION 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven Months........ 72
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Capacity in Which Acting................................. 72
SECTION 15.02. No Legal Title to Trust Indenture Estate in Holders...... 72
SECTION 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding................................................ 73
SECTION 15.04. Indenture for Benefit of Owner Trustee, Indenture Trustee,
Owner Participant and Holders.......................... 73
SECTION 15.05. No Action Contrary to the Lessee's Rights Under the Lease 73
SECTION 15.06. Notices.................................................. 73
SECTION 15.07. Officers' Certificates and Opinions of Counsel; Statements
to Be Contained Therein................................ 74
SECTION 15.08. Severability............................................. 75
SECTION 15.09. No Oral Modifications or Continuing Waivers.............. 75
SECTION 15.10. Successors and Assigns................................... 75
SECTION 15.11. Headings................................................. 75
SECTION 15.12. Normal Commercial Relations.............................. 76
SECTION 15.13. Governing Law; Counterparts.............................. 76
Exhibit A -- Form of Indenture and Security Agreement Supplement
Exhibit B -- Form of Certificate
Schedule I -- [Intentionally Left Blank]
Schedule II -- Definitions
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N663FE)
TRUST INDENTURE AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION
TRUST NO. N663FE) dated as of October 26, 1995 (the "Indenture"), between NBD
Bank, a Michigan banking corporation, not in its individual capacity, except
as otherwise specifically set forth herein (when acting in such individual
capacity, "NBD"), but solely as owner trustee (the "Owner Trustee") under the
Trust Agreement, as defined herein, and The Chase Manhattan Bank (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 set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and NBD have, immediately prior to the
execution and delivery of this Indenture, entered into a Trust Agreement
(Federal Express Corporation Trust No. N663FE) dated as of the date hereof (as
amended or otherwise modified from time to time in accordance with the
provisions thereof and of the Participation Agreement, the "Trust Agreement"),
whereby, among other things, NBD has declared a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Lien of this
Indenture, and the Owner Trustee is authorized and directed to execute and
deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture, among other
things (i) to provide for the issuance by the Owner Trustee of Certificates as
provided in the Participation Agreement, and (ii) to provide 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 and after the Delivery Date for
the assignment, mortgage and pledge by the Owner Trustee to the Indenture
Trustee, as part of the Trust Indenture Estate hereunder, of among other
things, certain of the Owner Trustee's estate, right, title and interest in
and to the Aircraft and the Indenture Documents and certain payments and other
amounts received hereunder or thereunder in accordance with the terms hereof,
as security for, among other things, the Owner Trustee's obligations to the
Certificate Holders and for the benefit and security of such Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee, and authenticated, issued and delivered
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.
NOW, THEREFORE, the parties agree as follows:
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 the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of 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 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 first priority security interest in and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
grant a first priority 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 mortgage Lien on all estate,
right, title and interest of the Owner Trustee in, to and under the following
described property, rights and privileges (whether now or hereafter acquired
by the Owner Trustee) other than Excepted Payments, which collectively,
excluding Excepted Payments 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, subject always to the rights
granted to the Owner Trustee or the Owner Participant hereunder and to the
other terms and conditions of this Indenture:
(1) The Airframe, as the same is more particularly described in the
Indenture and Security Agreement Supplement and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture; 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
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) The Lease and all Rent thereunder, including, without limitation,
all amounts of Interim Rent, 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;
(3) The Purchase Agreement, the Purchase Agreement Assignment, the
AVSA Consent and Agreement, the Consent and Agreement, the Consent and
Guaranty, the GTA, the Engine Warranty Assignment and the Engine Consent,
AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty and
the Participation Agreement (to the extent of amounts payable to the Owner
Trustee thereunder) (collectively, and together with the Lease, the Trust
Agreement and the Certificates, the "Indenture Documents"), 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 any of
the foregoing documents and instruments;
(4) 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;
(5) The Collateral Account, the Liquid Collateral and all other
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;
(6) 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
Section 13 of the Lease, but excluding any insurance maintained by the Lessee
and not required under Section 13 of the Lease; and
(7) All proceeds of the foregoing.
Notwithstanding the foregoing provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, 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 and
(B) to adjust Interim Rent, Basic Rent and the percentages relating to
Stipulated Loss Value and Termination Value and the EBO Price as provided in
Section 3.04 of the Lease and Section 15.01 of the Participation Agreement,
(C) 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, (D) 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, (E) to retain the right of "Lessor" to determine the
Fair Market Rental or Fair Market Value pursuant to Article 4 of the Lease,
(F) 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 (G) 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) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have the
rights separately but not to the exclusion of the other (agreement of both
required in the case of clause (E) below), (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 (provided that if an Indenture Event of
Default shall be continuing, no inspection right of the Owner Trustee shall
interfere with the efforts of the Indenture Trustee to exercise remedies under
the Lease or this Indenture), (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 default
under Section 16.01 of the Lease and to declare the Lease in default in
respect thereof, and (E) the right to consent to changes to the list of
countries on Schedule III to the Participation Agreement;
(iii)(A) 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, 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 and to exercise all rights, elections and
options of the Lessor in connection with the return of the Aircraft pursuant
to express provisions of the Operative Agreements, and (B) so long as no
Indenture Event of Default not constituting an 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, jointly with the Indenture
Trustee (agreement of both not being required), to further assurances and
financial information from the Lessee pursuant to Section 19.01 of the Lease
(other than the right to receive any funds to be delivered to the "Lessor"
under the Lease (except funds delivered with respect to Excepted Payments) and
under the Purchase Agreement;
(iv) at all times the Owner Trustee shall have the right as Lessor,
but not to the exclusion of the Indenture Trustee, to seek specific
performance of the covenants of the Lessee under the Lease relating to the
protection, insurance, maintenance, possession and use of the Aircraft; and
(v) at all times the Owner Trustee and the Owner Participant shall
have the rights granted to them under Articles VI, VIII and X and Section 7.02
hereof.
(b) 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.
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.
Effective upon the occurrence and continuance of an Indenture
Event of Default, 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 Interim Rent, 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 is directed to make all payments of Rent
(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.
The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect and shall not have been terminated pursuant
to Section 14.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except in
respect of Excepted Payments or otherwise as provided in or permitted by this
Indenture, accept any payment from the Lessee or any sublessee (other than
Excepted Payments), 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 and the chattel paper original counterpart of the Lease.
It is hereby further covenanted and agreed by and between the parties
as follows:
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;
COLLATERAL ACCOUNT
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 NBD. 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 NBD 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 NBD, 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 NBD; 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 NBD, 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 NBD 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 Certificate 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 Refunding 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 Administration of
the Indenture Trustee or at any office or agency maintained for such
purpose pursuant to Section 3.02 hereof in immediately available funds
prior to 10:30 A.M. (New York time) on the due date thereof and the
Indenture Trustee shall remit all such amounts received by it to the
Holders at such account or accounts at such financial institution or
institutions as the Holders shall have designated to the Indenture Trustee
in writing, in immediately available funds, such payment to be made if the
payment was received prior to 10:30 A.M. New York time by the Indenture
Trustee on any Business Day, by 12:00 noon New York time on such Business
Day; otherwise, the Indenture Trustee shall make payment promptly, but not
later than 11:00 A.M. New York time on the next succeeding Business Day;
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. If any
amount payable under the Certificates, or under this 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.
The Holder at the close of business on any Record Date with respect
to any Payment Date shall be entitled to receive the interest if any payable
on such Payment Date notwithstanding any transfer or exchange of such
Certificate subsequent to the Record Date and prior to such Payment Date,
except if and to the extent the Owner Trustee shall default in the payment of
the interest due on such Payment Date, in which case such defaulted interest
shall be paid to the Holder at the close of business on a subsequent Record
Date (which shall be not less than five (5) or more than fifteen (15) Business
Days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Owner Trustee to the Holders not
less than fifteen (15) days preceding such subsequent Record Date.
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 of the type
described in Section 5.01 hereof to the extent actually received by the
Indenture Trustee 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 described in Section 5.01 hereof to the extent actually received by the
Indenture Trustee) to the extent available for distribution to it as provided
herein and that neither the Owner Participant, the Owner Trustee, NBD 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 NBD, the Owner Trustee or the Indenture
Trustee.
NBD 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 NBD'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 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, and (3) the
Indenture Trustee actually receives any Recourse Amount which reflects any
payment by the Owner Participant on account of (2) above, then the Indenture
Trustee shall promptly refund to the Owner Participant such Recourse Amount.
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, or from
retaining any amount paid by the Owner Participant under Sections 5.01, 8.02
and 8.03 hereof.
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 period of 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,
principal amount and interest rate and in authorized denominations for an
equal aggregate principal amount; provided, that such Certificate being
transferred shall be cancelled in accordance with Section 2.08 hereof
simultaneously with the issuance of the new Certificate.
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 15.01 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 NBD, the Indenture Trustee shall authenticate and deliver, a
new Certificate of like Maturity, principal amount and interest rate as the
Certificate being replaced, 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 the 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 required by them to indemnify and defend
and to hold each of them harmless and 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 incurred in connection 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
hold 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 destroy cancelled Certificates held
by it and deliver a certificate of destruction to the Owner Trustee. 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 NBD, 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, temporary 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 shall have been paid in full.
SECTION 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture and Security Agreement Supplement
covering a replacement airframe and/or Replacement Engine, as provided in
Section 9.09 hereof, each Certificate shall be deemed to have been issued in
connection with such replacement airframe and/or 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 airframe and/or 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 7.11 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 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).
SECTION 2.13. Establishment of Collateral Account. (a) The
Indenture Trustee shall establish, or cause to be established, with NBD, who
represents and warrants that it is a financial intermediary (as defined in
Section 8313(4) of the Michigan Uniform Commercial Code), in its name as
secured party hereunder an Eligible Deposit Account entitled "The Chase
Manhattan Bank (National Association), as secured party under the Trust
Indenture and Security Agreement (Federal Express Corporation Trust No.
N663FE) dated as of October 26, 1995, with the Owner Trustee referred to
therein".
(b) If at any time the Collateral Account ceases to be an Eligible
Deposit Account, the Indenture Trustee shall within two (2) 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) 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 Indenture.
(d) NBD agrees to send confirmation to the Indenture Trustee that
it has credited the Specified Investments to the Collateral Account and to
make appropriate entries on its books identifying the Specified Investments
as pledged to the Indenture Trustee.
SECTION 2.14. Investment of Funds on Deposit in the Collateral
Account. (a) Funds deposited in the Collateral Account shall be invested
and reinvested by the Indenture Trustee, subject to Section 17.02 of the
Participation Agreement, at the risk of the Owner Trustee, in
Specified Investments selected by the Lessee for the account of
the Owner Trustee in accordance with Section 2.14(b) below;
provided, however, that if Specified Investments meeting the
requirements of Section 2.14(b) are not available on any day on which funds
are to be invested as contemplated by the preceding provisions of this Section
2.14(a), the Indenture Trustee may leave such funds in the Collateral Account
until the earliest of (i) the date on which an appropriate Specified
Investment becomes available, (ii) the Delivery Date and (iii) the Cut-Off
Date. 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 a
financial intermediary with the applicable Federal Reserve Bank; provided,
however, if the account is credited to the financial intermediary, the
financial intermediary shall make written confirmation thereof to the
Indenture Trustee and make an appropriate entry on its books identifying the
Specified Investments as pledged to 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 Indenture. The Indenture Trustee
shall promptly notify the Owner Trustee and the Lessee of any Losses.
(b) On the Certificate Closing Date, the Indenture Trustee shall
invest the amount deposited in the Collateral Account pursuant to Section
2.01(c) of the Participation Agreement in Specified Investments selected
by the Lessee for the account of the Owner Trustee which mature prior to
November 24, 1995. If the Delivery Date is postponed pursuant
to Section 3.02(c) or Section 3.05 of the Participation Agreement,
the proceeds of the Specified Investments maturing prior to such
postponed Delivery Date shall be invested in Specified Investments
and any such Specified Investments shall mature prior to the
rescheduled Delivery Date or if no notice of a rescheduled Delivery Date
has been given, prior to the Cut-Off Date.
(c) If for any reason the Indenture Trustee shall be required to
make any distributions of the Liquid Collateral prior to the maturity date of
any Specified Investment, the Indenture Trustee shall cause the same to be
sold in accordance with standard commercial practices, and the Lessee, for the
account of the Owner Trustee, shall forthwith compensate the Indenture Trustee
for any Losses as provided in Section 17.02(a) of the Participation Agreement.
SECTION 2.15. Release of Debt Portion on Delivery Date. Subject to
the satisfaction or waiver of the conditions precedent to the Indenture
Trustee's obligations set forth in Section 4.02 of the Participation
Agreement, on the Delivery Date the Indenture Trustee shall release from the
Collateral Account 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
Delivery Date. Such amount so released, together with the amount of any
Losses received from the Lessee pursuant to Section 17.02(a) of the
Participation Agreement, shall be used to finance a portion of the Purchase
Price payable by (x) the Owner Trustee as contemplated by Section 3.02(a) of
the Participation Agreement or (y) if Section 3.05(ii) of the Participation
Agreement shall be applicable, by the Lessee as contemplated by such Section.
Any amount remaining in the Collateral Account after such release (net of any
uncompensated Losses) shall be remitted by the Indenture Trustee on behalf of
the Owner Trustee to the Lessee pursuant to Section 3.02(a)(C) of the
Participation Agreement.
SECTION 2.16. Cut-Off Date. In the case of a prepayment under
Section 6.02(a)(vi) hereof, the Indenture Trustee shall release from the
Collateral Account all amounts held in the Collateral Account on such date.
Such amount so released, together with the amount of any Losses received from
the Lessee pursuant to Sections 17.02(a) and 17.02(c) of the Participation
Agreement, shall be applied to pay amounts due under Section 6.02(b)(1) hereof
on the Cut-Off Date, and any amount (net of any uncompensated Losses)
remaining after such release and application shall be remitted by the
Indenture Trustee, on behalf of the Owner Trustee, to the Lessee.
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Make-Whole Premium and Interest.
The Owner Trustee covenants and agrees that it will, subject to Section 2.05
hereof, 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 Administration (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 and (b) a facility or agency in New York, New York where the
Certificates may be presented for registration of transfer and for exchange
and for prepayment 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 notwithstanding, 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 NBD and the Owner Trustee.
(a) NBD hereby covenants and agrees to perform its covenants set
forth in Sections 7.04(b) and 7.04(c) of the Participation Agreement.
(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 or an Event of Loss, the Owner Trustee will give prompt written
notice of such Indenture Event of Default, Indenture Default 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 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 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 or assume 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 take action to
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
Airframe or 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 INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR NBD NOR
THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, WORKMANSHIP,
VALUE, CONDITION, DESIGN, COMPLIANCE WITH SPECIFICATIONS, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR USE OR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE
WHATSOEVER, except that NBD warrants that on the Delivery Date (a) the Owner
Trustee shall have received whatever title was conveyed to it by the Lessee,
and (b) the Aircraft shall be free and clear of Lessor's Liens attributable to
NBD. Neither NBD, 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 NBD, the Indenture Trustee and the Owner Participant made under
this Indenture 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 ten (10)
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. Interim Rent and Basic Rent Distribution. Except as
otherwise provided in Section 5.03 hereof, each installment of Interim Rent
and Basic Rent, any amount paid by the Owner Participant under Section 3.07 of
the Participation Agreement, any payment of interest on overdue installments
of Interim Rent and Basic Rent, any payment received by the Indenture Trustee
pursuant to Section 8.03(a) hereof and any payment received by the Indenture
Trustee pursuant to Section 17.02(b) or 17.02(c) of the Participation
Agreement shall be distributed by the Indenture Trustee no later than the time
herein provided 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.
SECTION 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft (including pursuant to Section 11.03(e) of the Lease, but, in the
case of said Section 11.03(e), subject to the time limits specified therein)
or as the result of, or in connection with 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 (without giving effect to the parenthetical at
the end thereof), and third, as provided in clause "third" of Section 5.03
hereof; provided that if a replacement airframe shall be substituted for an
Airframe subject to an Event of Loss as provided in Section 11.03 of the Lease
and Section 9.08 hereof, any proceeds which result from such Event of Loss and
are paid to the Indenture Trustee shall be held by the Indenture Trustee as
part of the Trust Indenture Estate and, unless otherwise applied pursuant to
Section 5.01 or 5.03 hereof, such proceeds shall be released to the Lessee
upon the release of such damaged Airframe and the replacement thereof as
herein provided.
(b) Any amounts received directly or indirectly from any
governmental authority, insurer or other party pursuant to any provision of
Article 11 or 13 of the Lease as the result of loss or damage not
constituting an Event of Loss (x) 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 an Event of
Default shall have occurred and be continuing or (y) are pledged to the
Lessor as security in connection with an Event of Loss in accordance with
Section 11.03(e) of the Lease, 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 Article 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 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 Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof,
all payments (other than Excepted 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, or (b) after the Certificates shall have
become due and payable as provided in Section 7.02(b) or (c) hereof, 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, 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, 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 (it being understood that amounts payable
hereunder shall not include Make-Whole Premium); 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,
any Excepted 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
(including without limitation Section 9 of the Lease) 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, 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, 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 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); provided that,
solely for the purpose of determining whether an Indenture Event of Default
shall have occurred and be continuing, each such payment shall be deemed
applied in the following order of priority: first, in the manner provided in
clause "first" above, second, in the manner provided in clause "third" above,
third, in the manner provided in clause "second" above and fourth, in the
manner provided in clause "fourth" above.
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 by the Indenture Trustee 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 (and in the
absence of written direction by the Lessee, the Indenture Trustee shall
invest such monies in direct obligations of the United States of America)
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 or any investment sold 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.
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. Notwithstanding any provision to
the contrary in Sections 5.01 through 5.05 hereof and subject to Article 8 of
the Participation Agreement, if the Lessee is required to pay any such Tax, or
any interest or penalty thereon, or to indemnify the Owner Participant or the
Owner Trustee with respect thereto pursuant to Section 8.01(c) of the
Participation Agreement, the Lessee shall be entitled to receive any payments
otherwise distributable to the Holder of any Certificate who was subject to
such Tax pursuant to Sections 5.01 to 5.05 hereof until the foregoing amounts
shall have been recovered in full by the Lessee.
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 pursuant to Section 11.03 of the Lease and Section 9.08
hereof replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) 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) Pursuant to Section 15.01 of the Participation Agreement in
connection with a refinancing of the Certificates.
(vi) As contemplated by Section 2.16 hereof and Section 3.05(b)
of the Participation Agreement if the Delivery Date has not occurred on
or prior to the Cut-Off Date.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject to the terms of Section
4.02(a) or 10.01 of the Lease or Section 15 of the Participation Agreement, as
the case may be, shall give irrevocable (subject to Section 6.02(c) hereof)
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 date 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)(v) above, the Certificates
shall be prepaid on the effective date of the Refinancing. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(vi) above, the
Certificates shall be prepaid on the Cut-Off Date. The day on which the
Certificates are to be prepaid pursuant to this Section 6.01(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 (i) of the first sentence of
Section 8.02(a) hereof is applicable), 6.02(a)(vi) or, if such prepayment
is made on or after the applicable Premium Termination Date, 6.02(a)(ii),
6.02(a)(iii) (if clause (ii) of the first sentence of Section 8.02(a)
hereof is applicable), 6.02(a)(iv) or 6.02(a)(v) above, the sum of (A) the
aggregate principal amount of such Certificates then Outstanding, (B)
accrued interest on the Certificates to the Prepayment Date and (C) all
other aggregate sums due the Indenture Trustee hereunder or under the
Participation Agreement or the Lease, but excluding any Make-Whole Premium
or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date, in the event of a prepayment of the Certificates pursuant
to Section 6.02(a)(ii), 6.02(a)(iii) (if clause (ii) of the first sentence
of Section 8.02(a) hereof is applicable), 6.02(a)(iv) or 6.02(a)(v) 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 with respect to which the Premium Termination Date therefor
has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price"); provided that in no event shall
a Make-Whole Premium be payable in respect of the Certificates with a Maturity
of March 19, 1996.
(c) If, pursuant to the last paragraph of Section 10.01(f) of the
Lease, no Termination Date shall occur, or if, pursuant to Section 4.02(a) of
the Lease, the Lessee revokes its notice of election to purchase, or if no
refinancing shall occur pursuant to Section 15.01 of the Participation
Agreement, the Lessee shall give notice thereof to the Indenture Trustee, and
the prepayment proposed to be effected in respect thereof 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. Any notice of prepayment given by the Owner
Trustee may be revoked by the Owner Trustee at any time on or before the
Prepayment Date by prompt notice to the Holders except as otherwise provided
in 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 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 cash or Permitted Investments (marked-to-market
net of all costs and expenses of liquidation thereof) by the Indenture
Trustee in immediately available funds and deposited for the purpose, pay
to the Indenture Trustee an amount equal to the difference between (a) the
amount then so held 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 (A) if the Owner
Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise provided
in the Lease) 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 March 19, 1996 shall be subject to redemption in whole on
March 19, 1996. The Certificates with a Maturity of January 2, 2014 and the
Certificates with a Maturity of July 2, 2019 shall be subject to partial
redemption, at the aggregate principal amount set forth for the Certificates
of the respective Maturity, on a pro rata basis, on each date specified in
this Section (a "Sinking Fund Redemption Date") for such payment on the
Certificates of such Maturity. 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 Certificates
Sinking Fund with a Maturity of with a Maturity of
Redemption Date January 2, 2014 July 2, 2019
--------------- ------------------ ------------------
July 2, 1996 $ 476,564 $ 0
January 2, 1997 0 0
July 2, 1997 1,043,033 0
January 2, 1998 0 0
July 2, 1998 1,117,193 0
January 2, 1999 1,668,438 0
July 2, 1999 0 0
January 2, 2000 1,363,732 0
July 2, 2000 0 0
January 2, 2001 1,464,267 0
July 2, 2001 0 0
January 2, 2002 3,072,710 0
July 2, 2002 1,798,737 0
January 2, 2003 0 0
July 2, 2003 0 0
January 2, 2004 452,867 0
July 2, 2004 0 0
January 2, 2005 1,502,320 0
July 2, 2005 0 0
January 2, 2006 1,310,528 0
July 2, 2006 0 0
January 2, 2007 1,780,093 0
July 2, 2007 0 0
January 2, 2008 2,729,739 0
July 2, 2008 0 0
January 2, 2009 3,761,258 0
July 2, 2009 0 0
January 2, 2010 4,038,541 0
July 2, 2010 0 0
January 2, 2011 4,336,265 0
July 2, 2011 0 0
January 2, 2012 4,655,938 0
July 2, 2012 0 0
January 2, 2013 4,999,178 0
July 2, 2013 0 0
January 2, 2014 4,733,599 0
July 2, 2014 0 0
January 2, 2015 0 0
July 2, 2015 0 0
January 2, 2016 0 0
July 2, 2016 0 0
January 2, 2017 0 2,849,760
July 2, 2017 0 0
January 2, 2018 0 5,785,292
July 2, 2018 0 163,435
January 2, 2019 0 6,010,749
July 2, 2019 0 397,764
______________ ______________
Total $ 46,305,000 $ 15,207,000
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
SECTION 7.01. Indenture Event of Default. "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 notify the
Indenture Trustee in writing that such failure shall constitute an
Indenture Event of Default); or
(ii) the failure of the Owner Trustee other than by reason of a
Default or an Event of Default (i) to pay principal, interest or
Make-Whole Premium, if any, on any Certificate when due, and such
failure shall have continued unremedied for ten (10) Business Days
after the date when due or (ii) to pay any other amounts hereunder or
under the Certificates when due and such failure shall have continued
unremedied for a period of twenty (20) days after the Owner Trustee and
the Owner Participant shall receive written demand therefor from the
Indenture Trustee or by the Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates; or
(iii)(A) any representation or warranty made by NBD, the Owner
Trustee, the Owner Participant or any Owner Participant Guarantor or any
Owner Trustee Guarantor, in any Operative Agreement or in any
certificate of NBD, the Owner Trustee, the Owner Participant, or any
Owner Participant Guarantor 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 in any
respect material to the Holders and if such misrepresentation is capable
of being corrected as of a subsequent date and if such correction is
being sought diligently, and 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 the Owner Trustee
and the Owner Participant by the Indenture Trustee or by a Majority in
Interest of Holders; or
(B) any (x) covenant made by the Owner Trustee in the fifth
paragraph following the Habendum Clause hereof or Section 3.05(b)(iii)
hereof or Section 7.02(b) or 7.04(b) of the Participation Agreement
shall be breached in any respect, (y) covenant made by the Owner
Participant in Section 7.02(c), 7.03(c), 7.03(d) or 7.13 of the
Participation Agreement shall be breached in any respect or (z) other
covenant made by the Owner Trustee, in its individual capacity or as
Owner Trustee, or by any Owner Trustee Guarantor, or by the Owner
Participant or any Owner Participant Guarantor in any Operative
Agreement shall be breached in any respect 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
(iv) the Owner Trustee, the Lessor's Estate, any Owner Trustee
Guarantor, the Owner Participant or any Owner Participant Guarantor shall
file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(v) an order for relief shall be entered in respect of the Owner
Trustee or any Owner Trustee Guarantor or the Owner Participant or any
Owner Participant Guarantor or the Lessor's Estate 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 Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or any Owner
Participant Guarantor or the Lessor's Estate shall file any answer
admitting or not contesting the material allegations of a petition filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or any Owner Participant Guarantor or the Lessor's Estate in
any proceeding referred to in clause (vi) below or seek or consent or
acquiesce in the appointment of any trustee, custodian, receiver or
liquidator of the Owner Trustee or any Owner Trustee Guarantor or the
Owner Participant or any Owner Participant Guarantor or the Lessor's
Estate, as the case may be, or of all or any substantial part of its
properties; or
(vi) without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or any Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered constituting an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or if any such petition shall be filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or any Owner Participant Guarantor or the Lessor's Estate, as
the case may be, and such petition shall not be dismissed within 90 days,
or if, without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or any Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered appointing a trustee, custodian, receiver or liquidator of the
Owner Trustee or any Owner Trustee Guarantor or the Owner Participant or
any Owner Participant Guarantor or the Lessor's Estate, as the case may be,
or of all or any substantial part of the properties of the Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or any Owner
Participant Guarantor or the Lessor's Estate, as the case may be, and such
order shall not be dismissed within 90 days; or
(vii) any Owner Trustee Guaranty or any Owner Participant Guaranty
shall cease to be a valid and enforceable obligation of any Owner Trustee
Guarantor or any Owner Participant Guarantor, as the case may be, or
otherwise shall not be in full force and effect.
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 clause (i) of
Section 7.01 hereof, exercise any and all of the remedies pursuant to Article
17 of the Lease; provided that such exercise of remedies shall not occur until
after the latest date on which the Owner Trustee may cure the related Event of
Default pursuant to Section 8.03 hereof. 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 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.
Notwithstanding the foregoing, it is understood and agreed that if
the Indenture Trustee shall proceed to foreclose the Lien of this
Indenture, it shall substantially simultaneously therewith, to the extent
the Indenture Trustee is then entitled to do so hereunder and under the
Lease, and is not then stayed or otherwise prevented from doing so, proceed
(to the extent it has not already done so) to declare the Lease in default
and commence the exercise in good faith of one or more of the significant
remedies under Section 17 of the Lease (as the Indenture Trustee determines
in its sole discretion). It is further understood and agreed that if the
Indenture Trustee is unable to exercise one or more remedies under Section
17 of the Lease because of any stay or operation or law or otherwise, the
Indenture Trustee shall not be entitled to foreclose the Lien of this
Indenture (A) until the earlier of (i) 60 days from the date of any such
stay or applicable order under Section 1110 of the Bankruptcy Code
including any extension consented to by the Indenture Trustee or the
Holders of Certificates of such period permitted under Section 1110(b) of
the Bankruptcy Code and (ii) the date of actual repossession of the
Aircraft by the Indenture Trustee or (B) if the Lessee has agreed to
perform or assume the Lease and no Event of Default other than as specified
in Section 16.01(e), (f) or (g) of the Lease shall be continuing. For the
avoidance of doubt, it is expressly understood and agreed that except as
aforesaid the above-described inability of the Indenture Trustee to
exercise any right or remedy under the Lease shall in no event and under no
circumstances prevent the Indenture Trustee from exercising all of its
rights, powers and remedies under this Indenture, including, without
limitation, this Article VII. The Indenture Trustee further agrees that
notice of intent to foreclose shall be given to the Owner Trustee at the
earlier of the commencement of any proceeding or at least 30 days prior to
the consummation of foreclosure of the Lien of this Indenture.
(b) If an Indenture Event of Default under clause (iv), (v) or (vi)
of Section 7.01 hereof shall occur and be continuing, the unpaid principal of
all Outstanding Certificates, together with interest accrued but unpaid
thereon and all other amounts due thereunder, but without Make-Whole Premium,
shall immediately become due and payable, without presentment, 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 to the Owner Trustee and the
Lessee, declare the principal of all the Certificates to be due and payable,
whereupon the unpaid principal amount of all Outstanding Certificates,
together with accrued interest thereon and all other amounts due thereunder,
but without Make-Whole Premium, 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 not less
than 50% in aggregate principal amount of Outstanding Certificates, by notice
to the Indenture Trustee, the Owner Trustee and 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 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 Aircraft, 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 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 under this Indenture.
Subject to the foregoing, if the Owner Trustee shall for any reason fail to
execute and deliver such documents after such request by the Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee or an agent or representative designated by 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 or
an agent or representative designated by the Indenture Trustee, to the entry
of which judgment the Owner Trustee hereby specifically consents, and (ii)
pursue all or part of such Trust Indenture Estate wherever it may be found and
enter any of the premises of the Lessee or the Owner Trustee wherever such
Trust Indenture Estate may be or be supposed to be and search for such Trust
Indenture Estate and take possession of and remove such Trust Indenture
Estate. All expenses of obtaining such judgment or of pursuing, searching for
and taking such Trust Indenture Estate shall, until paid, be secured by the
Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Trust Indenture Estate, make all such
expenditures for maintenance, insurance and repairs to and of such Trust
Indenture Estate, as the Indenture Trustee may reasonably deem proper. In
each case subject to Section 7.02 hereof, 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 to exercise all rights and
powers of the Owner Participant and the Owner Trustee relating to the Trust
Indenture Estate, as the Indenture Trustee may reasonably deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, insurance, use, operation, storage, leasing, control, management
or disposition of all or any part of the Trust Indenture Estate as the
Indenture Trustee may determine. Further, the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Trust Indenture Estate
other than Excepted Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
under this Indenture. Such tolls, 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 all maintenance and repairs, and to make all payments
which the Indenture Trustee may be required or may reasonably elect to make
for any taxes, assessments, insurance or other proper charges upon the Trust
Indenture Estate (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 the Lessee), 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 for such
purposes by the Indenture Trustee; provided, that any excess amounts shall be
promptly distributed in accordance with Section 5.03 hereof.
(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 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 to
the highest bidder, with or without demand, advertisement or notice, except
that in respect of any private sale 20 days prior notice will be provided,
for cash or, with the consent of the Owner Trustee, which shall not be
unreasonably withheld, 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 exercising reasonable commercial discretion may
determine; provided, that any such action shall be at the time lawful and
that all mandatory legal requirements shall be complied with. Any notice
required pursuant to the terms hereof 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 not be obligated to make any
sale pursuant to such notice. 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 effective upon the
occurrence and continuance of an Indenture Event of Default, 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 proceedings 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 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
Owner Trustee or its property, or in case of any other comparable judicial
proceedings relative to the Owner Trustee, or to the creditors or property of
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 rights to assert claims under this
Indenture, or under any of the Certificates, may be enforced by the
Indenture Trustee without the possession of such Certificates on any trial
or other 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, as provided herein.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Certificates, and it shall not be
necessary to make any Holders parties to such proceedings.
SECTION 7.05. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee in this Indenture shall be cumulative
and shall be in addition to every other right, power and remedy specifically
given herein 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
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
be construed to be a waiver of the right to exercise at the same time or later
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 in any such default.
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 to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture 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 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 the Owner Trustee, the Indenture
Trustee, the Owner Participant, the Holders and the Lessee shall, subject
to any binding determination in such proceeding, be restored to their
former positions and rights under this Indenture 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 to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Indenture Trustee written notice that an
Indenture Event of Default shall then have occurred and be continuing, 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, except in the manner provided herein 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 and any provision of 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; 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.
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 of this Indenture 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 any 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 except in the case of a default in the payment of the
principal of or interest on any Certificate, 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 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 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 Indenture
Documents may not modify, amend or supplement any of said agreements, 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 any Holder.
(b) Subject to the provisions of subsection (c) of this Section
8.01, the respective parties to the Indenture Documents, 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 give any
waiver 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 waiver 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 as in effect on the effective date hereof: 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 3.05, Section
3.06 (except insofar as it relates to the address or account information
of the Owner Trustee or the Indenture Trustee) (other than as such
Sections 3.03, 3.05 and 3.06 may be amended pursuant to Section 3.04 of
the Lease as in effect on the effective date hereof), 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 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, Section 26.03 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 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 and any other
Indenture Document (other than the Lease and the Participation 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 in effect on the effective date hereof:
Articles 6, 8 and 9 and Section 10.01(b) (insofar as such Articles 6, 8 and
9 and Section 10.01(b) relate to the Indenture Trustee, the Pass Through
Trustee and the Holders), Article 7 and Sections 3.05, 15.01, 17.02 and
17.11 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); and
(4) 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 Interim Rent, 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 (subject in any event to Section 3.05 of the
Lease) 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 (subject in any event to Section 3.05 of the
Lease) upon termination of the Lease with respect to the Aircraft payable
under, or as provided in, the Lease as in effect on the effective date
hereof, or reduce the amount of any installment of Interim Rent, 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 Interim Rent, 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 as
in effect on the effective date hereof 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 in effect on the effective
date hereof 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 Interim Rent, 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
(subject in any event to Section 3.05 of the Lease) 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
(subject in any event to Section 3.05 of the Lease) of the Lease with
respect to the Aircraft, payable under, or as provided in, the Lease as in
effect on the effective date hereof, except for any such assignment
pursuant to Section 2.12 hereof, and except as provided in the Lease as in
effect on the effective date hereof.
(d) At all times so long as this Indenture is in effect, the consent
of the Owner Trustee (at the direction of the Owner Participant) shall be
required in order (i) to amend, modify or supplement the Lease or any other
Operative Document to which the Owner Trustee is a party or to waive
compliance by the Lessee with any of its obligations thereunder and (ii) to
grant any consent requested under the Lease.
Notwithstanding the foregoing, but subject always to the provision of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Article 17 (other than with respect to Excepted
Payments) thereof and (B) subject only to the provisions of this Indenture
exercise the remedies set forth in such Article 17 of the Lease (other than in
connection with Excepted Payments) and in Article 7 hereof.
Nothing in this Indenture shall be deemed to prohibit the Owner
Participant or the Owner Trustee from making demand on the Lessee for, or from
commencing an action at law to obtain the payment of, or from receiving
payment of, any Excepted Payment; provided, however, that if the Owner Trustee
is proceeding under the Lease, the Owner Trustee shall proceed pursuant to
Section 17.01(a)(v), and only Section 17.01(a)(v), of the Lease.
SECTION 8.02. Owner Participant's Right to Elect to Prepay or
Purchase the Certificates. (a) If (i) an Event of Default shall have occurred
and be continuing for more than 180 days or the Certificates shall have become
due and payable pursuant to Section 7.02(b) or (c) hereof or (ii) an Event of
Default shall have occurred and be continuing for not more than 180 days and
the Certificates shall not have become due and payable pursuant to Section
7.02(b) or (c) hereof, 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 15 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 15 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
applicable to each Outstanding Certificate (if such purchase occurs prior
to the Premium Termination Date for such Outstanding Certificate) in the
case of a purchase pursuant to clause (a)(ii) 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 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 and this Indenture 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 purchase
date, 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 and this Indenture arising 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 Interim Rent and
Basic Rent, and (B) the Owner Trustee shall have paid or caused to be paid on
or prior to the date which is 15 Business Days after such Event of Default 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 Interim Rent and Basic Rent or of interest on account
of such installment's being overdue shall not constitute or result in an
Indenture Event of Default under this Indenture 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 exercise any rights and powers or pursue any remedies pursuant to
Article 17 of the Lease or otherwise except as set forth in this Indenture,
and 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 Event of Default, and any right to any
interest in respect of the same, and shall be entitled to any payment of
Interim Rent and 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 Interim Rent and 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 Interim Rent and Basic Rent and (B) 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 date which is 15 Business Days after
such Event of Default, 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 or result in
an Indenture Event of Default under this Indenture 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 exercise any rights and powers or pursue
any remedies pursuant to Article 17 of the Lease or otherwise except as set
forth in this Indenture, and 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, plus any interest
due, 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(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 in its
individual capacity 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. So long as an
Indenture Event of Default has occurred and 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 agrees that it will execute and the Owner
Trustee agrees that it 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 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, after the latest date on which the Owner Trustee may cure such Event of
Default pursuant to Section 8.03 hereof, 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 Indenture Trustee's
Liens on any part of 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 furnished 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, 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, direction, order or demand of the Owner Trustee
mentioned herein shall be sufficiently evidenced by an Officers'
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 investigation 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 costs,
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 Officers' 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 Airframes and Replacement Engines. At any
time and from time to time any Airframe or Engine which has been subject to an
Event of Loss and may, or is required to, be replaced under Section 10.03,
11.03 or 11.04 of the Lease by a replacement airframe or Replacement Engine,
as the case may be, 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 Airframe and/or 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 Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or
other applicable registration information) and manufacturer's
serial number;
(ii) a description of the replacement airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the replacement airframe the Owner Trustee
will be the legal owner of and have good and marketable title to
such replacement airframe free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease, that such replacement
airframe will on such date be in at least as good operating
condition and repair as required by the terms of the Lease, and
that such replacement airframe has been or, substantially
concurrently with such replacement, will be duly registered in the
name of the Owner Trustee under the Aviation Act or under the law
then applicable to the registration of the Airframe subject to the
Event of Loss and that an airworthiness certificate has been duly
issued under the Aviation Act (or such other applicable law) with
respect to such replacement airframe and that such registration
and certificate is, or will be, in full force and effect, and that
the Lessee will have the full right and authority to use such
replacement airframe;
(iv) that the insurance required by Article 13 of the Lease is in
full force and effect with respect to such replacement airframe
and all premiums then due thereon have been paid in full;
(v) that the replacement airframe is of the same or an improved
make or model as the Airframe requested to be released from this
Indenture;
(vi) that the value of the replacement airframe as of the date of
such certificate is not less than the value of the Airframe
requested to be released (assuming such Airframe was in the
condition and repair required to be maintained under the Lease);
(vii) that no Event of Default has occurred and is continuing or
would result from the making and granting of the request for
release and the addition of a replacement airframe; (viii)that
the release of the Airframe subject to the Event of Loss will not
impair the security of the Indenture in contravention of any of
the provisions of this Indenture;
(ix) that upon such replacement, the Lien of this Indenture will
apply to the replacement airframe and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x) that each of the conditions specified in Section 11.03 of the
Lease with respect to such replacement airframe has been
satisfied.
B. With respect to the replacement of any Engine:
(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 such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(vii) that each of the conditions specified in Section 10.03,
11.03 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 airframe or Replacement Engine to be received
as consideration for the Airframe or 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
airframe or Replacement Engine, and an Indenture and Security Agreement
Supplement subjecting such replacement airframe or Replacement Engine to the
Trust Agreement and to the Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing satisfactory to the Indenture Trustee and the Owner Trustee
confirming the accuracy of the information set forth in clause (2)A.(vi) of
this Section 9.08.
(5) 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 airframe or Replacement Engine has been
validly subjected to the Lien of this Indenture and covered by the
Lease, the instruments subjecting such replacement airframe or
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
Aviation 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 the Lien of this Indenture on such replacement
airframe or Replacement Engine and the Indenture Trustee would be
entitled to the benefits of Section 1110 of the Bankruptcy Code with
respect to such replacement airframe or 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 airframe or 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 Section 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 Airframe or Engine being
replaced from the Lien of this Indenture.
SECTION 9.10. Effect of Replacement. In the event of the
substitution of a replacement airframe or 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 Airframe or Engine or Engines
being replaced shall be applicable to such replacement airframe or Replacement
Engine or Engines with the same force and effect as if such replacement
airframe or Replacement Engine or Engines were the same Airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine or
Engines being replaced.
SECTION 9.11. Compensation. The Owner Trustee covenants and agrees
to pay, and the Indenture 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 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, 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, NBD or 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
shall 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 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, NBD, the Lessee or by any Affiliate
thereof 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, NBD or
the Lessee 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, NBD or the Owner
Participant or by any Affiliate thereof, 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, NBD 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, NBD
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,
NBD, or the Owner Participant are actually named in the Register. Upon
request of the Indenture Trustee, the Owner Trustee, the Owner Participant,
NBD and the Lessee shall furnish to the Indenture Trustee promptly an
Officers' Certificate listing and identifying all Certificates, if any, known
by the Owner Trustee, the Owner Participant, NBD 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 Officers' 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 Administration 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. Any Person who is, or who in acquiring the
Certificates is or may be using the assets of, an employee benefit plan
subject to Title I of ERISA, or an individual retirement account or plan
subject to Section 4975 of the Code, or any trust established under any such
plan or account, may acquire or hold any of the Certificates, if such Person
determines either that an administrative or a statutory exemption from the
prohibited transaction rules under Section 406 of ERISA and Section 4975 of
the Code is applicable to its purchase and holding of the Certificates or that
its purchase and holding of the Certificates will not result in a prohibited
transaction under Section 406 of ERISA and Section 4975 of the Code.
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, 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 otherwise 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 or general tax 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 of such action 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 30 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 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, any 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 (i)(x) a bank or trust company organized and doing business under the
laws of the United States of America or any state or the District of Columbia
having a combined capital and surplus of at least $100,000,000 or (y) a bank
or trust company whose obligations hereunder are fully guaranteed by a direct
or indirect parent thereof having a combined capital and surplus of at least
$100,000,000 and (ii) a Citizen of the United States authorized under
applicable law to exercise corporate trust powers and 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, in form and substance
reasonably satisfactory to the Owner Trustee, 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 liable either personally or in its
capacity as such trustee, 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 right 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 airframe or
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
airframe or 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.
Any supplemental indenture may be executed without the consent of the
Holders of Outstanding Certificates, notwithstanding any of the provisions of
Section 13.02 hereof.
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 and every 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
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 (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 deprive any
Holder of the benefit of the Lien of this Indenture 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 Officers' 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 in accordance with the terms and conditions of the Lease to
subject a replacement airframe or 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 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 deposited with the Indenture Trustee as
trust funds 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 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 in the case of (c) above 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 (covering such matters reasonably requested by, and in form and
substance reasonably satisfactory to, the Indenture Trustee) 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 Indenture
Trustee hereunder 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.
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 (or, if the Trust Agreement shall no longer be in effect, to the
Owner Participant) 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 (or the
Owner Participant) 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 NBD (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, and, in the case of NBD (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 NBD,
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. Upon
termination of this Indenture pursuant to Article XIV hereof, the Indenture
Trustee in connection with the satisfaction of the Indenture shall return to
the Owner Trustee all property (and related documents and instruments)
constituting or evidencing the Trust Indenture Estate.
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, 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 611 Woodward Avenue,
Detroit, Michigan 48226, Attention: Corporate Trust Department (facsimile:
(313) 225-3420) (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 4 Chase Metrotech Center, 3rd Floor, Brooklyn, New York 11245 (facsimile:
(718) 242-3529), Attention: Corporate Trust 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 in Section 14.01 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. Officers' 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
Officers' 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 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 NBD 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 NBD, upon the certificate, statement or
opinion of or representations by an officer or officers of the Lessee or NBD,
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
NBD 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; Counterparts. 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 October, 1995 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.
NBD BANK,
not in its individual capacity,
but solely as Owner Trustee,
By_________________________________
Name:
Title:
THE CHASE MANHATTAN
(NATIONAL ASSOCIATION),
not in its individual capacity,
but solely as Indenture Trustee,
By_________________________________
Name:
Title:
Exhibit A
to
Trust Indenture and Security Agreement
--------------------------------------
INDENTURE AND SECURITY AGREEMENT SUPPLEMENT
(Federal Express Corporation Trust No. N663FE)
THIS INDENTURE AND SECURITY AGREEMENT SUPPLEMENT (Federal Express
Corporation Trust No. N663FE) dated ________, ____, of NBD BANK, a Michigan
banking corporation, not in its individual capacity, but solely as trustee (the
"Owner Trustee") under the Trust Agreement (Federal Express Corporation Trust
No. N663FE) dated as of October 26, 1995 (the "Trust Agreement") between NBD
Bank and the Owner Participant named therein.
W I T N E S 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 Indenture provides for the execution and delivery of an
Indenture and Security Agreement Supplement substantially in the form of this
Indenture and Security Agreement Supplement No. __, which Supplement shall
particularly describe the Aircraft included in the Trust Indenture Estate, and
shall specifically mortgage such Aircraft to the Indenture Trustee.
(1) WHEREAS, the Indenture relates to the Aircraft and the Engines
described in the following paragraph and a counterpart of the Indenture is
attached to and made a part of this Indenture and Security Agreement
Supplement No. 1, and this Indenture and Security Agreement Supplement No. 1,
together with such attachment, is being filed for recordation on or promptly
after the date of this Supplement No. 1 with the Federal Aviation
Administration as one document.
(2) Whereas, the Indenture and Indenture and Security Agreement
Supplement No. ___ dated _________________, ______ (the Indenture being
attached to and made a part of such Indenture and Security Agreement
Supplement and filed therewith) have been duly recorded pursuant to Subtitle
VII of Title 49 of the United States Code, on ____________, _____, as one
document and have been assigned Conveyance No. _________.
- -------------
(1) This recital is to be included only in the first Indenture Supplement.
(2) This recital is not to be included in the first Indenture Supplement.
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 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 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, and subject to all of the terms, conditions,
provisions and limitations set forth in 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) aircraft 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 aircraft 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,
and subject to all of the terms, conditions. provisions and limitations set
forth in the Indenture, all of the estate, right, title and interest of the
Owner Trustee in, to and under the 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.
NBD BANK,
not in its individual capacity,
but solely as Owner Trustee,
By_________________________________
Name:
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 No. N663FE)
NBD BANK
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
(Federal Express Corporation Trust No. N663FE)
dated as of October 26, 1995
Interest Rate Maturity
- ------------- --------
NBD Bank, a Michigan banking corporation, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the
"Owner Trustee") under that certain Trust Agreement (Federal Express
Corporation Trust No. N663FE) dated as of October 26, 1995, between the Owner
Participant named therein and NBD Bank (herein as such Trust Agreement may be
amended or supplemented from time to time called the "Trust Agreement"),
hereby promises to pay to The Chase Manhattan Bank (National Association), as
Pass Through Trustee, or its 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, on March 19, 1996 and thereafter semiannually on each
January 2 and July 2, on said principal sum in like coin or currency at the
rate per annum set forth above from the March 19, January 2 or the July 2, 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 December 18 or June 17 and before
the following January 2 or July 2, as the case may be, this Certificate shall
bear interest from such January 2 or July 2; provided that, if the Owner
Trustee shall default in the payment of interest due on such January 2 or July
2, then this Certificate shall bear interest from the next preceding January 2
or July 2 to which interest on this Certificate has been paid or duly provided
for. The interest so payable on any January 2 or July 2 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
December 18 or June 17 preceding such January 2 or July 2, 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 The Chase Manhattan Bank (National
Association) (the "Indenture Trustee") maintained for such purpose in
immediately available funds prior to 10:30 A.M. (New York time) on the due
date thereof and the Indenture Trustee shall remit all such amounts received
by it to the Holders at such account or accounts at such financial institution
or institutions as the Holders shall have designated to the Indenture Trustee
in writing, in immediately available funds, such payment to be made if the
payment was received prior to 10:30 A.M. New York time by the Indenture
Trustee on any Business Day, by 12:00 noon New York time on such Business Day;
otherwise, the Indenture Trustee shall make payment promptly, but not later
than 11:00 A.M. New York time on the next succeeding Business Day; provided
that, at the option of the Indenture Trustee or its Paying Agent, interest may
be paid by mailing a check therefor payable to or upon the written order of
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.
NBD Bank and The Chase Manhattan Bank (National Association) are not
acting individually hereunder, but solely as Owner Trustee and Indenture
Trustee, respectively.
Any Person who is, or who in acquiring the Certificates is or may be
using the assets of, an employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code,
or any trust established under any such plan or account, may acquire or hold
any of the Certificates, if such Person determines either that an
administrative or a statutory exemption from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code is applicable to its
purchase and holding of the Certificates or that its purchase and holding of
the Certificates will not result in a prohibited transaction under Section 406
of ERISA and Section 4975 of the Code.
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 No. N663FE) dated as of October 26, 1995
(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 No. N663FE)
limited in aggregate initial principal amount to $66,000,000 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
- -------- ---------- --------------
March 19, 1996 $4,488,000 6.05%
January 2, 2014 $46,305,000 7.11%
July 2, 2019 $15,207,000 7.58%
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 given to them in the Indenture.
The principal amounts of the Certificates are payable as follows. The
Certificates with a Maturity of March 19, 1996 are subject to redemption in
whole on March 19, 1996, the Certificates with a Maturity of January 2, 2014
are subject to redemption in part, pro rata (based on the face amount
thereof), commencing on July 2, 1996 and the Certificates with a Maturity of
July 2, 2019 are subject to redemption in part, pro rata (based on the face
amount thereof), commencing on January 2, 2017, 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 Certificates
Sinking Fund with a Maturity of with a Maturity of
Redemption Date January 2, 2014 July 2, 2019
--------------- ------------------ ------------------
July 2, 1996 $ 476,564 $ 0
January 2, 1997 0 0
July 2, 1997 1,043,033 0
January 2, 1998 0 0
July 2, 1998 1,117,193 0
January 2, 1999 1,668,438 0
July 2, 1999 0 0
January 2, 2000 1,363,732 0
July 2, 2000 0 0
January 2, 2001 1,464,267 0
July 2, 2001 0 0
January 2, 2002 3,072,710 0
July 2, 2002 1,798,737 0
January 2, 2003 0 0
July 2, 2003 0 0
January 2, 2004 452,867 0
July 2, 2004 0 0
January 2, 2005 1,502,320 0
July 2, 2005 0 0
January 2, 2006 1,310,528 0
July 2, 2006 0 0
January 2, 2007 1,780,093 0
July 2, 2007 0 0
January 2, 2008 2,729,739 0
July 2, 2008 0 0
January 2, 2009 3,761,258 0
July 2, 2009 0 0
January 2, 2010 4,038,541 0
July 2, 2010 0 0
January 2, 2011 4,336,265 0
July 2, 2011 0 0
January 2, 2012 4,655,938 0
July 2, 2012 0 0
January 2, 2013 4,999,178 0
July 2, 2013 0 0
January 2, 2014 4,733,599 0
July 2, 2014 0 0
January 2, 2015 0 0
July 2, 2015 0 0
January 2, 2016 0 0
July 2, 2016 0 0
January 2, 2017 0 2,849,760
July 2, 2017 0 0
January 2, 2018 0 5,785,292
July 2, 2018 0 163,435
January 2, 2019 0 6,010,749
July 2, 2019 0 397,764
Total $ 46,305,000 $ 15,207,000
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 neither the Owner Participant, the
Owner Trustee, NBD Bank nor 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 NBD Bank, the Owner Trustee and the Indenture Trustee.
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 pursuant to Section 11.03 of the Lease and Section 9.08 of
the Indenture replacement equipment is substituted therefor).
(ii)If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and the Lessee shall not have revoked
such notice or effected an assumption of the Certificates as provided in
Section 2.12 of the Indenture).
(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) Pursuant to Section 15.01 of the Participation Agreement in
connection with a Refinancing of the Certificates.
(vi)As contemplated by Section 2.16 of the Indenture and Section
3.05(b) of the Participation Agreement if the Delivery Date has not
occurred on or prior to the Cut-Off Date.
In the case of a prepayment of the Certificates pursuant to clauses
(ii), (iv) and (v) above, the Lessee, in accordance with and subject to the
terms (including timing of notice) of Section 4.02(a) or 10.01 of the Lease or
Section 15 of the Participation Agreement, as the case may be, shall give
irrevocable (subject to Section 6.02(c) of the Indenture) 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
clause (v) above, the Certificates shall be prepaid on the effective date of
the Refinancing. In the case of a prepayment of the Certificates pursuant to
clause (vi) above, the Certificates shall be prepaid on 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 pursuant to
clause (i), (iii) (if clause (i) of the first sentence of Section 8.02(a)
of the Indenture is applicable), clause (vi) or, if such prepayment is made
on or after the applicable Premium Termination Date, clause (ii), (iii) (if
clause (ii) of the first sentence of Section 8.02(a) of the Indenture is
applicable), (iv) or (v) above, the sum of (A) the aggregate principal
amount of such Certificates then Outstanding, (B) accrued interest on the
Certificates to the Prepayment Date and (C) all other aggregate sums due
the Indenture Trustee under the Indenture or under the Participation
Agreement or the Lease, but excluding any Make-Whole Premium or other
premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date, in the event of a prepayment of the Certificates pursuant
to clause (ii), (iii) (if clause (ii) of the first sentence of Section
8.02(a) of the Indenture is applicable), (iv) or (v) 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 with
respect to which the Premium Termination Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price"); provided that in no event shall
a Make-Whole Premium be payable in respect of the Certificates with a Maturity
of March 19, 1996.
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
Interim Rent and Basic Rent payments under the Lease, but the Owner Trustee
and the Owner Participant, collectively, may not cure more than three
consecutive such failures or more than six such failures in total. The Owner
Trustee or the Owner Participant may cure any other default by the Lessee in
the performance of its obligations under the Lease.
(A) If an Event of Default shall have occurred and be continuing for
more than 180 days or the Certificates shall have been accelerated or (B) an
Event of Default shall have occurred and be continuing for not more than 180
days and the Certificates shall not have been accelerated, 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
Outstanding 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 on such
amount to the date of purchase and any Make-Whole Premium applicable
to each Outstanding Certificate, if such purchase occurs prior to the
Premium Termination Date for such Outstanding Certificate, (in the
case of a purchase pursuant to clause (ii) of the first sentence 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 shall 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 No. N663FE) to be duly executed
in its corporate name by its officer thereunto duly authorized.
Dated: NBD BANK,
not in its individual capacity,
but solely as Owner Trustee
By ___________________________
Name:
Title:
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust Certificates (Federal Express
Corporation Trust No. N663FE) referred to in the within mentioned Indenture.
Dated: THE CHASE MANHATTAN BANK
(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 the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require. In the
case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
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 other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. In the case
of amounts payable to the Lessor, the Owner Participant, or any corporate
Affiliate 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.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee
pursuant to the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe) together with the two Engines (or any
Replacement Engine or Engines) whether or not any of such initial or
Replacement Engines may from time to time be installed on such Airframe or may
be installed on any other airframe or on any other aircraft, including any
aircraft substituted pursuant to Section 11.03 of the Lease. Prior to
delivery of the initial Lease Supplement, references in Section 3.05 of the
Participation Agreement to Aircraft shall mean the Airbus A300F4-605R
airframe bearing FAA Registration Number N663FE and Manufacturer's serial
number 766, together with the two General Electric CF6-80C2-A5F engines
bearing Manufacturer's serial numbers 705-233 and 705-234.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number and manufacturer's serial number
specified in the initial Lease Supplement, including (i) all Parts in respect
thereof and (ii) any replacement airframe which may be substituted pursuant to
Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which
the Lessor is a party or to which the Lessor has consented in writing
entered into on the Delivery Date or any date thereafter in connection with
the transactions contemplated by the Operative Agreements, as such
agreement may be amended and supplemented from time to time with the
consent of the Lessor and delivered to the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Owner Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N663FE), to be dated the Certificate Closing Date
among the Lessee, the Owner Trustee, not in its individual capacity,
but solely as Owner Trustee, the Owner Participant and the Indenture
Trustee not in its individual capacity, but solely as Indenture Trustee,
as originally executed or as amended, modified or supplemented with
the consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with a copy of such report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France, and its successors and assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as of
October 26, 1995, executed by AVSA, as the same may be amended, modified or
supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
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 either does or with the giving of notice or lapse of
time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft throughout
the Basic Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 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 July 2, 2020, 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.
Business Day. Any day on which commercial banks are not
authorized or required to close in New York, New York and Memphis,
Tennessee, and after the Lien of the Indenture is discharged, Detroit,
Michigan.
Certificate Closing Date. The date of the closing with respect to
the purchase of Certificates by the Pass Through Trustee contemplated by
Section 2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N663FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
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 Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Commencement Date. July 2, 1996.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of October
26, 1995, executed by the Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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 Participant
and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner Trustee
located at 611 Woodward Avenue, Detroit, Michigan 48226, or such other office
at which the Owner Trustee's corporate trust business shall be administered
which the Owner Trustee shall have specified by notice in writing to the
Lessee, the Owner Participant and the Indenture Trustee.
Cut-Off Date. December 29, 1995.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
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 Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts related thereto. 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.
The term "Engines" means, as of any date of determination, both Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of October 26, 1995,
executed by the Engine Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment
(Federal Express Corporation Trust No. N663FE), dated as of October 26,
1995 between the Lessor and the Lessee, as the same may be amended,
modified or supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 90 days due to theft or disappearance or such longer
period, not to exceed 90 days from the end of such initial 90-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by 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,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine as of the end of the Lease Term 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
A300F-600 series aircraft equipped with engines of the same make and model as
the Engines for a period not to exceed six (6) consecutive months, unless the
Lessee, prior to the expiration of such six (6) month period, shall be
diligently carrying forward in a similar manner as are then being carried
forward with respect to other aircraft of the Lessee so as to not discriminate
against the Aircraft by reason of its leased status, all steps which are
necessary or desirable to permit the normal use of the Aircraft or Airframe
or, in any event, if such use of the Aircraft or the Airframe shall have been
prohibited for a period of eighteen (18) consecutive months or until the end
of the Term, if earlier. The date of such Event of Loss shall be (s) the 91st
day or the 180th day, as the case may be, following loss of such property or
its use due to theft or disappearance (or the end of the Term or the Lessee's
abandonment of diligent efforts to recover such property, if earlier); (t) the
61st day following the date of any destruction, damage beyond economic repair
or rendition of such property permanently unfit for normal use; (u) the date
of any insurance settlement on the basis of a total loss or constructive or
compromised total loss; (v) the date of any condemnation, confiscation,
seizure or requisition of title of such property; (w) the 181st day following
condemnation, confiscation, seizure or requisition for use of such property by
a foreign government referred to in clause (iii)(2)(A) above (or the end of
the Term or the date of any insurance settlement described therein, if earlier
than such 181st day); (x) the last day of the Term in the case of requisition
for use of such property by the Government; (y) the last day of the six (6)
month or eighteen (18) month period, referred to in clause (iv) above (or if
earlier, the end of the Term or abandonment of the Lessee's efforts to restore
the normal use of the Aircraft). 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. If an Event of Loss described in any of clauses (i)
(A), (iii) or (iv) above shall occur, Lessor may elect, within 30 days
following the date upon which such Event of Loss is deemed to have occurred,
to waive such Event of Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments
(and interest thereon to the extent provided in the Operative Agreements)
paid or payable by the Lessee in respect of the Owner Participant, the
Owner Trustee in its individual capacity or any of their respective
successors, permitted assigns, directors, officers, employees, servants and
agents or Affiliates, pursuant to the Participation Agreement or any
indemnity hereafter granted to the Owner Participant or the Owner Trustee
in its individual capacity pursuant to the Lease or the Participation
Agreement, (ii) proceeds of public liability insurance (or government
indemnities in lieu thereof) in respect of the Aircraft payable as a result
of insurance claims paid for the benefit of, or losses suffered by, the
Owner Trustee or the Indenture Trustee in their respective individual
capacities or by the Owner Participant, or their respective successors,
permitted assigns or Affiliates, (iii) proceeds of insurance maintained
with respect to the Aircraft by the Owner Participant (whether directly or
through the Owner Trustee) maintained in accordance with Section 13.05 of
the Lease but not required under Section 13 of the Lease, (iv) payments of
Supplemental Rent by the Lessee in respect of any amounts payable under the
Tax Indemnity Agreement, (v) payments constituting increases in Interim
Rent or Basic Rent attributable to payments arising pursuant to Section 5
of the Tax Indemnity Agreement and (vi) any right to demand, collect or
otherwise receive and enforce the payment of any amount described in
clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a)
of the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee
has exercised its option to renew the Lease pursuant to the second
paragraph of Section 4.01(a) thereof and with respect to which the
conditions set forth in the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other
property) is unencumbered by the 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;
provided that in connection with any determination pursuant to or for the
purposes of Article 17 of the Lease, the Aircraft shall be appraised on an
"as is, where is" basis. Fair Market Value shall be determined in
accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed Renewal
Term equal to 50% of the average actual semi-annual Basic Rent payable during
the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as of
October 26, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between
the Engine Manufacturer and the Lessee related to the purchase by the
Lessee of the Engines as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
General Terms Agreement relates to the Engines, to the extent assigned to
the Owner Trustee pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as Owner
Trustee and Lessor, the Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, any Owner Participant Guarantor, 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 and the Trust Indenture
Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N663FE) dated as of October 26, 1995, between
the Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement, and as said Indenture may from time to time be
further supplemented or amended, including any amendment or supplement thereto
entered into from time to time pursuant to the applicable provisions of the
Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N663FE) to be dated the Delivery Date, as such Indenture and Security
Agreement Supplement shall be amended or supplemented from time to time and
any other supplement to the Indenture, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture Estate 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 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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft throughout
the Interim Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant Payment
Date and ending at the end of the day immediately preceding the Commencement
Date.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N663FE) dated as of October 26, 1995, entered into by the Lessor and the
Lessee concurrently with the execution and delivery of the Indenture, 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
one or more Lease Supplements entered into pursuant to the applicable
provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N663FE) to be dated the Delivery Date, as such Lease
Supplement shall be amended or supplemented from time to time and any other
supplement to the Lease, substantially in the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending
at the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation, and
its successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of
the Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA Bill
of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the GTA, the Engine Warranty
Assignment, the Engine Consent, any warranty with respect to the Airframe and
the Engines, all amounts of Interim Rent, Basic Rent and Supplemental Rent,
including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee 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) not include any Excepted Payment and (ii) include all property
intended to be subjected to the Indenture by the Granting Clause thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust
Indenture Estate arising as a result of (i) claims against 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) acts or omissions 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 or
expressly prohibited under the Operative Agreements and any act or omission
of the Owner Participant which 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, Owner Participant, Lessor's
Estate or the trust created by the Trust Agreement which are not required
to be indemnified against by the Lessee pursuant to the Participation
Agreement by reason of Section 8.01(b) or 9.01(b) thereof and which are not
required to be indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement, or (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 other than a transfer of the
Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings 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.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
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 Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of
(i) the present values of all remaining scheduled payments of such principal
amount or portion thereof 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 the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
unpaid principal amount of such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of the
Lease, discounted at a rate per semi-annual period equal to the Debt Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, if any, the Owner Trustee
Guaranty, if any, any Ancillary Agreement entered into by or with the written
consent of the Indenture Trustee, which by its terms is an Operative
Agreement, the Certificates outstanding at the time of reference, the
Indenture, the Indenture and Security Agreement Supplement, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the Engine Consent and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
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.
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, its right, title and
interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Amount. The amount described in Section 3.07 of
the Participation Agreement.
Owner Participant Guarantor. The provider of an Owner Participant
Guaranty.
Owner Participant Guaranty. Any guaranty delivered in compliance
with Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement, and its successors and permitted
assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Interim Rent, Basic
Rent, Stipulated Loss Value and Termination Value percentages or the EBO
Price, as the case may be, as such assumptions may be adjusted for events
which have been the basis of adjustments to Rent pursuant to Section 3.04 of
the Lease.
Participation Agreement. The Participation Agreement (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995, among
the Lessee, the Owner Trustee not in its individual capacity except as
otherwise expressly provided therein, but solely as owner trustee, the
Owner Participant, the Indenture Trustee not in its individual capacity
except as otherwise expressly provided therein, but solely as indenture
trustee and the Pass Through Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as pass through
trustee, 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, prior to replacement thereof in accordance with the Lease, which may be
removed therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated as
of February 1, 1993, as amended and restated as of October 1, 1995 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 1995 Pass Through
Certificates, Series B1, 1995 Pass Through Certificates, Series B2 or 1995
Pass Through Certificates, Series B3, 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 Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust, 1995-B1,
Federal Express Pass Through Trust, 1995-B2 or Federal Express Pass Through
Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. The Owner Participant Payment Date, and each January 2
and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date and
ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates having a
Maturity in 2014, November 7, 2007 and with respect to the Certificates having
a Maturity in 2019, October 7, 2017.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase
Agreement, dated as of July 3, 1991 between AVSA and the Lessee, including
all exhibits, appendices and letter agreements attached thereto as
originally executed or as modified, amended or supplemented in accordance
with the terms thereof, but only to the extent that the foregoing relates
to the Aircraft and to the extent assigned pursuant to the Purchase
Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N663FE), dated as of October 26, 1995
between the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule IV to the
Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the Owner
Participant Payment Date, December 18 for January 2 Payment Dates and June 17
for July 2 Payment Dates, whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 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 or more terms 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 Interim
Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July 2,
1996.
Reoptimization Date. Has the meaning specified in Section
15.02(a) of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) manufactured after October 22,
1994 of the same or of equal or greater value, remaining useful life and
utility as the Engine being replaced, together with all Parts relating to such
engine; provided, however, that if such replacement engine is not a General
Electric CF6-80C2-A5F engine, such replacement engine must then be commonly
used in the commercial aviation industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or Corporate
Trust Administration, as the case may be, designated by such Person to perform
obligations under the Operative Agreements, with respect to the Owner
Participant, the president or any vice president with direct responsibility
for the transactions contemplated by the Operative Agreements, and with
respect to any other party, any corporate officer or (except in the case of
the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be executed and
delivered by the Lessee and the Pass Through Trustee, the Series Supplement
1995-B2 to be executed and delivered by the Lessee and the Pass Through
Trustee or the Series Supplement 1995-B3 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.
Specified Investments. Direct obligations of the United States of
America and obligations fully guaranteed by the United States of America
maturing within 30 days of the date of purchase.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Term, the amount determined by multiplying the Purchase Price
by the percentage set forth in Schedule III of the Lease under the heading
"Stipulated Loss Value Factor" opposite such date (as such Schedule III may be
adjusted from time to time as provided in Section 3.04 of the Lease), and
during any Renewal Term, the amount determined pursuant to Section 4.01(b) of
the Lease. Notwithstanding any other provisions of the Lease or the
Participation Agreement or the Indenture, each Stipulated Loss Value shall be,
under any circumstances and in any event, an amount, together with so much of
the arrears portion of Interim Rent and Basic Rent due and owing through the
date of payment of Stipulated Loss Value as does not constitute an Excepted
Payment, at least sufficient to pay in full as of such date of payment the
aggregate unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on Schedule
III of the Lease, for dates other than Rent Payment Dates on which arrears
Interim Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent and,
accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
Substantial Authority. For Federal income tax purposes, shall have
the meaning applicable for purposes of Section 6662 of the Code and relevant
Treasury regulations.
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 any Ancillary Agreement
or any other Operative Agreement to the Lessor, the Owner Participant or
others, including, without limitation, payments of Stipulated Loss Value, EBO
Price and amounts calculated by reference to Termination Value and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement or the Tax Indemnity
Agreement or any other Operative Agreement, but excluding Interim Rent and
Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995, between
the Lessee and the Owner Participant, as from time to time modified, amended
or supplemented pursuant to its applicable provisions.
Term. The Preliminary Term, the Interim Term and the Basic Term of
the lease for the Aircraft under the Lease and, if renewed pursuant to Section
4.01 of the Lease, each Renewal Term for the Aircraft for which the Lease is
renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease, and in the
case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling on
July 2, 2009 or July 2, 2012, (ii) Section 4.02(a)(D) or (E) of the Lease, a
Rent Payment Date that is on or after the fifth anniversary of the
Commencement Date and (iii) Section 4.02(a)(F) of the Lease, January 2, 2015.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code (which,
among other things, recodified the Federal Aviation Act of 1958, as amended
to the time of such recodification), as amended and in effect on the date
of the Lease or as subsequently amended, or any successor or substituted
legislation at the time in effect and applicable, and the regulations
promulgated pursuant thereto.
Treasury Yield. (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N663FE), dated as of October 26, 1995, between the Owner Participant
and the Owner Trustee in its individual capacity, as from time to time
modified, amended or supplemented pursuant to its applicable provisions and in
accordance with the Operative Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the Underwriting
Agreement.
Underwriting Agreement. The Underwriting Agreement dated October 26,
1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
EXHIBIT 4.e.1
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N660FE)
Dated as of September 1, 1995
Amended and Restated as of October 26, 1995
among
FEDERAL EXPRESS CORPORATION,
Lessee
CHRYSLER CAPITAL CORPORATION,
Owner Participant
THE ENTITIES LISTED ON SCHEDULE I
TO THE ORIGINAL PARTICIPATION AGREEMENT,
Original Loan Participants
NBD BANK,
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as
Owner Trustee,
Owner Trustee
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as
Indenture Trustee,
Indenture Trustee
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as
Pass Through Trustee,
Pass Through Trustee
______________________________
LEVERAGED LEASE OF ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 759, REGISTRATION NO. N660FE
TABLE OF CONTENTS
Page
Initial Recitals........................................................... 1
ARTICLE 1
DEFINITIONS............................................................. 3
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
REFUNDING THE ORIGINAL LOAN CERTIFICATES
Section 2.01. Transfer of Funds........................................ 3
Section 2.02. Certificates............................................. 6
Section 2.03. Owner Participant Payment................................ 6
ARTICLE 3
EXTENT OF INTEREST OF ORIGINAL LOAN PARTICIPANTS
Section 3.01. Extent of Interest of Original Loan Participants......... 7
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent..................................... 7
Section 4.02. Opinion of Special Aviation Counsel...................... 16
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations............. 16
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties.................. 17
Section 6.02. Offering by Lessee....................................... 23
Section 6.03. Certain Covenants of Lessee.............................. 23
Section 6.04. Survival of Representations and Warranties............... 30
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate................................................. 31
Section 7.02. Citizenship.............................................. 31
Section 7.03. Representations, Warranties and Covenants of the Owner
Participant............................................ 32
Section 7.04. Representations, Covenants and Warranties of NBD and
the Owner Trustee...................................... 37
Section 7.05. Representations, Warranties and Covenants of the Indenture
Trustee................................................ 40
Section 7.06. Indenture Trustee's Notice of Default.................... 41
Section 7.07. Releases from Indenture.................................. 41
Section 7.08. Covenant of Quiet Enjoyment.............................. 42
Section 7.09. Original Loan Participants' and Pass Through Trustee's
Representations and Warranties......................... 42
Section 7.10. Survival of Representations, Warranties and Covenants.... 43
Section 7.11. Lessee's Assumption of the Certificates.................. 43
Section 7.12. Indebtedness of Owner Trustee............................ 45
Section 7.13. Compliance with Trust Agreement, Etc..................... 45
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes......................... 46
Section 8.02. After-Tax Basis.......................................... 52
Section 8.03. Time of Payment.......................................... 53
Section 8.04. Contests................................................. 53
Section 8.05. Refunds.................................................. 55
Section 8.06. Lessee's Reports......................................... 56
Section 8.07. Survival of Obligations.................................. 56
Section 8.08. Payment of Taxes......................................... 56
Section 8.09. Reimbursements by Indemnitees Generally.................. 57
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally................................................ 57
Section 9.02. After-Tax Basis.......................................... 61
Section 9.03. Subrogation.............................................. 62
Section 9.04. Notice and Payment....................................... 62
Section 9.05. Refunds.................................................. 62
Section 9.06. Defense of Claims........................................ 62
Section 9.07. Survival of Obligations.................................. 63
Section 9.08. Effect of Other Indemnities.............................. 63
Section 9.09. Interest................................................. 64
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs....................... 64
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee.................. 66
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant.................... 67
Section 12.02. Interest of Holders of Certificates..................... 68
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents.................... 68
Section 13.02. Further Assurances...................................... 68
Section 13.03. No Retroactive Application.............................. 68
ARTICLE 14
NOTICES
Section 14.01. Notices................................................. 69
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing............................................. 70
Section 15.02. Reoptimization.......................................... 73
ARTICLE 16
[INTENTIONALLY LEFT BLANK]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes.......................... 74
Section 17.02. [Intentionally Left Blank.]............................. 75
Section 17.03. Counterparts............................................ 75
Section 17.04. No Oral Modifications................................... 75
Section 17.05. Captions................................................ 75
Section 17.06. Successors and Assigns.................................. 75
Section 17.07. Concerning the Owner Trustee, the Pass Through Trustee
and the Indenture Trustee............................. 76
Section 17.08. Severability............................................ 76
Section 17.09. Public Release of Information........................... 76
Section 17.10. Certain Limitations on Reorganization................... 76
Section 17.11. GOVERNING LAW........................................... 77
Section 17.12. Section 1110 Compliance................................. 77
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality......................................... 78
SCHEDULE I Certificate Information
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
EXHIBIT A(1) (a) Opinion of Lessee's Counsel
EXHIBIT A(1) (b) Opinion of Lessee's Special Counsel
EXHIBIT A(2) (a) Opinion of Owner Participant's Special Counsel
EXHIBIT A(2) (b) Opinion of Owner Participant's Counsel
EXHIBIT A(3) (a) Opinion of Indenture Trustee's Special Counsel
EXHIBIT A(3) (b) Opinion of Indenture Trustee's Counsel
EXHIBIT A(4) Opinion of Special Aviation Counsel
EXHIBIT A(5) Opinion of Owner Trustee's Counsel
EXHIBIT A(6) (a) Opinion of Pass Through Trustee's Special Counsel
EXHIBIT A(6) (b) Opinion of Pass Through Trustee's Counsel
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N660FE)
PARTICIPATION AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO.
N660FE) dated as of September 1, 1995, as amended and restated as of
October 26, 1995 (this "Agreement") among FEDERAL EXPRESS CORPORATION, a
Delaware corporation (herein, together with its successors and permitted
assigns, the "Lessee"), CHRYSLER CAPITAL CORPORATION, a Delaware
corporation (herein, together with its successors and permitted assigns,
the "Owner Participant"), the entities listed on Schedule I to the Original
Participation Agreement as Loan Participants (individually, together with
its successors and permitted assigns, the "Original Loan Participant" and,
collectively, the "Original Loan Participants"), NBD BANK, a Michigan
banking corporation, 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, together with its
successors and permitted assigns, the "Owner Trustee"), THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), a national banking association, not in its
individual capacity, except as otherwise expressly stated herein, but
solely as indenture trustee under the Indenture referred to below (in such
capacity as trustee, together with its successors and permitted assigns,
the "Indenture Trustee") and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association, not in its individual
capacity, except as otherwise expressly stated herein, but solely as pass
through trustee (in such capacity as trustee, together with its successors
and permitted assigns, the "Pass Through Trustee") .
W I T N E S S E T H :
WHEREAS, the Lessee, the Owner Participant, the Owner Trustee, the
Original Loan Participants and the Indenture Trustee entered into the
Original Participation Agreement (such term, and all other terms not
heretofore defined, shall have the meanings assigned thereto as provided in
Article 1 below), providing for the sale and lease of the Aircraft that was
delivered on the Delivery Date;
WHEREAS, concurrently with the execution and delivery of the
Original Participation Agreement, the Owner Participant entered into the
Original Trust Agreement relating to the Aircraft with NBD in its
individual capacity, pursuant to which NBD agreed, among other things, to
hold the Lessor's Estate in trust for the benefit of the Owner Participant;
WHEREAS, concurrently with the execution and delivery of the
Original Participation Agreement, the Owner Trustee and the Indenture
Trustee entered into the Original Indenture, for the benefit of the
Original Loan Participants, pursuant to which the Owner Trustee issued to
the Original Loan Participants the Original Loan Certificates as evidence
of the loans made by the Original Loan Participants to the Owner Trustee,
the proceeds of which were used by the Owner Trustee to pay a portion of
the Purchase Price for the Aircraft;
WHEREAS, concurrently with the execution and delivery of the
Original Participation Agreement, the Owner Trustee and the Lessee entered
into the Original Lease relating to the Aircraft, whereby, subject to the
terms and conditions set forth in said Lease, the Owner Trustee agreed to
lease the Aircraft to the Lessee, and the Lessee agreed to lease the
Aircraft from the Owner Trustee, such lease of the Aircraft being evidenced
by the execution and delivery of the Lease Supplement;
WHEREAS, Article 15 of the Original Participation Agreement
permits a Refinancing of the Original Loan Certificates subject to the
satisfaction of the conditions specified in Section 15.01 thereof, and
Section 3.04 of the Original Lease contemplates the adjustment of the
percentages for Interim Rent, Basic Rent, Stipulated Loss Value and
Termination Value in the event of such a Refinancing, and the Lessee has
requested that the Owner Trustee effect such a Refinancing and adjustment;
WHEREAS, in order to facilitate such Refinancing, the Lessee is
concurrently entering into an Underwriting Agreement, which relates to
three series of Pass Through Certificates that will 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, on the Pass Through Closing Date, a closing will occur
with respect to the public offering of the Pass Through Certificates issued
by each Pass Through Trust, an allocable amount of the proceeds of which
offering 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, the proceeds of which purchase in turn will be applied
to the Refinancing in full of the outstanding principal amount of the
Original Loan Certificates;
WHEREAS, the Lessee, the Owner Participant, the Owner Trustee, the
Original Loan Participants and the Indenture Trustee have agreed, subject
to the terms and conditions hereinafter provided, to amend and restate, and
to add the Pass Through Trustee as a party to, the Original Participation
Agreement; and
WHEREAS, the Lessee, the Owner Participant, the Owner Trustee, the
Original Loan Participants and the Indenture Trustee have agreed, to the
extent they are parties thereto and, subject to the terms and conditions
hereinafter provided, to amend and restate the Original Indenture, to amend
and restate the Original Lease, to amend the Original Tax Indemnity
Agreement and to amend and restate the Original Trust Agreement, each such
amendment and restatement to be executed and delivered simultaneously with
the purchase of the Certificates by the Pass Through Trustee for the Pass
Through Trusts and the Refinancing in full of the Original Loan
Certificates.
NOW, THEREFORE, in consideration of the mutual covenants contained
in this Agreement and other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree, subject to the
terms and conditions hereinafter provided, that the Original Participation
Agreement be and the same is hereby amended and restated in its entirety as
follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, the definitions set
forth 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; REFUNDING THE
ORIGINAL LOAN CERTIFICATES
Section 2.01. Transfer of Funds.
(a) On or before the Pass Through Closing Date, the Pass Through
Trustee and the Lessee, in accordance with the Pass Through Agreement,
shall enter into the Series Supplements, and, subject to the terms and
conditions set forth therein, on the Pass Through 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 Refunding Date the following events shall occur in the
order set forth below:
(i) the Owner Participant shall on behalf of the Owner Trustee
execute a wire transfer or intra-bank transfer in favor of the Agent in
the amount of all accrued and unpaid interest on the Original Loan
Certificates to but excluding the Refunding Date, which transfer shall
constitute the payment of all such accrued and unpaid interest;
(ii) the Lessee shall on behalf of the Owner Trustee execute a
wire transfer or intra-bank transfer in favor of the Agent as
Supplemental Rent in the amount of any Breakage Costs required to be
paid pursuant to the Original Indenture which transfer shall constitute
the payment of all such Breakage Costs;
(iii) for 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 pay on behalf of the Owner Trustee in the manner
specified in paragraph (iv) below, an amount equal to the principal
amount of Certificates 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
Section 2.04 of the Indenture;
(iv) the aggregate amount payable by the Pass Through Trustee
pursuant to paragraph (iii) above shall be payable by wire transfer or
intra-bank transfer in favor of the Agent on behalf of the Owner Trustee
in the amount of the outstanding principal amount of the Original Loan
Certificates;
(v) the Agent shall apply the amounts received by it under
paragraphs (i), (ii) and (iv) of this subsection (b) to prepay the
Original Loan Certificates in full in accordance with Sections 2.06 and
2.10 of the Original Indenture; and
(vi) the Owner Trustee shall cause the Certificates to be
delivered to the applicable Pass Through Trustee in accordance with
Section 2.02 hereof.
On the Refunding Date concurrently with the events specified in
clauses (iii) through (v) of this Section 2.01(b), the parties hereto shall
execute and deliver, to the extent they are parties thereto, and consent to
the execution and delivery of (if they are not a party thereto), the
Indenture, the Lease and the Trust Agreement, and the Owner Trustee shall
execute and deliver to the Indenture Trustee for authentication, and the
Indenture Trustee shall authenticate and deliver to the applicable Pass
Through Trustee, upon the request of the Owner Trustee, the Certificates as
provided in Section 2.02 hereof. The Owner Participant hereby requests and
directs the Owner Trustee to execute and deliver this Participation
Agreement and, subject to the terms hereof, to take the actions specified
herein. The Original Loan Participants by their execution and delivery
hereof, request and direct the Indenture Trustee to execute and deliver
this Agreement and concurrently with the events specified in clauses (iii)
through (v) of this Section 2.01(b) and subject to the terms and conditions
hereof to take the actions contemplated herein. The parties hereto,
including, without limitation, the Original Loan Participants, confirm
that, as provided in Section 2.06 of the Original Indenture, upon payment
in full of the principal amount, Breakage Costs, if any, and interest on
the Original Loan Certificates and all other sums then payable to the
Original Loan Participants under the Original Agreements to the extent
specified in subsection (c) below, the Original Loan Participants shall
have no further interest in, or other right or obligation with respect to,
the Trust Indenture Estate, the Original Agreements or the Operative
Agreements (it being understood that the foregoing shall not limit or
detract from any claim that any Original Loan Participant may have under
Article 8 or 9 or Section 10.01(a) (ii) hereof or of the Original
Participation Agreement) and, accordingly, have no obligation to, and will
not attempt to direct any future actions of the Indenture Trustee with
respect to the Trust Indenture Estate, provided that the rights and
obligations of the Original Loan Participants shall, until the payment in
full of such amounts to the Agent on behalf of the Original Loan
Participants on the Refunding Date, be governed by the Original
Participation Agreement and the other Operative Agreements contemplated
thereby or in effect immediately prior to the effectiveness of this
Agreement and shall, upon such payment and thereafter, be governed by this
Agreement. The Lessee hereby consents to the foregoing.
(c) Not less than three (3) Business Days prior to the Refunding
Date, the Agent on behalf of the Original Loan Participants shall give
notice in writing to the parties hereto of the principal amount, Breakage
Costs, if any, and interest on and all other amounts due on the Refunding
Date under the Original Loan Certificates and all other sums payable on the
Refunding Date to the Original Loan Participants under the Original
Agreements, such notice to be deemed final and binding on the Original Loan
Participants as to the respective amounts of principal, Breakage Costs, if
any, and interest when given; provided that the expected Refunding Date, at
the time such notice is given, is the same as the Refunding Date.
(d) On the Refunding Date, subject to (i) the giving of at least
ten (10) Business Days' prior written notice to the Indenture Trustee and
the Original Loan Participants, (ii) the receipt by the Original Loan
Participants of the funds referred to in Section 2.01(b) (v) above and (iii)
compliance with the provisions of Section 15 of the Original Participation
Agreement and Section 2.10(c) of the Original Indenture (including the
Refinancing in full of the Original Loan Certificates), the Original Loan
Participants shall deliver the Original Loan Certificates to the Indenture
Trustee for cancellation and delivery to the Owner Trustee.
(e) The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to
the Refinancing of the Original Loan Certificates (together, the
"Closings") shall take place at the offices of Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017.
(f) All payments pursuant to this Section 2.01 shall be made in
immediately available funds.
(g) In the event that the Refunding Date and the actions
contemplated to occur on such date pursuant to subsection (d) of this
Section 2.01 do not occur on or before November 30, 1995, then the rights
and obligations of the parties to the Original Participation Agreement,
including, without limitation, the Original Loan Participants, shall be
governed by the Original Participation Agreement and the other Operative
Agreements contemplated thereby or in effect immediately prior to the
effectiveness of this Agreement and this Agreement shall be of no further
force and effect, except that the Lessee shall be obligated hereby to pay
all fees and expenses of the Original Loan Participants, the Indenture
Trustee, the Owner Participant, the Owner Trustee, the Pass Through Trustee
and their respective counsel relating to the transactions contemplated
hereby. Each of the parties hereto agrees to execute and deliver to the
other parties such documents and instruments as may be necessary to give
effect to the foregoing provisions of this subsection (g) .
Section 2.02. Certificates. Subject to the satisfaction or
waiver of the conditions set forth herein, on the Refunding Date, the Owner
Trustee shall execute 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 Refunding Date and shall bear interest from the Refunding Date and (v)
shall be registered in the name of the Pass Through Trustee on behalf of
such Pass Through Trust.
Section 2.03. Owner Participant Payment. The Owner Participant
agrees with the Lessee and only with the Lessee on behalf of the Owner
Trustee to make available to the Owner Trustee funds sufficient to pay to
the Indenture Trustee on the Owner Participant Payment Date an amount equal
to the amounts of principal (if any) and interest scheduled to be paid on
the Certificates on such date (the "Owner Participant Amount"), and the
Owner Trustee shall upon receipt thereof make such funds available to the
Indenture Trustee to pay amounts due and owing under the Certificates on
the Owner Participant Payment Date, provided that the Owner Participant
shall not be obligated to make such funds available if an Event of Default
under the Lease shall have occurred and be continuing on the date on which
such funds are to be made available. If the Owner Participant does not
make such funds available when otherwise required to do so, the Lessee
shall be obligated to make an advance pursuant to Section 3.05 of the Lease
in an amount sufficient to pay in full the amounts of principal and
interest due on the Certificates on such date. Such obligations shall not,
nor shall they be construed to, make the Owner Participant directly liable
on the Certificates or in any way convert the Certificates to recourse
loans against the Owner Participant.
ARTICLE 3
EXTENT OF INTEREST OF ORIGINAL LOAN PARTICIPANTS
Section 3.01. Extent of Interest of Original Loan Participants.
Delivery of the Original Loan Certificates by the Original Loan
Participants to the Indenture Trustee for cancellation on the Refunding
Date shall be conclusive evidence of receipt by the Original Loan
Participants of all amounts then due and payable to the Original Loan
Participants in respect of principal of, Breakage Costs, if any, and
interest on the Original Loan Certificates under the Original Agreements
(it being understood that the foregoing shall not limit or detract from any
claim any Original Loan Participant may have under Article 8 or 9 or
Section 10.01(a) (ii) hereof or of the Original Participation Agreement) .
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent. The obligations of the Owner
Trustee, the Owner Participant, the Lessee, the Indenture Trustee and the
Pass Through Trustee on behalf of each Pass Through Trust to participate in
the transactions contemplated hereby on the Refunding Date are subject to
the fulfillment to the satisfaction of such party (or waiver by such
party), prior to or on the Refunding Date, of the following conditions
precedent (it being understood that receipt by the Lessee of any of the
following documents shall not be a condition precedent to the obligations
of any party) :
(a) Certificates. On the Refunding Date, there shall have been
duly issued and delivered by the Owner Trustee to the Pass Through
Trustee for each Pass Through Trust, against payment therefor, a
Certificate, substantially in the form set forth in Exhibit B to the
Indenture, duly authenticated, dated the Refunding Date and registered
in the name of the Pass Through Trustee on behalf of such Pass Through
Trust, in the principal amounts, Maturity, bearing the interest rate and
the other economic terms specified in the Series Supplements and
otherwise as provided in Section 2.04 of the Indenture. 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 Refunding 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 or the Indenture Trustee or
their special counsel, 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 shall have occurred which would
otherwise make it illegal or otherwise in contravention of guidance
issued by regulatory authorities for the Owner Participant, the Lessee,
the Owner Trustee, the Pass Through Trustee or the Indenture Trustee, to
participate in the transaction to be consummated on the Refunding 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 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 Refunding 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 thereunder
shall have been satisfied or waived.
(d) Refunding Documents. This Agreement and the following
documents shall have been duly authorized, executed and delivered by the
respective party or parties thereto, shall, to the extent that the forms
thereof are not attached hereto, each be satisfactory in form and
substance to the Lessee, the Indenture Trustee, the Pass Through
Trustee, the Owner Trustee 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, the Owner Trustee, the Owner
Participant, the Indenture Trustee or the Pass Through Trustee, as the
case may be, of such documents shall have been delivered to the Lessee,
the Owner Participant, the Indenture Trustee, the Pass Through Trustee
and the Owner Trustee (provided that the sole chattel-paper original of
the Lease shall be delivered to the Indenture Trustee) :
(i) the Lease;
(ii) the Indenture;
(iii) the Trust Agreement; and
(iv) in the case of the Owner Participant only, Amendment No. 1 to
the Original Tax Indemnity Agreement.
(e) Insurance. Each of the Indenture Trustee, the Pass Through
Trustee, the Owner Trustee and the Owner Participant 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, in form and substance satisfactory to the
Indenture Trustee and the Pass Through Trustee (to the extent of their
interests thereunder) or the Owner Participant, as the case may be, to
establish that the insurance required by Article 13 of the Lease is in
effect.
(f) Financing Statements. (i) Uniform Commercial Code ("UCC")
financing statements covering all the security interests (and other
interests) created by or pursuant to the Granting Clause of the Original
Indenture 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 Original Loan Participants, and such financing statements
shall have been duly filed in the State of Michigan; (ii) a form UCC-3
financing statement to amend and restate each financing statement
referred to in the immediately preceding sentence shall have been
executed and delivered by the Owner Trustee, as debtor, and by the
Indenture Trustee as secured party, and a form UCC-1 financing statement
covering all the security interests (and other interests) created by or
pursuant to the Granting Clause of the Indenture 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 concurrently with the Refinancing of the Original Loan Certificates
such UCC-3 financing statement and UCC-1 financing statement shall have
been duly filed or duly submitted for filing in the State of Michigan,
and all other actions shall have been taken which, in the opinion of
special counsel for the Pass Through Trustee or for the Underwriters,
are necessary or desirable to maintain the perfection of the security
interest created by or pursuant to the Granting Clause of the Indenture;
(iii) a UCC notice filing describing the Original 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), and shall have been duly filed in the
State of Tennessee; and (iv) a form UCC-3 financing statement to amend
and restate the UCC notice filing referred to in the immediately
preceding clause (iii) shall have been executed and delivered by the
Owner Trustee, as lessor, and by the Lessee, as lessee (which filing
shall name the Indenture Trustee as assignee of the Owner Trustee), and
such notice filing shall concurrently with the Refinancing of the
Original Loan Certificates have been duly filed in the State of
Tennessee, and all other actions shall have been taken which, in the
opinion of the Owner Participant, Pass Through Trustee and the
Underwriters, are necessary to perfect and protect such security
interests and other interests created by or pursuant to the Granting
Clause of the Indenture.
(g) Corporate Documents. Except when such Person is the
delivering party, the Owner Participant, the Owner Trustee, the Lessee,
the Original Loan Participants, the Pass Through Trustee and the
Indenture Trustee (acting directly or by authorization to its counsel)
shall have received the following, in each case in form and substance
satisfactory to it:
(i) a copy of the certificate of incorporation and by-laws of
the Lessee, certified by the Secretary or an Assistant Secretary
of the Lessee as of the Refunding Date, and a copy of the
resolutions of the board of directors of the Lessee, certified as
such as of the Refunding Date by such Secretary or Assistant
Secretary, duly authorizing the lease by the Lessee of the
Aircraft under the Lease and the execution, delivery and
performance by the Lessee of the Original Agreements to which it
is a party, 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;
(ii) a copy of the certificate of incorporation and by-laws of
the Owner Participant, certified by the Secretary or an Assistant
Secretary of the Owner Participant as of the Refunding Date, and a
copy of the resolutions of the board of directors of the Owner
Participant, certified as such as of the Delivery Date by such
Secretary or Assistant Secretary, duly authorizing the execution,
delivery and performance by the Owner Participant of the Original
Agreements to which it is a party, this Agreement, the Tax
Indemnity Agreement, the Trust Agreement, the other Operative
Agreements to which the Owner Participant is or is to be a party
and each other document to be executed and delivered by the Owner
Participant in connection with the transactions contemplated
hereby;
(iii) a copy of the articles of incorporation and by-laws and
other instruments of NBD, certified by the Secretary or an
Assistant Secretary of NBD as of the Refunding Date (or other like
instruments satisfactory to the Lessee and the Owner Participant)
and evidence authorizing the execution, delivery and performance
by NBD or the Owner Trustee, as the case may be, of the Original
Agreements to which it is a party, this Agreement, 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 and each other document to be executed and delivered
by the Owner Trustee in connection with the transactions
contemplated hereby;
(iv) a copy of the articles of association and by-laws and
other instruments of Chase and a copy of the resolutions of the
board of directors of Chase, certified by the Secretary or an
Assistant Secretary of Chase as of the Refunding Date (or other
like instruments satisfactory to the Lessee and the Owner
Participant) duly authorizing the execution, delivery and
performance by Chase (in its capacity as the entity acting as
Indenture Trustee) or the Indenture Trustee, as the case may be,
of the Original Agreements to which it is a party, this 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 Indenture
Trustee and each other document to be executed and delivered by
the Indenture Trustee in connection with the transactions
contemplated hereby;
(v) a copy of the articles of association and by-laws and
other instruments of Chase and a copy of the resolutions of the
board of directors of Chase, certified by the Secretary or an
Assistant Secretary of Chase as of the Refunding Date (or other
like instruments satisfactory to the Lessee and the Owner
Participant) duly authorizing the execution, delivery and
performance by Chase (in its capacity as the entity acting as Pass
Through Trustee) or the Pass Through Trustee, as the case may be,
of this Agreement, the Pass Through Agreement, the Series
Supplements and each other document to be executed or
authenticated by or on behalf of the Pass Through Trustee in
connection with the transactions contemplated hereby; and
(vi) such other documents, evidences, materials, and
information with respect to the Lessee, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and the Owner
Participant as the Indenture Trustee, the Pass Through Trustee or
the Owner Participant may reasonably request in order to establish
the consummation of the transactions contemplated by this
Agreement.
(h) Title, Airworthiness and Registration. On the Refunding
Date, the following statements shall be true, and the Owner Participant,
the Owner Trustee, the Pass Through Trustee and the Indenture Trustee
shall have received evidence from the Lessee 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 the rights of the Owner
Trustee and the Lessee under the Lease and the Lease Supplement
covering the Aircraft, the rights of the Indenture Trustee under
the Indenture and the beneficial interest of the Owner Participant
created by the Trust Agreement and the interest of the Holders
created by the Indenture and the Indenture and Security Supplement
covering the Aircraft;
(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, the Indenture and the Trust Agreement
concurrently with the Refinancing of the Original Loan
Certificates 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) the Aircraft is registered in the name of the Owner
Trustee.
(i) Officer's Certificate of Lessee. On the Refunding Date, the
following statements shall be true, and the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee shall have
received a certificate signed by the Vice President and Treasurer or any
other duly authorized officer of the Lessee, dated the Refunding Date,
stating that:
(i) the representations and warranties of the Lessee contained
in the Operative Agreements to which it is a party (excluding the
Tax Indemnity Agreement) and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Refunding
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, 1995 (as updated by Note 7 to the
financial statement included in the Lessee's Quarterly Report on
Form 10-Q for the fiscal quarter ended August 31, 1995), 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 consolidated financial
statements of the Lessee as of August 31, 1995 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 a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, 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 an Event of Default under the
Lease.
(j) Officer's Certificate of Owner Participant. On the Refunding
Date, the following statements shall be true, and the Lessee, the Pass
Through Trustee, the Owner Trustee 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 Refunding Date,
stating that:
(i) the representations and warranties of the Owner
Participant contained in this Agreement, the Trust Agreement and
any other Operative Agreement to which it is a party and in any
certificate delivered pursuant hereto or thereto, are true and
correct on and as of the Refunding 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) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which
constitutes, due to any action or inaction on the part of the
Owner Participant, an Indenture Default or an Indenture Event of
Default.
(k) Other Officer's Certificates. On the Refunding Date, the
following statements shall be true, and the Owner Participant, the
Lessee, the Pass Through Trustee, the Owner Trustee and the Indenture
Trustee shall have received a certificate from each of NBD and the Owner
Trustee (in the case of the Lessee, the Owner Participant, the Pass
Through Trustee and the Indenture Trustee), Chase in its capacity as the
entity acting as Indenture Trustee (in the case of the Lessee, the Owner
Participant, the Pass Through Trustee and the Owner Trustee) and Chase
in its capacity as the entity acting as Pass Through Trustee (in the
case of the Lessee, the Owner Participant, the Indenture Trustee and the
Owner Trustee) signed by a duly authorized officer of NBD and Chase,
respectively, dated the Refunding Date, stating with respect to NBD and
the Owner Trustee, Chase (other than in its capacity as a Loan
Participant, Agent or Pass Through Trustee) and the Indenture Trustee or
Chase (other than in its capacity as a Loan Participant, Agent or
Indenture Trustee) and the Pass Through Trustee, as the case may be,
that:
(i) the representations and warranties of the Owner Trustee in
its individual capacity and as Owner Trustee, of the Indenture
Trustee in its individual capacity (other than in its capacity as
a Loan Participant, Agent or Pass Through Trustee) and as
Indenture Trustee, and of the Pass Through Trustee in its
individual capacity (other than in its capacity as a Loan
Participant, Agent or Indenture Trustee) and as Pass Through
Trustee, contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered
pursuant hereto or thereto are true and correct on and as of the
Refunding 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) 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, due to
any action or omission on the part of the Owner Trustee in its
individual capacity or as trustee, and of the Indenture Trustee in
its individual capacity (other than in its capacity as a Loan
Participant, Agent or Pass Through Trustee) or as trustee, an
Event of Default or an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or NBD and no Indenture Trustee's Liens affecting the
Trust Indenture Estate or the Lessor's Estate or any part thereof.
(l) Legal Opinions. The Owner Participant, the Original Loan
Participants, the Lessee, the Owner Trustee, the Indenture Trustee and
the Pass Through Trustee (acting directly or by authorization to its
special counsel) shall have received from the following counsel their
respective legal opinions in each case satisfactory to the Owner
Participant, the Original Loan Participants, the Lessee, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee, as the case
may be, as to scope and substance (and covering such other matters as
the recipient may reasonably request) and dated the Refunding Date:
(i) George W. Hearn, Esq., Vice President, Law - Corporate
and Business Transactions of the Lessee in the form of Exhibit
A(1) (a) hereto, addressed to the Owner Participant, the Owner
Trustee, the Pass Through Trustee, the Indenture Trustee, the
Underwriters and the Original Loan Participants;
(ii) Morgan, Lewis & Bockius, special counsel for the Owner
Participant, in the form of Exhibit A(2) (a) hereto and Ted
Verrill, Esq., Group Counsel of the Owner Participant, in the form
of Exhibit A(2) (b) hereto, each addressed to the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee, the Underwriters and the Original
Loan Participants;
(iii) Dewey Ballantine, special counsel for the Indenture
Trustee, in the form of Exhibit A(3) (a) hereto and Barbara Jo
Lubitz, Vice President and Senior Associate Counsel of the
Indenture Trustee, in the form of Exhibit A(3) (b) hereto, each
addressed to the Owner Participant, the Owner Trustee, the Pass
Through Trustee, the Indenture Trustee, the Lessee, the
Underwriters and the Original Loan Participants;
(iv) Daugherty, Fowler & Peregrin, special aviation counsel,
in the form of Exhibit A(4) hereto, addressed to the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee, the Underwriters and the Original
Loan Participants;
(v) [intentionally left blank];
(vi) [intentionally left blank];
(vii) Dickinson, Wright, Moon, Van Dusen & Freeman, special
counsel for the Owner Trustee, in the form of Exhibit A(5) hereto,
addressed to the Owner Participant, the Owner Trustee, the Pass
Through Trustee, the Indenture Trustee, the Lessee, the
Underwriters and the Original Loan Participants;
(viii) Davis Polk & Wardwell, special counsel to the Lessee, in
the form of Exhibit A(1) (b) hereto, addressed to the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee, the Underwriters and the Original
Loan Participants; and
(ix) Dewey Ballantine, special counsel for the Pass Through
Trustee, in the form of Exhibit A(6) (a) hereto and Barbara Jo
Lubitz, Vice President and Senior Associate Counsel of the Pass
Through Trustee, in the form of Exhibit A(6) (b) hereto, each
addressed to the Owner Participant, the Owner Trustee, the Pass
Through Trustee, the Indenture Trustee, the Lessee, the
Underwriters and the Original Loan Participants;
(m) No Indenture Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(n) No Defaults. No Default or Event of Default under 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.
(o) Cancellation. Following the Refinancing of the Original Loan
Certificates, the Original Loan Certificates shall have been duly
delivered by the Original Loan Participants to the Indenture Trustee for
cancellation and delivery to the Owner Trustee.
(p) 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 and the
Underwriters 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.
Section 4.02. Opinion of Special Aviation Counsel. Promptly upon
the filing and, where appropriate, recording of the documents specified in
4.01(h) (iii) hereof, pursuant to the Act, the Lessee shall cause Special
Aviation Counsel to deliver to the Owner Participant, the Owner Trustee,
the Pass Through Trustee and the Indenture Trustee an opinion as to (i) the
due recording of such documents and the documents identified in Section
4.01(i) of the Original Participation Agreement and (ii), subject to
customary qualifications, the lack of any intervening documents with
respect to the Aircraft.
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations. The
Lessee's obligation to participate in the transactions contemplated hereby
is subject to the conditions that, prior to or on the Refunding 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, as the case
may be, paragraphs (d), (g) (ii) -(v), (h) (ii) -(iv), (j), (k) and (l)(ii),
(iii), (iv), (vii), (viii) and (ix) of Section 4.01 hereof and the
Underwriters and the Owner Participant shall have made available the
amounts required to be paid by them pursuant to Section 2.01 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, on the
date hereof and as of the Refunding Date:
(a) the Lessee is a corporation duly organized and validly
existing and is in good standing under the laws of the State of Delaware
with its principal place of business and chief executive office (as such
terms are used in Article 9 of the Uniform Commercial Code) in Memphis,
Tennessee, and is duly qualified to do business as a foreign corporation
and is 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 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, the Original Agreements to which it is
a party, the other Operative Agreements to which it is a party, the Pass
Through Agreement and the Series Supplements (the "Lessee Documents") ;
(c) the Lessee is an "air carrier" within the meaning of the
Transportation Code and a holder of a certificate under Sections
41102(a) and 41103 of the Transportation Code and a "citizen of the
United States" within the meaning of Section 40102(a) (15) of the
Transportation Code holding an "air carrier operating certificate"
issued under Chapter 447 of the Transportation Code for aircraft capable
of carrying ten (10) or more individuals or 6,000 pounds or more of
cargo, 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) the execution, delivery and performance of the Lessee
Documents by the Lessee 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, and each such document
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 (regardless of
whether enforceability is considered in a proceeding in equity or at
law) ;
(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 the Lessee Documents 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
4.01(l) (iv) and 4.02 hereof and except for the filings referred to in
Section 4.01(f) hereof, all of which shall have been duly obtained or
made and shall be in full force and effect on and as of the Refunding
Date or as contemplated by said Sections;
(g) neither the execution, delivery or performance by the Lessee
of the Lessee Documents 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) 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 Aircraft, (B) 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, 1995 (as updated by Note 7 to the
financial statement included in the Lessee's Quarterly Report on Form
10-Q for the fiscal quarter ended August 31, 1995), 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, if adversely
determined, would materially and adversely affect the consolidated
financial condition, business or operations of the Lessee, or (C) if
adversely determined would adversely affect the ability of the Lessee to
perform its obligations under the Lessee Documents;
(i) the Lessee and its subsidiaries have 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, 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) ;
(j) except for (A) the filing and, where appropriate, recordation
pursuant to the Act of the Indenture, the Trust Agreement and the Lease,
(B) the filing of the financing statements referred to in Section
4.01(f) hereof and (C) 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
Delivery Date, no further action, including any filing or recording of
any document, is necessary or advisable in order (i) 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 (ii) to perfect
the first security interests in and mortgage Lien on the Trust Indenture
Estate in favor of the Indenture Trustee;
(k) on the Delivery Date, the Owner Trustee received good and
marketable title to the Aircraft, free and clear of all Liens, except
the rights of the Owner Trustee and the Lessee under the Original Lease,
the rights of the Indenture Trustee under the Original Indenture and the
beneficial interest of the Owner Participant created by the Original
Trust Agreement and the interest of the Original Loan Participants
created by the Original Indenture and the Indenture and Security
Supplement covering the Aircraft;
(l) the Lessee has heretofore delivered to the Owner Participant
true and correct copies of the Lessee's Annual Report on Form 10-K for
the fiscal year ended May 31, 1995 and its Quarterly Report on Form 10-Q
for the fiscal quarter ended August 31, 1995, and of the audited
consolidated balance sheet of the Lessee for the fiscal year ended May
31, 1995 and the unaudited consolidated balance sheet of the Lessee as
of August 31, 1995, and the related consolidated statements of income,
changes in common stockholders' investment and cash flows for the fiscal
year and interim reporting period ended on such dates, accompanied
(except in the case of such interim reporting period) by a report
thereon containing opinions without qualification, except as therein
noted, by Arthur Andersen & Co., independent public accountants; said
financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied and present fairly
the financial position of the Lessee as of such dates and the results of
its operations and cash flows for such periods and such Annual Reports,
Quarterly Reports and financial statements did not, as of their
respective dates of filing with the SEC, contain any untrue statement of
a material fact or omit a material fact necessary to make the statements
contained therein not misleading and there has been no material adverse
change in the consolidated financial condition of the Lessee since
August 31, 1995;
(m) with respect to ERISA, except as otherwise disclosed:
(i) none of the Pension Plans (as defined at the end of this
Section 6.01(m) ) nor their related trusts have been terminated in
a distress termination pursuant to Section 4041(c) of ERISA or by
the Pension Benefit Guaranty Corporation or any successor agency
or instrumentality thereto (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) 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
(viii) assuming (A) the truth of the representations contained
in Sections 7.03(a) (viii) and 7.09 hereof, (B) the applicability
of an individual or a class prohibited transaction exemption
("PTE") to the transactions contemplated hereby, and (C) the
compliance with all of the conditions of a PTE, 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 transaction 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 obligations
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 an employee benefit
plan subject to Section 4975 of the Code.
As used in this Section 6.01(m), 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;
(n) the Lessee is a Citizen of the United States;
(o) except for the filings referred to in Section 4.01(f) hereof,
no governmental approval of any kind is required of the Owner
Participant or for the Owner Participant's execution of or performance
under this Agreement or any agreement contemplated hereby 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;
(p) on the Refunding Date, all premiums with respect to the
insurance required to be provided by the Lessee on or prior to the
Refunding Date under Article 13 of the Lease have been paid by the
Lessee;
(q) on the Refunding Date, all sales or use taxes relating to the
sale of the Aircraft by AVSA to the Owner Trustee which are then or were
theretofore due shall have been paid;
(r) 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 Lessee Documents;
(s) 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;
(t) the Aircraft has been duly certified by the FAA as to type and
airworthiness; there is in effect with respect to the Aircraft a current
and valid airworthiness certificate issued by the FAA pursuant to the
Act; and there is no fact known to the Lessee which materially adversely
affects the value, utility or condition of the Aircraft;
(u) on the Refunding Date, the Lessee shall not be in default in
the performance of any term or condition of the Purchase Agreement, the
Purchase Agreement Assignment, the Engine Warranty Assignment and the
GTA;
(v) 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;
(w) the Aircraft is fully equipped to operate in commercial
service and will comply with all governmental requirements governing
such service;
(x) neither the Lessee nor any of its Affiliates is engaged
principally in the business of extending credit for the purpose of
buying or carrying margin stock (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System) and no part of the
proceeds from the sale of the Certificates and/or sale of the Aircraft
by the Lessee to the Owner Trustee will be used to purchase or carry any
such margin stock, or to refinance any borrowing, the proceeds of which
were used to purchase or carry any such margin stock;
(y) there are no broker's or underwriter's fees payable in
connection with the transactions contemplated in the Operative
Agreements other than those of the Underwriters and First Chicago
Leasing Corporation; and
(z) the representations and warranties of the Lessee set forth in
the Original Agreements to which it is a party were correct on and as of
the Delivery Date (except to the extent such representations expressly
related solely to a specified earlier date, in which case such
warranties and representations were correct on and as of such earlier
date) .
Section 6.02. Offering by Lessee. The Lessee represents and
warrants that it has authorized no one to act on its behalf in connection
with the offer or sale of any interest in the Lessor's Estate or the Trust
Agreement other than First Chicago Leasing Corporation. Neither the Lessee
nor, based on representations of First Chicago Leasing Corporation, anyone
acting on its behalf has directly or indirectly offered any interest in the
Lessor's Estate or the Trust Agreement, or similar interests, for sale to,
or solicited any offer to acquire any of the same from, anyone other than
the Owner Participant and no more than 53 other institutional investors (as
such term is defined in Regulation D promulgated under the Securities Act
of 1933, as amended) .
Section 6.03. 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, the Pass Through Trustee or the Owner
Participant shall reasonably require for accomplishing the purposes of
this Agreement, the Trust Agreement, the Indenture, the Tax Indemnity
Agreement, the Lease and the other Operative Agreements to which it is a
party. Without limiting the generality of this Section 6.03(a), the
Lessee will promptly 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 and any financing
statements or other instruments as may be 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 if the Lessee
cannot take, or cause to be taken, such action, 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 either of them to
take such action at the Lessee's cost and expense in a timely manner.
(b) The Lessee shall maintain the certificates referred to in
Section 7.01 of the Lease and shall cause the Aircraft to remain duly
registered, in the name of the Owner Trustee, under the Transportation
Code; provided, however, that the Owner Participant, the Owner Trustee
and the Indenture Trustee agree that if at any time after December 31,
2002 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 any country in which a permitted foreign
sublessee could be located pursuant to Section 7.02(a) (i) of the Lease
with which the United States then maintains normal diplomatic relations,
the Owner Participant, upon receipt by the Owner Participant, the Owner
Trustee and the Indenture Trustee of the assurances and opinion
described below, none of them shall 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 and trust
capacities, 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 and are and shall be in full
force and effect upon such change of registry;
(B) as to the continuation of the 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), (y) (i) if such change in registration
is made other than in connection with a sublease permitted under
Section 7.02(a) (i) of the Lease, imposes maintenance standards at
least comparable to those of the FAA, and (ii) if such change in
registration is made in connection with a sublease permitted under
Section 7.02(a) (i) of the Lease, imposes maintenance standards in
conformity with those set forth in Section 7.02(a) (i) of the Lease
and (z) would not impose requirements which materially increase
the administrative or other burdens or obligations of the Owner
Participant under the Operative Agreements unless indemnified by
the Lessee;
(E) that import and export certificates and any exchange
permits necessary to allow all Rent and other payments provided
for under the Lease, if required, shall have been procured at the
Lessee's own cost and expense by the Lessee;
(F) 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;
(G) 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 Pass
Through Trustee (in its individual capacity and as trustee under
the Pass Through Agreement) and the other Indemnitees under this
Agreement, the Indenture, the Pass Through Agreement and (in the
case of the Owner Participant only) the Tax Indemnity Agreement,
afford each such party substantially the same protection as
provided prior to such change of registry;
(H) that such change will not result in the imposition of, or
increase in the amount of, any Tax (which, for this purpose,
includes the loss of any tax benefits assumed by the Owner
Participant to be available to it based upon the assumptions set
forth in Section 2 of the Original Tax Indemnity Agreement) for
which the Lessee has not agreed to indemnify the Owner
Participant, the Indenture Trustee, the Owner Trustee (or any
successor, assign or Affiliate thereof) and the Trust Estate;
(I) 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;
(J) of the payment by the Lessee of any reasonable fees and
expenses of the Owner Participant, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee in connection with
such change of registry, including any reasonable attorneys' fees
and expenses; and
(K) that duties and tariffs, if applicable, shall have been
paid for by the Lessee;
(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 scope, 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, any sublessee, 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 or meet other requirements
not already met 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 or in order to maintain such
registration and the Lien of the Indenture;
(C) that the courts of such jurisdiction would provide
substantially equivalent protection to the Lessor, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee as
provided under United States law (with the exception described in
paragraph (b) (i) (D) (x) of this Section 6.03) 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 Trustee, 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) ;
(E) that the laws of such jurisdiction will not impair the
rights of the Lessor in and to the Aircraft or under the Lease and
(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) 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;
(F) that the Owner Trustee's title to the Aircraft is
recognized and fully enforceable in such jurisdiction, that such
jurisdiction will give effect to the title of the Aircraft therein
substantially to the same extent as does the Government, and that
the Lien of the Indenture shall continue as a first priority, duly
perfected lien on the Aircraft; and
(G) to such further effect with respect to such other matters
as the Owner Participant, the Owner Trustee, or the Indenture
Trustee may reasonably request.
(c) 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 by the Owner Trustee as the Lessor
and the Owner Participant under the Lease with any governmental
authority.
(d) The Lessee will cause the Special Aviation Counsel to file,
and where appropriate record, on the Refunding Date, the Lease, the
Trust Agreement and the Indenture. The following documents shall be
filed and, where appropriate, recorded on the Refunding Date with the
Aeronautics Authority in the following order of priority: first, the
Trust Agreement, second, the Indenture and third, the Lease with the
Indenture attached thereto.
(e) The Lessee 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 year 1996, 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 Owner Trustee's
title to and interest in the Aircraft and the Lessor's Estate as against
the Lessee and any third parties and to maintain the perfection of the
security interests 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 such title or 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 such title and the
perfection of such security interests (which the Lessee agrees timely to
take) ; 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 6.03(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 or the Owner Participant.
(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 U.S. Air Carrier holding an "air carrier operating
certificate" issued under Chapter 447 of the Transportation Code for
aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, (iv) expressly assumes by an instrument in
writing in form and substance satisfactory to the Indenture Trustee, the
Owner Participant 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 6.03(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 a Default not capable
of cure within the applicable grace period therefor or 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 6.03(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
6.03(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, the Owner Trustee 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
reports and statements furnished by the Lessee to all of 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 (and in any event within five (5) Business
Days after) any Responsible Officer of the Lessee obtaining actual
knowledge of any condition or event which constitutes a Default or
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, the Pass Through Trustee 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 employee
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 any Default
or any Event of Default or if a Default or 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 6.04. 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 Closings
hereunder 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) [Intentionally Left Blank.]
(b) 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 resale 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. Neither the Owner Participant nor
anyone authorized to act on its behalf 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 further represents and warrants
that neither it nor anyone authorized to act on its behalf has made or 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 of 1933, as amended. No representation in this Section
7.01(b) shall include any action or inaction of the Lessee, the Agent,
First Chicago Leasing Corporation or the Underwriters whether or not
purportedly on behalf of the Owner Trustee, the Owner Participant or any of
their Affiliates.
Section 7.02. Citizenship. (a) Generally. Each of the Owner
Trustee, in its individual capacity and as Trustee, and the Owner
Participant severally represents and warrants that it is a Citizen of the
United States on the Refunding Date. If the Owner Participant or 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 Participant or 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
Transportation Code as in effect at such time or, if it is not necessary
under the Transportation Code as in effect at such time, if it is informed
in writing by the Lessee or the Owner Participant that such lack of United
States citizenship would have any adverse effect on the Lessee or the Owner
Participant. 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 agrees, solely for
the benefit of the Lessee, the Pass Through Trustee, the Indenture Trustee
and the Owner Trustee, that if at any time when the Aircraft is registered
or the Lessee proposes to register the Aircraft in the United States (i) it
shall cease to be, or determines that it is likely to cease to be, a
Citizen of the United States and (ii) the Aircraft shall or would therefore
become ineligible for registration in the name of the Owner Trustee under
the Transportation Code and regulations then applicable thereunder, then
the Owner Participant shall give notice thereof to the Lessee, the Owner
Trustee and the Indenture Trustee and shall (at its own expense and without
any reimbursement or indemnification from the Lessee) immediately (and in
any event within a period of 15 Business Days following such determination
or, if earlier, within 15 days following actual loss of citizenship) (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 any actual damages (but not consequential damages) suffered by any
such other party to the extent the same shall result from the
representation and warranty of the Owner Participant in the first sentence
of Section 7.02(a) hereof proving to be untrue as of the Refunding Date;
and (B) to the Lessee, the Indenture Trustee and the Pass Through Trustee
for any damages actually incurred by the Lessee, the Indenture Trustee and
the Pass Through Trustee as a result of the Owner Participant's failure to
comply with its obligations pursuant to the first sentence of this Section
7.02(c) ; provided, that, the foregoing shall not restrict the Pass Through
Trustee or the Indenture Trustee from asserting against the Owner
Participant any damages actually incurred by the holders of any Pass
Through Certificates. 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
first sentence of this Section 7.02(c) .
Section 7.03. Representations, Warranties and Covenants of the
Owner Participant. (a) Representations, Warranties and Covenants. In
addition to and without limiting its other representations and warranties
provided for in this Article 7, the Owner Participant represents and
warrants that:
(i) it is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware and it has full
corporate 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 the Original
Agreements to which it is a party, this Agreement, the Tax Indemnity
Agreement, and the Trust Agreement;
(ii) the execution, delivery and performance by it of the Original
Agreements to which it is a party, this Agreement, the Tax Indemnity
Agreement, and the Trust Agreement have been duly authorized by all
necessary corporate action on its part and, assuming the accuracy of the
Lessee's representations in Section 6.01(o) 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 Sections 6.01(m) (viii), 6.02 and 7.09 hereof, neither the
execution, delivery or performance by the Owner Participant of the
Original Agreements to which it is a party, this Agreement, the Tax
Indemnity Agreement, and the Trust Agreement 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 by-laws, 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) the Original Agreements to which it is a party, this
Agreement, the Tax Indemnity Agreement and the Trust Agreement have been
or on the Refunding Date will be duly executed and delivered by the
Owner Participant and constitute or on the Refunding Date 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) to the best of its knowledge, 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 the Original Agreements to which it is a party,
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 the Owner Participant before any court, administrative agency or
tribunal which are expected to materially adversely affect the ability
of the Owner Participant to perform its obligations under any of the
Original Agreements or the Operative Agreements to which it is or is to
be a party, and the Owner Participant knows of no pending or threatened
actions or proceedings before any court, administrative agency or
tribunal involving it in connection with the transactions contemplated
by this Agreement, the Original Agreements or the Operative Agreements;
(vii) neither the execution and delivery by it of the Original
Agreements to which it is a party, this Agreement, the Tax Indemnity
Agreement or the Trust Agreement 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) it has a consolidated tangible net worth of not less than
$75,000,000; and
(x) the representations and warranties of the Owner Participant
set forth in the Original Agreements to which it is a party were correct
on and as of the Delivery Date (except to the extent such
representations expressly related solely to a specified earlier date, in
which case such warranties and representations were correct on and as of
such earlier date) .
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, including, without limitation, the airworthiness, value,
condition, workmanship, design, patent or trademark infringement,
operation, merchantability or fitness for use of the Aircraft, other than
such laws, rules or regulations relating to the citizenship requirements of
the Owner Participant under applicable aviation law.
(b) Lessor's Liens. The Owner Participant further represents,
warrants and covenants that there are no Lessor's Liens attributable to it
(or an Affiliate thereof) against, on or with respect to the Aircraft or
the Lessor's Estate or the Trust Indenture Estate, and that there will not
be any Lessor's Lien attributable to it (or an Affiliate thereof) against,
on or with respect to the Aircraft or the Lessor's Estate or the Trust
Indenture Estate attributable to it (or an Affiliate thereof) on the
Refunding Date. The Owner Participant agrees with and for the benefit of
the Lessee, the Owner Trustee, 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
neither the Lessee's operation and use of the Aircraft nor the validity and
priority of the Lien of the Indenture is 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 or otherwise materially adversely affect the validity or priority
of the Lien of the Indenture.
(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 (or an Affiliate thereof) and required to be discharged as
described in Section 7.03(b) hereof.
(d) Assignment of Interests of Owner Participant. At any time
after all obligations of the Owner Participant under Section 2.01(d) hereof
have been satisfied in full, the Owner Participant may assign, convey or
otherwise transfer to a single institutional investor or an Affiliate of an
institutional investor all (but not less than all) of the Beneficial
Interest, provided that it gives the Lessee and the Indenture Trustee at
least 10 Business Days' notice of such assignment, conveyance or other
transfer and provided further that the Owner Participant shall remain
liable for all obligations of the Owner Participant under the Trust
Agreement and the Operative Agreements to which the Owner Participant is a
party to the extent (but only to the extent) incurred on or before the date
of such transfer and provided that the transferee agrees by a written
instrument in form and substance reasonably satisfactory to the Indenture
Trustee, the Owner Trustee and the Lessee to assume primary liability for
all obligations as an Owner Participant under the Trust Agreement and the
other Operative Agreements to which such Owner Participant is a party
incurred after the date of transfer and the Owner Participant shall remain
secondarily liable for all such obligations assumed by its successor as
Owner Participant; provided, that the Owner Participant need not so agree
to remain and shall not be so secondarily liable if (a) 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 $75,000,000, (ii) a direct or indirect
subsidiary of any Person described in clause (i) where such Person provides
(A) support for the obligations assumed by such transferee subsidiary
reasonably satisfactory to the Lessee, the Owner Trustee and the Indenture
Trustee or (B) an unconditional guaranty reasonably satisfactory to the
Lessee, the Owner Trustee and the Indenture Trustee of such transferee
subsidiary's obligations, or (iii) an Affiliate of the transferring Owner
Participant, 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 $75,000,000, (b) such transferee is legally capable of
binding itself to the obligations of the Owner Participant and expressly
agrees to assume all obligations of the Owner Participant under the Trust
Agreement and this Agreement and (c) such transferee shall provide
representations substantially similar to those contained in Section 7.03(a)
hereof. In the event of any such assignment, conveyance or transfer, the
transferee shall become a party to the Trust Agreement and shall agree to
be bound by all the terms of and will undertake all of the obligations of
the Owner Participant contained in the Trust Agreement and the other
Operative Agreements in such manner as is reasonably satisfactory to the
Owner Trustee, the Indenture Trustee and the Lessee. A transferee
hereunder shall be (i) a "U.S. Person" as defined in Section 7701(a) (30)
of the Code (or any successor provision thereto) or if the transferee shall
not be such "U.S. Person" then (A) each Certificate Holder shall be
provided an indemnity in form and substance satisfactory to each such
Certificate Holder, for any Taxes that may be imposed on such Certificate
Holder (currently or in the future) due to such transferee's failure to be
such a "U.S. Person" and (B) such transferee shall be personally liable
for any debt service to the extent that its receipt of rentals is reduced
by reason of any withholding Taxes that result from such transferee's
failure to be such a "U.S. Person" and (ii) a Citizen of the United States
or has established a voting trust, voting powers or other arrangement
reasonably satisfactory to the Indenture Trustee and the Lessee to permit
the Owner Trustee to be the registered owner of the Aircraft under the
Transportation Code. A transferee hereunder shall not be, and in acquiring
the Beneficial Interest shall not use the assets of, an employee benefit
plan subject to Title I of ERISA or an individual retirement account or a
plan subject to Section 4975 of the Code. Assuming the truth of the
representations made in Sections 6.01(m) and 7.06 hereof, no such
assignment, conveyance or transfer shall violate any provision of law or
regulation or create a relationship which would be in violation thereof.
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 Owner Participant to a
transferee as above provided, the transferee shall be deemed the "Owner
Participant" or "Trustor" for all purposes of the Operative Agreements, 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 as
theretofore held by its transferor; and each reference therein to the
"Owner Participant" or "Trustor" shall thereafter be deemed a reference to
such transferee. Notwithstanding anything to the contrary contained in
this Section 7.03(d), in no event shall the Owner Participant transfer its
interest in the Beneficial Interest to any entity whose business is that of
a nationwide or worldwide overnight or expedited delivery small package air
courier, cargo or freight deliverer and which competes with the Lessee in
one of its principal lines of business.
(e) Actions with Respect to Lessor's Estate, Etc. The Owner
Participant agrees that it will not 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, Covenants and Warranties of NBD
and the Owner Trustee. (a) In addition to and without limiting its other
representations and warranties provided for in this Article 7, NBD
represents and warrants, in its individual capacity with respect to items
(i), (ii), (iii) (A), (iv), (v), (vi), (vii) and (viii) below and as the
Owner Trustee with respect to items (iii) (B) and (v) that:
(i) it is a banking corporation duly incorporated and validly
existing in good standing under the laws of the State of Michigan with
its principal place of business and chief executive office (as such
terms are used in Article 9 of the Uniform Commercial Code) at 611
Woodward Avenue, Detroit, Michigan 48226, 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 carry on its business as now conducted, and to
execute, deliver and perform this Agreement, the Original Agreements and
the Operative Agreements to which it is or is to be a party;
(ii) the execution, delivery and performance by NBD, either in its
individual capacity or as the Owner Trustee, as the case may be, of this
Agreement, the Original Agreements and the Operative Agreements to which
it is or is to be party have been duly authorized by all necessary
action on its part, and do not contravene its certificate of
incorporation or by-laws; each of this Agreement, the Original
Agreements and the Operative Agreements to which it is or is to be a
party has been duly authorized, executed and delivered by NBD, either in
its individual capacity or as the Owner Trustee, as the case may be, and
neither the execution and delivery thereof nor NBD's performance of or
compliance with any of the terms and provisions hereof or thereof will
violate any Federal or state or local law or regulation governing NBD's
banking or trust powers;
(iii) (A) assuming due authorization, execution and delivery by
each other party thereto, each of the Operative Agreements to which it
is or is to be party when duly executed and delivered will, and each of
the Original Agreements to which it is a party does, to the extent each
such document is entered into by NBD in its individual capacity,
constitute the legal, valid and binding obligation of NBD in its
individual capacity enforceable against it in such capacity in
accordance with its respective 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 (regardless of whether enforceability
is considered in a proceeding in equity or at law) ;
(B) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or
is to be party when duly executed and delivered will, and each of the
Original Agreements to which it is a party does, to the extent each such
document is entered into by the Owner Trustee in its trust capacity,
constitute the legal, valid and binding obligation of the Owner Trustee
enforceable against it in such capacity in accordance with its
respective 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 (regardless of whether enforceability
is considered in a proceeding in equity or at law), and the performance
by the Owner Trustee of any of its obligations thereunder does not
contravene any lease, regulation or contractual restriction binding on
the Owner Trustee or any judgement or order applicable to or binding on
it;
(iv) the performance by NBD in its individual capacity of any of
its obligations under this Agreement, the Original Agreements and the
Operative Agreements does not contravene any lease, regulation or
contractual restriction binding on NBD in its individual capacity;
(v) there are no pending or, to its knowledge, threatened actions
or proceedings against NBD before any court or administrative agency
which would materially and adversely affect the ability of NBD, either
in its individual capacity or as the Owner Trustee, as the case may be,
to perform its obligations under this Agreement, the Original Agreements
and the Operative Agreements to which it is or is to be party;
(vi) 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 or name;
(vii) 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 Original Agreements and the Operative Agreements to which it is
or is to be a party nor the performance of its obligations hereunder or
thereunder, requires on the part of NBD 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 state or local governmental authority or agency
governing its banking or trust powers;
(viii) on the Delivery Date the Owner Trustee shall have received
whatever title to the Aircraft as was conveyed to it by AVSA, on the
Refunding Date the Aircraft shall be free of Lessor's Liens attributable
to NBD in its individual capacity and NBD in its individual capacity is
a Citizen of the United States; and
(ix) the representations and warranties of the Owner Trustee set
forth in the Original Agreements to which it is a party were correct on
and as of the Delivery Date (except to the extent such representations
expressly related solely to a specified earlier date, in which case such
warranties and representations were correct on and as of such earlier
date) .
(b) Lessor's Liens. NBD, in its individual capacity, further
represents, warrants and covenants that there are no Lessor's Liens
attributable to it in its individual capacity against, on or with respect
to the Aircraft or the Lessor's Estate or the Trust Indenture Estate, and
that there will not be any such Lessor's Liens against, on or with respect
to the Aircraft or the Lessor's Estate or the Trust Indenture Estate on the
Refunding Date. 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, and in any event within 30 days after the same shall first become
known to it, take such action as may be necessary to discharge duly any
Lessor's Liens attributable to it in its trust capacity. NBD, 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, and in any event within 30 days 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 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. NBD, 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 NBD
to discharge and satisfy any Lessor's Liens attributable to it in its
individual capacity, as described in Section 7.04(b) hereof.
(d) Securities Act. None of NBD, the Owner Trustee or any Person
authorized by either of them to act on its behalf has directly or
indirectly offered or sold or will directly or indirectly offer or sell any
interest in the Lessor's Estate, or in any similar security relating to the
Lessor's Estate, or in any security the offering of which for purposes of
the Securities Act of 1933, as amended, would be deemed to be part of the
same offering as the offering of the aforementioned securities to, or
solicited any offer to acquire any of the same from, any Person. NBD
further represents and warrants, in its individual capacity and as the
Owner Trustee, that neither it nor anyone acting on its behalf shall own
the Certificates.
Section 7.05. Representations, Warranties and Covenants of the
Indenture Trustee. (a) The Indenture Trustee in its individual capacity
(other than as a Loan Participant, the Pass Through Trustee or the Agent)
represents as follows:
(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 power and authority to enter into and perform its
obligations under the Indenture, this Agreement and the Original
Agreements to which it is a party and to authenticate the Certificates
to be delivered on the Refunding Date;
(ii) the Indenture and this Agreement, and the authentication of
the Certificates to be delivered on the Refunding Date have been duly
authorized by all necessary 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, state or local 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) each of the Indenture, this Agreement and the Original
Agreements and the other Operative Agreements to which it is a party has
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 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;
(iv) neither the execution and delivery by it of this Agreement and
the Original Agreements 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, state or local
governmental authority or agency governing its banking and trust powers;
(v) the representations and warranties of the Indenture Trustee
set forth in the Original Agreements to which it is a party were correct
on and as of the Delivery Date (except to the extent such
representations expressly related solely to a specified earlier date, in
which case such warranties and representations were correct on and as of
such earlier date) ; and
(vi) the Indenture Trustee holds the original counterparts of the
Original Lease and the Lease Supplement.
(b) Indenture Trustee's Liens. The Indenture Trustee, in its
individual capacity, further represents, warrants and covenants that there
are no Indenture Trustee's Liens attributable to it in its individual
capacity against, on or with respect to the Aircraft or the Lessor's Estate
or the Trust Indenture Estate, and that there 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 on the Refunding Date. 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, and in any event within 30 days 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 Owner 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, the Owner Participant, the
Owner Trustee or the Pass Through 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) hereof.
Section 7.06. Indenture Trustee's Notice of Default. The
Indenture Trustee agrees to give the Owner Participant notice of any
Default promptly upon a Responsible Officer of the Indenture Trustee having
actual knowledge thereof.
Section 7.07. 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 the
Lien of the Indenture which it is required to execute and deliver in
accordance with the provisions of Article XIV 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 upon written notice from the Lessee to make such
request.
Section 7.08. Covenant of Quiet Enjoyment. 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 such Owner
Participant (or the Owner Trustee, the Indenture Trustee or the Pass
Through Trustee, as the case may be) nor any Person lawfully claiming
through such Owner Participant (or the Owner Trustee, the Indenture Trustee
or the Pass Through 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 such Owner Participant (or the Owner Trustee,
the Indenture Trustee or the Pass Through Trustee, as the case may be) .
Section 7.09. Original Loan Participants' and Pass Through
Trustee's Representations and Warranties. (a) Each Original Loan
Participant represents and warrants that the representations and warranties
made by it in Sections 7.01(a) and 7.06 of the Original Participation
Agreement were correct on and as of the Delivery Date (except to the extent
such representations expressly related solely to a specified earlier date,
in which case such representations and warranties were correct on and as of
such earlier date) .
(b) The Pass Through Trustee, in its individual capacity (except
with respect to clause (iii) below), represents and warrants as of the date
hereof (except as otherwise provided), as of the Pass Through Closing Date
and as of the Refunding Date 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 the Pass Through Agreement,
the Series Supplements and this Agreement and to execute and
authenticate the Pass Through Certificates to be delivered on the Pass
Through Closing Date;
(ii) the execution, delivery and performance of this Agreement, the
Pass Through Agreement and the Series Supplements and the performance of
its obligations hereunder and thereunder (including the execution and
authentication of the Pass Through Certificates to be delivered on the
Pass Through Closing Date) have been fully 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 violate any
Federal or New York 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 bylaws 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; and
(iii) each of this Agreement and the Pass Through Agreement has
been, and as of the Pass Through Closing Date the Series Supplements
will be, duly executed and delivered by it (in its individual and trust
capacities) 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 (in its individual and trust capacities), enforceable in
accordance with its respective terms except as 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 (regardless of whether such
enforceability is considered in a proceeding in equity or at law) .
Section 7.10. Survival of Representations, Warranties and
Covenants. The representations, warranties and covenants of the Owner
Participant, the Owner Trustee (in its individual or trust capacity), the
Pass Through Trustee (in its individual or trust capacity) and the
Indenture Trustee (in its individual or trust capacity) provided for in
this Article 7, and their respective obligations under any and all of them,
shall survive the Closings and the expiration or other termination of this
Agreement, and the other Operative Agreements.
Section 7.11. Lessee's Assumption of the Certificates. (a)
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 and to purchase the
Aircraft pursuant to Section 4.02(a) (A), (D), (E) or (F) of the Lease, and
so long as no 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 attributable to the
Owner Trustee) but subject to the 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) (A), (D), (E) or (F) 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, and 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 7.11
releasing the Owner Participant and the Owner Trustee from all obligations
in respect of the Certificates, the Indenture, this Agreement and all other
Operative Agreements, except any obligations which shall have arisen (or
with respect to events which shall have occurred) prior to such assumption
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, Make-Whole Premium, if any,
interest and all other sums owing on all Outstanding Certificates (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
and the Holders, 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 hereunder and under the Lease;
(ii) the instrument referred to in paragraph (i) of this Section
7.11(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 (or the Lessee's substituted
obligations) 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 7.11(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 of the
Certificates (or the Lessee's substituted obligations) referred to in
paragraph (ii) of this Section 7.11(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 Delivery
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 and expenses of counsel) of the Indenture Trustee, the Pass
Through Trustee, the Owner Trustee and the Owner Participant in connection
with such assumption.
Section 7.12. 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 shall not engage in any business or other activity other than the
transactions contemplated herein or in any other Operative Agreement and
all necessary or appropriate activity related thereto.
Section 7.13. Compliance with Trust Agreement, etc. Each of the
Owner Participant, NBD and the Owner Trustee agrees with the Lessee, the
Indenture Trustee and the Pass Through Trustee that so long as the Lien of
the Indenture shall be in effect it will (i) comply with all of the terms
of the Trust Agreement applicable to it in its respective capacity, the
noncompliance with which would materially adversely affect any such party
and (ii) not 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 any such party without the prior written consent of
such party. The Owner Trustee confirms for the benefit of the Lessee, the
Indenture Trustee and the Pass Through Trustee that it will comply with the
provisions of Article 2 of the Trust Agreement. Notwithstanding anything
else to the contrary in the Trust Agreement, so long as the Lease remains
in effect, the Owner Participant agrees not to terminate or revoke the
trust created by the Trust Agreement without the consent of the Lessee. If
and so long as the Indenture shall not have been discharged the consent of
the Indenture Trustee shall also be required in connection with any such
termination or revocation and in addition, the Owner Participant will
promptly and duly execute and deliver to the 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 the Indenture Trustee may from
time to time reasonably request and furnish in order to protect the rights
and remedies created or intended to be created in favor of the Indenture
Trustee under the Indenture and to create for the benefit of the
Certificate Holders a valid first priority Lien with respect to, and a
first and prior perfected security interest in, the Trust Indenture Estate.
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 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 the
Lessor's Estate, Rent 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 relating to:
(i) the acquisition, financing, use or operation of the Aircraft;
(ii) payments under the Original Agreements and the Operative
Agreements;
(iii) the property, or the income or other proceeds received with
respect to the property after an Event of Default under the Lease, by
the Indenture Trustee under the Indenture;
(iv) otherwise with respect to or by reason of the transactions
described in or contemplated by the Original Agreements and the
Operative Agreements;
(v) the payment of the principal or interest or other amounts
payable with respect to the Original Loan Certificates or the
Certificates;
(vi) the Original Loan Certificates, the Certificates or the Pass
Through Certificates or the issuance, acquisition, or refinancing
thereof or the beneficial interests in the Lessor's Estate or the
creation thereof under the Trust Agreement; or
(vii) any assumption by the Lessee pursuant to Section 7.11 of this
Agreement and Section 2.12 of the Indenture.
(b) Exceptions. The indemnity provided for in Section 8.01(a)
shall not extend to any of the following:
(i) with respect to an Indemnitee other than an Original Loan
Participant, Taxes based upon, measured by or with respect to the net or
gross income, items of tax preference or minimum tax or excess profits,
net receipts, value-added taxes (in the nature of an income tax and not
in the nature of a sales, use or similar tax), capital, franchise, net
worth (whether denominated income, excise, capital stock, or doing
business taxes) (other than, in each case, rental, sales, use,
transfer, value-added (in the nature of a sales, use or similar tax and
not in the nature of an income tax), consumption, ad valorem, stamp,
property, or similar taxes) ("Income Taxes"), provided that any such
gross income and gross receipts taxes and any such foreign taxes shall
not be excluded if such Taxes would not have been imposed absent the
location of the Aircraft, Airframe, any Engine or Part in, the presence,
operations or activities of the Lessee and/or its Affiliates or any
other user of the Aircraft, Airframe, any Engine or Part in, the making
of payments from, or any other Lessee (and/or Lessee Affiliate) or other
user contact with, such jurisdiction, and provided further that income
taxes on the Trust Estate shall not be excluded under this paragraph
(b) (i) if the Owner Participant would not have been subject to such
taxes in the absence of the participation of Owner Trustee in the
transaction;
(ii) with respect to an Original Loan Participant, Income Taxes
(other than in the case of a Non-U.S. Person, U.S. federal withholding
taxes on amounts payable with respect to such Holder's Loan Certificate)
except to the extent such Income Tax is imposed (including by way of
increase) by any jurisdiction in which the Indemnitee is subject to tax
(A) as a result of the operation, registration, location, presence,
basing or use of the Aircraft, Airframe, any Engine or any Part thereof,
in such jurisdiction (it being understood that (I) the incremental
Income Taxes described in this clause (A) shall not include any U.S.
Federal income taxes and (II) that to the extent such incremental Income
Taxes give rise to any incremental current Tax benefit in another tax
jurisdiction, that such incremental benefit shall offset and decrease
the incremental Income Taxes determined under this clause (A) ) or (B)
solely as a result of the place of incorporation, principal office,
corporate domicile or the activities of the Lessor, Owner Participant,
the Owner Trustee, the Indenture Trustee, the Lessee or any sublessee in
such jurisdiction (it being understood that to the extent that any
Income Taxes described under this clause (B) give rise to any
incremental current Tax benefit in another tax jurisdiction or another
tax period, that such incremental Tax benefit shall offset and decrease
the Income Taxes determined under this clause (B) ) ; provided, however,
that the provisions of this paragraph (b) (ii) relating to Income Taxes
shall not exclude from the indemnity described in Section 8.01(a) any
Income Taxes for which the Lessee would be required to indemnify an
Indemnitee (x) 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) pursuant to the last sentence of Section 8.02 of
this Agreement;
(iii) taxes imposed with respect to the Aircraft and arising out of
or measured by acts, omissions, events or periods of time (or any
combination of the foregoing) which occur after the later of (A) 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 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 7.11 of this
Agreement), and (B) the earliest of (x) the expiration of the Term of
the Lease 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, provided that this exclusion (iii) shall not apply
in respect of any payment made after the dates set forth in clauses (A)
and (B) above or with respect to any event or circumstance occurring on,
with or prior to such return or transfer or period prior to such return
or transfer;
(iv) 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 Owner Trustee under the Indenture;
(v) 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);
(vi) 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 Delivery Date, 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 Lessor's Estate except, in each
case, Taxes following or as a result of the exercise of remedies or in
connection with the exercise by the Lessee of one of its options to
purchase other than at Fair Market Value (it being understood that any
disposition of the Aircraft or the Airframe, any Engine or Part as a
result of the substitution, replacement or modification thereof by the
Lessee or by reason of any action taken by the Lessee or any other user
of the Aircraft, Airframe or any Engine pursuant to Sections 7, 8, or 9
of the Lease shall not be treated as a voluntary or involuntary transfer
or disposition, and that in the event that the Lessee exercises any of
its purchase options at Fair Market Value, the Lessee will, to the
extent practicable, cooperate to ensure delivery of the Aircraft in a
jurisdiction where there are no sales, transfer or similar Taxes to be
imposed);
(vii) Taxes imposed on the Owner Participant for which the Lessee
is obligated to indemnify the Owner Participant pursuant to the Tax
Indemnity Agreement;
(viii) Taxes imposed on a successor, assign or other transferee of
the Owner Participant that is not a U.S. Person or of any other
original Indemnitee (including, without limitation, a transferee which
is a new lending office of an original Indemnitee) (other than the
Owner Trustee) which on the Refunding Date is an Indemnitee (for
purposes of this clause (viii), an "original Indemnitee") or such
original Indemnitee to the extent that such Taxes exceed the amount of
Taxes that would have been imposed (in the case of an Original Loan
Participant, immediately after giving effect to such succession,
assignment or other transfer) 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
applicable to it); provided, however, that the exclusion provided by
this clause (viii) shall not apply in the case of a succession,
assignment or other transfer (1) while an Event of Default under the
Lease or the Indenture has occurred and is continuing; (2) required by
any provision of the Operative Agreements (other than pursuant to
Section 7.02 hereof) or (3) in the case of the Owner Participant or any
of its Affiliates, to any Tax other than an Income Tax;
(ix) As to any Original Loan Certificate Holder or Certificate
Holder, any U.S. federal withholding taxes imposed on the payment or
receipt of any amounts payable with respect to the Original Loan
Certificates of an Original Loan Certificate Holder or a Certificate of
a Certificate Holder, as the case may be, which is a Non-U.S. Person,
unless, in the case of an Original Loan Certificate Holder, such
Indemnitee (I) either (A) delivers to the Indenture Trustee and the
Lessor two Treasury Department Forms 4224 with respect to any and all
payments under the Loan Certificates, (B) delivers to the Indenture
Trustee and the Lessor a Treasury Department Form 1001 entitling such
Holder to a complete exemption from such U.S. withholding tax on
interest, or (C) delivers to Indenture Trustee and the Lessor a Treasury
Department Form W-8, in each case, evidencing such Indemnitee's partial
or complete exemption from United States withholding taxes, and (II)
executes and delivers to the Indenture Trustee and the Lessor additional
Treasury Department Forms 4224, 1001, or W-8 (or any successor forms),
as applicable in such manner and at such times as may be necessary to
evidence such exemption (unless and to the extent that, in the case of
any Loan Participant, such Indemnitee is not legally entitled to do so
as a result of a change in law or regulation enacted, adopted or
promulgated after the acquisition by it of its Loan Certificates) (in
the event that the Lessee assumes the debt, an Original Loan Participant
shall be deemed to have become such when it first acquired its Original
Loan Certificate); provided, however, that the provisions of this
paragraph (b) (viii) shall not apply to any withholding taxes for which
the Lessee would be required to indemnify an Original Loan Certificate
Holder 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;
(x) any Taxes which have been included in the Purchase Price and
which have been paid to the applicable taxing authorities;
(xi) 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;
(xii) any Taxes arising under or in connection with any prohibited
transaction, within the meaning of Section 406 of ERISA or Section
4975(c) (1) of the Code ("Prohibited Transaction"); provided, however,
that in the event Prohibited Transaction Exemption 89-88, appearing at
54 Fed. Reg. 42581 (1989), or any other comparable prohibited
transaction exemption, (individually or collectively, a "PTE") is not
valid or is not applicable in any respect to the purchase and holding of
the Pass Through Certificates, then the indemnity provided for in
Section 8.01(a) hereof shall extend to Taxes imposed on the Owner
Participant as the result of any Prohibited Transaction occurring with
respect to the purchase or holding of any Pass Through Certificate by an
employee benefit plan subject to Title I of ERISA or by a plan subject
to Section 4975 of the Code (individually or collectively, an "ERISA
Plan") with respect to which ERISA Plan the Owner Participant is a party
in interest, within the meaning of Section 3(14) of ERISA, or a
disqualified person, within the meaning of Section 4975 of the Code,
except, however, that such indemnity shall not extend to any Taxes
imposed on the Owner Participant as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificate (A) over which purchase or holding the Owner
Participant or any Affiliate thereof has discretion or control (other
than in the capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16) (B) of ERISA; and provided
further, however, that in the event the PTE is not valid or applicable
in any respect to the purchase and holding of the Pass Through
Certificates and the Lessee had failed to obtain from the manager or
co-manager of the underwriting syndicate of the Pass Through Certificates a
representation that such manager or co-manager has a PTE, then the
indemnity provided for in Section 8.01(a) hereof shall extend to Taxes
imposed on the Owner Participant as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificate by an ERISA Plan with respect to which the
Owner Participant is a party in interest or a disqualified person,
except, however, that such indemnity shall not extend to Taxes resulting
from any Prohibited Transaction occurring with respect to the purchase
or holding of any Pass Through Certificates by an ERISA Plan with
respect to which the Owner Participant (or any Affiliate thereof) is a
"plan sponsor", within the meaning of Section 3(16) (B) of ERISA; and
(xiii) Taxes imposed by any jurisdiction that would have been imposed on
the Lessor or the Owner Participant for activities in such jurisdiction
unrelated to the transactions contemplated by the Operative Agreements
to the extent imposed on such unrelated activities.
(c) Withholding. The Pass Through Trustee shall withhold any
Taxes required to be withheld on payments to any holder of a Pass Through
Certificate who is a Non-U.S. Person except to the extent that such holder
of a Pass Through Certificate has furnished evidence to the Pass Through
Trustee sufficient under applicable law to entitle such holder of a Pass
Through Certificate to any exemption from or reduction in the rate of
withholding on interest claimed by such holder of a Pass Through
Certificate. 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 a Tax required to be withheld with respect to any Holder of a
Certificate or any holder of a Pass Through Certificate or any claim is
otherwise asserted by a taxing authority against the Owner Trustee or Owner
Participant or any of their Affiliates for any withholding tax, the Lessee
will indemnify the Owner Trustee and the Owner Participant and their
Affiliates (and the Indenture Trustee or the Pass Through Trustee, as the
case may be, in turn agrees to indemnify the Lessee) (without regard to
the exclusions set forth in Section 8.01(b) hereof) on an After-Tax Basis
against any such Taxes required to be withheld and any interest and
penalties with respect thereto, along with any other costs (including
reasonable attorney's fees) incurred in connection with any such claim.
The Indenture Trustee or the Pass Through Trustee, as the case may be, in
its individual capacity (and without recourse to the Trust Indenture
Estate), shall indemnify the Lessee on an After-Tax Basis for any payment
the Lessee shall have made pursuant to the preceding sentence.
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, provided that the calculation of any additional
amounts owing to any Indemnitee as a result of the Lessee's obligation to
indemnify on an After-Tax Basis shall be made without regard to the
exclusions set forth in Section 8.01(b). 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 promptly 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 under this Agreement, the Tax
Indemnity Agreement, the Original Agreements and any other Operative
Agreement, an amount equal to the lesser of (x) the sum of such permanent
tax benefit plus any other permanent 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, and (y) the amount of the payment made under Sections 8.01 and 8.02
by the Lessee to such Indemnitee plus the amount of any other payments by
the Lessee to such Indemnitee theretofore required to be made under
Sections 8.01 and 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 to such Indemnitee 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 (and without regard to
Section 8.01(b), except for clause (v) thereof) 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 subsequently disallowed
or reduced (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 and adversely impaired by the
failure to provide such notice or copy. The Lessee may, at its option,
contest or, if required by law, require the Indemnitee to contest in good
faith, with due diligence and at the Lessee's expense, if timely requested
in writing by the Lessee, 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 Lessor's Lien on the Aircraft, Airframe or any Engine or any risk of
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 control the contest and 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; provided,
however, that the Lessee shall have the right to be consulted in good faith
with respect to any contest, including governmental and judicial
conferences and the right to be consulted in good faith regarding all
related submissions to any governmental or other authority, provided,
however, that the Lessee shall be permitted to participate in any such
contest only (x) with respect to issues that can be separated on audit from
any Taxes for which the Lessee is not required to indemnify the Indemnitee
hereunder, and (y) if the Indemnitee shall have determined that in its
judgement, exercised in its sole discretion, neither such participation nor
the separation of issues will adversely affect the Indemnitee.
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 to pay and shall pay the Indemnitee on a
current basis all reasonable fees and expenses which such Indemnitee may
incur as a 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 acknowledgement 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, and (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 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
the Lessee and reasonably satisfactory to such Indemnitee ("Tax Counsel")
to the effect that there exists Substantial Authority for contesting such
claim, (ii) such Indemnitee (and, if such Indemnitee is not the Owner
Participant, the Owner Participant and 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 circumstances or law has
changed and, in light thereof, there is Substantial Authority for
contesting such claim and (viii) the amount of the indemnity payments the
Lessee would be required to make with respect to such adjustment, when
aggregated with similar adjustments that could be raised in other taxable
years of such Indemnitee is at least $50,000; provided, that in the event
that such Indemnitee is not required under this paragraph to contest any
Tax liability for which the Lessee is obligated to indemnify any
Indemnitee, the Lessee may contest such Tax liability in the name of the
Lessee, if permitted by law.
The Lessee may appeal or require the Indemnitee to appeal any
judicial decision (including to the U.S. Supreme Court), provided that the
Lessee may not require the Indemnitee to appeal any judicial decision
unless (i) 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 appeal
will be successful, and (ii) the Indemnitee shall have made a good faith
determination that it shall not be adversely affected by such appeal.
Nothing contained in this Section 8.04 shall require any
Indemnitee to contest or continue to contest, or permit 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
Lessee of any amount that might otherwise be payable by 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
permanent 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 and (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
(in the case of any such tax benefit, without regard to Section 8.01(b)
hereof) .
Section 8.06. Lessee's Reports. 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 Indemnitee 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 Indemnitee may reasonably require from the Lessee to
enable the Indemnitee 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
Indemnitee will provide such information reasonably available to it as the
Lessee may reasonably require from such Indemnitee 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; provided that in no event shall any Indemnitee be
required to provide copies of any of its tax returns. The Lessee shall
hold the Indemnitee harmless from and against any liabilities, including
penalties, additions to tax, fines and interest, imposed upon or incurred
by such Indemnitee 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 such
Indemnitee 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 federal, 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 Trustee or Owner Participant
is the owner of the Aircraft, the Airframe, any Engine or any Part or which
would otherwise be inconsistent with the terms of the Lease or the Tax
Indemnity Agreement 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, 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 of any part thereof, which Taxes are not the responsibility of
Lessee with respect to such Indemnitee, then such Indemnitee shall pay to
Lessee within 30 days of Lessee's demand therefor an amount which equals
the amount actually paid by 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, penalties, claims, actions, suits, costs, disbursements and
expenses (including legal fees and expenses (including, without limitation,
the allocated reasonable costs and expenses of in-house counsel to any
Original Loan Participant) and all costs and expenses relating to
amendments, supplements, adjustments, consents, refinancings and waivers
under the Operative Agreements and the Original Agreements except as
otherwise provided in Section 10.01(d) (i) or Section 15 hereof) of every
kind and nature (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) the Original Agreements, this Agreement, the Lease, the
Indenture, the Trust Agreement, the Pass Through Trust Agreement, AVSA's
FAA Bill of Sale, AVSA's Warranty Bill of Sale or any other Operative
Agreement or any other document entered into in connection herewith or
any sublease or transfer 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, sale, return, purchase, acceptance,
rejection, delivery, non-delivery, condition, repair, modification,
servicing, rebuilding, airworthiness, registration, reregistration,
import, export, performance, non-performance, lease, sublease, transfer,
merchantability, fitness for use, alteration, substitution or
replacement of any Airframe, Engine, or Part under the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the GTA or the
Engine Warranty Assignment or other transfer of use or possession, or
other disposition 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 Original Agreements, or the falsity or inaccuracy of
any representation or warranty of the Lessee in any of the Operative
Agreements or the Original Agreements (other than representations and
warranties in the Tax Indemnity Agreement);
(v) the enforcement of the terms of the Operative Agreements or
the Original 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 any Original Loan Certificate, or any
refunding or refinancing thereof, or interest in the Lessor's Estate or
the Trust Agreement or the Original Trust Agreement or any similar
interest or in any way relating to or arising out of the Trust Agreement
or the Original Trust Agreement and the Lessor's Estate, the Indenture
or the Original Indenture or the Trust Indenture Estate (including,
without limitation, any claim arising out of the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, 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 or Indenture Trustee as trustees, in the manner
contemplated by this Agreement, the Original Participation Agreement,
the Indenture, the Original Indenture, the Indenture and Security
Agreement Supplement, the Trust Agreement or the Original Trust
Agreement and in the case of the Owner Participant, its obligations
arising under Section 6.01 of the Trust Agreement or the Original 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 Agreements and Original Agreements), 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 to the extent it:
(i) would not have occurred but for the willful misconduct or
gross negligence of such Indemnitee;
(ii) in respect of the Aircraft, is attributable to acts or events
which occur after the Aircraft is no longer part of the Lessor's Estate
or leased under the Lease or, if the Aircraft remains a part of the
Lessor's Estate, after the expiration of the Term (other than 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 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 circumstances or
events occurring prior to expiration of the Term, including without
limitation the Lessee's failure to fully discharge all of its
obligations under the Lease, the other Operative Agreements or the
Original Agreements;
(iii) 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;
(iv) is a cost or expense required to be paid by the Owner
Participant or its permitted transferees (and not by the Lessee)
pursuant to this Agreement or any other Operative Agreement (other than
the Owner Participant's obligations under Section 6.01 of the Trust
Agreement) and for which the Lessee is not otherwise obligated to
reimburse the Owner Participant, directly or indirectly;
(v) 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 required to be observed and performed by it, in this
Agreement, the Purchase Agreement Assignment, the Lease, the Indenture,
the Trust Agreement, the Original Agreements 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) is a payment required to be made by the Owner Participant
pursuant to Section 2.01(b) hereof, but nothing contained in this
Section 9.01(b) (vi) shall be deemed or construed to limit the
obligations of the Lessee to the Indenture Trustee and Holders of the
Certificates pursuant to Section 3.05 of the Lease;
(vii) is, 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) is, in the case of the Owner Participant or the Owner
Trustee, attributable to the offer or sale by such Indemnitee after the
Delivery 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) in connection with a Refinancing or (y) as a
result of exercise of remedies under Section 17 of the Lease; and
(ix) is incurred under or in connection with any prohibited
transaction, within the meaning of Section 406 of ERISA or Section
4975(c) (1) of the Code ("Prohibited Transaction"); provided, however,
that in the event Prohibited Transaction Exemption 89-88, appearing at
54 Fed. Reg. 42581 (1989), or any other comparable prohibited
transaction exemption, (individually or collectively, a "PTE") is not
valid or is not applicable in any respect to the purchase and holding of
the Pass Through Certificates, then the indemnity provided for in
Section 9.01(a) hereof shall extend to any Expense incurred by the Owner
Participant as the result of any Prohibited Transaction occurring with
respect to the purchase or holding of any Pass Through Certificate by an
employee benefit plan subject to Title I of ERISA or by a plan subject
to Section 4975 of the Code (individually or collectively, an "ERISA
Plan") with respect to which the Owner Participant is a party in
interest, within the meaning of Section 3(14) of ERISA, or a
disqualified person, within the meaning of Section 4975 of the Code,
except, however, that such indemnity shall not extend to any Expense
incurred by the Owner Participant as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificate (A) over which purchase or holding the Owner
Participant (or any Affiliate thereof) has discretion or control (other
than in the capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16) (B) of ERISA; and provided
further, however, that in the event the PTE is not valid or applicable
in any respect to the purchase and holding of the Pass Through
Certificates and the Lessee had failed to obtain from the manager or
co-manager of the underwriting syndicate of the Pass Through Certificates a
representation that such manager or co-manager has a PTE, then the
indemnity provided for in Section 9.01(a) hereof shall extend to any
Expense incurred by the Owner Participant as the result of any
Prohibited Transaction occurring with respect to the purchase or holding
of any Pass Through Certificate by an ERISA Plan with respect to which
the Owner Participant is a party in interest or a disqualified person,
except, however, that such indemnity shall not extend to any Expense
incurred by the Owner Participant as a result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificates by an ERISA Plan with respect to which the
Owner Participant (or any Affiliate thereof) is a "plan sponsor", within
the meaning of Section 3(16) (B) of ERISA.
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 under this Agreement, the Original Agreements, the Tax Indemnity
Agreement and any other Operative Agreement, an amount equal to the lesser
of (x) the sum of such Tax benefit plus any other permanent 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 to such Indemnitee pursuant to this Section 9.02),
it being intended that no Indemnitee should realize a net Tax benefit
pursuant to this Section 9.02 unless the Lessee shall first have been made
whole for any payments by it to such Indemnitee 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 (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 without regard to Section 8.01(b) 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
(with respect to such Indemnitee) 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, but without regard to Section 8.01(b)
hereof, other than Section 8.01(b) (v) hereof.
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 its 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 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 obligation to indemnify such Indemnitee hereunder in respect of
such claim, defend any such claim covered by insurance for which
indemnification is sought pursuant to this Article 9 and each Indemnitee
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, to the
extent 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 such Indemnitee waives its right to be
indemnified under this Article 9 with respect to such claim. The Lessee
shall not enter into any settlement or compromise which the Lessee has not
agreed to discharge or with respect to which the Lessee has not agreed to
indemnify such Indemnitee to such Indemnitee's satisfaction.
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 Purchase
Agreement Assignment, the Engine Warranty Assignment, the Lease and the
other Operative Agreements but, as to such indemnities, only with respect
to losses, liabilities, obligations, damages, penalties, claims, actions,
suits, costs, Expenses and disbursements caused by events occurring or
existing (or fairly attributable to the Lessee's acts or omissions) 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 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
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs. (a)
Transaction Costs. The Owner Participant shall pay (or reimburse the
Lessee if the Lessee shall have previously made such payment), in addition
to those items set forth in Section 10.01(a) of the Original Participation
Agreement (other than clause (vi) thereof) all fees and expenses of the
following persons relating to the public offering of the Pass Through
Certificates contemplated by the Underwriting Agreement and related to the
transactions contemplated hereby: (i) the fees and expenses of counsel for
the Owner Participant; (ii) the fees and expenses of the transaction
documentation counsel and counsel for the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee, the Original Loan Participants and the
Underwriters (other than those fees, expenses and disbursements payable by
the Underwriters pursuant to the Underwriting Agreement); (iii) the fees
and expenses of Daugherty, Fowler & Peregrin; (iv) any initial fees and
expenses of the Pass Through Trustee and the fees and expenses of the Owner
Trustee and the Indenture Trustee; (v) any compensation, commissions and
discounts payable to the Underwriters pursuant to the Underwriting
Agreement; (vi) the fees, if any, incurred in printing the Pass Through
Certificates; (vii) the fees and expenses incurred in connection with
printing any amendment to the Registration Statement on Form S-3 bearing
Registration No. 33-56569, printing any Preliminary Prospectus or
Prospectus (as such terms are defined in the Underwriting Agreement) for
the offering of the Pass Through Certificates; (viii) the fees and
expenses of Arthur Andersen & Co.; (ix) the fees and expenses of Moody's
and S&P; and (x) the fees and expenses of First Chicago Leasing
Corporation. The fees and expenses described in clauses (ii) through (x)
of this paragraph shall be allocable to the Owner Participant under this
Agreement (1) to the extent incurred specifically with respect to the Owner
Participant or the refunding of the Original Loan Certificates, and (2) to
the extent such fees and expenses are incurred but are not specifically
attributable to the Owner Participant or the refunding of the Original Loan
Certificates, in the proportion that the principal amount of the
Certificates bears to the total amount of the Pass Through Certificates.
The Owner Participant, the Owner Trustee and the Lessee
acknowledge that the percentages for Interim Rent, Basic Rent, Stipulated
Loss Value and Termination Value set forth in the Lease have been prepared
assuming the aggregate amount payable by the Owner Participant pursuant to
the preceding paragraph and Section 10.01 of the Original Participation
Agreement is 1.51% of the Purchase Price (the "Estimated Expense Amount") .
(b) Continuing Expenses. The continuing fees, expenses and
disbursements (including reasonable counsel fees and expenses) of the
entity acting as Owner Trustee, as lessor under the Lease and as Owner
Trustee under the Trust Agreement with respect to the administration of the
Lease and the Lessor's Estate 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
Indenture Trustee, as trustee under the Indenture with respect to the
administration of the Trust Indenture Estate and the continuing fees,
expenses and disbursements (including reasonable counsel fees and initial
fees relating to the establishment of a replacement trustee) of the Pass
Through Trustee shall be paid as Supplemental Rent by the Lessee, including
without limitation any amounts payable to the Indenture Trustee or on
account of requests by the Indenture Trustee for indemnification under
Article XI of the Indenture.
(c) 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 (a) any Default or Event of
Default and any enforcement or collection proceedings resulting
therefrom, or (b) the enforcement of the obligations of the Lessee
hereunder or under the other Operative Agreements, including, without
limitation, the entering into or giving or withholding of any amendments
or supplements or waivers or consents, including without limitation, any
amendment, supplement, waiver 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 or (c) any amendment, supplement, waiver or consent (whether
or not entered into) under the Original Agreements, this Agreement, the
Lease, the Indenture, the Certificates, the Tax Indemnity Agreement, the
Purchase Agreement Assignment or any other Operative Agreement 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 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 in connection
with the offer, sale or other transfer (whether pursuant to Section
7.03(d) hereof or otherwise) by the Owner Participant or the Owner
Trustee after the Refunding Date of any interest in the Aircraft, the
Lessor's Estate or the Trust Agreement or any similar interest (and the
Owner Participant shall be responsible for all such fees and expenses),
unless such offer, sale or transfer shall occur (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 the Lessee pursuant
to Section 4.02 or Article 10 of the Lease; 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, and a successor
Owner Trustee may be appointed and a Person may become Owner Trustee under
the Trust Agreement only in accordance with the provisions of Section 3.11
of the Trust Agreement and the provisions 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 or a bank or trust company fully guaranteed by a
direct or indirect parent thereof having a combined capital, surplus and
undivided profits of at least $100,000,000;
(iii) Such appointment shall not violate any provisions of the
Transportation Code 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 Transportation Code 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;
(iv) Such successor Owner Trustee shall enter into an agreement or
agreements, in form and substance reasonably 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 Supplement, the Purchase Agreement Assignment, the Engine Warranty
Assignment, the Indenture, the Indenture Supplement and any other
Operative Agreement to which the Owner Trustee is 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); and
(v) All filings of Uniform Commercial Code financing and
continuation statements, filings in accordance with the Transportation
Code and amendments thereto shall be made and all further actions taken
in connection with such appointment as may be necessary in connection
with maintaining the validity, perfection and priority of the Lien of
the Indenture and the valid and continued registration of the Aircraft
in accordance with the Transportation Code.
(c) Appointment. For so long as the Aircraft remains registered
under the Transportation Code, the Owner Participant agrees to appoint
promptly a successor Owner Trustee meeting the requirements of Section
11.01(b) hereof in the event the Owner Participant has knowledge that the
Owner Trustee at any time shall not be a Citizen of the United States.
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
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
Trust Agreement, the Tax Indemnity Agreement 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, the Purchase
Agreement Assignment, the Engine Warranty Assignment, any other Operative
Agreement, any Original 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 Holders of Certificates. A Holder of
a Certificate shall have no further interest in, or other right with
respect to, the Trust Indenture Estate when and if the principal and
interest on all Certificates held by such Holder and all other sums payable
to such Holder under this Agreement, under the Indenture and under such
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 each of the
Trust 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 Indenture or the Certificates, except that prior to the
occurrence and continuance of an Event of Default, no section of the
Indenture or the Trust Agreement shall be amended or modified in any manner
which materially adversely affects the Lessee 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. 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 Event of
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.
Section 13.03. No Retroactive Application. This Agreement, the
Lease, the Indenture and the Trust Agreement each amend and restate, and
the Tax Indemnity Agreement amends, the respective original agreements with
no intention of retroactive application. The applicable original
agreements have been restated for the convenience of the parties and such
amendments and restatements, and such amendment in the case of the Tax
Indemnity Agreement, are not intended to waive or modify the obligations of
any party which accrued or were to have been performed on or prior to the
Refunding Date under such unamended agreements (or, in the case of this
Agreement, the effective date hereof) or to deprive any party of its rights
and remedies in respect thereof.
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 (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 mail and (c) if given by
FedEx service (or, if a Default or Event of Default shall have occurred and
be continuing, by other comparable courier service), when received or
personally delivered, addressed:
(a) if to the Lessee, to its office at 2007 Corporate Avenue,
Memphis, Tennessee 38132, Attention: Vice President and Treasurer with
a copy to Senior Vice President and General Counsel at 1980 Nonconnah
Drive, Memphis, Tennessee 38132, telephone (901) 395-3388, facsimile
(901) 395-4758; or to such other address as the Lessee shall from time
to time designate in writing to the Lessor, the Indenture Trustee and
the Owner Participant;
(b) if to the Lessor or the Owner Trustee, to its office at 611
Woodward Avenue, Detroit, Michigan 48226, Attention: Corporate Trust
Administration Department, telephone (313) 225-3185, facsimile (313)
225-3420; or to such other address as Lessor shall from time to time
designate in writing to the Lessee and the Indenture Trustee, with a
copy to Owner Participant;
(c) if to the Owner Participant, to its office at 225 High Ridge
Road, Stamford, Connecticut 06905, Attention: Vice President - Leasing,
telephone (203) 975-3504, facsimile (203) 975-3910; or to such other
address as the Owner Participant may from time to time designate in
writing to the Lessee and the Indenture Trustee; and
(d) if to the Indenture Trustee or the Pass Through Trustee, to
its office at 4 Chase Metrotech Center, Brooklyn, New York 11245,
Attention: Corporate Trust Administration, telephone (718) 242-5854,
facsimile (718) 242-3529; or to such other address as the Indenture
Trustee or the Pass Through Trustee, as the case may be, shall from time
to time designate in writing to the Lessor, the Lessee, the Indenture
Trustee and the Pass Through Trustee.
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing. (a) Subject to the terms and
conditions of this Section 15.01, the Lessee may request the Owner
Participant to participate in up to three refinancings (including the
refinancing contemplated by this Agreement on the Refunding Date), in whole
but not in part, of the Certificates prior to the end of the Basic Term (a
"Refinancing"), provided, that, except in connection with the Refinancing
contemplated by this Agreement on the Refunding Date, such Refinancing may
not occur prior to the fifth anniversary of the Refunding Date. Such
Refinancings may be placed in either the private or public markets and
shall be denominated in United States dollars (or in any other foreign
currency so long as there is no foreign currency risk to the Owner
Participant), and shall be on terms that do not materially adversely affect
the Owner Participant. The Owner Participant agrees to negotiate promptly
in good faith to conclude an agreement with the Lessee as to the terms of
any such Refinancing transaction (including the terms of any debt to be
issued in connection with such refinancing and the documentation to be
executed in connection therewith). Without the prior written consent of
the Owner Participant, the prospectus and other offering materials relating
to any Refinancing in the form of a public offering shall not identify the
Owner Participant and shall not include any financial statements of the
Owner Participant or any Affiliate thereof. In connection with any such
Refinancing in the form of a public offering, the Lessee shall indemnify
the Owner Participant for any liabilities under federal, state or foreign
securities laws resulting from such offering. The aggregate principal
amount of the new Certificates issued in connection with each Refinancing
shall be the same as the aggregate principal amount outstanding on the
Certificates being refinanced.
(b) Notwithstanding anything herein to the contrary, no
Refinancing will be permitted unless the Owner Participant shall have
received at least 10 Business Days' prior written notice of the closing
date of such Refinancing, the Owner Participant shall have been provided
such longer period required for a reasonable opportunity to review the
relevant documentation and the Owner Participant shall have determined in
good faith that neither it nor the Owner Trustee shall suffer any loss or
expense or material adverse effect upon the rights or obligations or bear
any increased risk as a result of such Refinancing (including, without
limitation, any risk with respect to taxes or other adverse consequences to
the Owner Participant including the application of Revenue Procedures 75-21
and 75-28 and Section 467 of the Code) for which it has not been or will
not have been indemnified by the Lessee in a manner reasonably satisfactory
to the Owner Participant.
Prior to the consummation of any Refinancing pursuant to this
Section 15.01, the Owner Participant and the Lessee shall agree upon a
schedule setting forth each installment of Interim Rent, Basic Rent,
Stipulated Loss Values, Termination Values and EBO Price payable pursuant
to the Lease as a result of the Refinancing in accordance with Section 3.04
of the Lease, and thereafter the amounts set forth in such schedule shall
become the amounts payable under the Lease. Upon the consummation of the
Refinancing, the evidence of indebtedness issued pursuant to the
Refinancing shall be considered "Certificates" for purposes of this
Agreement, the Lease and the Indenture.
(c) Notwithstanding the foregoing, the Owner Participant shall
have no obligation to proceed with any Refinancing transaction as
contemplated by this Section 15.01 unless the Lessee indemnifies the Owner
Trustee and the Owner Participant by agreement in form and substance
satisfactory to each of them, for any liability, obligation (other than the
obligation to pay principal and interest in respect of the refinanced
indebtedness), cost or expense (including, without limitation, reasonable
attorneys' fees and Make-Whole Premium and any other premiums or amounts
due under the Indenture), including any adverse tax consequences or impact,
related to or arising out of any such Refinancing transaction, except to
the extent of amounts included in Transaction Costs and payable by the
Owner Participant as provided in Article 10 hereof.
(d) Each party agrees to take or cause to be taken all requested
action, including, without limitation, the execution and delivery of any
documents and instruments, including, without limitation, amendments or
supplements to the Lease, which may be reasonably necessary or desirable to
effect such Refinancing, including, in the case of the Owner Participant,
direction to the Owner Trustee by the Owner Participant to prepay the
Certificates then outstanding; provided, however, that such Refinancing
shall be subject to the satisfaction of each of the following conditions:
(i) payment of principal, accrued interest, Make-Whole Premium
and Breakage Costs, if any, and all other sums due and owing on the
Certificates payable under the Indenture;
(ii) payment in full of all other amounts then due and owing by
the Lessee under this Agreement, the Indenture, the Lease, the Trust
Agreement, and the Certificates then outstanding shall have been made by
the Lessee;
(iii) such party shall have received such opinions of counsel
(including, without limitation, an opinion received by the Owner
Participant from independent tax counsel reasonably satisfactory to the
Lessee that such Refinancing shall not result in any adverse tax
consequences to such Owner Participant, unless the Lessee shall have
agreed to provide an indemnity in respect thereof reasonably
satisfactory in form and substance to the Owner Participant),
certificates and other documents as it may reasonably request, each in
form and substance reasonably satisfactory to such party;
(iv) all authorizations, approvals and consents which in the
reasonable judgment of the Owner Participant are necessary for such
Refinancing shall have been obtained;
(v) the Lessee shall have provided or agreed to provide to the
Owner Participant, as Supplemental Rent under the Lease, sufficient
funds to pay any Breakage Costs, Make-Whole Premium and any other
amounts due under the Indenture;
(vi) the satisfaction or waiver by each other party to this
Agreement of the conditions set forth in this Section 15.01 to such
party's obligations under this Section 15.01;
(vii) no Event of Default shall have occurred and be continuing
or would occur immediately after giving effect to such Refinancing;
(viii) the Indenture Trustee shall have received no later than the
Business Day next preceding the day 15 days prior to the effective date
of such Refinancing irrevocable notice of such Refinancing; and
(ix) in the event the Lessee shall not prohibit the purchase of the
Refinancing loan certificates by, or with the assets of, an employee
benefit plan, as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA or a plan, which is subject to Section 4975(c) of the
Code, (individually or collectively, an "ERISA Plan"), the Lessee will
permit the placement of the Refinancing loan certificates with an ERISA
Plan only if either (A) if such placement is in the form of pass through
certificates, the sole underwriter or the manager or co-manager of the
underwriting syndicate or the selling or placement agent of the
Refinancing loan certificates represents to the Lessee that it has a
prohibited transaction exemption from the U.S. Department of Labor with
respect to pass through certificates (such as Prohibited Transaction
Exemption 90-24 or any other comparable exemption) or (B) purchasers of
the Refinancing loan certificates provide a representation regarding
their source of funds used in acquiring the Refinancing loan
certificates and, if such purchasers represent that they are using funds
of an ERISA Plan in acquiring the Refinancing loan certificates, such
purchasers further represent that either a prohibited transaction
exemption from the U.S. Department of Labor is available with respect
to their purchase and holding of the Refinancing loan certificates or
that their purchase and holding of the Refinancing loan certificates
will not constitute a prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code. The reliance on any such exemption will
not be conditional on the Owner Participant's representation concerning
its party in interest or other status with respect to ERISA Plans. If
neither exemption referred to in clause (A) or (B) of this paragraph
(viii) is valid or applicable in any respect to the purchase and holding
of the Refinancing loan certificates, or if the representation in clause
(B) of this paragraph (viii) that such purchase and holding will not
constitute a prohibited transaction is not correct, whichever is
applicable then the Lessee shall indemnify the Owner Participant
pursuant to, and to the extent provided for, under Sections 8 and 9
hereof for Taxes and Expenses 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 placement of the
Refinancing loan certificates with, or the holding of the Refinancing
loan certificates by, any ERISA Plan with respect to which the Owner
Participant is a party in interest, within the meaning of Section 3(14)
of ERISA, or a disqualified person, within the meaning of Section 4975
of the Code.
Section 15.02. Reoptimization. (a) If a Change in Tax Rate
occurs prior to the end of the Basic Term, then, subject to the terms and
conditions of this Section 15.02 and Section 3.04 of the Lease, the Owner
Participant may, upon 30 days' prior notice to the Lessee, the Indenture
Trustee, the Owner Trustee and the Holders, elect to modify the schedule of
payments of principal of the certificates issued ("Refinancing
Certificates") in connection with any Refinancing effected after the
Refunding Date using private debt (not including debt issued pursuant to an
exemption from registration under the Securities Act relying on Rule 144A
promulgated thereunder but otherwise marketed in a manner substantially
similar to securities registered under the Securities Act, and not
including debt issued in connection with any offering of securities
registered under the Securities Act) due on each remaining Rent Payment
Date on or commencing on the Rent Payment Date next succeeding the date
mutually agreed to by the Owner Participant, the Lessee and the Indenture
Trustee on which the Owner Participant shall make such modification (the
"Reoptimization Date"). Promptly after making such modification, the Owner
Participant shall furnish each party hereto written notice of the amounts
so recalculated.
(b) Adjustments to Refinancing Certificates. On the
Reoptimization Date, subject to the satisfaction on or before the
Reoptimization Date of the conditions set forth in Section 15.02(c), the
Owner Trustee will issue and deliver and the Indenture Trustee will
authenticate, and each holder of a Refinancing Certificate will accept
delivery of, a new Refinancing Certificate or Refinancing Certificates (in
replacement of each Refinancing Certificate then held by such holder, which
Refinancing Certificates shall be surrendered to the Indenture Trustee for
cancellation) containing such changed principal installments (expressed as
a percentage of the original principal amount of such Refinancing
Certificate) as shall have been recalculated by the Owner Participant, but
in the same principal amount as, and containing terms identical to, except
as otherwise contemplated by Section 15.02(d) hereof, the Refinancing
Certificates originally issued in connection with the Operative Agreements.
(c) Conditions to the Obligations of the Holders of the
Refinancing Certificates on the Reoptimization Date. The obligation of
each holder of a Refinancing Certificate to accept delivery of a new
Refinancing Certificate on the Reoptimization Date, and to surrender on
such Reoptimization Date any Refinancing Certificate then held by it, is
subject to the following conditions precedent having been satisfied on or
before the Reoptimization Date:
(i) the requirements of Section 15.02(d) hereof shall have been
satisfied;
(ii) the following documents, in form and substance satisfactory to
such Holder, shall have been duly authorized, executed and delivered by
the party or parties thereto and shall be in full force and effect: (A)
if the payments of Basic Rent, Stipulated Loss Values and Termination
Values with respect to the Term have been changed, an amendment to the
Lease, dated the Reoptimization Date, (B) an amendment to the Indenture
setting forth any changed repayment schedule to the Refinancing
Certificates, dated the Reoptimization Date and (C) replacement
Refinancing Certificates; and
(iii) in connection with any Reoptimization the Owner Participant
shall pay or agree to pay all reasonable costs and expenses incurred by
the Lessee, the Owner Trustee, the Indenture Trustee and each Holder of
a Refinancing Certificate (including, without limitation, reasonable
legal fees and expenses) in connection with any such reoptimization.
(d) Payment Schedules. Except as otherwise provided in this
Section 15.02 as long as the Refinancing Certificates remain outstanding,
the payment schedules for the Refinancing Certificates shall not be
modified.
ARTICLE 16
[INTENTIONALLY LEFT BLANK]
ARTICLE 17
MISCELLANEOUS
Section 17.01. 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 it is the intent of the parties for
Federal, state, local and foreign income tax purposes that the Owner
Participant will be treated as the owner of the Aircraft and the Lessee
will be treated as the lessee of the Aircraft.
Section 17.02. [Intentionally Left Blank.]
Section 17.03. 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 17.04. 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 and executed by the Owner Trustee and the
Indenture Trustee. A copy of each such termination, amendment, supplement,
waiver or modification shall also be delivered to each other party to this
Agreement other than the Original Loan Participants.
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 an 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 17.05. 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 17.06. 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 permitted assigns, the Owner Participant and
its successors and permitted assigns, the Owner Trustee and its successors
as Owner Trustee (and any additional owner trustee appointed) under the
Trust Agreement, the Indenture Trustee and its successors as Indenture
Trustee (and any additional indenture trustee appointed) under the
Indenture and the Pass Through Trustee and its successors as Pass Through
Trustee (and any additional pass through trustee appointed) .
Section 17.07. Concerning the Owner Trustee, the Pass Through
Trustee and the Indenture Trustee. Each of NBD and Chase is entering into
this Agreement solely in their respective capacities (except to the extent
otherwise expressly indicated), in the case of NBD, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, in the case
of Chase (except insofar as it is acting as a Loan Participant or Agent),
not in its individual capacity but solely as Indenture Trustee under the
Indenture and as Pass Through Trustee under the Pass Through Agreement, and
except as otherwise expressly provided in this Agreement or in the Lease,
the Indenture, the Pass Through Agreement or the Trust Agreement, neither
NBD, nor Chase, shall be personally liable for or on account of its
statements, representations, warranties, covenants or obligations under
this Agreement; provided, however, that each of NBD and Chase 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 (a) its own gross negligence or willful misconduct (whether in
its capacity as trustee or in its individual capacity), (b) any breach of
representations and warranties or any breach of covenants made in its
individual capacity pursuant to or in connection with this Agreement or the
other Operative Agreements to which it is a party, (c) any breach, in the
case of the Owner Trustee, of its covenants made in its individual capacity
in Sections 3.05 and 3.08 of the Indenture, (d) the failure to use ordinary
care in receiving, handling and disbursing funds, (e) in the case of the
Owner Trustee, Lessor's Liens attributable to it in its individual
capacity, (f) in the case of the Indenture Trustee, Indenture Trustee's
Liens and (g) taxes, fees or other charges on, or based on, or measured by,
any fees, commissions or compensation received by it in connection with the
transactions contemplated by the Operative Agreements.
Section 17.08. 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 17.09. 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 to this Agreement
shall in each instance obtain the prior written approval of each other
party to this Agreement concerning the exact text and timing of news
releases, articles and other information releases to the public media
concerning any Operative Agreements.
Section 17.10. Certain Limitations on Reorganization. The
Indenture Trustee agrees that, if (i) the Lessor's Estate or the trust
created by the Trust Agreement becomes a debtor subject to the
reorganization provisions of the Bankruptcy Code or any other applicable
bankruptcy or insolvency statutes, (ii) pursuant to such reorganization
provision, the Owner Participant is held to have recourse liability to the
debtor or the trustee of the debtor directly or indirectly on account of
any amount payable as principal, interest or premium on the Certificates,
and (iii) the Indenture Trustee actually receives any Recourse Amount which
reflects any payment by the Owner Participant on account of (ii) above,
then the Indenture Trustee, as the case may be, shall promptly refund to
the Owner Participant such Recourse Amount. For purposes of this Section
17.10, "Recourse Amount" means the amount by which the portion of such
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 Section shall prevent the Indenture Trustee from enforcing any
individual obligation (and retaining the proceeds thereof) of the Owner
Participant under this Agreement or any other Operative Agreement to the
extent herein or therein provided, for which the Owner Participant has
expressly agreed by the terms of this Agreement to accept individual
responsibility.
Section 17.11. 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 ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS AND
IS BEING DELIVERED IN NEW YORK.
Section 17.12. Section 1110 Compliance. The Owner Participant,
the Indenture Trustee and the Lessee agree that the transactions
contemplated by the Operative Agreements are expressly intended to be,
shall be and should be construed so as to be entitled to the benefits and
protection of Section 1110 of the Bankruptcy Code.
ARTICLE 18
CONFIDENTIALITY
Section 18.01. 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, (iii) to bank examiners, auditors, insurance regulators,
accountants or similar regulatory authorities, (iv) 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, (v) to a subsidiary or Affiliate of the parties hereto, (vi) 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 18.01 or (vii) in the case of the Owner
Participant or the Owner Trustee (in its individual or trust capacity) to
the Owner Trustee (in its individual or trust capacity) or to the Owner
Participant, as the case may be.
IN WITNESS WHEREOF, the parties have caused this Participation
Agreement to be executed by their respective, duly authorized officers and
this Participation Agreement shall be effective this ___ day of October,
1995.
LESSEE:
FEDERAL EXPRESS CORPORATION
By:__________________________________________
Name:Robert D. Henning
Title:Assistant Treasurer and
Managing Director - Structured
Finance
OWNER PARTICIPANT:
CHRYSLER CAPITAL CORPORATION
By:__________________________________________
Name: Title:
OWNER TRUSTEE:
NBD BANK, not in its individual capacity
except as otherwise expressly provided
herein, but solely as Owner Trustee
By:__________________________________________
Name: Title:
INDENTURE TRUSTEE:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), not in its individual
capacity except as otherwise expressly
provided herein, but solely as Indenture
Trustee
By:__________________________________________
Name: Title:
PASS THROUGH TRUSTEE:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), not in its individual
capacity except as otherwise expressly
provided herein, but solely as Pass
Through Trustee
By:__________________________________________
Name: Title:
ORIGINAL LOAN PARTICIPANTS:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as a Loan Participant and as
Agent
By:__________________________________________
Name: Title:
BANK OF AMERICA NT & SA
By:__________________________________________
Name: Title:
CIBC INC.
By:__________________________________________
Name: Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:__________________________________________
Name: Title:
SCHEDULE I CERTIFICATE INFORMATION
1. Federal Express Corporation Pass Through Trust, 1995-B1
Federal Express Corporation Trust No. N660FE
Interest Rate: 6.05%
Maturity: March 19, 1996
Principal Amount: $3,668,000
2. Federal Express Corporation Pass Through Trust, 1995-B2
Federal Express Corporation Trust No. N660FE
Interest Rate: 7.11%
Maturity: January 2, 2014
Principal Amount: $44,526,000
3. Federal Express Corporation Pass Through Trust, 1995-B3
Federal Express Corporation Trust No. N660FE
Interest Rate: 7.58%
Maturity: July 2, 2018
Principal Amount: $17,806,000
SCHEDULE II
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in
an Operative Agreement or the context thereof shall otherwise require. In
the case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to
agreements shall be deemed to mean and include such agreements as amended
and supplemented from time to time, and (ii) references to parties to
agreements shall be deemed to include the successors and permitted assigns
of such parties.
DEFINED TERMS:
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 other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise. In no event shall the Owner
Trustee or the Lessor be deemed an Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or
deemed to have been received by a Person (the "Original Payment") shall be
supplemented by a further payment to such Person so that the sum of the two
payments shall be equal to the Original Payment, after taking into account
(x) all Taxes that would result from the receipt or accrual of such
payments and (y) any reduction in Taxes that would result from such
increased Taxes. In the case of amounts payable to the Lessor, the Owner
Participant, or any corporate Affiliate 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.
Agent. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns as Agent for the Original Loan
Participants pursuant to Article 16 of the Original Participation
Agreement.
Air Carrier. Any U.S. Air Carrier and any "foreign air
carrier" (as defined in the Transportation Code) as to which there is in
force a permit granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe (or any permitted substitute airframe)
together with the two Engines (or any Replacement Engine or Engines)
whether or not any of such initial or Replacement Engines may from time to
time be installed on such Airframe or may be installed on any other
airframe or on any other aircraft, including any aircraft substituted
pursuant to Section 11.03 of the Lease.
Airframe. The Airbus A300F4-605R aircraft (excluding the
Engines or engines from time to time installed thereon) leased by the
Lessor to the Lessee pursuant to the Lease and the initial Lease Supplement
and having the United States FAA Registration Number and manufacturer's
serial number specified in the initial Lease Supplement, including (i) all
Parts in respect thereof and (ii) any replacement airframe which may be
substituted pursuant to Section 11.03 of the Lease.
Amendment No. 1 to the Original Tax Indemnity Agreement.
Amendment No. 1 to the Original Tax Indemnity Agreement, dated as of
October 26, 1995.
Ancillary Agreement. Any written agreement of the Lessee to
which the Lessor is a party or to which the Lessor has consented in writing
entered into on the Delivery Date or the Refunding Date or any date
thereafter in connection with the transactions contemplated by the
Operative Agreements, as such agreement may be amended and supplemented
from time to time with the consent of the Lessor and delivered to the Owner
Trustee, the Indenture Trustee, the Pass Through Trustee and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal
Express Corporation Trust No. N660FE), dated September 20, 1995 among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as
Owner Trustee, the Owner Participant and the Indenture Trustee not in its
individual capacity, but solely as Indenture Trustee, as originally
executed or as amended, modified or supplemented with the consent of all
the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and
delivered to the Owner Participant (with a copy of such report to the
Lessee) on the Delivery Date pursuant to Section 4.01(n) of the Original
Participation Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee,
organized and existing under the laws of France, and its successors and
assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as
of September 1, 1995, executed by AVSA, as the same may be amended,
modified or supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on
AC Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed
by AVSA as owner of the Aircraft in favor of the Owner Trustee and dated
the Delivery Date.
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 either does or with the giving of notice or
lapse of time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 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 July 2, 2020,
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.
Breakage Costs. Has the meaning specified in Schedule II to
the Original Participation Agreement.
Business Day. Any day on which commercial banks are not
authorized or required to close in New York, New York and Memphis,
Tennessee, and after the Lien of the Indenture is discharged, Detroit,
Michigan.
Certificates. The Equipment Trust Certificates (Federal
Express Corporation Trust No. N660FE), issued by the Owner Trustee
pursuant to the Indenture and any certificate issued in exchange therefor
or replacement thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion,
addition, or change to the Code which is enacted into law after the
Delivery Date which changes the highest marginal statutory rate of Federal
income tax applicable to the Owner Participant (other than a change which
is in the nature of a minimum tax) .
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States
as defined in Section 40102(a) (15) of the Transportation Code, or any
analogous part of any successor or substituted legislation or regulation at
the time in effect.
Closings. The closing with respect to the acquisition of the
Pass Through Certificates by the Underwriters and the closing with respect
to the refunding of the Original Loan Certificates.
Code. Except as otherwise provided, references to the Code
shall mean the Internal Revenue Code of 1986, as amended from time to time.
Commencement Date. July 2, 1996.
Consent and Agreement. The Consent and Agreement dated as of
September 1, 1995 executed by the Manufacturer, as the same may be amended,
modified or supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the
Manufacturer attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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
Participant and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner
Trustee located at 611 Woodward Avenue, Detroit, Michigan 48226, or such
other office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in
writing to the Lessee, the Owner Participant and the Indenture Trustee.
Debt Rate. The weighted average (based on Outstanding
principal amount) rate of interest on the Certificates issued pursuant to
the Indenture.
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 Date. September 20, 1995.
EBO Price. Has the meaning set forth in Section 4.02(a) (F) of
the Lease.
Engine. Each of the two General Electric CF6-80C2-A5F engines
listed by its manufacturer's serial number in the initial Lease Supplement
and leased pursuant to the Lease, 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 Section 7.02(a) (vii), 10.03, 11.03,
11.04 or 12.02 of the Lease, together with all Parts related thereto.
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. The term "Engines" means, as of any
date of determination, both Engines then leased to the Lessee pursuant to
the Lease.
Engine Consent. The Engine Consent dated as of September 1,
1995, executed by the Engine Manufacturer, as the same may be amended,
modified or supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment
(Federal Express Corporation Trust No. N660FE), dated as of September 1,
1995 between the Lessor and the Lessee, as the same may be amended,
modified or supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16
of the Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use
(A) for a period in excess of 90 days due to theft or disappearance or such
longer period, not to exceed 90 days from the end of such initial 90-day
period, if and so long as the location of such property is known to the
Lessee and the Lessee is diligently pursuing recovery of such property, or
to the end of the Term, if less (unless such theft or disappearance
constitutes an Event of Loss pursuant to (i) (B) or (ii) hereof) or (B) for
a period in excess of 60 days due to the destruction, damage beyond
economic repair or rendition of such property permanently unfit for normal
use by 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, or (2)
condemnation, confiscation, or seizure of, or requisition or taking of, use
of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the
date of return of the Aircraft, if shorter, so long as the Lessor receives
at least six months notice of such date of return) beyond the end of the
Term in the event that the Aircraft, the Airframe or any Engine as of the
end of the Lease Term 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 A300F-600 series
aircraft equipped with engines of the same make and model as the Engines
for a period not to exceed six (6) consecutive months, unless the Lessee,
prior to the expiration of such six (6) month period, shall be diligently
carrying forward in a similar manner as are then being carried forward with
respect to other aircraft of the Lessee so as to not discriminate against
the Aircraft by reason of its leased status, all steps which are necessary
or desirable to permit the normal use of the Aircraft or Airframe or, in
any event, if such use of the Aircraft or the Airframe shall have been
prohibited for a period of eighteen (18) consecutive months or until the
end of the Term, if earlier. The date of such Event of Loss shall be (s)
the 91st day or the 180th day, as the case may be, following loss of such
property or its use due to theft or disappearance (or the end of the Term
or the Lessee's abandonment of diligent efforts to recover such property,
if earlier); (t) the 61st day following the date of any destruction,
damage beyond economic repair or rendition of such property permanently
unfit for normal use; (u) the date of any insurance settlement on the
basis of a total loss or constructive or compromised total loss; (v) the
date of any condemnation, confiscation, seizure or requisition of title of
such property; (w) the 181st day following condemnation, confiscation,
seizure or requisition for use of such property by a foreign government
referred to in clause (iii) (2) (A) above (or the end of the Term or the date
of any insurance settlement described therein, if earlier than such 181st
day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the six (6) month or
eighteen (18) month period, referred to in clause (iv) above (or if
earlier, the end of the Term or abandonment of the Lessee's efforts to
restore the normal use of the Aircraft). 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. If an Event of Loss described in any of
clauses (i) (A), (iii) or (iv) above shall occur, Lessor may elect, within
30 days following the date upon which such Event of Loss is deemed to have
occurred, to waive such Event of Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other
payments (and interest thereon to the extent provided in the Operative
Agreements) paid or payable by the Lessee in respect of the Owner
Participant, the Owner Trustee in its individual capacity or any of their
respective successors, permitted assigns, directors, officers, employees,
servants and agents or Affiliates, pursuant to the Participation Agreement
or any indemnity hereafter granted to the Owner Participant or the Owner
Trustee in its individual capacity pursuant to the Lease or the
Participation Agreement, (ii) proceeds of public liability insurance (or
government indemnities in lieu thereof) in respect of the Aircraft payable
as a result of insurance claims paid for the benefit of, or losses suffered
by, the Owner Trustee or the Indenture Trustee in their respective
individual capacities or by the Owner Participant, or their respective
successors, permitted assigns or Affiliates, (iii) proceeds of insurance
maintained with respect to the Aircraft by the Owner Participant (whether
directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Section 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) payments constituting
increases in Interim Rent or Basic Rent attributable to payments arising
pursuant to Section 5 of the Tax Indemnity Agreement and (vi) any right to
demand, collect or otherwise receive and enforce the payment of any amount
described in clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section
9.01(a) of the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the
Lessee has exercised its option to renew the Lease pursuant to the second
paragraph of Section 4.01(a) thereof and with respect to which the
conditions set forth in the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other
property) is unencumbered by the 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;
provided that in connection with any determination pursuant to or for the
purposes of Article 17 of the Lease, the Aircraft shall be appraised on an
"as is, where is" basis. Fair Market Value shall be determined in
accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States
Federal Aviation Administration and any successor agency or agencies
thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed
Renewal Term equal to 50% of the average actual semi-annual Basic Rent
payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee
has exercised its option to renew the Lease pursuant to the first paragraph
of Section 4.01(a) thereof and with respect to which the conditions set
forth in such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as
of September 1, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991
between the Engine Manufacturer and the Lessee related to the purchase by
the Lessee of the Engines as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
General Terms Agreement relates to the Engines, to the extent assigned to
the Owner Trustee pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of
any particular time, the Person in whose name a Certificate shall be
registered (but not including the holder of any Pass Through Certificate) .
Indemnitee. Each of NBD, in its individual capacity and as
Owner Trustee and Lessor, the Agent (to the extent set forth in Articles 8
and 9 of the Original Participation Agreement), the Owner Participant, the
Original Loan Participants (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Indenture Trustee, in its
individual capacity and as trustee, any Owner Participant Guarantor, 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 and the
Trust Indenture Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N660FE) dated as of September 1, 1995, as
amended and restated as of October 26, 1995, between the Lessor and the
Indenture Trustee, as supplemented by the Indenture and Security Agreement
Supplement, and as said Indenture may from time to time be further
supplemented or amended, including any amendment or supplement thereto
entered into from time to time pursuant to the applicable provisions of the
Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N660FE) dated September 20, 1995, as such Indenture and Security Agreement
Supplement shall be amended or supplemented from time to time and any other
supplement to the Indenture, substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event or condition which with the lapse
of time or the giving of notice, or both, would constitute an Indenture
Event of Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in
Section 7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture
Estate 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 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, "Independent
Investment Banker" shall mean such an institution appointed by the
Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft
throughout the Interim Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant
Payment Date and ending at the end of the day immediately preceding the
Commencement Date.
Invoice. The invoice for the Aircraft given by AVSA to the
Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust
No. N660FE) dated as of September 1, 1995, as amended and restated as of
October 26, 1995, entered into by the Lessor and the Lessee concurrently
with the execution and delivery of the Indenture, 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 one or more
Lease Supplements entered into pursuant to the applicable provisions of the
Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995, as such Lease
Supplement shall be amended or supplemented from time to time and any other
supplement to the Lease, substantially in the form of Exhibit A to the
Lease.
Lease Term. The period commencing on the Delivery Date and
ending at the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation,
and its successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b)
of the Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of
Sale, the Airbus Guaranty, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the AVSA Consent and Agreement, the
Consent and Guaranty (to the extent assigned by the Purchase Agreement
Assignment), the GTA, the Engine Warranty Assignment, the Engine Consent,
any warranty with respect to the Airframe and the Engines, all amounts of
Interim Rent, Basic Rent and Supplemental Rent, including without
limitation, insurance proceeds (other than insurance proceeds payable to or
for the benefit of the Owner Trustee 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) not include any Excepted Payment and (ii) include all
property intended to be subjected to the Indenture by the Granting Clause
thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust
Indenture Estate arising as a result of (i) claims against 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) acts or omissions 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 or
expressly prohibited under the Operative Agreements and any act or omission
of the Owner Participant which 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, Owner Participant, Lessor's
Estate or the trust created by the Trust Agreement which are not required
to be indemnified against by the Lessee pursuant to the Participation
Agreement by reason of Section 8.01(b) or 9.01(b) thereof and which are not
required to be indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement, or (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 other than a transfer of the
Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease
or security interest or other similar interest.
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 Trustee or the Owner Participant or any interests of the
Owner Participant unless all Certificates then outstanding shall be held by
the Owner Participant, (ii) the Lessee or (iii) any Affiliate of any
thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of (i) the present values of all remaining scheduled
payments of such principal amount or portion thereof 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 the Treasury Yield, all as determined by
the Independent Investment Banker over (ii) the unpaid principal amount of
such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which
the final principal amount of such Certificate is scheduled to be due and
payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of
the Lease, discounted at a rate per semi-annual period equal to the Debt
Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no
longer suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the
Indenture, a certificate signed by a Responsible Officer of the Lessee or
the Owner Trustee, as the case may be, and delivered to the Indenture
Trustee. Each such certificate shall include the statements provided for
in Section 15.07 of the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the
Airbus Guaranty, the Purchase Agreement, the Purchase Agreement Assignment,
the GTA, the Engine Warranty Assignment, the French Pledge Agreement, the
Lease, the Lease Supplement, the Owner Participant Guaranty, if any, the
Owner Trustee Guaranty, if any, any Ancillary Agreement entered into by or
with the written consent of the Indenture Trustee, which by its terms is an
Operative Agreement, the Certificates outstanding at the time of reference,
the Indenture, the Indenture and Security Agreement Supplement, the Consent
and Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to
the extent assigned by the Purchase Agreement Assignment), the Engine
Consent and the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture,
a written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or
a successor firm or (iii) other counsel designated by the Lessee and
reasonably satisfactory to the Indenture Trustee and (b) for the Owner
Trustee or the Indenture Trustee, an attorney selected by such Person and,
in the case of the Owner Trustee, reasonably satisfactory to the Indenture
Trustee.
Original Agreements. The documents and instruments delivered
on the Delivery Date in connection with the transactions contemplated by
the Original Participation Agreement.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995 between the Owner Trustee and the Indenture Trustee,
which together with the Indenture and Security Agreement Supplement No. 1
(Federal Express Corporation Trust No. N660FE) dated September 20, 1995
attached thereto was recorded as one instrument by the FAA on September 21,
1995 and assigned Conveyance Number 2A267705.
Original Lease. The Lease Agreement (Federal Express
Corporation Trust No. N660FE) dated as of September 1, 1995 between the
Owner Trustee as lessor, and the Lessee, which together with Lease
Supplement No. 1 (Federal Express Corporation Trust No. N660FE) dated
September 20, 1995 attached thereto was recorded as one instrument by the
FAA on September 21, 1995 and assigned Conveyance Number 2A267706.
Original Loan Certificates. The loan certificates issued on
the Delivery Date to the Original Loan Participants.
Original Loan Participants. The entities listed on Schedule I
to the Original Participation Agreement and their successors and assigns
(other than any assignees in connection with the Refunding Date) .
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N660FE) among the Lessee, the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Original Loan
Participants as it was originally executed as of September 1, 1995.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N660FE) between the Lessee and the
Owner Participant as it was originally executed as of September 1, 1995.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N660FE) between the Owner Participant and the Owner
Trustee as it was originally executed as of September 1, 1995 and filed
with the FAA on September 20, 1995.
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.
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, its right,
title and interest in and to the Operative Agreements and the Lessor's
Estate.
Owner Participant Amount. The amount described in Section 2.03
of the Participation Agreement and set forth on Schedule II to the Lease.
Owner Participant Guarantor. The provider of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely
as Owner Trustee under the Trust Agreement, and its successors and
permitted assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee
Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance
with Section 11.01(b) (ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated
net after-tax book yield and aggregate after-tax cash during the Interim
Term and the Basic Term utilizing the multiple investment sinking fund
method of analysis, computed on the basis of the same methodology and
assumptions as were utilized by the Owner Participant in determining
Interim Rent, Basic Rent, Stipulated Loss Value and Termination Value
percentages or the EBO Price, as the case may be, as such assumptions may
be adjusted for events which have been the basis of adjustments to Rent
pursuant to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal
Express Corporation Trust No. N660FE), dated as of September 1, 1995, as
amended and restated as of October 26, 1995, among the Lessee, the Original
Loan Participants, the Owner Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as owner trustee, the
Owner Participant, the Indenture Trustee not in its individual capacity
except as otherwise expressly provided therein, but solely as indenture
trustee and the Pass Through Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as pass through
trustee, 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, prior to replacement thereof in accordance with the Lease, which may be
removed therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated
as of February 1, 1993, as amended and restated as of October 1, 1995
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 1995 Pass Through
Certificates, Series B1, 1995 Pass Through Certificates, Series B2 or 1995
Pass Through Certificates, Series B3, 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 Date. The Business Day on which the sale
of the Pass Through Certificates to the Underwriters pursuant to the
Underwriting Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust,
1995-B1, Federal Express Pass Through Trust, 1995-B2 or Federal Express
Pass Through Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the interest rate applicable to such
Certificate and (ii) in the case of any other such amount, 2% plus the Debt
Rate.
Payment Date. The Owner Participant Payment Date, and each
January 2 and July 2 commencing July 2, 1996.
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) .
Preliminary Term. The period commencing on the Delivery Date
and ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates
having a Maturity in 2014, November 7, 2007 and with respect to the
Certificates having a Maturity in 2018, October 7, 2017.
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. Has the meaning specified in
Section 10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase
Agreement, dated as of July 3, 1991 between AVSA and the Lessee, including
all exhibits, appendices and letter agreements attached thereto as
originally executed or as modified, amended or supplemented in accordance
with the terms thereof, but only to the extent that the foregoing relates
to the Aircraft and to the extent assigned pursuant to the Purchase
Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement
Assignment (Federal Express Corporation Trust No. N660FE), dated as of
September 1, 1995 between the Lessor and the Lessee, as the same may be
amended, modified or supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule II to
the Original Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the
Owner Participant Payment Date, December 18 for January 2 Payment Dates and
June 17 for July 2 Payment Dates, whether or not such date is a Business
Day.
Recourse Amount. Has the meaning specified in Section 17.10 of
the Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged
pursuant to Section 15.01 of the Participation Agreement.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least ten (10) Business
Days prior to such expected Refunding Date.
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.
Regulation D. Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
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 or more terms 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
Interim Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July
2, 1996.
Reoptimization Date. Has the meaning specified in Section
15.02(a) of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or
an engine of the same or another manufacturer) manufactured after October
22, 1994 of the same or of equal or greater value, remaining useful life
and utility as the Engine being replaced, together with all Parts relating
to such engine; provided, however, that if such replacement engine is not a
General Electric CF6-80C2-A5F engine, such replacement engine must then be
commonly used in the commercial aviation industry on Airbus A300-600
airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or
Corporate Trust Administration, as the case may be, designated by such
Person to perform obligations under the Operative Agreements, with respect
to the Owner Participant, the president or any vice president with direct
responsibility for the transactions contemplated by the Operative
Agreements, and with respect to any other party, any corporate officer or
(except in the case of the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
SEC. The Securities and Exchange Commission of the United
States and any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be
executed and delivered by the Lessee and the Pass Through Trustee, the
Series Supplement 1995-B2 to be executed and delivered by the Lessee and
the Pass Through Trustee or the Series Supplement 1995-B3 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.
Stipulated Loss Value. As of any Stipulated Loss Value
Determination Date during the Term, the amount determined by multiplying
the Purchase Price by the percentage set forth in Schedule III of the Lease
under the heading "Stipulated Loss Value Factor" opposite such date (as
such Schedule III may be adjusted from time to time as provided in Section
3.04 of the Lease), and during any Renewal Term, the amount determined
pursuant to Section 4.01(b) of the Lease. Notwithstanding any other
provisions of the Lease or the Participation Agreement or the Indenture,
each Stipulated Loss Value shall be, under any circumstances and in any
event, an amount, together with so much of the arrears portion of Interim
Rent and Basic Rent due and owing through the date of payment of Stipulated
Loss Value as does not constitute an Excepted Payment, at least sufficient
to pay in full as of such date of payment the aggregate unpaid principal
amount of and accrued interest on the Certificates outstanding on such date
of payment. Subject to the immediately preceding sentence, it is
understood and agreed that the amounts set forth on Schedule III of the
Lease, for dates other than Rent Payment Dates on which arrears Interim
Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent
and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth
on Schedule III of the Lease under the heading "Stipulated Loss Value
Date."
Substantial Authority. For Federal income tax purposes, shall
have the meaning applicable for purposes of Section 6662 of the Code and
relevant Treasury regulations.
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 any
Ancillary Agreement or any other Operative Agreement to the Lessor, the
Owner Participant or others, including, without limitation, payments of
Stipulated Loss Value, EBO Price and amounts calculated by reference to
Termination Value and all amounts required to be paid by Lessee under the
agreements, covenants and indemnities contained in the Lease or in the
Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Interim Rent and Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of
the Participation Agreement.
Tax Indemnity Agreement. The Original Tax Indemnity Agreement
as amended by Amendment No. 1 to the Original Tax Indemnity Agreement, as
from time to time modified, amended or supplemented pursuant to its
applicable provisions.
Term. The Preliminary Term, the Interim Term and the Basic
Term of the lease for the Aircraft under the Lease and, if renewed pursuant
to Section 4.01 of the Lease, each Renewal Term for the Aircraft for which
the Lease is renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease,
and in the case of (i) Section 4.02(a) (A) of the Lease, the Rent Payment
Date falling on July 2, 2008 or January 2, 2012, (ii) Section 4.02(a) (D)
or (E) of the Lease, a Rent Payment Date that is on or after the fifth
anniversary of the Commencement Date and (iii) Section 4.02(a) (F) of the
Lease, January 2, 2015.
Termination Value. As of any Termination Date, the amount
determined by multiplying the Purchase Price by the percentage set forth in
Schedule IV of the Lease under the heading "Termination Value Factor"
opposite such Termination Date (as such Schedule IV may be adjusted from
time to time as provided in Section 3.04 of the Lease). Notwithstanding
any other provisions of the Lease, the Participation Agreement or the
Indenture, each Termination Value shall be, under any circumstances and in
any event, an amount, together with so much of the arrears portion of Basic
Rent due and owing through the date of payment of any amount calculated by
reference to Termination Value as does not constitute an Excepted Payment,
at least sufficient to pay in full as of such date of payment the aggregate
unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on
Schedule IV of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals
and credits of unearned Basic Rent and, accordingly, no further accrual or
credit shall be required whenever Termination Value is to be calculated
with reference to any such date.
Transaction Costs. Those costs and expenses set forth in
Section 10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code
(which, among other things, recodified the Federal Aviation Act of 1958, as
amended to the time of such recodification), as amended and in effect on
the date of the Lease or as subsequently amended, or any successor or
substituted legislation at the time in effect and applicable, and the
regulations promulgated pursuant thereto.
Treasury Yield. (i) In the case of a Certificate having a
Maturity within one year after the Prepayment Date the average yield to
maturity on a government bond equivalent basis of the applicable United
States Treasury Bill due the week of Maturity of such Certificate and (ii)
in the case of a Certificate having a Maturity one year or more after the
Prepayment Date, the average yield of the most actively traded United
States Treasury Note (as reported by Cantor Fitzgerald Securities Corp. on
page 5 of Telerate Systems, Inc., a financial news service, or if such
report is not available, a source deemed comparable by the Independent
Investment Banker selected to determine the Make-Whole Premium and
reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N660FE), dated as of September 1, 1995, as amended
and restated as of October 26, 1995, between the Owner Participant and the
Owner Trustee in its individual capacity, as from time to time modified,
amended or supplemented pursuant to its applicable provisions and in
accordance with the Operative Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as
amended.
Trust Indenture Estate. All estate, right, title and interest
of the Indenture Trustee in and to any of the property, rights, interests
and privileges granted to the Indenture Trustee pursuant to the Granting
Clause of the Indenture, other than Excepted Payments and any and all other
rights of the Owner Trustee or the Owner Participant expressly reserved to
the Owner Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the
Underwriting Agreement.
Underwriting Agreement. The Underwriting Agreement dated
October 26, 1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan
Securities Inc. and Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which
there is in force a certificate issued pursuant to Section 41102(a) or
Section 41103 of the Transportation Code, and as to which there is in force
an air carrier operating certificate issued pursuant to Chapter 447 of the
Transportation Code and Part 121 of the regulations under such
Transportation Code, for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, or which may operate as an
air carrier by certification or otherwise under any successor or substitute
provision thereof or in absence thereof.
U.S. Person. A Person described in Section 7701(a) (30) of the
Code.
SCHEDULE III
PERMITTED COUNTRY LIST
Australia Japan
Austria Luxembourg
Belgium Malaysia
Canada Netherlands
Denmark New Zealand
Finland Norway
France Philippines
Germany Portugal
Greece Singapore
Hong Kong South Korea
Iceland Sweden
Ireland Switzerland
Italy United Kingdom
EXHIBIT A(1)(a)
[Letterhead of Federal Express]
[Refunding Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N660FE
--------------------------------------------
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express Corporation, a
Delaware corporation ("Federal"), and am familiar with the transactions
contemplated by the Participation Agreement (Federal Express Corporation
Trust No. N660FE), dated as of September 1, 1995, as amended and restated
as of October 26, 1995 (the "Participation Agreement"), among Federal, as
Lessee, Chrysler Capital Corporation, as Owner Participant, The Chase
Manhattan Bank (National Association), Bank of America NT & SA, CIBC Inc.
and The First National Bank of Chicago, as Original Loan Participants, NBD
Bank, a Michigan banking corporation, not in its individual capacity,
except as otherwise stated, but solely as Owner Trustee under the Trust
Agreement, The Chase Manhattan Bank (National Association), a national
banking association, not in its individual capacity, except as otherwise
stated, but solely as Indenture Trustee under the Indenture and The Chase
Manhattan Bank (National Association), as Pass Through Trustee, relating to
the Aircraft. This opinion is being delivered pursuant to Section
4.01(l) (i) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meaning assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things, for
the refinancing in full of the Original Loan Certificates evidencing the
Original Loan Participants' participation in the payment of the Purchase
Price of one Airbus A300F4-605R aircraft (the "Aircraft"), using the
proceeds from the public offering of the 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 No. N660FE) dated as of September 1, 1995, as amended
and restated as of October 26, 1995, as supplemented by the related
Indenture and Security Agreement Supplement ("Indenture"), between the
Owner Trustee and the Indenture Trustee.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision
executed counterparts of the Operative Agreements, the Pass Through
Agreement and each Series Supplement (the "Transaction 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
(other than any thereof relating to Federal), we have relied upon the
representations and warranties made in the Transaction 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 Transaction Agreements, other than Federal, has full
power, authority and legal right to enter into such Transaction Agreements
and that each such Transaction 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 40102(a) (15)
of the Transportation Code, 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
Original Agreements and the Transaction 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 so to qualify,
except where the failure so to qualify 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 Original Agreements and the Transaction
Agreements to which Federal is a party has or had, on the date of execution
thereof, been duly authorized, executed and delivered by Federal and
together constitute the legal, valid and binding obligation of Federal
enforceable against Federal in accordance with its and their terms. 4.
Neither the execution and delivery by Federal of the Original Agreements
and the Transaction 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 presently (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
constitutes a default under, or result in the creation of any Lien (other
than Liens permitted under Section 6.01(a) of the Lease) upon the property
of Federal under any law, governmental rule or regulation, or the charter
or bylaws of Federal or any order, writ, injunction or decree of any court
or 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, require
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
Original Agreements and the Transaction Agreements to which it 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
or does, as the case may be, 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 Refunding Date and which shall have been accomplished on or
prior to the Refunding Date) the registration with, or the taking of any
other action in respect of, the FAA, the Securities and Exchange Commission
or any other authority or agency of the federal government or of the State
of Tennessee other than (a) the registration of the issuance and sale of
the Pass Through Certificates under the Securities Act, (b) compliance with
the securities laws of each applicable state, and (c) the filing of the
Indenture, the Lease and the Trust Agreement with the FAA.
6. There are no pending, or to my knowledge, threatened
actions or proceedings before or by any court or administrative agency
which individually (or in the aggregate in the case of any group of related
lawsuits) (i) is expected to have a material adverse effect on (A) except
for the matters described under "Legal Proceedings" in Federal's Annual
Report on Form 10-K for the fiscal year ended May 31, 1995 (as updated by
Note 7 to the financial statement included in the Lessee's Quarterly Report
on Form 10-Q for the fiscal quarter ended August 31, 1995), 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, the financial condition
of Federal or (B) the ability of Federal to perform its obligations under
the Original Agreements or the Transaction Agreements, or (ii) involves the
Aircraft.
7. Except for the filing and, where appropriate, recording
pursuant to the Transportation Code of the Lease, the Indenture, the Trust
Agreement, the filing of the financing statements referred to in Section
4.01(f) of the Participation Agreement and 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 Delivery Date, 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 the first security interests
in and mortgage Lien on the Trust Indenture Estate in favor of the
Indenture Trustee in each case with respect to such portion of the Aircraft
as is covered by the recording system established by the Transportation
Code.
8. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
9. On the Delivery Date the Owner Trustee received valid title
to the Aircraft free and clear of all Liens on file with the FAA, except
for Liens permitted under Section 6.01(a) of the Lease. Pursuant to the
Original Participation Agreement the Aircraft was duly delivered to the
Owner Trustee. Federal, as Lessee, duly accepted the Aircraft under the
Original Lease and the Lease Supplement and the Term commenced on the
Delivery Date.
10. 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.
11. 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 as to the
enforceability of the Original Agreements and the Transaction Agreements to
which Federal is a party are based upon the assumption for purposes of such
opinions and without independent analysis that, notwithstanding the
respective choice of laws clauses in the Original Agreements and the
Transaction Agreements, the governing law with respect to each of the
Original Agreements and the Transaction 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 the 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 paragraphs 5, 7 and 9 above, 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 and subject to the assumptions and qualifications expressed
therein.
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, without
my prior written consent.
I rendered an opinion dated September 20, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. I hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
George W. Hearn
SCHEDULE A
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(1)(b)
[Letterhead of Davis Polk & Wardwell]
[Refunding Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N660FE
--------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal
Express Corporation Trust No. N660FE), dated as of September 1, 1995, as
amended and restated as of October 26, 1995 (the "Participation
Agreement"), among Federal Express, as Lessee, Chrysler Capital
Corporation, as Owner Participant, The Chase Manhattan Bank (National
Association), Bank of America NT & SA, CIBC Inc. and The First National
Bank of Chicago, as the Original Loan Participants, NBD Bank, a Michigan
banking corporation, not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, The Chase Manhattan Bank (National
Association), a national banking association, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee under
the Indenture, and The Chase Manhattan Bank (National Association), as Pass
Through Trustee, relating to the Aircraft. This opinion is being delivered
pursuant to Section 4.01(l) (viii) of the Participation Agreement.
Capitalized terms not otherwise defined herein have the meanings assigned
thereto in the Participation Agreement.
Pursuant to the Original Participation Agreement, the Owner
Participant and the Original Loan Participants participated in the payment
of the Purchase Price of one Airbus A300F4-605R Aircraft which was
purchased by the Owner Trustee pursuant to AVSA's FAA Bill of Sale and
AVSA's Warranty Bill of Sale, subjected to the Lien of the Original
Indenture and leased to Federal Express under the Original Lease. The
Participation Agreement provides, among other things, for the refinancing
of the Original Loan Certificates using the proceeds from the public
offering of the 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 executed counterparts of the Original Agreements, the Operative
Agreements, 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 such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as
originals and the conformity with the originals of all documents submitted
to us as copies.
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, the Original 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 telephoned
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 FAA pursuant to Section 44107 of
the Transportation Code, no filing or recording of any document or other
action was or 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
Transportation Code being subject to the due and timely filing and, where
appropriate, recording of (A) the Lease, with the Indenture attached as an
exhibit, (B) the Indenture and (C) the Trust Agreement.
3. The execution, delivery and performance of the Original
Participation Agreement, the Participation Agreement, the Original Trust
Agreement, the Trust Agreement, the Original Indenture, the Indenture, the
Indenture and Security Agreement Supplement, the Original Lease, the Lease
and the Lease Supplement by the Owner Trustee in its individual or trust
capacity, as the case may be, and the issuance, execution, delivery and
performance of the Certificates by the Owner Trustee in its trust capacity
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 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 or performance or the taking of any other action, the
conduct of any other business or the exercise of any other powers by NBD
Bank in its individual or in a trust capacity in the State of New York not
related to the transactions contemplated by the Original Agreements, the
Operative Agreements, the Pass Through Agreement or the Series Supplements.
We have assumed that NBD Bank has made the filings necessary to comply with
Section 131.3 of the Banking Law of the State of New York, however we
express no opinion as to whether NBD Bank is required to comply with said
Section 131.3.
4. (a) Each of the Original Agreements, the Operative
Agreements, the Pass Through Agreement and each of the Series Supplements
to which Federal Express is a party has been duly authorized, executed and
delivered by Federal Express.
(b) The execution, delivery and performance by Federal Express
of each of the Original Agreements and each of the Operative Agreements to
which Federal Express is a party, the Pass Through Agreement and each
Series Supplement 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
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
other than the transactions contemplated by the Original Agreements, the
Operative Agreements, the Pass Through Agreement or each Series Supplement.
5. Assuming (i) the due authorization, execution and delivery
of the Original Agreements, the Operative Agreements, the Pass Through
Agreement and each Series Supplement by each of the parties to each such
document (other than Federal Express), (ii) that the execution, delivery
and performance by each of the Operative Agreements, the Pass Through
Agreement and each Series Supplement by each of the parties thereto will
not violate the respective parties' constituent documents, (iii) 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,
(iv) that the Original Loan Certificates are delivered by the Original Loan
Participants to the Indenture Trustee for cancellation and are cancelled,
(v) 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 (vi) that the form
of each Operative Agreement, the Pass Through Agreement and each Series
Supplement 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 Operative Agreement, the Pass Through Agreement and
each Series Supplement in form constitutes a legal, valid and binding
agreement of each party thereto enforceable against each such party in
accordance with its terms; (B) the Original Indenture created, and the
Indenture creates, for the benefit of the Holders, the security interest in
the Trust Indenture Estate that they purport to create; (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; (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. The opinions set
forth in this paragraph 5 are subject to the due filing and recording,
where appropriate, with the FAA of the documents referred to in paragraph 2
above.
6. All the properties which are part of the Trust Indenture
Estate (including all right, title and interest of the Owner Trustee
pledged and mortgaged by it pursuant to the Indenture 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 to the due filing
and, where appropriate, recording of those documents referred to in
paragraph 2 above and the financing statements referred to in Section
4.01(f) of the Participation Agreement), and the beneficial interests of
the Owner Participant under the Trust Agreement in and to such properties
are subject, to the extent provided in the Indenture, to the Lien of the
Indenture in favor of the Holders of the Certificates issued and to be
issued under the Indenture.
7. The Indenture creates, as security for 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 and, where
appropriate, recording in accordance with the Transportation Code of the
documents referred to in paragraph 2 above. We express no opinion 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 (6) and (7) of Section 40102(a) of the Transportation
Code.
8. Federal Express's participation in the transactions
contemplated by the Operative Agreements, the Pass Through Agreement and
each Series Supplement does not and will not constitute a violation of
Section 7 of the Securities Exchange Act of 1934.
9. It is not necessary, in connection with the creation of the
beneficial interests 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.
10. The provisions of Section 1110 of the United States
Bankruptcy Code will apply to the Aircraft for the benefit of the Indenture
Trustee.
The foregoing opinions are subject to the following
qualifications:
(a) To the extent that this opinion relates to matters involving
Federal aviation law, we have relied, with your consent, without
independent investigation and verification and subject to the assumptions
and qualifications contained therein, upon the opinion of Daugherty, Fowler
& Peregrin to be delivered to you and dated the date hereof. We have also
relied, with your consent, on the opinion dated the date hereof of George
W. Hearn, Vice President - Law of the Lessee, for purposes of the matters
stated in paragraphs 4(a) and as to all matters of Tennessee law.
(b) 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, the laws
of the United States and the General Corporation Law of the State of
Delaware.
(c) The opinion contained in paragraph 5 above as to enforceability
is subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity 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.
(d) 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 any other Person
without our prior written consent.
(e) We rendered an opinion dated September 20, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Davis Polk & Wardwell
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- ---------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(2)(a)
[Letterhead of Morgan, Lewis & Bockius]
[Refunding Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N660FE
--------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel for Chrysler Capital
Corporation, a Delaware corporation (the "Owner Participant"), in
connection with the transactions contemplated by (i) the Participation
Agreement, dated as of September 1, 1995, as amended and restated as of
October 26, 1995 (the "Participation Agreement"), among Federal Express
Corporation, as Lessee (the "Lessee"), the Owner Participant, The Chase
Manhattan Bank (National Association), Bank of America NT & SA, CIBC Inc.
and The First National Bank of Chicago, as the Original Loan Participants
(the "Original Loan Participants"), NBD Bank, a Michigan banking
corporation, not in its individual capacity but solely as Owner Trustee
under the Trust Agreement (the "Owner Trustee"), The Chase Manhattan Bank
(National Association), a national banking association, not in its
individual capacity, except as otherwise stated, but solely as Indenture
Trustee under the Indenture (the "Indenture Trustee"), and The Chase
Manhattan Bank (National Association), as Pass Through Trustee, (ii) the
Trust Agreement, dated as of September 1, 1995, as amended and restated as
of October 26, 1995 (the "Trust Agreement"), by and between the Owner
Participant and the Owner Trustee and (iii) the Tax Indemnity Agreement,
dated as of September 1, 1995, as amended by Amendment No. 1 thereto dated
as of October 26, 1995 (the "Tax Indemnity Agreement"), by and between the
Owner Participant and the Lessee. This opinion is delivered pursuant to
Section 4.01(l) (ii) of the Participation Agreement. Unless otherwise
defined herein, all capitalized terms used herein shall have the respective
defined meanings set forth in the Participation Agreement.
In connection with our opinions herein, we have examined
executed counterparts of (i) the Original Participation Agreement, the
Original Trust Agreement and the Original Tax Indemnity Agreement
(collectively, the "Original Owner Participant Documents") and (ii) the
Participation Agreement, the Trust Agreement and the Tax Indemnity
Agreement (collectively, the "Owner Participant Documents"). We have
further examined and relied upon the accuracy of original, certified,
conformed, photographic or telecopied copies of such records, agreements,
certificates, instruments 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, the authenticity of all documents submitted to us as
originals and the conformity to such original documents of all copies
submitted to us as certified, conformed, photographic or telecopied copies
and the authenticity of such latter documents, 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
various questions of fact material to our opinions, we have relied solely
upon the accuracy of the statements, representations and warranties made in
the Original Owner Participant Documents and the Owner Participant
Documents, and we have made no independent investigation or inquiry with
respect to such factual matters.
With your consent, and for purposes of this opinion, we have
assumed the accuracy of the following matters, but we have not made any
independent investigation or inquiry with respect thereto and we render no
opinion on such matters:
(a) That the execution and delivery and performance of each of the
Original Owner Participant Documents and the Owner Participant Documents by
each of the parties thereto did not or will not, as the case may be,
violate the respective parties' constituent documents.
(b) That each of the parties to the Original Owner Participant
Documents and the Owner Participant Documents had or has, as the case may
be, full power, authority and legal right to enter into and perform its
respective obligations under the Original Owner Participant Documents and
the Owner Participant Documents to which it is a party.
(c) The Original Owner Participant Documents and the Owner
Participant Documents, at the time of execution and delivery by the Owner
Participant, were or will have been, as the case may be, duly authorized
and validly executed and delivered by all parties thereto (other than the
Owner Participant) and constituted or will constitute, as the case may be,
the legal, valid and binding obligations of such parties, enforceable
against such parties in accordance with their terms.
(d) The parties to the Original Owner Participant Documents and the
Owner Participant Documents (other than the Owner Participant, as to which
we have not assumed the acquisition of all consents, permits and approvals
under New York law) at the time of execution and delivery by the Owner
Participant, obtained or have obtained, as the case may be, and there were
or are, as the case may be, in full force and effect at such time, any and
all required consents, permits and approvals required by or from any and
all federal, state, local or foreign governmental agencies and authorities
in connection with the transactions contemplated thereby, to the extent
necessary for the legality, validity, binding effect or enforceability of
the Original Owner Participant Documents and the Owner Participant
Documents.
We have been retained as special counsel to the Owner
Participant in connection with the transactions contemplated by the
Participation Agreement, and have not generally represented the Owner
Participant in its business activities and are not familiar with the nature
and extent of such other activities. Accordingly, we also have assumed
without investigation that such other activities are not of such a nature
as to cause the transactions contemplated by the Participation Agreement to
be governed by laws or regulations of the State of New York or the United
States of America applicable only because of such other activities (such as
laws relating specifically to the banking, securities, insurance or utility
industries) and not applicable to business corporations generally.
Based upon the foregoing, we are of the opinion that:
(1) The Original Owner Participant Documents on the date of execution
thereof constituted, and the Owner Participant Documents constitute legal,
valid and binding obligations of the Owner Participant, enforceable against
the Owner Participant in accordance with their respective terms, except as
the enforceability thereof may be limited by (a) applicable bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors', mortgagees' and lessors'
rights generally, (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding at law or in equity) and
(c) with respect to the indemnification provisions set forth in the
Original Owner Participant Documents and the Owner Participant Documents,
considerations of public policy.
(2) Neither the execution and delivery of the Original Owner Participant
Documents and the Owner Participant Documents by the Owner Participant nor
the consummation by the Owner Participant of any of the transactions
therein contemplated, or the fulfillment of, or compliance with, the terms
and provisions of any thereof, (A) required or requires, as the case may
be, for its validity that the Owner Participant obtain the consent or
approval of, give notice to, register with, or take 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, or (B) contravened or
contravenes any law, governmental rule or regulation of the State of New
York or the Federal government of the United States or any governmental
authority or agency thereof.
In rendering the foregoing opinions, we have relied, with your
consent, on the opinion of even date herewith of Ted W. Verrill, Esq.,
Senior Vice President and General Counsel of the Owner Participant, as to
the matters set forth therein (i) that are governed by the laws of the
State of New York, and (ii) relating to the due authorization, execution
and delivery of the Original Owner Participant Documents and the Owner
Participant Documents by the Owner Participant under the laws of the United
States of America, and our opinions are subject to the same limitations and
exceptions as set forth therein.
The foregoing opinions are subject, however, to the
qualification that we express no opinion as to matters relating to the
title to or sufficiency of description of any property or collateral
described in the Original Owner Participant Documents and the Owner
Participant Documents or the perfection or relative priority of any lien or
security interest created with respect to such property or collateral
thereunder. In addition, we express no opinion as to matters governed by
(i) any tax laws, (ii) the Transportation Code, or by any other laws,
statutes, rules or regulations of the United States particularly relating
to the acquisition, ownership, registration, leasing, use or sale of the
Aircraft, the Airframe or the Engines other than such laws relating to
personal property generally, (iii) any securities laws and (iv) laws
pertaining to the Owner Participant solely because of the business
activities of the Owner Participant and not applicable to business
corporations generally.
We are licensed to practice law in the State of New York and 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 laws of the United
States of America.
This opinion is furnished by us at your request and at the
Owner Participant's request for your sole benefit, and we agree that you
and your successors and permitted assigns 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;
provided that no such consent shall be necessary for the reproduction,
circulation or distribution of this opinion to (i) the special counsel,
auditors or public accountants of the persons named on Schedule A hereto or
(ii) bank examiners or similar regulatory authorities. Our 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 20, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Morgan, Lewis & Bockius
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- ------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- ---------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- ------------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- -------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- ---------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(2)(b)
[Letterhead of Chrysler Capital Corporation]
[Refunding Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N660FE
--------------------------------------------
Ladies and Gentlemen:
I have acted as counsel to Chrysler Capital Corporation, a
Delaware corporation (the "Owner Participant"), in connection with the
transactions contemplated by that certain (i) the Participation Agreement,
dated as of September 1, 1995, as amended and restated as of October 26,
1995 (the "Participation Agreement"), among Federal Express Corporation, as
Lessee (the "Lessee"), the Owner Participant, The Chase Manhattan Bank
(National Association), Bank of America NT & SA, CIBC Inc. and The First
National Bank of Chicago, as the Original Loan Participants (the "Original
Loan Participants"), NBD Bank, a Michigan banking corporation, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement
(the "Owner Trustee"), The Chase Manhattan Bank (National Association), a
national banking association, not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee under the Indenture (the
"Indenture Trustee"), and The Chase Manhattan Bank (National Association),
as Pass Through Trustee (the "Pass Through Trustee), (ii) the Trust
Agreement, dated as of September 1, 1995, as amended and restated as of
October 26, 1995 (the "Trust Agreement"), by and between the Owner
Participant and the Owner Trustee and (iii) the Tax Indemnity Agreement,
dated as of September 1, 1995, as amended by Amendment No. 1 thereto (the
"Tax Indemnity Agreement"), by and between the Owner Participant and the
Lessee. This opinion is delivered pursuant to Section 4.01(l) (ii) of the
Participation Agreement. Unless otherwise defined herein, all capitalized
terms used herein shall have the respective defined meanings set forth in
the Participation Agreement.
For purposes of the opinions expressed below, I, or members of
my staff, have examined executed counterparts or copies certified to my
satisfaction of the Original Participation Agreement, the Original Trust
Agreement, the Original Tax Indemnity Agreement, the Participation
Agreement, the Trust Agreement and the Tax Indemnity Agreement
(collectively, the "Owner Participant Documents") and have examined
originals or photostatic, certified or telecopied copies of such records of
the Owner Participant, certificates of officers of the Owner Participant
and public officials, and such other documents as I have deemed relevant
and necessary as a basis for the opinions set forth below. In such
examination I have assumed the genuineness of all signatures (other than
those of the Owner Participant), the authenticity of all documents
submitted to me as originals, the conformity to the original documents of
documents submitted to me as certified, photostatic or telecopied copies,
and the authenticity of the originals of such copies. As to questions of
fact material to my opinions, I have relied upon the representations and
warranties contained in the Owner Participant Documents and upon
certificates of officers of the Owner Participant, those of other persons
having knowledge thereof delivered pursuant thereto and those of public
officials. I have assumed, except with regard to the Owner Participant,
that each of the Owner Participant Documents have been duly authorized,
executed and delivered by the respective parties thereto and that they
constitute the legal, valid and binding obligations of each party thereto
enforceable against each such party in accordance with their respective
terms.
Based on the foregoing examination and subject to the
assumptions and qualifications set forth herein, I am of the opinion that
as of the date hereof:
1. The Owner Participant is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. The
Owner Participant has all requisite corporate power, authority and legal
right to carry on its present business and operations, to own or lease its
Properties and enter into and to carry out the transactions contemplated by
each of the Owner Participant Documents.
2. The performance by the Owner Participant of its obligations under
each of the Owner Participant Documents did not or does not, as the case
may be, (a) required or require, as the case may be, any approval or
consent of any shareholder, to the best of my knowledge, require any
consent or approval of any trustee, or holder of any indebtedness or other
obligation of the Owner Participant, (b) violated or violate, as the case
may be, the organizational documents or by-laws of the Owner Participant,
(c) violated or violate, as the case may be, any law, governmental rule or
regulation of the State of New York or of the federal government of the
United States or any governmental authority or agency thereof or (d) to the
best of my knowledge, conflicted or conflict, as the case may be, with any
judgment or order applicable to or binding upon the Owner Participant or
its properties, or violated or violate, as the case may be, or (except as
contemplated by the Owner Participant Documents) subject the Trust 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 is a party or by
which the Owner Participant is bound.
3. The execution and delivery by the Owner Participant of the Owner
Participant Documents and the performance by the Owner Participant of its
obligations thereunder have been duly authorized by all necessary corporate
action on the part of the Owner Participant. Each of the Owner Participant
Documents has been duly executed and delivered by the Owner Participant.
4. Neither the execution and delivery by the Owner Participant of
the Owner Participant Documents, nor the consummation by the Owner
Participant of any of the transactions contemplated thereby, required or
requires, as the case may be, the consent or approval of, the giving of
notice to, the registration with, the recording or filing of any document
with, or the taking or any other action in respect of, any governmental
authority or agency of the State of New York or of the federal government
of the United States, except those contemplated by the Operative
Agreements.
5. There are no actions, suits, investigations or proceedings
pending or, to the best of my knowledge, threatened against or affecting
the Owner Participant or any of its properties in any court or before any
administrative agency or arbitrator, which, if adversely determined, would
materially adversely affect the ability of the Owner Participant to perform
its obligations under any of the Owner Participant Documents, and there are
no pending or, to the best of my knowledge, threatened actions or
proceedings before any court, administrative agency or tribunal involving
the Owner Participant in connection with the transactions contemplated by
any of the Owner Participant Documents.
I am a member of the Bar of the State of New York and I do not
purport to have any knowledge of, or to express any opinion herein
concerning, any laws other than the laws of the State of New York, the
General Corporation Law of the State of Delaware and the laws of the United
States of America, except that no opinion is given as to securities,
banking or tax laws. Further, I have made no investigation and express no
opinion, as to any aviation law or other laws, statutes, rules or
regulations applicable due to the particular nature of the equipment
subject to the Lease.
This opinion is furnished by me as counsel to the Owner
Participant for your sole benefit and for the benefit of your successors
and assigns and no other person or entity shall rely on this opinion
without my express written consent. This opinion shall not be published or
reproduced in any manner or distributed or circulated to any person or
entity without my express written consent; provided that no such consent
shall be necessary for the reproduction, circulation or distribution of
this opinion to (i) the special counsel, auditors or public accountants of
the persons named on Schedule A hereto or (ii) bank examiners or similar
regulatory authorities. My 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 20, 1995
(the "Delivery Date Opinion"), a copy of which is attached hereto, in
connection with the financing and acquisition of the Aircraft on such date.
We hereby consent and agree that the addressees hereto who were not
addressees to the Delivery Date Opinion may rely on the Delivery Date
Opinion as fully and with the same force and effect as if such addressees
were originally named therein on the date of the Delivery Date Opinion.
Very truly yours,
Ted W. Verrill
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(3)(a)
[Letterhead of Dewey Ballantine]
[Refunding Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N660FE
--------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to The Chase Manhattan Bank
(National Association), a national banking association (the "Indenture
Trustee"), in connection with the transactions contemplated by (i) the
Trust Indenture, Mortgage and Security Agreement (Federal Express
Corporation Trust No. N660FE) dated as of September 1, 1995 (the "Original
Indenture") between NBD Bank (the "Owner Trustee") and the Indenture
Trustee, (ii) the Participation Agreement (Federal Express Corporation
Trust No. N660FE) dated as of September 1, 1995 (the "Original
Participation Agreement") among Federal Express Corporation ("Federal
Express"), Chrysler Capital Corporation, as Owner Participant (the "Owner
Participant"), The Chase Manhattan Bank (National Association), Bank of
America NT & SA, CIBC Inc. and The First National Bank of Chicago, as
Original Loan Participants (the "Original Loan Participants"), the Owner
Trustee and the Indenture Trustee, (iii) the Trust Indenture and Security
Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, as amended and restated as of October 26, 1995 (as
amended and restated, the "Indenture") between the Owner Trustee and the
Indenture Trustee, and (iv) the Participation Agreement (Federal Express
Corporation Trust No. N660FE) dated as of September 1, 1995, as amended
and restated as of October 26, 1995 (as amended and restated, the
"Participation Agreement") among Federal Express, the Owner Participant,
the Original Loan Participants, the Owner Trustee, the Indenture Trustee,
and The Chase Manhattan Bank (National Association), as Pass Through
Trustee. 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(l) (iii) of the Participation Agreement. Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set
forth or referred to in the Participation Agreement. Additionally, The
Chase Manhattan Bank (National Association), in its capacity as Agent and
as an Original Loan Participant, is sometimes referred to herein as the
"New York Loan Participant". We have not served as counsel for or advised
the New York Loan Participant in connection with the transactions
contemplated by the Participation Agreement, the Indenture or any of the
other Operative Agreements and references herein to the Indenture Trustee,
in its individual capacity, exclude The Chase Manhattan Bank (National
Association) in its capacity as the New York Loan Participant.
In connection with the opinions expressed herein, we have
reviewed executed counterparts of the Operative Agreements and the Original
Agreements to which the Indenture Trustee is a party (which we previously
reviewed). We have also examined and relied upon the accuracy of the
originals or certified, conformed, photocopied or telecopied copies of such
corporate records, certificates, instruments 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,
photocopied 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, when relevant facts were not
independently established, relied upon representations and warranties
contained in the Operative Agreements and upon the statements and
certificates furnished to us.
Based upon and subject to the foregoing and the qualifications
hereinafter set forth, we are of the opinion that:
1. The Indenture Trustee is a national banking association duly
organized and validly existing in good standing 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 execute, deliver and perform its
obligations under the Indenture, the Participation Agreement and the other
Operative Agreements to which it is or is to be a party, and to
authenticate the Certificates to be 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 Original Indenture, the
Original Participation Agreement and the other Original Agreements to which
it was a party.
2. The Indenture Trustee, in its individual and trust capacities,
has duly authorized, executed and delivered the Indenture, the
Participation Agreement and each of the other Operative Agreements to which
it is a party and as of the date of execution thereof had duly authorized,
executed and delivered the Original Indenture, the Original Participation
Agreement and each of the other Original Agreements to which it was a
party.
3. Each of the Indenture, the Participation Agreement and the other
Operative Agreements to which it is a party constitutes, and on the date of
execution thereof, the Original Indenture, the Original Participation
Agreement and the other Original Agreements to which it was a party
constituted, 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 thereof, except as
the enforceability thereof may be limited by (a) general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law), (b) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and (c) public policy considerations (in the case of
the indemnity provisions contained therein) .
4. 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.
5. The execution, delivery, and performance by the Indenture Trustee
of the Indenture, the Participation Agreement and each of the other
Operative Agreements to which it is a party 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 of America or the
State of New York governing the banking or trust powers of the Indenture
Trustee. The execution, delivery, and performance by the Indenture Trustee
of the Original Indenture, the Original Participation Agreement and each of
the other Original Agreements to which it was a party were not on the date
of execution thereof 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 of America or the State of New York governing the banking or
trust powers of the Indenture Trustee.
6. Neither the execution and delivery by the Indenture Trustee, in
its individual or trust capacity, as the case may be, of the Original
Indenture, the Indenture, the Original Participation Agreement, the
Participation Agreement or any of the other Operative Agreements or
Original Agreements to which it is or was, as the case may be, a party, 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
the Indenture or the Participation Agreement requires, or required on the
date of execution thereof in the case of the Original Indenture and the
Original Participation Agreement, 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.
7. There are no fees, taxes or other governmental charges payable by
the Certificate Holders, the Owner Trustee, the Indenture Trustee (except
taxes imposed on fees payable to the Indenture Trustee) to the State of New
York or any political subdivision thereof in connection with the execution,
delivery or performance of any of the Operative Agreements or in connection
with the issuance and acquisition of the Certificates issued to the
Certificate Holders or the beneficial interests of the Certificate Holders
in the Trust Indenture Estate. 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 New York 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. There is no fee, tax or other
governmental charge (other than as such as may be imposed upon the New York
Loan Participant) under the laws of the State of New York 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 Certificate
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 New York. 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 Original Loan Participants, the
Owner Participant or the New York Loan Participant to the State of New York
or any political subdivision thereof in connection with (x) the execution,
delivery or performance by any of the Indenture, the Participation
Agreement or any of the other Operative Agreements, (y) the making by the
Owner Participant of its investment in the Aircraft, (z) with respect to
the New York Loan Participant, the issuance and ownership of the Original
Loan Certificates issued to the New York Loan Participant.
We express no opinion as to the laws of any jurisdiction other
than the laws of the State of New York and the federal laws of the United
States of America. In addition, we express no opinion herein as to (i) any
federal or state securities laws, (ii) any tax laws, (iii) any aviation
laws including, without limitation, the Transportation Code, (iv) any laws,
statutes, rules or regulations applicable to the particular nature of the
equipment acquired or to be acquired by the Owner Trustee, or (v) ERISA or
any other pension and employee benefit laws, rules or regulations. In
addition, we express no opinion as to the right, title or interest in or to
the Trust Estate on the part of any Person. We also express no opinion as
to the perfection or priority of any security interest created by any of
the Operative Agreements.
In rendering the opinions expressed herein, we have assumed
that (a) each of the Indenture, the Participation Agreement and the other
Operative Agreements has been duly authorized, executed and delivered by
the respective parties thereto (other than the Indenture Trustee) and
constitutes and on the date of execution thereof, the Original Indenture
and the Original Participation Agreement constituted, a legal, valid and
binding obligation of each of such parties (other than the Indenture
Trustee), enforceable against each of such parties in accordance with the
terms thereof, (b) each of such parties (other than the Indenture Trustee)
has the requisite power, authority and legal right to enter into and
perform its respective obligations under the Indenture, the Participation
Agreement and each of the other Operative Agreements to which it is a party
and (c) the transactions provided for in the Operative Agreements are not
within the prohibitions of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986, as amended.
This opinion is furnished by us for the sole benefit of the
addressees hereof, each of whom we understand and agree may rely upon the
opinions set forth herein. No other person or entity is entitled to rely
on this opinion 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 20, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Dewey Ballantine
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(3)(b)
[Letterhead of The Chase Manhattan Bank, N.A.]
[Refunding Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N660FE
--------------------------------------------
Ladies and Gentlemen:
As Vice President and Senior Associate Counsel to The Chase
Manhattan Bank (National Association), a national banking association (the
"Indenture Trustee"), I advise you as follows with respect to the
authorization, execution and delivery by the Indenture Trustee of (i) the
Trust Indenture, Mortgage and Security Agreement (Federal Express
Corporation Trust No. N660FE) dated as of September 1, 1995 (the "Original
Indenture") between NBD Bank (the "Owner Trustee") and the Indenture
Trustee, (ii) the Participation Agreement (Federal Express Corporation
Trust No. N660FE) dated as of September 1, 1995 (the "Original
Participation Agreement") among Federal Express Corporation ("Federal
Express"), Chrysler Capital Corporation, as Owner Participant (the "Owner
Participant"), The Chase Manhattan Bank (National Association), Bank of
America NT & SA, CIBC Inc. and The First National Bank of Chicago, as
Original Loan Participants (the "Original Loan Participants"), the Owner
Trustee and the Indenture Trustee, (iii) the Trust Indenture and Security
Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, as amended and restated as of October 26, 1995 (as
amended and restated, the "Indenture") between the Owner Trustee and the
Indenture Trustee, and (iv) the Participation Agreement (Federal Express
Corporation Trust No. N660FE) dated as of September 1, 1995, as amended
and restated as of October 26, 1995 (as amended and restated, the
"Participation Agreement") among Federal Express, the Owner Participant,
the Original Loan Participants, the Owner Trustee, the Indenture Trustee,
and The Chase Manhattan Bank (National Association), as Pass Through
Trustee. 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.
Unless otherwise defined herein, capitalized terms used herein
shall have the respective meanings attributed thereto in the Participation
Agreement. The Chase Manhattan Bank (National Association), in its
capacity as Agent and as a Loan Participant, is sometimes referred to
herein as the "New York Loan Participant". I have not served as counsel
for or advised the New York Loan Participant in connection with the
transactions contemplated by the Participation Agreement, the Indenture or
any of the other Operative Agreements and references herein to the
Indenture Trustee, in its individual capacity, exclude The Chase Manhattan
Bank (National Association) in its capacity as the New York Loan
Participant.
I have reviewed executed counterparts of the Operative
Agreements and the Original Agreements to which the Indenture Trustee is a
party (which we previously reviewed). I have also examined the originals,
or certified, conformed, photocopied or telecopied copies of such corporate
records, certificates, instruments and other documents as I have deemed
necessary to appropriate to enable me to render the opinions expressed
herein, including, without limitation, certified copies of the By-laws of
the Indenture Trustee, a certificate of the secretary 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 and a certificate of the
Comptroller of the Currency, Washington, D.C., dated September 23, 1965, 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, I have assumed the genuineness of
signatures on original documents (other than those of the Indenture
Trustee) and the conformity to such original documents of all copies
submitted to me as certified, conformed, photocopied or telecopied copies,
and as to certificates and telegraphic and telephonic confirmations given
by public officials, I have assumed the same to have been properly given
and to be accurate. As to all matters of fact material to my opinions, I
have, when relevant facts were not independently established, relied upon
statements, representations and warranties contained in the Operative
Agreements and upon the statements and certificates furnished to me.
A. Based upon the foregoing and subject to the limitations
expressed in paragraph B below, I am of the opinion that: (i) the
execution, delivery and performance by the Indenture Trustee of the
Indenture, the Participation Agreement and each of the other Operative
Agreements to which it is a party are not, to my knowledge, in violation of
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 and (ii) the execution, delivery and performance by the Indenture
Trustee of the Original Indenture, the Original Participation Agreement and
each of the other Original Agreements to which it was a party were not on
the date of execution thereof, to my knowledge, in violation of 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.
B. I am qualified to practice law in the State of New York and
I express no opinion as to any laws other than the laws of the State of New
York and the federal laws of the United States of America. Further,
without limiting the generality of the foregoing, I express no opinion with
respect to (i) the citizenship of the Indenture Trustee, the Transportation
Code and the regulations promulgated thereunder, the impact of the
Transportation Code 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 under the laws of any
jurisdiction other than New York or federal laws of the United States of
America 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 New York;
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 my
express prior written consent. This opinion may not be used, circulated,
quoted, published or otherwise referred to for any purpose without my
express prior written consent. This opinion is limited to the matters
stated herein, and no opinion is implied or may be inferred beyond the
opinions expressly stated herein.
We rendered an opinion dated September 20, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Barbara Jo Lubitz
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(4)
[Letterhead of Daugherty, Fowler & Peregrin]
[Refunding Date]
To the Parties Named on Schedule A attached hereto
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
4.01(l) (iv) of the Participation Agreement (Federal Express Corporation
Trust No. N660FE), dated as of September 1, 1995, as amended and restated
as of October 26, 1995 (the "Participation Agreement") among Federal
Express Corporation, as Lessee (the "Lessee"), Chrysler Capital
Corporation, as Owner Participant (the "Owner Participant"), The Chase
Manhattan Bank (National Association), Bank of America NT & SA, CIBC Inc.
and The First National Bank of Chicago, as the Original Loan Participants
(the "Original Loan Participants"), NBD Bank, not in its individual
capacity but solely as Owner Trustee (the "Owner Trustee"), The Chase
Manhattan Bank (National Association), as Indenture Trustee (the "Indenture
Trustee") and The Chase Manhattan Bank (National Association), as Pass
Through Trustee, with respect to that portion of Subtitle VII of Title 49
of the United States Code relative to the recordation of instruments and
the registration of aircraft thereunder.
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) Trust Agreement (Federal Express Corporation Trust No. N660FE)
dated as of September 1, 1995, as amended and restated as of October 26,
1995 (the "Trust Agreement") between the Owner Participant and the Owner
Trustee, which Trust Agreement amends and restates the Original Trust
Agreement, which Trust Agreement was filed at ____ _.m., C.D.T.;
(b) Trust Indenture and Security Agreement (Federal Express Corporation
Trust No. N660FE) dated as of September 1, 1995, as amended and restated
as of October 26, 1995 and executed on October __, 1995 (the "Indenture")
between the Owner Trustee and the Indenture Trustee, which Indenture amends
and restates the Original Indenture, which Indenture was filed at ____
_.m., C.D.T.; and,
(c) Lease Agreement (Federal Express Corporation Trust No. N660FE)
dated as of September 1, 1995, as amended and restated as of October 26,
1995 (the "Lease") between the Owner Trustee, as lessor, and the Lessee, as
lessee, which Lease amends and restates the Original Lease, with the
Indenture attached thereto, which Lease with the Indenture attached thereto
was filed at ____ _.m., C.D.T.
The Confidential Omissions were intentionally omitted from the FAA
filing counterparts of the Lease and the 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. AC Form 8050-2 Aircraft Bill of Sale dated September 20, 1995
(the "FAA Bill of Sale") from AVSA S.A.R.L., as seller, conveying title to
the Airframe to the Owner Trustee has been duly recorded by the FAA on
September 20, 1995 and assigned Conveyance No. 2A267698;
2. the Indenture and the Lease with the Indenture 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 49 U.S.C. Section
44107;
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 49
U.S.C. Section 44103(a);
4. the Original Trust Agreement was duly filed with the FAA on
September 20, 1995 pursuant to and in accordance with the provisions of 49
U.S.C. Section 44103(a);
5. the Original Indenture with the Indenture and Security Agreement
Supplement attached has been duly filed with and duly recorded by the FAA
pursuant to and in accordance with the provisions of 49 U.S.C. Section
44107;
6. the Original Lease with the Lease Supplement, the Original
Indenture and the Indenture and Security Agreement Supplement attached was
duly filed with and duly recorded by the FAA pursuant to and in accordance
with the provisions of 49 U.S.C. Section 44107;
7. the Airframe is duly registered in the name of the Owner Trustee
pursuant to and in accordance with the provisions of 49 U.S.C. Section
44103(a);
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 Original Indenture, as amended and restated by the
Indenture, as supplemented by the Indenture and Security Agreement
Supplement, and (ii) the rights of the parties under the Original Lease, as
amended and restated by the Lease, as supplemented by the Lease Supplement;
9. the Original Indenture, as amended and restated by the Indenture,
as supplemented by the Indenture and Security Agreement 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 Original Lease, as
amended and restated by the Lease, as supplemented by the Lease Supplement
(insofar as such assignment affects an interest covered by the recording
system established by the FAA pursuant to 49 U.S.C. Section 44107), 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 49 U.S.C. Section 44107), 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 to the recognition of the perfection of such security interest and
assignment as against third parties in any legal proceeding 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 Original Lease, as
amended and restated by the Lease, as supplemented by the Lease Supplement,
the Original Indenture, as amended and restated by the Indenture, as
supplemented by the Indenture and Security Agreement Supplement, or the
Original Trust Agreement, as amended and restated by the Trust Agreement,
except for such filings as are referred to in our opinion dated September
20, 1995 (which have been duly effected) and the filings referred to in
clauses (a), (b) and (c) above; and,
11. neither the authorization, issuance and delivery of the
Certificates, the execution and delivery by the parties thereto of the
Original Trust Agreement, the Trust Agreement, the Original Indenture, the
Indenture, the Indenture and Security Agreement Supplement, the Original
Participation Agreement, the Participation Agreement, the FAA Bill of Sale,
the Original Lease, the Lease and the Lease Supplement or the performance
by the parties thereto of: (i) the Original Trust Agreement, as amended
and restated by the Trust Agreement; (ii) the Original Indenture, as
amended and restated by the Indenture, as supplemented by the Indenture and
Security Agreement Supplement; (iii) the Original Participation Agreement,
as amended and restated by the Participation Agreement; and (iv) the
Original Lease, as amended and restated by the Lease, as supplemented by
the Lease Supplement, in accordance with the provisions 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 registration 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 the Airframe during any period or
periods of time during which it has not been subject to United States
registration.
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 29 U.S.C. Section 1368(a),
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 October __, 1995
and have continued to rely upon the opinion of the Assistant Chief Counsel
for the Aeronautical Center dated September 18, 1995, copies of which are
attached hereto.
Annex I
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus Industrie A300F4-605R aircraft bearing
manufacturer's serial number 759 and U.S. Registration No. N660FE (the
"Airframe") and two (2) General Electric CF6-80C2-A5F aircraft engines
bearing manufacturer's serial numbers 705-229 and 705-230 (the "Engines")
(the Airframe and the Engines are referred to collectively as the
"Aircraft") .
Original Trust Agreement
Trust Agreement (Federal Express Corporation Trust No. N660FE)
dated as of September 1, 1995 between the Owner Participant and the Owner
Trustee, which was filed with the FAA on September 20, 1995.
Original Indenture
Trust Indenture, Mortgage and Security Agreement (Federal
Express Corporation Trust No. N660FE) dated as of September 1, 1995
between the Owner Trustee and the Indenture Trustee, which together with
the Indenture and Security Agreement Supplement (as hereinafter defined)
attached thereto was recorded as one instrument by the FAA on September 21,
1995 and assigned Conveyance No. 2A267705.
Indenture and Security Agreement Supplement
Indenture and Security Agreement Supplement No. 1 (Federal
Express Corporation Trust No. N660FE) dated September 20, 1995 between the
Owner Trustee and the Indenture Trustee, with respect to the Aircraft,
which was attached to and recorded by the FAA as one instrument with the
Original Indenture.
Original Lease
Lease Agreement (Federal Express Corporation Trust No. N660FE)
dated as of September 1, 1995 between the Owner Trustee, as lessor, and the
Lessee, which together with the Lease Supplement (as hereinafter defined),
the Original Indenture and the Indenture and Security Agreement Supplement
attached thereto was recorded as one instrument by the FAA on September 21,
1995 and assigned Conveyance No. 2A267706.
Lease Supplement
Lease Supplement No. 1 (Federal Express Corporation Trust No.
N660FE) dated September 20, 1995 between the Owner Trustee, as lessor, and
the Lessee, with respect to the Aircraft, which was attached to and
recorded by the FAA as one instrument with the Original Lease.
Confidential Omissions
The Lease was filed with the FAA, with (i) the Owner
Participant Amount, the Interim Rent and Basic Rent (Schedule II), (ii) the
Stipulated Loss Values (Schedule III), (iii) the Termination Values
(Schedule IV), (iv) the Purchase Option Schedule (Schedule V) omitted from
the FAA filing counterpart thereof as containing confidential financial
information; and (v) the purchase price under Section 4.02(a) (F) set forth
in Ancillary Agreement I, which was not attached to the FAA filing
counterpart of the Lease or otherwise filed with the FAA for recordation as
containing confidential financial information.
The 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
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(5)
[Letterhead of Dickinson, Wright, Moon, Van Dusen & Freeman]
[Refunding Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N660FE
--------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to NBD Bank, a Michigan
banking corporation ("NBD"), in connection with the Trust Agreement
(Federal Express Corporation Trust No. N660FE), dated as of September 1,
1995, as amended and restated as of October 26, 1995 (the "Trust
Agreement"), between NBD and Chrysler Capital Corporation, a Delaware
corporation (the "Trustor" or "Owner Participant"). Pursuant to the
Participation Agreement (Federal Express Corporation Trust No. N660FE),
dated as of September 1, 1995, as amended and restated as of October 26,
1995 (the "Participation Agreement"), among Federal Express Corporation, as
Lessee, the Owner Participant, The Chase Manhattan Bank (National
Association), Bank of America NT & SA, CIBC Inc. and The First National
Bank of Chicago, as Original Loan Participants, NBD, not in its individual
capacity except as specifically set forth therein but solely as Owner
Trustee (the "Owner Trustee") under the Trust Agreement, The Chase
Manhattan Bank (National Association), as Indenture Trustee and The Chase
Manhattan Bank (National Association), as Pass Through Trustee, one Airbus
A300F4-605R aircraft bearing U.S. Registration No. N660FE (the
"Aircraft") is being refinanced. This opinion is being furnished pursuant
to Section 4.01(l) (vii) of the Participation Agreement. Capitalized terms
used herein and not otherwise defined are used as defined in the
Participation Agreement, except that references herein to any instrument
shall mean such instrument as in effect on the date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Participation Agreement;
(b) The Trust Agreement;
(c) The Indenture;
(d) The Indenture and Security Agreement Supplement No. 1
dated September 20, 1995;
(e) The Lease;
(f) The Lease Supplement dated September 20, 1995 (each of the
documents identified in paragraphs (a) through (f) above being collectively
referred to as the "Owner Trustee Documents"); and
(g) The Certificates being issued today (the "Certificates") .
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
public officials and of corporate officers and other representatives of NBD
and such other instruments as we have deemed necessary and relevant as the
basis for our opinion. Moreover, as to certain facts material to the
opinions expressed herein, we have relied upon representations and
warranties contained in the Owner Trustee Documents.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary and relevant, and subject
to the assumptions, exceptions and qualifications set forth below, we
advise you that, in our opinion:
1. NBD is a Michigan banking corporation duly organized and validly
existing under the laws of the State of the Michigan, with banking and
trust powers, is a "citizen of the United States" within the meaning of
Section 40102(a) (15) of the Transportation Code, and each of NBD and the
Owner Trustee, as the case may be, has or had, on the date of execution
thereof, full power, authority and legal right to execute, deliver and
perform each of the Owner Trustee Documents to which it is or is to be a
party and to issue, execute, deliver and perform the Certificates.
2. Each of NBD and the Owner Trustee, as the case may be, has duly
authorized, executed and delivered each Owner Trustee Document; each Owner
Trustee Document constitutes a legal, valid and binding obligation of the
Owner Trustee (and, to the extent set forth in the respective Owner Trustee
Document, of NBD) enforceable against the Owner Trustee (and, to the extent
set forth in the respective Owner Trustee Document, against NBD) 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.
3. 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.
4. On the Delivery Date, the Owner Trustee received from AVSA such
title to the Aircraft as AVSA conveyed to the Owner Trustee, subject to the
rights of the Owner Trustee and the Lessee under the Original Lease and the
security interest created pursuant to the Original Indenture and the
Indenture Supplement; and to our knowledge, there exist no Liens affecting
the title of the Owner Trustee to the Lessor's Estate resulting from claims
against NBD 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.
5. All of 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, to the Lien of the Indenture in
favor of the Holders of the Certificates.
6. To the extent that the Uniform Commercial Code of the State of
Michigan (the "UCC") is applicable, except for the Indenture Trustee's
taking 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 (including the
grant and assignment unto the Indenture Trustee of the security interest in
all estate, right, title and interest of the Owner Trustee in, to and under
the Lease) which the Indenture by its terms purports to create in favor of
the Indenture Trustee, and (ii) to perfect in the State of Michigan such
security interest, except for the filing of a UCC financing statement in
the office of the Secretary of State of the State of Michigan, 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.
7. The Trust Agreement duly creates a legal and valid trust under
Michigan 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 and the Indenture Supplement create for the benefit of the Owner
Participant the interest in the properties referred to in Section 1.02 of
the Trust Agreement which the Trust Agreement by its terms purports to
create, which interest is subject and subordinate to the security interests
created by the Indenture to the extent provided in the Indenture.
8. Neither the authorization, execution and delivery by the Owner
Trustee or NBD, as the case may be, of the Owner Trustee Documents, nor the
issuance, execution and delivery by the Owner Trustee of the Certificates
nor the fulfillment or compliance by the Owner Trustee or NBD with the
respective terms and provisions thereof nor the consummation of any of the
transactions by the Owner Trustee or NBD, 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 Michigan or the United
States of America governing the banking or trust powers of NBD.
9. The execution, delivery and performance by the Owner Trustee or
NBD, as the case may be, of each of the Owner Trustee Documents 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 incorporation or by-laws of NBD or of any law,
governmental rule, or regulation of the State of Michigan or the United
States of America governing the banking or trust powers of NBD 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, of any judgment or order of the State of Michigan or the United
States of America relating to the banking or trust powers of NBD.
10. Assuming that (i) the Aircraft is not used in Michigan and is
not physically located in Michigan at the commencement or termination of
the Term or during such Term, (ii) in connection with any sale of the
Aircraft, such Aircraft will not be physically delivered in Michigan to a
buyer nor be shipped from a point within Michigan to a buyer, and (iii) 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 Michigan 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 Owner Trustee Documents 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, and
neither the Owner Trustee, the Lessor's Estate nor the trust 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 Michigan 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 solely 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 Michigan or the Owner Trustee's performance of its
duties under the Trust Agreement.
11. There is no fee, tax or other governmental charge under the laws
of the State of Michigan 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 Michigan or the Owner Trustee's performance of its
duties under the Trust Agreement, within the State of Michigan, which would
not have been imposed if NBD did not have its principal place of business
and did not perform its obligations under the Owner Trustee Documents in
the State of Michigan.
12. Neither a Michigan court nor a federal court applying federal
law or Michigan law, if all relevant issues are properly presented to and
considered by such court, would permit the Owner Participant to terminate
the Trust Agreement, except as otherwise provided in the Trust Agreement or
with the consent of the Indenture Trustee, until the Lien of the Indenture
on the Trust Estate has been released and until payment in full of the
principal of, Make-Whole Premium, if any, and interest on, the
Certificates.
13. Under the laws of the State of Michigan, as 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 any insolvency proceeding has been
commenced) (collectively, the "Creditors") may acquire legal, valid and
enforceable claims and liens, as to the Trust Estate, only against the
rights of such Owner Participant under the Trust Agreement or in the Trust
Estate, and may not through the enforcement of such Creditor's rights,
acquire any greater rights than the rights of the Owner Participant with
respect to the Trust Agreement or the Trust Estate.
14. There are no actions, suits, investigations or proceedings
pending or, to our knowledge, threatened against or affecting NBD or the
Owner Trustee, as the case may be, or any of its properties in any court or
before any administrative agency or arbitrator, which, if adversely
determined, would materially adversely affect the ability of NBD or the
Owner Trustee, as the case may be, to perform its obligations under any of
the Owner Trustee Documents, and there are no pending or, to our knowledge,
threatened actions or proceedings before any court, administrative agency
or tribunal involving NBD or the Owner Trustee, as the case may be, in
connection with the transactions contemplated by any of the Owner Trustee
Documents.
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 Michigan and applicable federal laws. 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, the
Trust Indenture Act of 1939, as amended, and the Investment Company Act of
1940, as amended, (ii) Part A of Subtitle VII of Title 49 of the United
States Code, as amended (except with respect to the opinion set forth in
paragraph 1 above concerning the citizenship of NBD), (iii) state
securities or blue sky laws, or (iv) laws, rules and regulations applicable
to the particular nature of the Aircraft acquired by the Owner Trustee.
Insofar as any Owner Trustee Documents and the Certificates expressed to be
governed by the laws of a jurisdiction other than the State of Michigan, we
have assumed that all such documents are legal, valid, binding and
enforceable in accordance with their terms under such laws (as to which we
express no opinion) .
B. The foregoing opinions regarding enforceability, except for
the opinions set forth in paragraphs 12 and 13 above, are subject to (i)
applicable bankruptcy, insolvency, moratorium, reorganization, receivership
and other laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law) and (iii) the
effect of applicable public policy on the enforceability or provisions
relating to indemnification.
C. We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than NBD and the Owner
Trustee, of the Owner Trustee Documents to which each is a party and that
each of such parties has the full power, authority and legal right to
execute and deliver, and perform under the terms of, each such document.
D. The opinion set forth in paragraph 1 above concerning the
citizenship of NBD is based upon the Affidavit of Citizenship, and we have
not independently verified the facts supporting such opinion.
E. We have assumed the due authentication of the Certificates
by the Indenture Trustee.
F. We have assumed that all signatures (other than those of
the Owner Trustee or NBD) 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. Except as otherwise provided in paragraph 7, no opinion is
expressed as to the creation, attachment, perfection or priority of any
mortgage or security interest, of any instrument or document creating a
lien or security interest, or of the Indenture or as to the nature or
validity of title to any part of the Trust Estate. 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. Whenever our opinion, with respect to the existence or
absence of facts, is qualified by the phrase "to our knowledge" or a phrase
of similar import, it is intended to indicate that during the course of our
representation in connection with the Owner Trustee Documents, the lawyers
in our firm who have been principally involved in representing NBD and the
Owner Trustee in connection with the Owner Trustee Documents have not
obtained actual knowledge of the existence or absence of such facts, as the
case may be, without the implication that we have made any investigation or
inquiry to determine the existence or absence of such facts.
K. The foregoing opinions are given as of the date hereof
only, and do not contemplate, and no opinion is given or intended, with
respect to subsequent changes in law or fact.
This opinion is rendered solely for your benefit and may not be
relied upon by any other person or entity for any purpose without our prior
written consent, except that the law firm of Davis 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 20, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Dickinson, Wright, Moon, Van Dusen & Freeman
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(6)(a)
[Letterhead of Dewey Ballantine]
[Refunding Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N660FE
---------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to The Chase Manhattan Bank
(National Association), a national banking association, acting as Pass
Through Trustee (the "Pass Through Trustee") with respect to the Pass
Through Trust Agreement dated as of February 1, 1993, as amended and
restated as of October 1, 1995 (the "Pass Through Trust Agreement"), as
supplemented by the Series Supplements dated the date hereof, designated as
Series Supplement 1995-B1, 1995-B2 and 1995-B3, respectively (the "Series
Supplements"). We have advised the Pass Through Trustee with respect to
the Pass Through Agreement, the Series Supplements and the Participation
Agreement relating to the Pass Through Trust Agreement and each designated
Series Supplement (the "Participation Agreement") among the parties listed
therein. Additionally, we have advised the Pass Through Trustee with
respect to the Pass Through Certificates (the "Certificates") issued on the
date hereof.
This opinion is being delivered pursuant to Section 4.01(l) (ix)
of the Participation Agreement. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth or
referred to in the Participation Agreement, the Pass Through Trust
Agreement or the Series Supplements, as applicable.
In connection with the opinions expressed herein, we have
reviewed executed counterparts of the Operative Agreements, the Pass
Through Trust Agreement and the Series Supplements. We have also examined
and relied upon the accuracy of the originals or certified, conformed,
photocopied or telecopied copies of such corporate records, certificates,
instruments 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, photocopied 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, when relevant facts were not independently established, relied upon
representations and warranties contained in the Operative Agreements, the
Pass Through Trust Agreement and the Series Supplements and upon the
statements and certificates furnished to us.
Based upon and subject to the foregoing and the qualifications
hereinafter set forth, we are of the opinion that:
1. The Pass Through Trustee is a national banking association duly
organized and validly existing in good standing 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 execute, deliver and perform its
obligations under the Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements, the Certificates and the other Operative
Agreements to which it is a party. Upon execution of the Series
Supplements, the Pass Through Trustee will be deemed to have duly executed
the Pass Through Trust Agreement and thereupon become the Pass Through
Trustee under the Pass Through Trust Agreement and the Series Supplements
for all purposes thereof.
2. The Pass Through Trustee, in its individual and trust capacities,
has duly authorized, executed and delivered the Participation Agreement,
the Pass Through Trust Agreement and the Series Supplements and each of the
other Operative Agreements to which it is a party.
3. Each of the Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements, the Certificates and the other Operative
Agreements to which it is a party constitutes the legal, valid and binding
obligation of the Pass Through Trustee in its trust capacity (and, to the
extent provided in each such document, in its individual capacity)
enforceable against the Pass Through Trustee in its trust capacity (and, to
the extent provided in each such document, in its individual capacity) in
accordance with its terms thereof, except as the enforceability thereof may
be limited by (a) general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law), (b)
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and (c) public policy
considerations (in the case of the indemnity provisions contained therein) .
4. The Certificates have been duly authorized and validly executed,
issued, delivered and authenticated by the Pass Through Trustee pursuant to
the Pass Through Trust Agreement and the Series Supplements; and the
Certificates acquired by the Underwriters under the Underwriting Agreement
are enforceable against the Pass Through Trustee and are entitled to the
benefits of the related Pass Through Trust Agreement and the related Series
Supplements, except as the enforceability thereof may be limited by (a)
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law), (b) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and (c) public policy considerations (in the case of
the indemnity provisions contained therein) .
5. The execution, delivery, and performance by the Pass Through
Trustee in its trust capacity (and, to the extent provided in each such
document, in its individual capacity), of the Participation Agreement, the
Pass Through Trust Agreement and the Series Supplements and each of 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 Certificates thereunder are not in
violation of the Articles of Association or By-laws of the Pass Through
Trustee or any law, governmental rule or regulation of the United States of
America or the State of New York governing the banking or trust powers of
the Pass Through Trustee 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 New York or Federal law,
rule or regulation governing the Pass Through Trustee's banking or trust
powers, or of any judgment, order or decree known to us to be applicable to
the Pass Through Trustee, in its individual or trust capacity, of any
court, regulatory body, administrative agency, government or governmental
body having jurisdiction over the Pass Through Trustee, in its individual
or trust capacity, or its properties.
6. Neither the execution and delivery by the Pass Through Trustee,
in its individual or trust capacity, as the case may be, of the
Participation Agreement, the Pass Through Trust Agreement, the Series
Supplements, the Certificates or any of the other Operative Agreements to
which it is a party, nor the consummation by the Pass Through Trustee, in
its individual or trust capacity, as the case may be, of any of the
transactions contemplated in the Participation Agreement, the Pass Through
Trust Agreement, the Series Supplements, the Certificates or any of the
other Operative Agreements to which it is a party requires 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 Pass Through Trustee.
7. There are no taxes, fees or other governmental charges payable
under the laws of the State of New York or any political subdivision
thereof in connection with the execution, delivery and performance by the
Pass Through Trustee, in its individual or trust capacity, as the case may
be, of the Participation Agreement, 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
Certificates by the Pass Through Trustee, pursuant to the Series
Supplements.
8. Neither the trusts created by the Pass Through Trust Agreement
and the Series Supplements nor the Pass Through Trustee, in its individual
or trust capacity, as the case may be, nor their respective Affiliates,
successors or assigns, 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 New York or any political subdivision
thereof (other than taxes imposed on the fees received by The Chase
Manhattan Bank (National Association) for acting as Pass Through Trustee
under the Series Supplements). Certificate holders who are not residents
of or otherwise subject to tax in New York 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 New York or any
political subdivision thereof as a result of purchasing, owning (including
receiving payments with respect to) or selling a Certificate. There are no
applicable taxes under the laws of the State of New York 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, (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 Operative Agreements, any or all of the 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 hereto and 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 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 Certificates, or (g) otherwise
with respect to or in connection with the transactions contemplated by the
Pass Through Trust Agreement, the Series Supplements, the Certificates 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, the Certificates and the Operative
Agreements in, and had not engaged in any activities unrelated to the
transactions contemplated by the Pass Through Trust Agreement, the Series
Supplements, the Certificates and the Operative Agreements in, the State of
New York.
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
New York Taxes" in the Prospectus Supplement to the Prospectus forming part
of Registration Number No. 33-56569 (the "Registration Statement") for the
registration of the Certificates with the Securities and Exchange
Commission. In addition, we have assumed that each Pass Through Trust (as
defined in the Registration Statement) 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 New York. We
express no opinion as to the correctness of the foregoing assumptions and
we have conducted no independent investigation in this regard.
We express no opinion as to the laws of any jurisdiction other
than the laws of the State of New York and the Federal laws of the United
States of America. In addition, we express no opinion herein as to (i) any
Federal or state securities laws or blue sky laws and assume that the
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 tax laws, (iii) any aviation laws including, without limitation, the
Transportation Code, (iv) any laws, statutes, rules or regulations
applicable to the particular nature of the equipment acquired or to be
acquired by the Owner Trustee, or (v) ERISA or any other pension and
employee benefit laws, rules or regulations. In addition, we express no
opinion as to the right, title or interest in or to the Trust Estate on the
part of any Person. We also express no opinion as to the perfection or
priority of any security interest created by any of the Operative
Agreements.
In rendering the opinions expressed herein, we have assumed
that (a) each of the Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements, the Certificates and the other Operative
Agreements has been duly authorized, executed and delivered by the
respective parties thereto (other than the Pass Through Trustee) and
constitutes a legal, valid and binding obligation of each of such parties
(other than the Pass Through Trustee), enforceable against each of such
parties in accordance with the terms thereof, (b) each of such parties
(other than the Pass Through Trustee) has the requisite power, authority
and legal right to enter into and perform its respective obligations under
the Participation Agreement, the Pass Through Trust Agreement, the Series
Supplements, the Certificates and each of the other Operative Agreements to
which it is a party and (c) the transactions provided for in the Operative
Agreements are not within the prohibitions of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended.
This opinion is furnished by us for the sole benefit of the
addressees hereof, each of whom we understand and agree may rely upon the
opinions set forth herein. No other person or entity is entitled to rely
on this opinion 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,
Dewey Ballantine
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(6)(b)
[Letterhead of The Chase Manhattan Bank, N.A.]
[Refunding Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N660FE
---------------------------------------------
Ladies and Gentlemen:
As Vice President and Senior Associate Counsel to The Chase Manhattan
Bank (National Association), a national banking association, acting as Pass
Through Trustee (the "Pass Through Trustee") with respect to the Pass
Through Trust Agreement dated as of February 1, 1993, as amended and
restated as of October 1, 1995 (the "Pass Through Trust Agreement"), as
supplemented by the Series Supplements dated the date hereof, designated as
Series Supplement 1995-B1, 1995-B2 and 1995-B3, respectively (the "Series
Supplements"), I advise you as follows with respect to the authorization,
execution and delivery by the Pass Through Trustee of (i) the Series
Supplements and (ii) the Participation Agreement (Federal Express
Corporation Trust No. N660FE) dated as of September 1, 1995, as amended
and restated as of October 26, 1995 (as amended and restated, the
"Participation Agreement") among the parties listed therein. Additionally,
I have advised the Pass Through Trustee with respect to the Pass Through
Certificates (the "Certificates") issued on the date hereof.
Unless otherwise defined herein, capitalized terms used herein
shall have the respective meanings attributed thereto in the Participation
Agreement, the Pass Through Trust Agreement or the Series Supplements, as
applicable.
I have reviewed executed counterparts of the Pass Through Trust
Agreement, the Series Supplements, the Certificates, the Participation
Agreement and the other Operative Agreements to which the Pass Through
Trustee is a party. I have also examined the originals, or certified,
conformed, photocopied or telecopied copies of such corporate records,
certificates, instruments and other documents as I have deemed necessary to
appropriate to enable me to render the opinions expressed herein,
including, without limitation, certified copies of the By-laws of the Pass
Through Trustee, a certificate of the secretary of the Pass Through Trustee
as to certain matters, including the incumbency of the officer of the Pass
Through Trustee who executed the Pass Through Trust Agreement, the Series
Supplements, the Participation Agreement and the other certificates
executed and delivered in connection with the transactions contemplated by
any of the foregoing and who authenticated the Certificates and a
certificate of the Comptroller of the Currency, Washington, D.C., dated
September 23, 1965, as to the Pass Through Trustee's existence and
authority to do business as a national banking association and to act in a
fiduciary capacity.
In all such examinations, I have assumed the genuineness of
signatures on original documents (other than those of the Pass Through
Trustee) and the conformity to such original documents of all copies
submitted to me as certified, conformed, photocopied or telecopied copies,
and as to certificates and telegraphic and telephonic confirmations given
by public officials, I have assumed the same to have been properly given
and to be accurate. As to all matters of fact material to my opinions, I
have, when relevant facts were not independently established, relied upon
statements, representations and warranties contained in the Operative
Agreements, the Pass Through Trust Agreement, the Series Supplements and
the Certificates and upon the statements and certificates furnished to me.
A. Based upon the foregoing and subject to the limitations
expressed in paragraph B below, I am of the opinion that: the execution,
delivery and performance by the Pass Through Trustee of the Series
Supplements, the Certificates, the Participation Agreement and each of the
other Operative Agreements to which it is a party are not, to my knowledge,
in violation of 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. Upon execution of the Series Supplements, the
Pass Through Trustee will be deemed to have duly executed the Pass Through
Trust Agreement and thereupon become the Pass Through Trustee under the
Pass Through Trust Agreement and the Series Supplements for all purposes
thereof.
B. I am qualified to practice law in the State of New York and
I express no opinion as to any laws other than the laws of the State of New
York and the federal laws of the United States of America. Further,
without limiting the generality of the foregoing, I express no opinion with
respect to (i) the citizenship of the Pass Through Trustee, the
Transportation Code and the regulations promulgated thereunder, the impact
of the Transportation Code 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 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 Pass Through Trustee under the laws of
any jurisdiction other than New York or federal laws of the United States
of America to exercise any rights or remedies set forth in the Pass Through
Trust Agreement, the Series Supplements or 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 New York; 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 my
express prior written consent. This opinion may not be used, circulated,
quoted, published or otherwise referred to for any purpose without my
express prior written consent. This 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,
Barbara Jo Lubitz
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT B
[FORM OF LEASE AGREEMENT]
[See Exhibit 4.g]
EXHIBIT C
[FORM OF INDENTURE]
[See Exhibit 4.c.1]
EXHIBIT D
[FORM OF TRUST AGREEMENT]
[See Exhibit 4.f]
/dpw/cw/037/07853/042/8K/EDGAR/FILING.2/ex4e1.2.ed
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N661FE)
Dated as of October 1, 1995
Amended and Restated as of October 26, 1995
among
FEDERAL EXPRESS CORPORATION,
Lessee
NATIONSBANK, N.A.,
Owner Participant
THE ENTITIES LISTED ON SCHEDULE I
TO THE ORIGINAL PARTICIPATION AGREEMENT,
Original Loan Participants
NBD BANK,
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as
Owner Trustee,
Owner Trustee
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as
Indenture Trustee,
Indenture Trustee
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as
Pass Through Trustee,
Pass Through Trustee
______________________________
LEVERAGED LEASE OF ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 760, REGISTRATION NO. N661FE
TABLE OF CONTENTS
Page
Initial Recitals........................................................... 1
ARTICLE 1
DEFINITIONS............................................................. 3
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
REFUNDING THE ORIGINAL LOAN CERTIFICATES
Section 2.01. Transfer of Funds........................................ 3
Section 2.02. Certificates............................................. 6
Section 2.03. Owner Participant Payment................................ 6
ARTICLE 3
EXTENT OF INTEREST OF ORIGINAL LOAN PARTICIPANTS
Section 3.01. Extent of Interest of Original Loan Participants......... 7
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent..................................... 7
Section 4.02. Opinion of Special Aviation Counsel...................... 16
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations............. 16
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties.................. 17
Section 6.02. Offering by Lessee....................................... 23
Section 6.03. Certain Covenants of Lessee.............................. 23
Section 6.04. Survival of Representations and Warranties............... 30
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in
Lessor's Estate......................................... 31
Section 7.02. Citizenship.............................................. 31
Section 7.03. Representations, Warranties and Covenants of the Owner
Participant............................................. 32
Section 7.04. Representations, Covenants and Warranties of NBD and the
Indenture Owner Trustee................................. 37
Section 7.05. Representations, Warranties and Covenants of the
Trustee................................................. 40
Section 7.06. Indenture Trustee's Notice of Default.................... 41
Section 7.07. Releases from Indenture.................................. 41
Section 7.08. Covenant of Quiet Enjoyment.............................. 42
Section 7.09. Original Loan Participants' and Pass Through Trustee's
Representations and Warranties...........................42
Section 7.10. Survival of Representations, Warranties and Covenants.... 43
Section 7.11. Lessee's Assumption of the Certificates.................. 43
Section 7.12. Indebtedness of Owner Trustee............................ 45
Section 7.13. Compliance with Trust Agreement, Etc..................... 45
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes......................... 46
Section 8.02. After-Tax Basis.......................................... 52
Section 8.03. Time of Payment.......................................... 53
Section 8.04. Contests................................................. 53
Section 8.05. Refunds.................................................. 55
Section 8.06. Lessee's Reports......................................... 55
Section 8.07. Survival of Obligations.................................. 56
Section 8.08. Payment of Taxes......................................... 56
Section 8.09. Reimbursements by Indemnitees Generally.................. 56
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally................................................ 57
Section 9.02. After-Tax Basis.......................................... 61
Section 9.03. Subrogation.............................................. 61
Section 9.04. Notice and Payment....................................... 61
Section 9.05. Refunds.................................................. 62
Section 9.06. Defense of Claims........................................ 62
Section 9.07. Survival of Obligations.................................. 63
Section 9.08. Effect of Other Indemnities.............................. 63
Section 9.09. Interest................................................. 63
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs....................... 64
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee.................. 66
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant.................... 67
Section 12.02. Interest of Holders of Certificates..................... 67
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents.................... 68
Section 13.02. Further Assurances...................................... 68
Section 13.03. No Retroactive Application.............................. 68
ARTICLE 14
NOTICES
Section 14.01. Notices................................................. 69
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing............................................. 70
Section 15.02. Reoptimization.......................................... 73
ARTICLE 16
[INTENTIONALLY LEFT BLANK]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes.......................... 74
Section 17.02. [Intentionally Left Blank.]............................. 75
Section 17.03. Counterparts............................................ 75
Section 17.04. No Oral Modifications................................... 75
Section 17.05. Captions................................................ 75
Section 17.06. Successors and Assigns.................................. 75
Section 17.07. Concerning the Owner Trustee, the Pass Through Trustee
and the Indenture Trustee............................. 76
Section 17.08. Severability............................................ 76
Section 17.09. Public Release of Information........................... 76
Section 17.10. Certain Limitations on Reorganization................... 76
Section 17.11. GOVERNING LAW........................................... 77
Section 17.12. Section 1110 Compliance................................. 77
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality......................................... 78
SCHEDULE I Certificate Information
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
EXHIBIT A(1)(a) Opinion of Lessee's Counsel
EXHIBIT A(1)(b) Opinion of Lessee's Special Counsel
EXHIBIT A(2)(a) Opinion of Owner Participant's Special Counsel
EXHIBIT A(2)(b) Opinion of Owner Participant's Counsel
EXHIBIT A(3)(a) Opinion of Indenture Trustee's Special Counsel
EXHIBIT A(3)(b) Opinion of Indenture Trustee's Counsel
EXHIBIT A(4) Opinion of Special Aviation Counsel
EXHIBIT A(5) Opinion of Owner Trustee's Counsel
EXHIBIT A(6)(a) Opinion of Pass Through Trustee's Special Counsel
EXHIBIT A(6)(b) Opinion of Pass Through Trustee's Counsel
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N661FE)
PARTICIPATION AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO.
N661FE) dated as of October 1, 1995, as amended and restated as of October
26, 1995 (this "Agreement") among FEDERAL EXPRESS CORPORATION, a Delaware
corporation (herein, together with its successors and permitted assigns,
the "Lessee"), NATIONSBANK, N.A., a national banking association (herein,
together with its successors and permitted assigns, the "Owner
Participant"), the entities listed on Schedule I to the Original
Participation Agreement as Loan Participants (individually, together with
its successors and permitted assigns, the "Original Loan Participant" and,
collectively, the "Original Loan Participants"), NBD BANK, a Michigan
banking corporation, 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, together with its
successors and permitted assigns, the "Owner Trustee"), THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), a national banking association, not in its
individual capacity, except as otherwise expressly stated herein, but
solely as indenture trustee under the Indenture referred to below (in such
capacity as trustee, together with its successors and permitted assigns,
the "Indenture Trustee") and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association, not in its individual
capacity, except as otherwise expressly stated herein, but solely as pass
through trustee (in such capacity as trustee, together with its successors
and permitted assigns, the "Pass Through Trustee").
W I T N E S S E T H :
WHEREAS, the Lessee, the Owner Participant, the Owner Trustee, the
Original Loan Participants and the Indenture Trustee entered into the Original
Participation Agreement (such term, and all other terms not heretofore
defined, shall have the meanings assigned thereto as provided in Article 1
below), providing for the sale and lease of the Aircraft that was delivered on
the Delivery Date;
WHEREAS, concurrently with the execution and delivery of the Original
Participation Agreement, the Owner Participant entered into the Original Trust
Agreement relating to the Aircraft with NBD in its individual capacity,
pursuant to which NBD agreed, among other things, to hold the Lessor's Estate
in trust for the benefit of the Owner Participant;
WHEREAS, concurrently with the execution and delivery of the
Original Participation Agreement, the Owner Trustee and the Indenture
Trustee entered into the Original Indenture, for the benefit of the
Original Loan Participants, pursuant to which the Owner Trustee issued to
the Original Loan Participants the Original Loan Certificates as evidence
of the loans made by the Original Loan Participants to the Owner Trustee,
the proceeds of which were used by the Owner Trustee to pay a portion of
the Purchase Price for the Aircraft;
WHEREAS, concurrently with the execution and delivery of the
Original Participation Agreement, the Owner Trustee and the Lessee entered
into the Original Lease relating to the Aircraft, whereby, subject to the
terms and conditions set forth in said Lease, the Owner Trustee agreed to
lease the Aircraft to the Lessee, and the Lessee agreed to lease the
Aircraft from the Owner Trustee, such lease of the Aircraft being evidenced
by the execution and delivery of the Lease Supplement;
WHEREAS, Article 15 of the Original Participation Agreement
permits a Refinancing of the Original Loan Certificates subject to the
satisfaction of the conditions specified in Section 15.01 thereof, and
Section 3.04 of the Original Lease contemplates the adjustment of the
percentages for Interim Rent, Basic Rent, Stipulated Loss Value and
Termination Value in the event of such a Refinancing, and the Lessee has
requested that the Owner Trustee effect such a Refinancing and adjustment;
WHEREAS, in order to facilitate such Refinancing, the Lessee is
concurrently entering into an Underwriting Agreement, which relates to
three series of Pass Through Certificates that will 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, on the Pass Through Closing Date, a closing will occur
with respect to the public offering of the Pass Through Certificates issued
by each Pass Through Trust, an allocable amount of the proceeds of which
offering 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, the proceeds of which purchase in turn will be applied
to the Refinancing in full of the outstanding principal amount of the
Original Loan Certificates;
WHEREAS, the Lessee, the Owner Participant, the Owner Trustee, the
Original Loan Participants and the Indenture Trustee have agreed, subject
to the terms and conditions hereinafter provided, to amend and restate, and
to add the Pass Through Trustee as a party to, the Original Participation
Agreement; and
WHEREAS, the Lessee, the Owner Participant, the Owner Trustee, the
Original Loan Participants and the Indenture Trustee have agreed, to the
extent they are parties thereto and, subject to the terms and conditions
hereinafter provided, to amend and restate the Original Indenture, to amend
and restate the Original Lease, to amend the Original Tax Indemnity
Agreement and to amend and restate the Original Trust Agreement, each such
amendment and restatement to be executed and delivered simultaneously with
the purchase of the Certificates by the Pass Through Trustee for the Pass
Through Trusts and the Refinancing in full of the Original Loan
Certificates.
NOW, THEREFORE, in consideration of the mutual covenants contained
in this Agreement and other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree, subject to the
terms and conditions hereinafter provided, that the Original Participation
Agreement be and the same is hereby amended and restated in its entirety as
follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, the definitions set
forth 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;
REFUNDING THE ORIGINAL LOAN CERTIFICATES
Section 2.01. Transfer of Funds.
(a) On or before the Pass Through Closing Date, the Pass Through
Trustee and the Lessee, in accordance with the Pass Through Agreement,
shall enter into the Series Supplements, and, subject to the terms and
conditions set forth therein, on the Pass Through 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 Refunding Date the following events shall occur in the
order set forth below:
(i) the Owner Participant shall on behalf of the Owner Trustee
execute a wire transfer or intra-bank transfer in favor of the Agent in the
amount of all accrued and unpaid interest on the Original Loan Certificates
to but excluding the Refunding Date, which transfer shall constitute the
payment of all such accrued and unpaid interest;
(ii) the Lessee shall on behalf of the Owner Trustee execute a wire
transfer or intra-bank transfer in favor of the Agent as Supplemental
Rent in the amount of any Breakage Costs required to be paid pursuant to
the Original Indenture which transfer shall constitute the payment of
all such Breakage Costs;
(iii) for 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 pay on behalf of the Owner Trustee in the manner
specified in paragraph (iv) below, an amount equal to the principal
amount of Certificates 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
Section 2.04 of the Indenture;
(iv) the aggregate amount payable by the Pass Through Trustee
pursuant to paragraph (iii) above shall be payable by wire transfer or
intra-bank transfer in favor of the Agent on behalf of the Owner Trustee
in the amount of the outstanding principal amount of the Original Loan
Certificates;
(v) the Agent shall apply the amounts received by it under
paragraphs (i), (ii) and (iv) of this subsection (b) to prepay the
Original Loan Certificates in full in accordance with Sections 2.06 and
2.10 of the Original Indenture; and
(vi) the Owner Trustee shall cause the Certificates to be delivered
to the applicable Pass Through Trustee in accordance with Section 2.02
hereof.
On the Refunding Date concurrently with the events specified in
clauses (iii) through (v) of this Section 2.01(b), the parties hereto shall
execute and deliver, to the extent they are parties thereto, and consent to
the execution and delivery of (if they are not a party thereto), the
Indenture, the Lease and the Trust Agreement, and the Owner Trustee shall
execute and deliver to the Indenture Trustee for authentication, and the
Indenture Trustee shall authenticate and deliver to the applicable Pass
Through Trustee, upon the request of the Owner Trustee, the Certificates as
provided in Section 2.02 hereof. The Owner Participant hereby requests and
directs the Owner Trustee to execute and deliver this Participation
Agreement and, subject to the terms hereof, to take the actions specified
herein. The Original Loan Participants by their execution and delivery
hereof, request and direct the Indenture Trustee to execute and deliver
this Agreement and concurrently with the events specified in clauses (iii)
through (v) of this Section 2.01(b) and subject to the terms and conditions
hereof to take the actions contemplated herein. The parties hereto,
including, without limitation, the Original Loan Participants, confirm
that, as provided in Section 2.06 of the Original Indenture, upon payment
in full of the principal amount, Breakage Costs, if any, and interest on
the Original Loan Certificates and all other sums then payable to the
Original Loan Participants under the Original Agreements to the extent
specified in subsection (c) below, the Original Loan Participants shall
have no further interest in, or other right or obligation with respect to,
the Trust Indenture Estate, the Original Agreements or the Operative
Agreements (it being understood that the foregoing shall not limit or
detract from any claim that any Original Loan Participant may have under
Article 8 or 9 or Section 10.01(a)(ii) hereof or of the Original
Participation Agreement) and, accordingly, have no obligation to, and will
not attempt to direct any future actions of the Indenture Trustee with
respect to the Trust Indenture Estate, provided that the rights and
obligations of the Original Loan Participants shall, until the payment in
full of such amounts to the Agent on behalf of the Original Loan
Participants on the Refunding Date, be governed by the Original
Participation Agreement and the other Operative Agreements contemplated
thereby or in effect immediately prior to the effectiveness of this
Agreement and shall, upon such payment and thereafter, be governed by this
Agreement. The Lessee hereby consents to the foregoing.
(c) Not less than three (3) Business Days prior to the Refunding
Date, the Agent on behalf of the Original Loan Participants shall give
notice in writing to the parties hereto of the principal amount, Breakage
Costs, if any, and interest on and all other amounts due on the Refunding
Date under the Original Loan Certificates and all other sums payable on the
Refunding Date to the Original Loan Participants under the Original
Agreements, such notice to be deemed final and binding on the Original Loan
Participants as to the respective amounts of principal, Breakage Costs, if
any, and interest when given; provided that the expected Refunding Date, at
the time such notice is given, is the same as the Refunding Date.
(d) On the Refunding Date, subject to (i) the giving of at least
three (3) days' prior written notice to the Indenture Trustee and the
Original Loan Participants, (ii) the receipt by the Original Loan
Participants of the funds referred to in Section 2.01(b)(v) above and (iii)
compliance with the provisions of Section 15 of the Original Participation
Agreement and Section 2.10(c) of the Original Indenture (including the
Refinancing in full of the Original Loan Certificates), the Original Loan
Participants shall deliver the Original Loan Certificates to the Indenture
Trustee for cancellation and delivery to the Owner Trustee.
(e) The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to
the Refinancing of the Original Loan Certificates (together, the
"Closings") shall take place at the offices of Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017.
(f) All payments pursuant to this Section 2.01 shall be made in
immediately available funds.
(g) In the event that the Refunding Date and the actions
contemplated to occur on such date pursuant to subsection (d) of this
Section 2.01 do not occur on or before November 30, 1995, then the rights
and obligations of the parties to the Original Participation Agreement,
including, without limitation, the Original Loan Participants, shall be
governed by the Original Participation Agreement and the other Operative
Agreements contemplated thereby or in effect immediately prior to the
effectiveness of this Agreement and this Agreement shall be of no further
force and effect, except that the Lessee shall be obligated hereby to pay
all fees and expenses of the Original Loan Participants, the Indenture
Trustee, the Owner Participant, the Owner Trustee, the Pass Through Trustee
and their respective counsel relating to the transactions contemplated
hereby. Each of the parties hereto agrees to execute and deliver to the
other parties such documents and instruments as may be necessary to give
effect to the foregoing provisions of this subsection (g).
Section 2.02. Certificates. Subject to the satisfaction or
waiver of the conditions set forth herein, on the Refunding Date, the Owner
Trustee shall execute 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 Refunding Date and shall bear interest from the Refunding Date and (v)
shall be registered in the name of the Pass Through Trustee on behalf of
such Pass Through Trust.
Section 2.03. Owner Participant Payment. The Owner Participant
agrees with the Lessee and only with the Lessee on behalf of the Owner
Trustee to make available to the Owner Trustee funds sufficient to pay to
the Indenture Trustee on the Owner Participant Payment Date an amount equal
to the amounts of principal (if any) and interest scheduled to be paid on
the Certificates on such date (the "Owner Participant Amount"), and the
Owner Trustee shall upon receipt thereof make such funds available to the
Indenture Trustee to pay amounts due and owing under the Certificates on
the Owner Participant Payment Date, provided that the Owner Participant
shall not be obligated to make such funds available if an Event of Default
under the Lease shall have occurred and be continuing on the date on which
such funds are to be made available. If the Owner Participant does not
make such funds available when otherwise required to do so, the Lessee
shall be obligated to make an advance pursuant to Section 3.05 of the Lease
in an amount sufficient to pay in full the amounts of principal and
interest due on the Certificates on such date. Such obligations shall not,
nor shall they be construed to, make the Owner Participant directly liable
on the Certificates or in any way convert the Certificates to recourse
loans against the Owner Participant.
ARTICLE 3
EXTENT OF INTEREST OF ORIGINAL LOAN PARTICIPANTS
Section 3.01. Extent of Interest of Original Loan Participants.
Delivery of the Original Loan Certificates by the Original Loan
Participants to the Indenture Trustee for cancellation on the Refunding
Date shall be conclusive evidence of receipt by the Original Loan
Participants of all amounts then due and payable to the Original Loan
Participants in respect of principal of, Breakage Costs, if any, and
interest on the Original Loan Certificates under the Original Agreements
(it being understood that the foregoing shall not limit or detract from any
claim any Original Loan Participant may have under Article 8 or 9 or
Section 10.01(a)(ii) hereof or of the Original Participation Agreement).
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent. The obligations of the Owner
Trustee, the Owner Participant, the Lessee, the Indenture Trustee and the
Pass Through Trustee on behalf of each Pass Through Trust to participate in
the transactions contemplated hereby on the Refunding Date are subject to
the fulfillment to the satisfaction of such party (or waiver by such
party), prior to or on the Refunding Date, of the following conditions
precedent (it being understood that receipt by the Lessee of any of the
following documents shall not be a condition precedent to the obligations
of any party):
(a) Certificates. On the Refunding Date, there shall have been
duly issued and delivered by the Owner Trustee to the Pass Through
Trustee for each Pass Through Trust, against payment therefor, a
Certificate, substantially in the form set forth in Exhibit B to the
Indenture, duly authenticated, dated the Refunding Date and registered
in the name of the Pass Through Trustee on behalf of such Pass Through
Trust, in the principal amounts, Maturity, bearing the interest rate and
the other economic terms specified in the Series Supplements and
otherwise as provided in Section 2.04 of the Indenture. 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 Refunding 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 or the Indenture Trustee or
their special counsel, 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 shall have occurred which would
otherwise make it illegal or otherwise in contravention of guidance
issued by regulatory authorities for the Owner Participant, the Lessee,
the Owner Trustee, the Pass Through Trustee or the Indenture Trustee, to
participate in the transaction to be consummated on the Refunding 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 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 Refunding 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 thereunder
shall have been satisfied or waived.
(d) Refunding Documents. This Agreement and the following
documents shall have been duly authorized, executed and delivered by the
respective party or parties thereto, shall, to the extent that the forms
thereof are not attached hereto, each be satisfactory in form and
substance to the Lessee, the Indenture Trustee, the Pass Through
Trustee, the Owner Trustee 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, the Owner Trustee, the Owner
Participant, the Indenture Trustee or the Pass Through Trustee, as the
case may be, of such documents shall have been delivered to the Lessee,
the Owner Participant, the Indenture Trustee, the Pass Through Trustee
and the Owner Trustee (provided that the sole chattel-paper original of
the Lease shall be delivered to the Indenture Trustee):
(i) the Lease;
(ii) the Indenture;
(iii) the Trust Agreement; and
(iv) in the case of the Owner Participant only, Amendment No. 1
to the Original Tax Indemnity Agreement.
(e) Insurance. Each of the Indenture Trustee, the Pass Through
Trustee, the Owner Trustee and the Owner Participant 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, in form and substance satisfactory to the
Indenture Trustee and the Pass Through Trustee (to the extent of their
interests thereunder) or the Owner Participant, as the case may be, to
establish that the insurance required by Article 13 of the Lease is in
effect.
(f) Financing Statements. (i) Uniform Commercial Code ("UCC")
financing statements covering all the security interests (and other
interests) created by or pursuant to the Granting Clause of the Original
Indenture 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 Original Loan Participants, and such financing statements
shall have been duly filed in the State of Michigan; (ii) a form UCC-3
financing statement to amend and restate each financing statement
referred to in the immediately preceding sentence shall have been
executed and delivered by the Owner Trustee, as debtor, and by the
Indenture Trustee as secured party, and a form UCC-1 financing statement
covering all the security interests (and other interests) created by or
pursuant to the Granting Clause of the Indenture 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 concurrently with the Refinancing of the Original Loan Certificates
such UCC-3 financing statement and UCC-1 financing statement shall have
been duly filed or duly submitted for filing in the State of Michigan,
and all other actions shall have been taken which, in the opinion of
special counsel for the Pass Through Trustee or for the Underwriters,
are necessary or desirable to maintain the perfection of the security
interest created by or pursuant to the Granting Clause of the Indenture;
(iii) a UCC notice filing describing the Original 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), and shall have been duly filed in the
State of Tennessee; and (iv) a form UCC-3 financing statement to amend
and restate the UCC notice filing referred to in the immediately
preceding clause (iii) shall have been executed and delivered by the
Owner Trustee, as lessor, and by the Lessee, as lessee (which filing
shall name the Indenture Trustee as assignee of the Owner Trustee), and
such notice filing shall concurrently with the Refinancing of the
Original Loan Certificates have been duly filed in the State of
Tennessee, and all other actions shall have been taken which, in the
opinion of the Owner Participant, Pass Through Trustee and the
Underwriters, are necessary to perfect and protect such security
interests and other interests created by or pursuant to the Granting
Clause of the Indenture.
(g) Corporate Documents. Except when such Person is the
delivering party, the Owner Participant, the Owner Trustee, the Lessee,
the Original Loan Participants, the Pass Through Trustee and the
Indenture Trustee (acting directly or by authorization to its counsel)
shall have received the following, in each case in form and substance
satisfactory to it:
(i) a copy of the certificate of incorporation and by-laws of the
Lessee, certified by the Secretary or an Assistant Secretary of the
Lessee as of the Refunding Date, and a copy of the resolutions of the
board of directors of the Lessee, certified as such as of the
Refunding Date by such Secretary or Assistant Secretary, duly
authorizing the lease by the Lessee of the Aircraft under the Lease
and the execution, delivery and performance by the Lessee of the
Original Agreements to which it is a party, 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;
(ii) a copy of the articles of association and by-laws of the
Owner Participant, certified by the Secretary or an Assistant
Secretary of the Owner Participant as of the Refunding Date;
(iii) a copy of the articles of incorporation and by-laws and
other instruments of NBD, certified by the Secretary or an Assistant
Secretary of NBD as of the Refunding Date (or other like instruments
satisfactory to the Lessee and the Owner Participant) and evidence
authorizing the execution, delivery and performance by NBD or the
Owner Trustee, as the case may be, of the Original Agreements to
which it is a party, this Agreement, 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 and each other
document to be executed and delivered by the Owner Trustee in
connection with the transactions contemplated hereby;
(iv) a copy of the articles of association and by-laws and
other instruments of Chase and a copy of the resolutions of the
board of directors of Chase, certified by the Secretary or an
Assistant Secretary of Chase as of the Refunding Date (or other
like instruments satisfactory to the Lessee and the Owner
Participant) duly authorizing the execution, delivery and
performance by Chase (in its capacity as the entity acting as
Indenture Trustee) or the Indenture Trustee, as the case may be,
of the Original Agreements to which it is a party, this 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 Indenture
Trustee and each other document to be executed and delivered by
the Indenture Trustee in connection with the transactions
contemplated hereby;
(v) a copy of the articles of association and by-laws and
other instruments of Chase and a copy of the resolutions of the
board of directors of Chase, certified by the Secretary or an
Assistant Secretary of Chase as of the Refunding Date (or other
like instruments satisfactory to the Lessee and the Owner
Participant) duly authorizing the execution, delivery and
performance by Chase (in its capacity as the entity acting as Pass
Through Trustee) or the Pass Through Trustee, as the case may be,
of this Agreement, the Pass Through Agreement, the Series
Supplements and each other document to be executed or
authenticated by or on behalf of the Pass Through Trustee in
connection with the transactions contemplated hereby; and
(vi) such other documents, evidences, materials, and information
with respect to the Lessee, the Owner Trustee, the Indenture Trustee,
the Pass Through Trustee and the Owner Participant as the Indenture
Trustee, the Pass Through Trustee or the Owner Participant may
reasonably request in order to establish the consummation of the
transactions contemplated by this Agreement.
(h) Title, Airworthiness and Registration. On the Refunding
Date, the following statements shall be true, and the Owner Participant,
the Owner Trustee, the Pass Through Trustee and the Indenture Trustee
shall have received evidence from the Lessee 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 the rights of the Owner
Trustee and the Lessee under the Lease and the Lease Supplement
covering the Aircraft, the rights of the Indenture Trustee under
the Indenture and the beneficial interest of the Owner Participant
created by the Trust Agreement and the interest of the Holders
created by the Indenture and the Indenture and Security Supplement
covering the Aircraft;
(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, the Indenture and the Trust Agreement
concurrently with the Refinancing of the Original Loan Certificates
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) the Aircraft is registered in the name of the Owner Trustee.
(i) Officer's Certificate of Lessee. On the Refunding Date, the
following statements shall be true, and the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee shall have
received a certificate signed by the Vice President and Treasurer or any
other duly authorized officer of the Lessee, dated the Refunding Date,
stating that:
(i) the representations and warranties of the Lessee contained
in the Operative Agreements to which it is a party (excluding the
Tax Indemnity Agreement) and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Refunding
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, 1995 (as updated by Note 7 to the financial statement
included in the Lessee's Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 1995), 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
consolidated financial statements of the Lessee as of August 31, 1995
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 a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, 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 an Event of Default under the Lease.
(j) Officer's Certificate of Owner Participant. On the Refunding
Date, the following statements shall be true, and the Lessee, the Pass
Through Trustee, the Owner Trustee 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 Refunding Date,
stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement to which it is a party and in any certificate
delivered pursuant hereto or thereto, are true and correct on and as
of the Refunding 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) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes,
due to any action or inaction on the part of the Owner Participant,
an Indenture Default or an Indenture Event of Default.
(k) Other Officer's Certificates. On the Refunding Date, the
following statements shall be true, and the Owner Participant, the
Lessee, the Pass Through Trustee, the Owner Trustee and the Indenture
Trustee shall have received a certificate from each of NBD and the Owner
Trustee (in the case of the Lessee, the Owner Participant, the Pass
Through Trustee and the Indenture Trustee), Chase in its capacity as the
entity acting as Indenture Trustee (in the case of the Lessee, the Owner
Participant, the Pass Through Trustee and the Owner Trustee) and Chase
in its capacity as the entity acting as Pass Through Trustee (in the
case of the Lessee, the Owner Participant, the Indenture Trustee and the
Owner Trustee) signed by a duly authorized officer of NBD and Chase,
respectively, dated the Refunding Date, stating with respect to NBD and
the Owner Trustee, Chase (other than in its capacity as a Loan
Participant, Agent or Pass Through Trustee) and the Indenture Trustee or
Chase (other than in its capacity as a Loan Participant, Agent or
Indenture Trustee) and the Pass Through Trustee, as the case may be,
that:
(i) the representations and warranties of the Owner Trustee in
its individual capacity and as Owner Trustee, of the Indenture
Trustee in its individual capacity (other than in its capacity as
a Loan Participant, Agent or Pass Through Trustee) and as
Indenture Trustee, and of the Pass Through Trustee in its
individual capacity (other than in its capacity as a Loan
Participant, Agent or Indenture Trustee) and as Pass Through
Trustee, contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered
pursuant hereto or thereto are true and correct on and as of the
Refunding 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) 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, due to any action or
omission on the part of the Owner Trustee in its individual capacity
or as trustee, and of the Indenture Trustee in its individual
capacity (other than in its capacity as a Loan Participant, Agent or
Pass Through Trustee) or as trustee, an Event of Default or an
Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or NBD and no Indenture Trustee's Liens affecting the Trust
Indenture Estate or the Lessor's Estate or any part thereof.
(l) Legal Opinions. The Owner Participant, the Original Loan
Participants, the Lessee, the Owner Trustee, the Indenture Trustee and the
Pass Through Trustee (acting directly or by authorization to its special
counsel) shall have received from the following counsel their respective
legal opinions in each case satisfactory to the Owner Participant, the
Original Loan Participants, the Lessee, the Owner Trustee, the Indenture
Trustee and the Pass Through Trustee, as the case may be, as to scope and
substance (and covering such other matters as the recipient may reasonably
request) and dated the Refunding Date:
(i) George W. Hearn, Esq., Vice President, Law - Corporate
and Business Transactions of the Lessee in the form of Exhibit
A(1)(a) hereto, addressed to the Owner Participant, the Owner,
Trustee, the Pass Through Trustee, the Indenture Trustee, the
Underwriters and the Original Loan Participants;
(ii) Morgan, Lewis & Bockius, special counsel for the Owner
Participant, in the form of Exhibit A(2)(a) hereto and James R.
Marietta, Assistant General Counsel of NationsBank Corporation of the
Owner Participant, in the form of Exhibit A(2)(b) hereto, each
addressed to the Owner Participant, the Owner Trustee, the Pass
Through Trustee, the Indenture Trustee, the Lessee, the Underwriters
and the Original Loan Participants;
(iii) Dewey Ballantine, special counsel for the Indenture
Trustee, in the form of Exhibit A(3)(a) hereto and Barbara Jo Lubitz,
Vice President and Senior Associate Counsel of the Indenture Trustee,
in the form of Exhibit A(3)(b) hereto, each addressed to the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee, the Underwriters and the Original Loan
Participants;
(iv) Daugherty, Fowler & Peregrin, special aviation counsel,
in the form of Exhibit A(4) hereto, addressed to the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee, the Underwriters and the Original
Loan Participants;
(v) [intentionally left blank];
(vi) [intentionally left blank];
(vii) Dickinson, Wright, Moon, Van Dusen & Freeman, special
counsel for the Owner Trustee, in the form of Exhibit A(5) hereto,
addressed to the Owner Participant, the Owner Trustee, the Pass
Through Trustee, the Indenture Trustee, the Lessee, the Underwriters
and the Original Loan Participants;
(viii) Davis Polk & Wardwell, special counsel to the Lessee,
in the form of Exhibit A(1)(b) hereto, addressed to the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee, the Underwriters and the Original
Loan Participants; and
(ix) Dewey Ballantine, special counsel for the Pass Through
Trustee, in the form of Exhibit A(6)(a) hereto and Barbara Jo
Lubitz, Vice President and Senior Associate Counsel of the Pass
Through Trustee, in the form of Exhibit A(6)(b) hereto, each
addressed to the Owner Participant, the Owner Trustee, the Pass
Through Trustee, the Indenture Trustee, the Lessee, the
Underwriters and the Original Loan Participants;
(m) No Indenture Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(n) No Defaults. No Default or Event of Default under 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.
(o) Cancellation. Following the Refinancing of the Original Loan
Certificates, the Original Loan Certificates shall have been duly
delivered by the Original Loan Participants to the Indenture Trustee for
cancellation and delivery to the Owner Trustee.
(p) 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 and the
Underwriters 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.
Section 4.02. Opinion of Special Aviation Counsel. Promptly upon
the filing and, where appropriate, recording of the documents specified in
4.01(h)(iii) hereof, pursuant to the Act, the Lessee shall cause Special
Aviation Counsel to deliver to the Owner Participant, the Owner Trustee,
the Pass Through Trustee and the Indenture Trustee an opinion as to (i) the
due recording of such documents and the documents identified in Section
4.01(i) of the Original Participation Agreement and (ii), subject to
customary qualifications, the lack of any intervening documents with
respect to the Aircraft.
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations. The
Lessee's obligation to participate in the transactions contemplated hereby is
subject to the conditions that, prior to or on the Refunding 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, as the case may be,
paragraphs (d), (g)(ii)-(v), (h)(ii)-(iv), (j), (k) and (l) (ii), (iii), (iv),
(vii), (viii) and (ix) of Section 4.01 hereof and the Underwriters and the
Owner Participant shall have made available the amounts required to be paid by
them pursuant to Section 2.01 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, on the date
hereof and as of the Refunding Date:
(a) the Lessee is a corporation duly organized and validly existing
and is in good standing under the laws of the State of Delaware with its
principal place of business and chief executive office (as such terms are
used in Article 9 of the Uniform Commercial Code) in Memphis, Tennessee,
and is duly qualified to do business as a foreign corporation and is 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 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, the Original Agreements to which it is a party, the other
Operative Agreements to which it is a party, the Pass Through Agreement and
the Series Supplements (the "Lessee Documents");
(c) the Lessee is an "air carrier" within the meaning of the
Transportation Code and a holder of a certificate under Sections 41102(a)
and 41103 of the Transportation Code and a "citizen of the United States"
within the meaning of Section 40102(a)(15) of the Transportation Code
holding an "air carrier operating certificate" issued under Chapter 447 of
the Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, 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) the execution, delivery and performance of the Lessee Documents
by the Lessee 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, and each such document 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 (regardless of whether enforceability is
considered in a proceeding in equity or at law);
(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 the Lessee Documents 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 4.01(l)(iv) and
4.02 hereof and except for the filings referred to in Section 4.01(f)
hereof, all of which shall have been duly obtained or made and shall be in
full force and effect on and as of the Refunding Date or as contemplated by
said Sections;
(g) neither the execution, delivery or performance by the Lessee of
the Lessee Documents 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) 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 Aircraft, (B) 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, 1995 (as updated by Note 7 to the
financial statement included in the Lessee's Quarterly Report on Form
10-Q for the fiscal quarter ended August 31, 1995), 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, if adversely
determined, would materially and adversely affect the consolidated
financial condition, business or operations of the Lessee, or (C) if
adversely determined would adversely affect the ability of the Lessee to
perform its obligations under the Lessee Documents;
(i) the Lessee and its subsidiaries have 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, 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);
(j) except for (A) the filing and, where appropriate, recordation
pursuant to the Act of the Indenture, the Trust Agreement and the Lease,
(B) the filing of the financing statements referred to in Section
4.01(f) hereof and (C) 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
Delivery Date, no further action, including any filing or recording of
any document, is necessary or advisable in order (i) 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 (ii) to perfect
the first security interests in and mortgage Lien on the Trust Indenture
Estate in favor of the Indenture Trustee;
(k) on the Delivery Date, the Owner Trustee received good and
marketable title to the Aircraft, free and clear of all Liens, except
the rights of the Owner Trustee and the Lessee under the Original Lease,
the rights of the Indenture Trustee under the Original Indenture and the
beneficial interest of the Owner Participant created by the Original
Trust Agreement and the interest of the Original Loan Participants
created by the Original Indenture and the Indenture and Security
Supplement covering the Aircraft;
(l) the Lessee has heretofore delivered to the Owner Participant true
and correct copies of the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1995 and its Quarterly Report on Form 10-Q for
the fiscal quarter ended August 31, 1995, and of the audited
consolidated balance sheet of the Lessee for the fiscal year ended May
31, 1995 and the unaudited consolidated balance sheet of the Lessee as
of August 31, 1995, and the related consolidated statements of income,
changes in common stockholders' investment and cash flows for the fiscal
year and interim reporting period ended on such dates, accompanied
(except in the case of such interim reporting period) by a report
thereon containing opinions without qualification, except as therein
noted, by Arthur Andersen & Co., independent public accountants; said
financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied and present fairly
the financial position of the Lessee as of such dates and the results of
its operations and cash flows for such periods and such Annual Reports,
Quarterly Reports and financial statements did not, as of their
respective dates of filing with the SEC, contain any untrue statement of
a material fact or omit a material fact necessary to make the statements
contained therein not misleading and there has been no material adverse
change in the consolidated financial condition of the Lessee since
August 31, 1995;
(m) with respect to ERISA, except as otherwise disclosed:
(i) none of the Pension Plans (as defined at the end of this
Section 6.01(m)) nor their related trusts have been terminated in a
distress termination pursuant to Section 4041(c) of ERISA or by the
Pension Benefit Guaranty Corporation or any successor agency or
instrumentality thereto (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) 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
(viii) assuming (A) the truth of the representations contained
in Sections 7.03(a)(viii) and 7.09 hereof, (B) the applicability
of an individual or a class prohibited transaction exemption
("PTE") to the transactions contemplated hereby, and (C) the
compliance with all of the conditions of a PTE, 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 transaction 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 obligations
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 an employee benefit
plan subject to Section 4975 of the Code.
As used in this Section 6.01(m), 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;
(n) the Lessee is a Citizen of the United States;
(o) except for the filings referred to in Section 4.01(f) hereof,
no governmental approval of any kind is required of the Owner
Participant or for the Owner Participant's execution of or performance
under this Agreement or any agreement contemplated hereby 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;
(p) on the Refunding Date, all premiums with respect to the
insurance required to be provided by the Lessee on or prior to the
Refunding Date under Article 13 of the Lease have been paid by the
Lessee;
(q) on the Refunding Date, all sales or use taxes relating to the
sale of the Aircraft by AVSA to the Owner Trustee which are then or were
theretofore due shall have been paid;
(r) 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 Lessee Documents;
(s) 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;
(t) the Aircraft has been duly certified by the FAA as to type and
airworthiness; there is in effect with respect to the Aircraft a current
and valid airworthiness certificate issued by the FAA pursuant to the
Act; and there is no fact known to the Lessee which materially adversely
affects the value, utility or condition of the Aircraft;
(u) on the Refunding Date, the Lessee shall not be in default in
the performance of any term or condition of the Purchase Agreement, the
Purchase Agreement Assignment, the Engine Warranty Assignment and the
GTA;
(v) 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;
(w) the Aircraft is fully equipped to operate in commercial service
and will comply with all governmental requirements governing such service;
(x) neither the Lessee nor any of its Affiliates is engaged
principally in the business of extending credit for the purpose of buying
or carrying margin stock (within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System) and no part of the proceeds
from the sale of the Certificates and/or sale of the Aircraft by the Lessee
to the Owner Trustee will be used to purchase or carry any such margin
stock, or to refinance any borrowing, the proceeds of which were used to
purchase or carry any such margin stock;
(y) there are no broker's or underwriter's fees payable in
connection with the transactions contemplated in the Operative Agreements
other than those of the Underwriters and First Chicago Leasing Corporation;
and
(z) the representations and warranties of the Lessee set forth in the
Original Agreements to which it is a party were correct on and as of the
Delivery Date (except to the extent such representations expressly related
solely to a specified earlier date, in which case such warranties and
representations were correct on and as of such earlier date).
Section 6.02. Offering by Lessee. The Lessee represents and
warrants that it has authorized no one to act on its behalf in connection
with the offer or sale of any interest in the Lessor's Estate or the Trust
Agreement other than First Chicago Leasing Corporation. Neither the Lessee
nor, based on representations of First Chicago Leasing Corporation, anyone
acting on its behalf has directly or indirectly offered any interest in the
Lessor's Estate or the Trust Agreement, or similar interests, for sale to,
or solicited any offer to acquire any of the same from, anyone other than
the Owner Participant and no more than 53 other institutional investors (as
such term is defined in Regulation D promulgated under the Securities Act
of 1933, as amended).
Section 6.03. 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, the Pass Through Trustee or the Owner
Participant shall reasonably require for accomplishing the purposes of
this Agreement, the Trust Agreement, the Indenture, the Tax Indemnity
Agreement, the Lease and the other Operative Agreements to which it is a
party. Without limiting the generality of this Section 6.03(a), the
Lessee will promptly 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 and any financing
statements or other instruments as may be 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 if the Lessee
cannot take, or cause to be taken, such action, 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 either of them to
take such action at the Lessee's cost and expense in a timely manner.
(b) The Lessee shall maintain the certificates referred to in
Section 7.01 of the Lease and shall cause the Aircraft to remain duly
registered, in the name of the Owner Trustee, under the Transportation
Code; provided, however, that the Owner Participant, the Owner Trustee and
the Indenture Trustee agree that if at any time after December 31, 2002 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, upon receipt by the Owner Participant, the Owner Trustee and
the Indenture Trustee of the assurances and opinion described below, none
of them shall 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 and trust capacities,
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 and are and shall be in full
force and effect upon such change of registry;
(B) as to the continuation of the 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),
(y)(i) if such change in registration is made other than in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards at least comparable to those of
the FAA, and (ii) if such change in registration is made in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards in conformity with those set
forth in Section 7.02(a)(i) of the Lease and (z) would not impose
requirements which materially increase the administrative or other
burdens or obligations of the Owner Participant under the Operative
Agreements unless indemnified by the Lessee;
(E) that import and export certificates and any exchange permits
necessary to allow all Rent and other payments provided for under the
Lease, if required, shall have been procured at the Lessee's own cost
and expense by the Lessee;
(F) 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;
(G) 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 Pass
Through Trustee (in its individual capacity and as trustee under the
Pass Through Agreement) and the other Indemnitees under this
Agreement, the Indenture, the Pass Through Agreement and (in the case
of the Owner Participant only) the Tax Indemnity Agreement, afford
each such party substantially the same protection as provided prior
to such change of registry;
(H) that such change will not result in the imposition of, or
increase in the amount of, any Tax (which, for this purpose, includes
the loss of any tax benefits assumed by the Owner Participant to be
available to it based upon the assumptions set forth in Section 2 of
the Original Tax Indemnity Agreement) for which the Lessee has not
agreed to indemnify the Owner Participant, the Indenture Trustee, the
Owner Trustee (or any successor, assign or Affiliate thereof) and the
Trust Estate;
(I) 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;
(J) of the payment by the Lessee of any reasonable fees and
expenses of the Owner Participant, the Owner Trustee, the Indenture
Trustee and the Pass Through Trustee in connection with such change
of registry, including any reasonable attorneys' fees and expenses;
and
(K) that duties and tariffs, if applicable, shall have been paid
for by the Lessee;
(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 scope, 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, any sublessee,
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 or meet other requirements
not already met 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 or in order to maintain such
registration and the Lien of the Indenture;
(C) that the courts of such jurisdiction would provide
substantially equivalent protection to the Lessor, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee as
provided under United States law (with the exception described in
paragraph (b)(i)(D)(x) of this Section 6.03) 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 Trustee, 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);
(E) that the laws of such jurisdiction will not impair the
rights of the Lessor in and to the Aircraft or under the Lease and
(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) 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;
(F) that the Owner Trustee's title to the Aircraft is recognized
and fully enforceable in such jurisdiction, that such jurisdiction
will give effect to the title of the Aircraft therein substantially
to the same extent as does the Government, and that the Lien of the
Indenture shall continue as a first priority, duly perfected lien on
the Aircraft; and
(G) to such further effect with respect to such other matters
as the Owner Participant, the Owner Trustee, or the Indenture
Trustee may reasonably request.
(c) 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 by the Owner Trustee as the Lessor and the
Owner Participant under the Lease with any governmental authority.
(d) The Lessee will cause the Special Aviation Counsel to file, and
where appropriate record, on the Refunding Date, the Lease, the Trust
Agreement and the Indenture. The following documents shall be filed and,
where appropriate, recorded on the Refunding Date with the Aeronautics
Authority in the following order of priority: first, the Trust Agreement,
second, the Indenture and third, the Lease with the Indenture attached
thereto.
(e) The Lessee 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 year 1996, 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 Owner Trustee's
title to and interest in the Aircraft and the Lessor's Estate as against
the Lessee and any third parties and to maintain the perfection of the
security interests 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 such title or 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 such title and the
perfection of such security interests (which the Lessee agrees timely to
take); 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 6.03(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 or the Owner Participant.
(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 U.S. Air Carrier holding an "air carrier operating
certificate" issued under Chapter 447 of the Transportation Code for
aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, (iv) expressly assumes by an instrument in
writing in form and substance satisfactory to the Indenture Trustee, the
Owner Participant 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 6.03(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 a Default not capable
of cure within the applicable grace period therefor or 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 6.03(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 6.03(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, the Owner Trustee 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
reports and statements furnished by the Lessee to all of 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 (and in any event within five (5) Business
Days after) any Responsible Officer of the Lessee obtaining actual
knowledge of any condition or event which constitutes a Default or
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, the Pass Through Trustee 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 employee 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 any Default or any Event of Default
or if a Default or 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 6.04. 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 Closings
hereunder 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) [Intentionally Left Blank.]
(b) 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 resale 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. Neither the Owner Participant nor anyone
authorized to act on its behalf 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 further represents and warrants that neither it
nor anyone authorized to act on its behalf has made or 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 of
1933, as amended. No representation in this Section 7.01(b) shall include any
action or inaction of the Lessee, the Agent, First Chicago Leasing Corporation
or the Underwriters whether or not purportedly on behalf of the Owner Trustee,
the Owner Participant or any of their Affiliates.
Section 7.02. Citizenship. (a) Generally. Each of the Owner
Trustee, in its individual capacity and as Trustee, and the Owner
Participant severally represents and warrants that it is a Citizen of the
United States on the Refunding Date. If the Owner Participant or 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 Participant or 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
Transportation Code as in effect at such time or, if it is not necessary
under the Transportation Code as in effect at such time, if it is informed
in writing by the Lessee or the Owner Participant that such lack of United
States citizenship would have any adverse effect on the Lessee or the Owner
Participant. 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 agrees, solely for
the benefit of the Lessee, the Pass Through Trustee, the Indenture Trustee
and the Owner Trustee, that if at any time when the Aircraft is registered
or the Lessee proposes to register the Aircraft in the United States (i) it
shall cease to be, or determines that it is likely to cease to be, a
Citizen of the United States and (ii) the Aircraft shall or would therefore
become ineligible for registration in the name of the Owner Trustee under
the Transportation Code and regulations then applicable thereunder, then
the Owner Participant shall give notice thereof to the Lessee, the Owner
Trustee and the Indenture Trustee and shall (at its own expense and without
any reimbursement or indemnification from the Lessee) immediately (and in
any event within a period of 15 Business Days following such determination
or, if earlier, within 15 days following actual loss of citizenship) (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 any actual damages (but not consequential damages) suffered by any
such other party to the extent the same shall result from the
representation and warranty of the Owner Participant in the first sentence
of Section 7.02(a) hereof proving to be untrue as of the Refunding Date;
and (B) to the Lessee, the Indenture Trustee and the Pass Through Trustee
for any damages actually incurred by the Lessee, the Indenture Trustee and
the Pass Through Trustee as a result of the Owner Participant's failure to
comply with its obligations pursuant to the first sentence of this Section
7.02(c); provided, that, the foregoing shall not restrict the Pass Through
Trustee or the Indenture Trustee from asserting against the Owner
Participant any damages actually incurred by the holders of any Pass
Through Certificates. 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
first sentence of this Section 7.02(c).
Section 7.03. Representations, Warranties and Covenants of the
Owner Participant. (a) Representations, Warranties and Covenants. In
addition to and without limiting its other representations and warranties
provided for in this Article 7, the Owner Participant represents and
warrants that:
(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 it has full corporate 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 the Original Agreements to which it is a party, this
Agreement, the Tax Indemnity Agreement, and the Trust Agreement;
(ii) the execution, delivery and performance by it of the Original
Agreements to which it is a party, this Agreement, the Tax Indemnity
Agreement, and the Trust Agreement have been duly authorized by all
necessary corporate action on its part and, assuming the accuracy of the
Lessee's representations in Section 6.01(o) 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 Sections 6.01(m)(viii), 6.02 and 7.09 hereof, neither the
execution, delivery or performance by the Owner Participant of the
Original Agreements to which it is a party, this Agreement, the Tax
Indemnity Agreement, and the Trust Agreement 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 by-laws, 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) the Original Agreements to which it is a party, this
Agreement, the Tax Indemnity Agreement and the Trust Agreement have been
or on the Refunding Date will be duly executed and delivered by the
Owner Participant and constitute or on the Refunding Date 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) to the best of its knowledge, 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 the Original Agreements to which it is a party, 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 the Owner Participant before any court, administrative agency or
tribunal which are expected to materially adversely affect the ability of
the Owner Participant to perform its obligations under any of the Original
Agreements or the Operative Agreements to which it is or is to be a party,
and the Owner Participant knows of no pending or threatened actions or
proceedings before any court, administrative agency or tribunal involving
it in connection with the transactions contemplated by this Agreement, the
Original Agreements or the Operative Agreements;
(vii) neither the execution and delivery by it of the Original
Agreements to which it is a party, this Agreement, the Tax Indemnity
Agreement or the Trust Agreement 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) it has a consolidated tangible net worth of not less than
$75,000,000; and
(x) the representations and warranties of the Owner Participant
set forth in the Original Agreements to which it is a party were correct
on and as of the Delivery Date (except to the extent such
representations expressly related solely to a specified earlier date, in
which case such warranties and representations were correct on and as of
such earlier date).
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, including,
without limitation, the airworthiness, value, condition, workmanship, design,
patent or trademark infringement, operation, merchantability or fitness for
use of the Aircraft, other than such laws, rules or regulations relating to
the citizenship requirements of the Owner Participant under applicable
aviation law.
(b) Lessor's Liens. The Owner Participant further represents,
warrants and covenants that there are no Lessor's Liens attributable to it
(or an Affiliate thereof) against, on or with respect to the Aircraft or
the Lessor's Estate or the Trust Indenture Estate, and that there will not
be any Lessor's Lien attributable to it (or an Affiliate thereof) against,
on or with respect to the Aircraft or the Lessor's Estate or the Trust
Indenture Estate attributable to it (or an Affiliate thereof) on the
Refunding Date. The Owner Participant agrees with and for the benefit of
the Lessee, the Owner Trustee, 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
neither the Lessee's operation and use of the Aircraft nor the validity and
priority of the Lien of the Indenture is 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 or otherwise materially adversely affect the validity or priority
of the Lien of the Indenture.
(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 (or an Affiliate
thereof) and required to be discharged as described in Section 7.03(b) hereof.
(d) Assignment of Interests of Owner Participant. At any time after
all obligations of the Owner Participant under Section 2.01(d) hereof have
been satisfied in full, the Owner Participant may assign, convey or otherwise
transfer to a single institutional investor or an Affiliate of an
institutional investor all (but not less than all) of the Beneficial Interest,
provided that it gives the Lessee and the Indenture Trustee at least 10
Business Days' notice of such assignment, conveyance or other transfer and
provided further that the Owner Participant shall remain liable for all
obligations of the Owner Participant under the Trust Agreement and the
Operative Agreements to which the Owner Participant is a party to the extent
(but only to the extent) incurred on or before the date of such transfer and
provided that the transferee agrees by a written instrument in form and
substance reasonably satisfactory to the Indenture Trustee, the Owner Trustee
and the Lessee to assume primary liability for all obligations as an Owner
Participant under the Trust Agreement and the other Operative Agreements to
which such Owner Participant is a party incurred after the date of transfer
and the Owner Participant shall remain secondarily liable for all such
obligations assumed by its successor as Owner Participant; provided, that the
Owner Participant need not so agree to remain and shall not be so secondarily
liable if (a) 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 $75,000,000, (ii) a
subsidiary of any Person described in clause (i) where such Person provides
(A) support for the obligations assumed by such transferee subsidiary
reasonably satisfactory to the Lessee, the Owner Trustee and the Indenture
Trustee or (B) an unconditional guaranty reasonably satisfactory to the
Lessee, the Owner Trustee and the Indenture Trustee of such transferee
subsidiary's obligations, or (iii) an Affiliate of the transferring Owner
Participant, 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 $75,000,000, (b) such transferee is legally capable of binding itself to
the obligations of the Owner Participant and expressly agrees to assume all
obligations of the Owner Participant under the Trust Agreement and this
Agreement and (c) such transferee shall provide representations substantially
similar to those contained in Section 7.03(a) hereof. In the event of any such
assignment, conveyance or transfer, the transferee shall become a party to the
Trust Agreement and shall agree to be bound by all the terms of and will
undertake all of the obligations of the Owner Participant contained in the
Trust Agreement and the other Operative Agreements in such manner as is
reasonably satisfactory to the Owner Trustee, the Indenture Trustee and the
Lessee. A transferee hereunder shall be (i) a "U.S. Person" as defined in
Section 7701(a)(30) of the Code (or any successor provision thereto) or if the
transferee shall not be such "U.S. Person" then (A) each Certificate Holder
shall be provided an indemnity in form and substance satisfactory to each such
Certificate Holder, for any Taxes that may be imposed on such Certificate
Holder (currently or in the future) due to such transferee's failure to be
such a "U.S. Person" and (B) such transferee shall be personally liable for
any debt service to the extent that its receipt of rentals is reduced by
reason of any withholding Taxes that result from such transferee's failure to
be such a "U.S. Person" and (ii) a Citizen of the United States or has
established a voting trust, voting powers or other arrangement reasonably
satisfactory to the Indenture Trustee and the Lessee to permit the Owner
Trustee to be the registered owner of the Aircraft under the Transportation
Code. A transferee hereunder shall not be, and in acquiring the Beneficial
Interest shall not use the assets of, an employee benefit plan subject to
Title I of ERISA or an individual retirement account or a plan subject to
Section 4975 of the Code. Assuming the truth of the representations made in
Sections 6.01(m) and 7.06 hereof, no such assignment, conveyance or transfer
shall violate any provision of law or regulation or create a relationship
which would be in violation thereof. 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
Owner Participant to a transferee as above provided, the transferee shall be
deemed the "Owner Participant" or "Trustor" for all purposes of the Operative
Agreements, 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 as theretofore held by its transferor; and each reference therein to
the "Owner Participant" or "Trustor" shall thereafter be deemed a reference to
such transferee. Notwithstanding anything to the contrary contained in this
Section 7.03(d), in no event shall the Owner Participant transfer its interest
in the Beneficial Interest to any entity whose business is that of a
nationwide or worldwide overnight or expedited delivery small package air
courier, cargo or freight deliverer and which competes with the Lessee in one
of its principal lines of business.
(e) Actions with Respect to Lessor's Estate, Etc. The Owner
Participant agrees that it will not 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, Covenants and Warranties of NBD and
the Owner Trustee. (a) In addition to and without limiting its other
representations and warranties provided for in this Article 7, NBD represents
and warrants, in its individual capacity with respect to items (i), (ii),
(iii)(A), (iv), (v), (vi), (vii) and (viii) below and as the Owner Trustee
with respect to items (iii)(B) and (v) that:
(i) it is a banking corporation duly incorporated and validly
existing in good standing under the laws of the State of Michigan with its
principal place of business and chief executive office (as such terms are
used in Article 9 of the Uniform Commercial Code) at 611 Woodward Avenue,
Detroit, Michigan 48226, 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
carry on its business as now conducted, and to execute, deliver and perform
this Agreement, the Original Agreements and the Operative Agreements to
which it is or is to be a party;
(ii) the execution, delivery and performance by NBD, either in its
individual capacity or as the Owner Trustee, as the case may be, of this
Agreement, the Original Agreements and the Operative Agreements to which it
is or is to be party have been duly authorized by all necessary action on
its part, and do not contravene its certificate of incorporation or
by-laws; each of this Agreement, the Original Agreements and the Operative
Agreements to which it is or is to be a party has been duly authorized,
executed and delivered by NBD, either in its individual capacity or as the
Owner Trustee, as the case may be, and neither the execution and delivery
thereof nor NBD's performance of or compliance with any of the terms and
provisions hereof or thereof will violate any Federal or state or local law
or regulation governing NBD's banking or trust powers;
(iii)(A) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or is
to be party when duly executed and delivered will, and each of the Original
Agreements to which it is a party does, to the extent each such document is
entered into by NBD in its individual capacity, constitute the legal, valid
and binding obligation of NBD in its individual capacity enforceable
against it in such capacity in accordance with its respective 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
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(B) assuming due authorization, execution and delivery by each other
party thereto, each of the Operative Agreements to which it is or is to be
party when duly executed and delivered will, and each of the Original
Agreements to which it is a party does, to the extent each such document is
entered into by the Owner Trustee in its trust capacity, constitute the
legal, valid and binding obligation of the Owner Trustee enforceable
against it in such capacity in accordance with its respective 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
(regardless of whether enforceability is considered in a proceeding in
equity or at law), and the performance by the Owner Trustee of any of its
obligations thereunder does not contravene any lease, regulation or
contractual restriction binding on the Owner Trustee or any judgement or
order applicable to or binding on it;
(iv) the performance by NBD in its individual capacity of any of its
obligations under this Agreement, the Original Agreements and the
Operative Agreements does not contravene any lease, regulation or
contractual restriction binding on NBD in its individual capacity;
(v) there are no pending or, to its knowledge, threatened actions or
proceedings against NBD before any court or administrative agency which
would materially and adversely affect the ability of NBD, either in its
individual capacity or as the Owner Trustee, as the case may be, to perform
its obligations under this Agreement, the Original Agreements and the
Operative Agreements to which it is or is to be party;
(vi) 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 or name;
(vii) 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 Original Agreements and the Operative Agreements to which it is or is
to be a party nor the performance of its obligations hereunder or
thereunder, requires on the part of NBD 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 state or local governmental authority or agency governing its
banking or trust powers;
(viii) on the Delivery Date the Owner Trustee shall have received
whatever title to the Aircraft as was conveyed to it by AVSA, on the
Refunding Date the Aircraft shall be free of Lessor's Liens attributable to
NBD in its individual capacity and NBD in its individual capacity is a
Citizen of the United States; and
(ix) the representations and warranties of the Owner Trustee set
forth in the Original Agreements to which it is a party were correct on and
as of the Delivery Date (except to the extent such representations
expressly related solely to a specified earlier date, in which case such
warranties and representations were correct on and as of such earlier
date).
(b) Lessor's Liens. NBD, in its individual capacity, further
represents, warrants and covenants that there are no Lessor's Liens
attributable to it in its individual capacity against, on or with respect
to the Aircraft or the Lessor's Estate or the Trust Indenture Estate, and
that there will not be any such Lessor's Liens against, on or with respect
to the Aircraft or the Lessor's Estate or the Trust Indenture Estate on the
Refunding Date. 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, and in any event within 30 days after the same shall first become
known to it, take such action as may be necessary to discharge duly any
Lessor's Liens attributable to it in its trust capacity. NBD, 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, and in any event within 30 days 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 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. NBD, 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 NBD
to discharge and satisfy any Lessor's Liens attributable to it in its
individual capacity, as described in Section 7.04(b) hereof.
(d) Securities Act. None of NBD, the Owner Trustee or any Person
authorized by either of them to act on its behalf has directly or
indirectly offered or sold or will directly or indirectly offer or sell any
interest in the Lessor's Estate, or in any similar security relating to the
Lessor's Estate, or in any security the offering of which for purposes of
the Securities Act of 1933, as amended, would be deemed to be part of the
same offering as the offering of the aforementioned securities to, or
solicited any offer to acquire any of the same from, any Person. NBD
further represents and warrants, in its individual capacity and as the
Owner Trustee, that neither it nor anyone acting on its behalf shall own
the Certificates.
Section 7.05. Representations, Warranties and Covenants of the
Indenture Trustee. (a) The Indenture Trustee in its individual capacity (other
than as a Loan Participant, the Pass Through Trustee or the Agent) represents
as follows:
(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 power and authority to enter into and perform its
obligations under the Indenture, this Agreement and the Original
Agreements to which it is a party and to authenticate the Certificates
to be delivered on the Refunding Date;
(ii) the Indenture and this Agreement, and the authentication of
the Certificates to be delivered on the Refunding Date have been duly
authorized by all necessary 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, state or local 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) each of the Indenture, this Agreement and the Original
Agreements and the other Operative Agreements to which it is a party has
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 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;
(iv) neither the execution and delivery by it of this Agreement
and the Original Agreements 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, state or local
governmental authority or agency governing its banking and trust powers;
(v) the representations and warranties of the Indenture Trustee
set forth in the Original Agreements to which it is a party were correct
on and as of the Delivery Date (except to the extent such
representations expressly related solely to a specified earlier date, in
which case such warranties and representations were correct on and as of
such earlier date); and
(vi) the Indenture Trustee holds the original counterparts of the
Original Lease and the Lease Supplement.
(b) Indenture Trustee's Liens. The Indenture Trustee, in its
individual capacity, further represents, warrants and covenants that there
are no Indenture Trustee's Liens attributable to it in its individual
capacity against, on or with respect to the Aircraft or the Lessor's Estate
or the Trust Indenture Estate, and that there 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 on the Refunding Date. 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, and in any event within 30 days 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 Owner 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, the Owner Participant, the Owner Trustee or the Pass
Through 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) hereof.
Section 7.06. Indenture Trustee's Notice of Default. The Indenture
Trustee agrees to give the Owner Participant notice of any Default promptly
upon a Responsible Officer of the Indenture Trustee having actual knowledge
thereof.
Section 7.07. 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 the Lien of the
Indenture which it is required to execute and deliver in accordance with the
provisions of Article XIV 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 upon
written notice from the Lessee to make such request.
Section 7.08. Covenant of Quiet Enjoyment. 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 such Owner Participant
(or the Owner Trustee, the Indenture Trustee or the Pass Through Trustee, as
the case may be) nor any Person lawfully claiming through such Owner
Participant (or the Owner Trustee, the Indenture Trustee or the Pass Through
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 such
Owner Participant (or the Owner Trustee, the Indenture Trustee or the Pass
Through Trustee, as the case may be).
Section 7.09. Original Loan Participants' and Pass Through Trustee's
Representations and Warranties. (a) Each Original Loan Participant
represents and warrants that the representations and warranties made by it in
Sections 7.01(a) and 7.06 of the Original Participation Agreement were correct
on and as of the Delivery Date (except to the extent such representations
expressly related solely to a specified earlier date, in which case such
representations and warranties were correct on and as of such earlier date).
(b) The Pass Through Trustee, in its individual capacity (except
with respect to clause (iii) below), represents and warrants as of the date
hereof (except as otherwise provided), as of the Pass Through Closing Date and
as of the Refunding Date 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 the Pass Through Agreement, the Series
Supplements and this Agreement and to execute and authenticate the Pass
Through Certificates to be delivered on the Pass Through Closing Date;
(ii) the execution, delivery and performance of this Agreement, the
Pass Through Agreement and the Series Supplements and the performance of
its obligations hereunder and thereunder (including the execution and
authentication of the Pass Through Certificates to be delivered on the
Pass Through Closing Date) have been fully 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 violate any
Federal or New York 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 bylaws 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; and
(iii) each of this Agreement and the Pass Through Agreement has
been, and as of the Pass Through Closing Date the Series Supplements
will be, duly executed and delivered by it (in its individual and trust
capacities) 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 (in its individual and trust capacities), enforceable in
accordance with its respective terms except as 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 (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 7.10. Survival of Representations, Warranties and Covenants.
The representations, warranties and covenants of the Owner Participant, the
Owner Trustee (in its individual or trust capacity), the Pass Through Trustee
(in its individual or trust capacity) and the Indenture Trustee (in its
individual or trust capacity) provided for in this Article 7, and their
respective obligations under any and all of them, shall survive the Closings
and the expiration or other termination of this Agreement, and the other
Operative Agreements.
Section 7.11. Lessee's Assumption of the Certificates. (a) 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 and to purchase the Aircraft
pursuant to Section 4.02(a)(A), (D), (E) or (F) of the Lease, and so long
as no 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 attributable to the
Owner Trustee) but subject to the 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)(A), (D), (E) or (F) 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, and 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 7.11
releasing the Owner Participant and the Owner Trustee from all obligations
in respect of the Certificates, the Indenture, this Agreement and all other
Operative Agreements, except any obligations which shall have arisen (or
with respect to events which shall have occurred) prior to such assumption
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, Make-Whole Premium, if any,
interest and all other sums owing on all Outstanding Certificates (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
and the Holders, 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 hereunder and under the Lease;
(ii) the instrument referred to in paragraph (i) of this Section
7.11(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 (or the Lessee's substituted obligations) 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 7.11(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 of the
Certificates (or the Lessee's substituted obligations) referred to in
paragraph (ii) of this Section 7.11(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 Delivery
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 and expenses of counsel) of the Indenture Trustee, the Pass
Through Trustee, the Owner Trustee and the Owner Participant in connection
with such assumption.
Section 7.12. 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 shall not engage in any business or other activity other than the
transactions contemplated herein or in any other Operative Agreement and
all necessary or appropriate activity related thereto.
Section 7.13. Compliance with Trust Agreement, Etc. Each of the
Owner Participant, NBD and the Owner Trustee agrees with the Lessee, the
Indenture Trustee and the Pass Through Trustee that so long as the Lien of
the Indenture shall be in effect it will (i) comply with all of the terms
of the Trust Agreement applicable to it in its respective capacity, the
noncompliance with which would materially adversely affect any such party
and (ii) not 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 any such party without the prior written consent of
such party. The Owner Trustee confirms for the benefit of the Lessee, the
Indenture Trustee and the Pass Through Trustee that it will comply with the
provisions of Article 2 of the Trust Agreement. Notwithstanding anything
else to the contrary in the Trust Agreement, so long as the Lease remains
in effect, the Owner Participant agrees not to terminate or revoke the
trust created by the Trust Agreement without the consent of the Lessee. If
and so long as the Indenture shall not have been discharged the consent of
the Indenture Trustee shall also be required in connection with any such
termination or revocation and in addition, the Owner Participant will
promptly and duly execute and deliver to the 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 the Indenture Trustee may from
time to time reasonably request and furnish in order to protect the rights
and remedies created or intended to be created in favor of the Indenture
Trustee under the Indenture and to create for the benefit of the
Certificate Holders a valid first priority Lien with respect to, and a
first and prior perfected security interest in, the Trust Indenture Estate.
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 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 the
Lessor's Estate, Rent 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 relating to:
(i) the acquisition, financing, use or operation of the Aircraft;
(ii) payments under the Original Agreements and the Operative
Agreements;
(iii) the property, or the income or other proceeds received with
respect to the property after an Event of Default under the Lease, by the
Indenture Trustee under the Indenture;
(iv) otherwise with respect to or by reason of the transactions
described in or contemplated by the Original Agreements and the Operative
Agreements;
(v) the payment of the principal or interest or other amounts
payable with respect to the Original Loan Certificates or the
Certificates;
(vi) the Original Loan Certificates, the Certificates or the Pass
Through Certificates or the issuance, acquisition, or refinancing thereof
or the beneficial interests in the Lessor's Estate or the creation thereof
under the Trust Agreement; or
(vii) any assumption by the Lessee pursuant to Section 7.11 of this
Agreement and Section 2.12 of the Indenture.
(b) Exceptions. The indemnity provided for in Section 8.01(a) shall
not extend to any of the following:
(i) With respect to an Indemnitee other than an Original Loan
Participant, Taxes based upon, measured by or with respect to the net or
gross income, items of tax preference or minimum tax or excess profits,
net receipts, value-added taxes (in the nature of an income tax and not
in the nature of a sales, use or similar tax), capital, franchise, net
worth (whether denominated income, excise, capital stock, or doing
business taxes) (other than, in each case, rental, sales, use,
value-added (in the nature of a sales tax), consumption, ad valorem, stamp,
property, or similar taxes) ("Income Taxes"), provided that any such
gross income and gross receipts taxes and any such foreign taxes shall
not be excluded if such Taxes would not have been imposed absent the
location of the Aircraft, Airframe, any Engine or Part in, the presence,
operations or activities of the Lessee or user of the Aircraft,
Airframe, any Engine or Part in, or the making of payments from, such
jurisdiction, and provided further that income taxes on the Trust Estate
shall not be excluded under this paragraph (b)(i) if the Owner
Participant would not have been subject to such taxes in the absence of
the participation of Owner Trustee in the transaction;
(ii) With respect to an Original Loan Participant, Income Taxes
(other than in the case of a Non-U.S. Person, U.S. federal withholding
taxes on amounts payable with respect to such Holder's Loan Certificate)
except to the extent such Income Tax is imposed (including by way of
increase) by any jurisdiction in which the Indemnitee is subject to tax
(A) as a result of the operation, registration, location, presence,
basing or use of the Aircraft, Airframe, any Engine or any Part thereof,
in such jurisdiction (it being understood that (I) the incremental
Income Taxes described in this clause (A) shall not include any U.S.
Federal income taxes and (II) that to the extent such incremental Income
Taxes give rise to any incremental current Tax benefit in another tax
jurisdiction, that such incremental benefit shall offset and decrease
the incremental Income Taxes determined under this clause (A)) or (B)
solely as a result of the place of incorporation, principal office,
corporate domicile or the activities of the Lessor, Owner Participant,
the Owner Trustee, the Indenture Trustee, the Lessee or any sublessee in
such jurisdiction (it being understood that to the extent that any
Income Taxes described under this clause (B) give rise to any
incremental current Tax benefit in another tax jurisdiction or another
tax period, that such incremental Tax benefit shall offset and decrease
the Income Taxes determined under this clause (B)); provided, however,
that the provisions of this paragraph (b)(ii) relating to Income Taxes
shall not exclude from the indemnity described in Section 8.01(a) any
Income Taxes for which the Lessee would be required to indemnify an
Indemnitee (x) 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) pursuant to the last sentence of Section 8.02 of
this Agreement;
(iii) Taxes imposed with respect to the Aircraft and arising out
of or measured by acts, omissions, events or periods of time (or any
combination of the foregoing) which occur after the later of (A) 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 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 7.11 of this
Agreement), and (B) the earliest of (x) the expiration of the Term of
the Lease 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, provided that this exclusion (iii) shall not apply
in respect of any payment made after the dates set forth in clauses (A)
and (B) above or with respect to any event or circumstance occurring on,
with or prior to such return or transfer or period prior to such return
or transfer;
(iv) 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 Owner Trustee under the Indenture;
(v) 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);
(vi) 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 Delivery Date, 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 Lessor's Estate except, in each
case, Taxes following or as a result of the exercise of remedies or in
connection with the exercise by the Lessee of one of its options to
purchase other than at Fair Market Value (it being understood that any
disposition of the Aircraft or the Airframe, any Engine or Part as a
result of the substitution, replacement or modification thereof by the
Lessee or by reason of any action taken by the Lessee or any other user
of the Aircraft, Airframe or any Engine pursuant to Sections 7, 8, or 9
of the Lease shall not be treated as voluntary, and that in the event
that the Lessee exercises any of its purchase options at Fair Market
Value, the Lessee will, to the extent practicable, cooperate to ensure
delivery of the Aircraft in a jurisdiction where there are no sales,
transfer or similar Taxes to be imposed);
(vii) Taxes imposed on the Owner Participant for which
the Lessee is obligated to indemnify the Owner Participant pursuant to
the Tax Indemnity Agreement;
(viii) Taxes imposed on a successor, assign or other transferee
(including, without limitation, a transferee which is a new lending office
of an original Indemnitee) of any entity or Person which on the Refunding
Date is an Indemnitee (for purposes of this clause (viii), an "original
Indemnitee") or such original Indemnitee to the extent that such Taxes
exceed the amount of Taxes that would have been imposed (in the case of
an Original Loan Participant, immediately after giving effect to such
succession, assignment or other transfer) 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 applicable to it);
provided, however, that the exclusion provided by this clause (viii)
shall not apply in the case of a succession, assignment or other
transfer (1) while an Event of Default under the Lease or the Indenture
has occurred and is continuing; (2) required by any provision of the
Operative Agreements (other than pursuant to Section 7.02 hereof) or (3)
in the case of the Owner Participant or any of its Affiliates, to any
Tax other than an Income Tax;
(ix) As to any Original Loan Certificate Holder or Certificate
Holder, any U.S. federal withholding taxes imposed on the payment or
receipt of any amounts payable with respect to the Original Loan
Certificates of an Original Loan Certificate Holder or a Certificate of
a Certificate Holder, as the case may be, which is a Non-U.S. Person,
unless, in the case of an Original Loan Certificate Holder, such
Indemnitee (I) either (A) delivers to the Indenture Trustee and the
Lessor two Treasury Department Forms 4224 with respect to any and all
payments under the Loan Certificates, (B) delivers to the Indenture
Trustee and the Lessor a Treasury Department Form 1001 entitling such
Holder to a complete exemption from such U.S. withholding tax on
interest, or (C) delivers to Indenture Trustee and the Lessor a Treasury
Department Form W-8, in each case, evidencing such Indemnitee's partial
or complete exemption from United States withholding taxes, and (II)
executes and delivers to the Indenture Trustee and the Lessor additional
Treasury Department Forms 4224, 1001, or W-8 (or any successor forms),
as applicable in such manner and at such times as may be necessary to
evidence such exemption (unless and to the extent that, in the case of
any Loan Participant, such Indemnitee is not legally entitled to do so
as a result of a change in law or regulation enacted, adopted or
promulgated after the acquisition by it of its Loan Certificates) (in
the event that the Lessee assumes the debt, an Original Loan Participant
shall be deemed to have become such when it first acquired its Original
Loan Certificate); provided, however, that the provisions of this
paragraph (b)(viii) shall not apply to any withholding taxes for which
the Lessee would be required to indemnify an Original Loan Certificate
Holder 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;
(x) any Taxes which have been included in the Purchase Price
and which have been paid to the applicable taxing authorities;
(xi) 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;
(xii) any Taxes arising under or in connection with any prohibited
transaction, within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Code ("Prohibited Transaction"); provided, however,
that in the event Prohibited Transaction Exemption 89-88, appearing at
54 Fed. Reg. 42581 (1989), or any other comparable prohibited
transaction exemption, (individually or collectively, a "PTE") is not
valid or is not applicable in any respect to the purchase and holding of
the Pass Through Certificates, then the indemnity provided for in
Section 8.01(a) hereof shall extend to Taxes imposed on the Owner
Participant as the result of any Prohibited Transaction occurring with
respect to the purchase or holding of any Pass Through Certificate by an
employee benefit plan subject to Title I of ERISA or by a plan subject
to Section 4975 of the Code (individually or collectively, an "ERISA
Plan") with respect to which ERISA Plan the Owner Participant is a party
in interest, within the meaning of Section 3(14) of ERISA, or a
disqualified person, within the meaning of Section 4975 of the Code,
except, however, that such indemnity shall not extend to any Taxes
imposed on the Owner Participant as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificate (A) over which purchase or holding the Owner
Participant or any Affiliate thereof has discretion or control (other
than in the capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16)(B) of ERISA; and provided
further, however, that in the event the PTE is not valid or applicable
in any respect to the purchase and holding of the Pass Through
Certificates and the Lessee had failed to obtain from the manager or
co-manager of the underwriting syndicate of the Pass Through
Certificates a representation that such manager or co-manager has a PTE,
then the indemnity provided for in Section 8.01(a) hereof shall extend
to Taxes imposed on the Owner Participant as the result of any
Prohibited Transaction occurring with respect to the purchase or holding
of any Pass Through Certificate by an ERISA Plan with respect to which
the Owner Participant is a party in interest or a disqualified person,
except, however, that such indemnity shall not extend to Taxes resulting
from any Prohibited Transaction occurring with respect to the purchase
or holding of any Pass Through Certificates by an ERISA Plan with
respect to which the Owner Participant (or any Affiliate thereof) is a
"plan sponsor", within the meaning of Section 3(16)(B) of ERISA; and
(xiii) Taxes imposed by any jurisdiction that would have been imposed on
the Lessor or the Owner Participant for activities in such jurisdiction
unrelated to the transactions contemplated by the Operative Agreements
to the extent imposed on such unrelated activities.
(c) Withholding. The Pass Through Trustee shall withhold any Taxes
required to be withheld on payments to any holder of a Pass Through
Certificate who is a Non-U.S. Person except to the extent that such holder
of a Pass Through Certificate has furnished evidence to the Pass Through
Trustee sufficient under applicable law to entitle such holder of a Pass
Through Certificate to any exemption from or reduction in the rate of
withholding on interest claimed by such holder of a Pass Through
Certificate. 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 a Tax required to be withheld with respect to any Holder of a
Certificate or any holder of a Pass Through Certificate or any claim is
otherwise asserted by a taxing authority against the Owner Trustee or Owner
Participant or any of their Affiliates for any withholding tax, the Lessee
will indemnify the Owner Trustee and the Owner Participant and their
Affiliates (and the Indenture Trustee or the Pass Through Trustee, as the
case may be, in turn agrees to indemnify the Lessee) (without regard to
the exclusions set forth in Section 8.01(b) hereof) on an After-Tax Basis
against any such Taxes required to be withheld and any interest and
penalties with respect thereto, along with any other costs (including
reasonable attorney's fees) incurred in connection with any such claim.
The Indenture Trustee or the Pass Through Trustee, as the case may be, in
its individual capacity (and without recourse to the Trust Indenture
Estate), shall indemnify the Lessee on an After-Tax Basis for any payment
the Lessee shall have made pursuant to the preceding sentence.
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, provided that the calculation of any additional
amounts owing to any Indemnitee as a result of the Lessee's obligation to
indemnify on an After-Tax Basis shall be made without regard to the
exclusions set forth in Section 8.01(b). 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 promptly 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 under this Agreement, the Tax
Indemnity Agreement, the Original Agreements and any other Operative
Agreement, an amount equal to the lesser of (x) the sum of such permanent
tax benefit plus any other permanent 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, and (y) the amount of the payment made under Sections 8.01 and 8.02
by the Lessee to such Indemnitee plus the amount of any other payments by
the Lessee to such Indemnitee theretofore required to be made under
Sections 8.01 and 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 to such Indemnitee 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 (and without regard to
Section 8.01(b), except for clause (v) thereof) 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 subsequently disallowed
or reduced (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 and adversely impaired by the
failure to provide such notice or copy. 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 Lessor's Lien
on the Aircraft, Airframe or any Engine or any risk of 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 control the contest and 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; provided,
however, that if the Indemnitee determines in its sole discretion that such
participation will not adversely affect such Indemnitee's contest of any
Taxes not indemnified hereunder, the Lessee shall have the right to
participate in such contest, including, among other rights, the right to
attend governmental or judicial conferences (to the extent unrelated issues
are not discussed) concerning such claim and the right to be consulted in
good faith regarding all submissions to any governmental or other authority
insofar as they relate to the Tax for which indemnification is sought.
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 to pay and shall pay the Indemnitee on a
current basis all reasonable fees and expenses which such Indemnitee may
incur as a 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 acknowledgement 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, and (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 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
the Lessee and reasonably satisfactory to such Indemnitee ("Tax Counsel")
to the effect that a reasonable basis exists for contesting such claim,
(ii) such Indemnitee (and, if such Indemnitee is not the Owner Participant,
the Owner Participant and 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 circumstances or law has changed and, in light thereof,
there is substantial authority within the meaning of Section 6662(d) 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 (viii) the amount of the indemnity payments the
Lessee would be required to make with respect to such adjustment, when
aggregated with similar adjustments that could be raised in other taxable
years of such Indemnitee is at least $50,000; provided, that in the event
that such Indemnitee is not required under this paragraph to contest any
Tax liability for which the Lessee is obligated to indemnify any
Indemnitee, the Lessee may contest such Tax liability in the name of the
Lessee, if permitted by law.
The Indemnitee shall not appeal and shall not be required to permit
Lessee to appeal any judicial decision unless (i) it receives an opinion of
Tax Counsel, at the Lessee's sole expense, to the effect that Substantial
Authority exists for the Indemnitee's position and (ii) in the case of an
appeal to the U.S. Supreme Court, the amount of the proposed adjustment for
the Lessee's entire fleet exceeds $5,000,000.
Nothing contained in this Section 8.04 shall require any
Indemnitee to contest or continue to contest, or permit 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
Lessee of any amount that might otherwise be payable by 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
permanent 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 and (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
(in the case of any such tax benefit, without regard to Section 8.01(b)
hereof).
Section 8.06. Lessee's Reports. 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 Indemnitee 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 Indemnitee may reasonably require from the Lessee to
enable the Indemnitee 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
Indemnitee will provide such information reasonably available to it as the
Lessee may reasonably require from such Indemnitee 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; provided that in no event shall any Indemnitee be
required to provide copies of any of its tax returns. The Lessee shall
hold the Indemnitee harmless from and against any liabilities, including
penalties, additions to tax, fines and interest, imposed upon or incurred
by such Indemnitee 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 such
Indemnitee 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 federal, 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 Trustee or Owner Participant
is the owner of the Aircraft, the Airframe, any Engine or any Part or which
would otherwise be inconsistent with the terms of the Lease or the Tax
Indemnity Agreement 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, 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
of any part thereof, which Taxes are not the responsibility of Lessee with
respect to such Indemnitee, then such Indemnitee shall pay to Lessee within 30
days of Lessee's demand therefor an amount which equals the amount actually
paid by 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,
penalties, claims, actions, suits, costs, disbursements and expenses
(including legal fees and expenses (including, without limitation, the
allocated reasonable costs and expenses of in-house counsel to any Original
Loan Participant) and all costs and expenses relating to amendments,
supplements, adjustments, consents, refinancings and waivers under the
Operative Agreements and the Original Agreements except as otherwise provided
in Section 10.01(d)(i) or Section 15 hereof) of every kind and nature (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) the Original Agreements, this Agreement, the Lease, the
Indenture, the Trust Agreement, the Pass Through Trust Agreement, AVSA's
FAA Bill of Sale, AVSA's Warranty Bill of Sale or any other Operative
Agreement or any other document entered into in connection herewith or any
sublease or transfer 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, sale, return, purchase, acceptance,
rejection, delivery, non-delivery, condition, repair, modification,
servicing, rebuilding, airworthiness, registration, reregistration, import,
export, performance, non-performance, lease, sublease, transfer,
merchantability, fitness for use, alteration, substitution or replacement
of any Airframe, Engine, or Part under the Lease, the Purchase Agreement,
the Purchase Agreement Assignment, the GTA or the Engine Warranty
Assignment or other transfer of use or possession, or other disposition 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 Original Agreements, or the falsity or inaccuracy of any representation
or warranty of the Lessee in any of the Operative Agreements or the
Original Agreements (other than representations and warranties in the Tax
Indemnity Agreement);
(v) the enforcement of the terms of the Operative Agreements
or the Original 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 any Original Loan Certificate, or any
refunding or refinancing thereof, or interest in the Lessor's Estate or
the Trust Agreement or the Original Trust Agreement or any similar
interest or in any way relating to or arising out of the Trust Agreement
or the Original Trust Agreement and the Lessor's Estate, the Indenture
or the Original Indenture or the Trust Indenture Estate (including,
without limitation, any claim arising out of the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, 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 or Indenture Trustee as trustees, in the manner
contemplated by this Agreement, the Original Participation Agreement,
the Indenture, the Original Indenture, the Indenture and Security
Agreement Supplement, the Trust Agreement or the Original Trust
Agreement and in the case of the Owner Participant, its obligations
arising under Section 6.01 of the Trust Agreement or the Original 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 Agreements and Original Agreements), 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 to the extent it:
(i) would not have occurred but for the willful misconduct or
gross negligence of such Indemnitee;
(ii) in respect of the Aircraft, is attributable to
acts or events which occur after the Aircraft is no longer part of the
Lessor's Estate or leased under the Lease or, if the Aircraft remains a
part of the Lessor's Estate, after the expiration of the Term (other
than 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 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, the other Operative Agreements or the
Original Agreements;
(iii) 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;
(iv) is a cost or expense required to be paid by the Owner
Participant or its permitted transferees (and not by the Lessee)
pursuant to this Agreement or any other Operative Agreement (other than
the Owner Participant's obligations under Section 6.01 of the Trust
Agreement) and for which the Lessee is not otherwise obligated to
reimburse the Owner Participant, directly or indirectly;
(v) 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 required to be observed and performed by it, in this
Agreement, the Purchase Agreement Assignment, the Lease, the Indenture,
the Trust Agreement, the Original Agreements 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) is a payment required to be made by the Owner Participant
pursuant to Section 2.01(b) hereof, but nothing contained in this
Section 9.01(b)(vi) shall be deemed or construed to limit the
obligations of the Lessee to the Indenture Trustee and Holders of the
Certificates pursuant to Section 3.05 of the Lease;
(vii) is, 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) is, in the case of the Owner Participant or the Owner
Trustee, attributable to the offer or sale by such Indemnitee after the
Delivery 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) in connection with a Refinancing or (y) as a
result of exercise of remedies under Section 17 of the Lease; and
(ix) is incurred under or in connection with any prohibited
transaction, within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Code ("Prohibited Transaction"); provided, however,
that in the event Prohibited Transaction Exemption 89-88, appearing at
54 Fed. Reg. 42581 (1989), or any other comparable prohibited
transaction exemption, (individually or collectively, a "PTE") is not
valid or is not applicable in any respect to the purchase and holding of
the Pass Through Certificates, then the indemnity provided for in
Section 9.01(a) hereof shall extend to any Expense incurred by the Owner
Participant as the result of any Prohibited Transaction occurring with
respect to the purchase or holding of any Pass Through Certificate by an
employee benefit plan subject to Title I of ERISA or by a plan subject
to Section 4975 of the Code (individually or collectively, an "ERISA
Plan") with respect to which the Owner Participant is a party in
interest, within the meaning of Section 3(14) of ERISA, or a
disqualified person, within the meaning of Section 4975 of the Code,
except, however, that such indemnity shall not extend to any Expense
incurred by the Owner Participant as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificate (A) over which purchase or holding the Owner
Participant (or any Affiliate thereof) has discretion or control (other
than in the capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16)(B) of ERISA; and provided
further, however, that in the event the PTE is not valid or applicable
in any respect to the purchase and holding of the Pass Through
Certificates and the Lessee had failed to obtain from the manager or
co-manager of the underwriting syndicate of the Pass Through
Certificates a representation that such manager or co-manager has a PTE,
then the indemnity provided for in Section 9.01(a) hereof shall extend
to any Expense incurred by the Owner Participant as the result of any
Prohibited Transaction occurring with respect to the purchase or holding
of any Pass Through Certificate by an ERISA Plan with respect to which
the Owner Participant is a party in interest or a disqualified person,
except, however, that such indemnity shall not extend to any Expense
incurred by the Owner Participant as a result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificates by an ERISA Plan with respect to which the
Owner Participant (or any Affiliate thereof) is a "plan sponsor", within
the meaning of Section 3(16)(B) of ERISA.
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 under this Agreement, the Original Agreements, the Tax Indemnity
Agreement and any other Operative Agreement, an amount equal to the lesser
of (x) the sum of such Tax benefit plus any other permanent 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 to such Indemnitee pursuant to this Section 9.02),
it being intended that no Indemnitee should realize a net Tax benefit
pursuant to this Section 9.02 unless the Lessee shall first have been made
whole for any payments by it to such Indemnitee 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 without regard to Section 8.01(b)
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
(with respect to such Indemnitee) 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, but without regard to Section 8.01(b)
hereof, other than Section 8.01(b)(v) hereof.
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 its 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 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 obligation to indemnify such Indemnitee hereunder in respect of
such claim, defend any such claim covered by insurance for which
indemnification is sought pursuant to this Article 9 and each Indemnitee
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, to the
extent 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 such Indemnitee waives its right to be
indemnified under this Article 9 with respect to such claim. The Lessee
shall not enter into any settlement or compromise which the Lessee has not
agreed to discharge or with respect to which the Lessee has not agreed to
indemnify such Indemnitee to such Indemnitee's satisfaction.
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 Purchase
Agreement Assignment, the Engine Warranty Assignment, the Lease and the
other Operative Agreements but, as to such indemnities, only with respect
to losses, liabilities, obligations, damages, penalties, claims, actions,
suits, costs, Expenses and disbursements caused by events occurring or
existing (or fairly attributable to the Lessee's acts or omissions) 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 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
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs. (a)
Transaction Costs. The Owner Participant shall pay (or reimburse the
Lessee if the Lessee shall have previously made such payment), in addition
to those items set forth in Section 10.01(a) of the Original Participation
Agreement (other than clause (vi) thereof) all fees and expenses of the
following persons relating to the public offering of the Pass Through
Certificates contemplated by the Underwriting Agreement and related to the
transactions contemplated hereby: (i) the fees and expenses of counsel for
the Owner Participant; (ii) the fees and expenses of the transaction
documentation counsel and counsel for the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee, the Original Loan Participants and the
Underwriters (other than those fees, expenses and disbursements payable by
the Underwriters pursuant to the Underwriting Agreement); (iii) the fees
and expenses of Daugherty, Fowler & Peregrin; (iv) any initial fees and
expenses of the Pass Through Trustee and the fees and expenses of the Owner
Trustee and the Indenture Trustee; (v) any compensation, commissions and
discounts payable to the Underwriters pursuant to the Underwriting
Agreement; (vi) the fees, if any, incurred in printing the Pass Through
Certificates; (vii) the fees and expenses incurred in connection with
printing any amendment to the Registration Statement on Form S-3 bearing
Registration No. 33-56569, printing any Preliminary Prospectus or
Prospectus (as such terms are defined in the Underwriting Agreement) for
the offering of the Pass Through Certificates; (viii) the fees and
expenses of Arthur Andersen & Co.; (ix) the fees and expenses of Moody's
and S&P; and (x) the fees and expenses of First Chicago Leasing
Corporation. The fees and expenses described in clauses (ii) through (x)
of this paragraph shall be allocable to the Owner Participant under this
Agreement (1) to the extent incurred specifically with respect to the Owner
Participant or the refunding of the Original Loan Certificates, and (2) to
the extent such fees and expenses are incurred but are not specifically
attributable to the Owner Participant or the refunding of the Original Loan
Certificates, in the proportion that the principal amount of the
Certificates bears to the total amount of the Pass Through Certificates.
The Owner Participant, the Owner Trustee and the Lessee
acknowledge that the percentages for Interim Rent, Basic Rent, Stipulated
Loss Value and Termination Value set forth in the Lease have been prepared
assuming the aggregate amount payable by the Owner Participant pursuant to
the preceding paragraph and Section 10.01 of the Original Participation
Agreement is 1.48% of the Purchase Price (the "Estimated Expense Amount").
(b) Continuing Expenses. The continuing fees, expenses and
disbursements (including reasonable counsel fees and expenses) of the
entity acting as Owner Trustee, as lessor under the Lease and as Owner
Trustee under the Trust Agreement with respect to the administration of the
Lease and the Lessor's Estate 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
Indenture Trustee, as trustee under the Indenture with respect to the
administration of the Trust Indenture Estate and the continuing fees,
expenses and disbursements (including reasonable counsel fees and initial
fees relating to the establishment of a replacement trustee) of the Pass
Through Trustee shall be paid as Supplemental Rent by the Lessee, including
without limitation any amounts payable to the Indenture Trustee or on
account of requests by the Indenture Trustee for indemnification under
Article XI of the Indenture.
(c) 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 (a) any Default or Event of
Default and any enforcement or collection proceedings resulting
therefrom, or (b) the enforcement of the obligations of the Lessee
hereunder or under the other Operative Agreements, including, without
limitation, the entering into or giving or withholding of any amendments
or supplements or waivers or consents, including without limitation, any
amendment, supplement, waiver 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 or (c) any amendment, supplement, waiver or consent (whether
or not entered into) under the Original Agreements, this Agreement, the
Lease, the Indenture, the Certificates, the Tax Indemnity Agreement, the
Purchase Agreement Assignment or any other Operative Agreement 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 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 in connection
with the offer, sale or other transfer (whether pursuant to Section
7.03(d) hereof or otherwise) by the Owner Participant or the Owner
Trustee after the Refunding Date of any interest in the Aircraft, the
Lessor's Estate or the Trust Agreement or any similar interest (and the
Owner Participant shall be responsible for all such fees and expenses),
unless such offer, sale or transfer shall occur (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 the Lessee pursuant
to Section 4.02 or Article 10 of the Lease; 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, and a successor Owner
Trustee may be appointed and a Person may become Owner Trustee under the Trust
Agreement only in accordance with the provisions of Section 3.11 of the Trust
Agreement and the provisions 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 or a bank or trust company fully guaranteed by a
direct or indirect parent thereof having a combined capital, surplus and
undivided profits of at least $100,000,000;
(iii) Such appointment shall not violate any provisions of the
Transportation Code 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 Transportation Code 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;
(iv) Such successor Owner Trustee shall enter into an agreement
or agreements, in form and substance reasonably 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 Supplement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, the Indenture, the Indenture Supplement and
any other Operative Agreement to which the Owner Trustee is 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); and
(v) All filings of Uniform Commercial Code financing and
continuation statements, filings in accordance with the Transportation
Code and amendments thereto shall be made and all further actions taken
in connection with such appointment as may be necessary in connection
with maintaining the validity, perfection and priority of the Lien of
the Indenture and the valid and continued registration of the Aircraft
in accordance with the Transportation Code.
(c) Appointment. For so long as the Aircraft remains registered
under the Transportation Code, the Owner Participant agrees to appoint
promptly a successor Owner Trustee meeting the requirements of Section
11.01(b) hereof in the event the Owner Participant has knowledge that the
Owner Trustee at any time shall not be a Citizen of the United States.
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
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
Trust Agreement, the Tax Indemnity Agreement 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, the Purchase
Agreement Assignment, the Engine Warranty Assignment, any other Operative
Agreement, any Original 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 Holders of Certificates. A Holder of
a Certificate shall have no further interest in, or other right with
respect to, the Trust Indenture Estate when and if the principal and
interest on all Certificates held by such Holder and all other sums payable
to such Holder under this Agreement, under the Indenture and under such
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 each of the
Trust 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 Indenture or the Certificates, except that prior to the
occurrence and continuance of an Event of Default, no section of the
Indenture or the Trust Agreement shall be amended or modified in any manner
which materially adversely affects the Lessee 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.
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 Event of 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.
Section 13.03. No Retroactive Application. This Agreement, the
Lease, the Indenture and the Trust Agreement each amend and restate, and the
Tax Indemnity Agreement amends, the respective original agreements with no
intention of retroactive application. The applicable original agreements have
been restated for the convenience of the parties and such amendments and
restatements, and such amendment in the case of the Tax Indemnity Agreement,
are not intended to waive or modify the obligations of any party which accrued
or were to have been performed on or prior to the Refunding Date under such
unamended agreements (or, in the case of this Agreement, the effective date
hereof) or to deprive any party of its rights and remedies in respect thereof.
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 (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 mail and (c) if given by
FedEx service (or, if a Default or Event of Default shall have occurred and
be continuing, by other comparable courier service), when received or
personally delivered, addressed:
(a) If to the Lessee, to its office at 2007 Corporate Avenue,
Memphis, Tennessee 38132, Attention: Vice President and Treasurer with a
copy to Senior Vice President and General Counsel at 1980 Nonconnah Drive,
Memphis, Tennessee 38132, telephone (901) 395-3388, facsimile (901)
395-4758; or to such other address as the Lessee shall from time to time
designate in writing to the Lessor, the Indenture Trustee and the Owner
Participant;
(b) If to the Lessor or the Owner Trustee, to its office at 611
Woodward Avenue, Detroit, Michigan 48226, Attention: Corporate Trust
Administration Department, telephone (313) 225-3185, facsimile (313)
225-3420; or to such other address as Lessor shall from time to time
designate in writing to the Lessee and the Indenture Trustee, with a copy
to Owner Participant;
(c) If to the Owner Participant, to its office at c/o NationsBanc
Lease Investments, Inc., NationsBank Corporate Center, NC 1007-12-01, 100
North Tryon Street, Charlotte, North Carolina 28255-0001, Attention:
Manager of Lease Administration, telephone (704) 386-8990, facsimile (704)
386-0892; or to such other address as the Owner Participant may from time
to time designate in writing to the Lessee and the Indenture Trustee; and
(d) If to the Indenture Trustee or the Pass Through Trustee, to its
office at 4 Chase Metrotech Center, Brooklyn, New York 11245, Attention:
Corporate Trust Administration, telephone (718) 242-5854, facsimile (718)
242-3529; or to such other address as the Indenture Trustee or the Pass
Through Trustee, as the case may be, shall from time to time designate in
writing to the Lessor, the Lessee, the Indenture Trustee and the Pass
Through Trustee.
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing. (a) Subject to the terms and
conditions of this Section 15.01, the Lessee may request the Owner
Participant to participate in up to three refinancings (including the
refinancing contemplated by this Agreement on the Refunding Date), in whole
but not in part, of the Certificates prior to the end of the Basic Term (a
"Refinancing"), provided, that, except in connection with the Refinancing
contemplated by this Agreement on the Refunding Date, such Refinancing may
not occur prior to the fifth anniversary of the Refunding Date. Such
Refinancings may be placed in either the private or public markets and
shall be denominated in United States dollars (or in any other foreign
currency so long as there is no foreign currency risk to the Owner
Participant), and shall be on terms that do not materially adversely affect
the Owner Participant. The Owner Participant agrees to negotiate promptly
in good faith to conclude an agreement with the Lessee as to the terms of
any such Refinancing transaction (including the terms of any debt to be
issued in connection with such refinancing and the documentation to be
executed in connection therewith). Without the prior written consent of
the Owner Participant, the prospectus and other offering materials relating
to any Refinancing in the form of a public offering shall not identify the
Owner Participant and shall not include any financial statements of the
Owner Participant or any Affiliate thereof. In connection with any such
Refinancing in the form of a public offering, the Lessee shall indemnify
the Owner Participant for any liabilities under federal, state or foreign
securities laws resulting from such offering. The aggregate principal
amount of the new Certificates issued in connection with each Refinancing
shall be the same as the aggregate principal amount outstanding on the
Certificates being refinanced.
(b) Notwithstanding anything herein to the contrary, no
Refinancing will be permitted unless the Owner Participant shall have
received at least 10 Business Days' prior written notice of the closing
date of such Refinancing, the Owner Participant shall have been provided
such longer period required for a reasonable opportunity to review the
relevant documentation and the Owner Participant shall have determined in
good faith that neither it nor the Owner Trustee shall suffer any loss or
expense or bear any increased risk as a result of such Refinancing
(including, without limitation, any risk with respect to taxes or other
adverse consequences to the Owner Participant including the application of
Revenue Procedures 75-21 and 75-28 and Section 467 of the Code) for which
it has not been or will not have been indemnified by the Lessee in a manner
reasonably satisfactory to the Owner Participant.
Prior to the consummation of any Refinancing pursuant to this
Section 15.01, the Owner Participant and the Lessee shall agree upon a
schedule setting forth each installment of Interim Rent, Basic Rent,
Stipulated Loss Values, Termination Values and EBO Price payable pursuant
to the Lease as a result of the Refinancing in accordance with Section 3.04
of the Lease, and thereafter the amounts set forth in such schedule shall
become the amounts payable under the Lease. Upon the consummation of the
Refinancing, the evidence of indebtedness issued pursuant to the
Refinancing shall be considered "Certificates" for purposes of this
Agreement, the Lease and the Indenture.
(c) Notwithstanding the foregoing, the Owner Participant shall
have no obligation to proceed with any Refinancing transaction as
contemplated by this Section 15.01 unless the Lessee indemnifies the Owner
Trustee and the Owner Participant by agreement in form and substance
satisfactory to each of them, for any liability, obligation (other than the
obligation to pay principal and interest in respect of the refinanced
indebtedness), cost or expense (including, without limitation, reasonable
attorneys' fees and Make-Whole Premium and any other premiums or amounts
due under the Indenture), including any adverse tax consequences or impact,
related to or arising out of any such Refinancing transaction, except to
the extent of amounts included in Transaction Costs and payable by the
Owner Participant as provided in Article 10 hereof.
(d) Each party agrees to take or cause to be taken all requested
action, including, without limitation, the execution and delivery of any
documents and instruments, including, without limitation, amendments or
supplements to the Lease, which may be reasonably necessary or desirable to
effect such Refinancing, including, in the case of the Owner Participant,
direction to the Owner Trustee by the Owner Participant to prepay the
Certificates then outstanding; provided, however, that such Refinancing
shall be subject to the satisfaction of each of the following conditions:
(i) Payment of principal, accrued interest, Make-Whole Premium
and Breakage Costs, if any, and all other sums due and owing on the
Certificates payable under the Indenture;
(ii) Payment in full of all other amounts then due and owing by
the Lessee under this Agreement, the Indenture, the Lease, the Trust
Agreement, and the Certificates then outstanding shall have been made by
the Lessee;
(iii) Such party shall have received such opinions of counsel
(including, without limitation, an opinion received by the Owner
Participant from independent tax counsel reasonably satisfactory to the
Lessee that such Refinancing shall not result in any adverse tax
consequences to such Owner Participant, unless the Lessee shall have
agreed to provide an indemnity in respect thereof reasonably
satisfactory in form and substance to the Owner Participant),
certificates and other documents as it may reasonably request, each in
form and substance reasonably satisfactory to such party;
(iv) All authorizations, approvals and consents which in the
reasonable judgment of the Owner Participant are necessary for such
Refinancing shall have been obtained;
(v) The Lessee shall have provided or agreed to provide to the
Owner Participant, as Supplemental Rent under the Lease, sufficient
funds to pay any Breakage Costs, Make-Whole Premium and any other
amounts due under the Indenture;
(vi) The satisfaction or waiver by each other party to this
Agreement of the conditions set forth in this Section 15.01 to such
party's obligations under this Section 15.01;
(vii) No Event of Default shall have occurred and be continuing
or would occur immediately after giving effect to such Refinancing;
(viii) Except in the case of the Refinancing contemplated by this
Agreement or the Refunding Date, the Indenture Trustee shall have
received no later than the Business Day next preceding the day 15 days
prior to the effective date of such Refinancing irrevocable notice of
such Refinancing; and
(viii) The Indenture Trustee shall have received no later than the
Business Day next preceding the day 15 days prior to the effective date
of such Refinancing irrevocable notice of such Refinancing; and
(ix) In the event the Lessee shall not prohibit the purchase of the
Refinancing loan certificates by, or with the assets of, an employee
benefit plan, as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA or a plan, which is subject to Section 4975(c) of the
Code, (individually or collectively, an "ERISA Plan"), the Lessee will
permit the placement of the Refinancing loan certificates with an ERISA
Plan only if either (A) if such placement is in the form of pass through
certificates, the sole underwriter or the manager or co-manager of the
underwriting syndicate or the selling or placement agent of the
Refinancing loan certificates represents to the Lessee that it has a
prohibited transaction exemption from the U.S. Department of Labor with
respect to pass through certificates (such as Prohibited Transaction
Exemption 90-24 or any other comparable exemption) or (B) purchasers of
the Refinancing loan certificates provide a representation regarding
their source of funds used in acquiring the Refinancing loan
certificates and, if such purchasers represent that they are using funds
of an ERISA Plan in acquiring the Refinancing loan certificates, such
purchasers further represent that either a prohibited transaction
exemption from the U.S. Department of Labor is available with respect
to their purchase and holding of the Refinancing loan certificates or
that their purchase and holding of the Refinancing loan certificates
will not constitute a prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code. The reliance on any such exemption will
not be conditional on the Owner Participant's representation concerning
its party in interest or other status with respect to ERISA Plans. If
neither exemption referred to in clause (A) or (B) of this paragraph
(viii) is valid or applicable in any respect to the purchase and holding
of the Refinancing loan certificates, or if the representation in clause
(B) of this paragraph (viii) that such purchase and holding will not
constitute a prohibited transaction is not correct, whichever is
applicable then the Lessee shall indemnify the Owner Participant
pursuant to, and to the extent provided for, under Sections 8 and 9
hereof for Taxes and Expenses 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 placement of the
Refinancing loan certificates with, or the holding of the Refinancing
loan certificates by, any ERISA Plan with respect to which the Owner
Participant is a party in interest, within the meaning of Section 3(14)
of ERISA, or a disqualified person, within the meaning of Section 4975
of the Code.
Section 15.02. Reoptimization. (a) If a Change in Tax Rate
occurs prior to the end of the Basic Term, then, subject to the terms and
conditions of this Section 15.02 and Section 3.04 of the Lease, the Owner
Participant may, upon 30 days' prior notice to the Lessee, the Indenture
Trustee, the Owner Trustee and the Holders, elect to modify the schedule of
payments of principal of the certificates issued ("Refinancing
Certificates") in connection with any Refinancing effected after the
Refunding Date using private debt (not including debt issued pursuant to an
exemption from registration under the Securities Act relying on Rule 144A
promulgated thereunder but otherwise marketed in a manner substantially
similar to securities registered under the Securities Act, and not
including debt issued in connection with any offering of securities
registered under the Securities Act) due on each remaining Rent Payment
Date on or commencing on the Rent Payment Date next succeeding the date
mutually agreed to by the Owner Participant, the Lessee and the Indenture
Trustee on which the Owner Participant shall make such modification (the
"Reoptimization Date"). Promptly after making such modification, the Owner
Participant shall furnish each party hereto written notice of the amounts
so recalculated.
(b) Adjustments to Refinancing Certificates. On the
Reoptimization Date, subject to the satisfaction on or before the
Reoptimization Date of the conditions set forth in Section 15.02(c), the
Owner Trustee will issue and deliver and the Indenture Trustee will
authenticate, and each holder of a Refinancing Certificate will accept
delivery of, a new Refinancing Certificate or Refinancing Certificates (in
replacement of each Refinancing Certificate then held by such holder, which
Refinancing Certificates shall be surrendered to the Indenture Trustee for
cancellation) containing such changed principal installments (expressed as
a percentage of the original principal amount of such Refinancing
Certificate) as shall have been recalculated by the Owner Participant, but
in the same principal amount as, and containing terms identical to, except
as otherwise contemplated by Section 15.02(d) hereof, the Refinancing
Certificates originally issued in connection with the Operative Agreements.
(c) Conditions to the Obligations of the Holders of the
Refinancing Certificates on the Reoptimization Date. The obligation of
each holder of a Refinancing Certificate to accept delivery of a new
Refinancing Certificate on the Reoptimization Date, and to surrender on
such Reoptimization Date any Refinancing Certificate then held by it, is
subject to the following conditions precedent having been satisfied on or
before the Reoptimization Date:
(i) the requirements of Section 15.02(d) hereof shall have been
satisfied;
(ii) the following documents, in form and substance satisfactory to
such Holder, shall have been duly authorized, executed and delivered by
the party or parties thereto and shall be in full force and effect: (A)
if the payments of Basic Rent, Stipulated Loss Values and Termination
Values with respect to the Term have been changed, an amendment to the
Lease, dated the Reoptimization Date, (B) an amendment to the Indenture
setting forth any changed repayment schedule to the Refinancing
Certificates, dated the Reoptimization Date and (C) replacement
Refinancing Certificates; and
(iii) in connection with any Reoptimization the Owner Participant
shall pay or agree to pay all reasonable costs and expenses incurred by
the Lessee, the Owner Trustee, the Indenture Trustee and each Holder of
a Refinancing Certificate (including, without limitation, reasonable
legal fees and expenses) in connection with any such reoptimization.
(d) Payment Schedules. Except as otherwise provided in this
Section 15.02 as long as the Refinancing Certificates remain outstanding,
the payment schedules for the Refinancing Certificates shall not be
modified.
ARTICLE 16
[INTENTIONALLY LEFT BLANK]
ARTICLE 17
MISCELLANEOUS
Section 17.01. 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 it is the intent of the parties for
Federal, state, local and foreign income tax purposes that the Owner
Participant will be treated as the owner of the Aircraft and the Lessee
will be treated as the lessee of the Aircraft.
Section 17.02. [Intentionally Left Blank.]
Section 17.03. 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 17.04. 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 and executed by the Owner Trustee and the
Indenture Trustee. A copy of each such termination, amendment, supplement,
waiver or modification shall also be delivered to each other party to this
Agreement other than the Original Loan Participants.
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 an 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 17.05. 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 17.06. 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 permitted assigns, the Owner Participant and
its successors and permitted assigns, the Owner Trustee and its successors
as Owner Trustee (and any additional owner trustee appointed) under the
Trust Agreement, the Indenture Trustee and its successors as Indenture
Trustee (and any additional indenture trustee appointed) under the
Indenture and the Pass Through Trustee and its successors as Pass Through
Trustee (and any additional pass through trustee appointed).
Section 17.07. Concerning the Owner Trustee, the Pass Through
Trustee and the Indenture Trustee. Each of NBD and Chase is entering into
this Agreement solely in their respective capacities (except to the extent
otherwise expressly indicated), in the case of NBD, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, in the case
of Chase (except insofar as it is acting as a Loan Participant or Agent),
not in its individual capacity but solely as Indenture Trustee under the
Indenture and as Pass Through Trustee under the Pass Through Agreement, and
except as otherwise expressly provided in this Agreement or in the Lease,
the Indenture, the Pass Through Agreement or the Trust Agreement, neither
NBD, nor Chase, shall be personally liable for or on account of its
statements, representations, warranties, covenants or obligations under
this Agreement; provided, however, that each of NBD and Chase 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 (a) its own gross negligence or willful misconduct (whether in
its capacity as trustee or in its individual capacity), (b) any breach of
representations and warranties or any breach of covenants made in its
individual capacity pursuant to or in connection with this Agreement or the
other Operative Agreements to which it is a party, (c) any breach, in the
case of the Owner Trustee, of its covenants made in its individual capacity
in Sections 3.05 and 3.08 of the Indenture, (d) the failure to use ordinary
care in receiving, handling and disbursing funds, (e) in the case of the
Owner Trustee, Lessor's Liens attributable to it in its individual
capacity, (f) in the case of the Indenture Trustee, Indenture Trustee's
Liens and (g) taxes, fees or other charges on, or based on, or measured by,
any fees, commissions or compensation received by it in connection with the
transactions contemplated by the Operative Agreements.
Section 17.08. 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 17.09. 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 to this Agreement
shall in each instance obtain the prior written approval of each other
party to this Agreement concerning the exact text and timing of news
releases, articles and other information releases to the public media
concerning any Operative Agreements.
Section 17.10. Certain Limitations on Reorganization. The
Indenture Trustee agrees that, if (i) the Lessor's Estate or the trust
created by the Trust Agreement becomes a debtor subject to the
reorganization provisions of the Bankruptcy Code or any other applicable
bankruptcy or insolvency statutes, (ii) pursuant to such reorganization
provision, the Owner Participant is held to have recourse liability to the
debtor or the trustee of the debtor directly or indirectly on account of
any amount payable as principal, interest or premium on the Certificates,
and (iii) the Indenture Trustee actually receives any Recourse Amount which
reflects any payment by the Owner Participant on account of (ii) above,
then the Indenture Trustee, as the case may be, shall promptly refund to
the Owner Participant such Recourse Amount. For purposes of this Section
17.10, "Recourse Amount" means the amount by which the portion of such
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 Section shall prevent the Indenture Trustee from enforcing any
individual obligation (and retaining the proceeds thereof) of the Owner
Participant under this Agreement or any other Operative Agreement to the
extent herein or therein provided, for which the Owner Participant has
expressly agreed by the terms of this Agreement to accept individual
responsibility.
Section 17.11. 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 ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS AND
IS BEING DELIVERED IN NEW YORK.
Section 17.12. Section 1110 Compliance. The Owner Participant,
the Indenture Trustee and the Lessee agree that the transactions
contemplated by the Operative Agreements are expressly intended to be,
shall be and should be construed so as to be entitled to the benefits and
protection of Section 1110 of the Bankruptcy Code.
ARTICLE 18
CONFIDENTIALITY
Section 18.01. 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, (iii) to bank examiners, auditors, insurance regulators,
accountants or similar regulatory authorities, (iv) 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, (v) to a subsidiary or Affiliate of the parties hereto, (vi) 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 18.01 or (vii) in the case of the Owner
Participant or the Owner Trustee (in its individual or trust capacity) to
the Owner Trustee (in its individual or trust capacity) or to the Owner
Participant, as the case may be.
IN WITNESS WHEREOF, the parties have caused this Participation
Agreement to be executed by their respective, duly authorized officers and
this Participation Agreement shall be effective this ___ day of October,
1995.
LESSEE:
FEDERAL EXPRESS CORPORATION
By:__________________________________________
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director - Structured
Finance
OWNER PARTICIPANT:
NATIONSBANK, N.A.
By:_____________________________________
Name:
Title:
OWNER TRUSTEE:
NBD BANK, not in its individual capacity
except as otherwise expressly provided
herein, but solely as Owner Trustee
By:_____________________________________
Name:
Title:
INDENTURE TRUSTEE:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), not in its individual
capacity except as otherwise expressly
provided herein, but solely as Indenture
Trustee
By:_____________________________________
Name:
Title:
PASS THROUGH TRUSTEE:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), not in its individual
capacity except as otherwise expressly
provided herein, but solely as Pass
Through Trustee
By:_____________________________________
Name:
Title:
ORIGINAL LOAN PARTICIPANTS:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as a Loan Participant and as
Agent
By:_____________________________________
Name:
Title:
BANK OF AMERICA NT & SA
By:_____________________________________
Name:
Title:
CIBC INC.
By:_____________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:_____________________________________
Name:
Title:
SCHEDULE I
CERTIFICATE INFORMATION
1. Federal Express Corporation Pass Through Trust, 1995-B1 Federal Express
Corporation Trust No. N661FE
--------------------------------
Interest Rate: 6.05%
Maturity: March 19, 1996
Principal Amount: $0
2. Federal Express Corporation Pass Through Trust, 1995-B2 Federal Express
Corporation Trust No. N661FE
--------------------------------
Interest Rate: 7.11%
Maturity: January 2, 2014
Principal Amount: $44,715,000
3. Federal Express Corporation Pass Through Trust, 1995-B3 Federal Express
Corporation Trust No. N661FE
--------------------------------
Interest Rate: 7.58%
Maturity: January 2, 2019
Principal Amount: $18,089,000
SCHEDULE II
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in
an Operative Agreement or the context thereof shall otherwise require. In
the case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to
agreements shall be deemed to mean and include such agreements as amended
and supplemented from time to time, and (ii) references to parties to
agreements shall be deemed to include the successors and permitted assigns
of such parties.
DEFINED TERMS:
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 other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise. In no event shall the Owner
Trustee or the Lessor be deemed an Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or
deemed to have been received by a Person (the "Original Payment") shall be
supplemented by a further payment to such Person so that the sum of the two
payments shall be equal to the Original Payment, after taking into account
(x) all Taxes that would result from the receipt or accrual of such
payments and (y) any reduction in Taxes that would result from such
increased Taxes. In the case of amounts payable to the Lessor, the Owner
Participant, or any corporate Affiliate 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.
Agent. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns as Agent for the Original Loan
Participants pursuant to Article 16 of the Original Participation
Agreement.
Air Carrier. Any U.S. Air Carrier and any "foreign air
carrier" (as defined in the Transportation Code) as to which there is in
force a permit granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe (or any permitted substitute airframe)
together with the two Engines (or any Replacement Engine or Engines)
whether or not any of such initial or Replacement Engines may from time to
time be installed on such Airframe or may be installed on any other
airframe or on any other aircraft, including any aircraft substituted
pursuant to Section 11.03 of the Lease.
Airframe. The Airbus A300F4-605R aircraft (excluding the
Engines or engines from time to time installed thereon) leased by the
Lessor to the Lessee pursuant to the Lease and the initial Lease Supplement
and having the United States FAA Registration Number and manufacturer's
serial number specified in the initial Lease Supplement, including (i) all
Parts in respect thereof and (ii) any replacement airframe which may be
substituted pursuant to Section 11.03 of the Lease.
Amendment No. 1 to the Original Tax Indemnity Agreement.
Amendment No. 1 to the Original Tax Indemnity Agreement, dated as of
October 26, 1995.
Ancillary Agreement. Any written agreement of the Lessee to
which the Lessor is a party or to which the Lessor has consented in writing
entered into on the Delivery Date or the Refunding Date or any date
thereafter in connection with the transactions contemplated by the
Operative Agreements, as such agreement may be amended and supplemented
from time to time with the consent of the Lessor and delivered to the Owner
Trustee, the Indenture Trustee, the Pass Through Trustee and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal
Express Corporation Trust No. N661FE), dated October 25, 1995 among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as
Owner Trustee, the Owner Participant and the Indenture Trustee not in its
individual capacity, but solely as Indenture Trustee, as originally
executed or as amended, modified or supplemented with the consent of all
the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and
delivered to the Owner Participant (with a copy of such report to the
Lessee) on the Delivery Date pursuant to Section 4.01(n) of the Original
Participation Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee,
organized and existing under the laws of France, and its successors and
assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as
of October 15, 1995, executed by AVSA, as the same may be amended, modified
or supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on
AC Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed
by AVSA as owner of the Aircraft in favor of the Owner Trustee and dated
the Delivery Date.
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 either does or with the giving of notice or
lapse of time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 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 July 2, 2020,
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.
Breakage Costs. Has the meaning specified in Schedule II to
the Original Participation Agreement.
Business Day. Any day on which commercial banks are not
authorized or required to close in New York, New York and Memphis,
Tennessee, and after the Lien of the Indenture is discharged, Detroit,
Michigan.
Certificates. The Equipment Trust Certificates (Federal
Express Corporation Trust No. N661FE), issued by the Owner Trustee
pursuant to the Indenture and any certificate issued in exchange therefor
or replacement thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion,
addition, or change to the Code which is enacted into law after the
Delivery Date which changes the highest marginal statutory rate of Federal
income tax applicable to the Owner Participant (other than a change which
is in the nature of a minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States
as defined in Section 40102(a)(15) of the Transportation Code, or any
analogous part of any successor or substituted legislation or regulation at
the time in effect.
Closings. The closing with respect to the acquisition of the
Pass Through Certificates by the Underwriters and the closing with respect
to the refunding of the Original Loan Certificates.
Code. Except as otherwise provided, references to the Code
shall mean the Internal Revenue Code of 1986, as amended from time to time.
Commencement Date. July 2, 1996.
Consent and Agreement. The Consent and Agreement dated as of
October 15, 1995 executed by the Manufacturer, as the same may be amended,
modified or supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the
Manufacturer attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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
Participant and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner
Trustee located at 611 Woodward Avenue, Detroit, Michigan 48226, or such
other office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in
writing to the Lessee, the Owner Participant and the Indenture Trustee.
Debt Rate. The weighted average (based on Outstanding
principal amount) rate of interest on the Certificates issued pursuant to
the Indenture.
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 Date. October 25, 1995.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of
the Lease.
Engine. Each of the two General Electric CF6-80C2-A5F engines
listed by its manufacturer's serial number in the initial Lease Supplement
and leased pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03,
11.04 or 12.02 of the Lease, together with all Parts related thereto.
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. The term "Engines" means, as of any
date of determination, both Engines then leased to the Lessee pursuant to
the Lease.
Engine Consent. The Engine Consent dated as of October 15,
1995, executed by the Engine Manufacturer, as the same may be amended,
modified or supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment
(Federal Express Corporation Trust No. N661FE), dated as of October 15,
1995 between the Lessor and the Lessee, as the same may be amended,
modified or supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16
of the Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use
(A) for a period in excess of 60 days due to theft or disappearance or such
longer period, not to exceed 180 days from the end of such initial 60-day
period, if and so long as the location of such property is known to the
Lessee and the Lessee is diligently pursuing recovery of such property, or
to the end of the Term, if less (unless such theft or disappearance
constitutes an Event of Loss pursuant to (i)(B) or (ii) hereof) or (B) for
a period in excess of 60 days due to the destruction, damage beyond
economic repair or rendition of such property permanently unfit for normal
use by 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, or (2)
condemnation, confiscation, or seizure of, or requisition or taking of, use
of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the
date of return of the Aircraft, if shorter, so long as the Lessor receives
at least six months notice of such date of return) beyond the end of the
Term in the event that the Aircraft, the Airframe or any Engine as of the
end of the Lease Term 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 A300F-600 series
aircraft equipped with engines of the same make and model as the Engines
for a period of twelve (12) consecutive months, unless the Lessee, prior to
the expiration of such twelve (12) 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 of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if
earlier. The date of such Event of Loss shall be (s) the 61st day or the
241st day, as the case may be, following loss of such property or its use
due to theft or disappearance (or the end of the Term or the Lessee's
abandonment of diligent efforts to recover such property, if earlier); (t)
the 61st day following the date of any destruction, damage beyond economic
repair or rendition of such property permanently unfit for normal use; (u)
the date of any insurance settlement on the basis of a total loss or
constructive or compromised total loss; (v) the date of any condemnation,
confiscation, seizure or requisition of title of such property; (w) the
181st day following condemnation, confiscation, seizure or requisition for
use of such property by a foreign government referred to in clause
(iii)(2)(A) above (or the end of the Term or the date of any insurance
settlement described therein, if earlier than such 181st day); (x) the
last day of the Term in the case of requisition for use of such property by
the Government; (y) the last day of the 12 month or 24 month period,
referred to in clause (iv) above (or if earlier, the end of the Term or
abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). 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.
If an Event of Loss described in any of clauses (i) (A), (iii) or (iv)
above shall occur, Lessor may elect, within 30 days following the date upon
which such Event of Loss is deemed to have occurred, to waive such Event of
Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other
payments (and interest thereon to the extent provided in the Operative
Agreements) paid or payable by the Lessee in respect of the Owner
Participant, the Owner Trustee in its individual capacity or any of their
respective successors, permitted assigns, directors, officers, employees,
servants and agents or Affiliates, pursuant to the Participation Agreement
or any indemnity hereafter granted to the Owner Participant or the Owner
Trustee in its individual capacity pursuant to the Lease or the
Participation Agreement, (ii) proceeds of public liability insurance (or
government indemnities in lieu thereof) in respect of the Aircraft payable
as a result of insurance claims paid for the benefit of, or losses suffered
by, the Owner Trustee or the Indenture Trustee in their respective
individual capacities or by the Owner Participant, or their respective
successors, permitted assigns or Affiliates, (iii) proceeds of insurance
maintained with respect to the Aircraft by the Owner Participant (whether
directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Section 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) payments constituting
increases in Interim Rent or Basic Rent attributable to payments arising
pursuant to Section 5 of the Tax Indemnity Agreement and (vi) any right to
demand, collect or otherwise receive and enforce the payment of any amount
described in clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section
9.01(a) of the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the
Lessee has exercised its option to renew the Lease pursuant to the second
paragraph of Section 4.01(a) thereof and with respect to which the
conditions set forth in the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other
property) is unencumbered by the Lease. 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; provided that in connection with any determination pursuant to or
for the purposes of Article 17 of the Lease, the Aircraft shall be
appraised on an "as is, where is" basis. Fair Market Value shall be
determined in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States
Federal Aviation Administration and any successor agency or agencies
thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed
Renewal Term equal to 50% of the average actual semi-annual Basic Rent
payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee
has exercised its option to renew the Lease pursuant to the first paragraph
of Section 4.01(a) thereof and with respect to which the conditions set
forth in such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as
of October 15, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991
between the Engine Manufacturer and the Lessee related to the purchase by
the Lessee of the Engines as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
General Terms Agreement relates to the Engines, to the extent assigned to
the Owner Trustee pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of
any particular time, the Person in whose name a Certificate shall be
registered (but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as
Owner Trustee and Lessor, the Agent (to the extent set forth in Articles 8
and 9 of the Original Participation Agreement), the Owner Participant, the
Original Loan Participants (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Indenture Trustee, in its
individual capacity and as trustee, any Owner Participant Guarantor, 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 and the
Trust Indenture Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N661FE) dated as of October 15, 1995, as
amended and restated as of October 26, 1995, between the Lessor and the
Indenture Trustee, as supplemented by the Indenture and Security Agreement
Supplement, and as said Indenture may from time to time be further
supplemented or amended, including any amendment or supplement thereto
entered into from time to time pursuant to the applicable provisions of the
Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N661FE) dated October 25, 1995, as such Indenture and Security Agreement
Supplement shall be amended or supplemented from time to time and any other
supplement to the Indenture, substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event or condition which with the lapse
of time or the giving of notice, or both, would constitute an Indenture
Event of Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in
Section 7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture
Estate 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 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, "Independent
Investment Banker" shall mean such an institution appointed by the
Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft
throughout the Interim Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant
Payment Date and ending at the end of the day immediately preceding the
Commencement Date.
Invoice. The invoice for the Aircraft given by AVSA to the
Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust
No. N661FE) dated as of October 15, 1995, as amended and restated as of
October 26, 1995, entered into by the Lessor and the Lessee concurrently
with the execution and delivery of the Indenture, 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 one or more
Lease Supplements entered into pursuant to the applicable provisions of the
Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N661FE) dated October 25, 1995, as such Lease
Supplement shall be amended or supplemented from time to time and any other
supplement to the Lease, substantially in the form of Exhibit A to the
Lease.
Lease Term. The period commencing on the Delivery Date and
ending at the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation,
and its successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b)
of the Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of
Sale, the Airbus Guaranty, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the AVSA Consent and Agreement, the
Consent and Guaranty (to the extent assigned by the Purchase Agreement
Assignment), the GTA, the Engine Warranty Assignment, the Engine Consent,
any warranty with respect to the Airframe and the Engines, all amounts of
Interim Rent, Basic Rent and Supplemental Rent, including without
limitation, insurance proceeds (other than insurance proceeds payable to or
for the benefit of the Owner Trustee 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) not include any Excepted Payment and (ii) include all
property intended to be subjected to the Indenture by the Granting Clause
thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust
Indenture Estate arising as a result of (i) claims against 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) acts or omissions 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 or
expressly prohibited under the Operative Agreements and any act or omission
of the Owner Participant which 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, Owner Participant, Lessor's
Estate or the trust created by the Trust Agreement which are not required
to be indemnified against by the Lessee pursuant to the Participation
Agreement by reason of Section 8.01(b) or 9.01(b) thereof and which are not
required to be indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement, or (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 other than a transfer of the
Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease
or security interest or other similar interest.
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 Trustee or the Owner Participant or any interests of the
Owner Participant unless all Certificates then outstanding shall be held by
the Owner Participant, (ii) the Lessee or (iii) any Affiliate of any
thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of (i) the present values of all remaining scheduled
payments of such principal amount or portion thereof 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 the Treasury Yield, all as determined by
the Independent Investment Banker over (ii) the unpaid principal amount of
such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which
the final principal amount of such Certificate is scheduled to be due and
payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of
the Lease, discounted at a rate per semi-annual period equal to the Debt
Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no
longer suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the
Indenture, a certificate signed by a Responsible Officer of the Lessee or
the Owner Trustee, as the case may be, and delivered to the Indenture
Trustee. Each such certificate shall include the statements provided for
in Section 15.07 of the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the
Airbus Guaranty, the Purchase Agreement, the Purchase Agreement Assignment,
the GTA, the Engine Warranty Assignment, the French Pledge Agreement, the
Lease, the Lease Supplement, the Owner Participant Guaranty, if any, the
Owner Trustee Guaranty, if any, any Ancillary Agreement entered into by or
with the written consent of the Indenture Trustee, which by its terms is an
Operative Agreement, the Certificates outstanding at the time of reference,
the Indenture, the Indenture and Security Agreement Supplement, the Consent
and Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to
the extent assigned by the Purchase Agreement Assignment), the Engine
Consent and the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture,
a written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or
a successor firm or (iii) other counsel designated by the Lessee and
reasonably satisfactory to the Indenture Trustee and (b) for the Owner
Trustee or the Indenture Trustee, an attorney selected by such Person and,
in the case of the Owner Trustee, reasonably satisfactory to the Indenture
Trustee.
Original Agreements. The documents and instruments delivered
on the Delivery Date in connection with the transactions contemplated by
the Original Participation Agreement.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N661FE) dated as of
October 15, 1995 between the Owner Trustee and the Indenture Trustee, which
together with the Indenture and Security Agreement Supplement No. 1
(Federal Express Corporation Trust No. N661FE) dated October 25, 1995
attached thereto was recorded as one instrument by the FAA on October 25,
1995 and assigned Conveyance Number 2A267994.
Original Lease. The Lease Agreement (Federal Express
Corporation Trust No. N661FE) dated as of October 15, 1995 between the
Owner Trustee as lessor, and the Lessee, which together with Lease
Supplement No. 1 (Federal Express Corporation Trust No. N661FE) dated
October 25, 1995 attached thereto was recorded as one instrument by the FAA
on October 25, 1995 and assigned Conveyance Number 2A267995.
Original Loan Certificates. The loan certificates issued on
the Delivery Date to the Original Loan Participants.
Original Loan Participants. The entities listed on Schedule I
to the Original Participation Agreement and their successors and assigns
(other than any assignees in connection with the Refunding Date).
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N661FE) among the Lessee, the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Original Loan
Participants as it was originally executed as of October 1, 1995.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N661FE) between the Lessee and the
Owner Participant as it was originally executed as of October 15, 1995.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N661FE) between the Owner Participant and the Owner
Trustee as it was originally executed as of October 1, 1995 and filed with
the FAA on October 25, 1995.
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.
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, its right,
title and interest in and to the Operative Agreements and the Lessor's
Estate.
Owner Participant Amount. The amount described in Section 2.03
of the Participation Agreement and set forth on Schedule II to the Lease.
Owner Participant Guarantor. The provider of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely
as Owner Trustee under the Trust Agreement, and its successors and
permitted assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee
Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance
with Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated
net after-tax book yield and aggregate after-tax cash during the Interim
Term and the Basic Term utilizing the multiple investment sinking fund
method of analysis, computed on the basis of the same methodology and
assumptions as were utilized by the Owner Participant in determining
Interim Rent, Basic Rent, Stipulated Loss Value and Termination Value
percentages or the EBO Price, as the case may be, as such assumptions may
be adjusted for events which have been the basis of adjustments to Rent
pursuant to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal
Express Corporation Trust No. N661FE), dated as of October 1, 1995, as
amended and restated as of October 26, 1995, among the Lessee, the Original
Loan Participants, the Owner Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as owner trustee, the
Owner Participant, the Indenture Trustee not in its individual capacity
except as otherwise expressly provided therein, but solely as indenture
trustee and the Pass Through Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as pass through
trustee, 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, prior to replacement thereof in accordance with the Lease, which may be
removed therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated
as of February 1, 1993, as amended and restated as of October 1, 1995
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 1995 Pass Through
Certificates, Series B1, 1995 Pass Through Certificates, Series B2 or 1995
Pass Through Certificates, Series B3, 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 Date. The Business Day on which the sale
of the Pass Through Certificates to the Underwriters pursuant to the
Underwriting Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust,
1995-B1, Federal Express Pass Through Trust, 1995-B2 or Federal Express
Pass Through Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the interest rate applicable to such
Certificate and (ii) in the case of any other such amount, 2% plus the Debt
Rate.
Payment Date. The Owner Participant Payment Date, and each
January 2 and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date
and ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates
having a Maturity in 2014, November 7, 2007 and with respect to the
Certificates having a Maturity in 2019, October 7, 2017.
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. Has the meaning specified in
Section 10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase
Agreement, dated as of July 3, 1991 between AVSA and the Lessee, including
all exhibits, appendices and letter agreements attached thereto as
originally executed or as modified, amended or supplemented in accordance
with the terms thereof, but only to the extent that the foregoing relates
to the Aircraft and to the extent assigned pursuant to the Purchase
Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement
Assignment (Federal Express Corporation Trust No. N661FE), dated as of
October 15, 1995 between the Lessor and the Lessee, as the same may be
amended, modified or supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule II to
the Original Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the
Owner Participant Payment Date, December 18 for January 2 Payment Dates and
June 17 for July 2 Payment Dates, whether or not such date is a Business
Day.
Recourse Amount. Has the meaning specified in Section 17.10 of
the Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged
pursuant to Section 15.01 of the Participation Agreement.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least three (3) Business
Days prior to such expected Refunding Date.
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.
Regulation D. Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
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 or more terms 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
Interim Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July
2, 1996.
Reoptimization Date. Has the meaning specified in Section
15.02(a) of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or
an engine of the same or another manufacturer) manufactured after October
22, 1994 of the same or of equal or greater value, remaining useful life
and utility as the Engine being replaced, together with all Parts relating
to such engine; provided, however, that if such replacement engine is not a
General Electric CF6-80C2-A5F engine, such replacement engine must then be
commonly used in the commercial aviation industry on Airbus A300-600
airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or
Corporate Trust Administration, as the case may be, designated by such
Person to perform obligations under the Operative Agreements, with respect
to the Owner Participant, the president or any vice president with direct
responsibility for the transactions contemplated by the Operative
Agreements, and with respect to any other party, any corporate officer or
(except in the case of the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
SEC. The Securities and Exchange Commission of the United
States and any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be
executed and delivered by the Lessee and the Pass Through Trustee, the
Series Supplement 1995-B2 to be executed and delivered by the Lessee and
the Pass Through Trustee or the Series Supplement 1995-B3 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.
Stipulated Loss Value. As of any Stipulated Loss Value
Determination Date during the Term, the amount determined by multiplying
the Purchase Price by the percentage set forth in Schedule III of the Lease
under the heading "Stipulated Loss Value Factor" opposite such date (as
such Schedule III may be adjusted from time to time as provided in Section
3.04 of the Lease), and during any Renewal Term, the amount determined
pursuant to Section 4.01(b) of the Lease. Notwithstanding any other
provisions of the Lease or the Participation Agreement or the Indenture,
each Stipulated Loss Value shall be, under any circumstances and in any
event, an amount, together with so much of the arrears portion of Interim
Rent and Basic Rent due and owing through the date of payment of Stipulated
Loss Value as does not constitute an Excepted Payment, at least sufficient
to pay in full as of such date of payment the aggregate unpaid principal
amount of and accrued interest on the Certificates outstanding on such date
of payment. Subject to the immediately preceding sentence, it is
understood and agreed that the amounts set forth on Schedule III of the
Lease, for dates other than Rent Payment Dates on which arrears Interim
Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent
and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth
on Schedule III of the Lease under the heading "Stipulated Loss Value
Date."
Substantial Authority. For Federal income tax purposes, shall
have the meaning applicable for purposes of Section 6662 of the Code and
relevant Treasury regulations.
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 any
Ancillary Agreement or any other Operative Agreement to the Lessor, the
Owner Participant or others, including, without limitation, payments of
Stipulated Loss Value, EBO Price and amounts calculated by reference to
Termination Value and all amounts required to be paid by Lessee under the
agreements, covenants and indemnities contained in the Lease or in the
Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Interim Rent and Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of
the Participation Agreement.
Tax Indemnity Agreement. The Original Tax Indemnity Agreement
as amended by Amendment No. 1 to the Original Tax Indemnity Agreement, as
from time to time modified, amended or supplemented pursuant to its
applicable provisions.
Term. The Preliminary Term, the Interim Term and the Basic
Term of the lease for the Aircraft under the Lease and, if renewed pursuant
to Section 4.01 of the Lease, each Renewal Term for the Aircraft for which
the Lease is renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease,
and in the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment
Date falling on July 2, 2011 or July 2, 2013, (ii) Section 4.02(a)(D) or
(E) of the Lease, a Rent Payment Date that is on or after the fifth
anniversary of the Commencement Date and (iii) Section 4.02(a)(F) of the
Lease, July 2, 2015.
Termination Value. As of any Termination Date, the amount
determined by multiplying the Purchase Price by the percentage set forth in
Schedule IV of the Lease under the heading "Termination Value Factor"
opposite such Termination Date (as such Schedule IV may be adjusted from
time to time as provided in Section 3.04 of the Lease). Notwithstanding
any other provisions of the Lease, the Participation Agreement or the
Indenture, each Termination Value shall be, under any circumstances and in
any event, an amount, together with so much of the arrears portion of Basic
Rent due and owing through the date of payment of any amount calculated by
reference to Termination Value as does not constitute an Excepted Payment,
at least sufficient to pay in full as of such date of payment the aggregate
unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on
Schedule IV of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals
and credits of unearned Basic Rent and, accordingly, no further accrual or
credit shall be required whenever Termination Value is to be calculated
with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code
(which, among other things, recodified the Federal Aviation Act of 1958, as
amended to the time of such recodification), as amended and in effect on
the date of the Lease or as subsequently amended, or any successor or
substituted legislation at the time in effect and applicable, and the
regulations promulgated pursuant thereto.
Treasury Yield. (i) In the case of a Certificate having a
Maturity within one year after the Prepayment Date the average yield to
maturity on a government bond equivalent basis of the applicable United
States Treasury Bill due the week of Maturity of such Certificate and (ii)
in the case of a Certificate having a Maturity one year or more after the
Prepayment Date, the average yield of the most actively traded United
States Treasury Note (as reported by Cantor Fitzgerald Securities Corp. on
page 5 of Telerate Systems, Inc., a financial news service, or if such
report is not available, a source deemed comparable by the Independent
Investment Banker selected to determine the Make-Whole Premium and
reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N661FE), dated as of October 1, 1995, as amended and
restated as of October 26, 1995, between the Owner Participant and the
Owner Trustee in its individual capacity, as from time to time modified,
amended or supplemented pursuant to its applicable provisions and in
accordance with the Operative Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as
amended.
Trust Indenture Estate. All estate, right, title and interest
of the Indenture Trustee in and to any of the property, rights, interests
and privileges granted to the Indenture Trustee pursuant to the Granting
Clause of the Indenture, other than Excepted Payments and any and all other
rights of the Owner Trustee or the Owner Participant expressly reserved to
the Owner Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the
Underwriting Agreement.
Underwriting Agreement. The Underwriting Agreement dated
October 26, 1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan
Securities Inc. and Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which
there is in force a certificate issued pursuant to Section 41102(a) or
Section 41103 of the Transportation Code, and as to which there is in force
an air carrier operating certificate issued pursuant to Chapter 447 of the
Transportation Code and Part 121 of the regulations under such
Transportation Code, for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, or which may operate as an
air carrier by certification or otherwise under any successor or substitute
provision thereof or in absence thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the
Code.
SCHEDULE III
PERMITTED COUNTRY LIST
Australia Japan
Austria Luxembourg
Belgium Malaysia
Brazil Mexico
Canada Netherlands
Denmark New Zealand
Egypt Norway
Finland Philippines
France Portugal
Germany Republic of China
(Taiwan)
Greece
Hong Kong Singapore
Iceland Sweden
India Switzerland
Indonesia Thailand
Ireland United Kingdom
EXHIBIT A(1)(a)
[Letterhead of Federal Express]
[Refunding Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N661FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express Corporation, a
Delaware corporation ("Federal"), and am familiar with the transactions
contemplated by the Participation Agreement (Federal Express Corporation
Trust No. N661FE), dated as of October 1, 1995, as amended and restated as
of October 26, 1995 (the "Participation Agreement"), among Federal, as
Lessee, NationsBank, N.A., as Owner Participant, The Chase Manhattan Bank
(National Association), Bank of America NT & SA, CIBC Inc. and The First
National Bank of Chicago, as Original Loan Participants, NBD Bank, a
Michigan banking corporation, not in its individual capacity, except as
otherwise stated, but solely as Owner Trustee under the Trust Agreement,
The Chase Manhattan Bank (National Association), a national banking
association, not in its individual capacity, except as otherwise stated,
but solely as Indenture Trustee under the Indenture and The Chase Manhattan
Bank (National Association), as Pass Through Trustee, relating to the
Aircraft. This opinion is being delivered pursuant to Section 4.01(l)(i)
of the Participation Agreement. Capitalized terms not otherwise defined
herein have the meaning assigned thereto in the Participation Agreement.
The Participation Agreement provides, among other things, for
the refinancing in full of the Original Loan Certificates evidencing the
Original Loan Participants' participation in the payment of the Purchase
Price of one Airbus A300F4-605R aircraft (the "Aircraft"), using the
proceeds from the public offering of the 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 No. N661FE) dated as of October 15, 1995, as amended and
restated as of October 26, 1995, as supplemented by the related Indenture
and Security Agreement Supplement ("Indenture"), between the Owner Trustee
and the Indenture Trustee.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision
executed counterparts of the Operative Agreements, the Pass Through
Agreement and each Series Supplement (the "Transaction 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
(other than any thereof relating to Federal), we have relied upon the
representations and warranties made in the Transaction 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 Transaction Agreements, other than Federal, has full
power, authority and legal right to enter into such Transaction Agreements
and that each such Transaction 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 40102(a)(15)
of the Transportation Code, 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
Original Agreements and the Transaction 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 so to qualify,
except where the failure so to qualify 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 Original Agreements and the Transaction
Agreements to which Federal is a party has or had, on the date of execution
thereof, been duly authorized, executed and delivered by Federal and
together constitute the legal, valid and binding obligation of Federal
enforceable against Federal in accordance with its and their terms.
4. Neither the execution and delivery by Federal of the
Original Agreements and the Transaction 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 presently (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 constitutes a default under, or result in the creation of
any Lien (other than Liens permitted under Section 6.01(a) of the Lease)
upon the property of Federal under any law, governmental rule or
regulation, or the charter or bylaws of Federal or any order, writ,
injunction or decree of any court or 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, require 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
Original Agreements and the Transaction Agreements to which it 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
or does, as the case may be, 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 Refunding Date and which shall have been accomplished on or
prior to the Refunding Date) the registration with, or the taking of any
other action in respect of, the FAA, the Securities and Exchange Commission
or any other authority or agency of the federal government or of the State
of Tennessee other than (a) the registration of the issuance and sale of
the Pass Through Certificates under the Securities Act, (b) compliance with
the securities laws of each applicable state, and (c) the filing of the
Indenture, the Lease and the Trust Agreement with the FAA.
6. There are no pending, or to my knowledge, threatened
actions or proceedings before or by any court or administrative agency
which individually (or in the aggregate in the case of any group of related
lawsuits) (i) is expected to have a material adverse effect on (A) except
for the matters described under "Legal Proceedings" in Federal's Annual
Report on Form 10-K for the fiscal year ended May 31, 1995 (as updated by
Note 7 to the financial statement included in the Lessee's Quarterly Report
on Form 10-Q for the fiscal quarter ended August 31, 1995), 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, the financial condition
of Federal or (B) the ability of Federal to perform its obligations under
the Original Agreements or the Transaction Agreements, or (ii) involves the
Aircraft.
7. Except for the filing and, where appropriate, recording
pursuant to the Transportation Code of the Lease, the Indenture, the Trust
Agreement, the filing of the financing statements referred to in Section
4.01(f) of the Participation Agreement and 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 Delivery Date, 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 the first security interests
in and mortgage Lien on the Trust Indenture Estate in favor of the
Indenture Trustee in each case with respect to such portion of the Aircraft
as is covered by the recording system established by the Transportation
Code.
8. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
9. On the Delivery Date the Owner Trustee received valid title
to the Aircraft free and clear of all Liens on file with the FAA, except
for Liens permitted under Section 6.01(a) of the Lease. Pursuant to the
Original Participation Agreement the Aircraft was duly delivered to the
Owner Trustee. Federal, as Lessee, duly accepted the Aircraft under the
Original Lease and the Lease Supplement and the Term commenced on the
Delivery Date.
10. 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.
11. 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 as to the
enforceability of the Original Agreements and the Transaction Agreements to
which Federal is a party are based upon the assumption for purposes of such
opinions and without independent analysis that, notwithstanding the
respective choice of laws clauses in the Original Agreements and the
Transaction Agreements, the governing law with respect to each of the
Original Agreements and the Transaction 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 the 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 paragraphs 5, 7 and 9 above, 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 and subject to the assumptions and qualifications expressed
therein.
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, without
my prior written consent.
I rendered an opinion dated October 25, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. I hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
George W. Hearn
SCHEDULE A
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase ManhattOan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(1)(b)
[Letterhead of Davis Polk & Wardwell]
[Refunding Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N661FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal
Express Corporation Trust No. N661FE), dated as of October 1, 1995, as
amended and restated as of October 26, 1995 (the "Participation
Agreement"), among Federal Express, as Lessee, NationsBank, N.A., as Owner
Participant, The Chase Manhattan Bank (National Association), Bank of
America NT & SA, CIBC Inc. and The First National Bank of Chicago, as the
Original Loan Participants, NBD Bank, a Michigan banking corporation, not
in its individual capacity but solely as Owner Trustee under the Trust
Agreement, The Chase Manhattan Bank (National Association), a national
banking association, not in its individual capacity, except as otherwise
stated, but solely as Indenture Trustee under the Indenture, and The Chase
Manhattan Bank (National Association), as Pass Through Trustee, relating to
the Aircraft. This opinion is being delivered pursuant to Section
4.01(l)(viii) of the Participation Agreement. Capitalized terms not
otherwise defined herein have the meanings assigned thereto in the
Participation Agreement.
Pursuant to the Original Participation Agreement, the Owner
Participant and the Original Loan Participants participated in the payment
of the Purchase Price of one Airbus A300F4-605R Aircraft which was
purchased by the Owner Trustee pursuant to AVSA's FAA Bill of Sale and
AVSA's Warranty Bill of Sale, subjected to the Lien of the Original
Indenture and leased to Federal Express under the Original Lease. The
Participation Agreement provides, among other things, for the refinancing
of the Original Loan Certificates using the proceeds from the public
offering of the 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 executed counterparts of the Original Agreements, the Operative
Agreements, 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 such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as
originals and the conformity with the originals of all documents submitted
to us as copies.
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, the Original 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 telephoned
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 FAA pursuant to Section 44107 of
the Transportation Code, no filing or recording of any document or other
action was or 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
Transportation Code being subject to the due and timely filing and, where
appropriate, recording of (A) the Lease, with the Indenture attached as an
exhibit, (B) the Indenture and (C) the Trust Agreement.
3. The execution, delivery and performance of the Original
Participation Agreement, the Participation Agreement, the Original Trust
Agreement, the Trust Agreement, the Original Indenture, the Indenture, the
Indenture and Security Agreement Supplement, the Original Lease, the Lease
and the Lease Supplement by the Owner Trustee in its individual or trust
capacity, as the case may be, and the issuance, execution, delivery and
performance of the Certificates by the Owner Trustee in its trust capacity
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 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 or performance or the taking of any other action, the
conduct of any other business or the exercise of any other powers by NBD
Bank in its individual or in a trust capacity in the State of New York not
related to the transactions contemplated by the Original Agreements, the
Operative Agreements, the Pass Through Agreement or the Series Supplements.
We have assumed that NBD Bank has made the filings necessary to comply with
Section 131.3 of the Banking Law of the State of New York, however we
express no opinion as to whether NBD Bank is required to comply with said
Section 131.3.
4. (a) Each of the Original Agreements, the Operative
Agreements, the Pass Through Agreement and each of the Series Supplements
to which Federal Express is a party has been duly authorized, executed and
delivered by Federal Express.
(b) The execution, delivery and performance by Federal Express
of each of the Original Agreements and each of the Operative Agreements to
which Federal Express is a party, the Pass Through Agreement and each
Series Supplement 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
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
other than the transactions contemplated by the Original Agreements, the
Operative Agreements, the Pass Through Agreement or each Series Supplement.
5. Assuming (i) the due authorization, execution and delivery
of the Original Agreements, the Operative Agreements, the Pass Through
Agreement and each Series Supplement by each of the parties to each such
document (other than Federal Express), (ii) that the execution, delivery
and performance by each of the Operative Agreements, the Pass Through
Agreement and each Series Supplement by each of the parties thereto will
not violate the respective parties' constituent documents, (iii) 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,
(iv) that the Original Loan Certificates are delivered by the Original Loan
Participants to the Indenture Trustee for cancellation and are cancelled,
(v) 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 (vi) that the form
of each Operative Agreement, the Pass Through Agreement and each Series
Supplement 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 Operative Agreement, the Pass Through Agreement and
each Series Supplement in form constitutes a legal, valid and binding
agreement of each party thereto enforceable against each such party in
accordance with its terms; (B) the Original Indenture created, and the
Indenture creates, for the benefit of the Holders, the security interest in
the Trust Indenture Estate that they purport to create; (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; (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. The opinions set
forth in this paragraph 5 are subject to the due filing and recording,
where appropriate, with the FAA of the documents referred to in paragraph 2
above.
6. All the properties which are part of the Trust Indenture
Estate (including all right, title and interest of the Owner Trustee
pledged and mortgaged by it pursuant to the Indenture 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 to the due filing
and, where appropriate, recording of those documents referred to in
paragraph 2 above and the financing statements referred to in Section
4.01(f) of the Participation Agreement), and the beneficial interests of
the Owner Participant under the Trust Agreement in and to such properties
are subject, to the extent provided in the Indenture, to the Lien of the
Indenture in favor of the Holders of the Certificates issued and to be
issued under the Indenture.
7. The Indenture creates, as security for 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 and, where
appropriate, recording in accordance with the Transportation Code of the
documents referred to in paragraph 2 above. We express no opinion 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 (6) and (7) of Section 40102(a) of the Transportation
Code.
8. Federal Express's participation in the transactions
contemplated by the Operative Agreements, the Pass Through Agreement and
each Series Supplement does not and will not constitute a violation of
Section 7 of the Securities Exchange Act of 1934.
9. It is not necessary, in connection with the creation of the
beneficial interests 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.
10. The provisions of Section 1110 of the United States
Bankruptcy Code will apply to the Aircraft for the benefit of the Indenture
Trustee.
The foregoing opinions are subject to the following
qualifications:
(a) To the extent that this opinion relates to matters involving
Federal aviation law, we have relied, with your consent, without
independent investigation and verification and subject to the assumptions
and qualifications contained therein, upon the opinion of Daugherty, Fowler
& Peregrin to be delivered to you and dated the date hereof. We have also
relied, with your consent, on the opinion dated the date hereof of George
W. Hearn, Vice President - Law of the Lessee, for purposes of the matters
stated in paragraphs 4(a) and as to all matters of Tennessee law.
(b) 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, the laws
of the United States and the General Corporation Law of the State of
Delaware.
(c) The opinion contained in paragraph 5 above as to enforceability
is subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity 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.
(d) 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 any other Person
without our prior written consent.
(e) We rendered an opinion dated October 25, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Davis Polk & Wardwell
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(2)(a)
[Letterhead of Morgan, Lewis & Bockius]
[Refunding Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N661FE
Ladies and Gentlemen:
We have acted as special counsel for NationsBank, N.A., a
national banking association (the "Owner Participant"), in connection with
the transactions contemplated by (i) the Participation Agreement, dated as
of October 1, 1995, as amended and restated as of October 26, 1995 (the
"Participation Agreement"), among Federal Express Corporation, as Lessee
(the "Lessee"), the Owner Participant, The Chase Manhattan Bank (National
Association), Bank of America NT & SA, CIBC Inc. and The First National
Bank of Chicago, as the Original Loan Participants (the "Original Loan
Participants"), NBD Bank, a Michigan banking corporation, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement
(the "Owner Trustee"), The Chase Manhattan Bank (National Association), a
national banking association, not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee under the Indenture (the
"Indenture Trustee"), and The Chase Manhattan Bank (National Association),
as Pass Through Trustee, (ii) the Trust Agreement, dated as of October 1,
1995, as amended and restated as of October 26, 1995 (the "Trust
Agreement"), by and between the Owner Participant and the Owner Trustee and
(iii) the Tax Indemnity Agreement, dated as of October 15, 1995, as amended
by Amendment No. 1 thereto dated as of October 26, 1995 (the "Tax Indemnity
Agreement"), by and between the Owner Participant and the Lessee. This
opinion is delivered pursuant to Section 4.01(l)(ii) of the Participation
Agreement. Unless otherwise defined herein, all capitalized terms used
herein shall have the respective defined meanings set forth in the
Participation Agreement.
In connection with our opinions herein, we have examined
executed counterparts of (i) the Original Participation Agreement, the
Original Trust Agreement and the Original Tax Indemnity Agreement
(collectively, the "Original Owner Participant Documents") and (ii) the
Participation Agreement, the Trust Agreement and the Tax Indemnity
Agreement (collectively, the "Owner Participant Documents"). We have
further examined and relied upon the accuracy of original, certified,
conformed, photographic or telecopied copies of such records, agreements,
certificates, instruments 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, the authenticity of all documents submitted to us as
originals and the conformity to such original documents of all copies
submitted to us as certified, conformed, photographic or telecopied copies
and the authenticity of such latter documents, 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
various questions of fact material to our opinions, we have relied solely
upon the accuracy of the statements, representations and warranties made in
the Original Owner Participant Documents and the Owner Participant
Documents, and we have made no independent investigation or inquiry with
respect to such factual matters.
With your consent, and for purposes of this opinion, we have
assumed the accuracy of the following matters, but we have not made any
independent investigation or inquiry with respect thereto and we render no
opinion on such matters:
(a) That the execution and delivery and performance of each of the
Original Owner Participant Documents and the Owner Participant Documents by
each of the parties thereto did not or will not, as the case may be,
violate the respective parties' constituent documents.
(b) That each of the parties to the Original Owner Participant
Documents and the Owner Participant Documents had or has, as the case may
be, full power, authority and legal right to enter into and perform its
respective obligations under the Original Owner Participant Documents and
the Owner Participant Documents to which it is a party.
(c) The Original Owner Participant Documents and the Owner
Participant Documents, at the time of execution and delivery by the Owner
Participant, were or will have been, as the case may be, duly authorized
and validly executed and delivered by all parties thereto (other than the
Owner Participant) and constituted or will constitute, as the case may be,
the legal, valid and binding obligations of such parties, enforceable
against such parties in accordance with their terms.
(d) The parties to the Original Owner Participant Documents and the
Owner Participant Documents (other than the Owner Participant, as to which
we have not assumed the acquisition of all consents, permits and approvals
under New York law) at the time of execution and delivery by the Owner
Participant, obtained or have obtained, as the case may be, and there were
or are, as the case may be, in full force and effect at such time, any and
all required consents, permits and approvals required by or from any and
all federal, state, local or foreign governmental agencies and authorities
in connection with the transactions contemplated thereby, to the extent
necessary for the legality, validity, binding effect or enforceability of
the Original Owner Participant Documents and the Owner Participant
Documents.
We have been retained as special counsel to the Owner
Participant in connection with the transactions contemplated by the
Participation Agreement, and have not generally represented the Owner
Participant in its business activities and are not familiar with the nature
and extent of such other activities. Accordingly, we also have assumed
without investigation that such other activities are not of such a nature
as to cause the transactions contemplated by the Participation Agreement to
be governed by laws or regulations of the State of New York or the United
States of America applicable only because of such other activities (such as
laws relating specifically to the banking, securities, insurance or utility
industries) and not applicable to business corporations generally.
Based upon the foregoing, we are of the opinion that:
(1) The Original Owner Participant Documents on the date of execution
thereof constituted, and the Owner Participant Documents constitute legal,
valid and binding obligations of the Owner Participant, enforceable against
the Owner Participant in accordance with their respective terms, except as
the enforceability thereof may be limited by (a) applicable bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors', mortgagees' and lessors'
rights generally, (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding at law or in equity) and
(c) with respect to the indemnification provisions set forth in the
Original Owner Participant Documents and the Owner Participant Documents,
considerations of public policy.
(2) Neither the execution and delivery of the Original Owner Participant
Documents and the Owner Participant Documents by the Owner Participant nor
the consummation by the Owner Participant of any of the transactions
therein contemplated, or the fulfillment of, or compliance with, the terms
and provisions of any thereof, (A) required or requires, as the case may
be, for its validity that the Owner Participant obtain the consent or
approval of, give notice to, register with, or take 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, or (B) contravened or
contravenes any law, governmental rule or regulation of the State of New
York or the Federal government of the United States or any governmental
authority or agency thereof.
In rendering the foregoing opinions, we have relied, with your
consent, on the opinion of even date herewith of James R. Marietta,
Assistant General Counsel of NationsBank Corporation, as to the matters set
forth therein (i) that are governed by the laws of the State of New York,
and (ii) relating to the due authorization, execution and delivery of the
Original Owner Participant Documents and the Owner Participant Documents by
the Owner Participant under the laws of the United States of America, and
our opinions are subject to the same limitations and exceptions as set
forth therein.
The foregoing opinions are subject, however, to the
qualification that we express no opinion as to matters relating to the
title to or sufficiency of description of any property or collateral
described in the Original Owner Participant Documents and the Owner
Participant Documents or the perfection or relative priority of any lien or
security interest created with respect to such property or collateral
thereunder. In addition, we express no opinion as to matters governed by
(i) any tax laws, (ii) the Transportation Code, or by any other laws,
statutes, rules or regulations of the United States particularly relating
to the acquisition, ownership, registration, leasing, use or sale of the
Aircraft, the Airframe or the Engines other than such laws relating to
personal property generally, (iii) any securities laws and (iv) laws
pertaining to the Owner Participant solely because of the business
activities of the Owner Participant and not applicable to business
corporations generally.
We are licensed to practice law in the State of New York and 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 laws of the United
States of America.
This opinion is furnished by us at your request and at the
Owner Participant's request for your sole benefit, and we agree that you
and your successors and permitted assigns 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;
provided that no such consent shall be necessary for the reproduction,
circulation or distribution of this opinion to (i) the special counsel,
auditors or public accountants of the persons named on Schedule A hereto or
(ii) bank examiners or similar regulatory authorities. Our 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 October 25, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Morgan, Lewis & Bockius
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(2)(b)
[Letterhead of NationsBank Corporation]
[Refunding Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N661FE
Ladies and Gentlemen:
I have acted as counsel to NationsBank, N.A., a national
banking association (the "Owner Participant"), and in that capacity have
acted as counsel to the Owner Participant in connection with the
transactions contemplated by (i) the Participation Agreement, dated as of
October 1, 1995, as amended and restated as of October 26, 1995 (the
"Participation Agreement"), among Federal Express Corporation, as Lessee
(the "Lessee"), the Owner Participant, The Chase Manhattan Bank (National
Association), Bank of America NT & SA, CIBC Inc. and The First National
Bank of Chicago, as the Original Loan Participants (the "Original Loan
Participants"), NBD Bank, a Michigan banking corporation, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement
(the "Owner Trustee"), The Chase Manhattan Bank (National Association), a
national banking association, not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee under the Indenture (the
"Indenture Trustee"), and The Chase Manhattan Bank (National Association),
as Pass Through Trustee (the "Pass Through Trustee), (ii) the Trust
Agreement, dated as of October 1, 1995, as amended and restated as of
October 26, 1995 (the "Trust Agreement"), by and between the Owner
Participant and the Owner Trustee and (iii) the Tax Indemnity Agreement,
dated as of October 15, 1995, as amended by Amendment No. 1 thereto (the
"Tax Indemnity Agreement"), by and between the Owner Participant and the
Lessee. This opinion is delivered pursuant to Section 4.01(l)(ii) of the
Participation Agreement. Unless otherwise defined herein, all capitalized
terms used herein shall have the respective defined meanings set forth in
the Participation Agreement.
For purposes of the opinions expressed below, I have examined
executed counterparts or copies of the Original Participation Agreement,
the Original Trust Agreement, the Original Tax Indemnity Agreement, the
Participation Agreement, the Trust Agreement and the Tax Indemnity
Agreement (collectively, the "Owner Participant Documents"), I 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, I have
assumed the genuineness of signatures on original documents and the
conformity to such original documents of all copies submitted to me as
certified, conformed, photographic or telecopied copies, and as to
certificates and telegraphic and telephonic confirmations given by public
officials, I have assumed the same to have been properly given and to be
accurate. As to various questions of fact material to my opinions, I have
relied solely upon the accuracy of the statements, representations and
warranties made in the Participation Agreement, the Trust Agreement and the
Tax Indemnity Agreement. I have assumed, except with regard to the Owner
Participant, that the Participation Agreement, the Trust Agreement and the
Tax Indemnity Agreement have been duly authorized, executed and delivered
by the respective parties thereto and that they constitute the legal, valid
and binding obligations of each party thereto enforceable against each such
party in accordance with their respective terms.
Based upon the foregoing and such other information as I have
deemed necessary for purposes hereof, and subject to the assumptions,
qualifications and reliance's set forth herein, I am of the opinion that:
1. The Owner Participant is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States of America and has the full corporate power, authority and
legal right to carry on its present business and operations, to own or
lease its Properties and enter into and to carry out the transactions
contemplated by each of the Owner Participant Documents.
2. The Owner Participant has duly authorized, executed and delivered
each of the Owner Participant Documents.
2. None of the execution, delivery or performance by the Owner
Participant of the Owner Participant Documents, nor the compliance with the
terms and provisions thereof by the Owner Participant did not or does not,
as the case may be, (a) required or require, as the case may be, the
consent or approval of, the giving of notice to, the registration with, the
recording or filing of any document with or the taking or any other action
with respect to any governmental authority or agency of the State of North
Carolina or of the federal government of the United States; or (b) violated
or violate, as the case may be, any law, governmental rule or regulation of
the State of North Carolina or of the federal government of the United
States or any governmental authority or agency thereof; or (c) resulted or
result, as the case may be, in the breach of any of the terms, conditions
or provisions of the Articles of Association or By-Laws of the Owner
Participant; or (d) to the best of my knowledge, conflicted or conflict, as
the case may be, with any judgment or order applicable to or binding upon
the Owner Participant or its properties, or violated or violate, as the
case may be, or (except as contemplated by the Owner Participant Documents)
subject the Trust 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 is a party or by which the Owner Participant is bound.
4. There are no actions, suits, investigations or proceedings
pending or, to the best of my knowledge, threatened against or affecting
the Owner Participant or any of its properties in any court or before any
administrative agency or arbitrator, which, if adversely determined, would
materially adversely affect the ability of the Owner Participant to perform
its obligations under any of the Owner Participant Documents, and there are
no pending or, to the best of my knowledge, threatened actions or
proceedings before any court, administrative agency or tribunal involving
the Owner Participant in connection with the transactions contemplated by
any of the Owner Participant Documents.
I am authorized to practice law in the State of North Carolina
and do not hold myself out as an expert on the law of any state other than
the State of North Carolina. Consequently, the foregoing opinions are
limited to the federal laws of the United States of America and the laws of
the State of Carolina, and I express no opinion as to the laws of any other
state or jurisdiction. Further, I have made no investigation and express
no opinion, as to any aviation law or other laws, statutes, rules or
regulations applicable due to the particular nature of the equipment
subject to the Lease, and I express no opinion as to any tax or securities
laws.
This opinion is furnished by me at your request for your sole
benefit, and I agree that you and your successors and permitted assigns may
rely on the opinions expressed herein.
This opinion is furnished by me as counsel to the Owner
Participant for your sole benefit and for the benefit of your successors
and assigns and no other person or entity shall rely on this opinion
without my express written consent. This opinion shall not be published or
reproduced in any manner or distributed or circulated to any person or
entity without my express written consent; provided that no such consent
shall be necessary for the reproduction, circulation or distribution of
this opinion to (i) the special counsel, auditors or public accountants of
the persons named on Schedule A hereto or (ii) bank examiners or similar
regulatory authorities. My opinion is limited to the matters stated
herein, and no opinion is implied or may be inferred beyond the matters
expressly stated herein. My 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 October 25, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
James R. Marietta
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(3)(a)
[Letterhead of Dewey Ballantine]
[Refunding Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N661FE
Ladies and Gentlemen:
We have acted as special counsel to The Chase Manhattan Bank
(National Association), a national banking association (the "Indenture
Trustee"), in connection with the transactions contemplated by (i) the
Trust Indenture, Mortgage and Security Agreement (Federal Express
Corporation Trust No. N661FE) dated as of October 15, 1995 (the "Original
Indenture") between NBD Bank (the "Owner Trustee") and the Indenture
Trustee, (ii) the Participation Agreement (Federal Express Corporation
Trust No. N661FE) dated as of October 1, 1995 (the "Original Participation
Agreement") among Federal Express Corporation ("Federal Express"),
NationsBank, N.A., as Owner Participant (the "Owner Participant"), The
Chase Manhattan Bank (National Association), Bank of America NT & SA, CIBC
Inc. and The First National Bank of Chicago, as Original Loan Participants
(the "Original Loan Participants"), the Owner Trustee and the Indenture
Trustee, (iii) the Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N661FE) dated as of October 15, 1995, as amended and
restated as of October 26, 1995 (as amended and restated, the "Indenture")
between the Owner Trustee and the Indenture Trustee, and (iv) the
Participation Agreement (Federal Express Corporation Trust No. N661FE)
dated as of October 1, 1995, as amended and restated as of October 26, 1995
(as amended and restated, the "Participation Agreement") among Federal
Express, the Owner Participant, the Original Loan Participants, the Owner
Trustee, the Indenture Trustee, and The Chase Manhattan Bank (National
Association), as Pass Through Trustee. 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(l)(iii) of the Participation Agreement. Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set
forth or referred to in the Participation Agreement. Additionally, The
Chase Manhattan Bank (National Association), in its capacity as Agent and
as an Original Loan Participant, is sometimes referred to herein as the
"New York Loan Participant". We have not served as counsel for or advised
the New York Loan Participant in connection with the transactions
contemplated by the Participation Agreement, the Indenture or any of the
other Operative Agreements and references herein to the Indenture Trustee,
in its individual capacity, exclude The Chase Manhattan Bank (National
Association) in its capacity as the New York Loan Participant.
In connection with the opinions expressed herein, we have
reviewed executed counterparts of the Operative Agreements and the Original
Agreements to which the Indenture Trustee is a party (which we previously
reviewed). We have also examined and relied upon the accuracy of the
originals or certified, conformed, photocopied or telecopied copies of such
corporate records, certificates, instruments 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,
photocopied 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, when relevant facts were not
independently established, relied upon representations and warranties
contained in the Operative Agreements and upon the statements and
certificates furnished to us.
Based upon and subject to the foregoing and the qualifications
hereinafter set forth, we are of the opinion that:
1. The Indenture Trustee is a national banking association duly
organized and validly existing in good standing 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 execute, deliver and perform its
obligations under the Indenture, the Participation Agreement and the other
Operative Agreements to which it is or is to be a party, and to
authenticate the Certificates to be 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 Original Indenture, the
Original Participation Agreement and the other Original Agreements to which
it was a party.
2. The Indenture Trustee, in its individual and trust capacities,
has duly authorized, executed and delivered the Indenture, the
Participation Agreement and each of the other Operative Agreements to which
it is a party and as of the date of execution thereof had duly authorized,
executed and delivered the Original Indenture, the Original Participation
Agreement and each of the other Original Agreements to which it was a
party.
3. Each of the Indenture, the Participation Agreement and the other
Operative Agreements to which it is a party constitutes, and on the date of
execution thereof, the Original Indenture, the Original Participation
Agreement and the other Original Agreements to which it was a party
constituted, 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 thereof, except as
the enforceability thereof may be limited by (a) general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law), (b) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and (c) public policy considerations (in the case of
the indemnity provisions contained therein).
4. 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.
5. The execution, delivery, and performance by the Indenture Trustee
of the Indenture, the Participation Agreement and each of the other
Operative Agreements to which it is a party 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 of America or the
State of New York governing the banking or trust powers of the Indenture
Trustee. The execution, delivery, and performance by the Indenture Trustee
of the Original Indenture, the Original Participation Agreement and each of
the other Original Agreements to which it was a party were not on the date
of execution thereof 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 of America or the State of New York governing the banking or
trust powers of the Indenture Trustee.
6. Neither the execution and delivery by the Indenture Trustee, in
its individual or trust capacity, as the case may be, of the Original
Indenture, the Indenture, the Original Participation Agreement, the
Participation Agreement or any of the other Operative Agreements or
Original Agreements to which it is or was, as the case may be, a party, 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
the Indenture or the Participation Agreement requires, or required on the
date of execution thereof in the case of the Original Indenture and the
Original Participation Agreement, 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.
7. There are no fees, taxes or other governmental charges payable by
the Certificate Holders, the Owner Trustee, the Indenture Trustee (except
taxes imposed on fees payable to the Indenture Trustee) to the State of New
York or any political subdivision thereof in connection with the execution,
delivery or performance of any of the Operative Agreements or in connection
with the issuance and acquisition of the Certificates issued to the
Certificate Holders or the beneficial interests of the Certificate Holders
in the Trust Indenture Estate. 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 New York 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. There is no fee, tax or other
governmental charge (other than as such as may be imposed upon the New York
Loan Participant) under the laws of the State of New York 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 Certificate
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 New York. 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 Original Loan Participants, the
Owner Participant or the New York Loan Participant to the State of New York
or any political subdivision thereof in connection with (x) the execution,
delivery or performance by any of the Indenture, the Participation
Agreement or any of the other Operative Agreements, (y) the making by the
Owner Participant of its investment in the Aircraft, (z) with respect to
the New York Loan Participant, the issuance and ownership of the Original
Loan Certificates issued to the New York Loan Participant.
We express no opinion as to the laws of any jurisdiction other
than the laws of the State of New York and the federal laws of the United
States of America. In addition, we express no opinion herein as to (i) any
federal or state securities laws, (ii) any tax laws, (iii) any aviation
laws including, without limitation, the Transportation Code, (iv) any laws,
statutes, rules or regulations applicable to the particular nature of the
equipment acquired or to be acquired by the Owner Trustee, or (v) ERISA or
any other pension and employee benefit laws, rules or regulations. In
addition, we express no opinion as to the right, title or interest in or to
the Trust Estate on the part of any Person. We also express no opinion as
to the perfection or priority of any security interest created by any of
the Operative Agreements.
In rendering the opinions expressed herein, we have assumed
that (a) each of the Indenture, the Participation Agreement and the other
Operative Agreements has been duly authorized, executed and delivered by
the respective parties thereto (other than the Indenture Trustee) and
constitutes and on the date of execution thereof, the Original Indenture
and the Original Participation Agreement constituted, a legal, valid and
binding obligation of each of such parties (other than the Indenture
Trustee), enforceable against each of such parties in accordance with the
terms thereof, (b) each of such parties (other than the Indenture Trustee)
has the requisite power, authority and legal right to enter into and
perform its respective obligations under the Indenture, the Participation
Agreement and each of the other Operative Agreements to which it is a party
and (c) the transactions provided for in the Operative Agreements are not
within the prohibitions of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986, as amended.
This opinion is furnished by us for the sole benefit of the
addressees hereof, each of whom we understand and agree may rely upon the
opinions set forth herein. No other person or entity is entitled to rely
on this opinion 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 October 25, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Dewey Ballantine
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(3)(b)
[Letterhead of The Chase Manhattan Bank, N.A.]
[Refunding Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N661FE
Ladies and Gentlemen:
As Vice President and Senior Associate Counsel to The Chase
Manhattan Bank (National Association), a national banking association (the
"Indenture Trustee"), I advise you as follows with respect to the
authorization, execution and delivery by the Indenture Trustee of (i) the
Trust Indenture, Mortgage and Security Agreement (Federal Express
Corporation Trust No. N661FE) dated as of October 15, 1995 (the "Original
Indenture") between NBD Bank (the "Owner Trustee") and the Indenture
Trustee, (ii) the Participation Agreement (Federal Express Corporation
Trust No. N661FE) dated as of October 1, 1995 (the "Original Participation
Agreement") among Federal Express Corporation ("Federal Express"),
NationsBank, N.A., as Owner Participant (the "Owner Participant"), The
Chase Manhattan Bank (National Association), Bank of America NT & SA, CIBC
Inc. and The First National Bank of Chicago, as Original Loan Participants
(the "Original Loan Participants"), the Owner Trustee and the Indenture
Trustee, (iii) the Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N661FE) dated as of October 15, 1995, as amended and
restated as of October 26, 1995 (as amended and restated, the "Indenture")
between the Owner Trustee and the Indenture Trustee, and (iv) the
Participation Agreement (Federal Express Corporation Trust No. N661FE)
dated as of October 1, 1995, as amended and restated as of October 26, 1995
(as amended and restated, the "Participation Agreement") among Federal
Express, the Owner Participant, the Original Loan Participants, the Owner
Trustee, the Indenture Trustee, and The Chase Manhattan Bank (National
Association), as Pass Through Trustee. 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.
Unless otherwise defined herein, capitalized terms used herein
shall have the respective meanings attributed thereto in the Participation
Agreement. The Chase Manhattan Bank (National Association), in its
capacity as Agent and as a Loan Participant, is sometimes referred to
herein as the "New York Loan Participant". I have not served as counsel
for or advised the New York Loan Participant in connection with the
transactions contemplated by the Participation Agreement, the Indenture or
any of the other Operative Agreements and references herein to the
Indenture Trustee, in its individual capacity, exclude The Chase Manhattan
Bank (National Association) in its capacity as the New York Loan
Participant.
I have reviewed executed counterparts of the Operative
Agreements and the Original Agreements to which the Indenture Trustee is a
party (which we previously reviewed). I have also examined the originals,
or certified, conformed, photocopied or telecopied copies of such corporate
records, certificates, instruments and other documents as I have deemed
necessary to appropriate to enable me to render the opinions expressed
herein, including, without limitation, certified copies of the By-laws of
the Indenture Trustee, a certificate of the secretary 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 and a certificate of the
Comptroller of the Currency, Washington, D.C., dated September 23, 1965, 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, I have assumed the genuineness of
signatures on original documents (other than those of the Indenture
Trustee) and the conformity to such original documents of all copies
submitted to me as certified, conformed, photocopied or telecopied copies,
and as to certificates and telegraphic and telephonic confirmations given
by public officials, I have assumed the same to have been properly given
and to be accurate. As to all matters of fact material to my opinions, I
have, when relevant facts were not independently established, relied upon
statements, representations and warranties contained in the Operative
Agreements and upon the statements and certificates furnished to me.
A. Based upon the foregoing and subject to the limitations
expressed in paragraph B below, I am of the opinion that: (i) the
execution, delivery and performance by the Indenture Trustee of the
Indenture, the Participation Agreement and each of the other Operative
Agreements to which it is a party are not, to my knowledge, in violation of
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 and (ii) the execution, delivery and performance by the Indenture
Trustee of the Original Indenture, the Original Participation Agreement and
each of the other Original Agreements to which it was a party were not on
the date of execution thereof, to my knowledge, in violation of 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.
B. I am qualified to practice law in the State of New York and
I express no opinion as to any laws other than the laws of the State of New
York and the federal laws of the United States of America. Further,
without limiting the generality of the foregoing, I express no opinion with
respect to (i) the citizenship of the Indenture Trustee, the Transportation
Code and the regulations promulgated thereunder, the impact of the
Transportation Code 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 under the laws of any
jurisdiction other than New York or federal laws of the United States of
America 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 New York;
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 my
express prior written consent. This opinion may not be used, circulated,
quoted, published or otherwise referred to for any purpose without my
express prior written consent. This opinion is limited to the matters
stated herein, and no opinion is implied or may be inferred beyond the
opinions expressly stated herein.
We rendered an opinion dated October 25, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Barbara Jo Lubitz
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(4)
[Letterhead of Daugherty, Fowler & Peregrin]
[Refunding Date]
To the Parties Named on Schedule A attached hereto
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
4.01(l)(iv) of the Participation Agreement (Federal Express Corporation
Trust No. N661FE), dated as of October 1, 1995, as amended and restated as
of October 26, 1995 (the "Participation Agreement") among Federal Express
Corporation, as Lessee (the "Lessee"), NationsBank, N.A., as Owner
Participant (the "Owner Participant"), The Chase Manhattan Bank (National
Association), Bank of America NT & SA, CIBC Inc. and The First National
Bank of Chicago, as the Original Loan Participants (the "Original Loan
Participants"), NBD Bank, not in its individual capacity but solely as
Owner Trustee (the "Owner Trustee"), The Chase Manhattan Bank (National
Association), as Indenture Trustee (the "Indenture Trustee") and The Chase
Manhattan Bank (National Association), as Pass Through Trustee, with
respect to that portion of Subtitle VII of Title 49 of the United States
Code relative to the recordation of instruments and the registration of
aircraft thereunder.
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) Trust Agreement (Federal Express Corporation Trust No. N661FE)
dated as of October 1, 1995, as amended and restated as of October
26, 1995 (the "Trust Agreement") between the Owner Participant and
the Owner Trustee, which Trust Agreement amends and restates the
Original Trust Agreement, which Trust Agreement was filed at ____
_.m., C.D.T.;
(b) Trust Indenture and Security Agreement (Federal Express Corporation
Trust No. N661FE) dated as of October 15, 1995, as amended and
restated as of October 26, 1995 and executed on October __, 1995
(the "Indenture") between the Owner Trustee and the Indenture
Trustee, which Indenture amends and restates the Original Indenture,
which Indenture was filed at ____ _.m., C.D.T.; and,
(c) Lease Agreement (Federal Express Corporation Trust No. N661FE)
dated as of October 15, 1995, as amended and restated as of
October 26, 1995 (the "Lease") between the Owner Trustee, as
lessor, and the Lessee, as lessee, which Lease amends and restates
the Original Lease, with the Indenture attached thereto, which Lease
with the Indenture attached thereto was filed at ____ _.m., C.D.T.
The Confidential Omissions were intentionally omitted from the FAA
filing counterparts of the Lease and the 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. AC Form 8050-2 Aircraft Bill of Sale dated October 25, 1995 (the
"FAA Bill of Sale") from AVSA S.A.R.L., as seller, conveying title to the
Airframe to the Owner Trustee has been duly recorded by the FAA on October
25, 1995 and assigned Conveyance No. ________;
2. the Indenture and the Lease with the Indenture 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 49 U.S.C. Section
44107;
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 49
U.S.C. Section 44103(a);
4. the Original Trust Agreement was duly filed with the FAA on
October 25, 1995 pursuant to and in accordance with the provisions of 49
U.S.C. Section 44103(a);
5. the Original Indenture with the Indenture and Security Agreement
Supplement attached has been duly filed with and duly recorded by the FAA
pursuant to and in accordance with the provisions of 49 U.S.C. Section
44107;
6. the Original Lease with the Lease Supplement, the Original
Indenture and the Indenture and Security Agreement Supplement attached was
duly filed with and duly recorded by the FAA pursuant to and in accordance
with the provisions of 49 U.S.C. Section 44107;
7. the Airframe is duly registered in the name of the Owner Trustee
pursuant to and in accordance with the provisions of 49 U.S.C. Section
44103(a);
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 Original Indenture, as amended and restated by the
Indenture, as supplemented by the Indenture and Security Agreement
Supplement, and (ii) the rights of the parties under the Original Lease, as
amended and restated by the Lease, as supplemented by the Lease Supplement;
9. the Original Indenture, as amended and restated by the Indenture,
as supplemented by the Indenture and Security Agreement 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 Original Lease, as
amended and restated by the Lease, as supplemented by the Lease Supplement
(insofar as such assignment affects an interest covered by the recording
system established by the FAA pursuant to 49 U.S.C. Section 44107), 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 49 U.S.C. Section 44107), 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 to the recognition of the perfection of such security interest and
assignment as against third parties in any legal proceeding 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 Original Lease, as
amended and restated by the Lease, as supplemented by the Lease Supplement,
the Original Indenture, as amended and restated by the Indenture, as
supplemented by the Indenture and Security Agreement Supplement, or the
Original Trust Agreement, as amended and restated by the Trust Agreement,
except for such filings as are referred to in our opinion dated October 25,
1995 (which have been duly effected) and the filings referred to in clauses
(a), (b) and (c) above; and,
11. neither the authorization, issuance and delivery of the
Certificates, the execution and delivery by the parties thereto of the
Original Trust Agreement, the Trust Agreement, the Original Indenture, the
Indenture, the Indenture and Security Agreement Supplement, the Original
Participation Agreement, the Participation Agreement, the FAA Bill of Sale,
the Original Lease, the Lease and the Lease Supplement or the performance
by the parties thereto of: (i) the Original Trust Agreement, as amended
and restated by the Trust Agreement; (ii) the Original Indenture, as
amended and restated by the Indenture, as supplemented by the Indenture and
Security Agreement Supplement; (iii) the Original Participation Agreement,
as amended and restated by the Participation Agreement; and (iv) the
Original Lease, as amended and restated by the Lease, as supplemented by
the Lease Supplement, in accordance with the provisions 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 registration 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 the Airframe during any period or
periods of time during which it has not been subject to United States
registration.
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 29 U.S.C. Section 1368(a),
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 October __, 1995
and have continued to rely upon the opinion of the Assistant Chief Counsel
for the Aeronautical Center dated __________, 1995, copies of which are
attached hereto.
Annex I
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus Industrie A300F4-605R aircraft bearing
manufacturer's serial number 760 and U.S. Registration No. N661FE (the
"Airframe") and two (2) General Electric CF6-80C2-A5F aircraft engines
bearing manufacturer's serial numbers 705-231 and 705-232 (the "Engines")
(the Airframe and the Engines are referred to collectively as the
"Aircraft").
Original Trust Agreement
Trust Agreement (Federal Express Corporation Trust No. N661FE)
dated as of October 1, 1995 between the Owner Participant and the Owner
Trustee, which was filed with the FAA on October 25, 1995.
Original Indenture
Trust Indenture, Mortgage and Security Agreement (Federal
Express Corporation Trust No. N661FE) dated as of October 15, 1995 between
the Owner Trustee and the Indenture Trustee, which together with the
Indenture and Security Agreement Supplement (as hereinafter defined)
attached thereto was recorded as one instrument by the FAA on October 25,
1995 and assigned Conveyance No. 2A267994.
Indenture and Security Agreement Supplement
Indenture and Security Agreement Supplement No. 1 (Federal
Express Corporation Trust No. N661FE) dated October 25, 1995 between the
Owner Trustee and the Indenture Trustee, with respect to the Aircraft,
which was attached to and recorded by the FAA as one instrument with the
Original Indenture.
Original Lease
Lease Agreement (Federal Express Corporation Trust No. N661FE)
dated as of October 15, 1995 between the Owner Trustee, as lessor, and the
Lessee, which together with the Lease Supplement (as hereinafter defined),
the Original Indenture and the Indenture and Security Agreement Supplement
attached thereto was recorded as one instrument by the FAA on October 25,
1995 and assigned Conveyance No. 2A267995.
Lease Supplement
Lease Supplement No. 1 (Federal Express Corporation Trust No.
N661FE) dated October 25, 1995 between the Owner Trustee, as lessor, and
the Lessee, with respect to the Aircraft, which was attached to and
recorded by the FAA as one instrument with the Original Lease.
Confidential Omissions
The Lease was filed with the FAA, with (i) the Owner
Participant Amount, the Interim Rent and Basic Rent (Schedule II), (ii) the
Stipulated Loss Values (Schedule III), (iii) the Termination Values
(Schedule IV), (iv) the Purchase Option Schedule (Schedule V) omitted from
the FAA filing counterpart thereof as containing confidential financial
information; and (v) the purchase price under Section 4.02(a)(F) set forth
in Ancillary Agreement I, which was not attached to the FAA filing
counterpart of the Lease or otherwise filed with the FAA for recordation as
containing confidential financial information.
The 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
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(5)
[Letterhead of Dickinson, Wright, Moon, Van Dusen & Freeman]
[Refunding Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N661FE
-------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to NBD Bank, a Michigan
banking corporation ("NBD"), in connection with the Trust Agreement
(Federal Express Corporation Trust No. N661FE), dated as of October 1,
1995, as amended and restated as of October 26, 1995 (the "Trust
Agreement"), between NBD and NationsBank, N.A., a national banking
association (the "Trustor" or "Owner Participant"). Pursuant to the
Participation Agreement (Federal Express Corporation Trust No. N661FE),
dated as of October 1, 1995, as amended and restated as of October 26, 1995
(the "Participation Agreement"), among Federal Express Corporation, as
Lessee, the Owner Participant, The Chase Manhattan Bank (National
Association), Bank of America NT & SA, CIBC Inc. and The First National
Bank of Chicago, as Original Loan Participants, NBD, not in its individual
capacity except as specifically set forth therein but solely as Owner
Trustee (the "Owner Trustee") under the Trust Agreement, The Chase
Manhattan Bank (National Association), as Indenture Trustee and The Chase
Manhattan Bank (National Association), as Pass Through Trustee, one Airbus
A300F4-605R aircraft bearing U.S. Registration No. N661FE (the
"Aircraft") is being refinanced. This opinion is being furnished pursuant
to Section 4.01(l)(vii) of the Participation Agreement. Capitalized terms
used herein and not otherwise defined are used as defined in the
Participation Agreement, except that references herein to any instrument
shall mean such instrument as in effect on the date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Participation Agreement;
(b) The Trust Agreement;
(c) The Indenture;
(d) The Indenture and Security Agreement Supplement No. 1 dated
October 25, 1995;
(e) The Lease;
(f) The Lease Supplement dated October 25, 1995 (each of the
documents identified in paragraphs (a) through (f) above being
collectively referred to as the "Owner Trustee Documents"); and
(g) The Certificates being issued today (the "Certificates").
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
public officials and of corporate officers and other representatives of NBD
and such other instruments as we have deemed necessary and relevant as the
basis for our opinion. Moreover, as to certain facts material to the
opinions expressed herein, we have relied upon representations and
warranties contained in the Owner Trustee Documents.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary and relevant, and subject
to the assumptions, exceptions and qualifications set forth below, we
advise you that, in our opinion:
1. NBD is a Michigan banking corporation duly organized and validly
existing under the laws of the State of the Michigan, with banking and
trust powers, is a "citizen of the United States" within the meaning of
Section 40102(a)(15) of the Transportation Code, and each of NBD and the
Owner Trustee, as the case may be, has or had, on the date of execution
thereof, full power, authority and legal right to execute, deliver and
perform each of the Owner Trustee Documents to which it is or is to be a
party and to issue, execute, deliver and perform the Certificates.
2. Each of NBD and the Owner Trustee, as the case may be, has duly
authorized, executed and delivered each Owner Trustee Document; each Owner
Trustee Document constitutes a legal, valid and binding obligation of the
Owner Trustee (and, to the extent set forth in the respective Owner Trustee
Document, of NBD) enforceable against the Owner Trustee (and, to the extent
set forth in the respective Owner Trustee Document, against NBD) 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.
3. 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.
4. On the Delivery Date, the Owner Trustee received from AVSA such
title to the Aircraft as AVSA conveyed to the Owner Trustee, subject to the
rights of the Owner Trustee and the Lessee under the Original Lease and the
security interest created pursuant to the Original Indenture and the
Indenture Supplement; and to our knowledge, there exist no Liens affecting
the title of the Owner Trustee to the Lessor's Estate resulting from claims
against NBD 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.
5. All of 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, to the Lien of the Indenture in
favor of the Holders of the Certificates.
6. To the extent that the Uniform Commercial Code of the State of
Michigan (the "UCC") is applicable, except for the Indenture Trustee's
taking 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 (including the
grant and assignment unto the Indenture Trustee of the security interest in
all estate, right, title and interest of the Owner Trustee in, to and under
the Lease) which the Indenture by its terms purports to create in favor of
the Indenture Trustee, and (ii) to perfect in the State of Michigan such
security interest, except for the filing of a UCC financing statement in
the office of the Secretary of State of the State of Michigan, 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.
7. The Trust Agreement duly creates a legal and valid trust under
Michigan 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 and the Indenture Supplement create for the benefit of the Owner
Participant the interest in the properties referred to in Section 1.02 of
the Trust Agreement which the Trust Agreement by its terms purports to
create, which interest is subject and subordinate to the security interests
created by the Indenture to the extent provided in the Indenture.
8. Neither the authorization, execution and delivery by the Owner
Trustee or NBD, as the case may be, of the Owner Trustee Documents, nor the
issuance, execution and delivery by the Owner Trustee of the Certificates
nor the fulfillment or compliance by the Owner Trustee or NBD with the
respective terms and provisions thereof nor the consummation of any of the
transactions by the Owner Trustee or NBD, 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 Michigan or the United
States of America governing the banking or trust powers of NBD.
9. The execution, delivery and performance by the Owner Trustee or
NBD, as the case may be, of each of the Owner Trustee Documents 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 incorporation or by-laws of NBD or of any law,
governmental rule, or regulation of the State of Michigan or the United
States of America governing the banking or trust powers of NBD 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, of any judgment or order of the State of Michigan or the United
States of America relating to the banking or trust powers of NBD.
10. Assuming that (i) the Aircraft is not used in Michigan and is
not physically located in Michigan at the commencement or termination of
the Term or during such Term, (ii) in connection with any sale of the
Aircraft, such Aircraft will not be physically delivered in Michigan to a
buyer nor be shipped from a point within Michigan to a buyer, and (iii) 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 Michigan 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 Owner Trustee Documents 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, and
neither the Owner Trustee, the Lessor's Estate nor the trust 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 Michigan 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 solely 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 Michigan or the Owner Trustee's performance of its
duties under the Trust Agreement.
11. There is no fee, tax or other governmental charge under the laws
of the State of Michigan 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 Michigan or the Owner Trustee's performance of its
duties under the Trust Agreement, within the State of Michigan, which would
not have been imposed if NBD did not have its principal place of business
and did not perform its obligations under the Owner Trustee Documents in
the State of Michigan.
12. Neither a Michigan court nor a federal court applying federal
law or Michigan law, if all relevant issues are properly presented to and
considered by such court, would permit the Owner Participant to terminate
the Trust Agreement, except as otherwise provided in the Trust Agreement or
with the consent of the Indenture Trustee, until the Lien of the Indenture
on the Trust Estate has been released and until payment in full of the
principal of, Make-Whole Premium, if any, and interest on, the
Certificates.
13. Under the laws of the State of Michigan, as 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 any insolvency proceeding has been
commenced) (collectively, the "Creditors") may acquire legal, valid and
enforceable claims and liens, as to the Trust Estate, only against the
rights of such Owner Participant under the Trust Agreement or in the Trust
Estate, and may not through the enforcement of such Creditor's rights,
acquire any greater rights than the rights of the Owner Participant with
respect to the Trust Agreement or the Trust Estate.
14. There are no actions, suits, investigations or proceedings
pending or, to our knowledge, threatened against or affecting NBD or the
Owner Trustee, as the case may be, or any of its properties in any court or
before any administrative agency or arbitrator, which, if adversely
determined, would materially adversely affect the ability of NBD or the
Owner Trustee, as the case may be, to perform its obligations under any of
the Owner Trustee Documents, and there are no pending or, to our knowledge,
threatened actions or proceedings before any court, administrative agency
or tribunal involving NBD or the Owner Trustee, as the case may be, in
connection with the transactions contemplated by any of the Owner Trustee
Documents.
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 Michigan and applicable federal laws. 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, the
Trust Indenture Act of 1939, as amended, and the Investment Company Act of
1940, as amended, (ii) Part A of Subtitle VII of Title 49 of the United
States Code, as amended (except with respect to the opinion set forth in
paragraph 1 above concerning the citizenship of NBD), (iii) state
securities or blue sky laws, or (iv) laws, rules and regulations applicable
to the particular nature of the Aircraft acquired by the Owner Trustee.
Insofar as any Owner Trustee Documents and the Certificates expressed to be
governed by the laws of a jurisdiction other than the State of Michigan, we
have assumed that all such documents are legal, valid, binding and
enforceable in accordance with their terms under such laws (as to which we
express no opinion).
B. The foregoing opinions regarding enforceability, except for
the opinions set forth in paragraphs 12 and 13 above, are subject to (i)
applicable bankruptcy, insolvency, moratorium, reorganization, receivership
and other laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law) and (iii) the
effect of applicable public policy on the enforceability or provisions
relating to indemnification.
C. We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than NBD and the Owner
Trustee, of the Owner Trustee Documents to which each is a party and that
each of such parties has the full power, authority and legal right to
execute and deliver, and perform under the terms of, each such document.
D. The opinion set forth in paragraph 1 above concerning the
citizenship of NBD is based upon the Affidavit of Citizenship, and we have
not independently verified the facts supporting such opinion.
E. We have assumed the due authentication of the Certificates
by the Indenture Trustee.
F. We have assumed that all signatures (other than those of
the Owner Trustee or NBD) 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. Except as otherwise provided in paragraph 7, no opinion is
expressed as to the creation, attachment, perfection or priority of any
mortgage or security interest, of any instrument or document creating a
lien or security interest, or of the Indenture or as to the nature or
validity of title to any part of the Trust Estate. 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. Whenever our opinion, with respect to the existence or
absence of facts, is qualified by the phrase "to our knowledge" or a phrase
of similar import, it is intended to indicate that during the course of our
representation in connection with the Owner Trustee Documents, the lawyers
in our firm who have been principally involved in representing NBD and the
Owner Trustee in connection with the Owner Trustee Documents have not
obtained actual knowledge of the existence or absence of such facts, as the
case may be, without the implication that we have made any investigation or
inquiry to determine the existence or absence of such facts.
K. The foregoing opinions are given as of the date hereof
only, and do not contemplate, and no opinion is given or intended, with
respect to subsequent changes in law or fact.
This opinion is rendered solely for your benefit and may not be
relied upon by any other person or entity for any purpose without our prior
written consent, except that the law firm of Davis 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 October 25, 1995 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with the
financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the
Delivery Date Opinion may rely on the Delivery Date Opinion as fully and
with the same force and effect as if such addressees were originally named
therein on the date of the Delivery Date Opinion.
Very truly yours,
Dickinson, Wright, Moon, Van Dusen & Freeman
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(6)(a)
[Letterhead of Dewey Ballantine]
[Refunding Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N661FE
Ladies and Gentlemen:
We have acted as special counsel to The Chase Manhattan Bank
(National Association), a national banking association, acting as Pass
Through Trustee (the "Pass Through Trustee") with respect to the Pass
Through Trust Agreement dated as of February 1, 1993, as amended and
restated as of October 1, 1995 (the "Pass Through Trust Agreement"), as
supplemented by the Series Supplements dated the date hereof, designated as
Series Supplement 1995-B1, 1995-B2 and 1995-B3, respectively (the "Series
Supplements"). We have advised the Pass Through Trustee with respect to
the Pass Through Agreement, the Series Supplements and the Participation
Agreement relating to the Pass Through Trust Agreement and each designated
Series Supplement (the "Participation Agreement") among the parties listed
therein. Additionally, we have advised the Pass Through Trustee with
respect to the Pass Through Certificates (the "Certificates") issued on the
date hereof.
This opinion is being delivered pursuant to Section 4.01(l)(ix)
of the Participation Agreement. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth or
referred to in the Participation Agreement, the Pass Through Trust
Agreement or the Series Supplements, as applicable.
In connection with the opinions expressed herein, we have
reviewed executed counterparts of the Operative Agreements, the Pass
Through Trust Agreement and the Series Supplements. We have also examined
and relied upon the accuracy of the originals or certified, conformed,
photocopied or telecopied copies of such corporate records, certificates,
instruments 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, photocopied 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, when relevant facts were not independently established, relied upon
representations and warranties contained in the Operative Agreements, the
Pass Through Trust Agreement and the Series Supplements and upon the
statements and certificates furnished to us.
Based upon and subject to the foregoing and the qualifications
hereinafter set forth, we are of the opinion that:
1. The Pass Through Trustee is a national banking association duly
organized and validly existing in good standing 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 execute, deliver and perform its
obligations under the Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements, the Certificates and the other Operative
Agreements to which it is a party. Upon execution of the Series
Supplements, the Pass Through Trustee will be deemed to have duly executed
the Pass Through Trust Agreement and thereupon become the Pass Through
Trustee under the Pass Through Trust Agreement and the Series Supplements
for all purposes thereof.
2. The Pass Through Trustee, in its individual and trust capacities,
has duly authorized, executed and delivered the Participation Agreement,
the Pass Through Trust Agreement and the Series Supplements and each of the
other Operative Agreements to which it is a party.
3. Each of the Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements, the Certificates and the other Operative
Agreements to which it is a party constitutes the legal, valid and binding
obligation of the Pass Through Trustee in its trust capacity (and, to the
extent provided in each such document, in its individual capacity)
enforceable against the Pass Through Trustee in its trust capacity (and, to
the extent provided in each such document, in its individual capacity) in
accordance with its terms thereof, except as the enforceability thereof may
be limited by (a) general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law), (b)
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and (c) public policy
considerations (in the case of the indemnity provisions contained therein).
4. The Certificates have been duly authorized and validly executed,
issued, delivered and authenticated by the Pass Through Trustee pursuant to
the Pass Through Trust Agreement and the Series Supplements; and the
Certificates acquired by the Underwriters under the Underwriting Agreement
are enforceable against the Pass Through Trustee and are entitled to the
benefits of the related Pass Through Trust Agreement and the related Series
Supplements, except as the enforceability thereof may be limited by (a)
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law), (b) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and (c) public policy considerations (in the case of
the indemnity provisions contained therein).
5. The execution, delivery, and performance by the Pass Through
Trustee in its trust capacity (and, to the extent provided in each such
document, in its individual capacity), of the Participation Agreement, the
Pass Through Trust Agreement and the Series Supplements and each of 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 Certificates thereunder are not in
violation of the Articles of Association or By-laws of the Pass Through
Trustee or any law, governmental rule or regulation of the United States of
America or the State of New York governing the banking or trust powers of
the Pass Through Trustee 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 New York or Federal law,
rule or regulation governing the Pass Through Trustee's banking or trust
powers, or of any judgment, order or decree known to us to be applicable to
the Pass Through Trustee, in its individual or trust capacity, of any
court, regulatory body, administrative agency, government or governmental
body having jurisdiction over the Pass Through Trustee, in its individual
or trust capacity, or its properties.
6. Neither the execution and delivery by the Pass Through Trustee,
in its individual or trust capacity, as the case may be, of the
Participation Agreement, the Pass Through Trust Agreement, the Series
Supplements, the Certificates or any of the other Operative Agreements to
which it is a party, nor the consummation by the Pass Through Trustee, in
its individual or trust capacity, as the case may be, of any of the
transactions contemplated in the Participation Agreement, the Pass Through
Trust Agreement, the Series Supplements, the Certificates or any of the
other Operative Agreements to which it is a party requires 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 Pass Through Trustee.
7. There are no taxes, fees or other governmental charges payable
under the laws of the State of New York or any political subdivision
thereof in connection with the execution, delivery and performance by the
Pass Through Trustee, in its individual or trust capacity, as the case may
be, of the Participation Agreement, 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
Certificates by the Pass Through Trustee, pursuant to the Series
Supplements.
8. Neither the trusts created by the Pass Through Trust Agreement
and the Series Supplements nor the Pass Through Trustee, in its individual
or trust capacity, as the case may be, nor their respective Affiliates,
successors or assigns, 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 New York or any political subdivision
thereof (other than taxes imposed on the fees received by The Chase
Manhattan Bank (National Association) for acting as Pass Through Trustee
under the Series Supplements). Certificate holders who are not residents
of or otherwise subject to tax in New York 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 New York or any
political subdivision thereof as a result of purchasing, owning (including
receiving payments with respect to) or selling a Certificate. There are no
applicable taxes under the laws of the State of New York 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, (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 Operative Agreements, any or all of the 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 hereto and 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 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 Certificates, or (g) otherwise
with respect to or in connection with the transactions contemplated by the
Pass Through Trust Agreement, the Series Supplements, the Certificates 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, the Certificates and the Operative
Agreements in, and had not engaged in any activities unrelated to the
transactions contemplated by the Pass Through Trust Agreement, the Series
Supplements, the Certificates and the Operative Agreements in, the State of
New York.
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
New York Taxes" in the Prospectus Supplement to the Prospectus forming part
of Registration Number No. 33-56569 (the "Registration Statement") for the
registration of the Certificates with the Securities and Exchange
Commission. In addition, we have assumed that each Pass Through Trust (as
defined in the Registration Statement) 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 New York. We
express no opinion as to the correctness of the foregoing assumptions and
we have conducted no independent investigation in this regard.
We express no opinion as to the laws of any jurisdiction other
than the laws of the State of New York and the Federal laws of the United
States of America. In addition, we express no opinion herein as to (i) any
Federal or state securities laws or blue sky laws and assume that the
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 tax laws, (iii) any aviation laws including, without limitation, the
Transportation Code, (iv) any laws, statutes, rules or regulations
applicable to the particular nature of the equipment acquired or to be
acquired by the Owner Trustee, or (v) ERISA or any other pension and
employee benefit laws, rules or regulations. In addition, we express no
opinion as to the right, title or interest in or to the Trust Estate on the
part of any Person. We also express no opinion as to the perfection or
priority of any security interest created by any of the Operative
Agreements.
In rendering the opinions expressed herein, we have assumed
that (a) each of the Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements, the Certificates and the other Operative
Agreements has been duly authorized, executed and delivered by the
respective parties thereto (other than the Pass Through Trustee) and
constitutes a legal, valid and binding obligation of each of such parties
(other than the Pass Through Trustee), enforceable against each of such
parties in accordance with the terms thereof, (b) each of such parties
(other than the Pass Through Trustee) has the requisite power, authority
and legal right to enter into and perform its respective obligations under
the Participation Agreement, the Pass Through Trust Agreement, the Series
Supplements, the Certificates and each of the other Operative Agreements to
which it is a party and (c) the transactions provided for in the Operative
Agreements are not within the prohibitions of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended.
This opinion is furnished by us for the sole benefit of the
addressees hereof, each of whom we understand and agree may rely upon the
opinions set forth herein. No other person or entity is entitled to rely
on this opinion 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,
Dewey Ballantine
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT A(6)(b)
[Letterhead of The Chase Manhattan Bank, N.A.]
[Refunding Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N661FE
Ladies and Gentlemen:
As Vice President and Senior Associate Counsel to The Chase Manhattan
Bank (National Association), a national banking association, acting as Pass
Through Trustee (the "Pass Through Trustee") with respect to the Pass
Through Trust Agreement dated as of February 1, 1993, as amended and
restated as of October 1, 1995 (the "Pass Through Trust Agreement"), as
supplemented by the Series Supplements dated the date hereof, designated as
Series Supplement 1995-B1, 1995-B2 and 1995-B3, respectively (the "Series
Supplements"), I advise you as follows with respect to the authorization,
execution and delivery by the Pass Through Trustee of (i) the Series
Supplements and (ii) the Participation Agreement (Federal Express
Corporation Trust No. N661FE) dated as of October 1, 1995, as amended and
restated as of October 26, 1995 (as amended and restated, the
"Participation Agreement") among the parties listed therein. Additionally,
I have advised the Pass Through Trustee with respect to the Pass Through
Certificates (the "Certificates") issued on the date hereof.
Unless otherwise defined herein, capitalized terms used herein
shall have the respective meanings attributed thereto in the Participation
Agreement, the Pass Through Trust Agreement or the Series Supplements, as
applicable.
I have reviewed executed counterparts of the Pass Through Trust
Agreement, the Series Supplements, the Certificates, the Participation
Agreement and the other Operative Agreements to which the Pass Through
Trustee is a party. I have also examined the originals, or certified,
conformed, photocopied or telecopied copies of such corporate records,
certificates, instruments and other documents as I have deemed necessary to
appropriate to enable me to render the opinions expressed herein,
including, without limitation, certified copies of the By-laws of the Pass
Through Trustee, a certificate of the secretary of the Pass Through Trustee
as to certain matters, including the incumbency of the officer of the Pass
Through Trustee who executed the Pass Through Trust Agreement, the Series
Supplements, the Participation Agreement and the other certificates
executed and delivered in connection with the transactions contemplated by
any of the foregoing and who authenticated the Certificates and a
certificate of the Comptroller of the Currency, Washington, D.C., dated
September 23, 1965, as to the Pass Through Trustee's existence and
authority to do business as a national banking association and to act in a
fiduciary capacity.
In all such examinations, I have assumed the genuineness of
signatures on original documents (other than those of the Pass Through
Trustee) and the conformity to such original documents of all copies
submitted to me as certified, conformed, photocopied or telecopied copies,
and as to certificates and telegraphic and telephonic confirmations given
by public officials, I have assumed the same to have been properly given
and to be accurate. As to all matters of fact material to my opinions, I
have, when relevant facts were not independently established, relied upon
statements, representations and warranties contained in the Operative
Agreements, the Pass Through Trust Agreement, the Series Supplements and
the Certificates and upon the statements and certificates furnished to me.
A. Based upon the foregoing and subject to the limitations
expressed in paragraph B below, I am of the opinion that: the execution,
delivery and performance by the Pass Through Trustee of the Series
Supplements, the Certificates, the Participation Agreement and each of the
other Operative Agreements to which it is a party are not, to my knowledge,
in violation of 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. Upon execution of the Series Supplements, the
Pass Through Trustee will be deemed to have duly executed the Pass Through
Trust Agreement and thereupon become the Pass Through Trustee under the
Pass Through Trust Agreement and the Series Supplements for all purposes
thereof.
B. I am qualified to practice law in the State of New York and
I express no opinion as to any laws other than the laws of the State of New
York and the federal laws of the United States of America. Further,
without limiting the generality of the foregoing, I express no opinion with
respect to (i) the citizenship of the Pass Through Trustee, the
Transportation Code and the regulations promulgated thereunder, the impact
of the Transportation Code 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 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 Pass Through Trustee under the laws of
any jurisdiction other than New York or federal laws of the United States
of America to exercise any rights or remedies set forth in the Pass Through
Trust Agreement, the Series Supplements or 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 New York; 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 my express prior written
consent. This opinion may not be used, circulated, quoted, published or
otherwise referred to for any purpose without my express prior written
consent. This 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,
Barbara Jo Lubitz
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tyron Street
Charlotte, North Carolina 28255-0001
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Original Loan Participants
- --------------------------
The Chase Manhattan Bank (National Association)
One Chase Manhattan Plaza
New York, New York 10081
Bank of America NT & SA
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, California 94520
CIBC Inc.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
The First National Bank of Chicago
Transportation Division
One First National Plaza
Mail Suite 0362
Chicago, Illinois 60670
EXHIBIT B
[FORM OF LEASE AGREEMENT]
[See Exhibit 4.g]
EXHIBIT C
[FORM OF INDENTURE]
[See Exhibit 4.c.1]
EXHIBIT D
[FORM OF TRUST AGREEMENT]
[See Exhibit 4.f]
/dpw/cw/037/07853/042/8K/EDGAR/FILING.2/ex4e1.3.ed
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N663FE)
Dated as of October 26, 1995
among
FEDERAL EXPRESS CORPORATION,
Lessee
CHRYSLER CAPITAL CORPORATION,
Owner Participant
NBD BANK,
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as
Owner Trustee,
Owner Trustee
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as
Indenture Trustee,
Indenture Trustee
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as
Pass Through Trustee,
Pass Through Trustee
______________________________
LEVERAGED LEASE OF ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 766, REGISTRATION NO. N663FE
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........................................ 3
Section 2.02. Certificates............................................. 4
Section 2.03. Owner Participant's Instructions to Owner Trustee........ 5
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent,
Stipulated Loss Values, Termination Values
and EBO Price......................................... 5
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date......................... 6
Section 3.02. Commitments to Participate in Purchase Price............. 6
Section 3.03. Owner Participant's Instructions to Owner Trustee........ 8
Section 3.04. Transaction Costs........................................ 9
Section 3.05. Postponement of Delivery Date............................ 9
Section 3.06. Closing.................................................. 10
Section 3.07. Owner Participant Payment................................ 11
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date).......... 11
Section 4.02. Conditions Precedent (Delivery Date)..................... 19
Section 4.03. Opinion of Special Aviation Counsel upon Registration.... 26
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations............. 26
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties.................. 27
Section 6.02. Offering by Lessee....................................... 33
Section 6.03. Certain Covenants of Lessee.............................. 33
Section 6.04. Survival of Representations and Warranties............... 41
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests
in Lessor's Estate.................................... 41
Section 7.02. Citizenship.............................................. 41
Section 7.03. Representations, Warranties and Covenants of the Owner
Participant........................................... 43
Section 7.04. Representations, Covenants and Warranties of NBD and the
Owner Trustee......................................... 47
Section 7.05. Representations, Warranties and Covenants of the
Indenture Trustee..................................... 50
Section 7.06. Indenture Trustee's Notice of Default.................... 51
Section 7.07. Releases from Indenture.................................. 51
Section 7.08. Covenant of Quiet Enjoyment.............................. 52
Section 7.09. Pass Through Trustee's Representations and Warranties.... 52
Section 7.10. Survival of Representations, Warranties and Covenants.... 53
Section 7.11. Lessee's Assumption of the Certificates.................. 53
Section 7.12. Indebtedness of Owner Trustee............................ 55
Section 7.13. Compliance with Trust Agreement, Etc..................... 55
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes......................... 56
Section 8.02. After-Tax Basis.......................................... 61
Section 8.03. Time of Payment.......................................... 62
Section 8.04. Contests................................................. 62
Section 8.05. Refunds.................................................. 64
Section 8.06. Lessee's Reports......................................... 64
Section 8.07. Survival of Obligations.................................. 65
Section 8.08. Payment of Taxes......................................... 65
Section 8.09. Reimbursements by Indemnitees Generally.................. 65
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally................................................ 66
Section 9.02. After-Tax Basis.......................................... 69
Section 9.03. Subrogation.............................................. 70
Section 9.04. Notice and Payment....................................... 70
Section 9.05. Refunds.................................................. 71
Section 9.06. Defense of Claims........................................ 71
Section 9.07. Survival of Obligations.................................. 72
Section 9.08. Effect of Other Indemnities.............................. 72
Section 9.09. Interest................................................. 72
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs....................... 72
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee.................. 74
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant.................... 76
Section 12.02. Interest of Holders of Certificates..................... 76
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents.................... 76
Section 13.02. Further Assurances...................................... 77
ARTICLE 14
NOTICES
Section 14.01. Notices................................................. 77
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing............................................. 78
Section 15.02. Reoptimization.......................................... 81
ARTICLE 16
[INTENTIONALLY LEFT BLANK]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes.......................... 83
Section 17.02. Collateral Account...................................... 83
Section 17.03. Counterparts............................................ 84
Section 17.04. No Oral Modifications................................... 84
Section 17.05. Captions................................................ 84
Section 17.06. Successors and Assigns.................................. 84
Section 17.07. Concerning the Owner Trustee, the Pass Through
Trustee and the Indenture Trustee.................... 85
Section 17.08. Severability............................................ 85
Section 17.09. Public Release of Information........................... 85
Section 17.10. Certain Limitations on Reorganization................... 86
Section 17.11. GOVERNING LAW........................................... 86
Section 17.12. Section 1110 Compliance................................. 86
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality......................................... 87
SCHEDULE I Certificate Information
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
SCHEDULE IV Purchase Price, Owner Participant's Commitment and Debt
Portion
EXHIBIT A(1)(a)(i) Opinion of Lessee's Counsel (Certificate Closing Date)
EXHIBIT A(1)(a)(ii) Opinion of Lessee's Counsel (Delivery Date)
EXHIBIT A(1)(b)(i) Opinion of Lessee's Special Counsel (Certificate
Closing Date)
EXHIBIT A(1)(b)(ii) Opinion of Lessee's Special Counsel (Delivery Date)
EXHIBIT A(2)(a) Opinion of Owner Participant's Special Counsel
EXHIBIT A(2)(b) Opinion of Owner Participant's Counsel
EXHIBIT A(3)(a) Opinion of Indenture Trustee's Special Counsel
EXHIBIT A(3)(b) Opinion of Indenture Trustee's Counsel
EXHIBIT A(4)(a) Opinion of Owner Trustee's Counsel
EXHIBIT A(4)(b) Opinion of Owner Trustee's Counsel
EXHIBIT A(5)(a) Opinion of Pass Through Trustee's Special Counsel
EXHIBIT A(5)(b) Opinion of Pass Through Trustee's Counsel
EXHIBIT A(6) Opinion of Engine Manufacturer's Counsel
EXHIBIT A(7) Opinion of Manufacturer's and AVSA's Counsel
EXHIBIT A(8) Opinion of Special Aviation Counsel
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
EXHIBIT E Form of Purchase Agreement Assignment, Consent and
Agreement, AVSA Consent and Agreement
EXHIBIT F Form of Engine Warranty Assignment and Engine Consent
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N663FE)
PARTICIPATION AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO.
N663FE) dated as of October 26, 1995 (this "Agreement") among FEDERAL
EXPRESS CORPORATION, a Delaware corporation (herein, together with its
successors and permitted assigns, the "Lessee"), CHRYSLER CAPITAL
CORPORATION, a Delaware corporation (herein, together with its successors
and permitted assigns, the "Owner Participant"), NBD BANK, a Michigan
banking corporation, 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, together with its
successors and permitted assigns, the "Owner Trustee"), THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), a national banking association, not in its
individual capacity, except as otherwise expressly stated herein, but
solely as indenture trustee under the Indenture referred to below (in such
capacity as trustee, together with its successors and permitted assigns,
the "Indenture Trustee") and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association, not in its individual
capacity, except as otherwise expressly stated herein, but solely as pass
through trustee (in such capacity as trustee, together with its successors
and permitted assigns, the "Pass Through Trustee").
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 Article 1 hereof.
WHEREAS, the Owner Participant has entered into the Trust
Agreement with the Owner Trustee in its individual capacity, substantially
in the form of Exhibit D hereto, pursuant to which Trust Agreement NBD
agrees, among other things, to hold the Lessor's Estate in trust for the
benefit of the Owner Participant on the terms specified in the Trust
Agreement, subject to the Lien of the Indenture.
WHEREAS, on the Pass Through Closing Date, a closing will occur
with respect to the public offering of Pass Through Certificates issued by
each Pass Through Trust, an allocable amount of the proceeds of which
offering 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.
WHEREAS, concurrently with the execution and delivery hereof, the
Owner Trustee and the Indenture Trustee are entering into the Indenture for
the benefit of the Pass Through Trustee, pursuant to which the Owner
Trustee is issuing the Certificates to the Pass Through Trustee as evidence
of the loans made by the Pass Through Trustee to the Owner Trustee, the
proceeds of which loans will be deposited by the Owner Trustee in the
Collateral Account.
WHEREAS, prior to the Delivery Date, the Certificates will be
secured by the Liquid Collateral.
WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Trustee is authorized and directed by the Owner Participant:
(a) on the Delivery Date, to purchase the Aircraft from AVSA;
(b) on the Certificate Closing Date, to execute and deliver the
Lease substantially in the form of Exhibit B hereto, pursuant to which,
subject to the terms and conditions set forth in said Lease, the Owner
Trustee agrees to lease to the Lessee, and the Lessee agrees to lease
from the Owner Trustee, the Aircraft on the Delivery Date, such Lease to
be effected by the execution and delivery of a Lease Supplement, in the
form of Exhibit A to the Lease, covering the Aircraft and incorporating
by reference all of the terms of the Lease;
(c) on the Certificate Closing Date, to execute and deliver the
Indenture, substantially in the form of Exhibit C hereto, for the
benefit of the Holders from time to time of the Certificates, pursuant
to which the Owner Trustee agrees, among other things, (A) to deposit,
mortgage and pledge with the Indenture Trustee, as part of the Trust
Indenture Estate, all of the Lessor's Estate but not Excepted Payments,
(B) on the Certificate Closing Date, to issue Certificates substantially
in the form set forth in Exhibit B to the Indenture, the proceeds of the
sale of which will be held by the Owner Trustee in the Collateral
Account until released on the Delivery Date for use by the Owner Trustee
(or, in certain circumstances, the Lessee) towards payment of the
Purchase Price for the Aircraft, and (C) on the Delivery Date, to
execute and deliver the Indenture and Security Agreement Supplement,
substantially in the form of Exhibit A to the Indenture, covering the
Aircraft and supplementing the Indenture;
(d) on the Certificate Closing Date, to execute and deliver the
Purchase Agreement Assignment, whereby the Lessee assigns to the Owner
Trustee the right to purchase the Aircraft from AVSA and certain of the
Lessee's rights and interests under the Purchase Agreement and the
Consent and Guaranty to the extent that the same relate to the Aircraft
(except to the extent reserved in said Purchase Agreement Assignment),
which Purchase Agreement Assignment is to include as an annex a Consent
and Agreement executed by the Manufacturer and the AVSA Consent and
Agreement executed by AVSA, said Purchase Agreement Assignment, Consent
and Agreement and AVSA Consent and Agreement to be substantially in the
form of Exhibit E hereto; and
(e) on the Certificate Closing Date, to execute and deliver the
Engine Warranty Assignment, whereby the Lessee assigns to the Owner
Trustee certain of the Lessee's rights and interests under the GTA to
the extent that the same relate to the Engines (except to the extent
reserved in the Engine Warranty Assignment), which Engine Warranty
Assignment is to include as an annex a Consent executed by the Engine
Manufacturer, said Engine Warranty Assignment and Engine Consent to be
substantially in the form of Exhibit F hereto.
WHEREAS, on the Delivery Date pursuant to and subject to the terms
and conditions of this Agreement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, AVSA's FAA Bill of Sale, AVSA's Warranty Bill
of Sale and the Airbus Guaranty, the Owner Trustee will purchase, and
receive title to, the Aircraft from AVSA and lease the Aircraft to the
Lessee pursuant to the Lease (or, in certain, circumstances, the Lessee
will purchase the Aircraft).
NOW, THEREFORE, in consideration of the mutual covenants contained
in this Agreement and other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, the definitions set
forth 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.
(a) On or before the Pass Through Closing Date, the Pass Through
Trustee and the Lessee, in accordance with the Pass Through Agreement,
shall enter into the Series Supplements, and, subject to the terms and
conditions set forth therein, on the Pass Through 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 Certificate Closing Date, on behalf of each Pass
Through Trust, from an allocable amount of the proceeds of 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 Certificates 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 Section 2.04 of the Indenture. The aggregate
amount payable by the Pass Through Trustee pursuant to this Section 2.01(b)
shall be payable by wire transfer or intra-bank transfer to the Indenture
Trustee on behalf of the Owner Trustee.
(c) On the Certificate Closing Date, the Indenture Trustee shall,
on behalf of the Owner Trustee, deposit, by wire transfer or intra-bank
transfer, the amounts received by it pursuant to Section 2.01(b) hereof in
the Collateral Account pursuant to the Indenture.
(d) On the Certificate Closing Date concurrently with the events
specified in Section 2.01(b) hereof, the parties hereto shall execute and
deliver, to the extent they are parties thereto, and consent to the
execution and delivery of (if they are not parties thereto), the Lease, the
Indenture and the Trust Agreement, and the other documents listed in
Section 4.01(d) hereof, and the Owner Trustee shall execute and deliver to
the Indenture Trustee for authentication, and the Indenture Trustee shall
authenticate and deliver to the applicable Pass Through Trustee, upon the
request of the Owner Trustee, the Certificates as provided in Section 2.02
hereof.
(e) The Closings shall take place at the offices of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017.
Section 2.02. Certificates. Subject to the satisfaction or
waiver of the conditions set forth herein, on the Certificate Closing Date,
the Owner Participant will instruct the Owner Trustee to execute 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 Certificates
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 Certificate Closing
Date and shall bear interest from the Certificate Closing Date and (v)
shall be registered in the name of the Pass Through Trustee on behalf of
such Pass Through Trust.
Section 2.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the issuance of Certificates in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the action specified in Section 1.01 (other than clause (c)) of the
Trust Agreement and confirmation that all conditions to closing set forth
in Section 4.01 hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent,
Stipulated Loss Values, Termination Values and EBO Price. (a) On or prior
to the Delivery Date, the percentages for Basic Rent referred to in
Schedule II of the Lease and for Stipulated Loss Value and Termination
Value in Schedule III and Schedule IV, respectively, of the Lease and the
EBO Price shall be adjusted (upward or downward), subject to the procedures
set forth in Section 3.04 of the Lease and the minimum value established by
Section 3.05 of the Lease and the definitions of Stipulated Loss Value and
Termination Value, to reflect changes in the pricing assumptions with
respect to (i) the Delivery Date being other than November 20, 1995, (ii) a
different rate of interest or amortization schedule assumed by the Owner
Participant in calculating such percentages from that assumed by the Owner
Participant in originally calculating such percentages, (iii) Transaction
Costs being other than as assumed in Section 10.01 hereof, (iv) any change
in the length of the Interim Term or the Basic Term and (v) a change in the
Internal Revenue Code or the Treasury Regulations promulgated thereunder or
a publication by the Internal Revenue Service of any Revenue Ruling or
Revenue Procedure or any informational release or adverse judicial decision
(a "Change in Tax Law") which occurs after the date that is two days prior
to the execution of this Agreement but on or prior to the Delivery Date.
(b) If after the date that is two days prior to the execution of
this Agreement but on or prior to the Delivery Date, a Change in Tax Law is
proposed relating to depreciation or the accrual of rent, and on or prior
to the Delivery Date either (I) the Owner Participant provides a memorandum
of counsel that concludes there is a significant likelihood that such
Change in Tax Law (insofar as it affects the transaction) will be enacted
or become effective in substantially the form proposed, and if enacted or
effective, would adversely affect either component of the Owner's Economic
Return by more than 50 basis points, then the Lessee shall provide for
either (A) a rent adjustment in the manner described in Section 3.04 of the
Lease based on the assumption that such Change in Tax Law will occur or (B)
an indemnity reasonably satisfactory to the Owner Participant regarding
such Change in Tax Law that would preserve the Owner's Economic Return or
(II) the Lessee provides a memorandum of counsel that concludes there is a
significant likelihood that such Change in Tax Law (insofar as it effects
the transaction) will be enacted or become effective in substantially the
form proposed, and if enacted or effective, would enhance either component
of the Owner's Economic Return by more than 50 basis points, then the Owner
Participant will enter into an agreement with the Lessee in form and
substance reasonably satisfactory to both parties pursuant to which the
Owner Participant will agree that upon such proposed Change in Tax Law
becoming effective, the Owner Participant shall make payments directly to
the Lessee from time to time such that taking into account the Change in
Tax Law and such payments, the benefit of such Change in Tax Law will be
passed through to the Lessee while preserving the Owner's Economic Return.
(c) If, as a result of an adjustment to the percentages for
Interim Rent and Basic Rent referred to in Schedule II of the Lease
pursuant to clause (a) or (b) of this Section 2.04, the Net Present Value
of Rents assuming such adjustments increases by more than 1.50% from the Net
Present Value of Rents prior to such adjustments, the Lessee will have the
right to terminate its commitment to lease the Aircraft from the Owner
Trustee and will have no further obligations other than as described in
Section 3.05 hereof.
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date. The Lessee
agrees to give the Owner Participant, the Indenture Trustee, the Owner
Trustee and the Pass Through Trustee at least three (3) Business Days'
written or facsimile notice prior to the Delivery Date (which notice shall
be effective only if received not later than 10:00 a.m. (New York City
time) on the date that is at least three (3) Business Days prior to the
Delivery Date), which Delivery Notice shall specify the amount of the
Purchase Price, the amount of the Owner Participant's Commitment, the Debt
Portion, the Delivery Date for the Aircraft, the serial number of the
Airframe and each Engine, and the Aeronautics Authority registration number
for the Aircraft.
Section 3.02. Commitments to Participate in Purchase Price. (a)
Participation in Purchase Price. Subject to the terms and conditions of
this Agreement, on the Delivery Date, (i) the Indenture Trustee agrees to
release the Debt Portion or such lesser amount as may then be held in the
Collateral Account together with the Lessee Shortfall (as defined in clause
(iii) below), if any, to the Owner Trustee for application to the Purchase
Price as provided below, (ii) the Owner Participant agrees to participate
in the Lessor's payment of the Purchase Price by making an investment in
the beneficial ownership of the Lessor's Estate in an amount equal to that
percentage of the Purchase Price set forth opposite the Owner Participant's
name in Schedule IV hereto, (iii) the Lessee agrees to pay to the Indenture
Trustee the excess, if any, of (I) the Debt Portion over (II) the amount as
may then be held in the Collateral Account (the "Lessee Shortfall") as
provided in Section 17.02(a) hereof, and (iv) pursuant to the Purchase
Agreement as assigned pursuant to the Purchase Agreement Assignment, AVSA
shall sell the Aircraft to the Owner Trustee and the Owner Trustee shall
immediately thereafter lease the Aircraft to the Lessee pursuant to the
Lease. In consideration for the assignment to the Owner Trustee by the
Lessee under the Purchase Agreement Assignment of the Lessee's right to
purchase the Aircraft for the remaining balance due under the Purchase
Agreement and for the transfer of title to the Aircraft from AVSA to the
Owner Trustee, the following cash payments will be made by wire transfer of
immediately available funds on the Delivery Date: (A) by the Owner Trustee
to AVSA, an amount equal to the remaining balance due to AVSA under the
Purchase Agreement for the Aircraft, as evidenced by the Invoice, (B) by
the Owner Trustee to the Lessee, an amount equal to the Purchase Price
minus the cash payment to AVSA pursuant to clause (A) above and (C) by the
Indenture Trustee, on behalf of the Owner Trustee, to the Lessee the excess
of any amounts as may then be held in the Collateral Account over the Debt
Portion.
(b) Payment of Commitment. The Owner Participant agrees, subject
to the terms and conditions of this Agreement, to make the amount of its
Commitment available for and on account of the Owner Trustee on the
Delivery Date specified in the Delivery Notice pursuant to Section 3.03
hereof by wire transfer, initiated by 10:00 a.m. (New York City time on
such day) of such amount in immediately available funds, to NBD for deposit
in its account at NBD Bank, ABA No. 072-000-326, Account: NBD NATL
DET/TRUST, BNF = Corp Trust Dept (G/L #325604), OBI = FedEx Corp Trust No.
N663FE, Account #8094076-00, Attention: Karen O'Donoghue. The amount of
the Owner Participant's Commitment shall be held for the account of the
Owner Participant by NBD until released by the Owner Participant or its
special counsel at closing or until returned to the Owner Participant in
accordance with Section 3.02(c) hereof.
(c) Delayed Delivery. Subject to the provisions of Section 3.05
hereof, if the closing of the transactions contemplated by the Operative
Agreements shall not have been consummated by 2:00 p.m. (New York City
time), or such earlier time as directed by the Lessee, on the Scheduled
Delivery Date, the Owner Trustee shall, if instructed in writing by the
Lessee, at the risk and expense of the Lessee, use its reasonable best
efforts to cause the Owner Participant's Commitment to be invested and
reinvested to the extent practicable at the direction received by it from
the Lessee (with a copy to the Owner Participant), at the risk of the
Lessee, in Permitted Investments consisting of either commercial paper or
time deposits; provided, however, that in the absence of instructions by
2:00 p.m. (New York City time) the Owner Trustee shall use its reasonable
best efforts to cause such amount or the proceeds thereof to be invested
and reinvested to the extent practicable in overnight Eurodollar time
deposits. Earnings on any such investments shall be applied to the
Lessee's payment obligations, if any, to the Owner Participant or the Owner
Trustee under the next two paragraphs to the extent of such obligations,
and the balance, if any, of such earnings remaining after such application
shall be paid in accordance with the Lessee's written instructions.
If for any reason (i) the Operative Agreements shall not be
executed and delivered by the respective parties thereto and/or the
Delivery Date shall not occur (whether by reason of a failure to meet a
condition precedent thereto set forth in Article 4 hereof or otherwise) on
or before the third Business Day after the Scheduled Delivery Date or, if
earlier, the Cut-Off Date, or (ii) the Lessee has notified the Owner
Trustee (with a copy to the Owner Participant) prior to 2:00 p.m. (New
York City time) on any date after the Scheduled Delivery Date that it does
not intend to go forward to close the transactions contemplated hereby for
such Delivery Date, the Owner Participant may cancel any funding
arrangements made to fund its Commitment on the Scheduled Delivery Date but
the Owner Participant's Commitment hereunder with respect to the Aircraft
shall not (except as otherwise expressly contemplated in a signed term
sheet between the Owner Participant and the Lessee) be terminated thereby
until the Cut-Off Date, whereupon the Owner Participant's Commitment
hereunder shall terminate. On such third Business Day or the Cut-Off Date,
as the case may be, or the earliest practicable Business Day thereafter,
the Owner Trustee shall return the amounts held by it hereunder to the
Owner Participant, provided that the Owner Trustee shall have had a
reasonable time to liquidate any Permitted Investments it has been
authorized to invest in pursuant to the preceding paragraph and to obtain
the proceeds therefrom in funds of the type originally received, and the
Lessee shall pay interest on such funds to the Owner Participant at the
Base Rate minus 50 basis points, such interest to be payable for the period
from and including such Scheduled Delivery Date to but excluding the date
such funds are returned to the Owner Participant in accordance with the
terms hereof; provided that if any such funds are returned to the Owner
Participant after 2:00 p.m. (New York City time) on any such date, such
funds shall be deemed for purposes of this paragraph to have been returned
on the next succeeding Business Day.
The Lessee shall reimburse the Owner Trustee on demand for any
loss incurred by the Owner Trustee as a result of the investment of funds
by the Owner Trustee in accordance with the terms of this Section 3.02(c).
Further, the Lessee shall indemnify the Owner Trustee and hold it harmless
from and against any cost or expense the Owner Trustee may incur as a
result of any investment of funds or transfer of funds referred to herein
in accordance with the terms hereof. The Owner Trustee shall not be liable
for failure to invest such funds except as otherwise provided herein or for
any losses incurred on such investments except for any losses arising out
of its own gross negligence or willful misconduct.
Section 3.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the release of its Commitment in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the action specified in Section 1.01(c) of the Trust Agreement and
confirmation that all conditions to closing set forth in Section 4.02
hereof were either met to the satisfaction of the Owner Participant or, if
not so met, were in any event waived by it.
Section 3.04. Transaction Costs. If the transactions
contemplated by this Article 3 are consummated, as and when any portion of
Transaction Costs becomes due and payable, the Owner Participant shall, as
soon as practicable upon receipt of bills or invoices for the amounts
payable make such payments or, if the Lessee shall have already made such
payment, shall reimburse the Lessee therefor or shall, as soon as
practicable, furnish the Owner Trustee funds sufficient to, and the Owner
Trustee shall, as soon as practicable, make payment of such portion to the
Person or Persons entitled to payment upon presentation to the Owner
Trustee of bills or invoices for the amount of such payment. If, in breach
of a signed term sheet or this Agreement, the Owner Participant shall fail
to make the full amount of its Commitment available in accordance with
Section 3.02 hereof, the Lessee shall have no obligation to pay any costs
and expenses incurred by the Owner Participant in connection with the
transactions contemplated by this Agreement (but the Lessee shall be
obligated to pay all other Transaction Costs) and neither the fact of the
Lessee's agreement in Section 3.05 hereof to purchase the Aircraft nor the
requirement in Section 3.05 hereof that the Owner Participant shall assign
its interest to another equity investor identified by the Lessee shall be
deemed to constitute a waiver or release of any right which the Lessee may
have against the Owner Participant in such circumstances.
Section 3.05. Postponement of Delivery Date. (a) If the Owner
Participant shall for any reason not make the full amount of its Commitment
available when required in accordance with the terms of Section 3.02
hereof, the Owner Trustee will promptly give each party confirmed facsimile
notice thereof and the Lessee shall postpone the Delivery Date for a period
of not more than five (5) Business Days, but in no event later than the
Cut-Off Date. Notwithstanding the foregoing, if for any reason other than
the failure of the Manufacturer or AVSA to deliver the Aircraft, the Lessee
does not enter into the Lease Supplement with the Owner Trustee on or prior
to the Cut-Off Date, the Indenture Trustee and the Pass Through Trustee
agree that either (i) the Lessee shall cause the Owner Participant to
assign to another equity investor identified by the Lessee its interest in
the Lessor's Estate pursuant to Section 7.03(d) hereof and cause such
successor Owner Participant to so close on such transactions, provided that
the election contained in this clause (i) may be exercised by the Lessee
only if the Owner Participant fails to make available its Commitment in
breach of a signed term sheet or this Agreement or if the Lessee is
entitled by virtue of Section 2.04(c) hereof to terminate its commitment to
lease the Aircraft from the Owner Trustee or (ii) the Lessee shall purchase
the Aircraft and assume all of the obligations of the Owner Trustee under
the Certificates upon satisfaction of the requirements set forth in Section
4.02 hereof, as the same may be modified by the provisions of Section 7.11
hereof and as otherwise necessary to reflect a full recourse secured
aircraft financing of the Lessee. The Lessee agrees to elect either clause
(i) or (ii) of the previous sentence if the Lessee does not enter into the
Lease Supplement with the Owner Trustee on or prior to the Cut-Off Date as
specified in such sentence and agrees to perform the undertakings
associated with such election. If the Lessee has elected clause (i) of the
second preceding sentence hereof, the Owner Participant agrees to assign
its interest in the Lessor's Estate as provided in said clause (i). In
case of any such election (but subject to the satisfaction of the
conditions precedent specified herein), the Indenture Trustee shall release
the Debt Portion or such lesser amount as may then be held in the
Collateral Account for application to the payments contemplated in the last
sentence of Section 3.02(a) hereof.
(b) Release of Obligations. If the Delivery Date has not
occurred on or prior to the Cut-Off Date as a result of a failure of the
Manufacturer or AVSA to deliver the Aircraft, then, in such event, the
Owner Trustee shall not purchase the Aircraft from AVSA, and the parties to
the Operative Agreements shall have no further obligations or liabilities
under any of said Operative Agreements with respect to the Aircraft,
including the obligation of the Owner Participant to participate in the
payment of the Purchase Price, and such documents shall terminate and have
no further force or effect with respect to the Aircraft; provided, however,
that the Lessee shall provide, no later than the Business Day next
preceding the date 15 days prior to the Cut-Off Date, notice of prepayment
to the Indenture Trustee and the Certificates shall be prepaid on such date
as provided in Section 6.02(a)(vi) of the Indenture and Section 17.02(c)
hereof and provided further, that (i) the Lessee's obligation to pay any
Transaction Costs as provided in Section 3.04 hereof (to the extent such
section is applicable) and to indemnify such parties to the extent provided
in such documents, shall not be diminished or modified in any respect and
(ii) the obligations of the Owner Trustee, the Indenture Trustee and the
Lessee to return funds and pay interest, costs, expenses and other amounts
thereon or in respect thereof as provided in Section 3.02 hereof shall
continue.
(c) Optional Postponement. Without limiting the provisions of
Section 3.02(c) hereof, the Scheduled Delivery Date may be postponed from
time to time (but in no event shall the Delivery Date be later than the
Cut-Off Date) for any reason, other than pursuant to Section 3.05(a)
hereof, if the Lessee gives the Owner Participant, the Indenture Trustee,
the Owner Trustee and the Pass Through Trustee confirmed facsimile notice
(or telephone notice followed by written confirmation) of such postponement
and notice of the date to which the Delivery 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 Scheduled
Delivery Date.
Section 3.06. Closing. The closing with respect to the purchase
and lease of the Aircraft on the Delivery Date shall take place at the
offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York
10017.
Section 3.07. Owner Participant Payment. The Owner Participant
agrees with the Lessee and only with the Lessee on behalf of the Owner
Trustee to make available to the Owner Trustee funds sufficient to pay to
the Indenture Trustee on the Owner Participant Payment Date an amount equal
to the amounts of principal (if any) and, to the extent accrued from the
Delivery Date, the interest scheduled to be paid on the Certificates on
such date (the "Owner Participant Amount"), and the Owner Trustee shall
upon receipt thereof make such funds available to the Indenture Trustee to
pay (together with the amounts received from the Lessee pursuant to Section
17.02(b) hereof) amounts due and owing under the Certificates on the Owner
Participant Payment Date, provided that the Owner Participant shall not be
obligated to make such funds available if an Event of Default under the
Lease shall have occurred and be continuing on the date on which such funds
are to be made available. If the Owner Participant does not make such
funds available when otherwise required to do so, the Lessee shall be
obligated to make an advance pursuant to Section 3.05 of the Lease in an
amount sufficient to pay in full the amounts of principal and interest due
on the Certificates on such date for which the Owner Participant is liable
pursuant to the preceding sentence. Such obligations shall not, nor shall
they be construed to, make the Owner Participant directly liable on the
Certificates or in any way convert the Certificates to recourse loans
against the Owner Participant.
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date).
The obligations of the Owner Trustee, the Owner Participant, the Lessee,
the Indenture Trustee and the Pass Through Trustee on behalf of each Pass
Through Trust to participate in the transactions contemplated hereby on the
Certificate Closing Date are subject to the fulfillment to the satisfaction
of such party (or waiver by such party), prior to or on the Certificate
Closing Date, of the following conditions precedent (it being understood
that receipt by the Lessee of any of the following documents shall not be a
condition precedent to the obligations of any party):
(a) Certificates. On the Certificate Closing Date, there shall
have been duly issued and delivered by the Owner Trustee to the Pass
Through Trustee for each Pass Through Trust, against payment therefor, a
Certificate, substantially in the form set forth in Exhibit B to the
Indenture, duly authenticated, dated the Certificate Closing Date and
registered in the name of the Pass Through Trustee on behalf of such
Pass Through Trust, in the principal amounts, Maturity, bearing the
interest rate and the other economic terms specified in the Series
Supplements and otherwise as provided in Section 2.04 of the Indenture.
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 Certificate Closing Date, no change
shall have occurred after the date which is two days prior to the
signing 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, the Pass Through Trustee or the Indenture Trustee or
their special counsel, 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 shall have occurred which would
otherwise make it illegal or otherwise in contravention of guidance
issued by regulatory authorities for the Owner Participant, the Lessee,
the Owner Trustee, the Pass Through Trustee or the Indenture Trustee, to
participate in the transaction to be consummated on the Certificate
Closing 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 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 Certificate
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) Operative Documents. This Agreement and the following documents
shall have been duly authorized, executed and delivered by the respective
party or parties thereto, shall, to the extent that the forms thereof are
not attached hereto, each be satisfactory in form and substance to the
Lessee, the Indenture Trustee, the Pass Through Trustee, the Owner Trustee
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, the Owner Trustee,
the Owner Participant, the Indenture Trustee or the Pass Through Trustee,
as the case may be, of such documents shall have been delivered to the
Lessee, the Owner Participant, the Indenture Trustee and the Pass Through
Trustee:
(i) the Lease;
(ii) the Indenture;
(iii) in the case of the Owner Participant only, the Tax Indemnity
Agreement;
(iv) the Purchase Agreement and the Consent and Guaranty;
(v) the Purchase Agreement Assignment and the French Pledge
Agreement with respect thereto;
(vi) the Consent and Agreement and the AVSA Consent and
Agreement;
(vii) the GTA;
(viii) the Engine Warranty Assignment;
(ix) the Engine Consent;
(x) the Trust Agreement; and
(xi) Ancillary Agreement I.
Copies executed or certified as requested by the Lessee, the
Indenture Trustee or the Owner Participant, as the case may be, of the
documents set forth above shall have been delivered to the Owner
Participant, the Lessee, the Indenture Trustee and the Owner Trustee
(provided that the sole "chattel-paper original" of the Lease and
Ancillary Agreement I, together with executed copies of the Indenture
Documents, shall be delivered to the Indenture Trustee).
(e) 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.
(f) Financing Statements. Uniform Commercial Code ("UCC")
financing statements covering all the security interests (and other
interests) created by or pursuant to the Granting Clause of the
Indenture 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 duly submitted for filing in the State of Michigan, and
all other actions shall have been taken which, in the opinion of the
Owner Participant, the Pass Through Trustee and the Underwriters, are
necessary to perfect and protect such security interests and other
interests created by or pursuant to the Granting Clause of the
Indenture.
(g) Corporate Documents. Except when such Person is the
delivering party, the Owner Participant, the Owner Trustee, the Lessee,
the Pass Through Trustee and the Indenture Trustee (acting directly or
by authorization to its counsel) shall have received the following, in
each case in form and substance satisfactory to it:
(i) a copy of the certificate of incorporation and by-laws of
the Lessee, certified by the Secretary or an Assistant Secretary
of the Lessee as of the Certificate Closing Date, and a copy of
the resolutions of the board of directors of the Lessee, certified
as such as of the Certificate Closing Date by such Secretary or
Assistant Secretary, 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;
(ii) a copy of the certificate of incorporation and by-laws of
the Owner Participant, certified by the Secretary or an Assistant
Secretary of the Owner Participant as of the Certificate Closing
Date, and a copy of the resolutions of the board of directors of
the Owner Participant, certified as such as of the Certificate
Closing Date by such Secretary or Assistant Secretary, duly
authorizing the execution, delivery and performance by the Owner
Participant of this Agreement, the Tax Indemnity Agreement, the
Trust Agreement, the other Operative Agreements to which the Owner
Participant is or is to be a party and each other document to be
executed and delivered by the Owner Participant in connection with
the transactions contemplated hereby;
(iii) a copy of the articles of incorporation and by-laws and
other instruments of NBD, certified by the Secretary or an
Assistant Secretary of NBD as of the Certificate Closing Date (or
other like instruments satisfactory to the Lessee and the Owner
Participant) and evidence authorizing the execution, delivery and
performance by NBD or the Owner Trustee, as the case may be, of
this Agreement, 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 and each other
document to be executed and delivered by the Owner Trustee in
connection with the transactions contemplated hereby;
(iv) a copy of the articles of association and by-laws and
other instruments of Chase and a copy of the resolutions of the
board of directors of Chase, certified by the Secretary or an
Assistant Secretary of Chase as of the Certificate Closing Date
(or other like instruments satisfactory to the Lessee and the
Owner Participant) duly authorizing the execution, delivery and
performance by Chase (in its capacity as the entity acting as
Indenture Trustee) or the Indenture Trustee, as the case may be,
of this 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 Indenture Trustee and each other document to be
executed and delivered by the Indenture Trustee in connection with
the transactions contemplated hereby;
(v) a copy of the articles of association and by-laws and
other instruments of Chase and a copy of the resolutions of the
board of directors of Chase, certified by the Secretary or an
Assistant Secretary of Chase as of the Certificate Closing Date
(or other like instruments satisfactory to the Lessee and the
Owner Participant) duly authorizing the execution, delivery and
performance by Chase (in its capacity as the entity acting as Pass
Through Trustee) or the Pass Through Trustee, as the case may be,
of this Agreement, the Pass Through Agreement, the Series
Supplements and each other document to be executed or
authenticated by or on behalf of the Pass Through Trustee in
connection with the transactions contemplated hereby; and
(vi) such other documents, evidences, materials, and
information with respect to the Lessee, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and the Owner
Participant as the Indenture Trustee, the Pass Through Trustee 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 Lessee. On the Certificate Closing
Date, the following statements shall be true, and the Owner Participant,
the Owner Trustee, the Pass Through Trustee and the Indenture Trustee shall
have received a certificate signed by the Vice President and Treasurer or
any other duly authorized officer of the Lessee, dated the Certificate
Closing Date, stating that:
(i) the representations and warranties of the Lessee contained
in the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Certificate 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, 1995 (as updated by Note 7 to the financial statement
included in the Lessee's Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 1995), 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
consolidated financial statements of the Lessee as of August 31, 1995
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 a party; and
(iii) no event has occurred and is continuing which
constitutes a Default or an Event of Default under the Lease.
(i) Officer's Certificate of Owner Participant. On the Certificate
Closing Date, the following statements shall be true, and the Lessee, the
Pass Through Trustee, the Owner Trustee 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 Certificate Closing
Date, stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement to which it is a party and in any certificate
delivered pursuant hereto or thereto, are true and correct on and as
of the Certificate 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) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes,
due to any action or inaction on the part of the Owner Participant,
an Indenture Default or an Indenture Event of Default.
(j) Other Officer's Certificates. On the Certificate Closing Date,
the following statements shall be true, and the Owner Participant, the
Lessee, the Pass Through Trustee, the Owner Trustee and the Indenture
Trustee shall have received a certificate from each of NBD and the Owner
Trustee (in the case of the Lessee, the Owner Participant, the Pass Through
Trustee and the Indenture Trustee), Chase in its capacity as the entity
acting as Indenture Trustee (in the case of the Lessee, the Owner
Participant, the Pass Through Trustee and the Owner Trustee) and Chase in
its capacity as the entity acting as Pass Through Trustee (in the case of
the Lessee, the Owner Participant, the Indenture Trustee and the Owner
Trustee) signed by a duly authorized officer of NBD and Chase,
respectively, dated the Certificate Closing Date, stating with respect to
NBD and the Owner Trustee, Chase (other than in its capacity as Pass
Through Trustee) and the Indenture Trustee or Chase (other than in its
capacity as Indenture Trustee) and the Pass Through Trustee, as the case
may be, that:
(i) the representations and warranties of the Owner Trustee in
its individual capacity and as Owner Trustee, of the Indenture
Trustee in its individual capacity (other than in its capacity as
Pass Through Trustee) and as Indenture Trustee, and of the Pass
Through Trustee in its individual capacity (other than in its
capacity as Indenture Trustee) and as Pass Through Trustee, contained
in this Agreement, the Lease, the Trust Agreement and the Indenture
and in any certificate delivered pursuant hereto or thereto are true
and correct on and as of the Certificate 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) 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, due to any action or
omission on the part of the Owner Trustee in its individual capacity
or as trustee, and of the Indenture Trustee in its individual
capacity (other than in its capacity as Pass Through Trustee) or as
trustee, an Event of Default or an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or NBD and no Indenture Trustee's Liens affecting the Trust
Indenture Estate or the Lessor's Estate or any part thereof.
(k) Legal Opinions. The Owner Participant, the Lessee, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee (acting
directly or by authorization to its special counsel) shall have received
from the following counsel their respective legal opinions in each case
satisfactory to the Owner Participant, the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee, as the case may be, as to
scope and substance (and covering such other matters as the recipient may
reasonably request) and dated the Certificate Closing Date:
(i) George W. Hearn, Esq., Vice President, Law - Corporate and
Business Transactions of the Lessee in the form of Exhibit A(1)(a)(i)
hereto, addressed to the Owner Participant, the Owner Trustee, the
Pass Through Trustee, the Indenture Trustee and the Underwriters;
(ii) Morgan, Lewis & Bockius, special counsel for the Owner
Participant, in the form of Exhibit A(2)(a) hereto and Ted Verrill,
Esq., Group Counsel of the Owner Participant, in the form of Exhibit
A(2)(b) hereto, each addressed to the Owner Participant, the Owner
Trustee, the Pass Through Trustee, the Indenture Trustee, the Lessee
and the Underwriters;
(iii) Dewey Ballantine, special counsel for the Indenture
Trustee, in the form of Exhibit A(3)(a) hereto and Barbara Jo
Lubitz, Vice President and Senior Associate Counsel of the
Indenture Trustee, in the form of Exhibit A(3)(b) hereto, each
addressed to the Owner Participant, the Owner Trustee, the Pass
Through Trustee, the Indenture Trustee, the Lessee and the
Underwriters;
(iv) Dickinson, Wright, Moon, Van Dusen & Freeman, special
counsel for the Owner Trustee, in the form of Exhibit A(4)(a)
hereto, addressed to the Owner Participant, the Owner Trustee, the
Pass Through Trustee, the Indenture Trustee, the Lessee and the
Underwriters;
(v) Davis Polk & Wardwell, special counsel for the Lessee, in
the form of Exhibit A(1)(b)(i) hereto, addressed to the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee and the Underwriters; and
(vi) Dewey Ballantine, special counsel for the Pass Through
Trustee, in the form of Exhibit A(5)(a) hereto and Barbara Jo Lubitz,
Vice President and Senior Associate Counsel of the Pass Through
Trustee, in the form of Exhibit A(5)(b) hereto, each addressed to the
Owner Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee and the Underwriters.
(l) No Indenture Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(m) Event of Default; Default. No Default or Event of Default under
the Lease shall have occurred or be in existence.
(n) 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 and the
Underwriters 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.
(o) Payment of Taxes. (A) 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
referred to in subparagraph (f) of this Section 4.01, or in connection with
the issuance of the Certificates shall have been duly paid or caused to be
paid in full; and (B) all sales or use taxes and duties related to the
consummation of the transactions contemplated by the Operative Agreements
on the Certificate Closing Date which are then due and payable shall have
been duly paid in full.
Section 4.02. Conditions Precedent (Delivery Date). The obligations
of the Owner Trustee, the Owner Participant, the Lessee, the Indenture Trustee
and the Pass Through Trustee on behalf of each Pass Through Trust to
participate in the transactions contemplated hereby on the Delivery Date are
subject to the fulfillment to the satisfaction of each party (or waiver by
such party), prior to or on the Delivery Date, of the following conditions
precedent (it being understood that receipt by the Lessee of any of the
following documents shall not be a condition precedent to the obligation of
any party):
(a) Notice, etc. Each party hereto shall have received a Delivery
Notice pursuant to Section 3.01 hereof at least three (3) Business Days
prior to the Delivery Date.
(b) Legal Investment. No change shall have occurred after the date
which is two days prior to the Delivery Date 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, the Pass Through Trustee 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 shall have occurred which would
otherwise make it illegal or otherwise in contravention of guidance issued
by regulatory authorities for the Owner Participant, the Lessee, the Owner
Trustee, the Pass Through Trustee or the Indenture Trustee, to participate
in the transaction to be consummated on the Delivery 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 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 Delivery 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) Documents. The documents referred to in Section 4.01(d) hereof
shall each be in full force and effect and the following documents shall
have been duly authorized, executed and delivered by the respective party
or parties thereto, shall to the extent that the forms thereof are not
attached hereto each be satisfactory in form and substance to the Lessee,
the Indenture Trustee, the Pass Through Trustee, the Owner Trustee and the
Owner Participant (each acting directly or by authorization to its special
counsel) and shall each be in full force and effect, and there shall not
have occurred any default thereunder or any event which with the lapse of
time or giving of notice or both would constitute a default thereunder:
(i) the Lease Supplement covering the Aircraft, dated the Delivery
Date;
(ii) an Indenture and Security Agreement Supplement covering the
Aircraft, dated the Delivery Date;
(iii) the Invoice; and
(iv) AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale and the
Airbus Guaranty.
Copies executed or certified as requested by the Lessee, the
Indenture Trustee or the Owner Participant, as the case may be, of the
documents set forth above shall have been delivered to the Owner
Participant, the Lessee, the Indenture Trustee and the Owner Trustee
(provided that the sole "chattel-paper original" of the Lease
Supplement, together with executed copies of the Indenture Documents,
shall be delivered to the Indenture Trustee).
(d) Legal Opinions. The Owner Participant, the Lessee, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee (each acting
directly or by authorization to its special counsel) shall have received
from the following counsel their respective legal opinions, in each case
satisfactory to the Owner Participant, the Lessee, the Owner Trustee, the
Indenture Trustee, or the Pass Through Trustee, as the case may be, as to
scope and substance (and covering such other matters as the recipient may
reasonably request) and dated the Delivery Date:
(i) George W. Hearn, Esq., Vice President, Law - Corporate and
Business Transactions of the Lessee in the form of Exhibit
A(1)(a)(ii) hereto, addressed to the Owner Participant, the Owner
Trustee, the Pass Through Trustee, the Indenture Trustee and the
Underwriters;
(ii) Davis Polk & Wardwell, special counsel for the Lessee, in
the form of Exhibit A(1)(b)(ii) hereto, addressed to the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee and the Underwriters;
(iii) Daugherty, Fowler & Peregrin, in the form of Exhibit A(8)
hereto, addressed to the Owner Participant, the Owner Trustee, the
Pass Through Trustee, the Indenture Trustee, the Lessee and the
Underwriter;
(iv) counsel for the Engine Manufacturer, in the form of Exhibit
A(6) hereto, addressed to the Owner Participant, the Owner Trustee,
the Pass Through Trustee, the Indenture Trustee, the Lessee and the
Underwriters;
(v) Clifford Chance, counsel for AVSA and the Manufacturer in
the form of Exhibit A(7) hereto and addressed to the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Indenture Trustee, the Lessee and the Underwriters;
(vi) Dickinson, Wright, Moon, Van Dusen & Freeman, special
counsel for the Owner Trustee, in the form of Exhibit A(4)(b)
hereto, addressed to the Owner Participant, the Owner Trustee, the
Pass Through Trustee, the Indenture Trustee, the Lessee and the
Underwriters; and
(vii) in the case of the Owner Participant only, Morgan, Lewis &
Bockius, tax counsel for the Owner Participant, addressed to the
Owner Participant with respect to certain tax matters.
(e) Title, Airworthiness and Registration. On the Delivery Date,
the following statements shall be true, and the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee shall have
received evidence from the Lessee reasonably satisfactory to each such Person
to the effect that:
(i) the Owner Trustee has good and marketable title (subject to
filing and recording of AVSA's FAA Bill of Sale with the Aeronautics
Authority) to the Aircraft, free and clear of Liens, except the
rights of the Owner Trustee and the Lessee under the Lease and the
Lease Supplement covering the Aircraft, the rights of the Indenture
Trustee under the Indenture and the beneficial interest of the Owner
Participant created by the Trust Agreement and the interest of the
Certificate Holders created by the Indenture and Security Supplement
covering the Aircraft, which evidence shall include AVSA's FAA Bill
of Sale, AVSA's Warranty Bill of Sale and the Airbus Guaranty;
(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) AVSA's FAA Bill of Sale, the Lease and Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft and the Trust Agreement
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 Transportation Code; and
(iv) application to the Aeronautics Authority for registration
of the Aircraft in the name of the Owner Trustee shall have been
duly made.
(f) Financing Statements. A UCC 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) and shall have been duly filed in
the State of Tennessee.
(g) Payments. The Owner Participant shall have made available its
Commitment to the Owner Trustee and the other payments contemplated by
Section 3.02 hereof shall have been made.
(h) Report of Aircraft Expert. The Owner Participant shall have
received a report prepared by BK Associates, Inc. addressed to the Owner
Participant (with a copy of such report to the Lessee) which report shall
be in form and substance satisfactory to the Owner Participant to the
effect, among other things, that on the Delivery Date:
(i) (A) the estimated fair market value of the Aircraft net of
any cost to the Owner Participant or the Owner Trustee of return at
the end of the Basic Term and any Fixed Renewal Term (determined
without including in such value any increase or decrease for
inflation or deflation during the Term) is equal to or greater than
20% of the Purchase Price for the Aircraft and (B) at least 20% of
the useful economic life of the Aircraft will be remaining at the end
of the Basic Term and any Fixed Renewal Term;
(ii) the estimated useful life of the Aircraft is at least 133%
of the Lease Term and any Fixed Renewal Term;
(iii) the Purchase Price of the Aircraft is equal to the fair
market value of the Aircraft on the Delivery Date;
(iv) on the Delivery Date, the Aircraft will not require any
modifications, improvements or additions in order to be rendered
complete for its intended purpose by the Lessee;
(v) the amount payable by the Lessee upon the exercise of its
purchase option pursuant to Section 4.02(a)(F) of the Lease equals or
exceeds the currently estimated Fair Market Value of the Aircraft on
such date (taking into account inflation or deflation to such date);
and
(vi) the Aircraft is not limited use property.
(i) Insurance. Each of the Indenture Trustee, the Pass Through
Trustee, the Owner Trustee and the Owner Participant 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, in form and substance satisfactory to the
Indenture Trustee and the Pass Through Trustee (to the extent of their
interests thereunder) or the Owner Participant, as the case may be, to
establish that the insurance required by Article 13 of the Lease is in
effect.
(j) Payment of Taxes. (A) 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 documents and instruments referred to in subparagraphs (e) and (f) of
this Section 4.02, or in connection with the purchase of the Aircraft by
the Owner Trustee and the making by the Owner Participant of its equity
investment shall have been duly paid or caused to be paid in full; and (B)
all sales or use taxes and duties related to the consummation of the
transactions contemplated by the Operative Agreements on the Delivery Date
which are then due and payable shall have been duly paid in full.
(k) No Indenture Event of Default. No Indenture Event of Default or
Indenture Default attributable to either NBD or the Owner Trustee has
occurred and is continuing.
(l) Event of Default; Default; Event of Loss. No Default or Event
of Default under 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.
(m) Governmental Compliance. All appropriate action required to have
been taken by the FAA, or any governmental or political agency, subdivision
or instrumentality of the United States, prior to the Delivery 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 Delivery 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 Delivery Date.
(n) Officer's Certificate of Lessee. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee shall have
received a certificate signed by the Vice President and Treasurer or any
other duly authorized officer of the Lessee, dated the Delivery Date,
stating that:
(i) the representations and warranties of the Lessee contained
in the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Delivery 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, 1995 (as updated by Note 7 to the financial statement
included in the Lessee's Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 1995), 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
consolidated financial statements of the Lessee as of August 31, 1995
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 a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, 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 an Event of Default under the Lease.
(o) Officer's Certificate of Owner Participant. On the Delivery
Date, the following statements shall be true, and the Lessee, the Pass
Through Trustee, the Owner Trustee 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 Delivery Date,
stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement to which it is a party and in any certificate
delivered pursuant hereto or thereto, are true and correct on and as
of the Delivery 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) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes,
due to any action or inaction on the part of the Owner Participant,
an Indenture Default or an Indenture Event of Default.
(p) Other Officer's Certificates. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Lessee,
the Pass Through Trustee, the Owner Trustee and the Indenture Trustee shall
have received a certificate from each of NBD and the Owner Trustee (in the
case of the Lessee, the Owner Participant, the Pass Through Trustee and the
Indenture Trustee), Chase in its capacity as the entity acting as Indenture
Trustee (in the case of the Lessee, the Owner Participant, the Pass Through
Trustee and the Owner Trustee) and Chase in its capacity as the entity
acting as Pass Through Trustee (in the case of the Lessee, the Owner
Participant, the Indenture and the Owner Trustee) signed by a duly
authorized officer of NBD and Chase, respectively, dated the Delivery Date,
stating with respect to NBD and the Owner Trustee, Chase (other than in its
capacity as Pass Through Trustee) and the Indenture Trustee or Chase (other
than in its capacity as Indenture Trustee) and the Pass Through Trustee, as
the case may be, that:
(i) the representations and warranties of the Owner Trustee in
its individual capacity and as Owner Trustee, of the Indenture
Trustee in its individual capacity (other than in its capacity as
Pass Through Trustee) and as Indenture Trustee, and of the Pass
Through Trustee in its individual capacity (other than in its
capacity as Indenture Trustee) and as Pass Through Trustee contained
in this Agreement, the Lease, the Trust Agreement and the Indenture
and in any certificate delivered pursuant hereto or thereto are true
and correct on and as of the Delivery 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) 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, due to any action or
omission on the part of the Owner Trustee in its individual capacity
or as trustee, and of the Indenture Trustee in its individual
capacity (other than in its capacity as Pass Through Trustee) or as
trustee, an Event of Default or an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or NBD and no Indenture Trustee's Liens affecting the Trust
Indenture Estate or the Lessor's Estate or any part thereof.
Section 4.03. Opinion of Special Aviation Counsel upon
Registration. Promptly upon the registration of the Aircraft and the
filing and, where appropriate, recordation pursuant to the Transportation
Code, of AVSA's FAA Bill of Sale, the Trust Agreement, 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 and the Indenture Trustee an opinion as to (i) the due
registration of the Aircraft in the name of the Owner Trustee, (ii) the due
recording pursuant to the Transportation Code of AVSA's FAA Bill of Sale,
the Trust Agreement, 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), and (iii), subject to customary qualifications,
the lack of any intervening documents with respect to the Aircraft.
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations. The
Lessee's obligation to participate in the transactions contemplated hereby on
the Certificate Closing Date is subject to the conditions that, prior to or
on the Certificate Closing 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, as the case may be, paragraphs (d), (g)(ii)-(v),
(i), (j), (k)(ii)-(vi) of Section 4.01 hereof and the Underwriters
shall have made available the amounts required to be paid by them pursuant
to Section 2.01 hereof, and the Lessee's obligation to participate in the
transactions contemplated hereby on the Delivery Date, is subject to the
conditions that, on or prior to the Delivery Date, the Lessee shall have
received the documents which are referred to in, or the opinions to be
addressed to it under, as the case may be, paragraphs (c) and (d)(ii)-(v)
of Section 4.02 hereof and the Indenture Trustee shall have released the
Debt Portion from (or such lesser amount as may then be held in) the
Collateral Account.
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, on the
date hereof and as of the Certificate Closing Date and the Delivery Date:
(a) the Lessee is a corporation duly organized and validly existing
and is in good standing under the laws of the State of Delaware with its
principal place of business and chief executive office (as such terms are
used in Article 9 of the Uniform Commercial Code) in Memphis, Tennessee,
and is duly qualified to do business as a foreign corporation and is 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 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, the Pass Through Agreement and the Series Supplements (the
"Lessee Documents");
(c) the Lessee is an "air carrier" within the meaning of the
Transportation Code and a holder of a certificate under Sections 41102(a)
and 41103 of the Transportation Code and a "citizen of the United States"
within the meaning of Section 40102(a)(15) of the Transportation Code
holding an "air carrier operating certificate" issued under Chapter 447 of
the Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, 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) the execution, delivery and performance of the Lessee Documents
by the Lessee 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, and each such document has been duly executed
and delivered or, in the case of the Operative Agreements identified in
Section 4.02(c) hereof, will on the Delivery Date be executed and delivered
by the Lessee and constitutes (or will constitute, as the case may be) 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 (regardless of whether
enforceability is considered in a proceeding in equity or at law);
(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 the Lessee Documents 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)(iii) and
4.03 hereof and except for the filings referred to in Section 4.01(f) and
Section 4.02(f) hereof, all of which shall have been duly obtained or made
and shall be in full force and effect on and as of the Certificate Closing
Date or the Delivery Date, as contemplated by said Sections;
(g) neither the execution, delivery or performance by the Lessee of
the Lessee Documents 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 (other than the Consent and Agreement, the AVSA
Consent and Agreement, the Engine Consent and the Consent and Guaranty) 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) 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 Aircraft, (B) 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, 1995 (as updated by Note 7 to the financial statement
included in the Lessee's Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 1995), 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, if adversely determined, would materially and
adversely affect the consolidated financial condition, business or
operations of the Lessee, or (C) if adversely determined would adversely
affect the ability of the Lessee to perform its obligations under the
Lessee Documents;
(i) the Lessee and its subsidiaries have 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, 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);
(j) except for (A) the registration in the Owner Trustee's name of
the Aircraft pursuant to the Transportation Code, (B) the filing and, where
appropriate, recordation pursuant to the Transportation Code of the
Indenture, the Trust Agreement, the Indenture and Security Agreement
Supplement covering the Aircraft, the Lease, the Lease Supplement covering
the Aircraft and AVSA's FAA Bill of Sale, (C) the filing of the financing
statements referred to in Sections 4.01(f) and 4.02(f) hereof and (D)(x) on
the Certificate Closing Date, the taking of possession by the Indenture
Trustee of the Liquid Collateral and maintaining possession by the
Indenture Trustee thereof as contemplated in Section 2.14(a) of the
Indenture and (y) on the Delivery Date, the taking of possession by the
Indenture Trustee of the original counterpart of the Lease and the Lease
Supplement covering the Aircraft, no further action, including any filing
or recording of any document, is necessary or advisable in order (i) 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 (ii) to
perfect the first security interests in and mortgage Lien on the Trust
Indenture Estate in favor of the Indenture Trustee;
(k) on the Delivery Date, the Owner Trustee will receive good and
marketable title to the Aircraft, free and clear of all Liens, except
the rights of the Owner Trustee and the Lessee under the Lease and the
Lease Supplement, the rights of the Indenture Trustee under the
Indenture and the beneficial interest of the Owner Participant created
by the Trust Agreement;
(l) the Lessee has heretofore delivered to the Owner Participant true
and correct copies of the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1995 and its Quarterly Report on Form 10-Q for
the fiscal quarter ended August 31, 1995, and of the audited consolidated
balance sheet of the Lessee for the fiscal year ended May 31, 1995 and the
unaudited consolidated balance sheet of the Lessee as of August 31, 1995,
and the related consolidated statements of income, changes in common
stockholders' investment and cash flows for the fiscal year and interim
reporting period ended on such dates, accompanied (except in the case of
such interim reporting period) by a report thereon containing opinions
without qualification, except as therein noted, by Arthur Andersen & Co.,
independent public accountants; said financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied and present fairly the financial position of the
Lessee as of such dates and the results of its operations and cash flows
for such periods and such Annual Reports, Quarterly Reports and financial
statements did not, as of their respective dates of filing with the SEC,
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein not misleading and there
has been no material adverse change in the consolidated financial condition
of the Lessee since August 31, 1995;
(m) with respect to ERISA, except as otherwise disclosed:
(i) none of the Pension Plans (as defined at the end of this
Section 6.01(m)) nor their related trusts have been terminated in a
distress termination pursuant to Section 4041(c) of ERISA or by the
Pension Benefit Guaranty Corporation or any successor agency or
instrumentality thereto (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) 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
(viii) assuming (A) the truth of the representations contained in
Sections 7.03(a)(viii) and 7.09 hereof, (B) the applicability of an
individual or a class prohibited transaction exemption ("PTE") to the
transactions contemplated hereby, and (C) the compliance with all of
the conditions of a PTE, 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
transaction 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 obligations 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
an employee benefit plan subject to Section 4975 of the Code.
As used in this Section 6.01(m), 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;
(n) the Lessee is a Citizen of the United States;
(o) except for the filings referred to in Sections 4.01(f), 4.02(e)
and 4.02(f) hereof, no governmental approval of any kind is required of the
Owner Participant or for the Owner Participant's execution of or
performance under this Agreement or any agreement contemplated hereby 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;
(p) on the Delivery Date, all premiums with respect to the insurance
required to be provided by the Lessee on or prior to the Delivery Date
under Article 13 of the Lease shall have been paid by the Lessee;
(q) on the Delivery Date, all sales or use taxes relating to the
sale of the Aircraft by AVSA to the Owner Trustee which are then due shall
have been paid;
(r) 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
Lessee Documents;
(s) 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;
(t) on the Delivery Date, the Aircraft will be in such condition so
as to enable the airworthiness certificate of such Aircraft to be in good
standing under the Transportation Code; the Aircraft will be duly certified
by the FAA as to type and airworthiness; there will be in effect with
respect to the Aircraft a current and valid airworthiness certificate
issued by the FAA pursuant to the Transportation Code; and there will be no
fact known to the Lessee which materially adversely affects the value,
utility or condition of the Aircraft;
(u) the Lessee shall not be in default in the performance of any
term or condition of the Purchase Agreement, the Purchase Agreement
Assignment, the Engine Warranty Assignment and the GTA;
(v) 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;
(w) the Aircraft will be fully equipped to operate in commercial
service upon delivery on the Delivery Date and will comply with all
governmental requirements governing such service;
(x) neither the Lessee nor any of its Affiliates is engaged
principally in the business of extending credit for the purpose of buying
or carrying margin stock (within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System) and no part of the proceeds
from the sale of the Certificates and/or sale of the Aircraft by the Lessee
to the Owner Trustee will be used to purchase or carry any such margin
stock, or to refinance any borrowing, the proceeds of which were used to
purchase or carry any such margin stock; and
(y) there are no broker's or underwriter's fees payable in
connection with the transactions contemplated in the Operative Agreements
other than those of the Underwriters and First Chicago Leasing Corporation.
Section 6.02. Offering by Lessee. The Lessee represents and
warrants that it has authorized no one to act on its behalf in connection with
the offer or sale of any interest in the Lessor's Estate or the Trust
Agreement other than First Chicago Leasing Corporation. Neither the Lessee
nor, based on representations of First Chicago Leasing Corporation, anyone
acting on its behalf has directly or indirectly offered any interest in the
Lessor's Estate or the Trust Agreement, or similar interests, for sale to, or
solicited any offer to acquire any of the same from, anyone other than the
Owner Participant and no more than 53 other institutional investors (as such
term is defined in Regulation D promulgated under the Securities Act of 1933,
as amended).
Section 6.03. 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, the Pass Through Trustee or the Owner
Participant shall reasonably require for accomplishing the purposes of this
Agreement, the Trust Agreement, the Purchase Agreement, the Purchase
Agreement Assignment, the GTA, the Engine Warranty Assignment, the
Indenture, the Indenture and Security Agreement Supplement, the Tax
Indemnity Agreement, the Lease and the Lease Supplement and the other
Operative Agreements to which it is a party. Without limiting the
generality of this Section 6.03(a), the Lessee will promptly 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 and any financing statements or other instruments as may be
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 if the Lessee cannot take, or cause to be taken, such action,
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
either of them to take such action at the Lessee's cost and expense in a
timely manner.
(b) From and after the Delivery Date, the Lessee shall maintain the
certificates referred to in Section 7.01 of the Lease and 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 Transportation Code, 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 at any time after December 31, 2002 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 any
country in which a permitted foreign sublessee could be located pursuant to
Section 7.02(a)(i) of the Lease with which the United States then maintains
normal diplomatic relations, the Owner Participant, upon receipt by the
Owner Participant, the Owner Trustee and the Indenture Trustee of the
assurances and opinion described below, none of them shall 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 and trust capacities,
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 and are and shall be in full
force and effect upon such change of registry;
(B) as to the continuation of the 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),
(y)(i) if such change in registration is made other than in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards at least comparable to those of
the FAA, and (ii) if such change in registration is made in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards in conformity with those set
forth in Section 7.02(a)(i) of the Lease and (z) would not impose
requirements which materially increase the administrative or other
burdens or obligations of the Owner Participant under the Operative
Agreements unless indemnified by the Lessee;
(E) that import and export certificates and any exchange permits
necessary to allow all Rent and other payments provided for under the
Lease, if required, shall have been procured at the Lessee's own cost
and expense by the Lessee;
(F) 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;
(G) 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 Pass
Through Trustee (in its individual capacity and as trustee under the
Pass Through Agreement) and the other Indemnitees under this
Agreement, the Indenture, the Pass Through Agreement and (in the case
of the Owner Participant only) the Tax Indemnity Agreement, afford
each such party substantially the same protection as provided prior
to such change of registry;
(H) that such change will not result in the imposition of, or
increase in the amount of, any Tax (which, for this purpose, includes
the loss of any tax benefits assumed by the Owner Participant to be
available to it based upon the assumptions set forth in Section 2 of
the Tax Indemnity Agreement) for which the Lessee has not agreed to
indemnify the Owner Participant, the Indenture Trustee, the Owner
Trustee (or any successor, assign or Affiliate thereof) and the Trust
Estate;
(I) 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;
(J) of the payment by the Lessee of any reasonable fees and
expenses of the Owner Participant, the Owner Trustee, the Indenture
Trustee and the Pass Through Trustee in connection with such change
of registry, including any reasonable attorneys' fees and expenses;
and
(K) that duties and tariffs, if applicable, shall have been paid
for by the Lessee;
(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 scope, 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, any sublessee,
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 or meet other requirements not
already met 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
or in order to maintain such registration and the Lien of the
Indenture;
(C) that the courts of such jurisdiction would provide
substantially equivalent protection to the Lessor, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee as
provided under United States law (with the exception described in
paragraph (b)(i)(D)(x) of this Section 6.03) 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 Trustee, 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);
(E) that the laws of such jurisdiction will not impair the
rights of the Lessor in and to the Aircraft or under the Lease and
(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) 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;
(F) that the Owner Trustee's title to the Aircraft is recognized
and fully enforceable in such jurisdiction, that such jurisdiction
will give effect to the title of the Aircraft therein substantially
to the same extent as does the Government, and that the Lien of the
Indenture shall continue as a first priority, duly perfected lien on
the Aircraft; and
(G) to such further effect with respect to such other matters as
the Owner Participant, the Owner Trustee, or the Indenture Trustee may
reasonably request.
(c) 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 by the Owner Trustee as the Lessor and the
Owner Participant under the Lease with any governmental authority.
(d) The Lessee will cause the Special Aviation Counsel to file, and
where appropriate record, on the Delivery Date, AVSA's FAA Bill of Sale,
the Lease, the Lease Supplement, the Trust Agreement, the Indenture and the
Indenture and Security Agreement Supplement. The following documents shall
be filed and, where appropriate, recorded on the Delivery Date with the
Aeronautics Authority in the following order of priority: first, AVSA's
FAA Bill of Sale, second, the application for registration of the Aircraft
in the Owner Trustee's name, with the Trust Agreement and the affidavit of
the Owner Trustee attached thereto, third, the Indenture with the Indenture
and Security Agreement Supplement attached thereto, and fourth, the Lease
with the Lease Supplement, the Indenture and the Indenture and Security
Agreement Supplement attached thereto.
(e) The Lessee 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 year 1997, 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 Owner Trustee's title to and interest in the
Aircraft and the Lessor's Estate as against the Lessee and any third
parties and to maintain the perfection of the security interests 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 such title
or 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 such title and the perfection of such security interests (which
the Lessee agrees timely to take); 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 6.03(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 or the Owner Participant.
(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 U.S. Air
Carrier holding an "air carrier operating certificate" issued under Chapter
447 of the Transportation Code for aircraft capable of carrying ten (10) or
more individuals or 6,000 pounds or more of cargo, (iv) expressly assumes
by an instrument in writing in form and substance satisfactory to the
Indenture Trustee, the Owner Participant 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 6.03(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 a Default not capable of cure within the applicable
grace period therefor or 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 6.03(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
6.03(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, the Owner Trustee 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
reports and statements furnished by the Lessee to all of 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 (and in any event within five (5) Business
Days after) any Responsible Officer of the Lessee obtaining actual
knowledge of any condition or event which constitutes a Default or
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, the Pass Through Trustee 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 employee 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 any Default or any Event of Default
or if a Default or 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 6.04. 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 Closings
and the delivery of the Aircraft hereunder 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) [Intentionally Left Blank.]
(b) Owner Participant. The Owner Participant represents and
warrants that its interest in the Lessor's Estate and the Trust Agreement is
being acquired by it for its own account and not with a view to resale 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. Neither the Owner Participant nor anyone
authorized to act on its behalf 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 further represents and warrants that neither it
nor anyone authorized to act on its behalf has made or 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 of
1933, as amended. No representation in this Section 7.01(b) shall include any
action or inaction of the Lessee, First Chicago Leasing Corporation or the
Underwriters whether or not purportedly on behalf of the Owner Trustee, the
Owner Participant or any of their Affiliates.
Section 7.02. Citizenship. (a) Generally. Each of the Owner
Trustee, in its individual capacity and as Trustee, and the Owner
Participant severally represents and warrants that it is a Citizen of the
United States on the Delivery Date. If the Owner Participant or 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 Participant or 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 Transportation Code
as in effect at such time or, if it is not necessary under the Transportation
Code as in effect at such time, if it is informed in writing by the Lessee or
the Owner Participant that such lack of United States citizenship would have
any adverse effect on the Lessee or the Owner Participant. 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 agrees, solely for
the benefit of the Lessee, the Pass Through Trustee, the Indenture Trustee
and the Owner Trustee, that if at any time when the Aircraft is registered
or the Lessee proposes to register the Aircraft in the United States (i) it
shall cease to be, or determines that it is likely to cease to be, a
Citizen of the United States and (ii) the Aircraft shall or would therefore
become ineligible for registration in the name of the Owner Trustee under
the Transportation Code and regulations then applicable thereunder, then
the Owner Participant shall give notice thereof to the Lessee, the Owner
Trustee and the Indenture Trustee and shall (at its own expense and without
any reimbursement or indemnification from the Lessee) immediately (and in
any event within a period of 15 Business Days following such determination
or, if earlier, within 15 days following actual loss of citizenship) (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 any actual damages (but not consequential damages) suffered by any
such other party to the extent the same shall result from the
representation and warranty of the Owner Participant in the first sentence
of Section 7.02(a) hereof proving to be untrue as of the Delivery Date; and
(B) to the Lessee, the Indenture Trustee and the Pass Through Trustee for
any damages actually incurred by the Lessee, the Indenture Trustee and the
Pass Through Trustee as a result of the Owner Participant's failure to
comply with its obligations pursuant to the first sentence of this Section
7.02(c); provided, that, the foregoing shall not restrict the Pass Through
Trustee or the Indenture Trustee from asserting against the Owner
Participant any damages actually incurred by the holders of any Pass
Through Certificates. 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
first sentence of this Section 7.02(c).
Section 7.03. Representations, Warranties and Covenants of the Owner
Participant. (a) Representations, Warranties and Covenants. In addition to
and without limiting its other representations and warranties provided for in
this Article 7, the Owner Participant represents and warrants on the date
hereof and as of the Certificate Closing Date and the Delivery Date that:
(i) it is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware and it has full corporate
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, the Tax Indemnity
Agreement, and the Trust Agreement;
(ii) the execution, delivery and performance by it of this Agreement,
the Tax Indemnity Agreement, and the Trust Agreement have been duly
authorized by all necessary corporate action on its part and, assuming the
accuracy of the Lessee's representations in Section 6.01(o) 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 Sections 6.01(m)(viii) and 6.02 hereof, neither the
execution, delivery or performance by the Owner Participant of this
Agreement, the Tax Indemnity Agreement, and the Trust Agreement 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 by-laws, 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, the Tax Indemnity Agreement and the Trust
Agreement have been or on the Certificate Closing Date will be duly
executed and delivered by the Owner Participant and constitute, or on the
Certificate Closing Date 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) to the best of its knowledge, 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 the Owner Participant before any court, administrative agency or
tribunal which are expected to materially adversely affect the ability of
the Owner Participant to perform its obligations under any of the Operative
Agreements to which it is or is to be a party, and the Owner Participant
knows of no pending or threatened actions or proceedings before any court,
administrative agency or tribunal involving it in connection with the
transactions contemplated by this Agreement or the other Operative
Agreements;
(vii) neither the execution and delivery by it of this Agreement, the
Tax Indemnity Agreement or the Trust Agreement 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; and
(ix) it has a consolidated tangible net worth of not less than
$75,000,000.
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, including,
without limitation, the airworthiness, value, condition, workmanship, design,
patent or trademark infringement, operation, merchantability or fitness for
use of the Aircraft, other than such laws, rules or regulations relating to
the citizenship requirements of the Owner Participant under applicable
aviation law.
(b) Lessor's Liens. The Owner Participant further represents,
warrants and covenants that there are no Lessor's Liens attributable to it (or
an Affiliate thereof) against, on or with respect to the Aircraft or the
Lessor's Estate or the Trust Indenture Estate, and that there will not be any
Lessor's Lien attributable to it (or an Affiliate thereof) against, on or with
respect to the Aircraft or the Lessor's Estate or the Trust Indenture Estate
attributable to it (or an Affiliate thereof) on the Certificate Closing Date.
The Owner Participant agrees with and for the benefit of the Lessee, the Owner
Trustee, 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 neither the Lessee's operation
and use of the Aircraft nor the validity and priority of the Lien of the
Indenture is 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 or otherwise materially adversely affect the validity
or priority of the Lien of the Indenture.
(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 (or an Affiliate
thereof) and required to be discharged as described in Section 7.03(b) hereof.
(d) Assignment of Interests of Owner Participant. At any time
after all obligations of the Owner Participant under Section 3.07 hereof
have been satisfied in full (or upon the direction of the Lessee if Section
3.05(a)(i) hereof shall be applicable), the Owner Participant may (or
shall, as the case may be) assign, convey or otherwise transfer to a single
institutional investor or an Affiliate of an institutional investor all
(but not less than all) of the Beneficial Interest, provided that it gives
the Lessee and the Indenture Trustee at least 10 Business Days' notice of
such assignment, conveyance or other transfer and provided further that the
Owner Participant shall remain liable for all obligations of the Owner
Participant under the Trust Agreement and the Operative Agreements to which
the Owner Participant is a party to the extent (but only to the extent)
incurred on or before the date of such transfer and provided that the
transferee agrees by a written instrument in form and substance reasonably
satisfactory to the Indenture Trustee, the Owner Trustee and the Lessee to
assume primary liability for all obligations as an Owner Participant under
the Trust Agreement and the other Operative Agreements to which such Owner
Participant is a party incurred after the date of transfer and the Owner
Participant shall remain secondarily liable for all such obligations
assumed by its successor as Owner Participant; provided, that the Owner
Participant need not so agree to remain and shall not be so secondarily
liable if (a) 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
$75,000,000, (ii) a direct or indirect subsidiary of any Person described
in clause (i) where such Person provides (A) support for the obligations
assumed by such transferee subsidiary reasonably satisfactory to the
Lessee, the Owner Trustee and the Indenture Trustee or (B) an unconditional
guaranty reasonably satisfactory to the Lessee, the Owner Trustee and the
Indenture Trustee of such transferee subsidiary's obligations, or (iii) an
Affiliate of the transferring Owner Participant, 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 $75,000,000, (b)
such transferee is legally capable of binding itself to the obligations of
the Owner Participant and expressly agrees to assume all obligations of the
Owner Participant under the Trust Agreement and this Agreement and (c) such
transferee shall provide representations substantially similar to those
contained in Section 7.03(a) hereof. In the event of any such assignment,
conveyance or transfer, the transferee shall become a party to the Trust
Agreement and shall agree to be bound by all the terms of and will
undertake all of the obligations of the Owner Participant contained in the
Trust Agreement and the other Operative Agreements in such manner as is
reasonably satisfactory to the Owner Trustee, the Indenture Trustee and the
Lessee. A transferee hereunder shall be (i) a "U.S. Person" as defined in
Section 7701(a)(30) of the Code (or any successor provision thereto) or if
the transferee shall not be such "U.S. Person" then (A) each Certificate
Holder shall be provided an indemnity in form and substance satisfactory to
each such Certificate Holder, for any Taxes that may be imposed on such
Certificate Holder (currently or in the future) due to such transferee's
failure to be such a "U.S. Person" and (B) such transferee shall be
personally liable for any debt service to the extent that its receipt of
rentals is reduced by reason of any withholding Taxes that result from such
transferee's failure to be such a "U.S. Person" and (ii) a Citizen of the
United States or has established a voting trust, voting powers or other
arrangement reasonably satisfactory to the Indenture Trustee and the Lessee
to permit the Owner Trustee to be the registered owner of the Aircraft
under the Transportation Code. A transferee hereunder shall not be, and in
acquiring the Beneficial Interest shall not use the assets of, an employee
benefit plan subject to Title I of ERISA or an individual retirement
account or a plan subject to Section 4975 of the Code. Assuming the truth
of the representations made in Section 6.01(m) hereof, no such assignment,
conveyance or transfer shall violate any provision of law or regulation or
create a relationship which would be in violation thereof. 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 Owner Participant to a
transferee as above provided, the transferee shall be deemed the "Owner
Participant" or "Trustor" for all purposes of the Operative Agreements, 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 as
theretofore held by its transferor; and each reference therein to the
"Owner Participant" or "Trustor" shall thereafter be deemed a reference to
such transferee. Notwithstanding anything to the contrary contained in
this Section 7.03(d), in no event shall the Owner Participant transfer its
interest in the Beneficial Interest to any entity whose business is that of
a nationwide or worldwide overnight or expedited delivery small package air
courier, cargo or freight deliverer and which competes with the Lessee in
one of its principal lines of business.
(e) Actions with Respect to Lessor's Estate, Etc. The Owner
Participant agrees that it will not 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, Covenants and Warranties of NBD and
the Owner Trustee. (a) In addition to and without limiting its other
representations and warranties provided for in this Article 7, NBD represents
and warrants, in its individual capacity with respect to items (i), (ii),
(iii)(A), (iv), (v), (vi), (vii) and (viii) below and as the Owner Trustee
with respect to items (iii)(B) and (v) on the date hereof, on the Certificate
Closing Date and on the Delivery Date that:
(i) it is a banking corporation duly incorporated and validly
existing in good standing under the laws of the State of Michigan with its
principal place of business and chief executive office (as such terms are
used in Article 9 of the Uniform Commercial Code) at 611 Woodward Avenue,
Detroit, Michigan 48226, 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
carry on its business as now conducted, and to execute, deliver and perform
this Agreement and the Operative Agreements to which it is or is to be a
party;
(ii) the execution, delivery and performance by NBD, either in its
individual capacity or as the Owner Trustee, as the case may be, of this
Agreement and the Operative Agreements to which it is or is to be party
have been duly authorized by all necessary action on its part, and do
not contravene its certificate of incorporation or by-laws; each of this
Agreement and the other Operative Agreements to which it is or is to be
a party has been duly authorized, and has been duly executed and
delivered or, in the case of the Operative Agreements identified in
Section 4.02(c) hereof, will on the Delivery Date be duly executed and
delivered by NBD, either in its individual capacity or as the Owner
Trustee, as the case may be, and neither the execution and delivery
thereof nor NBD's performance of or compliance with any of the terms and
provisions hereof or thereof will violate any Federal or state or local
law or regulation governing NBD's banking or trust powers;
(iii)(A) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or is
to be party when duly executed and delivered will, to the extent each such
document is entered into by NBD in its individual capacity, constitute the
legal, valid and binding obligation of NBD in its individual capacity
enforceable against it in such capacity in accordance with its respective
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
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(B) assuming due authorization, execution and delivery by each other
party thereto, each of the Operative Agreements to which it is or is to be
party when duly executed and delivered will, to the extent each such
document is entered into by the Owner Trustee in its trust capacity,
constitute the legal, valid and binding obligation of the Owner Trustee
enforceable against it in such capacity in accordance with its respective
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
(regardless of whether enforceability is considered in a proceeding in
equity or at law), and the performance by the Owner Trustee of any of its
obligations thereunder does not contravene any lease, regulation or
contractual restriction binding on the Owner Trustee or any judgement or
order applicable to or binding on it;
(iv) the performance by NBD in its individual capacity of any of
its obligations under this Agreement and the other Operative Agreements
does not contravene any lease, regulation or contractual restriction
binding on NBD in its individual capacity;
(v) there are no pending or, to its knowledge, threatened
actions or proceedings against NBD before any court or administrative
agency which would materially and adversely affect the ability of NBD,
either in its individual capacity or as the Owner Trustee, as the case
may be, to perform its obligations under this Agreement and the
Operative Agreements to which it is or is to be party;
(vi) 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 or name;
(vii) 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 nor the
performance of its obligations hereunder or thereunder, requires on the
part of NBD 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 state or local
governmental authority or agency governing its banking or trust powers; and
(viii) on the Certificate Closing Date, the Owner Trustee shall own
good title to the proceeds arising from the issuance and sale of the
Certificates, which proceeds shall be free of Lessor's Liens attributable
to NBD in its individual capacity and on the Delivery Date the Owner
Trustee shall have received whatever title to the Aircraft as was conveyed
to it by AVSA, the Aircraft shall be free of Lessor's Liens attributable to
NBD in its individual capacity and NBD in its individual capacity is a
Citizen of the United States.
(b) Lessor's Liens. NBD, in its individual capacity, further
represents, warrants and covenants that there are no Lessor's Liens
attributable to it in its individual capacity against, on or with respect to
the Lessor's Estate or the Trust Indenture Estate (and as at the Delivery
Date, the Aircraft), and that there will not be any such Lessor's Liens
against, on or with respect to the Lessor's Estate or the Trust Indenture
Estate on the Certificate Closing Date or the Delivery Date. 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, and in any event within
30 days after the same shall first become known to it, take such action as may
be necessary to discharge duly any Lessor's Liens attributable to it in its
trust capacity. NBD, 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, and in any event within 30 days after the same
shall first become known to it, any Lessor's Liens against, on or with respect
to the Lessor's Estate or the Trust Indenture Estate or, following the
Delivery Date, the Aircraft, attributable to it in its individual capacity or
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. NBD, 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 NBD to discharge
and satisfy any Lessor's Liens attributable to it in its individual
capacity, as described in Section 7.04(b) hereof.
(d) Securities Act. None of NBD, the Owner Trustee or any Person
authorized by either of them to act on its behalf has directly or indirectly
offered or sold or will directly or indirectly offer or sell any interest in
the Lessor's Estate, or in any similar security relating to the Lessor's
Estate, or in any security the offering of which for purposes of the
Securities Act of 1933, as amended, would be deemed to be part of the same
offering as the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person. NBD further represents and
warrants, in its individual capacity and as the Owner Trustee, that neither it
nor anyone acting on its behalf shall own the Certificates.
Section 7.05. Representations, Warranties and Covenants of the
Indenture Trustee. (a) The Indenture Trustee in its individual capacity (other
than as the Pass Through Trustee) represents on the date hereof, on the
Certificate Closing Date and on the Delivery Date as follows:
(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 power and authority to enter into and
perform its obligations under the Indenture and this Agreement and the
other Operative Agreements to which it is or is to be a party and to
authenticate the Certificates to be delivered on the Certificate Closing
Date;
(ii) the Indenture and this Agreement and the other Operative
Agreements to which it is or is to be a party, and the authentication of
the Certificates to be delivered on the Certificate Closing Date have been
duly authorized by all necessary 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, state or local 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) each of the Indenture, this Agreement and the other
Operative Agreements to which it is or is to be a party has been duly
executed and delivered or, in the case of the Operative Agreements
identified in Section 4.02(c) hereof, will on the Delivery Date be
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 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;
(iv) 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 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, state or local governmental authority
or agency governing its banking and trust powers; and
(v) on the Certificate Closing Date, the Indenture
Trustee holds the Liquid Collateral on behalf of the Owner Trustee and
on the Delivery Date, the Indenture Trustee will hold the original
counterparts of the Lease and the Lease Supplement.
(b) Indenture Trustee's Liens. The Indenture Trustee, in its
individual capacity, further represents, warrants and covenants that there
are no Indenture Trustee's Liens attributable to it in its individual
capacity against, on or with respect to the Lessor's Estate or the Trust
Indenture Estate or, as at and following the Delivery Date, the Aircraft,
and that there will not be any Indenture Trustee's Liens against, on or
with respect to the Lessor's Estate or the Trust Indenture Estate on the
Certificate Closing Date or the Delivery Date. 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, and in any event within 30 days 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 Owner 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, the Owner Participant, the
Owner Trustee or the Pass Through 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) hereof.
Section 7.06. Indenture Trustee's Notice of Default. The
Indenture Trustee agrees to give the Owner Participant notice of any
Default promptly upon a Responsible Officer of the Indenture Trustee having
actual knowledge thereof.
Section 7.07. 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 the
Lien of the Indenture which it is required to execute and deliver in
accordance with the provisions of Article XIV 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 upon written notice from the Lessee to make such
request.
Section 7.08. Covenant of Quiet Enjoyment. 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 such Owner
Participant (or the Owner Trustee, the Indenture Trustee or the Pass
Through Trustee, as the case may be) nor any Person lawfully claiming
through such Owner Participant (or the Owner Trustee, the Indenture Trustee
or the Pass Through 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 such Owner Participant (or the Owner Trustee,
the Indenture Trustee or the Pass Through Trustee, as the case may be).
Section 7.09. Pass Through Trustee's Representations and
Warranties. (a) The Pass Through Trustee, in its individual capacity
(except with respect to clause (iii) below), represents and warrants as of
the date hereof (except as otherwise provided), as of the date hereof and
as of Pass Through Closing Date, the Certificate Closing Date and the
Delivery Date 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 the Pass Through Agreement,
the Series Supplements and this Agreement and to execute and
authenticate the Pass Through Certificates to be delivered on the Pass
Through Closing Date;
(ii) the execution, delivery and performance of this Agreement, the
Pass Through Agreement and the Series Supplements and the performance of
its obligations hereunder and thereunder (including the execution and
authentication of the Pass Through Certificates to be delivered on the
Pass Through Closing Date) have been fully 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 violate any
Federal or New York 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 bylaws 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; and
(iii) each of this Agreement and the Pass Through Agreement has
been, and as of the Pass Through Closing Date the Series Supplements
will be, duly executed and delivered by it (in its individual and trust
capacities) 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 (in its individual and trust capacities), enforceable in
accordance with its respective terms except as 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 (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 7.10. Survival of Representations, Warranties and
Covenants. The representations, warranties and covenants of the Owner
Participant, the Owner Trustee (in its individual or trust capacity), the
Pass Through Trustee (in its individual or trust capacity) and the
Indenture Trustee (in its individual or trust capacity) provided for in
this Article 7, and their respective obligations under any and all of them,
shall survive the Closings, the delivery of the Aircraft and the expiration
or other termination of this Agreement and the other Operative Agreements.
Section 7.11. Lessee's Assumption of the Certificates. (a)
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 and to purchase the
Aircraft pursuant to Section 4.02(a)(A), (D), (E) or (F) of the Lease, and
so long as no 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 attributable to the
Owner Trustee) but subject to the 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)(A), (D), (E) or (F) 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, and 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 7.11
releasing the Owner Participant and the Owner Trustee from all obligations
in respect of the Certificates, the Indenture, this Agreement and all other
Operative Agreements, except any obligations which shall have arisen (or
with respect to events which shall have occurred) prior to such assumption
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, Make-Whole Premium, if any,
interest and all other sums owing on all Outstanding Certificates (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
and the Holders, 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 hereunder and under the Lease;
(ii) the instrument referred to in paragraph (i) of this Section
7.11(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 (or the Lessee's substituted
obligations) 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 7.11(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 of the
Certificates (or the Lessee's substituted obligations) referred to in
paragraph (ii) of this Section 7.11(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
Certificate Closing Date or the Delivery Date, as the case may be, 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 and expenses of counsel) of the Indenture Trustee, the Pass
Through Trustee, the Owner Trustee and the Owner Participant in connection
with such assumption.
Section 7.12. 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 shall not engage in any business or other activity other than the
transactions contemplated herein or in any other Operative Agreement and
all necessary or appropriate activity related thereto.
Section 7.13. Compliance with Trust Agreement, Etc. Each of the
Owner Participant, NBD and the Owner Trustee agrees with the Lessee, the
Indenture Trustee and the Pass Through Trustee that so long as the Lien of
the Indenture shall be in effect it will (i) comply with all of the terms
of the Trust Agreement applicable to it in its respective capacity, the
noncompliance with which would materially adversely affect any such party
and (ii) not 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 any such party without the prior written consent of
such party. The Owner Trustee confirms for the benefit of the Lessee, the
Indenture Trustee and the Pass Through Trustee that it will comply with the
provisions of Article 2 of the Trust Agreement. Notwithstanding anything
else to the contrary in the Trust Agreement, so long as the Lease remains
in effect, the Owner Participant agrees not to terminate or revoke the
trust created by the Trust Agreement without the consent of the Lessee. If
and so long as the Indenture shall not have been discharged the consent of
the Indenture Trustee shall also be required in connection with any such
termination or revocation and in addition, the Owner Participant will
promptly and duly execute and deliver to the 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 the Indenture Trustee may from
time to time reasonably request and furnish in order to protect the rights
and remedies created or intended to be created in favor of the Indenture
Trustee under the Indenture and to create for the benefit of the
Certificate Holders a valid first priority Lien with respect to, and a
first and prior perfected security interest in, the Trust Indenture Estate.
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 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 the
Lessor's Estate, Rent 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 relating to:
(i) the acquisition, financing, use or operation of the Aircraft;
(ii) payments under the Operative Agreements;
(iii) the property, or the income or other proceeds received with
respect to the property after an Event of Default under the Lease, by
the Indenture Trustee under the Indenture;
(iv) otherwise with respect to or by reason of the transactions
described in or contemplated by the Operative Agreements;
(v) the payment of the principal or interest or other amounts
payable with respect to the Certificates;
(vi) the Certificates or the Pass Through Certificates or the
issuance, acquisition, or refinancing thereof or the beneficial
interests in the Lessor's Estate or the creation thereof under the Trust
Agreement; or
(vii) any assumption by the Lessee pursuant to Section 7.11 of this
Agreement and Section 2.12 of the Indenture.
(b) Exceptions. The indemnity provided for in Section 8.01(a)
shall not extend to any of the following:
(i) With respect to an Indemnitee, Taxes based upon, measured by
or with respect to the net or gross income, items of tax preference or
minimum tax or excess profits, net receipts, value-added taxes (in the
nature of an income tax and not in the nature of a sales, use or similar
tax), capital, franchise, net worth (whether denominated income, excise,
capital stock, or doing business taxes) (other than, in each case,
rental, sales, use, transfer, value-added (in the nature of a sales, use
or similar tax and not in the nature of an income tax), consumption, ad
valorem, stamp, property, or similar taxes) ("Income Taxes"), provided
that any such gross income and gross receipts taxes and any such foreign
taxes shall not be excluded if such Taxes would not have been imposed
absent the location of the Aircraft, Airframe, any Engine or Part in,
the presence, operations or activities of the Lessee and/or its
Affiliates or any other user of the Aircraft, Airframe, any Engine or
Part in, the making of payments from, or any other Lessee (and/or Lessee
Affiliate) or other user contact with, such jurisdiction, and provided
further that income taxes on the Trust Estate shall not be excluded
under this paragraph (b)(i) if the Owner Participant would not have been
subject to such taxes in the absence of the participation of Owner
Trustee in the transaction;
(ii) [Intentionally left blank];
(iii) Taxes imposed with respect to the Aircraft and arising out of
or measured by acts, omissions, events or periods of time (or any
combination of the foregoing) which occur after the later of (A) 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 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 7.11 of this
Agreement), and (B) the earliest of (x) the expiration of the Term of
the Lease 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, provided that this exclusion (iii) shall not apply
in respect of any payment made after the dates set forth in clauses (A)
and (B) above or with respect to any event or circumstance occurring on,
with or prior to such return or transfer or period prior to such return
or transfer;
(iv) 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 Owner Trustee under the Indenture;
(v) 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);
(vi) 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 Delivery Date, 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 Lessor's Estate except, in each
case, Taxes following or as a result of the exercise of remedies or in
connection with the exercise by the Lessee of one of its options to
purchase other than at Fair Market Value (it being understood that any
disposition of the Aircraft or the Airframe, any Engine or Part as a
result of the substitution, replacement or modification thereof by the
Lessee or by reason of any action taken by the Lessee or any other user
of the Aircraft, Airframe or any Engine pursuant to Sections 7, 8, or 9
of the Lease shall not be treated as a voluntary or involuntary transfer
or disposition, and that in the event that the Lessee exercises any of
its purchase options at Fair Market Value, the Lessee will, to the
extent practicable, cooperate to ensure delivery of the Aircraft in a
jurisdiction where there are no sales, transfer or similar Taxes to be
imposed);
(vii) Taxes imposed on the Owner Participant for which the Lessee
is obligated to indemnify the Owner Participant pursuant to the Tax
Indemnity Agreement;
(viii) Taxes imposed on a successor, assign or other transferee of
the Owner Participant that is not a U.S. Person or of any other
original Indemnitee (including, without limitation, a transferee which
is a new lending office of an original Indemnitee) (other than the
Owner Trustee) which on the Certificate Closing Date is an Indemnitee
(for purposes of this clause (viii), 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 applicable to it); provided, however, that the
exclusion provided by this clause (viii) shall not apply in the case of
a succession, assignment or other transfer (1) while an Event of Default
under the Lease or the Indenture has occurred and is continuing; (2)
required by any provision of the Operative Agreements (other than
pursuant to Section 7.02 hereof) or (3) in the case of the Owner
Participant or any of its Affiliates, to any Tax other than an Income
Tax;
(ix) [Intentionally Left Blank];
(x) any Taxes which have been included in the Purchase Price and
which have been paid to the applicable taxing authorities;
(xi) 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;
(xii) any Taxes arising under or in connection with any prohibited
transaction, within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Code ("Prohibited Transaction"); provided, however,
that in the event Prohibited Transaction Exemption 89-88, appearing at
54 Fed. Reg. 42581 (1989), or any other comparable prohibited
transaction exemption, (individually or collectively, a "PTE") is not
valid or is not applicable in any respect to the purchase and holding of
the Pass Through Certificates, then the indemnity provided for in
Section 8.01(a) hereof shall extend to Taxes imposed on the Owner
Participant as the result of any Prohibited Transaction occurring with
respect to the purchase or holding of any Pass Through Certificate by an
employee benefit plan subject to Title I of ERISA or by a plan subject
to Section 4975 of the Code (individually or collectively, an "ERISA
Plan") with respect to which ERISA Plan the Owner Participant is a party
in interest, within the meaning of Section 3(14) of ERISA, or a
disqualified person, within the meaning of Section 4975 of the Code,
except, however, that such indemnity shall not extend to any Taxes
imposed on the Owner Participant as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificate (A) over which purchase or holding the Owner
Participant or any Affiliate thereof has discretion or control (other
than in the capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16)(B) of ERISA; and provided
further, however, that in the event the PTE is not valid or applicable
in any respect to the purchase and holding of the Pass Through
Certificates and the Lessee had failed to obtain from the manager or
co-manager of the underwriting syndicate of the Pass Through
Certificates a representation that such manager or co-manager has a PTE,
then the indemnity provided for in Section 8.01(a) hereof shall extend
to Taxes imposed on the Owner Participant as the result of any
Prohibited Transaction occurring with respect to the purchase or holding
of any Pass Through Certificate by an ERISA Plan with respect to which
the Owner Participant is a party in interest or a disqualified person,
except, however, that such indemnity shall not extend to Taxes resulting
from any Prohibited Transaction occurring with respect to the purchase
or holding of any Pass Through Certificates by an ERISA Plan with
respect to which the Owner Participant (or any Affiliate thereof) is a
"plan sponsor", within the meaning of Section 3(16)(B) of ERISA; and
(xiii)Taxes imposed by any jurisdiction that would have been imposed on
the Lessor or the Owner Participant for activities in such jurisdiction
unrelated to the transactions contemplated by the Operative Agreements
to the extent imposed on such unrelated activities.
(c) Withholding. The Pass Through Trustee shall withhold any
Taxes required to be withheld on payments to any holder of a Pass Through
Certificate who is a Non-U.S. Person except to the extent that such holder
of a Pass Through Certificate has furnished evidence to the Pass Through
Trustee sufficient under applicable law to entitle such holder of a Pass
Through Certificate to any exemption from or reduction in the rate of
withholding on interest claimed by such holder of a Pass Through
Certificate. 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 a Tax required to be withheld with respect to any Holder of a
Certificate or any holder of a Pass Through Certificate or any claim is
otherwise asserted by a taxing authority against the Owner Trustee or Owner
Participant or any of their Affiliates for any withholding tax, the Lessee
will indemnify the Owner Trustee and the Owner Participant and their
Affiliates (and the Indenture Trustee or the Pass Through Trustee, as the
case may be, in turn agrees to indemnify the Lessee) (without regard to
the exclusions set forth in Section 8.01(b) hereof) on an After-Tax Basis
against any such Taxes required to be withheld and any interest and
penalties with respect thereto, along with any other costs (including
reasonable attorney's fees) incurred in connection with any such claim.
The Indenture Trustee or the Pass Through Trustee, as the case may be, in
its individual capacity (and without recourse to the Trust Indenture
Estate), shall indemnify the Lessee on an After-Tax Basis for any payment
the Lessee shall have made pursuant to the preceding sentence.
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, provided that the calculation of any additional
amounts owing to any Indemnitee as a result of the Lessee's obligation to
indemnify on an After-Tax Basis shall be made without regard to the
exclusions set forth in Section 8.01(b). 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 promptly 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 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
permanent 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, and (y) the amount of the
payment made under Sections 8.01 and 8.02 by the Lessee to such Indemnitee
plus the amount of any other payments by the Lessee to such Indemnitee
theretofore required to be made under Sections 8.01 and 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
to such Indemnitee 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 (and without regard to Section 8.01(b), except for
clause (v) thereof) 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 subsequently disallowed or reduced (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 and adversely impaired by the
failure to provide such notice or copy. The Lessee may, at its option,
contest or, if required by law, require the Indemnitee to contest in good
faith, with due diligence and at the Lessee's expense, if timely requested
in writing by the Lessee, 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 Lessor's Lien on the Aircraft, Airframe or any Engine or any risk of
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 control the contest and 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; provided,
however, that the Lessee shall have the right to be consulted in good faith
with respect to any contest, including governmental and judicial
conferences and the right to be consulted in good faith regarding all
related submissions to any governmental or other authority, provided,
however, that the Lessee shall be permitted to participate in any such
contest only (x) with respect to issues that can be separated on audit from
any Taxes for which the Lessee is not required to indemnify the Indemnitee
hereunder, and (y) if the Indemnitee shall have determined that in its
judgement, exercised in its sole discretion, neither such participation nor
the separation of issues will adversely affect the Indemnitee.
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 to pay and shall pay the Indemnitee on a
current basis all reasonable fees and expenses which such Indemnitee may
incur as a 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 acknowledgement 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, and (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 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
the Lessee and reasonably satisfactory to such Indemnitee ("Tax Counsel")
to the effect that there exists Substantial Authority for contesting such
claim, (ii) such Indemnitee (and, if such Indemnitee is not the Owner
Participant, the Owner Participant and 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 circumstances or law has
changed and, in light thereof, there is Substantial Authority for
contesting such claim and (viii) the amount of the indemnity payments the
Lessee would be required to make with respect to such adjustment, when
aggregated with similar adjustments that could be raised in other taxable
years of such Indemnitee is at least $50,000; provided, that in the event
that such Indemnitee is not required under this paragraph to contest any
Tax liability for which the Lessee is obligated to indemnify any
Indemnitee, the Lessee may contest such Tax liability in the name of the
Lessee, if permitted by law.
The Lessee may appeal or require the Indemnitee to appeal any
judicial decision (including to the U.S. Supreme Court), provided that the
Lessee may not require the Indemnitee to appeal any judicial decision
unless (i) 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 appeal
will be successful, and (ii) the Indemnitee shall have made a good faith
determination that it shall not be adversely affected by such appeal.
Nothing contained in this Section 8.04 shall require any
Indemnitee to contest or continue to contest, or permit 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
Lessee of any amount that might otherwise be payable by 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
permanent 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 and (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
(in the case of any such tax benefit, without regard to Section 8.01(b)
hereof).
Section 8.06. Lessee's Reports. 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 Indemnitee 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 Indemnitee may reasonably require from the Lessee to
enable the Indemnitee 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
Indemnitee will provide such information reasonably available to it as the
Lessee may reasonably require from such Indemnitee 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; provided that in no event shall any Indemnitee be
required to provide copies of any of its tax returns. The Lessee shall
hold the Indemnitee harmless from and against any liabilities, including
penalties, additions to tax, fines and interest, imposed upon or incurred
by such Indemnitee 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 such
Indemnitee 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 federal, 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 Trustee or Owner Participant
is the owner of the Aircraft, the Airframe, any Engine or any Part or which
would otherwise be inconsistent with the terms of the Lease or the Tax
Indemnity Agreement 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, 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 of any part thereof, which Taxes are not the responsibility of
Lessee with respect to such Indemnitee, then such Indemnitee shall pay to
Lessee within 30 days of Lessee's demand therefor an amount which equals
the amount actually paid by 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, penalties, claims, actions, suits, costs, disbursements and
expenses (including legal fees and expenses and all costs and expenses
relating to amendments, supplements, adjustments, consents, refinancings
and waivers under the Operative Agreements except as otherwise provided in
Section 10.01(d)(i) or Section 15 hereof) of every kind and nature (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,
the Pass Through Trust Agreement, AVSA's FAA Bill of Sale, AVSA's
Warranty Bill of Sale or any other Operative Agreement or any other
document entered into in connection herewith or any sublease or transfer
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, sale, return, purchase, acceptance,
rejection, delivery, non-delivery, condition, repair, modification,
servicing, rebuilding, airworthiness, registration, reregistration,
import, export, performance, non-performance, lease, sublease, transfer,
merchantability, fitness for use, alteration, substitution or
replacement of any Airframe, Engine, or Part under the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the GTA or the
Engine Warranty Assignment or other transfer of use or possession, or
other disposition 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) 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 any refunding or refinancing thereof, or
interest in the Lessor's Estate or the Trust Agreement or any similar
interest or in any way relating to or arising out of the Trust Agreement
and the Lessor's Estate, the Indenture or the Trust Indenture Estate
(including, without limitation, any claim arising out of the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, 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 or Indenture Trustee as trustees, in the
manner contemplated by this Agreement, the Indenture, the Indenture and
Security Agreement Supplement or the Trust Agreement 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 Agreements), 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 to the extent it:
(i) would not have occurred but for the willful misconduct or
gross negligence of such Indemnitee;
(ii) in respect of the Aircraft, is attributable to acts or events
which occur after the Aircraft is no longer part of the Lessor's Estate
or leased under the Lease or, if the Aircraft remains a part of the
Lessor's Estate, after the expiration of the Term (other than 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 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 circumstances or
events occurring prior to expiration of the Term, including without
limitation the Lessee's failure to fully discharge all of its
obligations under the Lease or the other Operative Agreements;
(iii) 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;
(iv) is a cost or expense required to be paid by the Owner
Participant or its permitted transferees (and not by the Lessee)
pursuant to this Agreement or any other Operative Agreement (other than
the Owner Participant's obligations under Section 6.01 of the Trust
Agreement) and for which the Lessee is not otherwise obligated to
reimburse the Owner Participant, directly or indirectly;
(v) 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 required to be observed and performed by it, in this
Agreement, the Purchase Agreement Assignment, 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) is a payment required to be made by the Owner Participant
pursuant to Section 3.02(b) hereof, but nothing contained in this
Section 9.01(b)(vi) shall be deemed or construed to limit the
obligations of the Lessee to the Indenture Trustee and Holders of the
Certificates pursuant to Section 3.05 of the Lease;
(vii) is, 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) is, in the case of the Owner Participant or the Owner
Trustee, attributable to the offer or sale by such Indemnitee after the
Certificate Closing 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) in connection with a
Refinancing or (y) as a result of exercise of remedies under Section 17
of the Lease; and
(ix) is incurred under or in connection with any prohibited
transaction, within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Code ("Prohibited Transaction"); provided, however,
that in the event Prohibited Transaction Exemption 89-88, appearing at
54 Fed. Reg. 42581 (1989), or any other comparable prohibited
transaction exemption, (individually or collectively, a "PTE") is not
valid or is not applicable in any respect to the purchase and holding of
the Pass Through Certificates, then the indemnity provided for in
Section 9.01(a) hereof shall extend to any Expense incurred by the Owner
Participant as the result of any Prohibited Transaction occurring with
respect to the purchase or holding of any Pass Through Certificate by an
employee benefit plan subject to Title I of ERISA or by a plan subject
to Section 4975 of the Code (individually or collectively, an "ERISA
Plan") with respect to which the Owner Participant is a party in
interest, within the meaning of Section 3(14) of ERISA, or a
disqualified person, within the meaning of Section 4975 of the Code,
except, however, that such indemnity shall not extend to any Expense
incurred by the Owner Participant as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificate (A) over which purchase or holding the Owner
Participant (or any Affiliate thereof) has discretion or control (other
than in the capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16)(B) of ERISA; and provided
further, however, that in the event the PTE is not valid or applicable
in any respect to the purchase and holding of the Pass Through
Certificates and the Lessee had failed to obtain from the manager or
co-manager of the underwriting syndicate of the Pass Through
Certificates a representation that such manager or co-manager has a PTE,
then the indemnity provided for in Section 9.01(a) hereof shall extend
to any Expense incurred by the Owner Participant as the result of any
Prohibited Transaction occurring with respect to the purchase or holding
of any Pass Through Certificate by an ERISA Plan with respect to which
the Owner Participant is a party in interest or a disqualified person,
except, however, that such indemnity shall not extend to any Expense
incurred by the Owner Participant as a result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Pass Through Certificates by an ERISA Plan with respect to which the
Owner Participant (or any Affiliate thereof) is a "plan sponsor", within
the meaning of Section 3(16)(B) of ERISA.
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 under this Agreement, the Tax Indemnity Agreement and any other
Operative Agreement, an amount equal to the lesser of (x) the sum of such
Tax benefit plus any other permanent 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 to such
Indemnitee pursuant to this Section 9.02), it being intended that no
Indemnitee should realize a net Tax benefit pursuant to this Section 9.02
unless the Lessee shall first have been made whole for any payments by it
to such Indemnitee 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 (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
without regard to Section 8.01(b) 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
(with respect to such Indemnitee) 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, but without regard to Section 8.01(b)
hereof, other than Section 8.01(b)(v) hereof.
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 its 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 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 obligation to indemnify such Indemnitee hereunder in respect of
such claim, defend any such claim covered by insurance for which
indemnification is sought pursuant to this Article 9 and each Indemnitee
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, to the
extent 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 such Indemnitee waives its right to be
indemnified under this Article 9 with respect to such claim. The Lessee
shall not enter into any settlement or compromise which the Lessee has not
agreed to discharge or with respect to which the Lessee has not agreed to
indemnify such Indemnitee to such Indemnitee's satisfaction.
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 Purchase
Agreement Assignment, the Engine Warranty Assignment, the Lease and the
other Operative Agreements but, as to such indemnities, only with respect
to losses, liabilities, obligations, damages, penalties, claims, actions,
suits, costs, Expenses and disbursements caused by events occurring or
existing (or fairly attributable to the Lessee's acts or omissions) 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 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
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs. (a)
Transaction Costs. The Owner Participant shall pay (or reimburse the
Lessee if the Lessee shall have previously made such payment) all fees and
expenses of the following persons relating to the public offering of the
Pass Through Certificates contemplated by the Underwriting Agreement and
related to the transactions contemplated hereby on the Certificate Closing
Date and the Delivery Date: (i) the fees and expenses of counsel for the
Owner Participant; (ii) the fees and expenses of the transaction
documentation counsel and counsel for the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Underwriters (other than those
fees, expenses and disbursements payable by the Underwriters pursuant to
the Underwriting Agreement); (iii) the fees and expenses of Daugherty,
Fowler & Peregrin; (iv) any initial fees and expenses of the Pass Through
Trustee and the fees and expenses of the Owner Trustee and the Indenture
Trustee; (v) any compensation, commissions and discounts payable to the
Underwriters pursuant to the Underwriting Agreement; (vi) the fees, if
any, incurred in printing the Pass Through Certificates; (vii) the fees
and expenses incurred in connection with printing any amendment to the
Registration Statement on Form S-3 bearing Registration No. 33-56569,
printing any Preliminary Prospectus or Prospectus (as such terms are
defined in the Underwriting Agreement) for the offering of the Pass Through
Certificates; (viii) the fees and expenses of Arthur Andersen & Co.; (ix)
the fees and expenses of Moody's and S&P; and (x) the fees and expenses of
First Chicago Leasing Corporation. The fees and expenses described in
clauses (ii) through (x) of this paragraph shall be allocable to the Owner
Participant under this Agreement (1) to the extent incurred specifically
with respect to the Owner Participant, and (2) to the extent such fees and
expenses are incurred but are not specifically attributable to the Owner
Participant, in the proportion that the principal amount of the
Certificates bears to the total amount of the Pass Through Certificates.
The Owner Participant, the Owner Trustee and the Lessee
acknowledge that the percentages for Interim Rent, Basic Rent, Stipulated
Loss Value and Termination Value set forth in the Lease have been prepared
assuming the aggregate amount payable by the Owner Participant pursuant to
the preceding paragraph is 1.31% of the Purchase Price (the "Estimated
Expense Amount").
(b) Continuing Expenses. The continuing fees, expenses and
disbursements (including reasonable counsel fees and expenses) of the
entity acting as Owner Trustee, as lessor under the Lease and as Owner
Trustee under the Trust Agreement with respect to the administration of the
Lease and the Lessor's Estate 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
Indenture Trustee, as trustee under the Indenture with respect to the
administration of the Trust Indenture Estate and the continuing fees,
expenses and disbursements (including reasonable counsel fees and initial
fees relating to the establishment of a replacement trustee) of the Pass
Through Trustee shall be paid as Supplemental Rent by the Lessee, including
without limitation any amounts payable to the Indenture Trustee or on
account of requests by the Indenture Trustee for indemnification under
Article XI of the Indenture.
(c) 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 (a) any Default or Event of
Default and any enforcement or collection proceedings resulting
therefrom, or (b) the enforcement of the obligations of the Lessee
hereunder or under the other Operative Agreements, including, without
limitation, the entering into or giving or withholding of any amendments
or supplements or waivers or consents, including without limitation, any
amendment, supplement, waiver 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 or (c) any amendment, supplement, waiver or consent (whether
or not entered into) under this Agreement, the Lease, the Indenture, the
Certificates, the Tax Indemnity Agreement, the Purchase Agreement
Assignment or any other Operative Agreement 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 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 in connection with the offer, sale or other
transfer (whether pursuant to Section 7.03(d) hereof or otherwise) by
the Owner Participant or the Owner Trustee after the Certificate Closing
Date of any interest in the Aircraft, the Lessor's Estate or the Trust
Agreement or any similar interest (and the Owner Participant shall be
responsible for all such fees and expenses), unless such offer, sale or
transfer shall occur (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 the Lessee pursuant to Section 4.02
or Article 10 of the Lease; 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, and a successor
Owner Trustee may be appointed and a Person may become Owner Trustee under
the Trust Agreement only in accordance with the provisions of Section 3.11
of the Trust Agreement and the provisions 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 or a bank or trust company fully guaranteed by a
direct or indirect parent thereof having a combined capital, surplus and
undivided profits of at least $100,000,000;
(iii) Such appointment shall not violate any provisions of the
Transportation Code 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 Transportation Code 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;
(iv) Such successor Owner Trustee shall enter into an agreement or
agreements, in form and substance reasonably 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 Supplement, the Purchase Agreement Assignment, the Engine Warranty
Assignment, the Indenture, the Indenture Supplement and any other
Operative Agreement to which the Owner Trustee is 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); and
(v) All filings of Uniform Commercial Code financing and
continuation statements, filings in accordance with the Transportation
Code and amendments thereto shall be made and all further actions taken
in connection with such appointment as may be necessary in connection
with maintaining the validity, perfection and priority of the Lien of
the Indenture and the valid and continued registration of the Aircraft
in accordance with the Transportation Code.
(c) Appointment. For so long as the Aircraft remains registered
under the Transportation Code, the Owner Participant agrees to appoint
promptly a successor Owner Trustee meeting the requirements of Section
11.01(b) hereof in the event the Owner Participant has knowledge that the
Owner Trustee at any time shall not be a Citizen of the United States.
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
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
Trust Agreement, the Tax Indemnity Agreement 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, the Purchase
Agreement Assignment, the Engine Warranty Assignment, 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 Holders of Certificates. A Holder of
a Certificate shall have no further interest in, or other right with
respect to, the Trust Indenture Estate when and if the principal and
interest on all Certificates held by such Holder and all other sums payable
to such Holder under this Agreement, under the Indenture and under such
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 each of the
Trust 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 Indenture or the Certificates, except that prior to the
occurrence and continuance of an Event of Default, no section of the
Indenture or the Trust Agreement shall be amended or modified in any manner
which materially adversely affects the Lessee 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. 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 Event of
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 (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 mail and (c) if given by
FedEx service (or, if a Default or Event of Default shall have occurred and
be continuing, by other comparable courier service), when received or
personally delivered, addressed:
(a) If to the Lessee, to its office at 2007 Corporate Avenue,
Memphis, Tennessee 38132, Attention: Vice President and Treasurer with
a copy to Senior Vice President and General Counsel at 1980 Nonconnah
Drive, Memphis, Tennessee 38132, telephone (901) 395-3388, facsimile
(901) 395-4758; or to such other address as the Lessee shall from time
to time designate in writing to the Lessor, the Indenture Trustee and
the Owner Participant;
(b) If to the Lessor or the Owner Trustee, to its office at 611
Woodward Avenue, Detroit, Michigan 48226, Attention: Corporate Trust
Administration Department, telephone (313) 225-3185, facsimile (313)
225-3420; or to such other address as Lessor shall from time to time
designate in writing to the Lessee and the Indenture Trustee, with a
copy to Owner Participant;
(c) If to the Owner Participant, to its office at 225 High Ridge
Road, Stamford, Connecticut 06905, Attention: Vice President - Leasing,
telephone (203) 975-3504, facsimile (203) 975-3910; or to such other
address as the Owner Participant may from time to time designate in
writing to the Lessee and the Indenture Trustee; and
(d) If to the Indenture Trustee or the Pass Through Trustee, to
its office at 4 Chase Metrotech Center, Brooklyn, New York 11245,
Attention: Corporate Trust Administration, telephone (718) 242-5854,
facsimile (718) 242-3529; or to such other address as the Indenture
Trustee or the Pass Through Trustee, as the case may be, shall from time
to time designate in writing to the Lessor, the Lessee, the Indenture
Trustee and the Pass Through Trustee.
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing. (a) Subject to the terms and
conditions of this Section 15.01, the Lessee may request the Owner
Participant to participate in up to two refinancings, in whole but not in
part, of the Certificates prior to the end of the Basic Term (a
"Refinancing"), provided, that, such Refinancing may not occur prior to the
fifth anniversary of the Certificate Closing Date. Such Refinancings may
be placed in either the private or public markets and shall be denominated
in United States dollars (or in any other foreign currency so long as there
is no foreign currency risk to the Owner Participant), and shall be on
terms that do not materially adversely affect the Owner Participant. The
Owner Participant agrees to negotiate promptly in good faith to conclude an
agreement with the Lessee as to the terms of any such Refinancing
transaction (including the terms of any debt to be issued in connection
with such refinancing and the documentation to be executed in connection
therewith). Without the prior written consent of the Owner Participant,
the prospectus and other offering materials relating to any Refinancing in
the form of a public offering shall not identify the Owner Participant and
shall not include any financial statements of the Owner Participant or any
Affiliate thereof. In connection with any such Refinancing in the form of
a public offering, the Lessee shall indemnify the Owner Participant for any
liabilities under federal, state or foreign securities laws resulting from
such offering. The aggregate principal amount of the new Certificates
issued in connection with each Refinancing shall be the same as the
aggregate principal amount outstanding on the Certificates being
refinanced.
(b) Notwithstanding anything herein to the contrary, no
Refinancing will be permitted unless the Owner Participant shall have
received at least 10 Business Days' prior written notice of the closing
date of such Refinancing, the Owner Participant shall have been provided
such longer period required for a reasonable opportunity to review the
relevant documentation and the Owner Participant shall have determined in
good faith that neither it nor the Owner Trustee shall suffer any loss or
expense or material adverse effect upon the rights or obligations or bear
any increased risk as a result of such Refinancing (including, without
limitation, any risk with respect to taxes or other adverse consequences to
the Owner Participant including the application of Revenue Procedures 75-21
and 75-28 and Section 467 of the Code) for which it has not been or will
not have been indemnified by the Lessee in a manner reasonably satisfactory
to the Owner Participant.
Prior to the consummation of any Refinancing pursuant to this
Section 15.01, the Owner Participant and the Lessee shall agree upon a
schedule setting forth each installment of Interim Rent, Basic Rent,
Stipulated Loss Values, Termination Values and EBO Price payable pursuant
to the Lease as a result of the Refinancing in accordance with Section 3.04
of the Lease, and thereafter the amounts set forth in such schedule shall
become the amounts payable under the Lease. Upon the consummation of the
Refinancing, the evidence of indebtedness issued pursuant to the
Refinancing shall be considered "Certificates" for purposes of this
Agreement, the Lease and the Indenture.
(c) Notwithstanding the foregoing, the Owner Participant shall
have no obligation to proceed with any Refinancing transaction as
contemplated by this Section 15.01 unless the Lessee indemnifies the Owner
Trustee and the Owner Participant by agreement in form and substance
satisfactory to each of them, for any liability, obligation (other than the
obligation to pay principal and interest in respect of the refinanced
indebtedness), cost or expense (including, without limitation, reasonable
attorneys' fees and Make-Whole Premium and any other premiums or amounts
due under the Indenture), including any adverse tax consequences or impact,
related to or arising out of any such Refinancing transaction, except to
the extent of amounts included in Transaction Costs and payable by the
Owner Participant as provided in Article 10 hereof.
(d) Each party agrees to take or cause to be taken all requested
action, including, without limitation, the execution and delivery of any
documents and instruments, including, without limitation, amendments or
supplements to the Lease, which may be reasonably necessary or desirable to
effect such Refinancing, including, in the case of the Owner Participant,
direction to the Owner Trustee by the Owner Participant to prepay the
Certificates then outstanding; provided, however, that such Refinancing
shall be subject to the satisfaction of each of the following conditions:
(i) Payment of principal, accrued interest, Make-Whole Premium
and breakage costs, if any, and all other sums due and owing on the
Certificates payable under the Indenture;
(ii) Payment in full of all other amounts then due and owing by
the Lessee under this Agreement, the Indenture, the Lease, the Trust
Agreement, and the Certificates then outstanding shall have been made by
the Lessee;
(iii) Such party shall have received such opinions of counsel
(including, without limitation, an opinion received by the Owner
Participant from independent tax counsel reasonably satisfactory to the
Lessee that such Refinancing shall not result in any adverse tax
consequences to such Owner Participant, unless the Lessee shall have
agreed to provide an indemnity in respect thereof reasonably
satisfactory in form and substance to the Owner Participant),
certificates and other documents as it may reasonably request, each in
form and substance reasonably satisfactory to such party;
(iv) All authorizations, approvals and consents which in the
reasonable judgment of the Owner Participant are necessary for such
Refinancing shall have been obtained;
(v) The Lessee shall have provided or agreed to provide to the
Owner Participant, as Supplemental Rent under the Lease, sufficient
funds to pay any breakage costs, Make-Whole Premium and any other
amounts due under the Indenture;
(vi) The satisfaction or waiver by each other party to this
Agreement of the conditions set forth in this Section 15.01 to such
party's obligations under this Section 15.01;
(vii) No Event of Default shall have occurred and be continuing
or would occur immediately after giving effect to such Refinancing;
(viii) The Indenture Trustee shall have received no later than the
Business Day next preceding the day 15 days prior to the effective date
of such Refinancing irrevocable notice of such Refinancing; and
(ix) In the event the Lessee shall not prohibit the purchase of
the Refinancing loan certificates by, or with the assets of, an employee
benefit plan, as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA or a plan, which is subject to Section 4975(c) of the
Code, (individually or collectively, an "ERISA Plan"), the Lessee will
permit the placement of the Refinancing loan certificates with an ERISA
Plan only if either (A) if such placement is in the form of pass through
certificates, the sole underwriter or the manager or co-manager of the
underwriting syndicate or the selling or placement agent of the
Refinancing loan certificates represents to the Lessee that it has a
prohibited transaction exemption from the U.S. Department of Labor with
respect to pass through certificates (such as Prohibited Transaction
Exemption 90-24 or any other comparable exemption) or (B) purchasers of
the Refinancing loan certificates provide a representation regarding
their source of funds used in acquiring the Refinancing loan
certificates and, if such purchasers represent that they are using funds
of an ERISA Plan in acquiring the Refinancing loan certificates, such
purchasers further represent that either a prohibited transaction
exemption from the U.S. Department of Labor is available with respect
to their purchase and holding of the Refinancing loan certificates or
that their purchase and holding of the Refinancing loan certificates
will not constitute a prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code. The reliance on any such exemption will
not be conditional on the Owner Participant's representation concerning
its party in interest or other status with respect to ERISA Plans. If
neither exemption referred to in clause (A) or (B) of this paragraph
(viii) is valid or applicable in any respect to the purchase and holding
of the Refinancing loan certificates, or if the representation in clause
(B) of this paragraph (viii) that such purchase and holding will not
constitute a prohibited transaction is not correct, whichever is
applicable then the Lessee shall indemnify the Owner Participant
pursuant to, and to the extent provided for, under Sections 8 and 9
hereof for Taxes and Expenses 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 placement of the
Refinancing loan certificates with, or the holding of the Refinancing
loan certificates by, any ERISA Plan with respect to which the Owner
Participant is a party in interest, within the meaning of Section 3(14)
of ERISA, or a disqualified person, within the meaning of Section 4975
of the Code.
Section 15.02. Reoptimization. (a) If a Change in Tax Rate
occurs prior to the end of the Basic Term, then, subject to the terms and
conditions of this Section 15.02 and Section 3.04 of the Lease, the Owner
Participant may, upon 30 days' prior notice to the Lessee, the Indenture
Trustee, the Owner Trustee and the Holders, elect to modify the schedule of
payments of principal of the certificates issued ("Refinancing
Certificates") in connection with any Refinancing using private debt (not
including debt issued pursuant to an exemption from registration under the
Securities Act relying on Rule 144A promulgated thereunder but otherwise
marketed in a manner substantially similar to securities registered under
the Securities Act, and not including debt issued in connection with any
offering of securities registered under the Securities Act) due on each
remaining Rent Payment Date on or commencing on the Rent Payment Date next
succeeding the date mutually agreed to by the Owner Participant, the Lessee
and the Indenture Trustee on which the Owner Participant shall make such
modification (the "Reoptimization Date"). Promptly after making such
modification, the Owner Participant shall furnish each party hereto written
notice of the amounts so recalculated.
(b) Adjustments to Refinancing Certificates. On the
Reoptimization Date, subject to the satisfaction on or before the
Reoptimization Date of the conditions set forth in Section 15.02(c), the
Owner Trustee will issue and deliver and the Indenture Trustee will
authenticate, and each holder of a Refinancing Certificate will accept
delivery of, a new Refinancing Certificate or Refinancing Certificates (in
replacement of each Refinancing Certificate then held by such holder, which
Refinancing Certificates shall be surrendered to the Indenture Trustee for
cancellation) containing such changed principal installments (expressed as
a percentage of the original principal amount of such Refinancing
Certificate) as shall have been recalculated by the Owner Participant, but
in the same principal amount as, and containing terms identical to, except
as otherwise contemplated by Section 15.02(d) hereof, the Refinancing
Certificates originally issued in connection with the Operative Agreements.
(c) Conditions to the Obligations of the Holders of the
Refinancing Certificates on the Reoptimization Date. The obligation of
each holder of a Refinancing Certificate to accept delivery of a new
Refinancing Certificate on the Reoptimization Date, and to surrender on
such Reoptimization Date any Refinancing Certificate then held by it, is
subject to the following conditions precedent having been satisfied on or
before the Reoptimization Date:
(i) the requirements of Section 15.02(d) hereof shall have been
satisfied;
(ii) the following documents, in form and substance satisfactory to
such Holder, shall have been duly authorized, executed and delivered by
the party or parties thereto and shall be in full force and effect: (A)
if the payments of Interim Rent, Basic Rent, Stipulated Loss Values and
Termination Values with respect to the Term have been changed, an
amendment to the Lease, dated the Reoptimization Date and duly filed (or
in the process of being so duly filed) for recordation with the
Aeronautics Authority, (B) an amendment to the Indenture setting forth
any changed repayment schedule to the Refinancing Certificates, dated
the Reoptimization Date and duly filed (or in the process of being so
duly filed) for recordation with the Aeronautics Authority, and (C)
replacement Refinancing Certificates; and
(iii) in connection with any Reoptimization the Owner Participant
shall pay or agree to pay all reasonable costs and expenses incurred by
the Lessee, the Owner Trustee, the Indenture Trustee and each Holder of
a Refinancing Certificate (including, without limitation, reasonable
legal fees and expenses) in connection with any such reoptimization.
(d) Payment Schedules. Except as otherwise provided in this
Section 15.02 as long as the Refinancing Certificates remain outstanding,
the payment schedules for the Refinancing Certificates shall not be
modified.
ARTICLE 16
[INTENTIONALLY LEFT BLANK]
ARTICLE 17
MISCELLANEOUS
Section 17.01. 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 it is the intent of the parties for
Federal, state, local and foreign income tax purposes that the Owner
Participant will be treated as the owner of the Aircraft and the Lessee
will be treated as the lessee of the Aircraft.
Section 17.02. Collateral Account. (a) The Indenture Trustee
shall notify the Owner Trustee and the Lessee of any losses incurred on the
Specified Investments in the Collateral Account promptly upon the
realization thereof, as well as any fees, commissions and other costs,
Taxes (other than income taxes) and expenses, if any, incurred by the
Indenture Trustee in connection with its administration of the Collateral
Account (collectively, "Losses"). Promptly upon receipt of such
notification but, in any event, no later than the earlier of the Delivery
Date and the Cut-Off Date, the Lessee shall pay to the Indenture Trustee,
on behalf of the Owner Trustee, for deposit into the Collateral Account, an
amount equal to such Losses (net of any investment earnings).
(b) The Lessee shall pay to the Indenture Trustee, on behalf of
the Owner Trustee, on the Owner Participant Payment Date an amount equal to
the aggregate amount of interest accrued on the Certificates from (and
including) the Certificate Closing Date to (but excluding) the Delivery
Date.
(c) If the Aircraft has neither (i) been purchased by the Owner
Trustee on the Delivery Date nor (ii) been acquired by the Lessee in the
manner contemplated by Section 3.05(a)(ii) hereof, the Lessee agrees to pay
to the Indenture Trustee, on behalf of the Owner Trustee, on the Cut-Off
Date the excess, if any, of the amounts payable under Section 6.02(b)(1) of
the Indenture over the amounts released from the Collateral Account under
Section 2.16 of the Indenture.
(d) All amounts payable by the Lessee pursuant to this Section
17.02 shall be paid to the Indenture Trustee at its principal office at 4
Chase Metrotech Center, 3rd Floor, Brooklyn, New York 11245, Attention:
Corporate Trust Office, or as the Indenture Trustee may otherwise direct
within the United States, by wire transfer of immediately available funds
in U.S. Dollars no later than 10:30 a.m., New York City time, on the due
date of such payment.
Section 17.03. 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 17.04. 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 and executed by the Owner Trustee and the
Indenture 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 an 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 17.05. 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 17.06. 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 permitted assigns, the Owner Participant and
its successors and permitted assigns, the Owner Trustee and its successors
as Owner Trustee (and any additional owner trustee appointed) under the
Trust Agreement, the Indenture Trustee and its successors as Indenture
Trustee (and any additional indenture trustee appointed) under the
Indenture and the Pass Through Trustee and its successors as Pass Through
Trustee (and any additional pass through trustee appointed).
Section 17.07. Concerning the Owner Trustee, the Pass Through
Trustee and the Indenture Trustee. Each of NBD and Chase is entering into
this Agreement solely in their respective capacities (except to the extent
otherwise expressly indicated), in the case of NBD, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, in the case
of Chase), not in its individual capacity but solely as Indenture Trustee
under the Indenture and as Pass Through Trustee under the Pass Through
Agreement, and except as otherwise expressly provided in this Agreement or
in the Lease, the Indenture, the Pass Through Agreement or the Trust
Agreement, neither NBD, nor Chase, shall be personally liable for or on
account of its statements, representations, warranties, covenants or
obligations under this Agreement; provided, however, that each of NBD and
Chase 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 (a) its own gross negligence or willful
misconduct (whether in its capacity as trustee or in its individual
capacity), (b) any breach of representations and warranties or any breach
of covenants made in its individual capacity pursuant to or in connection
with this Agreement or the other Operative Agreements to which it is a
party, (c) any breach, in the case of the Owner Trustee, of its covenants
made in its individual capacity in Sections 3.05 and 3.08 of the Indenture,
(d) the failure to use ordinary care in receiving, handling and disbursing
funds, (e) in the case of the Owner Trustee, Lessor's Liens attributable to
it in its individual capacity, (f) in the case of the Indenture Trustee,
Indenture Trustee's Liens and (g) taxes, fees or other charges on, or based
on, or measured by, any fees, commissions or compensation received by it in
connection with the transactions contemplated by the Operative Agreements.
Section 17.08. 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 17.09. 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 to this Agreement
shall in each instance obtain the prior written approval of each other
party to this Agreement concerning the exact text and timing of news
releases, articles and other information releases to the public media
concerning any Operative Agreements.
Section 17.10. Certain Limitations on Reorganization. The
Indenture Trustee agrees that, if (i) the Lessor's Estate or the trust
created by the Trust Agreement becomes a debtor subject to the
reorganization provisions of the Bankruptcy Code or any other applicable
bankruptcy or insolvency statutes, (ii) pursuant to such reorganization
provision, the Owner Participant is held to have recourse liability to the
debtor or the trustee of the debtor directly or indirectly on account of
any amount payable as principal, interest or premium on the Certificates,
and (iii) the Indenture Trustee actually receives any Recourse Amount which
reflects any payment by the Owner Participant on account of (ii) above,
then the Indenture Trustee, as the case may be, shall promptly refund to
the Owner Participant such Recourse Amount. For purposes of this Section
17.10, "Recourse Amount" means the amount by which the portion of such
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 Section shall prevent the Indenture Trustee from enforcing any
individual obligation (and retaining the proceeds thereof) of the Owner
Participant under this Agreement or any other Operative Agreement to the
extent herein or therein provided, for which the Owner Participant has
expressly agreed by the terms of this Agreement to accept individual
responsibility.
Section 17.11. 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 ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS AND
IS BEING DELIVERED IN NEW YORK.
Section 17.12. Section 1110 Compliance. The Owner Participant,
the Indenture Trustee and the Lessee agree that the transactions
contemplated by the Operative Agreements that are to occur from and after
the Delivery Date are expressly intended to be, shall be and should be
construed so as to be entitled to the benefits and protection of Section
1110 of the Bankruptcy Code.
ARTICLE 18
CONFIDENTIALITY
Section 18.01. 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, (iii) to bank examiners, auditors, insurance regulators,
accountants or similar regulatory authorities, (iv) 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, (v) to a subsidiary or Affiliate of the parties hereto, (vi) 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 18.01 or (vii) in the case of the Owner
Participant or the Owner Trustee (in its individual or trust capacity) to
the Owner Trustee (in its individual or trust capacity) or to the Owner
Participant, as the case may be.
IN WITNESS WHEREOF, the parties have caused this Participation
Agreement to be executed by their respective, duly authorized officers and
this Participation Agreement shall be effective this ___ day of October,
1995.
LESSEE:
FEDERAL EXPRESS CORPORATION
By:__________________________________________
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director - Structured
Finance
OWNER PARTICIPANT:
CHRYSLER CAPITAL CORPORATION
By:__________________________________________
Name:
Title:
OWNER TRUSTEE:
NBD BANK, not in its individual capacity
except as otherwise expressly provided
herein, but solely as Owner Trustee
By:__________________________________________
Name:
Title:
INDENTURE TRUSTEE:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), not in its individual
capacity except as otherwise expressly
provided herein, but solely as Indenture
Trustee
By:__________________________________________
Name:
Title:
PASS THROUGH TRUSTEE:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), not in its individual
capacity except as otherwise expressly
provided herein, but solely as Pass
Through Trustee
By:__________________________________________
Name:
Title:
SCHEDULE I CERTIFICATE INFORMATION
1. Federal Express Corporation Pass Through Trust, 1995-B1
Federal Express Corporation Trust No. N663FE
Interest Rate: 6.05%
Maturity: March 19, 1996
Principal Amount: $4,488,000
2. Federal Express Corporation Pass Through Trust, 1995-B2
Federal Express Corporation Trust No. N663FE
Interest Rate: 7.11%
Maturity: January 2, 2014
Principal Amount: $46,305,000
3. Federal Express Corporation Pass Through Trust, 1995-B3
Federal Express Corporation Trust No. N663FE
Interest Rate: 7.58%
Maturity: July 2, 2019
Principal Amount: $15,207,000
SCHEDULE II
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in
an Operative Agreement or the context thereof shall otherwise require. In
the case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to
agreements shall be deemed to mean and include such agreements as amended
and supplemented from time to time, and (ii) references to parties to
agreements shall be deemed to include the successors and permitted assigns
of such parties.
DEFINED TERMS:
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 other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise. In no event shall the Owner
Trustee or the Lessor be deemed an Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or
deemed to have been received by a Person (the "Original Payment") shall be
supplemented by a further payment to such Person so that the sum of the two
payments shall be equal to the Original Payment, after taking into account
(x) all Taxes that would result from the receipt or accrual of such
payments and (y) any reduction in Taxes that would result from such
increased Taxes. In the case of amounts payable to the Lessor, the Owner
Participant, or any corporate Affiliate 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.
Air Carrier. Any U.S. Air Carrier and any "foreign air
carrier" (as defined in the Transportation Code) as to which there is in
force a permit granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date
executed by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee
pursuant to the Participation Agreement and to be leased under the Lease
(or any permitted substitute airframe) together with the two Engines (or
any Replacement Engine or Engines) whether or not any of such initial or
Replacement Engines may from time to time be installed on such Airframe or
may be installed on any other airframe or on any other aircraft, including
any aircraft substituted pursuant to Section 11.03 of the Lease. Prior to
delivery of the initial Lease Supplement, references in Section 3.05 of the
Participation Agreement to Aircraft shall mean the Airbus A300F4-605R
airframe bearing FAA Registration Number N663FE and Manufacturer's serial
number 766, together with the two General Electric CF6-80C2-A5F engines
bearing Manufacturer's serial numbers 705-233 and 705-234.
Airframe. The Airbus A300F4-605R aircraft (excluding the
Engines or engines from time to time installed thereon) to be leased by the
Lessor to the Lessee pursuant to the Lease and the initial Lease Supplement
and having the United States FAA Registration Number and manufacturer's
serial number specified in the initial Lease Supplement, including (i) all
Parts in respect thereof and (ii) any replacement airframe which may be
substituted pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to
which the Lessor is a party or to which the Lessor has consented in writing
entered into on the Delivery Date or any date thereafter in connection with
the transactions contemplated by the Operative Agreements, as such
agreement may be amended and supplemented from time to time with the
consent of the Lessor and delivered to the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Owner Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal
Express Corporation Trust No. N663FE), to be dated the Certificate
Closing Date among the Lessee, the Owner Trustee, not in its individual
capacity, but solely as Owner Trustee, the Owner Participant and the
Indenture Trustee not in its individual capacity, but solely as Indenture
Trustee, as originally executed or as amended, modified or supplemented
with the consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and to
be delivered to the Owner Participant (with a copy of such report to the
Lessee) on the Delivery Date pursuant to Section 4.02(h) of the
Participation Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee,
organized and existing under the laws of France, and its successors and
assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as
of October 26, 1995, executed by AVSA, as the same may be amended, modified
or supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on
AC Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated
the Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed
by AVSA as owner of the Aircraft in favor of the Owner Trustee and to be
dated the Delivery Date.
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 either does or with the giving of notice or
lapse of time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 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 July 2, 2020,
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.
Business Day. Any day on which commercial banks are not
authorized or required to close in New York, New York and Memphis,
Tennessee, and after the Lien of the Indenture is discharged, Detroit,
Michigan.
Certificate Closing Date. The date of the closing with respect
to the purchase of Certificates by the Pass Through Trustee contemplated by
Section 2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal
Express Corporation Trust No. N663FE), issued by the Owner Trustee
pursuant to the Indenture and any certificate issued in exchange therefor
or replacement thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion,
addition, or change to the Code which is enacted into law after the
Delivery Date which changes the highest marginal statutory rate of Federal
income tax applicable to the Owner Participant (other than a change which
is in the nature of a minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States
as defined in Section 40102(a)(15) of the Transportation Code, or any
analogous part of any successor or substituted legislation or regulation at
the time in effect.
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 Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, references to the Code
shall mean the Internal Revenue Code of 1986, as amended from time to time.
Collateral Account. The deposit account established and
maintained pursuant to Section 2.13 of the Indenture.
Commencement Date. July 2, 1996.
Commitment. The amount of the Owner Participant's
participation in the Purchase Price required to be made available or paid
as provided in Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of
October 26, 1995, executed by the Manufacturer, as the same may be amended,
modified or supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the
Manufacturer attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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
Participant and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner
Trustee located at 611 Woodward Avenue, Detroit, Michigan 48226, or such
other office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in
writing to the Lessee, the Owner Participant and the Indenture Trustee.
Cut-Off Date. December 29, 1995.
Debt Portion. The amount specified as such on Schedule IV to
the Participation Agreement.
Debt Rate. The weighted average (based on Outstanding
principal amount) rate of interest on the Certificates issued pursuant to
the Indenture.
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 Date. The date on which the Aircraft is delivered and
sold by AVSA to the Lessor and leased by the Lessor to the Lessee under the
Lease, which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given
by the Lessee as provided in Section 3.01 of the Participation Agreement
and including any notice with respect to a postponed Delivery Date given by
the Lessee pursuant to Section 3.05(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of
the Lease.
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.
Engine. Each of the two General Electric CF6-80C2-A5F engines
listed by its manufacturer's serial number in the initial Lease Supplement
and leased pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03,
11.04 or 12.02 of the Lease, together with all Parts related thereto.
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. The term "Engines" means, as of any
date of determination, both Engines then leased to the Lessee pursuant to
the Lease.
Engine Consent. The Engine Consent dated as of October 26,
1995, executed by the Engine Manufacturer, as the same may be amended,
modified or supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment
(Federal Express Corporation Trust No. N663FE), dated as of October 26,
1995 between the Lessor and the Lessee, as the same may be amended,
modified or supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16
of the Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use
(A) for a period in excess of 90 days due to theft or disappearance or such
longer period, not to exceed 90 days from the end of such initial 90-day
period, if and so long as the location of such property is known to the
Lessee and the Lessee is diligently pursuing recovery of such property, or
to the end of the Term, if less (unless such theft or disappearance
constitutes an Event of Loss pursuant to (i)(B) or (ii) hereof) or (B) for
a period in excess of 60 days due to the destruction, damage beyond
economic repair or rendition of such property permanently unfit for normal
use by 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, or (2)
condemnation, confiscation, or seizure of, or requisition or taking of, use
of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the
date of return of the Aircraft, if shorter, so long as the Lessor receives
at least six months notice of such date of return) beyond the end of the
Term in the event that the Aircraft, the Airframe or any Engine as of the
end of the Lease Term 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 A300F-600 series
aircraft equipped with engines of the same make and model as the Engines
for a period not to exceed six (6) consecutive months, unless the Lessee,
prior to the expiration of such six (6) month period, shall be diligently
carrying forward in a similar manner as are then being carried forward with
respect to other aircraft of the Lessee so as to not discriminate against
the Aircraft by reason of its leased status, all steps which are necessary
or desirable to permit the normal use of the Aircraft or Airframe or, in
any event, if such use of the Aircraft or the Airframe shall have been
prohibited for a period of eighteen (18) consecutive months or until the
end of the Term, if earlier. The date of such Event of Loss shall be (s)
the 91st day or the 180th day, as the case may be, following loss of such
property or its use due to theft or disappearance (or the end of the Term
or the Lessee's abandonment of diligent efforts to recover such property,
if earlier); (t) the 61st day following the date of any destruction,
damage beyond economic repair or rendition of such property permanently
unfit for normal use; (u) the date of any insurance settlement on the
basis of a total loss or constructive or compromised total loss; (v) the
date of any condemnation, confiscation, seizure or requisition of title of
such property; (w) the 181st day following condemnation, confiscation,
seizure or requisition for use of such property by a foreign government
referred to in clause (iii)(2)(A) above (or the end of the Term or the date
of any insurance settlement described therein, if earlier than such 181st
day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the six (6) month or
eighteen (18) month period, referred to in clause (iv) above (or if
earlier, the end of the Term or abandonment of the Lessee's efforts to
restore the normal use of the Aircraft). 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. If an Event of Loss described in any of
clauses (i) (A), (iii) or (iv) above shall occur, Lessor may elect, within
30 days following the date upon which such Event of Loss is deemed to have
occurred, to waive such Event of Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other
payments (and interest thereon to the extent provided in the Operative
Agreements) paid or payable by the Lessee in respect of the Owner
Participant, the Owner Trustee in its individual capacity or any of their
respective successors, permitted assigns, directors, officers, employees,
servants and agents or Affiliates, pursuant to the Participation Agreement
or any indemnity hereafter granted to the Owner Participant or the Owner
Trustee in its individual capacity pursuant to the Lease or the
Participation Agreement, (ii) proceeds of public liability insurance (or
government indemnities in lieu thereof) in respect of the Aircraft payable
as a result of insurance claims paid for the benefit of, or losses suffered
by, the Owner Trustee or the Indenture Trustee in their respective
individual capacities or by the Owner Participant, or their respective
successors, permitted assigns or Affiliates, (iii) proceeds of insurance
maintained with respect to the Aircraft by the Owner Participant (whether
directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Section 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) payments constituting
increases in Interim Rent or Basic Rent attributable to payments arising
pursuant to Section 5 of the Tax Indemnity Agreement and (vi) any right to
demand, collect or otherwise receive and enforce the payment of any amount
described in clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section
9.01(a) of the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the
Lessee has exercised its option to renew the Lease pursuant to the second
paragraph of Section 4.01(a) thereof and with respect to which the
conditions set forth in the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other
property) is unencumbered by the 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;
provided that in connection with any determination pursuant to or for the
purposes of Article 17 of the Lease, the Aircraft shall be appraised on an
"as is, where is" basis. Fair Market Value shall be determined in
accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States
Federal Aviation Administration and any successor agency or agencies
thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed
Renewal Term equal to 50% of the average actual semi-annual Basic Rent
payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee
has exercised its option to renew the Lease pursuant to the first paragraph
of Section 4.01(a) thereof and with respect to which the conditions set
forth in such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as
of October 26, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991
between the Engine Manufacturer and the Lessee related to the purchase by
the Lessee of the Engines as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
General Terms Agreement relates to the Engines, to the extent assigned to
the Owner Trustee pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of
any particular time, the Person in whose name a Certificate shall be
registered (but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as
Owner Trustee and Lessor, the Owner Participant, the Indenture Trustee, in
its individual capacity and as trustee, any Owner Participant Guarantor,
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 and the
Trust Indenture Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N663FE) dated as of October 26, 1995,
between the Lessor and the Indenture Trustee, as supplemented by the
Indenture and Security Agreement Supplement, and as said Indenture may from
time to time be further supplemented or amended, including any amendment or
supplement thereto entered into from time to time pursuant to the
applicable provisions of the Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N663FE) to be dated the Delivery Date, as such Indenture and Security
Agreement Supplement shall be amended or supplemented from time to time and
any other supplement to the Indenture, substantially in the form of Exhibit
A to the Indenture.
Indenture Default. Any event or condition which with the lapse
of time or the giving of notice, or both, would constitute an Indenture
Event of Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in
Section 7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture
Estate 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 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, "Independent
Investment Banker" shall mean such an institution appointed by the
Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft
throughout the Interim Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant
Payment Date and ending at the end of the day immediately preceding the
Commencement Date.
Invoice. The invoice for the Aircraft given by AVSA to the
Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust
No. N663FE) dated as of October 26, 1995, entered into by the Lessor and
the Lessee concurrently with the execution and delivery of the Indenture,
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 one or more Lease Supplements entered into pursuant to
the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N663FE) to be dated the Delivery Date, as such Lease
Supplement shall be amended or supplemented from time to time and any other
supplement to the Lease, substantially in the form of Exhibit A to the
Lease.
Lease Term. The period commencing on the Delivery Date and
ending at the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation,
and its successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b)
of the Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Collateral Account, the Liquid Collateral, the
Aircraft, the Lease, any Lease Supplement, the Participation Agreement,
AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty,
the Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the GTA, the Engine
Warranty Assignment, the Engine Consent, any warranty with respect to the
Airframe and the Engines, all amounts of Interim Rent, Basic Rent and
Supplemental Rent, including without limitation, insurance proceeds (other
than insurance proceeds payable to or for the benefit of the Owner Trustee
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) not include any
Excepted Payment and (ii) include all property intended to be subjected to
the Indenture by the Granting Clause thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust
Indenture Estate arising as a result of (i) claims against 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) acts or omissions 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 or
expressly prohibited under the Operative Agreements and any act or omission
of the Owner Participant which 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, Owner Participant, Lessor's
Estate or the trust created by the Trust Agreement which are not required
to be indemnified against by the Lessee pursuant to the Participation
Agreement by reason of Section 8.01(b) or 9.01(b) thereof and which are not
required to be indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement, or (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 other than a transfer of the
Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease
or security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from
time to time in the Collateral Account and all the products, investments,
earnings 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.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
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 Trustee or the Owner Participant or any interests of the
Owner Participant unless all Certificates then outstanding shall be held by
the Owner Participant, (ii) the Lessee or (iii) any Affiliate of any
thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of (i) the present values of all remaining scheduled
payments of such principal amount or portion thereof 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 the Treasury Yield, all as determined by
the Independent Investment Banker over (ii) the unpaid principal amount of
such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which
the final principal amount of such Certificate is scheduled to be due and
payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of
the Lease, discounted at a rate per semi-annual period equal to the Debt
Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no
longer suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the
Indenture, a certificate signed by a Responsible Officer of the Lessee or
the Owner Trustee, as the case may be, and delivered to the Indenture
Trustee. Each such certificate shall include the statements provided for
in Section 15.07 of the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the
Airbus Guaranty, the Purchase Agreement, the Purchase Agreement Assignment,
the GTA, the Engine Warranty Assignment, the French Pledge Agreement, the
Lease, the Lease Supplement, the Owner Participant Guaranty, if any, the
Owner Trustee Guaranty, if any, any Ancillary Agreement entered into by or
with the written consent of the Indenture Trustee, which by its terms is an
Operative Agreement, the Certificates outstanding at the time of reference,
the Indenture, the Indenture and Security Agreement Supplement, the Consent
and Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to
the extent assigned by the Purchase Agreement Assignment), the Engine
Consent and the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture,
a written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or
a successor firm or (iii) other counsel designated by the Lessee and
reasonably satisfactory to the Indenture Trustee and (b) for the Owner
Trustee or the Indenture Trustee, an attorney selected by such Person and,
in the case of the Owner Trustee, reasonably satisfactory to the Indenture
Trustee.
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.
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, its right,
title and interest in and to the Operative Agreements and the Lessor's
Estate.
Owner Participant Amount. The amount described in Section 3.07
of the Participation Agreement.
Owner Participant Guarantor. The provider of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely
as Owner Trustee under the Trust Agreement, and its successors and
permitted assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee
Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance
with Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated
net after-tax book yield and aggregate after-tax cash during the Interim
Term and the Basic Term utilizing the multiple investment sinking fund
method of analysis, computed on the basis of the same methodology and
assumptions as were utilized by the Owner Participant in determining
Interim Rent, Basic Rent, Stipulated Loss Value and Termination Value
percentages or the EBO Price, as the case may be, as such assumptions may
be adjusted for events which have been the basis of adjustments to Rent
pursuant to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995, among
the Lessee, the Owner Trustee not in its individual capacity except as
otherwise expressly provided therein, but solely as owner trustee, the
Owner Participant, the Indenture Trustee not in its individual capacity
except as otherwise expressly provided therein, but solely as indenture
trustee and the Pass Through Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as pass through
trustee, 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, prior to replacement thereof in accordance with the Lease, which may be
removed therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated
as of February 1, 1993, as amended and restated as of October 1, 1995
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 1995 Pass Through
Certificates, Series B1, 1995 Pass Through Certificates, Series B2 or 1995
Pass Through Certificates, Series B3, 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 Date. The Business Day on which the sale
of the Pass Through Certificates to the Underwriters pursuant to the
Underwriting Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust,
1995-B1, Federal Express Pass Through Trust, 1995-B2 or Federal Express
Pass Through Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the interest rate applicable to such
Certificate and (ii) in the case of any other such amount, 2% plus the Debt
Rate.
Payment Date. The Owner Participant Payment Date, and each
January 2 and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date
and ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates
having a Maturity in 2014, November 7, 2007 and with respect to the
Certificates having a Maturity in 2019, October 7, 2017.
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. Has the meaning specified in
Section 10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase
Agreement, dated as of July 3, 1991 between AVSA and the Lessee, including
all exhibits, appendices and letter agreements attached thereto as
originally executed or as modified, amended or supplemented in accordance
with the terms thereof, but only to the extent that the foregoing relates
to the Aircraft and to the extent assigned pursuant to the Purchase
Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement
Assignment (Federal Express Corporation Trust No. N663FE), dated as of
October 26, 1995 between the Lessor and the Lessee, as the same may be
amended, modified or supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule IV to
the Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the
Owner Participant Payment Date, December 18 for January 2 Payment Dates and
June 17 for July 2 Payment Dates, whether or not such date is a Business
Day.
Recourse Amount. Has the meaning specified in Section 17.10 of
the Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged
pursuant to Section 15.01 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 or more terms 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
Interim Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July
2, 1996.
Reoptimization Date. Has the meaning specified in Section
15.02(a) of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or
an engine of the same or another manufacturer) manufactured after October
22, 1994 of the same or of equal or greater value, remaining useful life
and utility as the Engine being replaced, together with all Parts relating
to such engine; provided, however, that if such replacement engine is not a
General Electric CF6-80C2-A5F engine, such replacement engine must then be
commonly used in the commercial aviation industry on Airbus A300-600
airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or
Corporate Trust Administration, as the case may be, designated by such
Person to perform obligations under the Operative Agreements, with respect
to the Owner Participant, the president or any vice president with direct
responsibility for the transactions contemplated by the Operative
Agreements, and with respect to any other party, any corporate officer or
(except in the case of the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the
Delivery Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United
States and any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be
executed and delivered by the Lessee and the Pass Through Trustee, the
Series Supplement 1995-B2 to be executed and delivered by the Lessee and
the Pass Through Trustee or the Series Supplement 1995-B3 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.
Specified Investments. Direct obligations of the United States
of America and obligations fully guaranteed by the United States of America
maturing within 30 days of the date of purchase.
Stipulated Loss Value. As of any Stipulated Loss Value
Determination Date during the Term, the amount determined by multiplying
the Purchase Price by the percentage set forth in Schedule III of the Lease
under the heading "Stipulated Loss Value Factor" opposite such date (as
such Schedule III may be adjusted from time to time as provided in Section
3.04 of the Lease), and during any Renewal Term, the amount determined
pursuant to Section 4.01(b) of the Lease. Notwithstanding any other
provisions of the Lease or the Participation Agreement or the Indenture,
each Stipulated Loss Value shall be, under any circumstances and in any
event, an amount, together with so much of the arrears portion of Interim
Rent and Basic Rent due and owing through the date of payment of Stipulated
Loss Value as does not constitute an Excepted Payment, at least sufficient
to pay in full as of such date of payment the aggregate unpaid principal
amount of and accrued interest on the Certificates outstanding on such date
of payment. Subject to the immediately preceding sentence, it is
understood and agreed that the amounts set forth on Schedule III of the
Lease, for dates other than Rent Payment Dates on which arrears Interim
Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent
and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth
on Schedule III of the Lease under the heading "Stipulated Loss Value
Date."
Substantial Authority. For Federal income tax purposes, shall
have the meaning applicable for purposes of Section 6662 of the Code and
relevant Treasury regulations.
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 any
Ancillary Agreement or any other Operative Agreement to the Lessor, the
Owner Participant or others, including, without limitation, payments of
Stipulated Loss Value, EBO Price and amounts calculated by reference to
Termination Value and all amounts required to be paid by Lessee under the
agreements, covenants and indemnities contained in the Lease or in the
Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Interim Rent and Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of
the Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995,
between the Lessee and the Owner Participant, as from time to time
modified, amended or supplemented pursuant to its applicable provisions.
Term. The Preliminary Term, the Interim Term and the Basic
Term of the lease for the Aircraft under the Lease and, if renewed pursuant
to Section 4.01 of the Lease, each Renewal Term for the Aircraft for which
the Lease is renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease,
and in the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment
Date falling on July 2, 2009 or July 2, 2012, (ii) Section 4.02(a)(D) or
(E) of the Lease, a Rent Payment Date that is on or after the fifth
anniversary of the Commencement Date and (iii) Section 4.02(a)(F) of the
Lease, January 2, 2015.
Termination Value. As of any Termination Date, the amount
determined by multiplying the Purchase Price by the percentage set forth in
Schedule IV of the Lease under the heading "Termination Value Factor"
opposite such Termination Date (as such Schedule IV may be adjusted from
time to time as provided in Section 3.04 of the Lease). Notwithstanding
any other provisions of the Lease, the Participation Agreement or the
Indenture, each Termination Value shall be, under any circumstances and in
any event, an amount, together with so much of the arrears portion of Basic
Rent due and owing through the date of payment of any amount calculated by
reference to Termination Value as does not constitute an Excepted Payment,
at least sufficient to pay in full as of such date of payment the aggregate
unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on
Schedule IV of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals
and credits of unearned Basic Rent and, accordingly, no further accrual or
credit shall be required whenever Termination Value is to be calculated
with reference to any such date.
Transaction Costs. Those costs and expenses set forth in
Section 10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code
(which, among other things, recodified the Federal Aviation Act of 1958, as
amended to the time of such recodification), as amended and in effect on
the date of the Lease or as subsequently amended, or any successor or
substituted legislation at the time in effect and applicable, and the
regulations promulgated pursuant thereto.
Treasury Yield. (i) In the case of a Certificate having a
Maturity within one year after the Prepayment Date the average yield to
maturity on a government bond equivalent basis of the applicable United
States Treasury Bill due the week of Maturity of such Certificate and (ii)
in the case of a Certificate having a Maturity one year or more after the
Prepayment Date, the average yield of the most actively traded United
States Treasury Note (as reported by Cantor Fitzgerald Securities Corp. on
page 5 of Telerate Systems, Inc., a financial news service, or if such
report is not available, a source deemed comparable by the Independent
Investment Banker selected to determine the Make-Whole Premium and
reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N663FE), dated as of October 26, 1995, between the
Owner Participant and the Owner Trustee in its individual capacity, as from
time to time modified, amended or supplemented pursuant to its applicable
provisions and in accordance with the Operative Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as
amended.
Trust Indenture Estate. All estate, right, title and interest
of the Indenture Trustee in and to any of the property, rights, interests
and privileges granted to the Indenture Trustee pursuant to the Granting
Clause of the Indenture, other than Excepted Payments and any and all other
rights of the Owner Trustee or the Owner Participant expressly reserved to
the Owner Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the
Underwriting Agreement.
Underwriting Agreement. The Underwriting Agreement dated
October 26, 1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan
Securities Inc. and Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which
there is in force a certificate issued pursuant to Section 41102(a) or
Section 41103 of the Transportation Code, and as to which there is in force
an air carrier operating certificate issued pursuant to Chapter 447 of the
Transportation Code and Part 121 of the regulations under such
Transportation Code, for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, or which may operate as an
air carrier by certification or otherwise under any successor or substitute
provision thereof or in absence thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the
Code.
SCHEDULE III
PERMITTED COUNTRY LIST
Australia Japan
Austria Luxembourg
Belgium Malaysia
Canada Netherlands
Denmark New Zealand
Finland Norway
France Philippines
Germany Portugal
Greece Singapore
Hong Kong South Korea
Iceland Sweden
Ireland Switzerland
Italy United Kingdom
SCHEDULE IV
PURCHASE PRICE, OWNER PARTICIPANT'S COMMITMENT AND DEBT PORTION
Purchase Price $82,500,000
Owner Participant's Commitment $16,500,000
Debt Portion $66,000,000
EXHIBIT A(1)(a)(i)
[Letterhead of Federal Express]
[Certificate Closing Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express Corporation, a
Delaware corporation ("Federal"), and am familiar with the transactions
contemplated by the Participation Agreement (Federal Express Corporation
Trust No. N663FE), dated as of October 26, 1995 (the "Participation
Agreement"), among Federal, as Lessee, Chrysler Capital Corporation, as
Owner Participant, NBD Bank, a Michigan banking corporation, not in its
individual capacity, except as otherwise stated, but solely as Owner
Trustee under the Trust Agreement, The Chase Manhattan Bank (National
Association), a national banking association, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee under
the Indenture and The Chase Manhattan Bank (National Association), as Pass
Through Trustee, relating to the Aircraft. This opinion is being delivered
pursuant to Section 4.01(k)(i) of the Participation Agreement. Capitalized
terms not otherwise defined herein have the meaning assigned thereto in the
Participation Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the 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 No. N663FE) dated as
of October 26, 1995, as supplemented by the related Indenture and Security
Agreement Supplement ("Indenture"), between the Owner Trustee and the
Indenture Trustee.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision (i)
executed counterparts of the Pass Through Agreement, the Series Supplements
and the Operative Agreements to be delivered on the Certificate Closing
Date (the "Certificate Closing Date Documents") and (ii) the forms of the
Operative Agreements to be delivered on the Delivery Date. 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 (other than any
thereof relating to Federal), we have relied upon the representations and
warranties made in the Certificate Closing Date Documents, 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 Certificate Closing Date Documents, other than Federal, has
full power, authority and legal right to enter into such Certificate
Closing Date Documents and that each such Certificate Closing Date Document
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 40102(a)(15)
of the Transportation Code, 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
Certificate Closing Date Documents 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 so to qualify, except where the
failure so to qualify 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 Certificate Closing Date Documents to which
Federal is a party has been duly authorized, executed and delivered by
Federal and together constitute the legal, valid and binding obligation of
Federal enforceable against Federal in accordance with its and their terms.
Each of the Operative Agreements to which Federal is to be a party and
which are to be executed on the Delivery Date has been duly authorized by
Federal.
4. Neither the execution and delivery by Federal of the
Certificate Closing Date Documents 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, (a) requires
any stockholder approval or violates the certificate of incorporation or
by-laws of Federal or (b) conflicts with or contravenes the provisions of,
or constitutes a default under, or results in the creation of any Lien
(other than Liens permitted under Section 6.01(a) of the Lease) upon the
property of Federal under any law, governmental rule or regulation, or the
charter or bylaws of Federal or any order, writ, injunction or decree of
any court or 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, require 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
Certificate Closing Date Documents to which it is a party, nor the
consummation of any of the transactions by Federal contemplated thereby,
nor the performance of the obligations thereunder by Federal, (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 Certificate
Closing Date and which shall have been accomplished on or prior to the
Certificate Closing Date) the registration with, or the taking of any other
action in respect of, the FAA, the Securities and Exchange Commission or
any other authority or agency of the federal government or of the State of
Tennessee other than (x) the registration of the issuance and sale of the
Pass Through Certificates under the Securities Act and (y) compliance with
the securities laws of each applicable state, 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. There are no pending, or to my knowledge, threatened
actions or proceedings before or by 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 (A) except for
the matters described under "Legal Proceedings" in Federal's Annual Report
on Form 10-K for the fiscal year ended May 31, 1995 (as updated by Note 7
to the financial statement included in the Lessee's Quarterly Report on
Form 10-Q for the fiscal quarter ended August 31, 1995), 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, the financial condition
of Federal or (B) the ability of Federal to perform its obligations under
the Certificate Closing Date Documents.
7. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
8. 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.
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.
The opinions expressed in paragraph 3 above as to the
enforceability of the Certificate Closing Date Documents to which Federal
is a party are based upon the assumption for purposes of such opinions and
without independent analysis that, notwithstanding the respective choice of
laws clauses in the Certificate Closing Date Documents, the governing law
with respect to each of the Certificate Closing Date Documents 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, without
my prior written consent.
Very truly yours,
George W. Hearn
SCHEDULE A
Owner Trustee
- ------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- -------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(1)(a)(ii)
[Letterhead of Federal Express]
[Delivery Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express Corporation, a
Delaware corporation ("Federal"), and am familiar with the transactions
contemplated by the Participation Agreement (Federal Express Corporation
Trust No. N663FE), dated as of October 26, 1995 (the "Participation
Agreement"), among Federal, as Lessee, Chrysler Capital Corporation, as
Owner Participant, NBD Bank, a Michigan banking corporation, not in its
individual capacity, except as otherwise stated, but solely as Owner
Trustee under the Trust Agreement, The Chase Manhattan Bank (National
Association), a national banking association, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee under
the Indenture and The Chase Manhattan Bank (National Association), as Pass
Through Trustee, relating to the Aircraft. This opinion is being delivered
pursuant to Section 4.02(d)(i) of the Participation Agreement. Capitalized
terms not otherwise defined herein have the meaning assigned thereto in the
Participation Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the Pass
Through Certificates. On the Certificate Closing Date, three Series of
Pass Through Certificates were 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 were issued under the
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N663FE) dated as of October 26, 1995, as supplemented by the related
Indenture and Security Agreement Supplement ("Indenture"), between the
Owner Trustee and the Indenture Trustee.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision
executed counterparts of the Transaction Agreements, the Pass Through
Agreement and each Series Supplement (the "Transaction 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
(other than any thereof relating to Federal), we have relied upon the
representations and warranties made in the Transaction 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 Transaction Agreements, other than Federal, has full
power, authority and legal right to enter into such Transaction Agreements
and that each such Transaction 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 40102(a)(15)
of the Transportation Code, 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
Transaction 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 so to qualify, except where the failure so to
qualify 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 Transaction Agreements to which Federal is a
party has or had, on the date of execution thereof, been duly authorized,
executed and delivered by Federal and together constitute the legal, valid
and binding obligation of Federal enforceable against Federal in accordance
with its and their terms.
4. Neither the execution and delivery by Federal of the
Transaction 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 presently (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 constitutes a
default under, or result in the creation of any Lien (other than Liens
permitted under Section 6.01(a) of the Lease) upon the property of Federal
under any law, governmental rule or regulation, or the charter or bylaws of
Federal or any order, writ, injunction or decree of any court or
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, require
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
Transaction Agreements to which it 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 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 Delivery
Date and which were or shall have been accomplished on or prior to the
Delivery Date) the registration with, or the taking of any other action in
respect of, the FAA, the Securities and Exchange Commission 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. There are no pending, or to my knowledge, threatened
actions or proceedings before or by any court or administrative agency
which individually (or in the aggregate in the case of any group of related
lawsuits) (i) is expected to have a material adverse effect on (A) except
for the matters described under "Legal Proceedings" in Federal's Annual
Report on Form 10-K for the fiscal year ended May 31, 1995 (as updated by
Note 7 to the financial statement included in the Lessee's Quarterly Report
on Form 10-Q for the fiscal quarter ended August 31, 1995), 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, the financial condition
of Federal or (B) the ability of Federal to perform its obligations under
the Transaction Agreements, or (ii) involves the Aircraft.
7. Except for (A) the registration in the Owner Trustee's name
of the Aircraft pursuant to the Transportation Code, (B) the filing and,
where appropriate, recordation pursuant to the Transportation Code of the
Indenture, the Trust Agreement, the Indenture and Security Agreement
Supplement covering the Aircraft, the Lease, the Lease Supplement covering
the Aircraft and AVSA's FAA Bill of Sale, (C) the filing of the financing
statement referred to in Section 4.02(f) of the Participation Agreement and
(D) the taking of possession by the Indenture Trustee of the original
counterpart of the Lease and the Lease Supplement covering the Aircraft, no
further action, including any filing or recording of any document, is
necessary or advisable in order (i) 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 (ii) to perfect the first security
interests in and mortgage Lien on the Trust Indenture Estate in favor of
the Indenture Trustee.
8. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
9. On the date hereof the Owner Trustee received valid title
to the Aircraft free and clear of all Liens on file with the FAA, except
for Liens permitted under Section 6.01(a) of the Lease.
10. 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.
11. 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 as to the
enforceability of the Transaction Agreements to which Federal is a party
are based upon the assumption for purposes of such opinions and without
independent analysis that, notwithstanding the respective choice of laws
clauses in the Transaction Agreements, the governing law with respect to
each of the Transaction 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 the 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 paragraphs 5, 7 and 9 above, 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 and subject to the assumptions and qualifications expressed
therein.
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, without
my prior written consent.
Very truly yours,
George W. Hearn
SCHEDULE A
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(1)(b)(i)
[Letterhead of Davis Polk & Wardwell]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995 (the
"Participation Agreement"), among Federal Express, as Lessee, Chrysler
Capital Corporation, as Owner Participant, NBD Bank, a Michigan banking
corporation, not in its individual capacity but solely as Owner Trustee
under the Trust Agreement, The Chase Manhattan Bank (National Association),
a national banking association, not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee under the Indenture, and
The Chase Manhattan Bank (National Association), as Pass Through Trustee,
relating to the Aircraft. This opinion is being delivered pursuant to
Section 4.01(k)(v) of the Participation Agreement. Capitalized terms not
otherwise defined herein have the meanings assigned thereto in the
Participation Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R Aircraft using the
proceeds from the public offering of the Pass Through Certificates. On the
Certificate Closing Date, 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 executed counterparts of the Pass Through Agreement, the Series
Supplements and the Operative Agreements to be delivered on the Certificate
Closing Date (the "Certificate Closing Date Documents"), the Pass Through
Certificates, the Pass Through Agreement, each Series Supplement and the
forms of the Operative Agreements to be delivered on the Delivery Date. 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 such examination, we have
assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with the
originals of all documents submitted to us as copies.
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 telephoned 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
Certificate Closing Date Documents (other than the Certificates) 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 violate, and
fully comply 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 or
performance or the taking of any other action, the conduct of any other
business or the exercise of any other powers by NBD Bank in its individual
or in a trust capacity in the State of New York not related to the
transactions contemplated by the Certificate Closing Date Documents. We
have assumed that NBD Bank has made the filings necessary to comply with
Section 131.3 of the Banking Law of the State of New York, however we
express no opinion as to whether NBD Bank is required to comply with said
Section 131.3.
2. (a) Each of the Certificate Closing Date Documents to
which Federal Express is a party has been duly authorized, executed and
delivered by Federal Express. Each of the Operative Agreements to which
Federal Express is to be a party and which are to be delivered on the
Delivery Date has been authorized by Federal Express.
(b) The execution, delivery and performance by Federal Express
of each of the Certificate Closing Date Documents to which Federal Express
is 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 2(b) is rendered
without regard to the taking of any action or the conduct of any other
business by Federal Express in the State of New York other than the
transactions contemplated by the Certificate Closing Date Documents.
3. Assuming (i) the due authorization, execution and delivery
of the Certificate Closing Date Documents, the Pass Through Agreement and
each Series Supplement by each of the parties to each such document (other
than Federal Express), (ii) that the execution, delivery and performance by
each of such Certificate Closing Date Document by each of the parties
thereto will not violate the respective parties' constituent documents,
(iii) 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, (iv) 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 (v) that the form of each Certificate Closing Date 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 Certificate Closing Date Document in form
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, 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 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.
4. Federal Express's participation in the transactions
contemplated by the Certificate Closing Date Documents does not and will
not constitute a violation of Section 7 of the Securities Exchange Act of
1934.
5. It is not necessary, in connection with the creation of the
beneficial interests 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.
The foregoing opinions are subject to the following
qualifications:
(a) For purposes of the matters stated in paragraph 2(a) above and
as to all matters of Tennessee law, we have relied, with your consent, on
the opinion dated the date hereof of George W. Hearn, Vice President - Law
of the Lessee.
(b) 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, the laws
of the United States and the General Corporation Law of the State of
Delaware.
(c) The opinion contained in paragraph 3 above as to enforceability
is subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity 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.
(d) 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 any other Person
without our prior written consent.
Very truly yours,
Davis Polk & Wardwell
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(1)(b)(ii)
[Letterhead of Davis Polk & Wardwell]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995 (the
"Participation Agreement"), among Federal Express, as Lessee, Chrysler
Capital Corporation, as Owner Participant, NBD Bank, a Michigan banking
corporation, not in its individual capacity but solely as Owner Trustee
under the Trust Agreement, The Chase Manhattan Bank (National Association),
a national banking association, not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee under the Indenture, and
The Chase Manhattan Bank (National Association), as Pass Through Trustee,
relating to the Aircraft. This opinion is being delivered pursuant to
Section 4.02(d)(ii) of the Participation Agreement. Capitalized terms not
otherwise defined herein have the meanings assigned thereto in the
Participation Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of the Owner Trustee's payment of a
portion of the Purchase Price of one Airbus A300F4-605R Aircraft (the
"Aircraft") using the proceeds from the public offering of the Pass Through
Certificates. On the Certificate Closing Date, three Series of Pass
Through Certificates were 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. The Aircraft is to be leased to Federal Express by the Owner
Trustee pursuant to the Lease and subjected to the Lien of the Indenture,
and is to be delivered by the Owner Trustee to the Lessee on this date, and
in connection with the delivery of the Aircraft, the Owner Trustee and
Federal Express will execute and deliver the Lease Supplement, and the
Owner Trustee will execute and deliver the Indenture and Security Agreement
Supplement.
In connection with the opinions expressed below, we have
examined executed counterparts of the Transaction Agreements, the Pass
Through Certificates, the Pass Through Agreement and each Series Supplement
(the "Transaction Agreements"). 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 such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as
originals and the conformity with the originals of all documents submitted
to us as copies.
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 telephoned 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 FAA pursuant to Section 44107 of
the Transportation Code, no filing or recording of any document or other
action was or is necessary in order to establish the Owner Trustee's title
thereto and interest therein as against Federal Express and any third
parties.
2. Subject to execution and delivery of the Lease Supplement
and the Indenture and Security Agreement Supplement for the Aircraft and to
the registration of the Aircraft with the FAA in the name of the Owner
Trustee, the Lease, as supplemented, will create a valid leasehold interest
in the Aircraft, the entitlement thereof to the benefits of recordation
under the Transportation Code being subject to the due and timely filing
and, where appropriate, recording of (A) AVSA's FAA Bill of Sale, (B) the
Trust Agreement, (C) 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 (D) the Indenture (with the
Indenture and Security Agreement Supplement covering the Aircraft attached
as an exhibit), pursuant to the Transportation Code, and assuming that at
the time of such filing no other documents relating to the Aircraft have
been filed pursuant to the Transportation Code.
3. The execution, delivery and performance by the Owner
Trustee, in its individual or trust capacity, as the case may be, of the
Transaction Agreements (other than the Certificates) 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 or performance or the taking of any other action, the
conduct of any other business or the exercise of any other powers by NBD
Bank in its individual or in a trust capacity in the State of New York not
related to the transactions contemplated by the Transaction Agreements. We
have assumed that NBD Bank has made the filings necessary to comply with
Section 131.3 of the Banking Law of the State of New York, however we
express no opinion as to whether NBD Bank is required to comply with said
Section 131.3.
4. (a) Each of the Transaction Agreements to which Federal
Express is a party has or had, on the date of execution thereof been duly
authorized, executed and delivered by Federal Express.
(b) The execution, delivery and performance by Federal Express
of each of the Transaction 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 action or
the conduct of any other business by Federal Express in the State of New
York other than the transactions contemplated by the Transaction
Agreements.
5. Assuming (i) the due authorization, execution and delivery
of the Transaction Agreements by each of the parties to each such document
(other than Federal Express), (ii) that the execution, delivery and
performance by each of the Transaction Agreements by each of the parties
thereto will not violate the respective parties' constituent documents,
(iii) 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, (iv) 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 relating
to such Pass Through Certificates, in each case in accordance with the
terms of the Pass Through Agreement and such Series Supplement, and (v)
that the form of each Transaction Agreement 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 Transaction
Agreement in form 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; (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;
(D) 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, 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 filing and recording, where appropriate,
with the FAA of the documents referred to in paragraph 2 above.
6. All the properties which are part of the Trust Indenture
Estate (including all right, title and interest of the Owner Trustee
pledged and mortgaged by it pursuant to the Indenture 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 to the due filing
and, where appropriate, recording of those documents referred to in
paragraph 2 above and the financing statement referred to in Section
4.02(f) of the Participation Agreement), and the beneficial interests of
the Owner Participant under the Trust Agreement in and to such properties
are subject, to the extent provided in the Indenture, to the Lien of the
Indenture in favor of the Holders of the Certificates issued and to be
issued under the Indenture.
7. The Indenture and Security Agreement Supplement, pursuant
to the Granting Clause of the Indenture, creates, as security for 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 and, where appropriate, recording in accordance with the
Transportation Code of the documents referred to in paragraph 2 above. We
express no opinion 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 (6) and (7) of Section 40102(a)
of the Transportation Code.
8. Federal Express's participation in the transactions
contemplated by the Transaction Agreements does not and will not constitute
a violation of Section 7 of the Securities Exchange Act of 1934.
9. It is not necessary, in connection with the creation of the
beneficial interests 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.
10. The provisions of Section 1110 of the United States
Bankruptcy Code will apply to the Aircraft for the benefit of the Indenture
Trustee.
The foregoing opinions are subject to the following
qualifications:
(a) To the extent that this opinion relates to matters involving
Federal aviation law, we have relied, with your consent, without
independent investigation and verification and subject to the assumptions
and qualifications contained therein, upon the opinion of Daugherty, Fowler
& Peregrin to be delivered to you and dated the date hereof. We have also
relied, with your consent, on the opinion dated the date hereof of George
W. Hearn, Vice President - Law of the Lessee, for purposes of the matters
stated in paragraphs 4(a) and as to all matters of Tennessee law.
(b) 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, the laws
of the United States and the General Corporation Law of the State of
Delaware.
(c) The opinion contained in paragraph 5 above as to enforceability
is subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity 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.
(d) 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 any other Person
without our prior written consent.
Very truly yours,
Davis Polk & Wardwell
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(2)(a)
[Letterhead of Morgan, Lewis & Bockius]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
We have acted as special counsel for Chrysler Capital
Corporation, a Delaware corporation (the "Owner Participant"), in
connection with the transactions contemplated by (i) the Participation
Agreement, dated as of October 26, 1995 (the "Participation Agreement"),
among Federal Express Corporation, as Lessee (the "Lessee"), the Owner
Participant, NBD Bank, a Michigan banking corporation, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement
(the "Owner Trustee"), The Chase Manhattan Bank (National Association), a
national banking association, not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee under the Indenture (the
"Indenture Trustee"), and The Chase Manhattan Bank (National Association),
as Pass Through Trustee, (ii) the Trust Agreement, dated as of October 26,
1995 (the "Trust Agreement"), by and between the Owner Participant and the
Owner Trustee and (iii) the Tax Indemnity Agreement, dated as of October
26, 1995 (the "Tax Indemnity Agreement"), by and between the Owner
Participant and the Lessee. 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 defined
meanings set forth in the Participation Agreement.
In connection with our opinions herein, we have examined
executed counterparts of the Participation Agreement, the Trust Agreement,
the Tax Indemnity Agreement and the Ancillary Agreement I (collectively,
the "Owner Participant Documents"). We have further examined and relied
upon the accuracy of original, certified, conformed, photographic or
telecopied copies of such records, agreements, certificates, instruments
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, the
authenticity of all documents submitted to us as originals and the
conformity to such original documents of all copies submitted to us as
certified, conformed, photographic or telecopied copies and the
authenticity of such latter documents, 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
various questions of fact material to our opinions, we have relied solely
upon the accuracy of the statements, representations and warranties made in
the Owner Participant Documents, and we have made no independent
investigation or inquiry with respect to such factual matters.
With your consent, and for purposes of this opinion, we have
assumed the accuracy of the following matters, but we have not made any
independent investigation or inquiry with respect thereto and we render no
opinion on such matters:
(a) That the execution and delivery and performance of each of the
Owner Participant Documents by each of the parties thereto will not violate
the respective parties' constituent documents.
(b) That each of the parties to the Owner Participant Documents has
full power, authority and legal right to enter into and perform its
respective obligations under the Owner Participant Documents to which it is
a party.
(c) The Owner Participant Documents, at the time of execution and
delivery by the Owner Participant, will have been duly authorized and
validly executed and delivered by all parties thereto (other than the Owner
Participant) and will constitute the legal, valid and binding obligations
of such parties, enforceable against such parties in accordance with their
terms.
(d) The parties to the Owner Participant Documents (other than the
Owner Participant, as to which we have not assumed the acquisition of all
consents, permits and approvals under New York law) at the time of
execution and delivery by the Owner Participant have obtained and there are
in full force and effect at such time, any and all required consents,
permits and approvals required by or from any and all federal, state, local
or foreign governmental agencies and authorities in connection with the
transactions contemplated thereby, to the extent necessary for the
legality, validity, binding effect or enforceability of the Owner
Participant Documents.
We have been retained as special counsel to the Owner
Participant in connection with the transactions contemplated by the
Participation Agreement, and have not generally represented the Owner
Participant in its business activities and are not familiar with the nature
and extent of such other activities. Accordingly, we also have assumed
without investigation that such other activities are not of such a nature
as to cause the transactions contemplated by the Participation Agreement to
be governed by laws or regulations of the State of New York or the United
States of America applicable only because of such other activities (such as
laws relating specifically to the banking, securities, insurance or utility
industries) and not applicable to business corporations generally.
Based upon the foregoing, we are of the opinion that:
(1) The Owner Participant Documents constitute legal, valid and binding
obligations of the Owner Participant, enforceable against the Owner
Participant in accordance with their respective terms, except as the
enforceability thereof may be limited by (a) applicable bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors', mortgagees' and lessors'
rights generally, (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding at law or in equity) and
(c) with respect to the indemnification provisions set forth in the Owner
Participant Documents, considerations of public policy. (2) Neither the
execution and delivery of the Owner Participant Documents by the Owner
Participant nor the consummation by the Owner Participant of any of the
transactions therein contemplated, or the fulfillment of, or compliance
with, the terms and provisions of any thereof, (A) requires for its
validity that the Owner Participant obtain the consent or approval of, give
notice to, register with, or take 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, or (B) contravenes any law, governmental
rule or regulation of the State of New York or the Federal government of
the United States or any governmental authority or agency thereof.
In rendering the foregoing opinions, we have relied, with your
consent, on the opinion of even date herewith of Ted W. Verrill, Esq.,
Senior Vice President and General Counsel of the Owner Participant, as to
the matters set forth therein (i) that are governed by the laws of the
State of New York, and (ii) relating to the due authorization, execution
and delivery of the Owner Participant Documents by the Owner Participant
under the laws of the United States of America, and our opinions are
subject to the same limitations and exceptions as set forth therein.
The foregoing opinions are subject, however, to the
qualification that we express no opinion as to matters relating to the
title to or sufficiency of description of any property or collateral
described in the Owner Participant Documents or the perfection or relative
priority of any lien or security interest created with respect to such
property or collateral thereunder. In addition, we express no opinion as
to matters governed by (i) any tax laws, (ii) the Transportation Code, or
by any other laws, statutes, rules or regulations of the United States
particularly relating to the acquisition, ownership, registration, leasing,
use or sale of the Aircraft, the Airframe or the Engines other than such
laws relating to personal property generally, (iii) any securities laws and
(iv) laws pertaining to the Owner Participant solely because of the
business activities of the Owner Participant and not applicable to business
corporations generally.
We are licensed to practice law in the State of New York and 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 laws of the United
States of America.
This opinion is furnished by us at your request and at the
Owner Participant's request for your sole benefit, and we agree that you
and your successors and permitted assigns 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;
provided that no such consent shall be necessary for the reproduction,
circulation or distribution of this opinion to (i) the special counsel,
auditors or public accountants of the persons named on Schedule A hereto or
(ii) bank examiners or similar regulatory authorities. Our 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,
Morgan, Lewis & Bockius
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(2)(b)
[Letterhead of Chrysler Capital Corporation]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
I have acted as counsel to Chrysler Capital Corporation, a
Delaware corporation (the "Owner Participant"), in connection with the
transactions contemplated by that certain (i) the Participation Agreement,
dated as of October 26, 1995 (the "Participation Agreement"), among Federal
Express Corporation, as Lessee (the "Lessee"), the Owner Participant, NBD
Bank, a Michigan banking corporation, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement (the "Owner Trustee"),
The Chase Manhattan Bank (National Association), a national banking
association, not in its individual capacity, except as otherwise stated,
but solely as Indenture Trustee under the Indenture (the "Indenture
Trustee"), and The Chase Manhattan Bank (National Association), as Pass
Through Trustee (the "Pass Through Trustee), (ii) the Trust Agreement,
dated as of October 26, 1995 (the "Trust Agreement"), by and between the
Owner Participant and the Owner Trustee and (iii) the Tax Indemnity
Agreement, dated as of October 26, 1995 (the "Tax Indemnity Agreement"), by
and between the Owner Participant and the Lessee. 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 defined meanings set forth in the Participation
Agreement.
For purposes of the opinions expressed below, I, or members of
my staff, have examined executed counterparts or copies certified to my
satisfaction of the Participation Agreement, the Trust Agreement, the Tax
Indemnity Agreement and the Ancillary Agreement I (collectively, the "Owner
Participant Documents") and have examined originals or photostatic,
certified or telecopied copies of such records of the Owner Participant,
certificates of officers of the Owner Participant and public officials, and
such other documents as I have deemed relevant and necessary as a basis for
the opinions set forth below. In such examination I have assumed the
genuineness of all signatures (other than those of the Owner Participant),
the authenticity of all documents submitted to me as originals, the
conformity to the original documents of documents submitted to me as
certified, photostatic or telecopied copies, and the authenticity of the
originals of such copies. As to questions of fact material to my opinions,
I have relied upon the representations and warranties contained in the
Owner Participant Documents and upon certificates of officers of the Owner
Participant, those of other persons having knowledge thereof delivered
pursuant thereto and those of public officials. I have assumed, except
with regard to the Owner Participant, that each of the Owner Participant
Documents have been duly authorized, executed and delivered by the
respective parties thereto and that they constitute the legal, valid and
binding obligations of each party thereto enforceable against each such
party in accordance with their respective terms.
Based on the foregoing examination and subject to the
assumptions and qualifications set forth herein, I am of the opinion that
as of the date hereof:
1. The Owner Participant is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. The
Owner Participant has all requisite corporate power, authority and legal
right to carry on its present business and operations, to own or lease its
Properties and enter into and to carry out the transactions contemplated by
each of the Owner Participant Documents.
2. The performance by the Owner Participant of its obligations under
each of the Owner Participant Documents does not (a) require any approval
or consent of any shareholder, to the best of my knowledge, require any
consent or approval of any trustee, or holder of any indebtedness or other
obligation of the Owner Participant, (b) violate the organizational
documents or by-laws of the Owner Participant, (c) violate any law,
governmental rule or regulation of the State of New York or of the federal
government of the United States or any governmental authority or agency
thereof or (d) to the best of my knowledge, conflict with any judgment or
order applicable to or binding upon the Owner Participant or its
properties, or violate or (except as contemplated by the Owner Participant
Documents) subject the Trust 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 is a party or by which the Owner Participant is
bound.
3. The execution and delivery by the Owner Participant of the Owner
Participant Documents and the performance by the Owner Participant of its
obligations thereunder have been duly authorized by all necessary corporate
action on the part of the Owner Participant. Each of the Owner Participant
Documents has been duly executed and delivered by the Owner Participant.
4. Neither the execution and delivery by the Owner Participant of
the Owner Participant Documents, nor the consummation by the Owner
Participant of any of the transactions contemplated thereby, 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 or any other action
in respect of, any governmental authority or agency of the State of New
York or of the federal government of the United States, except those
contemplated by the Operative Agreements.
5. There are no actions, suits, investigations or proceedings
pending or, to the best of my knowledge, threatened against or affecting
the Owner Participant or any of its properties in any court or before any
administrative agency or arbitrator, which, if adversely determined, would
materially adversely affect the ability of the Owner Participant to perform
its obligations under any of the Owner Participant Documents, and there are
no pending or, to the best of my knowledge, threatened actions or
proceedings before any court, administrative agency or tribunal involving
the Owner Participant in connection with the transactions contemplated by
any of the Owner Participant Documents.
I am a member of the Bar of the State of New York and I do not
purport to have any knowledge of, or to express any opinion herein
concerning, any laws other than the laws of the State of New York, the
General Corporation Law of the State of Delaware and the laws of the United
States of America, except that no opinion is given as to securities,
banking or tax laws. Further, I have made no investigation and express no
opinion, as to any aviation law or other laws, statutes, rules or
regulations applicable due to the particular nature of the equipment
subject to the Lease.
This opinion is furnished by me as counsel to the Owner
Participant for your sole benefit and for the benefit of your successors
and assigns and no other person or entity shall rely on this opinion
without my express written consent. This opinion shall not be published or
reproduced in any manner or distributed or circulated to any person or
entity without my express written consent; provided that no such consent
shall be necessary for the reproduction, circulation or distribution of
this opinion to (i) the special counsel, auditors or public accountants of
the persons named on Schedule A hereto or (ii) bank examiners or similar
regulatory authorities. My 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,
Ted W. Verrill
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Underwriters
- -------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(3)(a)
[Letterhead of Dewey Ballantine]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
We have acted as special counsel to The Chase Manhattan Bank
(National Association), a national banking association (the "Indenture
Trustee"), in connection with the transactions contemplated by (i) the
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N663FE) dated as of October 26, 1995 (the "Indenture") between NBD
Bank (the "Owner Trustee") and the Indenture Trustee and (ii) the
Participation Agreement (Federal Express Corporation Trust No. N663FE)
dated as of October 26, 1995 (the "Participation Agreement") among Federal
Express Corporation ("Federal Express"), Chrysler Capital Corporation, as
Owner Participant (the "Owner Participant"), the Indenture Trustee, the
Owner Trustee and The Chase Manhattan Bank (National Association), as Pass
Through Trustee (the "Pass Through Trustee"). 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. Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set
forth or referred to in the Participation Agreement.
In connection with the opinions expressed herein, we have
reviewed executed counterparts of the Operative Agreements to be delivered
on the Certificate Closing Date (the "Certificate Closing Date Documents")
and the forms of Operative Agreements to be delivered on the Delivery Date.
We have also examined and relied upon the accuracy of the originals or
certified, conformed, photocopied or telecopied copies of such corporate
records, certificates, instruments 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,
photocopied 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, when relevant facts were not
independently established, relied upon representations and warranties
contained in the Certificate Closing Date Documents and upon the statements
and certificates furnished to us.
Based upon and subject to the foregoing and the qualifications
hereinafter set forth, we are of the opinion that:
1. The Indenture Trustee is a national banking association duly
organized and validly existing in good standing 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 execute, deliver and perform its
obligations under the Indenture, the Participation Agreement and the other
Certificate Closing Date Documents to which it is a party, and to
authenticate the Certificates to be delivered on the date hereof.
2. The Indenture Trustee, in its individual and trust capacities,
has duly authorized, executed and delivered the Indenture, the
Participation Agreement and each of the other Certificate Closing Date
Documents to which it is a party. Each of the Operative Agreements to be
executed by the Indenture Trustee on the Delivery Date has been authorized
by the Indenture Trustee in its individual and trust capacities.
3. Each of the Indenture, the Participation Agreement and the other
Certificate Closing Date Documents to which it is a party 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 thereof, except as the
enforceability thereof may be limited by (a) general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), (b) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
(c) public policy considerations (in the case of the indemnity provisions
contained therein).
4. 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.
5. The execution, delivery, and performance by the Indenture Trustee
of the Indenture, the Participation Agreement and each of the other
Certificate Closing Date Documents to which it is a party 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 of
America or the State of New York governing the banking or trust powers of
the Indenture Trustee.
6. Neither the execution and delivery by the Indenture Trustee, in
its individual or trust capacity, as the case may be, of the Indenture, the
Participation Agreement or any of the other Certificate Closing Date
Documents to which it is a party, 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 the Indenture or the Participation
Agreement requires 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.
7. There are no fees, taxes or other governmental charges payable by
the Certificate Holders, the Owner Trustee or the Indenture Trustee (except
taxes imposed on fees payable to the Indenture Trustee) to the State of New
York or any political subdivision thereof in connection with the execution,
delivery or performance of any of the Certificate Closing Date Documents or
in connection with the issuance and acquisition of the Certificates issued
to the Certificate Holders or the beneficial interests of the Certificate
Holders in the Trust Indenture Estate. 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 New York 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. There is no fee, tax or other
governmental charge under the laws of the State of New York 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
Certificate 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
New York. 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 New York or any political subdivision thereof
in connection with (x) the execution, delivery or performance by any of the
Indenture, the Participation Agreement or any of the other Certificate
Closing Date Documents or (y) the making by the Owner Participant of its
investment in the Aircraft.
We express no opinion as to the laws of any jurisdiction other
than the laws of the State of New York and the federal laws of the United
States of America. In addition, we express no opinion herein as to (i) any
federal or state securities laws, (ii) any tax laws, (iii) any aviation
laws including, without limitation, the Transportation Code, (iv) any laws,
statutes, rules or regulations applicable to the particular nature of the
equipment acquired or to be acquired by the Owner Trustee, or (v) ERISA or
any other pension and employee benefit laws, rules or regulations. In
addition, we express no opinion as to the right, title or interest in or to
the Trust Estate on the part of any Person. We also express no opinion as
to the perfection or priority of any security interest created by any of
the Certificate Closing Date Documents.
In rendering the opinions expressed herein, we have assumed
that (a) each of the Indenture, the Participation Agreement and the other
Certificate Closing Date Documents has been duly authorized, executed and
delivered by the respective parties thereto (other than the Indenture
Trustee) and constitutes a legal, valid and binding obligation of each of
such parties (other than the Indenture Trustee), enforceable against each
of such parties in accordance with the terms thereof, (b) each of such
parties (other than the Indenture Trustee) has the requisite power,
authority and legal right to enter into and perform its respective
obligations under the Indenture, the Participation Agreement and each of
the other Certificate Closing Date Documents to which it is a party and (c)
the transactions provided for in the Certificate Closing Date Documents are
not within the prohibitions of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986, as amended.
This opinion is furnished by us for the sole benefit of the
addressees hereof, each of whom we understand and agree may rely upon the
opinions set forth herein. No other person or entity is entitled to rely
on this opinion 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,
Dewey Ballantine
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- --------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- -------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(3)(b)
[Letterhead of The Chase Manhattan Bank, N.A.]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
As Vice President and Senior Associate Counsel to The Chase
Manhattan Bank (National Association), a national banking association (the
"Indenture Trustee"), I advise you as follows with respect to the
authorization, execution and delivery by the Indenture Trustee of (i) the
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N663FE) dated as of October 26, 1995 (the "Indenture") between NBD
Bank (the "Owner Trustee") and the Indenture Trustee and (ii) the
Participation Agreement (Federal Express Corporation Trust No. N663FE)
dated as of October 26, 1995 (the "Participation Agreement") among Federal
Express Corporation ("Federal Express"), Chrysler Capital Corporation, as
Owner Participant (the "Owner Participant"), the Owner Trustee, the
Indenture Trustee, and The Chase Manhattan Bank (National Association), as
Pass Through Trustee. 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.
Unless otherwise defined herein, capitalized terms used herein
shall have the respective meanings attributed thereto in the Participation
Agreement.
I have reviewed executed counterparts of the Operative
Agreements to be delivered on the Certificate Closing Date (the
"Certificate Closing Date Documents") and the forms of Operative Agreements
to be delivered on the Delivery Date. I have also examined the originals,
or certified, conformed, photocopied or telecopied copies of such corporate
records, certificates, instruments and other documents as I have deemed
necessary to appropriate to enable me to render the opinions expressed
herein, including, without limitation, certified copies of the By-laws of
the Indenture Trustee, a certificate of the secretary 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 and a certificate of the
Comptroller of the Currency, Washington, D.C., dated September 23, 1965, 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, I have assumed the genuineness of
signatures on original documents (other than those of the Indenture
Trustee) and the conformity to such original documents of all copies
submitted to me as certified, conformed, photocopied or telecopied copies,
and as to certificates and telegraphic and telephonic confirmations given
by public officials, I have assumed the same to have been properly given
and to be accurate. As to all matters of fact material to my opinions, I
have, when relevant facts were not independently established, relied upon
statements, representations and warranties contained in the Certificate
Closing Date Documents and upon the statements and certificates furnished
to me.
A. Based upon the foregoing and subject to the limitations
expressed in paragraph B below, I am of the opinion that: the execution,
delivery and performance by the Indenture Trustee of the Indenture, the
Participation Agreement and each of the other Certificate Closing Date
Documents to which it is a party are not, to my knowledge, in violation of
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.
B. I am qualified to practice law in the State of New York and
I express no opinion as to any laws other than the laws of the State of New
York and the federal laws of the United States of America. Further,
without limiting the generality of the foregoing, I express no opinion with
respect to (i) the citizenship of the Indenture Trustee, the Transportation
Code and the regulations promulgated thereunder, the impact of the
Transportation Code 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 under the laws of any
jurisdiction other than New York or federal laws of the United States of
America to exercise any rights or remedies set forth in the Certificate
Closing Date Documents or to perform any duties or obligations on its part
to be performed other than those that can be performed in the State of New
York; 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 my
express prior written consent. This opinion may not be used, circulated,
quoted, published or otherwise referred to for any purpose without my
express prior written consent. This 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,
Barbara Jo Lubitz
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(4)(a)
[Letterhead of Dickinson, Wright, Moon, Van Dusen & Freeman]
[Certificate Closing Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
We have acted as special counsel to NBD Bank, a Michigan
banking corporation ("NBD"), in connection with the Trust Agreement
(Federal Express Corporation Trust No. N663FE), dated as of October 26,
1995 (the "Trust Agreement"), between NBD and Chrysler Capital Corporation,
a Delaware corporation (the "Trustor" or "Owner Participant"). Pursuant to
the Participation Agreement (Federal Express Corporation Trust No.
N663FE), dated as of October 26, 1995 (the "Participation Agreement"),
among Federal Express Corporation, as Lessee, the Owner Participant, NBD,
not in its individual capacity except as specifically set forth therein but
solely as Owner Trustee (the "Owner Trustee") under the Trust Agreement,
The Chase Manhattan Bank (National Association), as Indenture Trustee and
The Chase Manhattan Bank (National Association), as Pass Through Trustee,
one Airbus A300F4-605R aircraft bearing U.S. Registration No. N663FE (the
"Aircraft") is being financed. This opinion is being furnished pursuant to
Section 4.01(k)(iv) of the Participation Agreement. Capitalized terms used
herein and not otherwise defined are used as defined in the Participation
Agreement, except that references herein to any instrument shall mean such
instrument as in effect on the date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Participation Agreement;
(b) The Trust Agreement;
(c) The Indenture;
(d) The Lease;
(e) The Purchase Agreement Assignment;
(f) The Engine Warranty Assignment;
(g) Ancillary Agreement I to be dated the Delivery Date;
(h) The French Pledge Agreement (each of the documents
identified in paragraphs (a) through (j) above being collectively referred
to as the "Certificate Closing Date Documents"); and
(i) The Certificates being issued today (the "Certificates").
We have also examined the forms of the Lease Supplement
relating to the Aircraft to be dated the Delivery Date and the Indenture
and Security Agreement Supplement relating to the Aircraft to be dated the
Delivery Date.
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
public officials and of corporate officers and other representatives of NBD
and such other instruments as we have deemed necessary and relevant as the
basis for our opinion. Moreover, as to certain facts material to the
opinions expressed herein, we have relied upon representations and
warranties contained in the Certificate Closing Date Documents.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary and relevant, and subject
to the assumptions, exceptions and qualifications set forth below, we
advise you that, in our opinion:
1. NBD is a Michigan banking corporation duly organized and validly
existing under the laws of the State of the Michigan, with banking and
trust powers, is a "citizen of the United States" within the meaning of
Section 40102(a)(15) of the Transportation Code, and each of NBD and the
Owner Trustee, as the case may be, has full power, authority and legal
right to execute, deliver and perform each of the Certificate Closing Date
Documents to which it is a party and to issue, execute, deliver and perform
the Certificates.
2. Each of NBD and the Owner Trustee, as the case may be, has duly
authorized, executed and delivered each Certificate Closing Date Document;
each Certificate Closing Date Document constitutes a legal, valid and
binding obligation of the Owner Trustee (and, to the extent set forth in
the respective Certificate Closing Date Document, of NBD) enforceable
against the Owner Trustee (and, to the extent set forth in the respective
Certificate Closing Date Document, against NBD) 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.
3. 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.
4. To our knowledge, there exist no Liens affecting the title of the
Owner Trustee to the Lessor's Estate resulting from claims against NBD 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.
5. All of 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, to the Lien of the Indenture in
favor of the Holders of the Certificates.
6. To the extent that the Uniform Commercial Code of the State of
Michigan (the "UCC") is applicable, except for the Indenture Trustee's
taking 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 (including the
grant and assignment unto the Indenture Trustee of the security interest in
all estate, right, title and interest of the Owner Trustee in, to and under
the Lease) which the Indenture by its terms purports to create in favor of
the Indenture Trustee, and (ii) to perfect in the State of Michigan such
security interest, except for the filing of a UCC financing statement in
the office of the Secretary of State of the State of Michigan, 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.
7. The Trust Agreement duly creates a legal and valid trust under
Michigan 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 and the Indenture Supplement create for the benefit of the Owner
Participant the interest in the properties referred to in Section 1.02 of
the Trust Agreement which the Trust Agreement by its terms purports to
create, which interest is subject and subordinate to the security interests
created by the Indenture to the extent provided in the Indenture.
8. Neither the authorization, execution and delivery by the Owner
Trustee or NBD, as the case may be, of the Certificate Closing Date
Documents, nor the issuance, execution and delivery by the Owner Trustee of
the Certificates nor the fulfillment or compliance by the Owner Trustee or
NBD with the respective terms and provisions thereof nor the consummation
of any of the transactions by the Owner Trustee or NBD, 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 Michigan
or the United States of America governing the banking or trust powers of
NBD.
9. The execution, delivery and performance by the Owner Trustee or
NBD, as the case may be, of each of the Certificate Closing Date Documents
and the issuance, execution, delivery and performance of the Certificates
by the Owner Trustee are not in violation of the articles of incorporation
or by-laws of NBD or of any law, governmental rule, or regulation of the
State of Michigan or the United States of America governing the banking or
trust powers of NBD 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, of any judgment or order of the State of
Michigan or the United States of America relating to the banking or trust
powers of NBD.
10. There is no fee, tax or other governmental charge under the laws
of the State of Michigan 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 Michigan or the Owner Trustee's performance of its
duties under the Trust Agreement, within the State of Michigan, which would
not have been imposed if NBD did not have its principal place of business
and did not perform its obligations under the Certificate Closing Date
Documents in the State of Michigan.
11. Neither a Michigan court nor a federal court applying federal
law or Michigan law, if all relevant issues are properly presented to and
considered by such court, would permit the Owner Participant to terminate
the Trust Agreement, except as otherwise provided in the Trust Agreement or
with the consent of the Indenture Trustee, until the Lien of the Indenture
on the Trust Estate has been released and until payment in full of the
principal of, Make-Whole Premium, if any, and interest on, the
Certificates.
12. Under the laws of the State of Michigan, as 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 any insolvency proceeding has been
commenced) (collectively, the "Creditors") may acquire legal, valid and
enforceable claims and liens, as to the Trust Estate, only against the
rights of such Owner Participant under the Trust Agreement or in the Trust
Estate, and may not through the enforcement of such Creditor's rights,
acquire any greater rights than the rights of the Owner Participant with
respect to the Trust Agreement or the Trust Estate.
13. There are no actions, suits, investigations or proceedings
pending or, to our knowledge, threatened against or affecting NBD or the
Owner Trustee, as the case may be, or any of its properties in any court or
before any administrative agency or arbitrator, which, if adversely
determined, would materially adversely affect the ability of NBD or the
Owner Trustee, as the case may be, to perform its obligations under any of
the Certificate Closing Date Documents, and there are no pending or, to our
knowledge, threatened actions or proceedings before any court,
administrative agency or tribunal involving NBD or the Owner Trustee, as
the case may be, in connection with the transactions contemplated by any of
the Certificate Closing Date Documents.
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 Michigan and applicable federal laws. 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, the
Trust Indenture Act of 1939, as amended, and the Investment Company Act of
1940, as amended, (ii) Part A of Subtitle VII of Title 49 of the United
States Code, as amended (except with respect to the opinion set forth in
paragraph 1 above concerning the citizenship of NBD), (iii) state
securities or blue sky laws, or (iv) laws, rules and regulations applicable
to the particular nature of the Aircraft to be acquired by the Owner
Trustee on the Delivery Date. Insofar as any Certificate Closing Date
Documents and the Certificates expressed to be governed by the laws of a
jurisdiction other than the State of Michigan, we have assumed that all
such documents are legal, valid, binding and enforceable in accordance with
their terms under such laws (as to which we express no opinion).
B. The foregoing opinions regarding enforceability, except for
the opinions set forth in paragraphs 11 and 12 above, are subject to (i)
applicable bankruptcy, insolvency, moratorium, reorganization, receivership
and other laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law) and (iii) the
effect of applicable public policy on the enforceability or provisions
relating to indemnification.
C. We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than NBD and the Owner
Trustee, of the Certificate Closing Date Documents to which each is a party
and that each of such parties has the full power, authority and legal right
to execute and deliver, and perform under the terms of, each such document.
D. The opinion set forth in paragraph 1 above concerning the
citizenship of NBD is based upon the Affidavit of Citizenship, and we have
not independently verified the facts supporting such opinion.
E. We have assumed the due authentication of the Certificates
by the Indenture Trustee.
F. We have assumed that all signatures (other than those of
the Owner Trustee or NBD) 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 on the Delivery Date.
H. Except as otherwise provided in paragraph 7, no opinion is
expressed as to the creation, attachment, perfection or priority of any
mortgage or security interest, of any instrument or document creating a
lien or security interest, or of the Indenture or as to the nature or
validity of title to any part of the Trust Estate.
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. Whenever our opinion, with respect to the existence or
absence of facts, is qualified by the phrase "to our knowledge" or a phrase
of similar import, it is intended to indicate that during the course of our
representation in connection with the Certificate Closing Date Documents,
the lawyers in our firm who have been principally involved in representing
NBD and the Owner Trustee in connection with the Certificate Closing Date
Documents have not obtained actual knowledge of the existence or absence of
such facts, as the case may be, without the implication that we have made
any investigation or inquiry to determine the existence or absence of such
facts.
K. The foregoing opinions are given as of the date hereof
only, and do not contemplate, and no opinion is given or intended, with
respect to subsequent changes in law or fact.
This opinion is rendered solely for your benefit and may not be
relied upon by any other person or entity for any purpose without our prior
written consent, except that the law firm of Davis 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,
Dickinson, Wright, Moon, Van Dusen & Freeman
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- ------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(4)(b)
[Letterhead of Dickinson, Wright, Moon, Van Dusen & Freeman]
[Delivery Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
We have acted as special counsel to NBD Bank, a Michigan
banking corporation ("NBD"), in connection with the Trust Agreement
(Federal Express Corporation Trust No. N663FE), dated as of October 26,
1995 (the "Trust Agreement"), between NBD and Chrysler Capital Corporation,
a Delaware corporation (the "Trustor" or "Owner Participant"). Pursuant to
the Participation Agreement (Federal Express Corporation Trust No.
N663FE), dated as of October 26, 1995 (the "Participation Agreement"),
among Federal Express Corporation, as Lessee, the Owner Participant, NBD,
not in its individual capacity except as specifically set forth therein but
solely as Owner Trustee (the "Owner Trustee") under the Trust Agreement,
The Chase Manhattan Bank (National Association), as Indenture Trustee and
The Chase Manhattan Bank (National Association), as Pass Through Trustee,
one Airbus A300F4-605R aircraft bearing U.S. Registration No. N663FE (the
"Aircraft") is being financed. This opinion is being furnished pursuant to
Section 4.02(d)(vi) of the Participation Agreement. Capitalized terms used
herein and not otherwise defined are used as defined in the Participation
Agreement, except that references herein to any instrument shall mean such
instrument as in effect on the date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Participation Agreement;
(b) The Trust Agreement;
(c) The Indenture;
(d) The Indenture and Security Agreement Supplement relating
to the Aircraft and dated the date hereof (the "Indenture Supplement");
(e) The Lease;
(f) The Lease Supplement relating to the Aircraft and dated
the date hereof (the "Lease Supplement");
(g) The Purchase Agreement Assignment;
(h) The Engine Warranty Assignment;
(i) Ancillary Agreement dated the date hereof;
(j) The French Pledge Agreement (each of the documents
identified in paragraphs (a) through (j) above being collectively referred
to as the "Owner Trustee Documents"); and
(k) The Certificates issued on the Certificate Closing Date.
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
public officials and of corporate officers and other representatives of NBD
and such other instruments as we have deemed necessary and relevant as the
basis for our opinion. Moreover, as to certain facts material to the
opinions expressed herein, we have relied upon representations and
warranties contained in the Owner Trustee Documents.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary and relevant, and subject
to the assumptions, exceptions and qualifications set forth below, we
advise you that, in our opinion:
1. NBD is a Michigan banking corporation duly organized and validly
existing under the laws of the State of the Michigan, with banking and
trust powers, is a "citizen of the United States" within the meaning of
Section 40102(a)(15) of the Transportation Code, and each of NBD and the
Owner Trustee, as the case may be, has or had, on the date of execution
thereof, full power, authority and legal right to execute, deliver and
perform each of the Owner Trustee Documents to which it is or is to be a
party and to issue, execute, deliver and perform the Certificates.
2. Each of NBD and the Owner Trustee, as the case may be, has duly
authorized, executed and delivered each Owner Trustee Document; each Owner
Trustee Document constitutes a legal, valid and binding obligation of the
Owner Trustee (and, to the extent set forth in the respective Owner Trustee
Document, of NBD) enforceable against the Owner Trustee (and, to the extent
set forth in the respective Owner Trustee Document, against NBD) 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.
3. On the Certificate Closing Date, the Certificates were duly
issued, executed and delivered by the Owner Trustee, pursuant to
authorization contained in the Trust Agreement, and constituted 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.
4. The Owner Trustee received from AVSA such title to the Aircraft
as AVSA conveyed to the Owner Trustee, subject to the rights of the Owner
Trustee and the Lessee under the Lease and the security interest created
pursuant to the Indenture and the Indenture Supplement; and to our
knowledge, there exist no Liens affecting the title of the Owner Trustee to
the Lessor's Estate resulting from claims against NBD 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.
5. All of 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, to the Lien of the Indenture in
favor of the Holders of the Certificates.
6. To the extent that the Uniform Commercial Code of the State of
Michigan (the "UCC") is applicable, except for the Indenture Trustee's
taking 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 (including the
grant and assignment unto the Indenture Trustee of the security interest in
all estate, right, title and interest of the Owner Trustee in, to and under
the Lease) which the Indenture by its terms purports to create in favor of
the Indenture Trustee, and (ii) to perfect in the State of Michigan such
security interest, except for the filing of a UCC financing statement in
the office of the Secretary of State of the State of Michigan, 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.
7. On the Certificate Closing Date, the Trust Agreement duly created
a legal and valid trust under Michigan 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 and the Indenture Supplement create
for the benefit of the Owner Participant the interest in the properties
referred to in Section 1.02 of the Trust Agreement which the Trust
Agreement by its terms purports to create, which interest is subject and
subordinate to the security interests created by the Indenture to the
extent provided in the Indenture.
8. Neither the authorization, execution and delivery by the Owner
Trustee or NBD, as the case may be, of the Owner Trustee Documents, nor the
issuance, execution and delivery by the Owner Trustee of the Certificates
nor the fulfillment or compliance by the Owner Trustee or NBD with the
respective terms and provisions thereof nor the consummation of any of the
transactions by the Owner Trustee or NBD, 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 Michigan or the United
States of America governing the banking or trust powers of NBD.
9. The execution, delivery and performance by the Owner Trustee or
NBD, as the case may be, of each of the Owner Trustee Documents 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 incorporation or by-laws of NBD or of any law,
governmental rule, or regulation of the State of Michigan or the United
States of America governing the banking or trust powers of NBD 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, of any judgment or order of the State of Michigan or the United
States of America relating to the banking or trust powers of NBD.
10. Assuming that (i) the Aircraft is not used in Michigan and is
not physically located in Michigan at the commencement or termination of
the Term or during such Term, (ii) in connection with any sale of the
Aircraft, such Aircraft will not be physically delivered in Michigan to a
buyer nor be shipped from a point within Michigan to a buyer, and (iii) 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 Michigan 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 Owner Trustee Documents 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, and
neither the Owner Trustee, the Lessor's Estate nor the trust 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 Michigan 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 solely 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 Michigan or the Owner Trustee's performance of its
duties under the Trust Agreement.
11. There is no fee, tax or other governmental charge under the laws
of the State of Michigan 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 Michigan or the Owner Trustee's performance of its
duties under the Trust Agreement, within the State of Michigan, which would
not have been imposed if NBD did not have its principal place of business
and did not perform its obligations under the Owner Trustee Documents in
the State of Michigan.
12. Neither a Michigan court nor a federal court applying federal
law or Michigan law, if all relevant issues are properly presented to and
considered by such court, would permit the Owner Participant to terminate
the Trust Agreement, except as otherwise provided in the Trust Agreement or
with the consent of the Indenture Trustee, until the Lien of the Indenture
on the Trust Estate has been released and until payment in full of the
principal of, Make-Whole Premium, if any, and interest on, the
Certificates.
13. Under the laws of the State of Michigan, as 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 any insolvency proceeding has been
commenced) (collectively, the "Creditors") may acquire legal, valid and
enforceable claims and liens, as to the Trust Estate, only against the
rights of such Owner Participant under the Trust Agreement or in the Trust
Estate, and may not through the enforcement of such Creditor's rights,
acquire any greater rights than the rights of the Owner Participant with
respect to the Trust Agreement or the Trust Estate.
14. There are no actions, suits, investigations or proceedings
pending or, to our knowledge, threatened against or affecting NBD or the
Owner Trustee, as the case may be, or any of its properties in any court or
before any administrative agency or arbitrator, which, if adversely
determined, would materially adversely affect the ability of NBD or the
Owner Trustee, as the case may be, to perform its obligations under any of
the Owner Trustee Documents, and there are no pending or, to our knowledge,
threatened actions or proceedings before any court, administrative agency
or tribunal involving NBD or the Owner Trustee, as the case may be, in
connection with the transactions contemplated by any of the Owner Trustee
Documents.
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 Michigan and applicable federal laws. 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, the
Trust Indenture Act of 1939, as amended, and the Investment Company Act of
1940, as amended, (ii) Part A of Subtitle VII of Title 49 of the United
States Code, as amended (except with respect to the opinion set forth in
paragraph 1 above concerning the citizenship of NBD), (iii) state
securities or blue sky laws, or (iv) laws, rules and regulations applicable
to the particular nature of the Aircraft acquired by the Owner Trustee on
the date hereof. Insofar as any Owner Trustee Documents and the
Certificates expressed to be governed by the laws of a jurisdiction other
than the State of Michigan, we have assumed that all such documents are
legal, valid, binding and enforceable in accordance with their terms under
such laws (as to which we express no opinion).
B. The foregoing opinions regarding enforceability, except for
the opinions set forth in paragraphs 12 and 13 above, are subject to (i)
applicable bankruptcy, insolvency, moratorium, reorganization, receivership
and other laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law) and (iii) the
effect of applicable public policy on the enforceability or provisions
relating to indemnification.
C. We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than NBD and the Owner
Trustee, of the Owner Trustee Documents to which each is a party and that
each of such parties has the full power, authority and legal right to
execute and deliver, and perform under the terms of, each such document.
D. The opinion set forth in paragraph 1 above concerning the
citizenship of NBD is based upon the Affidavit of Citizenship, and we have
not independently verified the facts supporting such opinion.
E. We have assumed the due authentication of the Certificates
by the Indenture Trustee.
F. We have assumed that all signatures (other than those of
the Owner Trustee or NBD) 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 on the date hereof.
H. Except as otherwise provided in paragraph 7, no opinion is
expressed as to the creation, attachment, perfection or priority of any
mortgage or security interest, of any instrument or document creating a
lien or security interest, or of the Indenture or as to the nature or
validity of title to any part of the Trust Estate.
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. Whenever our opinion, with respect to the existence or
absence of facts, is qualified by the phrase "to our knowledge" or a phrase
of similar import, it is intended to indicate that during the course of our
representation in connection with the Owner Trustee Documents, the lawyers
in our firm who have been principally involved in representing NBD and the
Owner Trustee in connection with the Owner Trustee Documents have not
obtained actual knowledge of the existence or absence of such facts, as the
case may be, without the implication that we have made any investigation or
inquiry to determine the existence or absence of such facts.
K. The foregoing opinions are given as of the date hereof
only, and do not contemplate, and no opinion is given or intended, with
respect to subsequent changes in law or fact.
This opinion is rendered solely for your benefit and may not be
relied upon by any other person or entity for any purpose without our prior
written consent, except that the law firm of Davis 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,
Dickinson, Wright, Moon, Van Dusen & Freeman
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(5)(a)
[Letterhead of Dewey Ballantine]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
We have acted as special counsel to The Chase Manhattan Bank
(National Association), a national banking association, acting as Pass
Through Trustee (the "Pass Through Trustee") with respect to the Pass
Through Trust Agreement dated as of February 1, 1993, as amended and
restated as of October 1, 1995 (the "Pass Through Trust Agreement"), as
supplemented by the Series Supplements dated the date hereof, designated as
Series Supplement 1995-B1, 1995-B2 and 1995-B3, respectively (the "Series
Supplements"). We have advised the Pass Through Trustee with respect to
the Pass Through Agreement, the Series Supplements and the Participation
Agreement relating to the Pass Through Trust Agreement and each designated
Series Supplement (the "Participation Agreement") among the parties listed
therein. Additionally, we have advised the Pass Through Trustee with
respect to the Pass Through Certificates (the "Certificates") issued on the
date hereof.
This opinion is being delivered pursuant to Section 4.01(l)(ix)
of the Participation Agreement. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth or
referred to in the Participation Agreement, the Pass Through Trust
Agreement or the Series Supplements, as applicable.
In connection with the opinions expressed herein, we have
reviewed executed counterparts of the Operative Agreements, the Pass
Through Trust Agreement and the Series Supplements. We have also examined
and relied upon the accuracy of the originals or certified, conformed,
photocopied or telecopied copies of such corporate records, certificates,
instruments 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, photocopied 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, when relevant facts were not independently established, relied upon
representations and warranties contained in the Operative Agreements, the
Pass Through Trust Agreement and the Series Supplements and upon the
statements and certificates furnished to us.
Based upon and subject to the foregoing and the qualifications
hereinafter set forth, we are of the opinion that:
1. The Pass Through Trustee is a national banking association duly
organized and validly existing in good standing 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 execute, deliver and perform its
obligations under the Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements, the Certificates and the other Operative
Agreements to which it is a party. Upon execution of the Series
Supplements, the Pass Through Trustee will be deemed to have duly executed
the Pass Through Trust Agreement and thereupon become the Pass Through
Trustee under the Pass Through Trust Agreement and the Series Supplements
for all purposes thereof.
2. The Pass Through Trustee, in its individual and trust capacities,
has duly authorized, executed and delivered the Participation Agreement,
the Pass Through Trust Agreement and the Series Supplements and each of the
other Operative Agreements to which it is a party.
3. Each of the Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements, the Certificates and the other Operative
Agreements to which it is a party constitutes the legal, valid and binding
obligation of the Pass Through Trustee in its trust capacity (and, to the
extent provided in each such document, in its individual capacity)
enforceable against the Pass Through Trustee in its trust capacity (and, to
the extent provided in each such document, in its individual capacity) in
accordance with its terms thereof, except as the enforceability thereof may
be limited by (a) general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law), (b)
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and (c) public policy
considerations (in the case of the indemnity provisions contained therein).
4. The Certificates have been duly authorized and validly executed,
issued, delivered and authenticated by the Pass Through Trustee pursuant to
the Pass Through Trust Agreement and the Series Supplements; and the
Certificates acquired by the Underwriters under the Underwriting Agreement
are enforceable against the Pass Through Trustee and are entitled to the
benefits of the related Pass Through Trust Agreement and the related Series
Supplements, except as the enforceability thereof may be limited by (a)
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law), (b) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and (c) public policy considerations (in the case of
the indemnity provisions contained therein).
5. The execution, delivery, and performance by the Pass Through
Trustee in its trust capacity (and, to the extent provided in each such
document, in its individual capacity), of the Participation Agreement, the
Pass Through Trust Agreement and the Series Supplements and each of 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 Certificates thereunder are not in
violation of the Articles of Association or By-laws of the Pass Through
Trustee or any law, governmental rule or regulation of the United States of
America or the State of New York governing the banking or trust powers of
the Pass Through Trustee 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 New York or Federal law,
rule or regulation governing the Pass Through Trustee's banking or trust
powers, or of any judgment, order or decree known to us to be applicable to
the Pass Through Trustee, in its individual or trust capacity, of any
court, regulatory body, administrative agency, government or governmental
body having jurisdiction over the Pass Through Trustee, in its individual
or trust capacity, or its properties.
6. Neither the execution and delivery by the Pass Through Trustee,
in its individual or trust capacity, as the case may be, of the
Participation Agreement, the Pass Through Trust Agreement, the Series
Supplements, the Certificates or any of the other Operative Agreements to
which it is a party, nor the consummation by the Pass Through Trustee, in
its individual or trust capacity, as the case may be, of any of the
transactions contemplated in the Participation Agreement, the Pass Through
Trust Agreement, the Series Supplements, the Certificates or any of the
other Operative Agreements to which it is a party requires 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 Pass Through Trustee.
7. There are no taxes, fees or other governmental charges payable
under the laws of the State of New York or any political subdivision
thereof in connection with the execution, delivery and performance by the
Pass Through Trustee, in its individual or trust capacity, as the case may
be, of the Participation Agreement, 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
Certificates by the Pass Through Trustee, pursuant to the Series
Supplements.
8. Neither the trusts created by the Pass Through Trust Agreement
and the Series Supplements nor the Pass Through Trustee, in its individual
or trust capacity, as the case may be, nor their respective Affiliates,
successors or assigns, 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 New York or any political subdivision
thereof (other than taxes imposed on the fees received by The Chase
Manhattan Bank (National Association) for acting as Pass Through Trustee
under the Series Supplements). Certificate holders who are not residents
of or otherwise subject to tax in New York 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 New York or any
political subdivision thereof as a result of purchasing, owning (including
receiving payments with respect to) or selling a Certificate. There are no
applicable taxes under the laws of the State of New York 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, (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 Operative Agreements, any or all of the 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 hereto and 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 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 Certificates, or (g) otherwise
with respect to or in connection with the transactions contemplated by the
Pass Through Trust Agreement, the Series Supplements, the Certificates 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, the Certificates and the Operative
Agreements in, and had not engaged in any activities unrelated to the
transactions contemplated by the Pass Through Trust Agreement, the Series
Supplements, the Certificates and the Operative Agreements in, the State of
New York.
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
New York Taxes" in the Prospectus Supplement to the Prospectus forming part
of Registration Number No. 33-56569 (the "Registration Statement") for the
registration of the Certificates with the Securities and Exchange
Commission. In addition, we have assumed that each Pass Through Trust (as
defined in the Registration Statement) 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 New York. We
express no opinion as to the correctness of the foregoing assumptions and
we have conducted no independent investigation in this regard.
We express no opinion as to the laws of any jurisdiction other
than the laws of the State of New York and the Federal laws of the United
States of America. In addition, we express no opinion herein as to (i) any
Federal or state securities laws or blue sky laws and assume that the
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 tax laws, (iii) any aviation laws including, without limitation, the
Transportation Code, (iv) any laws, statutes, rules or regulations
applicable to the particular nature of the equipment acquired or to be
acquired by the Owner Trustee, or (v) ERISA or any other pension and
employee benefit laws, rules or regulations. In addition, we express no
opinion as to the right, title or interest in or to the Trust Estate on the
part of any Person. We also express no opinion as to the perfection or
priority of any security interest created by any of the Operative
Agreements.
In rendering the opinions expressed herein, we have assumed
that (a) each of the Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements, the Certificates and the other Operative
Agreements has been duly authorized, executed and delivered by the
respective parties thereto (other than the Pass Through Trustee) and
constitutes a legal, valid and binding obligation of each of such parties
(other than the Pass Through Trustee), enforceable against each of such
parties in accordance with the terms thereof, (b) each of such parties
(other than the Pass Through Trustee) has the requisite power, authority
and legal right to enter into and perform its respective obligations under
the Participation Agreement, the Pass Through Trust Agreement, the Series
Supplements, the Certificates and each of the other Operative Agreements to
which it is a party and (c) the transactions provided for in the Operative
Agreements are not within the prohibitions of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended.
This opinion is furnished by us for the sole benefit of the
addressees hereof, each of whom we understand and agree may rely upon the
opinions set forth herein. No other person or entity is entitled to rely
on this opinion 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,
Dewey Ballantine
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- ------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- -------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(5)(b)
[Letterhead of The Chase Manhattan Bank, N.A.]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
As Vice President and Senior Associate Counsel to The Chase Manhattan
Bank (National Association), a national banking association, acting as Pass
Through Trustee (the "Pass Through Trustee") with respect to the Pass
Through Trust Agreement dated as of February 1, 1993, as amended and
restated as of October 1, 1995 (the "Pass Through Trust Agreement"), as
supplemented by the Series Supplements dated the date hereof, designated as
Series Supplement 1995-B1, 1995-B2 and 1995-B3, respectively (the "Series
Supplements"), I advise you as follows with respect to the authorization,
execution and delivery by the Pass Through Trustee of (i) the Series
Supplements and (ii) the Participation Agreement (Federal Express
Corporation Trust No. N663FE) dated as of October 26, 1995 (as amended and
restated, the "Participation Agreement") among the parties listed therein.
Additionally, I have advised the Pass Through Trustee with respect to the
Pass Through Certificates (the "Certificates") issued on the date hereof.
Unless otherwise defined herein, capitalized terms used herein
shall have the respective meanings attributed thereto in the Participation
Agreement, the Pass Through Trust Agreement or the Series Supplements, as
applicable.
I have reviewed executed counterparts of the Pass Through Trust
Agreement, the Series Supplements, the Certificates, the Participation
Agreement and the other Operative Agreements to which the Pass Through
Trustee is a party. I have also examined the originals, or certified,
conformed, photocopied or telecopied copies of such corporate records,
certificates, instruments and other documents as I have deemed necessary to
appropriate to enable me to render the opinions expressed herein,
including, without limitation, certified copies of the By-laws of the Pass
Through Trustee, a certificate of the secretary of the Pass Through Trustee
as to certain matters, including the incumbency of the officer of the Pass
Through Trustee who executed the Pass Through Trust Agreement, the Series
Supplements, the Participation Agreement and the other certificates
executed and delivered in connection with the transactions contemplated by
any of the foregoing and who authenticated the Certificates and a
certificate of the Comptroller of the Currency, Washington, D.C., dated
September 23, 1965, as to the Pass Through Trustee's existence and
authority to do business as a national banking association and to act in a
fiduciary capacity.
In all such examinations, I have assumed the genuineness of
signatures on original documents (other than those of the Pass Through
Trustee) and the conformity to such original documents of all copies
submitted to me as certified, conformed, photocopied or telecopied copies,
and as to certificates and telegraphic and telephonic confirmations given
by public officials, I have assumed the same to have been properly given
and to be accurate. As to all matters of fact material to my opinions, I
have, when relevant facts were not independently established, relied upon
statements, representations and warranties contained in the Operative
Agreements, the Pass Through Trust Agreement, the Series Supplements and
the Certificates and upon the statements and certificates furnished to me.
A. Based upon the foregoing and subject to the limitations
expressed in paragraph B below, I am of the opinion that: the execution,
delivery and performance by the Pass Through Trustee of the Series
Supplements, the Certificates, the Participation Agreement and each of the
other Operative Agreements to which it is a party are not, to my knowledge,
in violation of 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. Upon execution of the Series Supplements, the
Pass Through Trustee will be deemed to have duly executed the Pass Through
Trust Agreement and thereupon become the Pass Through Trustee under the
Pass Through Trust Agreement and the Series Supplements for all purposes
thereof.
B. I am qualified to practice law in the State of New York and
I express no opinion as to any laws other than the laws of the State of New
York and the federal laws of the United States of America. Further,
without limiting the generality of the foregoing, I express no opinion with
respect to (i) the citizenship of the Pass Through Trustee, the
Transportation Code and the regulations promulgated thereunder, the impact
of the Transportation Code 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 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 Pass Through Trustee under the laws of
any jurisdiction other than New York or federal laws of the United States
of America to exercise any rights or remedies set forth in the Pass Through
Trust Agreement, the Series Supplements or 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 New York; 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 my
express prior written consent. This opinion may not be used, circulated,
quoted, published or otherwise referred to for any purpose without my
express prior written consent. This 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,
Barbara Jo Lubitz
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- -----------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(6)
[Letter of General Electric Company]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N663FE
Reference is made to (i) that certain Participation Agreement
(Federal Express Corporation Trust No. N663FE), dated as of October 26,
1995 (the "Participation Agreement") by and among Federal Express
Corporation, as Lessee ("Fed Ex"), Chrysler Capital Corporation, as Owner
Participant, NBD Bank ("NBD") (not in its individual capacity, except as
otherwise expressly set forth therein, but solely as Owner Trustee), The
Chase Manhattan Bank (National Association), as Indenture Trustee ("Chase")
and The Chase Manhattan Bank (National Association), as Pass Through
Trustee; (ii) that certain Purchase Agreement Assignment (Federal Express
Corporation Trust No. N663FE), dated as of October 26, 1995 (the "Purchase
Agreement Assignment") between Fed Ex, as Lessee and NBD, as Lessor; (iii)
that certain Lease Agreement (Federal Express Corporation Trust No.
N663FE), dated as of October 26, 1995 (the "Lease") between NBD (not in its
individual capacity, but solely as Owner Trustee), as Lessor and Fed Ex, as
Lessee; and (iv) that certain Trust Indenture and Security Agreement
(Federal Express Corporation Trust No. N663FE), dated as of October 26,
1995 (the "Trust Indenture") between NBD (not in its individual capacity),
as Owner Trustee and Chase, as Indenture Trustee.
I am an attorney employed by General Electric Company, a New
York corporation (the "Engine Manufacturer") and as such have acted as
counsel for the Engine Manufacturer in connection with the execution and
delivery by the Engine Manufacturer of the Consent (the "Consent"), and the
Engine Warranty Assignment (Federal Express Corporation Trust No. N663FE)
(the "Engine Warranty Assignment"), each attached to the Participation
Agreement as Exhibit F and dated as of October 26, 1995. The Consent and
the Engine Warranty Assignment covers two GE CF6-80C2-A5F series engines
bearing Engine Manufacturer's serial numbers 705-233 and 705-234,
respectively. In this connection, I have, or an attorney under my
supervision has, reviewed such documents as I have deemed necessary for the
purpose of this opinion, including, but without limiting the generality of
the foregoing, the General Terms Agreement No. 6-9034, dated as of July 3,
1991 between the Engine Manufacturer and Fed Ex (the "General Terms
Agreement"), the Engine Product Support Plan forming a part thereof (the
"Engine Product Support Plan"), the Participation Agreement, the Purchase
Agreement Assignment, the Lease and the Trust Indenture.
In making such examinations, I have relied upon the accuracy of
original, certified, conformed, photocopied or telecopied copies of such
records, agreements, certificates and other documents as I have deemed
necessary or appropriate to enable me to render the opinions expressed
herein. In all such examinations, I have assumed the genuineness of
signatures on original documents and the conformity to such original
documents of all copies submitted to me as certified, conformed,
photocopied or telecopied copies, and as to certificates and telegraphic
and telephonic confirmations given by public officials, I have assumed the
same to have been properly given and to be accurate. As to various
questions of fact material to such opinions, I have relied, when such
relevant facts were not independently established by me, solely upon the
accuracy of the statements, representations and warranties made in the
Participation Agreement, the Purchase Agreement Assignment, the Lease and
the Trust Indenture.
With your consent, and for the purposes of this opinion, I have
assumed (other than with respect to the Engine Manufacturer), the accuracy
of the following matters, but I have not made any independent investigation
or inquiry with respect thereto and I render no opinion on such matters:
(a) each of the Participation Agreement, the Purchase Agreement
Assignment, the Lease and the Trust Indenture have been duly and validly
authorized, executed and delivered by all parties thereto and constitutes
the legal, valid and binding obligations of each of such parties in
accordance with the respective terms thereof; and
(b) the respective parties to the Participation Agreement, the
Purchase Agreement Assignment, the Lease and the Trust Indenture have
obtained, and there are in full force and effect, any and all federal,
state, local or foreign governmental agencies and authorities in connection
with the transactions contemplated thereby, to the extent necessary for the
legality, validity and binding effect or enforceability of the Consent and
the Engine Warranty Assignment.
Based upon the foregoing, and subject to the specific assumptions,
qualifications and reliances herein set forth, and on the basis of my
consideration of such facts and law as I have deemed necessary for purposes
of this letter, it is my opinion that:
(1) The Engine Manufacturer has the full corporate power, authority
and the legal right to enter into and perform its obligations under the
General Terms Agreement, the Consent and the Engine Warranty Assignment.
The execution, delivery and performance by the Engine Manufacturer of each
of the General Terms Agreement, the Consent and the Engine Warranty
Assignment was duly authorized by all necessary corporate action on the
part of the Engine Manufacturer.
(2) Each of the General Terms Agreement, the Consent and Engine
Warranty Assignment has been duly authorized, executed and delivered by and
constitutes a legal, valid and binding obligation of the Engine
Manufacturer, enforceable against the Engine Manufacturer in accordance
with the respective terms thereof, except as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and by general
equity principles.
(3) The Engine Product Support Plan insofar as it relates to the
Engine Warranties (as such term is defined in the Engine Warranty
Assignment), constitutes a legal, valid and binding obligation of the
Engine Manufacturer, enforceable against the Engine Manufacturer in
accordance with the terms thereof, except as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and by general
equity principles.
The foregoing opinions are limited to the laws of the State of
New York and the federal laws of the United States of America, but no
opinion is expressed as to matters governed by the Transportation Code, or
by any other law, statute, rule or regulation of the United States relating
to the acquisition, ownership, registration, use, operation, maintenance,
repair, replacement or sale of aircraft. Further, no opinion is expressed
as to title to any engines or other property.
This opinion is furnished by me at your request for your sole
benefit and no other person or entity shall be entitled to rely on this
opinion without our express written consent. My 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,
David L. Lloyd, Jr.
SCHEDULE A
Lessee
- -------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- ---------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- ------------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(7)
[Letterhead of Clifford Chance]
[Delivery Date]
To The Opinion Addressees referred to in Schedule I hereof
Re: Federal Express Corporation Trust No. N663FE
Ladies and Gentlemen:
We are special French counsel for Airbus Industrie G.I.E.
("Airbus") and AVSA S.A.R.L. ("AVSA") and you have asked for our opinion
in connection with certain transactions contemplated in the Participation
Agreement (Federal Express Corporation Trust No. N663FE), dated as of
October 26, 1995 (the "Participation Agreement") among Federal Express
Corporation, as Lessee ("Federal Express"), Chrysler Capital Corporation,
as Owner Participant ("Owner Participant"), NBD Bank, a Michigan banking
corporation, not in its individual capacity but solely as Owner Trustee
under the Trust Agreement ("Owner Trustee"), The Chase Manhattan Bank
(National Association), a national banking association, not in its
individual capacity, except as otherwise stated, but solely as Indenture
Trustee under the Indenture ("Indenture Trustee") and The Chase Manhattan
Bank (National Association), a national banking association, not in its
individual capacity, except as otherwise stated, but solely as Pass Through
Trustee, and relating to the Aircraft to be operated by Federal Express.
This opinion is being delivered pursuant to Section 4.02(m)(x)
of the Participation Agreement.
Capitalized terms used in this opinion and not otherwise
defined shall have the meaning assigned thereto in the Participation
Agreement.
We have examined:
(i) a copy of an Airbus A300-600R Freighter Purchase Agreement dated as
of July 3, 1991 and made between AVSA and Federal Express with an executed
Consent and Guaranty of Airbus of same date attached thereto, sent to us by
facsimile by AINA Holdings Inc. ("AINA") on April 27, 1994;
(ii) a copy sent to us by facsimile by Davis Polk & Wardwell on
_________________ of an executed Purchase Agreement Assignment dated as of
October 26, 1995 (the "Purchase Agreement Assignment") made between Federal
Express and the Owner Trustee;
(iii) a copy sent to us by facsimile by AINA on _________________ of
an executed Airbus Industrie Consent and Agreement to the Purchase
Agreement Assignment dated as of October 26, 1995;
(iv) a copy sent to us by facsimile by AINA on _________________ of
an executed but undated AVSA Consent and Agreement to the Purchase
Agreement Assignment dated as of October 26, 1995;
(v) a copy sent to us by AVSA on _________________ of an executed
but undated Warranty Bill of Sale, relating to the Aircraft and
transferring title therein from AVSA to the Owner Trustee (the "AVSA
Warranty Bill of Sale");
(vi) a copy sent to us by AVSA on _________________ of an executed
but undated Airbus Industrie G.I.E. Warranty, in favour of the
Participants (the "Airbus Warranty") warranting AVSA's Warranty Bill of
Sale;
(vii) a copy sent to us by facsimile by AVSA on _________________ of
a copy of an undated FAA Bill of Sale executed by AVSA in favour of the
Owner Trustee;
(viii) a copy sent to us by facsimile by AVSA on May 3, 1995 of an
executed power of attorney dated September 1, 1994 appointing Messrs. John
Leahy and Michel Dechelotte, acting singly, as attorneys-in-fact of Mr.
Jean Pierson, Managing Director ("Adminstrateur Gerant") of Airbus;
(ix) a copy sent to us by facsimile by AVSA on May 3, 1995 of an executed
power of attorney dated August 16, 1995 appointing Mr. X. De Rouville as
attorney in fact of Mr. Jean Pierson, Managing Director ("Adminstrateur
Gerant") of Airbus; and
(x) a copy sent to us by facsimile by AVSA on September 15, 1995 of an
executed power of attorney dated 16 August, 1995 appointing J.C. Mauries
as attorney-in-fact of Mr. Jean Pierson, Managing Director
("Administrateur Gerant") of Airbus;
(xi) a copy sent to us by courier by AVSA on September 15, 1995 of an
executed power of attorney dated August 1, 1995 appointing Ms. Michele
Lascaux and Mr. Etienne O. de Coninck, acting singly, as attorneys-in-fact
of Mr. Christophe Mourey, Chief Executive Office ("Gerant") of AVSA; and
(xii) a copy sent to us by courier by AVSA on September 15, 1995 of
an executed power of attorney dated August 1, 1995 appointing Ms.
Marie-Pierre Merle-Beral and Michele Lascaux, Messrs. Jacques Debeaulieu,
Sylvain Lebeuf, Philippe Martin, Rainer von Borstel and Alain Rochet,
acting singly, as attorneys-in-fact of Mr. Christophe Mourey, Chief
Executive Office ("Gerant") of AVSA.
(the documents referred to in paragraphs (i) to (x) being referred to
herein as the "Documents").
Based on the foregoing, and such other documents, records and
other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, and assuming the Documents to have been duly
executed by the parties thereto (other than Airbus and AVSA), the
genuineness of all signatures and the completeness and conformity to the
originals of all documents supplied to us as copies or as facsimiles, we
are of the opinion that, subject to the qualifications set out below:
1. Airbus is a groupement d'interet economique duly organized and
existing under the laws of the French Republic, and has the power and
authority to carry on its business as now conducted. The present members
of Airbus are (i) Aerospatiale, Societe Nationale Industrielle, (ii)
Daimler-Benz Aerospace Airbus GmbH, (iii) British Aerospace (Operations)
Ltd. and (iv) Construcciones Aeronauticas S.A., and each of such
corporations is, without the need to proceed against any collateral
security for the indebtedness of Airbus or to take any other legal action
or process (except for service on Airbus by huissier of notice to perform
and subsequent failure by Airbus to do so), jointly and severally liable
with the other members for the debts of Airbus arising out of obligations
contracted by Airbus while such corporation is a member of Airbus.
2. AVSA is a societe a responsabilite limitee duly established and
existing under the laws of the French Republic and has the power and
authority to carry on its business as now conducted.
3. Each of Airbus and AVSA has full power and authority to enter
into and to execute, deliver and perform its obligations under those of the
Documents to which it is a party; such obligations are legal, valid and
binding upon them respectively, are enforceable in accordance with their
respective terms and rank pari passu with the other unsecured obligations
of Airbus or AVSA, as the case may be.
4. All actions, authorizations, approvals, consents, conditions and
things required at law to be taken, fulfilled and done to authorize the
execution, delivery and performance by Airbus and AVSA of those of the
Documents to which they respectively are party have been taken, obtained,
fulfilled and done; and no consents under any exchange control or
regulations of the French Republic are necessary in connection therewith.
5. Neither the execution and delivery and performance of the
Documents to which Airbus and AVSA respectively are a party, nor the
consummation of the transactions contemplated thereby, contravenes or
violates any law, governmental rule or regulation applicable to or binding
on Airbus or AVSA.
6. The choice of the laws of the State of New York to govern the
Documents (which are expressed to be so governed) is valid under the laws
of the French Republic, and a French court would uphold such choice of law
in any suit on the Documents brought in a French court.
7. Under the laws of the French Republic, Airbus and AVSA are
subject to private commercial law and to suit, and neither Airbus nor AVSA,
nor their respective properties have any immunity from the jurisdiction of
any court or any legal process (whether through service of notice,
attachment prior to notice, attachment prior to judgment, attachment in aid
of execution, execution or otherwise), except that:
(a) to the extent that Airbus or AVSA occupies or possesses any property
by virtue of any license or grant from the French State, such property and
the title of Airbus or AVSA thereto may be immune from suit or execution on
the grounds of sovereignty, and
(b) suit and execution against Airbus and AVSA or their respective
property may be affected by action taken by the French public authorities
in the interests of national defence or on the occurrence of exceptional
circumstances of paramount importance to the national interest of France,
as such concept is understood under the Constitution, laws and regulations
of France.
8. No French value added tax is due upon the transfer of title of the
Aircraft from AVSA to NBD Bank as Owner Trustee.
9. In connection with the obligations of Airbus and AVSA under the
Documents, this opinion must be read subject to the following
qualifications and observations as to French law:
(a) the remedy of specific performance may not be available in a French
court;
(b) the enforcement against Airbus of any of the Documents to which
it is a party may be limited by applicable bankruptcy, insolvency,
arrangement, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights generally, as such laws are applied to
Airbus. The enforcement against AVSA of any of the Documents to which it
is a party may be limited by such laws, as such laws are applied to AVSA.
The enforcement against any member of Airbus of any obligation of Airbus
contained in the Documents may be limited by such laws, as such laws are
applied to such member;
(c) in respect of payment obligations, a French court has power under
Article 1244-1 of the French Civil Code to grant time to a debtor (not in
excess of two years), taking into account the position of the debtor and
the needs of the creditor;
(d) in order to ensure the validity as against third parties of the
assignment made in the Purchase Agreement Assignment, it is necessary that
notice of such assignment be served on Airbus and AVSA by "huissier" in
accordance with the provisions of Article 1690 of the French Civil Code;
(e) in the event of any proceedings being brought in a French court in
respect of a monetary obligation expressed to be payable in a currency
other than French Francs, a French court would probably give judgment
expressed as an order to pay, not such currency, but its French Franc
equivalent at the time of payment or enforcement of judgment. With respect
to a bankruptcy, insolvency, liquidation, moratorium, reorganization,
reconstruction or similar proceedings, French law may require that all
claims or debts be converted into French Francs at an exchange rate
determined by the court at a date related thereto, such as the date of
commencement of a winding-up;
(f) a determination or certificate as to any matter provided for in the
Documents might be held by a French court not to be final, conclusive or
binding, if such determination or certificate could be shown to have an
unreasonable, incorrect or arbitrary basis or not to have been given or
made in good faith;
(g) claims may become barred by effluxion of time or may be or become
subject to defence of set-off or counterclaim;
(h) provisions in any Document providing that it or any other Documents
may be amended or varied or any provision thereof waived only by an
instrument in writing may not be effective;
(i) a French court may stay proceedings if concurrent proceedings are
being brought elsewhere;
(j) we express no opinion as to whether any provision in the Documents
conferring a right of set-off or similar right would be effective against a
liquidator or a creditor; and
(k) our opinion as to the enforceability of the Documents relates only to
their enforceability in France in circumstances where the competent French
court has and accepts jurisdiction. The term "enforceability" refers to
the legal character of the obligations assumed by the parties under the
documents, i.e., that they are of a character which French law enforces or
recognizes. It does not mean that the Documents will be enforced in all
circumstances or in foreign jurisdictions or by or against third parties or
that any particular remedy will be available.
(l) Article 899 of the French Tax Code provides that agreements
evidencing an undertaking to pay a sum of money are subject to stamp tax
("droit de timbre") of a nominal amount if made in the French Republic, if
made in a foreign country, such agreements are subject to a stamp tax of a
nominal amount before certain use thereof can be made in the French
Republic (Article 897 of the French Tax Code). However non-payment of such
stamp tax does not affect the legality, validity or enforceability of the
agreements.
In rendering the foregoing opinions, we have assumed that the
Documents (expressed to be governed by New York law) constitute the legal,
valid and binding obligations of the parties under New York law.
We are qualified as French Avocats.
No opinion is expressed herein as to laws other than the laws
of the French Republic as of the date hereof. This opinion is for your use
and that of no one else, and is limited to (i) the matters specifically
mentioned herein, and (ii) the purpose set out above.
Very truly yours,
Clifford Chance
SCHEDULE A
Lessee
- ------
Federal Express Corporation
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- -------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- -----------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- --------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- ------------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- ------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
EXHIBIT A(8)
[Letterhead of Daugherty, Fowler & Peregrin]
[Delivery Date]
To the Parties Named on Schedule A attached hereto
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
4.02(d)(iii) of the Participation Agreement (Federal Express Corporation
Trust No. N663FE), dated as of October 26, 1995 (the "Participation
Agreement") among Federal Express Corporation, as Lessee (the "Lessee"),
Chrysler Capital Corporation, as Owner Participant (the "Owner
Participant"), NBD Bank, not in its individual capacity but solely as Owner
Trustee (the "Owner Trustee"), The Chase Manhattan Bank (National
Association), as Indenture Trustee and The Chase Manhattan Bank (National
Association), as Pass Through Trustee, with respect to that portion of
Subtitle VII of Title 49 of the United States Code relative to the
recordation of instruments and the registration of aircraft thereunder.
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 November __, 1995 (the
"FAA Bill of Sale") from AVSA, S.A.R.L., 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 November __,
1995 (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 November __, 1995 (the "Owner
Trustee Affidavit") pursuant to Section 47.7(c)(2)(ii) of Part 47 of the
Federal Aviation Regulations together with Affidavit of the Owner
Participant dated November __, 1995 (the "Owner Participant Affidavit")
attached thereto, which Owner Trustee Affidavit with the Owner Participant
Affidavit attached was filed at ____ _.m., C.S.T.;
(d) executed counterpart of Trust Agreement (Federal Express Corporation
Trust No. N663FE) dated as of October 26, 1995 (the "Trust Agreement")
between the Owner Participant and the Owner Trustee, which Trust Agreement
was filed at ____ _.m., C.S.T.;
(e) executed counterpart of Trust Indenture and Security Agreement
(Federal Express Corporation Trust No. N663FE) dated as of October 26,
1995 (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. N663FE) dated
November __, 1995 (the "Trust Indenture Supplement") between the Owner
Trustee and the Indenture 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. N663FE) dated as of October 26, 1995 (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. N663FE) dated November __, 1995 (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 49 U.S.C.
Section 44107;
2. the Aircraft Registration Application, the Owner Trustee Affidavit
with the Owner Participant Affidavit attached and the Trust Agreement are
in due form for filing and have been duly filed with the FAA pursuant to
and in accordance with the provisions of 49 U.S.C. Section 44103(a) and
Section 47.7(c) of the Federal Aviation Regulations;
3. the Airframe is eligible for registration under 49 U.S.C. Section
44102 in the name of the Owner Trustee and the filing with the FAA of the
FAA Bill of Sale, the Aircraft Registration Application, the Owner Trustee
Affidavit with the Owner Participant Affidavit attached and the Trust
Agreement will cause the FAA to register the Airframe, in due course, in
the name of the Owner Trustee and to issue to the Owner Trustee an AC Form
8050-3 Certificate of Aircraft Registration for the Airframe pursuant to
and in accordance with the provisions of 49 U.S.C. Section 44103(a);
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 49 U.S.C. Section
44107), 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 49 U.S.C. Section
44107), it being understood that no opinion is herein expressed as to the
validity, priority or enforceability of such security interest and
assignment under local law or as to the recognition of the perfection of
such security interest and assignment as against third parties in any legal
proceeding 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 except for such filings as are
referred to above; and,
8. neither the execution and delivery by the Loan Participants of the
Participation Agreement or by the Owner Participant of the Participation
Agreement or the Trust Agreement, nor other consummation of the
transactions contemplated thereby by the Loan Participants 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 Owner Participant Affidavit and the Trust Agreement to the
FAA and (y) the filings for recordation specified elsewhere in this
opinion.
No opinion is expressed as to the Airframe during any period or
periods of time during which it has not been subject to United States
registration.
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 had 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 __________,
1995, 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 Industrie A300F4-605R aircraft bearing
manufacturer's serial number 766 and U.S. Registration No. N663FE (the
"Airframe") and two (2) General Electric CF6-80C2-A5F aircraft engines
bearing manufacturer's serial numbers 705-233 and 705-234 (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 Owner
Participant Amount, Interim Rent and Basic Rent (Schedule II), (ii) the
Stipulated Loss Values (Schedule III), (iii) the Termination Values
(Schedule IV), (iv) the Purchase Option Schedule (Schedule V) omitted from
the FAA filing counterpart thereof as containing confidential financial
information; and (v) the purchase price under Section 4.02(a)(F) set forth
in Schedule IV to the Participation 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
2007 Corporate Avenue
Memphis, TN 38132
Owner Trustee
- --------------
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Indenture Trustee
- ------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Pass Through Trustee
- ---------------------
The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Owner Participant
- ------------------
Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Underwriters
- -------------
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
[Letterhead of Federal Aviation Administration]
__________, 1995
Robert M. Peregrin, Esq.
Daugherty, Fowler & Peregrin
204 North Robinson
900 City Place
Oklahoma City, OK 73102
Dear Mr. Peregrin:
Civil Aircraft N663FE
(Your File No. _________)
Pursuant to your letter of _____, 1995, this office has reviewed drafts of
the following described instruments:
(a) Trust Agreement (Federal Express Corporation Trust No. N663FE) dated
as of October 26, 1995 (the "Trust Agreement") between Chrysler Capital
Corporation, as trustor (the "Trustor") and NBD Bank, as owner trustee (the
"Owner Trustee");
(b) form of Affidavit by the Owner Trustee (the "Owner Trustee Affidavit")
pursuant to section 47.7(c)(2)(ii) of the Federal Aviation Regulations;
(c) form of Affidavit of the Trustor (the "Trustor Affidavit");
(d) Schedule II Definitions;
(e) Lease Agreement (Federal Express Corporation Trust No. N663FE) dated
as of October 26, 1995 (the "Lease") between the Owner Trustee, as lessor,
and Federal Express Corporation, as lessee (the "Lessee"); and,
(f) Trust Indenture and Security Agreement (Federal Express Corporation
Trust No. N663FE) dated as of October 26, 1995 (the "Trust Indenture")
between the Owner Trustee and The Chase Manhattan Bank (National
Association), as indenture trustee.
As you suggest in your letter, the Lease contains various opinions to
purchase in favor of the Lessee. Particularly, at Section 4.02 of the
Lease, there appear to be "fair market value" options. You indicate that
the options contained in Section 4.02(D) and 4.02(E) will be referenced in
Schedule V, however, they will be an amount not less than the greater of
the amount specified in Schedule V and fair market value. You represent
that the parties desire to have the event triggering these purchase options
to remain confidential. You further state that the option contained in
Section 4.02(F) will be contained in Ancillary Agreement I which will not
be attached to the Lease or recorded as separate instrument, however, it
[the option] will be an amount not less than the fair market value at the
time of the exercise of the purchase option.
In your letter, you request our opinion as to the following matters:
1. The eligibility of the captioned aircraft for registration under 49
U.S.C.Section 44102 in the name of the Owner Trustee upon the filing with
the FAA of the above described instruments together with appropriate title
documentation and an AC Form 8050-1 Aircraft Registration Application by
the Owner Trustee, covering the captioned aircraft;
2. The form of the Trust Agreement satisfies the requirements of section
47.7(c)(2)(i) of the Federal Aviation Regulations;
3. The form of the Owner Trustee Affidavit, as supported by the form of
the Trustor Affidavit, satisfies the requirements of Section 47.7(c)(2)(ii)
of the Federal Aviation Regulations;
4. The Lease is a "true lease" requiring registration under 49
U.S.C.Section 44102 in the name of the Owner Trustee;
5. The Lease, with (i) the Owner Participant Amount, Interim Rent and
Basic Rent (Schedule II), (ii) the Stipulated Loss Values (Schedule III),
(iii) the Termination Values (Schedule IV), (iv) the Purchase Option
Schedule (Schedule V) (this will be the purchase option contained in
Sections 4.02(D) and 4.02(E) intentionally omitted from the FAA filing
counterpart thereof, and (v) the EBO Price under Section 4.02(F) contained
in Ancillary Agreement I, which Ancillary Agreement I will be neither
attached to the Lease nor otherwise filed with the FAA Registry, all as
containing confidential financial information, is eligible for recordation
under 49 U.S.C. Section 44107(a)(1) and (2); and,
(6) The Trust Indenture is eligible for recordation under 49 U.S.C.
Section 44107(a)(1) and (2).
Based upon our review of the above referenced instruments, our opinion is
as follows:
(1) The captioned aircraft is eligible for registration under 49 U.S.C.
Section 44102 in the name of the Owner Trustee upon the filing with the FAA
of the above described instruments together with appropriate title
documentation and an AC Form 8050-1 Aircraft Registration Application by
the Owner Trustee, covering the captioned aircraft;
(2) The form of the Trust Agreement satisfies the requirements of Section
47.7(c)(2)(i) of the Federal Aviation Regulations;
(3) The form of the Owner Trustee Affidavit, as supported by the form of
the Trustor Affidavit, satisfies the requirements of Section 47.7(c)(2)(ii)
of the Federal Aviation Regulations.
(4) The Lease is a "true lease" requiring registration under 49 U.S.C.
Section 44102 in the name of the Owner Trustee;
(5) The Lease, with (i) the Owner Participant Amount, Interim Rent and
Basic Rent (Schedule II), (ii) the Stipulated Loss Values (Schedule III),
(iii) the Termination Values (Schedule IV), (iv) the Purchase Option
Schedule (Schedule V) (this will be the purchase option contained in
Section 4.02(D) and 4.02(E)) intentionally omitted from the FAA filing
counterpart thereof, and (v) the EBO Price under Section 4.02(F) contained
in Ancillary Agreement I, which Ancillary Agreement I will be neither
attached to the Lease nor otherwise filed with the FAA Registry, all as
containing confidential financial information, is eligible for recordation
under 49 U.S.C. Section 44107(a)(1) and (2); and,
(6) The Trust Indenture is eligible for recordation under 49 U.S.C.
Section 44107(1) and (2).
Sincerely,
Joseph R. Standell
Assistant Chief Counsel
Aeronautical Center
By:
----------------------
General Attorney
EXHIBIT B
[FORM OF LEASE AGREEMENT]
[See Exhibit 4.g]
EXHIBIT C
[FORM OF INDENTURE]
[See Exhibit 4.c.1]
EXHIBIT D
[FORM OF TRUST AGREEMENT]
[See Exhibit 4.f]
EXHIBIT E
[FORM OF PURCHASE AGREEMENT ASSIGNMENT, CONSENT AND AGREEMENT,
AVSA CONSENT AND AGREEMENT]
[See Exhibit 4.g]
EXHIBIT F
[FORM OF ENGINE WARRANTY ASSIGNMENT AND ENGINE CONSENT]
[See Exhibit 4.g]
EXHIBIT 4.f
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N660FE)
Dated as of September 1, 1995
Amended and Restated as of October 26, 1995
between
CHRYSLER CAPITAL CORPORATION,
as Trustor
and
NBD BANK,
as Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 759, REGISTRATION NO. N660FE
TABLE OF CONTENTS
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Direction to Owner Trustee............. 1
SECTION 1.02. Declaration of Trust..................................... 2
SECTION 1.03. Conditions Precedent..................................... 2
ARTICLE 2
DISTRIBUTIONS
SECTION 2.01. Rent, Etc................................................ 3
SECTION 2.02. Excepted Payments........................................ 3
SECTION 2.03. Other Receipts........................................... 3
SECTION 2.04. Distributions after Default.............................. 4
SECTION 2.05. Distributions after Release of Lien of Indenture......... 4
SECTION 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and Duties........................... 5
SECTION 3.02. Limitation on Authority of Owner Trustee................. 6
SECTION 3.03. Notice of Default........................................ 6
SECTION 3.04. Action Upon Instructions................................. 6
SECTION 3.05. Certain Duties and Responsibilities of Owner Trustee..... 6
SECTION 3.06. Certain Rights of Owner Trustee.......................... 8
SECTION 3.07. No Representations or Warranties as to Certain Matters... 9
SECTION 3.08. Status of Moneys Received................................ 10
SECTION 3.09. Self-Dealing............................................. 10
SECTION 3.10. Intentionally Left Blank................................. 11
SECTION 3.11. Resignation or Removal of Owner Trustee.................. 11
SECTION 3.12. Estate and Rights of Successor Owner Trustee............. 11
SECTION 3.13. Merger or Consolidation of NBD........................... 12
SECTION 3.14. Co-Trustees.............................................. 12
SECTION 3.15. Interpretation of Agreements............................. 13
SECTION 3.16. Not Acting in Individual Capacity........................ 14
SECTION 3.17. Tax Returns.............................................. 14
ARTICLE 4
TERMINATION OF TRUST
SECTION 4.01. Termination.............................................. 14
SECTION 4.02. Distribution of Lessor's Estate upon Termination......... 15
SECTION 4.03. Termination and Revocation............................... 15
ARTICLE 5
[INTENTIONALLY LEFT BLANK]
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification.......................................... 15
SECTION 6.02. Supplements and Amendments............................... 17
SECTION 6.03. Nature of Title of Trustor............................... 17
SECTION 6.04. Power of Owner Trustee to Convey......................... 17
SECTION 6.05. Notices.................................................. 18
SECTION 6.06. Situs of Trust; Applicable Law; Severability............. 18
SECTION 6.07. Successors and Assigns................................... 19
SECTION 6.08. Headings and Table of Contents........................... 19
SECTION 6.09. Definitions.............................................. 19
SECTION 6.10. Identification of Trust.................................. 19
SECTION 6.11. Counterparts............................................. 19
SECTION 6.12. Trustor Interest......................................... 19
SCHEDULE I DEFINITIONS
TRUST AGREEMENT
TRUST AGREEMENT (Federal Express Corporation Trust No. N660FE) dated
as of September 1, 1995, as amended and restated as of October 26, 1995 (this
"Agreement"), between NBD BANK, a Michigan banking corporation (in its
individual capacity, "NBD", and not in its individual capacity but solely as
trustee hereunder, the "Owner Trustee"), and CHRYSLER CAPITAL CORPORATION, a
Delaware corporation (together with its successors and permitted assigns, the
"Trustor");
W I T N E S S E T H :
WHEREAS, the Trustor and NBD have heretofore entered into the Original
Trust Agreement;
WHEREAS, the Original Trust Agreement was duly filed with the Federal
Aviation Administration on September 20, 1995;
WHEREAS, the Original Loan Participants participated in the payment
of the Purchase Price by providing financing as evidenced by the Original Loan
Certificates;
WHEREAS, pursuant to Section 15 of the Original Participation
Agreement, the Lessee, the Trustor and the Owner Trustee desire to refinance
all of the Original Loan Certificates on the Refunding Date; and
WHEREAS, the Trustor and the Owner Trustee desire, in connection with
such refinancing, to amend and restate the Original Trust Agreement in its
entirety as herein provided.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, NBD and the Trustor agree that the Original Trust Agreement
be and the same is hereby amended and restated in its entirety as follows:
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver each of the other Operative Agreements to
which the Owner Trustee is a party and to enter into and perform the
transactions contemplated thereby;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements and the Original Agreements to which the Owner Trustee
is a party or which the Owner Trustee is required to deliver pursuant to
the Operative Agreements and the Original Agreements;
(d) 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 Operative Agreements; and
(e) 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.
The Trustor hereby ratifies the actions taken by the Owner Trustee in
connection with the delivery of the Aircraft as contemplated by the Original
Indenture and the Original Participation Agreement.
SECTION 1.02. Declaration of Trust. NBD hereby confirms that it
holds and will continue to, in its capacity as the Owner Trustee, hold the
Lessor's Estate 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 Indenture.
SECTION 1.03. Conditions Precedent. The right and obligation of the
Owner Trustee to take the actions required by Section 1.01 hereof shall be
subject to the condition that the terms and conditions of Section 4.01 of the
Participation Agreement shall have been complied with in a manner satisfactory
to the Owner Trustee and the Trustor.
ARTICLE 2
DISTRIBUTIONS
SECTION 2.01. Rent, Etc. The Trustor and the Owner Trustee
acknowledge that the Lease will be security for the Certificates pursuant to
the Indenture which provides that all moneys payable by the Lessee to the
Owner Trustee under the Lease (other than Excepted Payments) are to be paid to
the Indenture Trustee while the Lien of the Indenture is in effect. Except as
otherwise provided in Section 2.04 hereof, the Owner Trustee shall promptly
apply each payment of the Owner Participant Amount, Rent (other than Excepted
Payments), Stipulated Loss Value, Termination Value, and any proceeds from the
sale, requisition or disposition of the Aircraft received by it as follows:
(a) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (i) the Lessee with respect to NBD's or 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 the 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 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 Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
SECTION 2.02. Excepted Payments. Notwithstanding any other provision
contained herein, all Excepted Payments at any time received by the Owner
Trustee shall be distributed promptly to the applicable Person, and such
payment shall not be deemed under any circumstances to be part of the Lessor's
Estate.
SECTION 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such distribution or release of Lien, any such
payment for which provision as to the distribution thereof is made in the
other Operative Agreements shall be applied promptly to the purpose for which
such payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the 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 after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the 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 the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee.
SECTION 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner
Trustee under the Lease or otherwise with respect to the Aircraft or
any part thereof (including, without limitation, all payments
received pursuant to Section 17.01 of the Lease and amounts realized
upon the sale or lease of the Aircraft or any part thereof after the
termination of the Lease with respect thereto), to the extent
received or realized at any time after the Lien of the Indenture
shall have been released pursuant to the terms of the Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after the Lien of the
Indenture has been released,
shall, to the extent required, be retained by the Owner Trustee as
reimbursement for all fees and expenses hereunder or under the Lease not
theretofore reimbursed under this Agreement, the 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
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 Indenture Trustee pursuant to
this Article 2 by paying the amount to be distributed to the Indenture Trustee
in the manner specified in the Indenture; provided, that the Owner Trustee
shall invest overnight, 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 in
investments 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 the Lien created by, the Indenture, the Owner Trustee will,
if so requested by the Trustor by written notice, pay in immediately available
funds any and all amounts payable by the Owner Trustee hereunder to the
Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and Duties. NBD accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, 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 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, Sections 7.02(a)
and (b) and 7.04 of the Participation Agreement or its representations,
warranties and covenants given in its individual capacity in Section 3.05 of
the Indenture, (c) the failure to use ordinary care in receiving, handling and
disbursing funds, (d) Lessor's Liens 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 NBD or the Owner Trustee in
connection with the transactions contemplated by the Lease, the Indenture and
the Operative Agreements including this Agreement.
SECTION 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to, and agrees that it
will not, manage, control, possess, use, sell, lease, dispose of or otherwise
deal with the Aircraft, Airframe, Engines, any Part thereof or any other
property at any time constituting a part of the Lessor's Estate, or otherwise
to take or refrain from taking any action under or in connection with the
Operative Agreements, except (i) to execute and deliver the Operative
Agreements to which it is a party, (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 other Operative Agreements, 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 obligations of the Owner Trustee hereunder.
SECTION 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Department of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt telephone or facsimile
notice, followed by prompt confirmation thereof by certified mail, postage
prepaid (in any event within two Business Days of the discovery thereof), in
accordance with Article 14 of the Participation Agreement, of such Default,
Event of Default, Indenture Default or Indenture Event of Default. Subject to
the terms of Section 3.06(e) hereof and the rights of the Indenture Trustee
under the Indenture, the Owner Trustee shall take such action with respect to
such Default, Event of Default, Indenture Default or Indenture Event of
Default as shall be specified in written instructions from the Trustor;
provided that the Owner Trustee shall have no duty to take any (and shall take
no) action whatsoever in the absence of written instructions from the Owner
Participant. For all purposes of this Agreement and the 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 Default, Event of Default,
Indenture Default or Indenture Event of Default unless notified in writing by
the Lessee, the Trustor, the Indenture Trustee or any Certificate Holder.
SECTION 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
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 with the degree of care
specified in Section 3.01 hereof, and in accordance with written instructions
given by the Trustor hereunder, and no implied duties, covenants or
obligations shall be read into this Agreement, any such instructions or the
Operative Agreements 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 the Aircraft or any part of the Lessor's Estate except as
required by the terms of the Operative Agreements, 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
other Operative Agreements, 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 Operative Agreements.
(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 in good faith believe 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
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(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 other Operative
Agreements or the Original Agreements (including those furnished to the
Indenture Trustee pursuant to the terms of the 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 Owner Participant within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the 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 Operative Agreement 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; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, 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 or under any of the
other Operative Agreements, 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 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 or under any of the other Operative Agreements
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 or the other Operative Agreements;
(f) the Owner 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, 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 may make such further inquiry or
investigation into such facts or matters as instructed by the Owner
Participant and the Owner Trustee shall be entitled, to the same extent
permitted to the Lessor under the Lease, to examine the books and records
of the Lessee to reasonably determine whether the Lessee is in compliance
with the terms and conditions of the Lease and to examine the Aircraft,
Airframe, Engines or any 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 Indenture or the Participation
Agreement, 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 Operative Agreements 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 the
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, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
SECTION 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR NBD MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that NBD represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever right, title and interests in, to and under the
Aircraft that were purported to be conveyed to it by AVSA and NBD represents,
warrants and covenants that at all times on and after the Delivery Date the
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 or any other Operative Agreement 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 NBD and
except that NBD hereby represents and warrants that this Agreement has been,
and (assuming the due authorization, execution and delivery of this Agreement
by the Trustor) the other Operative Agreements 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
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 NBD and (assuming due authorization, execution and delivery of
this Trust Agreement by the Trustor) constitutes the legal, valid and binding
obligation of NBD 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 or any
Operative Agreement 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. Intentionally Left Blank.
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 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, 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 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.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
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, an instrument accepting such appointment, in form and substance
acceptable to the predecessor Owner Trustee and the Trustor 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
trusts 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 and the trusts hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
SECTION 3.13. Merger or Consolidation of NBD. Any corporation into
which NBD 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 NBD 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 Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
SECTION 3.14. Co-Trustees. At any time, if the Owner Trustee or 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 may at the time be located, the Owner Trustee by an instrument in
writing signed by it, shall appoint one or more Persons approved by the
Trustor 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, and to vest in such
Person or Persons, in such capacity, such title to the Lessor's Estate or any
part thereof, and such rights, powers, duties, trusts or obligations as the
Trustor may consider necessary or prudent or desirable. 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. 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 or otherwise affect any of the terms of the Indenture or adversely
affect the interests of the Indenture Trustee or the Certificate Holders in
the 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 or under the
Participation Agreement 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) the Owner 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
additional trustee;
(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 or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements 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 or any other
Operative Agreement 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 in writing sent in accordance with Article 14 of the
Participation Agreement 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; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable 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 or in the other 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 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 its receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. 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 or necessary from the Owner Trustee in connection
with the preparation of such tax returns and 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 of the Trustor and at
the expense of the Lessee all income tax returns required to be filed with
respect to the trust created hereby and shall execute and file such returns;
provided, however, that the Owner Trustee shall send a completed copy of each
such return to the Trustor not more than 60 nor less than 30 days prior to the
due date of such return; provided that the Owner Trustee shall have timely
received all necessary information to complete and deliver to the Trustor such
return. The Trustor, upon request, will furnish the Owner Trustee with all
such information as may be required from the Trustor 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) 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 and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(b) 21 years from the death of the last survivor of the descendants of
Queen Elizabeth II of England living on the date of this Agreement.
SECTION 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) 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 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 the
Lessor's Estate 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 hereof.
SECTION 4.03. Termination and Revocation. Notwithstanding anything
herein to the contrary, the trust created hereby may not be terminated or
revoked (i) by the Trustor without the written consent of the Indenture
Trustee, (ii) as a result of the death, incapacity, dissolution or bankruptcy
of the Trustor, or (iii) until all liens on the property of this trust have
been released and until payment in full of all indebtedness of the trust.
ARTICLE 5
[INTENTIONALLY LEFT BLANK]
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification. The Trustor and its assigns agree to
reimburse and save NBD, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against NBD upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees which may be incurred by reason of its being the Owner
Trustee or acting hereunder or under the Operative Agreements or the Original
Agreements, but solely by reason thereof and arising out of or relating solely
to this Agreement or the other Operative Agreements or the Original Agreements
or the 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, NBD, in its individual capacity, shall have a Lien on the
Lessor's Estate and the proceeds thereof, 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 and the Original Agreements and
subject and subordinate to the Lien of the Indenture), except that NBD shall
not have any such Lien (and the Owner Participant shall have no obligation) 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 NBD or any breach by NBD of its warranties and covenants given in its
individual capacity in this Agreement, Article 5 of the Lease, Sections
7.02(a) and (b) and 7.04 of the Participation Agreement and its
representations and warranties in the Operative Agreements, (C) the failure to
use ordinary care in receiving, handling and disbursing funds, (D) Lessor's
Liens 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 NBD in connection with the transactions contemplated by the Lease,
the Indenture and this Agreement, (F) Taxes excluded from indemnification
pursuant to Section 8.01(b) of the Participation Agreement (disregarding for
the purposes of this Section 6.01, subsections (ii) and (v) of Section 8.01(b)
of the Participation Agreement) or (G) Expenses excluded from indemnification
pursuant to Section 9.01(b) of the Participation Agreement (disregarding for
the purposes of this Section 6.01, subsections (ii), (iv), (vi), and (viii) of
Section 9.01(b) of the Participation Agreement); provided, that, before
asserting any right to payment or indemnification hereunder, NBD shall first
demand (but need not exhaust or pursue any further its remedies with respect
to) its corresponding right to payment or indemnification from the Lessee
pursuant to the Participation Agreement. It is further understood that the
distribution by the Owner Trustee of all or any part of the Lessor's Estate as
provided in Section 4.02 of this Agreement shall not impair the right of NBD
to indemnity, payment and reimbursement as herein provided. In the event NBD
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 NBD, 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 Prime 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. NBD or the
Owner Trustee (in its individual capacity or as trustee, as the case may be)
agrees that it shall have no right against (except as provided in this Section
6.01) the Trustor or (subject to the provisions of the Indenture) the Trust
Indenture Estate for any fee as compensation for its services hereunder.
SECTION 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) NBD 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 (b) the Owner Trustee shall, subject to the provisions of Article
XIII of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
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 Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) 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 or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section 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 NBD or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
SECTION 6.03. Nature of Title of Trustor. The Trustor shall not
have any legal title to any part of the Lessor's Estate. No transfer, by
operation of law or otherwise, of the right, title and interest of the Trustor
in and to the Lessor's Estate or the trusts hereunder shall operate to
terminate this Agreement or 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 Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
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 Operative Agreements or the 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 by 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 mail and (c) if given by FedEx service (or, if a Default or
Event of Default shall have occurred and be continuing, by other comparable
courier service), when received or personally delivered, addressed:
If to the Owner Trustee:NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Corporate Trust Administration
Department
Facsimile: (313) 225-3420
If to the Trustor: Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Attention: Vice President - Leasing
Facsimile: (203) 975-3910
If to the Indenture
Trustee: The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Attention: Corporate Trust Administration
Facsimile: (718) 242-3529
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 MICHIGAN, 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 benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Section 7.03(d) of the Participation Agreement.
SECTION 6.08. Headings and Table of Contents. The headings of the
Articles 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 provisions hereof.
SECTION 6.09. Definitions. The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule II to the Participation
Agreement (Federal Express Corporation Trust No. N660FE) dated as of September
1, 1995, as amended and restated as of October 26, 1995, among Federal Express
Corporation, Trustor, the Original Loan Participants, NBD, not in its
individual capacity but solely as Owner Trustee except as otherwise expressly
provided therein, The Chase Manhattan Bank (National Association), as Pass
Through Trustee, and The Chase Manhattan Bank (National Association), as
Indenture Trustee, which schedule is attached hereto as Schedule I and by this
reference incorporated herein.
SECTION 6.10. Identification of Trust. This trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N660FE."
SECTION 6.11. Counterparts. This instrument 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 6.12. Trustor Interest. The Trustor has no interest in any
specific property of this trust. No creditor of the Trustor shall have any
right to obtain possession of, or otherwise exercise legal or equitable
remedies with respect to, the property of this trust.
IN WITNESS WHEREOF, NBD and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
CHRYSLER CAPITAL CORPORATION
By: _______________________________________
Name:
Title:
NBD BANK
By: _______________________________________
Name:
Title:
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require. In the
case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
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 other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. In the case
of amounts payable to the Lessor, the Owner Participant, or any corporate
Affiliate 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.
Agent. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns as Agent for the Original Loan Participants
pursuant to Article 16 of the Original Participation Agreement.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty dated the Delivery Date executed by the
Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe (or any permitted substitute airframe)
together with the two Engines (or any Replacement Engine or Engines) whether
or not any of such initial or Replacement Engines may from time to time be
installed on such Airframe or may be installed on any other airframe or on any
other aircraft, including any aircraft substituted pursuant to Section 11.03
of the Lease.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) leased by the Lessor to the Lessee
pursuant to the Lease and the initial Lease Supplement and having the United
States FAA Registration Number and manufacturer's serial number specified in
the initial Lease Supplement, including (i) all Parts in respect thereof and
(ii) any replacement airframe which may be substituted pursuant to Section
11.03 of the Lease.
Amendment No. 1 to the Original Tax Indemnity Agreement. Amendment
No. 1 to the Original Tax Indemnity Agreement, dated as of October 26, 1995.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on the Delivery Date or the Refunding Date or any date thereafter in
connection with the transactions contemplated by the Operative Agreements, as
such agreement may be amended and supplemented from time to time with the
consent of the Lessor and delivered to the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Owner Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N660FE), dated September 20, 1995 among the Lessee, the
Owner Trustee, not in its individual capacity, but solely as Owner Trustee,
the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant (with a copy of such report to the Lessee) on the
Delivery Date pursuant to Section 4.01(n) of the Original Participation
Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France, and its successors and assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as of
September 1, 1995, executed by AVSA, as the same may be amended, modified or
supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and dated the
Delivery Date.
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 either does or with the giving of notice or lapse of
time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft throughout
the Basic Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 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 July 2, 2020, 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.
Breakage Costs. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York and Memphis, Tennessee, and after the
Lien of the Indenture is discharged, Detroit, Michigan.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N660FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
refunding of the Original Loan Certificates.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Commencement Date. July 2, 1996.
Consent and Agreement. The Consent and Agreement dated as of
September 1, 1995 executed by the Manufacturer, as the same may be amended,
modified or supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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 Participant
and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner Trustee
located at 611 Woodward Avenue, Detroit, Michigan 48226, or such other office
at which the Owner Trustee's corporate trust business shall be administered
which the Owner Trustee shall have specified by notice in writing to the
Lessee, the Owner Participant and the Indenture Trustee.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
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 Date. September 20, 1995.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts related thereto. 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.
The term "Engines" means, as of any date of determination, both Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of September 1, 1995,
executed by the Engine Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N660FE), dated as of September 1, 1995 between
the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 90 days due to theft or disappearance or such longer
period, not to exceed 90 days from the end of such initial 90-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by 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,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine as of the end of the Lease Term 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
A300F-600 series aircraft equipped with engines of the same make and model as
the Engines for a period not to exceed six (6) consecutive months, unless the
Lessee, prior to the expiration of such six (6) month period, shall be
diligently carrying forward in a similar manner as are then being carried
forward with respect to other aircraft of the Lessee so as to not discriminate
against the Aircraft by reason of its leased status, all steps which are
necessary or desirable to permit the normal use of the Aircraft or Airframe
or, in any event, if such use of the Aircraft or the Airframe shall have been
prohibited for a period of eighteen (18) consecutive months or until the end
of the Term, if earlier. The date of such Event of Loss shall be (s) the 91st
day or the 180th day, as the case may be, following loss of such property or
its use due to theft or disappearance (or the end of the Term or the Lessee's
abandonment of diligent efforts to recover such property, if earlier); (t) the
61st day following the date of any destruction, damage beyond economic repair
or rendition of such property permanently unfit for normal use; (u) the date
of any insurance settlement on the basis of a total loss or constructive or
compromised total loss; (v) the date of any condemnation, confiscation,
seizure or requisition of title of such property; (w) the 181st day following
condemnation, confiscation, seizure or requisition for use of such property by
a foreign government referred to in clause (iii)(2)(A) above (or the end of
the Term or the date of any insurance settlement described therein, if earlier
than such 181st day); (x) the last day of the Term in the case of requisition
for use of such property by the Government; (y) the last day of the six (6)
month or eighteen (18) month period, referred to in clause (iv) above (or if
earlier, the end of the Term or abandonment of the Lessee's efforts to restore
the normal use of the Aircraft). 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. If an Event of Loss described in any of clauses (i)
(A), (iii) or (iv) above shall occur, Lessor may elect, within 30 days
following the date upon which such Event of Loss is deemed to have occurred,
to waive such Event of Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments (and
interest thereon to the extent provided in the Operative Agreements) paid or
payable by the Lessee in respect of the Owner Participant, the Owner Trustee
in its individual capacity or any of their respective successors, permitted
assigns, directors, officers, employees, servants and agents or Affiliates,
pursuant to the Participation Agreement or any indemnity hereafter granted to
the Owner Participant or the Owner Trustee in its individual capacity pursuant
to the Lease or the Participation Agreement, (ii) proceeds of public liability
insurance (or government indemnities in lieu thereof) in respect of the
Aircraft payable as a result of insurance claims paid for the benefit of, or
losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Section 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) payments constituting increases
in Interim Rent or Basic Rent attributable to payments arising pursuant to
Section 5 of the Tax Indemnity Agreement and (vi) any right to demand, collect
or otherwise receive and enforce the payment of any amount described in
clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other property) is
unencumbered by the 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; provided that in connection
with any determination pursuant to or for the purposes of Article 17 of the
Lease, the Aircraft shall be appraised on an "as is, where is" basis. Fair
Market Value shall be determined in accordance with the provisions of Section
4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed Renewal
Term equal to 50% of the average actual semi-annual Basic Rent payable during
the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as of
September 1, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as Owner
Trustee and Lessor, the Agent (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Owner Participant, the Original
Loan Participants (to the extent set forth in Articles 8 and 9 of the Original
Participation Agreement), the Indenture Trustee, in its individual capacity
and as trustee, any Owner Participant Guarantor, 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 and the Trust Indenture Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N660FE) dated as of September 1, 1995, as
amended and restated as of October 26, 1995, between the Lessor and the
Indenture Trustee, as supplemented by the Indenture and Security Agreement
Supplement, and as said Indenture may from time to time be further
supplemented or amended, including any amendment or supplement thereto entered
into from time to time pursuant to the applicable provisions of the Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N660FE) dated September 20, 1995, as such Indenture and Security Agreement
Supplement shall be amended or supplemented from time to time and any other
supplement to the Indenture, substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event or condition which with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture Estate 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 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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft throughout
the Interim Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant Payment
Date and ending at the end of the day immediately preceding the Commencement
Date.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N660FE) dated as of September 1, 1995, as amended and restated as of October
26, 1995, entered into by the Lessor and the Lessee concurrently with the
execution and delivery of the Indenture, 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 one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995, as such Lease
Supplement shall be amended or supplemented from time to time and any other
supplement to the Lease, substantially in the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of
Sale, the Airbus Guaranty, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the AVSA Consent and Agreement, the
Consent and Guaranty (to the extent assigned by the Purchase Agreement
Assignment), the GTA, the Engine Warranty Assignment, the Engine Consent, any
warranty with respect to the Airframe and the Engines, all amounts of Interim
Rent, Basic Rent and Supplemental Rent, including without limitation,
insurance proceeds (other than insurance proceeds payable to or for the
benefit of the Owner Trustee 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) not include any
Excepted Payment and (ii) include all property intended to be subjected to the
Indenture by the Granting Clause thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust Indenture
Estate arising as a result of (i) claims against 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)
acts or omissions 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 or expressly prohibited under
the Operative Agreements and any act or omission of the Owner Participant
which 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, Owner Participant, Lessor's Estate or the trust created by the
Trust Agreement which are not required to be indemnified against by the Lessee
pursuant to the Participation Agreement by reason of Section 8.01(b) or
9.01(b) thereof and which are not required to be indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement, or (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 other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
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 Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of
(i) the present values of all remaining scheduled payments of such principal
amount or portion thereof 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 the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
unpaid principal amount of such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of the
Lease, discounted at a rate per semi-annual period equal to the Debt Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, if any, the Owner Trustee
Guaranty, if any, any Ancillary Agreement entered into by or with the written
consent of the Indenture Trustee, which by its terms is an Operative
Agreement, the Certificates outstanding at the time of reference, the
Indenture, the Indenture and Security Agreement Supplement, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the Engine Consent and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Original Agreements. The documents and instruments delivered on the
Delivery Date in connection with the transactions contemplated by the Original
Participation Agreement.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N660FE) dated as of September
1, 1995 between the Owner Trustee and the Indenture Trustee, which together
with the Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995 attached thereto was
recorded as one instrument by the FAA on September 21, 1995 and assigned
Conveyance Number 2A267705.
Original Lease. The Lease Agreement (Federal Express Corporation
Trust No. N660FE) dated as of September 1, 1995 between the Owner Trustee as
lessor, and the Lessee, which together with Lease Supplement No. 1 (Federal
Express Corporation Trust No. N660FE) dated September 20, 1995 attached
thereto was recorded as one instrument by the FAA on September 21, 1995 and
assigned Conveyance Number 2A267706.
Original Loan Certificates. The loan certificates issued on the
Delivery Date to the Original Loan Participants.
Original Loan Participants. The entities listed on Schedule I to the
Original Participation Agreement and their successors and assigns (other than
any assignees in connection with the Refunding Date).
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N660FE) among the Lessee, the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Original Loan
Participants as it was originally executed as of September 1, 1995.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N660FE) between the Lessee and the
Owner Participant as it was originally executed as of September 1, 1995.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N660FE) between the Owner Participant and the Owner
Trustee as it was originally executed as of September 1, 1995 and filed with
the FAA on September 20, 1995.
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.
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, its right, title and
interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Amount. The amount described in Section 2.03 of the
Participation Agreement and set forth on Schedule II to the Lease.
Owner Participant Guarantor. The provider of an Owner Participant
Guaranty.
Owner Participant Guaranty. Any guaranty delivered in compliance with
Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement, and its successors and permitted
assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Interim Rent, Basic
Rent, Stipulated Loss Value and Termination Value percentages or the EBO
Price, as the case may be, as such assumptions may be adjusted for events
which have been the basis of adjustments to Rent pursuant to Section 3.04 of
the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N660FE), dated as of September 1, 1995, as amended and
restated as of October 26, 1995, among the Lessee, the Original Loan
Participants, the Owner Trustee not in its individual capacity except as
otherwise expressly provided therein, but solely as owner trustee, the Owner
Participant, the Indenture Trustee not in its individual capacity except as
otherwise expressly provided therein, but solely as indenture trustee and the
Pass Through Trustee not in its individual capacity except as otherwise
expressly provided therein, but solely as pass through trustee, 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, prior to
replacement thereof in accordance with the Lease, which may be removed
therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
February 1, 1993, as amended and restated as of October 1, 1995 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 1995 Pass Through Certificates,
Series B1, 1995 Pass Through Certificates, Series B2 or 1995 Pass Through
Certificates, Series B3, 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 Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust, 1995-B1,
Federal Express Pass Through Trust, 1995-B2 or Federal Express Pass Through
Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. The Owner Participant Payment Date, and each January 2
and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date and
ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates having a
Maturity in 2014, November 7, 2007, and with respect to the Certificates
having a Maturity in 2018, October 7, 2017.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N660FE), dated as of September 1, 1995
between the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the Owner
Participant Payment Date, December 18 for January 2 Payment Dates and June 17
for July 2 Payment Dates, whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least ten (10) Business Days
prior to such expected Refunding Date.
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.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
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 or more terms 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 Interim
Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July 2, 1996.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) manufactured after October 22,
1994 of the same or of equal or greater value, remaining useful life and
utility as the Engine being replaced, together with all Parts relating to such
engine; provided, however, that if such replacement engine is not a General
Electric CF6-80C2-A5F engine, such replacement engine must then be commonly
used in the commercial aviation industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or Corporate
Trust Administration, as the case may be, designated by such Person to perform
obligations under the Operative Agreements, with respect to the Owner
Participant, the president or any vice president with direct responsibility
for the transactions contemplated by the Operative Agreements, and with
respect to any other party, any corporate officer or (except in the case of
the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be executed and
delivered by the Lessee and the Pass Through Trustee, the Series Supplement
1995-B2 to be executed and delivered by the Lessee and the Pass Through
Trustee or the Series Supplement 1995-B3 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.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Term, the amount determined by multiplying the Purchase Price
by the percentage set forth in Schedule III of the Lease under the heading
"Stipulated Loss Value Factor" opposite such date (as such Schedule III may be
adjusted from time to time as provided in Section 3.04 of the Lease), and
during any Renewal Term, the amount determined pursuant to Section 4.01(b) of
the Lease. Notwithstanding any other provisions of the Lease or the
Participation Agreement or the Indenture, each Stipulated Loss Value shall be,
under any circumstances and in any event, an amount, together with so much of
the arrears portion of Interim Rent and Basic Rent due and owing through the
date of payment of Stipulated Loss Value as does not constitute an Excepted
Payment, at least sufficient to pay in full as of such date of payment the
aggregate unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on Schedule
III of the Lease, for dates other than Rent Payment Dates on which arrears
Interim Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent and,
accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
Substantial Authority. For Federal income tax purposes, shall have
the meaning applicable for purposes of Section 6662 of the Code and relevant
Treasury regulations.
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 any Ancillary Agreement
or any other Operative Agreement to the Lessor, the Owner Participant or
others, including, without limitation, payments of Stipulated Loss Value, EBO
Price and amounts calculated by reference to Termination Value and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement or the Tax Indemnity
Agreement or any other Operative Agreement, but excluding Interim Rent and
Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Original Tax Indemnity Agreement as
amended by Amendment No. 1 to the Original Tax Indemnity Agreement, as from
time to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Preliminary Term, the Interim Term and the Basic Term of
the lease for the Aircraft under the Lease and, if renewed pursuant to Section
4.01 of the Lease, each Renewal Term for the Aircraft for which the Lease is
renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease, and in the
case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling on
July 2, 2008 or January 2, 2012, (ii) Section 4.02(a)(D) or (E) of the Lease,
a Rent Payment Date that is on or after the fifth anniversary of the
Commencement Date and (iii) Section 4.02(a)(F) of the Lease, January 2, 2015.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code (which, among
other things, recodified the Federal Aviation Act of 1958, as amended to the
time of such recodification), as amended and in effect on the date of the
Lease or as subsequently amended, or any successor or substituted legislation
at the time in effect and applicable, and the regulations promulgated pursuant
thereto.
Treasury Yield. (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N660FE), dated as of September 1, 1995, as amended and restated as
of October 26, 1995, between the Owner Participant and the Owner Trustee in
its individual capacity, as from time to time modified, amended or
supplemented pursuant to its applicable provisions and in accordance with the
Operative Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the Underwriting
Agreement.
Underwriting Agreement. The Underwriting Agreement dated October 26,
1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N661FE)
Dated as of October 1, 1995
Amended and Restated as of October 26, 1995
between
NATIONSBANK, N.A.,
as Trustor
and
NBD BANK,
as Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 760, REGISTRATION NO. N661FE
TABLE OF CONTENTS
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Direction to Owner Trustee............. 1
SECTION 1.02. Declaration of Trust..................................... 2
SECTION 1.03. Conditions Precedent..................................... 2
ARTICLE 2
DISTRIBUTIONS
SECTION 2.01. Rent, Etc................................................ 3
SECTION 2.02. Excepted Payments........................................ 3
SECTION 2.03. Other Receipts........................................... 3
SECTION 2.04. Distributions after Default.............................. 4
SECTION 2.05. Distributions after Release of Lien of Indenture......... 4
SECTION 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and Duties........................... 5
SECTION 3.02. Limitation on Authority of Owner Trustee................. 6
SECTION 3.03. Notice of Default........................................ 6
SECTION 3.04. Action Upon Instructions................................. 6
SECTION 3.05. Certain Duties and Responsibilities of Owner Trustee..... 6
SECTION 3.06. Certain Rights of Owner Trustee.......................... 8
SECTION 3.07. No Representations or Warranties as to Certain Matters... 9
SECTION 3.08. Status of Moneys Received................................ 10
SECTION 3.09. Self-Dealing............................................. 10
SECTION 3.10. Intentionally Left Blank................................. 11
SECTION 3.11. Resignation or Removal of Owner Trustee.................. 11
SECTION 3.12. Estate and Rights of Successor Owner Trustee............. 11
SECTION 3.13. Merger or Consolidation of NBD........................... 12
SECTION 3.14. Co-Trustees.............................................. 12
SECTION 3.15. Interpretation of Agreements............................. 13
SECTION 3.16. Not Acting in Individual Capacity........................ 14
SECTION 3.17. Tax Returns.............................................. 14
ARTICLE 4
TERMINATION OF TRUST
SECTION 4.01. Termination.............................................. 14
SECTION 4.02. Distribution of Lessor's Estate upon Termination......... 15
SECTION 4.03. Termination and Revocation............................... 15
ARTICLE 5
[INTENTIONALLY LEFT BLANK]
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification.......................................... 15
SECTION 6.02. Supplements and Amendments............................... 17
SECTION 6.03. Nature of Title of Trustor............................... 17
SECTION 6.04. Power of Owner Trustee to Convey......................... 17
SECTION 6.05. Notices.................................................. 18
SECTION 6.06. Situs of Trust; Applicable Law; Severability............. 18
SECTION 6.07. Successors and Assigns................................... 19
SECTION 6.08. Headings and Table of Contents........................... 19
SECTION 6.09. Definitions.............................................. 19
SECTION 6.10. Identification of Trust.................................. 19
SECTION 6.11. Counterparts............................................. 19
SECTION 6.12. Trustor Interest......................................... 19
SCHEDULE I DEFINITIONS
TRUST AGREEMENT
TRUST AGREEMENT (Federal Express Corporation Trust No. N661FE) dated
as of October 1, 1995, as amended and restated as of October 26, 1995 (this
"Agreement"), between NBD BANK, a Michigan banking corporation (in its
individual capacity, "NBD", and not in its individual capacity but solely as
trustee hereunder, the "Owner Trustee"), and NATIONSBANK, N.A., a national
banking association (together with its successors and permitted assigns, the
"Trustor");
W I T N E S S E T H :
WHEREAS, the Trustor and NBD have heretofore entered into the Original
Trust Agreement;
WHEREAS, the Original Trust Agreement was duly filed with the Federal
Aviation Administration on October 25, 1995;
WHEREAS, the Original Loan Participants participated in the payment
of the Purchase Price by providing financing as evidenced by the Original Loan
Certificates;
WHEREAS, pursuant to Section 15 of the Original Participation
Agreement, the Lessee, the Trustor and the Owner Trustee desire to refinance
all of the Original Loan Certificates on the Refunding Date; and
WHEREAS, the Trustor and the Owner Trustee desire, in connection with
such refinancing, to amend and restate the Original Trust Agreement in its
entirety as herein provided.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, NBD and the Trustor agree that the Original Trust Agreement
be and the same is hereby amended and restated in its entirety as follows:
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver each of the other Operative Agreements to
which the Owner Trustee is a party and to enter into and perform the
transactions contemplated thereby;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements and the Original Agreements to which the Owner Trustee
is a party or which the Owner Trustee is required to deliver pursuant to
the Operative Agreements and the Original Agreements;
(d) 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 Operative Agreements; and
(e) 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.
The Trustor hereby ratifies the actions taken by the Owner Trustee in
connection with the delivery of the Aircraft as contemplated by the Original
Indenture and the Original Participation Agreement.
SECTION 1.02. Declaration of Trust. NBD hereby confirms that it
holds and will continue to, in its capacity as the Owner Trustee, hold the
Lessor's Estate 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 Indenture.
SECTION 1.03. Conditions Precedent. The right and obligation of the
Owner Trustee to take the actions required by Section 1.01 hereof shall be
subject to the condition that the terms and conditions of Section 4.01 of the
Participation Agreement shall have been complied with in a manner satisfactory
to the Owner Trustee and the Trustor.
ARTICLE 2
DISTRIBUTIONS
SECTION 2.01. Rent, etc. The Trustor and the Owner Trustee
acknowledge that the Lease will be security for the Certificates pursuant to
the Indenture which provides that all moneys payable by the Lessee to the
Owner Trustee under the Lease (other than Excepted Payments) are to be paid to
the Indenture Trustee while the Lien of the Indenture is in effect. Except as
otherwise provided in Section 2.04 hereof, the Owner Trustee shall promptly
apply each payment of the Owner Participant Amount, Rent (other than Excepted
Payments), Stipulated Loss Value, Termination Value, and any proceeds from the
sale, requisition or disposition of the Aircraft received by it as follows:
(a) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (i) the Lessee with respect to NBD's or 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 the 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 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 Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
SECTION 2.02. Excepted Payments. Notwithstanding any other provision
contained herein, all Excepted Payments at any time received by the Owner
Trustee shall be distributed promptly to the applicable Person, and such
payment shall not be deemed under any circumstances to be part of the Lessor's
Estate.
SECTION 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such distribution or release of Lien, any such
payment for which provision as to the distribution thereof is made in the
other Operative Agreements shall be applied promptly to the purpose for which
such payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the 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 after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the 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 the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee.
SECTION 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner
Trustee under the Lease or otherwise with respect to the Aircraft or
any part thereof (including, without limitation, all payments
received pursuant to Section 17.01 of the Lease and amounts realized
upon the sale or lease of the Aircraft or any part thereof after the
termination of the Lease with respect thereto), to the extent
received or realized at any time after the Lien of the Indenture
shall have been released pursuant to the terms of the Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after the Lien of the
Indenture has been released,
shall, to the extent required, be retained by the Owner Trustee as
reimbursement for all fees and expenses hereunder or under the Lease not
theretofore reimbursed under this Agreement, the 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
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 Indenture Trustee pursuant to
this Article 2 by paying the amount to be distributed to the Indenture Trustee
in the manner specified in the Indenture; provided, that the Owner Trustee
shall invest overnight, 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 in
investments 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 the Lien created by, the Indenture, the Owner Trustee will,
if so requested by the Trustor by written notice, pay in immediately available
funds any and all amounts payable by the Owner Trustee hereunder to the
Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and Duties. NBD accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, 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 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, Sections 7.02(a)
and (b) and 7.04 of the Participation Agreement or its representations,
warranties and covenants given in its individual capacity in Section 3.05 of
the Indenture, (c) the failure to use ordinary care in receiving, handling and
disbursing funds, (d) Lessor's Liens 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 NBD or the Owner Trustee in
connection with the transactions contemplated by the Lease, the Indenture and
the Operative Agreements including this Agreement.
SECTION 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to, and agrees that it
will not, manage, control, possess, use, sell, lease, dispose of or otherwise
deal with the Aircraft, Airframe, Engines, any Part thereof or any other
property at any time constituting a part of the Lessor's Estate, or otherwise
to take or refrain from taking any action under or in connection with the
Operative Agreements, except (i) to execute and deliver the Operative
Agreements to which it is a party, (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 other Operative Agreements, 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 obligations of the Owner Trustee hereunder.
SECTION 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Department of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt telephone or facsimile
notice, followed by prompt confirmation thereof by certified mail, postage
prepaid (in any event within two Business Days of the discovery thereof), in
accordance with Article 14 of the Participation Agreement, of such Default,
Event of Default, Indenture Default or Indenture Event of Default. Subject to
the terms of Section 3.06(e) hereof and the rights of the Indenture Trustee
under the Indenture, the Owner Trustee shall take such action with respect to
such Default, Event of Default, Indenture Default or Indenture Event of
Default as shall be specified in written instructions from the Trustor;
provided that the Owner Trustee shall have no duty to take any (and shall take
no) action whatsoever in the absence of written instructions from the Owner
Participant. For all purposes of this Agreement and the 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 Default, Event of Default,
Indenture Default or Indenture Event of Default unless notified in writing by
the Lessee, the Trustor, the Indenture Trustee or any Certificate Holder.
SECTION 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
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 with the degree of care
specified in Section 3.01 hereof, and in accordance with written instructions
given by the Trustor hereunder, and no implied duties, covenants or
obligations shall be read into this Agreement, any such instructions or the
Operative Agreements 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 the Aircraft or any part of the Lessor's Estate except as
required by the terms of the Operative Agreements, 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
other Operative Agreements, 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 Operative Agreements.
(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 in good faith believe 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
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(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 other Operative
Agreements or the Original Agreements (including those furnished to the
Indenture Trustee pursuant to the terms of the 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 Owner Participant within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the 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 Operative Agreement 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; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, 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 or under any of the
other Operative Agreements, 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 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 or under any of the other Operative Agreements
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 or the other Operative Agreements;
(f) the Owner 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, 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 may make such further inquiry or
investigation into such facts or matters as instructed by the Owner
Participant and the Owner Trustee shall be entitled, to the same extent
permitted to the Lessor under the Lease, to examine the books and records
of the Lessee to reasonably determine whether the Lessee is in compliance
with the terms and conditions of the Lease and to examine the Aircraft,
Airframe, Engines or any 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 Indenture or the Participation
Agreement, 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 Operative Agreements 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 the
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, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
SECTION 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR NBD MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that NBD represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever right, title and interests in, to and under the
Aircraft that were purported to be conveyed to it by AVSA and NBD represents,
warrants and covenants that at all times on and after the Delivery Date the
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 or any other Operative Agreement 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 NBD and
except that NBD hereby represents and warrants that this Agreement has been,
and (assuming the due authorization, execution and delivery of this Agreement
by the Trustor) the other Operative Agreements 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
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 NBD and (assuming due authorization, execution and delivery of
this Trust Agreement by the Trustor) constitutes the legal, valid and binding
obligation of NBD 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 or any
Operative Agreement 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. Intentionally Left Blank.
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 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, 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 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.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
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, an instrument accepting such appointment, in form and substance
acceptable to the predecessor Owner Trustee and the Trustor 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
trusts 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 and the trusts hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
SECTION 3.13. Merger or Consolidation of NBD. Any corporation into
which NBD 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 NBD 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 Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
SECTION 3.14. Co-Trustees. At any time, if the Owner Trustee or 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 may at the time be located, the Owner Trustee by an instrument in
writing signed by it, shall appoint one or more Persons approved by the
Trustor 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, and to vest in such
Person or Persons, in such capacity, such title to the Lessor's Estate or any
part thereof, and such rights, powers, duties, trusts or obligations as the
Trustor may consider necessary or prudent or desirable. 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. 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 or otherwise affect any of the terms of the Indenture or adversely
affect the interests of the Indenture Trustee or the Certificate Holders in
the 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 or under the
Participation Agreement 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) the Owner 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
additional trustee;
(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 or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements 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 or any other
Operative Agreement 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 in writing sent in accordance with Article 14 of the
Participation Agreement 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; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable 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 or in the other 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 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 its receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. 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 or necessary from the Owner Trustee in connection
with the preparation of such tax returns and 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 of the Trustor and at
the expense of the Lessee all income tax returns required to be filed with
respect to the trust created hereby and shall execute and file such returns;
provided, however, that the Owner Trustee shall send a completed copy of each
such return to the Trustor not more than 60 nor less than 30 days prior to the
due date of such return; provided that the Owner Trustee shall have timely
received all necessary information to complete and deliver to the Trustor such
return. The Trustor, upon request, will furnish the Owner Trustee with all
such information as may be required from the Trustor 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) 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 and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(b) 21 years from the death of the last survivor of the descendants of
Queen Elizabeth II of England living on the date of this Agreement.
SECTION 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) 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 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 the
Lessor's Estate 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 hereof.
SECTION 4.03. Termination and Revocation. Notwithstanding anything
herein to the contrary, the trust created hereby may not be terminated or
revoked (i) by the Trustor without the written consent of the Indenture
Trustee, (ii) as a result of the death, incapacity, dissolution or bankruptcy
of the Trustor, or (iii) until all liens on the property of this trust have
been released and until payment in full of all indebtedness of the trust.
ARTICLE 5
[INTENTIONALLY LEFT BLANK]
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification. The Trustor and its assigns agree to
reimburse and save NBD, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against NBD upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees which may be incurred by reason of its being the Owner
Trustee or acting hereunder or under the Operative Agreements or the Original
Agreements, but solely by reason thereof and arising out of or relating solely
to this Agreement or the other Operative Agreements or the Original Agreements
or the 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, NBD, in its individual capacity, shall have a Lien on the
Lessor's Estate and the proceeds thereof, 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 and the Original Agreements and
subject and subordinate to the Lien of the Indenture), except that NBD shall
not have any such Lien (and the Owner Participant shall have no obligation) 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 NBD or any breach by NBD of its warranties and covenants given in its
individual capacity in this Agreement, Article 5 of the Lease, Sections
7.02(a) and (b) and 7.04 of the Participation Agreement and its
representations and warranties in the Operative Agreements, (C) the failure to
use ordinary care in receiving, handling and disbursing funds, (D) Lessor's
Liens 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 NBD in connection with the transactions contemplated by the Lease,
the Indenture and this Agreement, (F) Taxes excluded from indemnification
pursuant to Section 8.01(b) of the Participation Agreement (disregarding for
the purposes of this Section 6.01, subsections (ii) and (v) of Section 8.01(b)
of the Participation Agreement) or (G) Expenses excluded from indemnification
pursuant to Section 9.01(b) of the Participation Agreement (disregarding for
the purposes of this Section 6.01, subsections (ii), (iv), (vi), and (viii) of
Section 9.01(b) of the Participation Agreement); provided, that, before
asserting any right to payment or indemnification hereunder, NBD shall first
demand (but need not exhaust or pursue any further its remedies with respect
to) its corresponding right to payment or indemnification from the Lessee
pursuant to the Participation Agreement. It is further understood that the
distribution by the Owner Trustee of all or any part of the Lessor's Estate as
provided in Section 4.02 of this Agreement shall not impair the right of NBD
to indemnity, payment and reimbursement as herein provided. In the event NBD
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 NBD, 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 Prime 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. NBD or the
Owner Trustee (in its individual capacity or as trustee, as the case may be)
agrees that it shall have no right against (except as provided in this Section
6.01) the Trustor or (subject to the provisions of the Indenture) the Trust
Indenture Estate for any fee as compensation for its services hereunder.
SECTION 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) NBD 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 (b) the Owner Trustee shall, subject to the provisions of Article
XIII of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
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 Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) 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 or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section 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 NBD or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
SECTION 6.03. Nature of Title of Trustor. The Trustor shall not
have any legal title to any part of the Lessor's Estate. No transfer, by
operation of law or otherwise, of the right, title and interest of the Trustor
in and to the Lessor's Estate or the trusts hereunder shall operate to
terminate this Agreement or 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 Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
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 Operative Agreements or the 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 by 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 mail and (c) if given by FedEx service (or, if a Default or
Event of Default shall have occurred and be continuing, by other comparable
courier service), when received or personally delivered, addressed:
If to the Owner Trustee:NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Corporate Trust Administration
Department
Facsimile: (313) 225-3420
If to the Trustor: NationsBank, N.A.
c/o NationsBanc Lease Investments, Inc.
NationsBank Corporate Center
NC 1007-12-01
100 North Tryon Street
Charlotte, North Carolina 28255-0001
Attention: Manager of Lease Administration
Facsimile: (704) 386-0892
If to the Indenture
Trustee: The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Attention: Corporate Trust Administration
Facsimile: (718) 242-3529
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 MICHIGAN, 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 benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Section 7.03(d) of the Participation Agreement.
SECTION 6.08. Headings and Table of Contents. The headings of the
Articles 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 provisions hereof.
SECTION 6.09. Definitions. The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule II to the Participation
Agreement (Federal Express Corporation Trust No. N661FE) dated as of October
1, 1995, as amended and restated as of October 26, 1995, among Federal Express
Corporation, Trustor, the Original Loan Participants, NBD, not in its
individual capacity but solely as Owner Trustee except as otherwise expressly
provided therein, The Chase Manhattan Bank (National Association), as Pass
Through Trustee, and The Chase Manhattan Bank (National Association), as
Indenture Trustee, which schedule is attached hereto as Schedule I and by this
reference incorporated herein.
SECTION 6.10. Identification of Trust. This trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N661FE."
SECTION 6.11. Counterparts. This instrument 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 6.12. Trustor Interest. The Trustor has no interest in any
specific property of this trust. No creditor of the Trustor shall have any
right to obtain possession of, or otherwise exercise legal or equitable
remedies with respect to, the property of this trust.
IN WITNESS WHEREOF, NBD and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
NATIONSBANK, N.A.
By: _______________________________________
Name:
Title:
NBD BANK
By: _______________________________________
Name:
Title:
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require. In the
case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
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 other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. In the case
of amounts payable to the Lessor, the Owner Participant, or any corporate
Affiliate 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.
Agent. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns as Agent for the Original Loan Participants
pursuant to Article 16 of the Original Participation Agreement.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty dated the Delivery Date executed by the
Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe (or any permitted substitute airframe)
together with the two Engines (or any Replacement Engine or Engines) whether
or not any of such initial or Replacement Engines may from time to time be
installed on such Airframe or may be installed on any other airframe or on any
other aircraft, including any aircraft substituted pursuant to Section 11.03
of the Lease.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) leased by the Lessor to the Lessee
pursuant to the Lease and the initial Lease Supplement and having the United
States FAA Registration Number and manufacturer's serial number specified in
the initial Lease Supplement, including (i) all Parts in respect thereof and
(ii) any replacement airframe which may be substituted pursuant to Section
11.03 of the Lease.
Amendment No. 1 to the Original Tax Indemnity Agreement. Amendment
No. 1 to the Original Tax Indemnity Agreement, dated as of October 26, 1995.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on the Delivery Date or the Refunding Date or any date thereafter in
connection with the transactions contemplated by the Operative Agreements, as
such agreement may be amended and supplemented from time to time with the
consent of the Lessor and delivered to the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Owner Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N661FE), dated October 25, 1995 among the Lessee, the
Owner Trustee, not in its individual capacity, but solely as Owner Trustee,
the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant (with a copy of such report to the Lessee) on the
Delivery Date pursuant to Section 4.01(n) of the Original Participation
Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France, and its successors and assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as of
October 15, 1995, executed by AVSA, as the same may be amended, modified or
supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and dated the
Delivery Date.
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 either does or with the giving of notice or lapse of
time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft throughout
the Basic Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 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 July 2, 2020, 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.
Breakage Costs. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York and Memphis, Tennessee, and after the
Lien of the Indenture is discharged, Detroit, Michigan.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N661FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
refunding of the Original Loan Certificates.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Commencement Date. July 2, 1996.
Consent and Agreement. The Consent and Agreement dated as of October
15, 1995 executed by the Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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 Participant
and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner Trustee
located at 611 Woodward Avenue, Detroit, Michigan 48226, or such other office
at which the Owner Trustee's corporate trust business shall be administered
which the Owner Trustee shall have specified by notice in writing to the
Lessee, the Owner Participant and the Indenture Trustee.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
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 Date. October 25, 1995.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts related thereto. 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.
The term "Engines" means, as of any date of determination, both Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of October 15, 1995,
executed by the Engine Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N661FE), dated as of October 15, 1995 between the
Lessor and the Lessee, as the same may be amended, modified or supplemented
from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by 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,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine as of the end of the Lease Term 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
A300F-600 series aircraft equipped with engines of the same make and model as
the Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) 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 of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). 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. If an
Event of Loss described in any of clauses (i) (A), (iii) or (iv) above shall
occur, Lessor may elect, within 30 days following the date upon which such
Event of Loss is deemed to have occurred, to waive such Event of Loss and the
consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments (and
interest thereon to the extent provided in the Operative Agreements) paid or
payable by the Lessee in respect of the Owner Participant, the Owner Trustee
in its individual capacity or any of their respective successors, permitted
assigns, directors, officers, employees, servants and agents or Affiliates,
pursuant to the Participation Agreement or any indemnity hereafter granted to
the Owner Participant or the Owner Trustee in its individual capacity pursuant
to the Lease or the Participation Agreement, (ii) proceeds of public liability
insurance (or government indemnities in lieu thereof) in respect of the
Aircraft payable as a result of insurance claims paid for the benefit of, or
losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Section 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) payments constituting increases
in Interim Rent or Basic Rent attributable to payments arising pursuant to
Section 5 of the Tax Indemnity Agreement and (vi) any right to demand, collect
or otherwise receive and enforce the payment of any amount described in
clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other property) is
unencumbered by the Lease. 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed Renewal
Term equal to 50% of the average actual semi-annual Basic Rent payable during
the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as of
October 15, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as Owner
Trustee and Lessor, the Agent (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Owner Participant, the Original
Loan Participants (to the extent set forth in Articles 8 and 9 of the Original
Participation Agreement), the Indenture Trustee, in its individual capacity
and as trustee, any Owner Participant Guarantor, 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 and the Trust Indenture Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N661FE) dated as of October 15, 1995, as amended
and restated as of October 26, 1995, between the Lessor and the Indenture
Trustee, as supplemented by the Indenture and Security Agreement Supplement,
and as said Indenture may from time to time be further supplemented or
amended, including any amendment or supplement thereto entered into from time
to time pursuant to the applicable provisions of the Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N661FE) dated October 25, 1995, as such Indenture and Security Agreement
Supplement shall be amended or supplemented from time to time and any other
supplement to the Indenture, substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event or condition which with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture Estate 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 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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft throughout
the Interim Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant Payment
Date and ending at the end of the day immediately preceding the Commencement
Date.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N661FE) dated as of October 15, 1995, as amended and restated as of October 26,
1995, entered into by the Lessor and the Lessee concurrently with the
execution and delivery of the Indenture, 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 one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N661FE) dated October 25, 1995, as such Lease Supplement
shall be amended or supplemented from time to time and any other supplement to
the Lease, substantially in the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of
Sale, the Airbus Guaranty, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the AVSA Consent and Agreement, the
Consent and Guaranty (to the extent assigned by the Purchase Agreement
Assignment), the GTA, the Engine Warranty Assignment, the Engine Consent, any
warranty with respect to the Airframe and the Engines, all amounts of Interim
Rent, Basic Rent and Supplemental Rent, including without limitation,
insurance proceeds (other than insurance proceeds payable to or for the
benefit of the Owner Trustee 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) not include any
Excepted Payment and (ii) include all property intended to be subjected to the
Indenture by the Granting Clause thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust Indenture
Estate arising as a result of (i) claims against 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)
acts or omissions 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 or expressly prohibited under
the Operative Agreements and any act or omission of the Owner Participant
which 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, Owner Participant, Lessor's Estate or the trust created by the
Trust Agreement which are not required to be indemnified against by the Lessee
pursuant to the Participation Agreement by reason of Section 8.01(b) or
9.01(b) thereof and which are not required to be indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement, or (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 other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
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 Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of
(i) the present values of all remaining scheduled payments of such principal
amount or portion thereof 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 the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
unpaid principal amount of such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of the
Lease, discounted at a rate per semi-annual period equal to the Debt Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, if any, the Owner Trustee
Guaranty, if any, any Ancillary Agreement entered into by or with the written
consent of the Indenture Trustee, which by its terms is an Operative
Agreement, the Certificates outstanding at the time of reference, the
Indenture, the Indenture and Security Agreement Supplement, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the Engine Consent and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Original Agreements. The documents and instruments delivered on the
Delivery Date in connection with the transactions contemplated by the Original
Participation Agreement.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N661FE) dated as of October
15, 1995 between the Owner Trustee and the Indenture Trustee, which together
with the Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N661FE) dated October 25, 1995 attached thereto was
recorded as one instrument by the FAA on October 25, 1995 and assigned
Conveyance Number 2A267994.
Original Lease. The Lease Agreement (Federal Express Corporation
Trust No. N661FE) dated as of October 15, 1995 between the Owner Trustee as
lessor, and the Lessee, which together with Lease Supplement No. 1 (Federal
Express Corporation Trust No. N661FE) dated October 25, 1995 attached thereto
was recorded as one instrument by the FAA on October 25, 1995 and assigned
Conveyance Number 2A267995.
Original Loan Certificates. The loan certificates issued on the
Delivery Date to the Original Loan Participants.
Original Loan Participants. The entities listed on Schedule I to the
Original Participation Agreement and their successors and assigns (other than
any assignees in connection with the Refunding Date).
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N661FE) among the Lessee, the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Original Loan
Participants as it was originally executed as of October 1, 1995.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N661FE) between the Lessee and the
Owner Participant as it was originally executed as of October 15, 1995.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N661FE) between the Owner Participant and the Owner
Trustee as it was originally executed as of October 1, 1995 and filed with the
FAA on October 25, 1995.
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.
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, its right, title and
interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Amount. The amount described in Section 2.03 of the
Participation Agreement and set forth on Schedule II to the Lease.
Owner Participant Guarantor. The provider of an Owner Participant
Guaranty.
Owner Participant Guaranty. Any guaranty delivered in compliance with
Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement, and its successors and permitted
assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Interim Rent, Basic
Rent, Stipulated Loss Value and Termination Value percentages or the EBO
Price, as the case may be, as such assumptions may be adjusted for events
which have been the basis of adjustments to Rent pursuant to Section 3.04 of
the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N661FE), dated as of October 1, 1995, as amended and
restated as of October 26, 1995, among the Lessee, the Original Loan
Participants, the Owner Trustee not in its individual capacity except as
otherwise expressly provided therein, but solely as owner trustee, the Owner
Participant, the Indenture Trustee not in its individual capacity except as
otherwise expressly provided therein, but solely as indenture trustee and the
Pass Through Trustee not in its individual capacity except as otherwise
expressly provided therein, but solely as pass through trustee, 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, prior to
replacement thereof in accordance with the Lease, which may be removed
therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
February 1, 1993, as amended and restated as of October 1, 1995 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 1995 Pass Through Certificates,
Series B1, 1995 Pass Through Certificates, Series B2 or 1995 Pass Through
Certificates, Series B3, 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 Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust, 1995-B1,
Federal Express Pass Through Trust, 1995-B2 or Federal Express Pass Through
Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. The Owner Participant Payment Date, and each January 2
and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date and
ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates having a
Maturity in 2014, November 7, 2007 and with respect to the Certificates
having a Maturity in 2019, October 7, 2017.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N661FE), dated as of October 15, 1995
between the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the Owner
Participant Payment Date, December 18 for January 2 Payment Dates and June 17
for July 2 Payment Dates, whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least three (3) Business Days
prior to such expected Refunding Date.
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.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
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 or more terms 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 Interim
Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July 2, 1996.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) manufactured after October 22,
1994 of the same or of equal or greater value, remaining useful life and
utility as the Engine being replaced, together with all Parts relating to such
engine; provided, however, that if such replacement engine is not a General
Electric CF6-80C2-A5F engine, such replacement engine must then be commonly
used in the commercial aviation industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or Corporate
Trust Administration, as the case may be, designated by such Person to perform
obligations under the Operative Agreements, with respect to the Owner
Participant, the president or any vice president with direct responsibility
for the transactions contemplated by the Operative Agreements, and with
respect to any other party, any corporate officer or (except in the case of
the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be executed and
delivered by the Lessee and the Pass Through Trustee, the Series Supplement
1995-B2 to be executed and delivered by the Lessee and the Pass Through
Trustee or the Series Supplement 1995-B3 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.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Term, the amount determined by multiplying the Purchase Price
by the percentage set forth in Schedule III of the Lease under the heading
"Stipulated Loss Value Factor" opposite such date (as such Schedule III may be
adjusted from time to time as provided in Section 3.04 of the Lease), and
during any Renewal Term, the amount determined pursuant to Section 4.01(b) of
the Lease. Notwithstanding any other provisions of the Lease or the
Participation Agreement or the Indenture, each Stipulated Loss Value shall be,
under any circumstances and in any event, an amount, together with so much of
the arrears portion of Interim Rent and Basic Rent due and owing through the
date of payment of Stipulated Loss Value as does not constitute an Excepted
Payment, at least sufficient to pay in full as of such date of payment the
aggregate unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on Schedule
III of the Lease, for dates other than Rent Payment Dates on which arrears
Interim Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent and,
accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
Substantial Authority. For Federal income tax purposes, shall have
the meaning applicable for purposes of Section 6662 of the Code and relevant
Treasury regulations.
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 any Ancillary Agreement
or any other Operative Agreement to the Lessor, the Owner Participant or
others, including, without limitation, payments of Stipulated Loss Value, EBO
Price and amounts calculated by reference to Termination Value and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement or the Tax Indemnity
Agreement or any other Operative Agreement, but excluding Interim Rent and
Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Original Tax Indemnity Agreement as
amended by Amendment No. 1 to the Original Tax Indemnity Agreement, as from
time to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Preliminary Term, the Interim Term and the Basic Term of
the lease for the Aircraft under the Lease and, if renewed pursuant to Section
4.01 of the Lease, each Renewal Term for the Aircraft for which the Lease is
renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease, and in the
case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling on
July 2, 2011 or July 2, 2013, (ii) Section 4.02(a)(D) or (E) of the Lease, a
Rent Payment Date that is on or after the fifth anniversary of the
Commencement Date and (iii) Section 4.02(a)(F) of the Lease, July 2, 2015.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code (which, among
other things, recodified the Federal Aviation Act of 1958, as amended to the
time of such recodification), as amended and in effect on the date of the
Lease or as subsequently amended, or any successor or substituted legislation
at the time in effect and applicable, and the regulations promulgated pursuant
thereto.
Treasury Yield. (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N661FE), dated as of October 1, 1995, as amended and restated as of
October 26, 1995, between the Owner Participant and the Owner Trustee in its
individual capacity, as from time to time modified, amended or supplemented
pursuant to its applicable provisions and in accordance with the Operative
Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the Underwriting
Agreement.
Underwriting Agreement. The Underwriting Agreement dated October 26,
1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N663FE)
Dated as of October 26, 1995
between
CHRYSLER CAPITAL CORPORATION,
as Trustor
and
NBD BANK,
as Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 766, REGISTRATION NO. N663FE
TABLE OF CONTENTS
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Direction to Owner Trustee............. 1
SECTION 1.02. Declaration of Trust..................................... 2
SECTION 1.03. Conditions Precedent..................................... 2
ARTICLE 2
DISTRIBUTIONS
SECTION 2.01. Predelivery Funding; Rent, Etc........................... 2
SECTION 2.02. Excepted Payments........................................ 3
SECTION 2.03. Other Receipts........................................... 3
SECTION 2.04. Distributions after Default.............................. 4
SECTION 2.05. Distributions after Release of Lien of Indenture......... 4
SECTION 2.06. Manner of Making Distributions........................... 4
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and Duties........................... 5
SECTION 3.02. Limitation on Authority of Owner Trustee................. 5
SECTION 3.03. Notice of Default........................................ 6
SECTION 3.04. Action Upon Instructions................................. 6
SECTION 3.05. Certain Duties and Responsibilities of Owner Trustee..... 6
SECTION 3.06. Certain Rights of Owner Trustee.......................... 7
SECTION 3.07. No Representations or Warranties as to Certain Matters... 9
SECTION 3.08. Status of Moneys Received................................ 10
SECTION 3.09. Self-Dealing............................................. 10
SECTION 3.10. Intentionally Left Blank................................. 10
SECTION 3.11. Resignation or Removal of Owner Trustee.................. 10
SECTION 3.12. Estate and Rights of Successor Owner Trustee............. 11
SECTION 3.13. Merger or Consolidation of NBD........................... 12
SECTION 3.14. Co-Trustees.............................................. 12
SECTION 3.15. Interpretation of Agreements............................. 13
SECTION 3.16. Not Acting in Individual Capacity........................ 13
SECTION 3.17. Tax Returns.............................................. 14
ARTICLE 4
TERMINATION OF TRUST
SECTION 4.01. Termination.............................................. 14
SECTION 4.02. Distribution of Lessor's Estate upon Termination......... 14
SECTION 4.03. Termination and Revocation............................... 15
ARTICLE 5
[INTENTIONALLY LEFT BLANK]
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification.......................................... 15
SECTION 6.02. Supplements and Amendments............................... 16
SECTION 6.03. Nature of Title of Trustor............................... 17
SECTION 6.04. Power of Owner Trustee to Convey......................... 17
SECTION 6.05. Notices.................................................. 17
SECTION 6.06. Situs of Trust; Applicable Law; Severability............. 18
SECTION 6.07. Successors and Assigns................................... 18
SECTION 6.08. Headings and Table of Contents........................... 18
SECTION 6.09. Definitions.............................................. 19
SECTION 6.10. Identification of Trust.................................. 19
SECTION 6.11. Counterparts............................................. 19
SECTION 6.12. Trustor Interest......................................... 19
SCHEDULE I DEFINITIONS
TRUST AGREEMENT
TRUST AGREEMENT (Federal Express Corporation Trust No. N663FE) dated
as of October 26, 1995 (this "Agreement"), between NBD BANK, a Michigan banking
corporation (in its individual capacity, "NBD", and not in its individual
capacity but solely as trustee hereunder, the "Owner Trustee"), and CHRYSLER
CAPITAL CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor");
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Owner Trustee in the Collateral Account and released on the Delivery
Date in order to finance a portion of the Purchase Price of the Aircraft, to
acquire the Aircraft from AVSA on the Delivery Date, to lease the Aircraft to
the Lessee on the Delivery Date and to receive the benefits provided for
herein.
WHEREAS, NBD is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, NBD and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver the Participation Agreement, the Lease
and the Indenture and to enter into and perform the transactions
contemplated thereby including, without limitation, accepting title to, and
delivery of, the Aircraft from AVSA on the Delivery Date, and taking all
appropriate action to cause the Airframe to be registered with the Federal
Aviation Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver as and when specified in the Participation
Agreement each of the other Operative Agreements to which the Owner Trustee
is a party and to enter into and perform the transactions contemplated
thereby;
(d) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(e) 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 Operative Agreements; and
(f) 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 Certificate Closing Date and the Delivery Date and
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.
SECTION 1.02. Declaration of Trust. NBD hereby declares and agrees
that it will, in its capacity as the Owner Trustee, hold the Lessor's Estate
upon the trusts herein set forth for the use and benefit of the Trustor,
subject, however, to the provisions of, and the Lien to be created by, the
Indenture.
SECTION 1.03. Conditions Precedent. The right and obligation of the
Owner Trustee to take the actions required by Section 1.01 hereof shall be
subject to the condition that the terms and conditions of Section 4.01 or
Section 4.02, as the case may be, of the Participation Agreement shall have
been complied with in a manner satisfactory to the Owner Trustee and the
Trustor.
ARTICLE 2
DISTRIBUTIONS
SECTION 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the Lease will
be security for the Certificates pursuant to the Indenture which provides that
all moneys payable by the Lessee to the Owner Trustee under the Lease (other
than Excepted Payments) are to be paid to the Indenture Trustee while the Lien
of the Indenture is in effect. Except as otherwise provided in Section 2.04
hereof, the Owner Trustee shall promptly apply each payment of the Owner
Participant Amount, Rent (other than Excepted Payments), Stipulated Loss
Value, Termination Value, and any proceeds from the sale, requisition or
disposition of the Aircraft received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to NBD's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii)any amount remaining after application in full in accordance with
paragraph (b)(i) of this Section 2.01 and which represents payments for
which provision as to the application thereof is made in any other
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
(iii)after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(a), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
SECTION 2.02. Excepted Payments. Notwithstanding any other provision
contained herein, all Excepted Payments at any time received by the Owner
Trustee shall be distributed promptly to the applicable Person, and such
payment shall not be deemed under any circumstances to be part of the Lessor's
Estate.
SECTION 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such distribution or release of Lien, any such
payment for which provision as to the distribution thereof is made in the
other Operative Agreements shall be applied promptly to the purpose for which
such payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the 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 after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the 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 the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee.
SECTION 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner
Trustee under the Lease or otherwise with respect to the Aircraft or
any part thereof (including, without limitation, all payments
received pursuant to Section 17.01 of the Lease and amounts realized
upon the sale or lease of the Aircraft or any part thereof after the
termination of the Lease with respect thereto), to the extent
received or realized at any time after the Lien of the Indenture
shall have been released pursuant to the terms of the Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after the Lien of the
Indenture has been released,
shall, to the extent required, be retained by the Owner Trustee as
reimbursement for all fees and expenses hereunder or under the Lease not
theretofore reimbursed under this Agreement, the 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
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 Indenture Trustee pursuant to
this Article 2 by paying the amount to be distributed to the Indenture Trustee
in the manner specified in the Indenture; provided, that the Owner Trustee
shall invest overnight, 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 in
investments 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 the Lien created by, the Indenture, the Owner Trustee will,
if so requested by the Trustor by written notice, pay in immediately available
funds any and all amounts payable by the Owner Trustee hereunder to the
Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and Duties. NBD accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, 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 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, Sections 7.02(a)
and (b) and 7.04 of the Participation Agreement or its representations,
warranties and covenants given in its individual capacity in Section 3.05 of
the Indenture, (c) the failure to use ordinary care in receiving, handling and
disbursing funds, (d) Lessor's Liens 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 NBD or the Owner Trustee in
connection with the transactions contemplated by the Lease, the Indenture and
the Operative Agreements including this Agreement.
SECTION 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to, and agrees that it
will not, manage, control, possess, use, sell, lease, dispose of or otherwise
deal with the Aircraft, Airframe, Engines, any Part thereof or any other
property at any time constituting a part of the Lessor's Estate, or otherwise
to take or refrain from taking any action under or in connection with the
Operative Agreements, except (i) to execute and deliver the Operative
Agreements to which it is a party, (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 other Operative Agreements, 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 obligations of the Owner Trustee hereunder.
SECTION 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Department of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt telephone or facsimile
notice, followed by prompt confirmation thereof by certified mail, postage
prepaid (in any event within two Business Days of the discovery thereof), in
accordance with Article 14 of the Participation Agreement, of such Default,
Event of Default, Indenture Default or Indenture Event of Default. Subject to
the terms of Section 3.06(e) hereof and the rights of the Indenture Trustee
under the Indenture, the Owner Trustee shall take such action with respect to
such Default, Event of Default, Indenture Default or Indenture Event of
Default as shall be specified in written instructions from the Trustor;
provided that the Owner Trustee shall have no duty to take any (and shall take
no) action whatsoever in the absence of written instructions from the Owner
Participant. For all purposes of this Agreement and the 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 Default, Event of Default,
Indenture Default or Indenture Event of Default unless notified in writing by
the Lessee, the Trustor, the Indenture Trustee or any Certificate Holder.
SECTION 3.04. Action upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
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 with the degree of care
specified in Section 3.01 hereof, and in accordance with written instructions
given by the Trustor hereunder, and no implied duties, covenants or
obligations shall be read into this Agreement, any such instructions or the
Operative Agreements 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 the Aircraft or any part of the Lessor's Estate except as
required by the terms of the Operative Agreements, 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
other Operative Agreements, 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 Operative Agreements.
(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 in good faith believe 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
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(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 other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the 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 Owner Participant within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the 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 Operative Agreement 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; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, 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 or under any of the
other Operative Agreements, 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 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 or under any of the other Operative Agreements
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 or the other Operative Agreements;
(f) the Owner 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, 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 may make such further inquiry or
investigation into such facts or matters as instructed by the Owner
Participant and the Owner Trustee shall be entitled, to the same extent
permitted to the Lessor under the Lease, to examine the books and records
of the Lessee to reasonably determine whether the Lessee is in compliance
with the terms and conditions of the Lease and to examine the Aircraft,
Airframe, Engines or any 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 Indenture or the Participation
Agreement, 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 Operative Agreements 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 the
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, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
SECTION 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR NBD MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that NBD represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever right, title and interests in, to and under the
Aircraft that were purported to be conveyed to it by AVSA and NBD represents,
warrants and covenants that at all times on and after the Delivery Date the
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 or any other Operative Agreement 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 NBD and
except that NBD hereby represents and warrants that this Agreement has been,
and (assuming the due authorization, execution and delivery of this Agreement
by the Trustor) the other Operative Agreements 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
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 NBD and (assuming due authorization, execution and delivery of
this Trust Agreement by the Trustor) constitutes the legal, valid and binding
obligation of NBD 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 or any
Operative Agreement 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. Intentionally Left Blank.
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 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, 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 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.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
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, an instrument accepting such appointment, in form and substance
acceptable to the predecessor Owner Trustee and the Trustor 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
trusts 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 and the trusts hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
SECTION 3.13. Merger or Consolidation of NBD. Any corporation into
which NBD 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 NBD 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 Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
SECTION 3.14. Co-Trustees. At any time, if the Owner Trustee or 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 may at the time be located, the Owner Trustee by an instrument in
writing signed by it, shall appoint one or more Persons approved by the
Trustor 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, and to vest in such
Person or Persons, in such capacity, such title to the Lessor's Estate or any
part thereof, and such rights, powers, duties, trusts or obligations as the
Trustor may consider necessary or prudent or desirable. 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. 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 or otherwise affect any of the terms of the Indenture or adversely
affect the interests of the Indenture Trustee or the Certificate Holders in
the 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 or under the
Participation Agreement 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) the Owner 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
additional trustee;
(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 or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements 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 or any other
Operative Agreement 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 in writing sent in accordance with Article 14 of the
Participation Agreement 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; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable 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 or in the other 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 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 its receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. 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 or necessary from the Owner Trustee in connection
with the preparation of such tax returns and 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 of the Trustor and at
the expense of the Lessee all income tax returns required to be filed with
respect to the trust created hereby and shall execute and file such returns;
provided, however, that the Owner Trustee shall send a completed copy of each
such return to the Trustor not more than 60 nor less than 30 days prior to the
due date of such return; provided that the Owner Trustee shall have timely
received all necessary information to complete and deliver to the Trustor such
return. The Trustor, upon request, will furnish the Owner Trustee with all
such information as may be required from the Trustor 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) 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 and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(b) 21 years from the death of the last survivor of the descendants of
Queen Elizabeth II of England living on the date of this Agreement.
SECTION 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) 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 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 the
Lessor's Estate 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 hereof.
SECTION 4.03. Termination and Revocation. Notwithstanding anything
herein to the contrary, the trust created hereby may not be terminated or
revoked (i) by the Trustor without the written consent of the Indenture
Trustee, (ii) as a result of the death, incapacity, dissolution or bankruptcy
of the Trustor, or (iii) until all liens on the property of this trust have
been released and until payment in full of all indebtedness of the trust.
ARTICLE 5
[INTENTIONALLY LEFT BLANK]
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification. The Trustor and its assigns agree to
reimburse and save NBD, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against NBD upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees which may be incurred by reason of its being the Owner
Trustee or acting hereunder or under the Operative Agreements, but solely by
reason thereof and arising out of or relating solely to this Agreement or the
other Operative Agreements or the 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, NBD, in its individual capacity,
shall have a Lien on the Lessor's Estate and the proceeds thereof, 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 and subject
and subordinate to the Lien of the Indenture), except that NBD shall not have
any such Lien (and the Owner Participant shall have no obligation) 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 NBD or
any breach by NBD of its warranties and covenants given in its individual
capacity in this Agreement, Article 5 of the Lease, Sections 7.02(a) and (b)
and 7.04 of the Participation Agreement and its representations and warranties
in the Operative Agreements, (C) the failure to use ordinary care in
receiving, handling and disbursing funds, (D) Lessor's Liens 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 NBD in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from indemnification pursuant to Section
8.01(b) of the Participation Agreement (disregarding for the purposes of this
Section 6.01, subsections (ii) and (v) of Section 8.01(b) of the Participation
Agreement) or (G) Expenses excluded from indemnification pursuant to Section
9.01(b) of the Participation Agreement (disregarding for the purposes of this
Section 6.01, subsections (ii), (iv), (vi), and (viii) of Section 9.01(b) of
the Participation Agreement); provided, that, before asserting any right to
payment or indemnification hereunder, NBD shall first demand (but need not
exhaust or pursue any further its remedies with respect to) its corresponding
right to payment or indemnification from the Lessee pursuant to the
Participation Agreement. It is further understood that the distribution by
the Owner Trustee of all or any part of the Lessor's Estate as provided in
Section 4.02 of this Agreement shall not impair the right of NBD to indemnity,
payment and reimbursement as herein provided. In the event NBD 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 NBD, 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 Prime
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. NBD or the Owner Trustee
(in its individual capacity or as trustee, as the case may be) agrees that it
shall have no right against (except as provided in this Section 6.01) the
Trustor or (subject to the provisions of the Indenture) the Trust Indenture
Estate for any fee as compensation for its services hereunder.
SECTION 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) NBD 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 (b) the Owner Trustee shall, subject to the provisions of Article
XIII of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
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 Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) 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 or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section 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 NBD or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
SECTION 6.03. Nature of Title of Trustor. The Trustor shall not
have any legal title to any part of the Lessor's Estate. No transfer, by
operation of law or otherwise, of the right, title and interest of the Trustor
in and to the Lessor's Estate or the trusts hereunder shall operate to
terminate this Agreement or 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 Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
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 Operative Agreements or the 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 by 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 mail and (c) if given by FedEx service (or, if a Default or
Event of Default shall have occurred and be continuing, by other comparable
courier service), when received or personally delivered, addressed:
If to the Owner Trustee:NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Corporate Trust Administration
Department
Facsimile: (313) 225-3420
If to the Trustor: Chrysler Capital Corporation
225 High Ridge Road
Stamford, Connecticut 06905
Attention: Vice President - Leasing
Facsimile: (203) 975-3910
If to the Indenture
Trustee: The Chase Manhattan Bank (National Association)
4 Chase Metrotech Center
3rd Floor
Brooklyn, New York 11245
Attention: Corporate Trust Administration
Facsimile: (718) 242-3529
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 MICHIGAN, 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 benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Section 7.03(d) of the Participation Agreement.
SECTION 6.08. Headings and Table of Contents. The headings of the
Articles 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 provisions hereof.
SECTION 6.09. Definitions. The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule II to the Participation
Agreement (Federal Express Corporation Trust No. N663FE) dated as of October
26, 1995, among Federal Express Corporation, Trustor, NBD, not in its
individual capacity but solely as Owner Trustee except as otherwise expressly
provided therein, The Chase Manhattan Bank (National Association), as Pass
Through Trustee, and The Chase Manhattan Bank (National Association), as
Indenture Trustee, which schedule is attached hereto as Schedule I and by this
reference incorporated herein.
SECTION 6.10. Identification of Trust. This trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N663FE."
SECTION 6.11. Counterparts. This instrument 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 6.12. Trustor Interest. The Trustor has no interest in any
specific property of this trust. No creditor of the Trustor shall have any
right to obtain possession of, or otherwise exercise legal or equitable
remedies with respect to, the property of this trust.
IN WITNESS WHEREOF, NBD and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
CHRYSLER CAPITAL CORPORATION
By: _______________________________________
Name:
Title:
NBD BANK
By: _______________________________________
Name:
Title:
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require. In the
case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
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 other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. In the case
of amounts payable to the Lessor, the Owner Participant, or any corporate
Affiliate 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.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee
pursuant to the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe) together with the two Engines (or any
Replacement Engine or Engines) whether or not any of such initial or
Replacement Engines may from time to time be installed on such Airframe or may
be installed on any other airframe or on any other aircraft, including any
aircraft substituted pursuant to Section 11.03 of the Lease. Prior to
delivery of the initial Lease Supplement, references in Section 3.05 of the
Participation Agreement to Aircraft shall mean the Airbus A300F4-605R
airframe bearing FAA Registration Number N663FE and Manufacturer's serial
number 766, together with the two General Electric CF6-80C2-A5F engines
bearing Manufacturer's serial numbers 705-233 and 705-234.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number and manufacturer's serial number
specified in the initial Lease Supplement, including (i) all Parts in respect
thereof and (ii) any replacement airframe which may be substituted pursuant to
Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee and the Owner Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N663FE), to be dated the Certificate Closing Date
among the Lessee, the Owner Trustee, not in its individual capacity,
but solely as Owner Trustee, the Owner Participant and the Indenture
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with a copy of such report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France, and its successors and assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as of
October 26, 1995, executed by AVSA, as the same may be amended, modified or
supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
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 either does or with the giving of notice or lapse of
time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft throughout
the Basic Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 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 July 2, 2020, 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.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York and Memphis, Tennessee, and after the
Lien of the Indenture is discharged, Detroit, Michigan.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N663FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
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 Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Commencement Date. July 2, 1996.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of October
26, 1995, executed by the Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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 Participant
and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner Trustee
located at 611 Woodward Avenue, Detroit, Michigan 48226, or such other office
at which the Owner Trustee's corporate trust business shall be administered
which the Owner Trustee shall have specified by notice in writing to the
Lessee, the Owner Participant and the Indenture Trustee.
Cut-Off Date. December 29, 1995.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
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 Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts related thereto. 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.
The term "Engines" means, as of any date of determination, both Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of October 26, 1995,
executed by the Engine Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995 between the
Lessor and the Lessee, as the same may be amended, modified or supplemented
from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 90 days due to theft or disappearance or such longer
period, not to exceed 90 days from the end of such initial 90-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by 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,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine as of the end of the Lease Term 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
A300F-600 series aircraft equipped with engines of the same make and model as
the Engines for a period not to exceed six (6) consecutive months, unless the
Lessee, prior to the expiration of such six (6) month period, shall be
diligently carrying forward in a similar manner as are then being carried
forward with respect to other aircraft of the Lessee so as to not discriminate
against the Aircraft by reason of its leased status, all steps which are
necessary or desirable to permit the normal use of the Aircraft or Airframe
or, in any event, if such use of the Aircraft or the Airframe shall have been
prohibited for a period of eighteen (18) consecutive months or until the end
of the Term, if earlier. The date of such Event of Loss shall be (s) the 91st
day or the 180th day, as the case may be, following loss of such property or
its use due to theft or disappearance (or the end of the Term or the Lessee's
abandonment of diligent efforts to recover such property, if earlier); (t) the
61st day following the date of any destruction, damage beyond economic repair
or rendition of such property permanently unfit for normal use; (u) the date
of any insurance settlement on the basis of a total loss or constructive or
compromised total loss; (v) the date of any condemnation, confiscation,
seizure or requisition of title of such property; (w) the 181st day following
condemnation, confiscation, seizure or requisition for use of such property by
a foreign government referred to in clause (iii)(2)(A) above (or the end of
the Term or the date of any insurance settlement described therein, if earlier
than such 181st day); (x) the last day of the Term in the case of requisition
for use of such property by the Government; (y) the last day of the six (6)
month or eighteen (18) month period, referred to in clause (iv) above (or if
earlier, the end of the Term or abandonment of the Lessee's efforts to restore
the normal use of the Aircraft). 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. If an Event of Loss described in any of clauses (i)
(A), (iii) or (iv) above shall occur, Lessor may elect, within 30 days
following the date upon which such Event of Loss is deemed to have occurred,
to waive such Event of Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments (and
interest thereon to the extent provided in the Operative Agreements) paid or
payable by the Lessee in respect of the Owner Participant, the Owner Trustee
in its individual capacity or any of their respective successors, permitted
assigns, directors, officers, employees, servants and agents or Affiliates,
pursuant to the Participation Agreement or any indemnity hereafter granted to
the Owner Participant or the Owner Trustee in its individual capacity pursuant
to the Lease or the Participation Agreement, (ii) proceeds of public liability
insurance (or government indemnities in lieu thereof) in respect of the
Aircraft payable as a result of insurance claims paid for the benefit of, or
losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Section 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) payments constituting increases
in Interim Rent or Basic Rent attributable to payments arising pursuant to
Section 5 of the Tax Indemnity Agreement and (vi) any right to demand, collect
or otherwise receive and enforce the payment of any amount described in
clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other property) is
unencumbered by the 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; provided that in connection
with any determination pursuant to or for the purposes of Article 17 of the
Lease, the Aircraft shall be appraised on an "as is, where is" basis. Fair
Market Value shall be determined in accordance with the provisions of Section
4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed Renewal
Term equal to 50% of the average actual semi-annual Basic Rent payable during
the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as of
October 26, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as Owner
Trustee and Lessor, the Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, any Owner Participant Guarantor, 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 and the Trust Indenture
Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N663FE) dated as of October 26, 1995, between
the Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement, and as said Indenture may from time to time be
further supplemented or amended, including any amendment or supplement thereto
entered into from time to time pursuant to the applicable provisions of the
Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N663FE) to be dated the Delivery Date, as such Indenture and Security
Agreement Supplement shall be amended or supplemented from time to time and
any other supplement to the Indenture, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture Estate 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 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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft throughout
the Interim Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant Payment
Date and ending at the end of the day immediately preceding the Commencement
Date.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N663FE) dated as of October 26, 1995, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, 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 one or more Lease
Supplements entered into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N663FE) to be dated the Delivery Date, as such Lease
Supplement shall be amended or supplemented from time to time and any other
supplement to the Lease, substantially in the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA Bill
of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the GTA, the Engine Warranty
Assignment, the Engine Consent, any warranty with respect to the Airframe and
the Engines, all amounts of Interim Rent, Basic Rent and Supplemental Rent,
including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee 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) not include any Excepted Payment and (ii) include all property
intended to be subjected to the Indenture by the Granting Clause thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust Indenture
Estate arising as a result of (i) claims against 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)
acts or omissions 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 or expressly prohibited under
the Operative Agreements and any act or omission of the Owner Participant
which 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, Owner Participant, Lessor's Estate or the trust created by the
Trust Agreement which are not required to be indemnified against by the Lessee
pursuant to the Participation Agreement by reason of Section 8.01(b) or
9.01(b) thereof and which are not required to be indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement, or (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 other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings 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.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
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 Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of
(i) the present values of all remaining scheduled payments of such principal
amount or portion thereof 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 the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
unpaid principal amount of such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of the
Lease, discounted at a rate per semi-annual period equal to the Debt Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, if any, the Owner Trustee
Guaranty, if any, any Ancillary Agreement entered into by or with the written
consent of the Indenture Trustee, which by its terms is an Operative
Agreement, the Certificates outstanding at the time of reference, the
Indenture, the Indenture and Security Agreement Supplement, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the Engine Consent and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
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.
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, its right, title and
interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Amount. The amount described in Section 3.07 of the
Participation Agreement.
Owner Participant Guarantor. The provider of an Owner Participant
Guaranty.
Owner Participant Guaranty. Any guaranty delivered in compliance with
Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement, and its successors and permitted
assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Interim Rent, Basic
Rent, Stipulated Loss Value and Termination Value percentages or the EBO
Price, as the case may be, as such assumptions may be adjusted for events
which have been the basis of adjustments to Rent pursuant to Section 3.04 of
the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N663FE), dated as of October 26, 1995, among the Lessee,
the Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee and the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee, 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, prior to
replacement thereof in accordance with the Lease, which may be removed
therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
February 1, 1993, as amended and restated as of October 1, 1995 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 1995 Pass Through Certificates,
Series B1, 1995 Pass Through Certificates, Series B2 or 1995 Pass Through
Certificates, Series B3, 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 Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust, 1995-B1,
Federal Express Pass Through Trust, 1995-B2 or Federal Express Pass Through
Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. The Owner Participant Payment Date, and each January 2
and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date and
ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates having a
Maturity in 2014, November 7, 2007 and with respect to the Certificates having
a Maturity in 2019, October 7, 2017.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N663FE), dated as of October 26, 1995
between the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule IV to the
Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the Owner
Participant Payment Date, December 18 for January 2 Payment Dates and June 17
for July 2 Payment Dates, whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 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 or more terms 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 Interim
Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July 2, 1996.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) manufactured after October 22,
1994 of the same or of equal or greater value, remaining useful life and
utility as the Engine being replaced, together with all Parts relating to such
engine; provided, however, that if such replacement engine is not a General
Electric CF6-80C2-A5F engine, such replacement engine must then be commonly
used in the commercial aviation industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or Corporate
Trust Administration, as the case may be, designated by such Person to perform
obligations under the Operative Agreements, with respect to the Owner
Participant, the president or any vice president with direct responsibility
for the transactions contemplated by the Operative Agreements, and with
respect to any other party, any corporate officer or (except in the case of
the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be executed and
delivered by the Lessee and the Pass Through Trustee, the Series Supplement
1995-B2 to be executed and delivered by the Lessee and the Pass Through
Trustee or the Series Supplement 1995-B3 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.
Specified Investments. Direct obligations of the United States of
America and obligations fully guaranteed by the United States of America
maturing within 30 days of the date of purchase.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Term, the amount determined by multiplying the Purchase Price
by the percentage set forth in Schedule III of the Lease under the heading
"Stipulated Loss Value Factor" opposite such date (as such Schedule III may be
adjusted from time to time as provided in Section 3.04 of the Lease), and
during any Renewal Term, the amount determined pursuant to Section 4.01(b) of
the Lease. Notwithstanding any other provisions of the Lease or the
Participation Agreement or the Indenture, each Stipulated Loss Value shall be,
under any circumstances and in any event, an amount, together with so much of
the arrears portion of Interim Rent and Basic Rent due and owing through the
date of payment of Stipulated Loss Value as does not constitute an Excepted
Payment, at least sufficient to pay in full as of such date of payment the
aggregate unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on Schedule
III of the Lease, for dates other than Rent Payment Dates on which arrears
Interim Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent and,
accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
Substantial Authority. For Federal income tax purposes, shall have
the meaning applicable for purposes of Section 6662 of the Code and relevant
Treasury regulations.
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 any Ancillary Agreement
or any other Operative Agreement to the Lessor, the Owner Participant or
others, including, without limitation, payments of Stipulated Loss Value, EBO
Price and amounts calculated by reference to Termination Value and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement or the Tax Indemnity
Agreement or any other Operative Agreement, but excluding Interim Rent and
Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995, between
the Lessee and the Owner Participant, as from time to time modified, amended
or supplemented pursuant to its applicable provisions.
Term. The Preliminary Term, the Interim Term and the Basic Term of
the lease for the Aircraft under the Lease and, if renewed pursuant to Section
4.01 of the Lease, each Renewal Term for the Aircraft for which the Lease is
renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease, and in the
case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling on
July 2, 2009 or July 2, 2012, (ii) Section 4.02(a)(D) or (E) of the Lease, a
Rent Payment Date that is on or after the fifth anniversary of the
Commencement Date and (iii) Section 4.02(a)(F) of the Lease, January 2, 2015.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code (which, among
other things, recodified the Federal Aviation Act of 1958, as amended to the
time of such recodification), as amended and in effect on the date of the
Lease or as subsequently amended, or any successor or substituted legislation
at the time in effect and applicable, and the regulations promulgated pursuant
thereto.
Treasury Yield. (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N663FE), dated as of October 26, 1995, between the Owner Participant
and the Owner Trustee in its individual capacity, as from time to time
modified, amended or supplemented pursuant to its applicable provisions and in
accordance with the Operative Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the Underwriting
Agreement.
Underwriting Agreement. The Underwriting Agreement dated October 26,
1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
EXHIBIT 4.g
LEASE AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N660FE)
Dated as of September 1, 1995
Amended and Restated as of October 26, 1995
between
NBD BANK,
Not in its Individual Capacity,
but Solely as Owner Trustee,
AS LESSOR
and
FEDERAL EXPRESS CORPORATION,
AS LESSEE
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 759, REGISTRATION NO. N660FE
CERTAIN OF THE RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE
AGREEMENT OF NBD BANK, AS OWNER TRUSTEE, HAS BEEN ASSIGNED TO AND IS SUBJECT
TO A LIEN AND SECURITY INTEREST IN FAVOR OF THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), AS INDENTURE TRUSTEE UNDER THE TRUST INDENTURE AND SECURITY
AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N660FE) DATED AS OF SEPTEMBER
1, 1995, AS AMENDED AND RESTATED AS OF OCTOBER 26, 1995 FOR THE BENEFIT OF THE
HOLDERS OF THE CERTIFICATES REFERRED TO IN SUCH TRUST INDENTURE AND SECURITY
AGREEMENT. THIS LEASE AGREEMENT HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS.
ONLY THE CHATTEL-PAPER "ORIGINAL" COUNTERPART CONTAINS THE RECEIPT THEREFOR
EXECUTED BY THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS INDENTURE
TRUSTEE, ON THE SIGNATURE PAGES THEREOF.
TABLE OF CONTENTS
Page
Initial Recitals.............................................................1
ARTICLE 1
DEFINITIONS
ARTICLE 2
ACCEPTANCE UNDER THE LEASE
Section 2.01. Affirmation of Acceptance under the Lease................ 2
ARTICLE 3
RENT AND RENT ADJUSTMENT
Section 3.01. Owner Participant Payment................................ 2
Section 3.02. Interim Rent and Basic Rent.............................. 2
Section 3.03. Supplemental Rent........................................ 3
Section 3.04. Adjustments to Interim Rent, Basic Rent, Stipulated Loss
Value, Termination Value and the EBO Price After the
Delivery Date.......................................... 3
Section 3.05. Minimum Interim Rent and Basic Rent...................... 5
Section 3.06. Payment to Indenture Trustee............................. 6
Section 3.07. Costs and Expenses....................................... 6
ARTICLE 4
RENEWAL OPTIONS AND PURCHASE OPTIONS
Section 4.01. Renewal Options.......................................... 6
Section 4.02. Purchase Options......................................... 7
Section 4.03. Appraisal Procedures..................................... 9
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.01. Disclaimer of Representations and Warranties............. 11
Section 5.02. No Modification of Other Warranties...................... 12
Section 5.03. Certain Agreements of the Lessee......................... 12
ARTICLE 6
LIENS
Section 6.01. Liens.................................................... 12
ARTICLE 7
AIRCRAFT REGISTRATION, MAINTENANCE AND OPERATION
Section 7.01. Registration, Maintenance and Operation.................. 14
Section 7.02. Possession and Permitted Transfer and Sublease........... 16
Section 7.03. Insignia................................................. 20
ARTICLE 8
REPLACEMENT AND POOLING OF PARTS
Section 8.01. Replacement of Parts..................................... 21
Section 8.02. Pooling of Parts......................................... 22
ARTICLE 9
ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section 9.01. Required Alterations and Modifications................... 23
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 Aircraft by the Lessor..................... 27
Section 10.03. Voluntary Termination as to Engines..................... 28
ARTICLE 11
LOSS, DESTRUCTION, REQUISITION
Section 11.01. Lessee's Election Rights................................ 28
Section 11.02. Payment of Stipulated Loss Value........................ 29
Section 11.03. Replacement of Airframe and Engines..................... 30
Section 11.04. Event of Loss with Respect to an Engine................. 33
Section 11.05. Application of Payments from the Government or Others... 35
Section 11.06. Requisition of an Airframe and the Installed Engines
for Use by Government................................. 36
Section 11.07. Requisition for Use by Government of an Engine Not
Installed on the Airframe............................. 37
Section 11.08. Application of Payments During Existence of Certain
Defaults.............................................. 37
ARTICLE 12
RETURN OF AIRCRAFT
Section 12.01. Return of Aircraft...................................... 37
Section 12.02. Return of Engines....................................... 38
Section 12.03. Return of Manuals....................................... 38
Section 12.04. Condition of Aircraft................................... 39
Section 12.05. Delayed Return of Aircraft.............................. 40
Section 12.06. Storage................................................. 41
Section 12.07. Special Markings........................................ 41
Section 12.08. Lessor's Option to Purchase Parts....................... 41
ARTICLE 13
INSURANCE
Section 13.01. Comprehensive Airline Liability and Property Damage
Liability Insurance................................... 42
Section 13.02. Insurance Against Loss or Damage to Aircraft and Engines 44
Section 13.03. Application of Insurance Proceeds....................... 46
Section 13.04. Reports................................................. 47
Section 13.05. Lessor's Insurance...................................... 48
Section 13.06. Self-Insurance.......................................... 48
ARTICLE 14
INSPECTION
Section 14.01. Right of Inspection..................................... 48
Section 14.02. No Obligation to Inspect................................ 49
ARTICLE 15
ASSIGNMENT
Section 15.01. Lessee's Right to Assign................................ 49
Section 15.02. Citizenship............................................. 49
ARTICLE 16
EVENTS OF DEFAULT
Section 16.01. Events of Default....................................... 50
ARTICLE 17
REMEDIES
Section 17.01. Remedies Upon Lessee's Default.......................... 52
Section 17.02. Cumulative Remedies..................................... 55
Section 17.03. Waiver.................................................. 55
Section 17.04. Lessor's Right to Perform for Lessee.................... 55
ARTICLE 18
COVENANT OF QUIET ENJOYMENT
Section 18.01. Quiet Enjoyment......................................... 56
ARTICLE 19
FURTHER ASSURANCES
Section 19.01. Further Assurances...................................... 56
ARTICLE 20
NET LEASE
Section 20.01. Nature of Lease......................................... 57
ARTICLE 21
SUCCESSOR LESSOR
Section 21.01. Successor Lessor........................................ 58
ARTICLE 22
SECURITY FOR LESSOR'S OBLIGATIONS
Section 22.01. Security for Lessor's Obligations to Holders............ 59
Section 22.02. Intentionally Left Blank................................ 59
Section 22.03. Consent of Lessee to Assignment of Lease as Security.... 59
ARTICLE 23
SECURITY FUNDS
Section 23.01. Investment of Security Funds............................ 59
ARTICLE 24
CONCERNING THE LESSOR
Section 24.01. Lessor's Entry Into Lease............................... 61
ARTICLE 25
NOTICES
Section 25.01. Notices................................................. 61
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Headings and Captions........................... 62
Section 26.02. References.............................................. 62
Section 26.03. APPLICABLE LAW.......................................... 62
Section 26.04. Severability............................................ 63
Section 26.05. No Oral Modification.................................... 63
Section 26.06. Agreement as Chattel Paper.............................. 63
Section 26.07. Counterparts............................................ 63
Section 26.08. Public Release of Information........................... 63
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties................................... 64
Section 27.02. Section 1110 Compliance................................. 64
Section 27.03. Finance Lease........................................... 64
Schedule I Definitions
Schedule II Owner Participant Amount, Interim Rent and Basic Rent
Schedule III Stipulated Loss Values
Schedule IV Termination Values
Schedule V Purchase Option Schedule
Exhibit A Form of Lease Supplement
LEASE AGREEMENT
(Federal Express Corporation Trust No. N660FE)
Lease Agreement (Federal Express Corporation Trust No. N660FE) dated
as of September 1, 1995, as amended and restated as of October 26, 1995 (this
"Lease"), between NBD BANK, a Michigan banking corporation, 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, the Lessor and the Lessee have heretofore entered into the
Original Lease dated as of September 1, 1995 as supplemented by Lease
Supplement No. 1 dated September 20, 1995.
WHEREAS, the Original Lease was recorded by the FAA on September 21,
1995 and assigned Conveyance Number 2A267706.
WHEREAS, pursuant to Article 15 of the Original Participation
Agreement, the Lessee, the Original Loan Participants, the Owner Participant,
the Indenture Trustee and the Lessor desire to refinance, in full, the
Original Loan Certificates on the Refunding Date; and
WHEREAS, in connection with such refinancing, the Lessee, the Owner
Participant, the Lessor and the Indenture Trustee desire that the Original
Lease be amended and restated in its entirety as provided herein;
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 that the
Original Lease be and the same is hereby amended and restated in its entirety
as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, 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. Affirmation of Acceptance under the Lease. The Lessor,
having accepted delivery of the Aircraft from AVSA on the Delivery Date and
having simultaneously leased the Aircraft to the Lessee, and the Lessee,
having leased the Aircraft from the Lessor on the Delivery Date, as evidenced
by the execution by the Lessor and the Lessee of the initial Lease Supplement
(which is incorporated by reference herein), hereby affirm the terms and
conditions of the Original Lease as herein amended and restated and of the
Purchase Agreement Assignment. This Lease shall last for the Term, at all
times during which full legal title to the Aircraft shall remain vested with
the Lessor to the exclusion of the Lessee, notwithstanding the possession and
use thereof by the Lessee or any other Person.
ARTICLE 3
RENT AND RENT ADJUSTMENT
Section 3.01. Owner Participant Payment. The Owner Participant has
agreed, so long as no Event of Default has occurred and is continuing, to make
available to the Lessor funds sufficient to pay to the Indenture Trustee on
the Owner Participant Payment Date an amount equal to the amounts scheduled to
be paid on the Certificates on such date, all in accordance with the
provisions of Section 2.03 of the Participation Agreement. To the extent such
amount is not paid when due on the Owner Participant Payment Date, the Lessee
shall make an advance on behalf of the Owner Participant as described in
Section 3.05 hereof equal to such amount and, if not otherwise reimbursed, the
Lessee shall have the right to offset such amount pursuant to Section 3.05
hereof.
Section 3.02. Interim Rent and Basic Rent. No Rent (other than
Supplemental Rent, if any) shall be payable for the Preliminary Term. The
Lessee agrees to pay to the Lessor in immediately available funds on the
Commencement Date, Interim Rent in the amount set forth on Schedule II hereto
for such date, subject to increase or decrease as provided in Section 3.04
hereof, with such Interim Rent being allocated to the Interim Term. The
Lessee agrees to pay to the Lessor in immediately available funds, on each
Rent Payment Date, Basic Rent for the Aircraft during the Basic Term, each
payment being set forth on Schedule II hereto opposite the applicable Rent
Payment Date, subject to increase or decrease as provided in Sections 3.04 of
this Lease. Each payment of Interim Rent and Basic Rent shall be made in
arrears or in advance, all as stated in Schedule II hereto. Each payment of
Basic Rent designated as advance rent shall be allocated over the six-month
period beginning on the Rent Payment Date on which such advance rent payment is
scheduled to be made, and each installment of Basic Rent that is designated as
payable in arrears 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 is scheduled to be made and each installment of Interim Rent
that is designated as payable in arrears shall be accrued over the Interim
Term.
Section 3.03. 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 Interim Rent or 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 Interim Rent or 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, the Lessee will pay to the Lessor, as Supplemental Rent, in
the case of any prepayment of the Certificates pursuant to Section 6.02 of the
Indenture (except in the case of an Indenture Event of Default in the absence
of any Event of Default) or any prepayment or purchase of the Certificates
pursuant to clause (ii) of the first sentence of Section 8.02(a) of the
Indenture, an amount equal to the aggregate amount of any Make-Whole Premium
payable on such prepayment or purchase. The expiration or other termination
of the Lessee's obligation to pay Interim Rent or Basic Rent shall not limit
or otherwise modify the obligations of the Lessee with respect to the payment
of Supplemental Rent.
Section 3.04. Adjustments to Interim Rent, Basic Rent, Stipulated
Loss Value, Termination Value and the EBO Price after the Delivery Date. The
percentages for Interim Rent and Basic Rent referred to in Schedule II hereto
and for Stipulated Loss Value and Termination Value in Schedule III and
Schedule IV, respectively, hereto and the EBO Price shall be adjusted (upward
or downward) subject to the minimum value established by Section 3.05 hereof
and the definitions of Stipulated Loss Value and Termination Value to reflect
(i) any costs and expenses paid by the Lessor or the Owner Participant
pursuant to Section 10.01 of the Participation Agreement being greater or less
than the Estimated Expense Amount, (ii) any Refinancing pursuant to Section
15.01 of the Participation Agreement, (iii) any reoptimization pursuant to
Section 15.02 of the Participation Agreement, (iv) the Owner Participant
Amount being different from the amount set forth on Schedule II hereto or
paid, in whole or in part, on a date other than as set forth on Schedule II
hereto or (v) payments pursuant to Section 5 of the Tax Indemnity Agreement by
an adjustment of Interim Rent and Basic Rent. Each such adjustment pursuant
to clause (i), (ii), (iv) or (v) of the first sentence of this Section 3.04
shall maintain the Owner's Economic Return (and, while maintaining such
Return, minimize the aggregate Net Present Value of Rents to the Lessee) and
shall not cause the EBO Price to be less than the greater of (i) the
Termination Value as of such Rent Payment Date and (ii) the estimate set forth
in the Appraisal of the Fair Market Value of the Aircraft at the time of
exercise of the purchase option under Section 4.02(a)(F) hereof. In the event
of an adjustment pursuant to clause (iii) of the first sentence of this
Section 3.04, the Owner Participant may recalculate Interim Rent and Basic
Rent as set forth in Schedule II hereto in order to maintain the Owner's
Economic Return, recalculate the Owner Participant Amount set forth in
Schedule II hereto and, subject to the provisions of Section 15.02 of the
Participation Agreement, recalculate the schedule of principal repayments, the
Stipulated Loss Value percentages set forth in Schedule III hereto, the
Termination Value percentages set forth in Schedule IV hereto and the EBO
Price in a manner consistent with such recalculation of Interim Rent and Basic
Rent; provided that any such recalculations may not (A) increase the Net
Present Value of Rents to the Lessee, (B) increase as of any date the sum of
(1) the Net Present Value of Rents to the Lessee payable through such date
plus (2) the present value of the Stipulated Loss Value, the Termination Value
or the EBO Price as of such date, in each case discounted at the Debt Rate,
beyond such net present values prior to such adjustment, or (C) otherwise
result in any adverse impact (including tax consequences) to the Lessee for
which the Owner Participant has not agreed to indemnify the Lessee on terms
reasonably acceptable to the Lessee. The Owner Participant shall promptly
notify the Lessee and the Lessor and the Lessee shall promptly notify the
Owner Participant and the Lessor of the need for any such adjustment. As
promptly as feasible after any such notification, the Lessor shall furnish the
Lessee with a notice setting forth the amount of any such adjustments together
with the calculations upon which the adjustments are based; provided, however,
that the Lessor and the Owner Participant shall not be required to disclose to
the Lessee in such notice any confidential or proprietary information
(including methodology or assumptions) relating to such calculations. At the
request and, subject to the next succeeding sentence, expense of the Lessee,
the accuracy of the calculation of such adjustments and the consistency of the
calculation with the calculation used to determine Interim Rent, Basic Rent,
Stipulated Loss Values, Termination Values and the EBO Price shall be verified
first, by First Chicago Leasing Corporation or such other financial advisor
chosen by the Lessee and second, if such adjustments are still believed to be
in error and are not reconciled with the Owner Participant within fifteen
(15) Business Days, by a firm of nationally recognized independent public
accountants selected by the Lessee and reasonably acceptable to the Owner
Participant and, in order to enable them to verify such adjustments, the Owner
Participant shall make available to such accountants (for their own
confidential use and not to be disclosed to the Lessee or any other Person and
subject to the execution of a confidentiality agreement reasonably
satisfactory to the Owner Participant) all information reasonably necessary
for such verification, including the name of the lease analysis program used
by the Owner Participant to calculate such adjustments. The Lessee will pay
the reasonable costs and expenses of the verification process under this
Section 3.04 unless as a result of such verification process by the
independent public accountants Interim Rent or Basic Rent is adjusted and such
adjustment causes the Net Present Value of Rents to decline by 10 or more
basis points (in which event the Owner Participant shall pay the reasonable
costs and expenses of such verification process). The Lessor and the Lessee
shall execute and deliver an amendment to this Lease to reflect each
adjustment under this Section 3.04.
All adjustments under this Section 3.04 shall be in compliance with
the requirements of Revenue Procedure 75-21, 1975-1 C.B. 715 and Sections
4.02(5), 4.07(1), 4.07(2) and 4.08(1) of Revenue Procedure 75-28, 1975-1 C.B.
752 and shall be structured so as to not cause the Lease to be a "disqualified
leaseback or long-term agreement" within the meaning of Section 467 of the
Code.
Section 3.05. Minimum Interim Rent and Basic Rent. Notwithstanding
any other provisions of the Operative Agreements to the contrary, each
installment of Interim Rent and Basic Rent due on each Rent Payment Date and
not constituting an Excepted Payment shall be, under any and all
circumstances, an amount 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 Article 17 hereof) on such Rent Payment Date. To the
extent that the Owner Participant does not provide the Lessor with funds on
the Owner Participant Payment Date as referred to in Section 3.01 hereof if
and when due, the Lessee shall on such date advance on behalf of the Owner
Participant (and such advance shall be deemed a demand loan owing to the Lessee
from the Owner Participant bearing interest at the Past Due Rate plus 3%) an
amount equal to the funds not so provided. Unless otherwise reimbursed, the
Lessee shall, in addition to all other rights and remedies under applicable
law but subject to Article 20 hereof, be entitled to offset against any
payments due from the Lessee to the Lessor (including, without limitation,
Interim Rent, Basic Rent and payments due to the Lessor under Article 9 of the
Participation Agreement but not including the fees and expenses payable to NBD
or to the Owner Participant under the Tax Indemnity Agreement and Excepted
Payments), until the Lessee has fully offset such advance plus interest
thereon at the Past Due Rate plus 3% from the date of such advance until the
date of such reimbursement or offset; provided, however, that in the case of
any payment due from the Lessee which is distributable under the terms of the
Indenture, the Lessee's right of offset shall be limited to the amount
distributable to the Lessor thereunder (and shall not include any amounts
distributable to the Indenture Trustee in its individual capacity or to the
Holders of the Certificates or any of them). No such offset or aggregate
combined effect of separate offsets shall reduce the amount of any installment
of Interim Rent and Basic Rent, or the amount of Stipulated Loss Value,
Termination Value or EBO Price, to an amount insufficient to pay in full the
payments then required to be made on account of the principal of and interest
on the Certificates then Outstanding. If the Owner Participant is not
required to provide such funds under Section 3.01 hereof, the Lessee shall
make a payment of Supplemental Rent in an amount equal to the Owner
Participant Amount.
Section 3.06. Payment to Indenture Trustee. All Rent payable by the
Lessee to the Lessor shall be paid to the Lessor at its principal office at 611
Woodward Avenue, Detroit, Michigan 48226, Attention: Corporate Trust
Department, 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 10:30 a.m., New
York time on the due date of such payment; provided, however, that so long as
the Indenture shall not have been discharged the Lessor hereby directs, and
the Lessee agrees, that all Rent (other than Excepted Payments, which shall be
paid by the Lessee directly to the Person entitled thereto) (all without
set-off or counterclaim as and to the extent provided in Article 20 hereof) and
all amounts referred to in Section 3.01 hereof shall be paid directly to the
Indenture Trustee at its principal office at 4 Chase Metrotech Center, 3rd
Floor, Brooklyn, New York 11245, Attention: Corporate Trust Administration, or
as the Indenture Trustee may otherwise direct within the United States by wire
transfer of immediately available funds in U.S. Dollars no later than 10:30
a.m., New York 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 without interest
thereon for the period of such extension (provided that payment is made on
such next succeeding Business Day).
Section 3.07. 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 or Purchase.
The Lessee shall provide the Lessor with irrevocable written notice (the
"Preliminary Notice") not more than 360 days nor less than 180 days prior to
the end of the Basic Term or the preceding Renewal Term, as the case may be,
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)(B)
hereof or, if a further Renewal Term is available, pursuant to Section
4.02(a)(C) hereof. If, following delivery of a Preliminary Notice, the Lessee
shall not have notified the Lessor, at least 30 days prior to the end of the
Basic Term or a current Renewal Term, that it is renewing this Lease in
accordance with this Section 4.01, the Lessee's Preliminary Notice shall be
deemed an irrevocable notice of purchase satisfying Section 4.02(a)(B) hereof.
Provided that (i) no 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 timely delivered the respective Preliminary
Notice, the Lessee may, by irrevocable written notice delivered to the Lessor
not less than 30 days prior to the end of the Basic Term, extend the Term for
a single Fixed Renewal Term of not less than one (1) nor more than three (3)
years commencing on the expiration of the Basic Term. The Lessee shall pay
the Fixed Renewal Rent during any Fixed Renewal Term.
In addition, provided that (i) no 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 written notice delivered to the Lessor
not less than 30 days prior to the end of the Basic Term or the preceding
Renewal Term, as the case may be, elect to extend the Term for a Renewal Term
or further Renewal Term commencing on the expiration of the Basic Term or the
preceding Renewal Term and ending one or more years thereafter for a rent
equal to the then-current Fair Market Rental of the Aircraft. The Lessee
shall pay the Fair Market Rental during any Fair Market Renewal Term.
(b) Terms and Conditions. Any such renewal shall be on the same
terms and conditions as provided herein, except that (i) rent for the Aircraft
due during any Renewal Term shall be payable semi-annually in arrears on the
dates corresponding to the Rent Payment Dates during such Renewal Term, and
(ii) during any Renewal Term, the Stipulated Loss Value for the Aircraft shall
as of any Stipulated Loss Value Determination Date during the Renewal Term be
equal to the higher of the Stipulated Loss Value and the Fair Market Value of
the Aircraft as of the end of the Basic Term or the next preceding Renewal
Term, if applicable.
Section 4.02.Purchase Options. (a) Election to Purchase. Provided
that (i) this Lease has not otherwise expired or terminated, (ii) either no
Event of Default shall have occurred and be continuing at the time of the
notice provided below or, if an Event of Default occurs after such notice has
been given, the Lessee shall have provided evidence reasonably satisfactory to
the Lessor and the Owner Participant of its financial ability to purchase the
Aircraft and (iii) the Lessee shall have previously given the Preliminary
Notice under Section 4.01(a) hereof (in the case of paragraph (B) below or, if
a further Renewal Term is available, paragraph (C) below) or the applicable
notice for each other paragraph below, as the case may be, the Lessee may:
(A) by written notice delivered to the Lessor and the Owner
Participant, not more than 180 nor less than 90 days prior to July 2, 2008
or January 2, 2012, as the case may be, elect to terminate the Lease and
purchase the Aircraft on July 2, 2008 or January 2, 2012, for, at the
Lessee's option, either (1) an amount in immediately available funds equal
to the greater of the Fair Market Value or the Termination Value on such
date or (2)(i) the assumption by the Lessee, pursuant to Section 7.11 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 (ii) the payment to the Lessor of an amount equal to the
excess of (A) the greater of the Fair Market Value or the Termination Value
on such date over (B) the unpaid principal of the Certificates plus accrued
interest as of such date. Such notice (which shall be revocable by the
Lessee upon written notice no later than the Business Day prior to the date
15 days prior to the applicable Rent Payment Date) shall either direct the
Lessor to prepay the Certificates in full on such Termination Date pursuant
to Section 6.02 of the Indenture or state that the Lessee shall exercise
its option to assume the Certificates pursuant to Section 7.11 of the
Participation Agreement and Section 2.12 of the Indenture; or
(B) by irrevocable written notice delivered to the Lessor and the
Owner Participant not more than 180 nor less than 30 days prior to the end
of the Basic Term (or deemed given pursuant to the second sentence of
Section 4.01(a) hereof), elect to purchase the Aircraft on the last day of
the Basic Term for an amount equal to the Fair Market Value thereof on such
date; or
(C) by irrevocable written notice delivered to the Lessor and the
Owner Participant not more than 180 days nor less than 30 days prior to the
end of any Renewal Term, elect to purchase the Aircraft on the last day of
such Renewal Term at a price equal to the Fair Market Value of the Aircraft
on such day; provided, however, that the Lessee shall have paid all Rent
due and payable under this Lease on or prior to the expiration of any such
Renewal Term; 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 shall be in an amount not less than the
greater of the amount specified in Schedule V hereto and the Fair Market
Value;
(E) exercise the purchase option in this Section 4.02(a)(E) which is
more particularly described in Schedule V hereto by reference to this
Section 4.02(a)(E) and which shall be in an amount not less than the
greater of the amount specified in Schedule V hereto and the Fair Market
Value; or
(F) by irrevocable written notice delivered to the Lessor and the
Owner Participant not more than 180 nor less than 90 days prior to January
2, 2015, elect to terminate this Lease and purchase the Aircraft on such
Rent Payment Date for an amount specified in Ancillary Agreement I (the
"EBO Price") with respect to this Section 4.02(a)(F) which amount shall not
be less than the greater of (i) the Termination Value as of such Rent
Payment Date and (ii) the estimate set forth in the Appraisal of the Fair
Market Value at the time of exercise of the option under this Section
4.02(a)(F).
The Lessee shall give the Lessor, the Owner Participant and the
Indenture Trustee not more than 180 and not less than 90 days' prior written
notice of its election to purchase pursuant to Section 4.02(a)(D) or
4.02(a)(E) hereof. Such notice shall be revocable by the Lessee upon
written notice no later than the Business Day prior to the date 15 days prior
to the applicable Rent Payment Date and such notice shall either direct the
Lessor to prepay the Certificates in full on such Termination Date pursuant to
Section 6.02 of the Indenture or state that the Lessee shall exercise its
option to assume the Certificates pursuant to Section 7.11 of the
Participation Agreement and Section 2.12 of the Indenture. In the event that
the Lessee shall have given notice to purchase the Aircraft under Section
4.02(a)(A), 4.02(a)(D) or 4.02(a)(E) hereof and shall fail to
make payment (and, if applicable, assume the Certificates) on the applicable
Termination Date, the Lease shall continue and the Lessee shall pay to the
Owner Trustee any losses, costs and expenses of the Owner Participant incurred
in connection with such failure.
(b) Terms and Conditions. If the Lessee elects to purchase the
Aircraft pursuant to Section 4.02(a) hereof, the Lessee shall pay to the
Lessor on the applicable Termination Date by wire transfer of immediately
available funds any Basic Rent payable on such Termination Date (to the extent
payable in arrears but not to the extent payable in advance), the applicable
purchase price together with any other amounts past due hereunder or due on
the applicable Termination Date and all other Supplemental Rent then due under
this Lease including, without limitation, the aggregate amount of any
Make-Whole Premium applicable to any Certificate (if such purchase occurs
prior to the Premium Termination Date for such Certificate) and amounts due
under the Participation Agreement and the Tax Indemnity Agreement, whereupon
(and upon discharge of the Lien of the Indenture in accordance with Section
14.01 thereof) 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 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 such other documents as the Lessee may reasonably require.
In connection with any termination or proposed termination of this 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 by the
date 60 days prior to the date for exercise of the applicable option, such
amount shall be determined by independent appraisal conducted by appraisers
selected pursuant to Section 4.03(b) hereof. At any time prior to final
determination of such amount pursuant to Section 4.03(b) hereof, 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 further determination
shall be excluded, the remaining two determinations shall be averaged, and
such average shall be final and binding upon the Lessor and the Lessee.
Otherwise, the average of all three determinations shall be final and binding
upon the Lessor 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 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 under Section
4.02 hereof, in which case 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 EACH 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 (IN ITS INDIVIDUAL
CAPACITY OR AS OWNER TRUSTEE), THE INDENTURE TRUSTEE, THE OWNER PARTICIPANT
OR ANY HOLDER. THE LESSOR LEASES THE AIRFRAME AND EACH ENGINE, AS-IS,
WHERE-IS, AND NEITHER THE LESSOR (IN ITS INDIVIDUAL CAPACITY OR AS OWNER
TRUSTEE), THE INDENTURE TRUSTEE, THE OWNER PARTICIPANT NOR ANY HOLDER
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, AIRWORTHINESS,
WORKMANSHIP, CONDITION, VALUE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE,
DESIGN, OPERATION OR MERCHANTABILITY OF THE AIRFRAME, EACH 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, (E) THE LESSOR'S TITLE THERETO, (F) THE LESSEE'S OR ANY SUBLESSEE'S
RIGHT TO THE QUIET ENJOYMENT THEREOF (EXCEPT AS PROVIDED IN ARTICLE 18
HEREOF) OR (G) ANY OTHER MATTER WHATSOEVER. IT IS AGREED THAT ALL RISKS
INCIDENT TO THE MATTERS DISCUSSED IN THE PRECEDING SENTENCE, AS AMONG THE
LESSOR, THE INDENTURE TRUSTEE, THE OWNER PARTICIPANT AND THE LESSEE, ARE TO
BE BORNE BY THE LESSEE. The provisions of this Section 5.01 have been
negotiated by the Lessor and the Lessee and, except as provided in Article
7 of the Participation Agreement, are intended to be a complete exclusion
and negation of any representations or warranties of the Lessor, the
Indenture Trustee and the Owner Participant, 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, AVSA, the Manufacturer
or the Engine Manufacturer or any of their respective subcontractors or
suppliers, with respect to the Airframe, the Engines or any Parts incorporated
or installed in or attached to the Airframe or Engines, or to release the
Lessee, AVSA, the Manufacturer or the Engine Manufacturer or any of their
respective subcontractors or suppliers from any such representation, warranty
or obligation. 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 Manufacturer, AVSA or Engine Manufacturer or any of their
respective subcontractors or suppliers, and any other claims against the
Manufacturer, AVSA 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 Manufacturer, AVSA and Engine Manufacturer are
obligated to provide and do provide pursuant to the Purchase Agreement or the
GTA with respect to the Aircraft; 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; provided that 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.
Section 5.03. Certain Agreements of the Lessee. The Lessee
agrees with the Lessor for the benefit of the Owner Participant 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, 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 or other Person under a
sublease, transfer, assignment or other such arrangement 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 Section 7.03(b),
7.04(b) or 7.05(b) of the Participation Agreement;
(d) 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 material danger of the sale,
forfeiture or loss of the Lessor's Estate, the Aircraft, the Airframe or
any Engine or any interest therein or any material risk of civil
liabilities (unless the Owner Trustee, the Indenture Trustee and the Owner
Participant shall be indemnified to its satisfaction against such
liabilities by the Lessee) or any risk of the assertion of criminal charges
against the Lessor, the Owner Participant, the Indenture Trustee or any
Holder;
(e) 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 material danger of the sale,
forfeiture or loss of the Lessor's Estate, the Aircraft, the Airframe or
any Engine or any interest therein; and
(f) Liens arising from judgments 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 material danger of the sale,
forfeiture or loss of the Lessor's Estate, the Aircraft, Airframe or any
Engine or any interest therein.
ARTICLE 7
AIRCRAFT REGISTRATION, MAINTENANCE AND OPERATION
Section 7.01. Registration, Maintenance and Operation. The
Lessee, at its own cost and expense, shall:
(a) cause the Aircraft to remain at all times duly registered in the
name of the Lessor as owner, pursuant to the Transportation Code and,
subject to the proviso to Section 6.03(b) of the Participation Agreement,
to remain at all times duly registered pursuant to the Transportation Code
and at all times act 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 6.03(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 Aircraft) in as good
operating condition as when delivered to the Lessor on the Delivery Date,
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 pursuant to Section 6.03(b) of the Participation
Agreement and the Lessee's maintenance program approved by the Aeronautics
Authority or such agency or body, (ii) in the same manner and with the same
care used by the Lessee with respect to other A300-600 series aircraft and
CF6-80C2-A5F series engines (or other engines permitted by the terms of
this Lease to be used on the Aircraft) owned, operated or leased 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 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, and (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 Transportation Code 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;
(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
Transportation Code (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 11.03 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 interest in the
Aircraft;
(e) not maintain, service, repair, overhaul, use or operate the
Aircraft or any Engine in violation of any airworthiness certificate or
registration relating thereto, or in violation of any law or any license,
rule, regulation or order of or by any government or governmental authority
having jurisdiction over the Lessee or the Aircraft or any Engine or for
any purpose for which the Aircraft or any Engine is not designed; provided,
however, that the Lessee (or if a sublease shall then be in effect, the
sublessee thereunder) may in good faith contest the validity or application
of any such law, license, rule, regulation or order in any manner that does
not adversely affect the Lessor, its right, title or interest in the
Aircraft or any Engine or the interests of the Indenture Trustee or the
Owner Participant therein, or in any Operative Agreement (excluding any
interests indemnified for under the Tax Indemnity Agreement) and such
contest or non-compliance will not result in any material risk of loss,
forfeiture or damage to the Aircraft or in any risk of criminal liability
to the Lessor, 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 the same therewith at its
own cost and expense and will maintain the Aircraft or any Engine in
compliance with such law, license, rule, regulation or order; and
(f) not operate or locate the Airframe or any Engine, or suffer the
Airframe or any Engine to be operated or located in any area excluded from
coverage by any insurance policy required by the terms of Article 13
hereof, unless the Lessee has obtained, prior to the operation or location
of the Airframe or any Engine in such area, indemnification or other
insurance from the Government, or other insurance acceptable to the Lessor
in its sole discretion, against the risks and in the amounts required by,
and in compliance with, Article 13 hereof covering such area (and naming
the Lessor, or so long as this Lease is assigned to the Indenture Trustee,
the Indenture Trustee, as loss payee in respect of indemnification or
insurance payable in respect of casualties to the Aircraft) or unless the
Aircraft is only temporarily located in such area as a result of an
isolated occurrence attributable to a hijacking, medical emergency,
equipment malfunction, weather conditions, navigational error or other
similar unforeseen circumstances and the Lessee is using its good faith
efforts to remove the Aircraft from such area.
The Lessee may, at any time during the Term, install an engine or
engines on the Airframe and operate the Aircraft with such engine or engines
installed thereon and the Lessor shall have no right, title or interest in and
to any such engine until such time, if any, that such engine is returned to
the Lessor under Section 12.02 hereof.
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) in the case of clause (i) below, no Event of
Default shall have occurred and be continuing, (ii) the Lien of the Indenture
is not impaired thereby, (iii) all applicable governmental approvals in
connection therewith have been obtained and (iv) the Lessee shall comply with
the provisions of Article 13 hereof, the Lessee may without the prior written
consent of the Lessor:
(i) so long as the sublessee is generally meeting its material
obligations as they come due and is not subject to a proceeding or final
order under applicable bankruptcy, insolvency or reorganization laws on the
date the sublease is entered into, (A) sublease the Aircraft or any Engine
to a U.S. Air Carrier, (B) sublease the Aircraft or any Engine to an Air
Carrier which is principally based in and domiciled in one of the countries
listed on Schedule III of the Participation Agreement, (C) sublease the
Aircraft or any Engine to an Air Carrier that is principally based in and
a domiciliary of a country which is a party to the International Convention
on the Recognition of Rights in Aircraft, or (D) sublease the Aircraft or
any Engine to any other Air Carrier not described in this Section which
shall be reasonably acceptable to the Lessor as evidenced by its prior
written consent; provided, that, with respect to clauses (B) and (C) above,
at all times during any such sublease the United States of America
maintains normal diplomatic relations with the country in which such Air
Carrier is principally based and domiciled. 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 except that, in
the case of subparagraph (iv), possession of the Aircraft may only be
transferred at the direction of the Lessee) and (z) such sublease shall
expire not later than the expiration of the Basic Term or any applicable
Renewal Term hereof. Prior to any sublease to an Air Carrier permitted
under Section 7.02(a)(i)(B) or (C) above: (I) the maintenance standards of
the aeronautical authority of the country of domicile or principal
operation of the sublessee taken as a whole shall not be materially less
stringent than those of the FAA or at least comparable to those, taken as a
whole, required by the central civil aviation authority of any of the
United Kingdom, France, Canada, Japan or Germany; (II) the Lessee will
provide opinions of counsel (such counsel and the form and substance of
such opinions to be reasonably satisfactory to the Lessor and the Indenture
Trustee) with respect to (A) the legality, validity and enforceability of
the Operative Agreements and the sublease in such country, (B) that 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 Aircraft in the event of a requisition
of use or title by such government, (C) the Lessor's title to the subleased
equipment will be recognized, (D) 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), (E) that 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, (F) 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 to the Owner Participant and is provided at or before the
execution of such a sublease, at the Lessee's cost and expense), (G) that
there exist no possessory rights in favor of such sublessee under the laws
of such country which would, upon bankruptcy or insolvency of the Lessee
(and assuming that at such time such sublessee is not bankrupt or
insolvent) or of the sublessee, prevent the return of the Aircraft in
accordance with the terms of this Lease and (H) all necessary governmental
approvals required for the subleased equipment, the Airframe or any Engine,
as the case may be, to be imported and, to the extent reasonably
obtainable, exported from the applicable country of domicile upon
repossession of such subleased equipment by the Lessor (and the Lessee as
sublessor), shall have been procured at the Lessee's own cost and expense
by the Lessee prior to commencement of any such sublease; (III) duties and
tariffs, if applicable, shall be paid for by the Lessee and (IV) the Lessee
shall effect or cause to be effected at the Lessee's own cost and expense
all recordings and filings that are required, or reasonably requested by
the Lessor, to continue the Lessor's right, title and interest to the
Aircraft and rights under the Lease (and sublease) and to perfect and
maintain the priority of the Lien of the Indenture;
(ii) subject the Airframe or permit the Airframe to be subjected to
normal interchange agreements or subject the Engines or permit any Engine
to be subjected to normal interchange or pooling agreements or
arrangements, in each case customary in the airline industry, entered into
by the 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 or (x) any United States air carrier
certificated under Section 41102(a) of the Transportation Code or any
successor provision or (y) any "foreign air carrier" (as such term is
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code and 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, (III) is a party to the Convention
on the International Recognition of Rights in Aircraft 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 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 any 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. 12056, as amended, or any
similar or substitute programs of the Government, 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
Lessor and 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 then-current Renewal Term, the Basic Term or
the Renewal Term, as applicable, shall be automatically extended (including
the obligation to pay Rent per diem at a rate equal to the Fair Market
Rental) for six (6) months after the end of the Term (or, if shorter, until
the date of return of the Aircraft);
(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 Lessee 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 be for a term shorter than the Lease (as such Lease shall have
been extended in accordance with its terms) and shall include appropriate
provisions for the maintenance, inspection (as required by Section 14.01
hereof), operation, use 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
within ten (10) Business Days after the consummation of any sublease which has
a term greater than one year. The Lessee shall promptly provide the Lessor,
the Owner Participant and the Indenture Trustee a copy of any sublease (if so
requested by the Lessor) 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 any 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 Indenture Trustee or the Owner Participant 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 Owner Participant, the
Indenture Trustee and the Lessor incurred in connection with any subleasing or
proposed subleasing.
Section 7.03. Insignia. (a) Nameplate. On or prior to the
Delivery Date 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 "NBD BANK, AS OWNER TRUSTEE, OWNER AND LESSOR," and, so long as
such Airframe or Engines shall be subject to the Lien of the Indenture, the
additional inscription "THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS
INDENTURE TRUSTEE, MORTGAGEE" (such nameplate to be replaced, if necessary,
from time to time with a nameplate reflecting the name of any successor
Lessor or successor Indenture Trustee, in each case as permitted by the
Operative Agreements).
(b) Lessee's Marks. Except as provided in Section 7.03(a) hereof,
the Lessee will not allow the name of any Person to be placed on the Airframe
or any Engine as a designation that might be interpreted as a claim of
ownership; provided, that during the Term, the Lessee may cause the 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 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 hereof)
and shall thereupon be and become a Part; 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
U.S. 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 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 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 or sublessee, as the case may be, may in
good faith contest the validity or application of any such requirements in
any reasonable manner that does not involve any material risk of civil
liabilities (unless indemnified by the Lessee) or any risk of criminal
penalties being imposed on or against the Indenture Trustee, the Owner
Participant or the Lessor, that does not involve any material risk or
danger of loss, forfeiture or sale of the Aircraft or any Engine and that
does not adversely affect the Lessor, its title or interest in the Aircraft
or any Engine, the first and prior perfected Lien and security interest of
the Indenture, or the interests of the Indenture Trustee or the Owner
Participant in the Airframe or any Engine, or in any Operative Agreement
(excluding any interests indemnified for under the Tax Indemnity
Agreement). All such alterations, modifications or additions shall be made
on or before the date mandated therefor, taking into account authorized
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.
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 in its usual course
of maintenance, 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, remaining useful life, or utility of the Airframe or the value or
utility of any Engine or impair its condition or airworthiness below its
value, remaining useful life (in the case of the Airframe only), utility,
condition and state of 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,
except that the value (but not the remaining useful life, utility, condition or
airworthiness) of the Aircraft may be reduced by the value, if any, of any such
Obsolete Parts which shall have been removed; provided that in no event shall
the aggregate value of all such Obsolete Parts which shall have been so
removed and not replaced exceed $500,000.
(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
9.01 or 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 Delivery Date or
any Part in replacement of, or substitution for, any such Part;
(ii) such Part is not required to be incorporated or installed in or
attached or added to the Airframe or such Engine pursuant to the terms of
Article 7 hereof or the first sentence of Section 9.01 hereof; and
(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 or remaining useful life of the Airframe
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.
(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 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 shall have occurred
and be continuing, the Lessee shall have the right, at its option, on any
Termination Date, on no more than 180 days' and at least 90 days' prior
written notice (which notice shall state the proposed Termination Date (the
"Proposed Termination Date")) to the Lessor and the Owner Participant to
terminate this Lease as of a Termination Date 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 the Lessee that the Aircraft is
obsolete or surplus to its needs. Unless the Lessor has elected to retain the
Aircraft as herein provided, the Lessee shall have the right on no more than
two occasions to revoke its notice of termination no later than the Business
Day prior to the day that is 15 days prior to the Proposed Termination Date
whereupon this Lease shall continue in full force and effect. The Lessee
shall reimburse any reasonable expenses incurred by the Owner Participant in
connection with any proposed termination whether or not revoked.
(b) Sale Procedure. During the period from the giving of notice
pursuant to Section 10.01(a) hereof 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
the Aircraft. On the Proposed 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 so directed by
the Owner Participant, seek to obtain such bids. The Owner Participant shall
not inspect any bids received by the Lessee with respect to the Aircraft,
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 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 sum of the applicable Termination Value, the aggregate
amount of any Make-Whole Premium and all other expenses incurred by the
Lessor, the Owner Participant and the Indenture Trustee in connection with the
sale. 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) 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 and
upon discharge of the Lien of the Indenture in accordance with Article XIV
thereof, 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 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, 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 Proposed Termination Date over the Net Sales Price; plus
(ii) the installment of Basic Rent due with respect to the
Aircraft on the Proposed Termination Date to the extent payable in
arrears but not to the extent payable in advance; plus
(iii) all other amounts then due and payable by the Lessee
(including, without limitation, the aggregate amount of any Make-Whole
Premium, if the Proposed Termination Date occurs prior to the applicable
Premium Termination Date) under this Lease and any other Operative
Agreement.
(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 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 (determined as
described in Section 10.01(b) above) 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 in Section 10.01(c) hereof.
(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 with respect to the Aircraft shall cease for any Rent Payment Date
occurring after the Proposed Termination Date and the Term shall end effective
as of the Proposed 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 Indenture Trustee and the Owner
Participant in connection with the proposed sale.
Section 10.02. Retention of Aircraft by the Lessor. (a) Generally.
Notwithstanding Section 10.01 hereof, 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) hereof, by
giving the Lessee and the Indenture Trustee written irrevocable notice of such
election not less than sixty (60) 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 the sum of:
(i) the installment of Basic Rent due with respect to the Aircraft on
the Proposed Termination Date to the extent payable in arrears but not to
the extent payable in advance; plus
(ii) all other amounts then due and payable by the Lessee under this
Lease and any other Operative Agreement, including the aggregate amount of
any Make-Whole Premium (if the Proposed Termination Date occurs prior to
the applicable Premium Termination Date), on or prior to the Payment Date.
(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) hereof) shall have paid to the
Holders and such Holders shall have received the entire outstanding principal
amount of, the aggregate amount of any Make-Whole Premium and accrued interest
on the Certificates on the Termination Date and all other sums due and owing
to the Indenture Trustee and the Holders on or prior to the Termination Date
under this Lease, the Indenture or any other Operative Agreement.
(c) Delivery of Aircraft to Lessor; Title to Engines. If the Lessor
elects to retain the 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 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 with respect to the Aircraft shall
cease for any Rent Payment Date occurring after the Termination Date and the
Term shall end effective as of the Termination Date.
Section 10.03. Voluntary Termination as to Engines. The Lessee
shall have the right at its option and at any time, on at least thirty (30)
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 Election Rights. The Lessee shall notify
the Lessor, the Indenture Trustee and the Owner Participant as soon as
practicable but in no event more than 10 Business Days following the
occurrence of an event which constitutes, or would with the passage of time
constitute, an Event of Loss with respect to the Airframe or with respect
to the Airframe and the Engines or engines then installed on the Airframe.
By written notice to the Lessor, the Indenture Trustee and the Owner
Participant delivered within 60 days of the occurrence of any Event of
Loss, the Lessee shall have the right to elect the alternative set forth in
Section 11.02 hereof or the alternative set forth in Section 11.03 hereof.
The Lessee's failure to make such election within said 60-day period shall
be deemed to be an election of the alternative set forth in Section 11.02
hereof.
Section 11.02. Payment of Stipulated Loss Value. (a) The Lessee
shall, if it has so elected or is deemed to have so elected under Section
11.01 hereof, pay to the Lessor, by wire transfer of immediately available
funds on the earlier of (i) the fifteenth 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 120th 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
for the Aircraft, 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 Interim Rent and 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, plus (D) all other amounts owing by the
Lessee or the Owner Trustee to the Indenture Trustee or the Holders under the
Indenture and the other Operative Agreements, plus (E) 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, minus (F) if the relevant Stipulated Loss Value
Determination Date is a Rent Payment Date, the portion, if any, of the Interim
Rent and Basic Rent installment due and paid by the Lessee on such Stipulated
Loss Value Determination Date pursuant to Section 3.02 hereof to the extent
such Interim Rent and Basic Rent installment (or portion thereof) is
designated on Schedule II hereto as being payable in advance, together with
an imputed interest amount in respect of such advance payment of Interim Rent
and Basic Rent (or portion thereof) at the Debt Rate from the date of payment
of such Interim Rent and Basic Rent installment (or portion thereof) by the
Lessee to the Loss Payment Date; provided that in no event shall there be
subtracted pursuant to clause (F) an amount such that the Holders shall not be
paid in full.
(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 Interim Rent and 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), all
of the Lessor's right, title and interest, if any, in and to the Airframe,
Engines and engines 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, and will deliver to the Lessee such instrument as the
Lessor shall have received from the Indenture Trustee, releasing such Aircraft
from the Lien of the Indenture.
Section 11.03. Replacement of Airframe and Engines. (a) Generally.
So long as no Payment Default, Bankruptcy Default or Event of Default shall
have occurred and be continuing, and subject to Section 11.01 hereof, if the
Lessee has elected to replace the Airframe and Engines suffering an Event of
Loss pursuant to this Section 11.03, the Lessee shall cause to be duly
conveyed to the Lessor within one hundred twenty (120) days after the
occurrence of such Event of Loss, as replacement for the Airframe and Engines
with respect to which such Event of Loss has occurred, good and marketable
title to an Airbus A300F4-605R airframe manufactured after October 22, 1994
(the "Replacement Airframe") and good and marketable title to a number of
Replacement Engines equal to the number of Engines with respect to which an
Event of Loss has occurred, provided that following compliance with all other
terms of this Section 11.03 each Engine shall be of identical make and model
and manufactured after October 22, 1994 and, in the case of such Replacement
Airframe and each such Replacement Engine, will be owned by the Lessee free
and clear of all Liens not excepted in Section 6.01(a), (b), (c) and (e)
hereof, duly certified as an airworthy aircraft by the Aeronautics Authority,
and having in the case of the Replacement Airframe a value, remaining useful
life and utility, and in the case of the Replacement Engines a value and
utility, at least equal to, and being in as good operating condition as, the
Airframe and Engines with respect to which such Event of Loss occurred,
assuming that the Airframe and Engines were then in the condition and state of
airworthiness required to be maintained by the terms of this Lease immediately
prior to the occurrence of such Event of Loss. In such case and as a
condition to such substitution the Lessee, at its own cost and expense, will
also promptly:
(i) furnish the Indenture Trustee with originals of, and the Lessor
with copies of, full warranty bills of sale, in form and substance
satisfactory to the Lessor and the Indenture Trustee, with respect to such
Replacement Airframe and Replacement Engines 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 or manufacturers to such assignment;
(ii) cause such Replacement Airframe and Replacement Engines to be
duly registered in the name of the Lessor pursuant to the Transportation
Code or the applicable laws of any other jurisdiction in which the
Aircraft may then be registered in accordance with Section 6.03(b) of
the Participation Agreement;
(iii) cause a Lease Supplement with respect to such Replacement
Airframe and Replacement Engines to be duly executed by the Lessee and
recorded pursuant to the Transportation Code, or the applicable laws, rules
and regulations of any other jurisdiction in which the Aircraft may then be
registered as permitted by Section 6.03(b) of the Participation Agreement;
(iv) furnish the Lessor, the Indenture Trustee and the Owner
Participant with an appraisal or other report of a nationally recognized
aircraft appraiser based on an inspection of such Replacement Airframe and
Replacement Engines reasonably satisfactory to the Indenture Trustee and
the Owner Participant certifying that such Replacement Airframe has a
value, remaining useful life and utility, and such Replacement Engines have
a utility and, in the aggregate, value, at least equal to, and are in as
good operating condition as, the Airframe and Engines replaced, assuming
such Airframe and Engines were in the condition and repair required by the
terms of this Lease immediately prior to the occurrence of such Event of
Loss;
(v) furnish the Lessor, the Indenture Trustee and the Owner
Participant with such evidence as the Lessor or the Indenture Trustee
may reasonably request of compliance with the insurance provisions of
Article 13 hereof with respect to such Replacement Airframe and
Replacement Engines;
(vi) 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 consequence not otherwise indemnified for as
a result of such substitution or (B) an indemnity reasonably acceptable
to the Lessor and the Owner Participant against such consequences;
(vii)comply with the provisions of Section 9.08 of the Indenture;
(viii) cause an Indenture Supplement with respect to such Replacement
Airframe and Replacement Engines to be duly executed by the Lessor and the
Indenture Trustee and recorded pursuant to the Transportation Code, or the
applicable laws, rules and regulations of any other jurisdiction in which
the Aircraft may then be registered as permitted by Section 6.03(b) of the
Participation Agreement in order that the Lien of the Indenture shall
constitute a first and prior perfected Lien and security interest on and in
respect of such Replacement Airframe and Replacement Engines;
(ix) take such other action, including the filing of UCC financing
statements naming the Indenture Trustee as a secured party with the
Secretary of State of Michigan and the filing of a notice with the
Secretary of State of Tennessee, as the Lessor or the Indenture Trustee may
reasonably request in order that such Replacement Airframe and Replacement
Engines shall 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 Airframe and Engines;
(x) furnish 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 and the Owner
Participant to the effect that (A) the Lessor has good title to such
Replacement Airframe and Replacement Engines, and (B) such Replacement
Airframe and Replacement Engines have been validly subjected to the Lien of
the Indenture (with the effect and result that the Indenture constitutes a
first priority duly perfected security interest and Lien on such
Replacement Airframe and Replacement Engines); and
(xi) cause to be delivered to the Lessor, the Owner Participant
and the Indenture Trustee (a) an opinion of counsel to the Lessee
addressed to the Lessor, the Owner Participant and the Indenture Trustee
as to the due registration of the Aircraft and the due recordation of
the requisite documents or instruments and the validity and perfection
of the Lien in such Replacement Airframe and Replacement Engines and (b)
a certificate signed by the Vice President and Treasurer or any other
duly authorized officer of the Lessee stating that no Payment Default,
Bankruptcy Default or Event of Default has occurred or is continuing.
(b) Title to Replaced Equipment. Upon compliance by the Lessee with
the terms of Section 11.03(a) 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), all of the Lessor's right, title
and interest, if any, in and to the Airframe and Engines 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 of the Airframe and Engines with respect to
which such Event of Loss occurred from the Indenture and such other documents
as the Lessee reasonably requests, all at the Lessee's sole cost and expense.
Any Engine constituting part of the Aircraft, but not installed on the
Airframe when such Event of Loss occurred, shall continue to be property of
the Lessor and leased under this Lease as part of the same equipment as the
Replacement Airframe and Replacement Engines.
(c) Definitions. Each Replacement Airframe and Replacement Engine
shall be deemed part of the property leased under this Lease, each such
Replacement Airframe shall be deemed an "Airframe," each such Replacement
Engine shall be deemed an "Engine" and each such Replacement Airframe and
Replacement Engine shall be deemed part of the same Aircraft as was the
Airframe or Engine replaced.
(d) Rent Adjustments. An Event of Loss covered by this Section
11.03 shall not result in any change in Interim Rent, Basic Rent, Stipulated
Loss Values or Termination Values except as may be provided pursuant to the
Tax Indemnity Agreement and the Participation Agreement.
(e) Time Limitations. If the Lessee has elected to proceed under
this Section 11.03 but has not fully performed its obligations under this
Section 11.03 within 120 days of the occurrence of the applicable Event of
Loss, in the event that any amounts held by the Lessor (or, so long as the
Indenture shall be in effect, the Indenture Trustee) in respect of such Event
of Loss are less than the Stipulated Loss Value thereof, the Lessee will
deposit with the Lessor or the Indenture Trustee, as the case may be, the
amount of any deficiency as security on such 120th day. If the Lessee has
elected to proceed under this Section 11.03 but has not fully performed its
obligations under this Section 11.03 within 180 days of the occurrence of such
Event of Loss, the Lessee shall be deemed to have elected to proceed under
Section 11.02 hereof and shall immediately perform its obligations thereunder,
and the Indenture Trustee, or the Lessor if the Indenture shall have been
discharged, shall apply the amounts held by it pursuant to the preceding
sentence as a credit against such obligations.
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 Engine 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) and (e) hereof and having a value and
utility at least equal to, and being in as good operating condition as, the
Engine with respect to which such Event of Loss occurred, assuming such Engine
was of the value and utility and in the condition and repair required by the
terms of this Lease immediately prior to the occurrence of such Event of Loss,
provided that after any replacement, each Engine 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, 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
Transportation Code, or the applicable laws, rules and regulations of any
other jurisdiction in which the Aircraft may then be registered as
permitted by Section 6.03(b) of the Participation Agreement and, if the
Engine being replaced was registered under the applicable laws of 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 a nationally recognized aircraft appraiser reasonably
satisfactory to the Lessor and the Indenture Trustee 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 a result of such
substitution or (B) an indemnity reasonably acceptable to the Lessor and
the Owner Participant against such consequences;
(vi) comply with the provisions of Section 9.08 of the Indenture;
(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 Transportation Code, or the applicable laws, rules
and regulations of any other jurisdiction in which the Aircraft may be
registered as permitted by Section 6.03(b) of the Participation Agreement
in order that the Indenture shall constitute a first priority duly
perfected Lien and security interest on and in respect of such Replacement
Engine;
(viii) take such other action, including the filing of UCC financing
statements naming the Indenture Trustee as Secured Party with the Secretary
of State of Michigan and a notice filing with the Secretary of State of
Tennessee, 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 and the Owner Participant 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 priority duly
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), 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 of the Engine with respect to which such Event of Loss
occurred from the Indenture and such other documents as the Lessee reasonably
requests, 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 Interim Rent, Basic Rent, Stipulated Loss Values or Termination
Values, 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 the Airframe
and the Lessee has elected the alternative set forth in Section 11.02 hereof,
so much of such payments as shall not exceed the payments required to be paid
by the Lessee pursuant to clauses (A) and (B) of Section 11.02(a) hereof shall
be paid to the Lessor (or, if the Lien of the Indenture has not been
discharged, the Indenture Trustee) in reduction of the Lessee's obligations
under clauses (A) and (B) of Section 11.02(a) 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 if the Lessee Elects Replacement. If the payments
described in Section 11.05(a) hereof are received with respect to the Airframe
or with respect to the Airframe and the Engines or engines then installed on
the Airframe and the Lessee has elected the alternative set forth in Section
11.03 hereof, or if such payments 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 11.03 or Section 11.04
hereof, as the case may be, with respect to the Event of Loss for which such
payments are made.
Section 11.06. Requisition of an Airframe and the Installed Engines
for Use by Government. In the event of the requisition for use by the
Government or any other government of registry of the Aircraft, or any agency
or instrumentality 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 with
respect to such Airframe and Engines or engines 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 and, subject to Section 7.01(f)
hereof, the maintenance of required insurance) 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 unless a Payment Default, Bankruptcy Default or Event
of Default shall have occurred and be continuing (in which case such proceeds
shall be held (unless applied) pursuant to Section 23.01 hereof as security
for Lessee's obligations hereunder and under the Participation Agreement).
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).
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 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 to the extent not theretofore applied as provided
herein, shall be paid to the Lessee.
ARTICLE 12
RETURN OF AIRCRAFT
Section 12.01. Return of Aircraft. Unless the 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 10 or Article 17 hereof
or otherwise, 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 or on the
Termination Date, as the case may be, at the Lessee's principal maintenance
facility in Memphis, Tennessee or such other location specified by the Lessee
(and reasonably acceptable to the Owner Participant (or the Lessor so long as
the Lien of the Indenture is in effect)), within the continental United States
(on the Lessee's route structure as in effect on the return date) and the
Airframe shall be fully equipped with two Engines of the same or an improved
make and model as were delivered on the Delivery 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 agreements or arrangements, it being understood that all 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 15 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 any 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 (i) transfer to
the Lessee, without recourse or warranty (except as to the absence of Lessor's
Liens), and subject to the disclaimers provided 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" and (ii) deliver to the Lessee such instrument as the Lessor
shall have received from the Indenture Trustee, releasing such Engine 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 all original (or photocopied or microfilmed
copies thereof, if then permitted to be maintained in such form under
applicable law) logs, manuals, certificates and technical data, and
inspection, modification and overhaul records pertaining to the Airframe,
Engines or engines, which are required to be maintained under applicable rules
and regulations of the Aeronautics Authority or pursuant to the Lessee's or
any permitted sublessee's Aeronautics Authority-approved maintenance program
and all original (or photocopied or microfilmed copies thereof, if then
permitted to be maintained in such form under applicable law) records required
to be maintained with respect to the Aircraft under the maintenance program
approved by the aeronautical authority of any other country of registry of the
Aircraft. All records shall be returned in the format necessary to allow the
Lessee or any sublessee to comply with Section 12.04(a)(i) hereof.
Section 12.04. Condition of 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, unless otherwise requested by the Lessor not less than
90 days prior to the end of the Term to retain the then-existing
registration of the Aircraft, be duly registered in the name of the Lessor
or its designee pursuant to the Transportation Code;
(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), both of the same make and model, installed thereon,
together with the equipment, accessories or parts installed thereon on the
Delivery 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 12.04(b) hereof
and in as good operating condition as when delivered to the Lessor on the
Delivery Date, 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) to be terminated during the Term of the Lease and each Engine
(including any Replacement Engine) shall be serviceable in accordance with
the Lessee's FAA-approved maintenance program;
(vii) it shall be free and clear of all Liens and rights of others
(other than 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; and
(viii) it shall be in a standard cargo configuration.
(b) Remaining Time. If, at the time of return of the Aircraft, the
Airframe is not being maintained under a continuous maintenance program, then
the Airframe shall have remaining until the next scheduled "C" check at least
1,000 hours of operation. If, at the time of return of the Aircraft, the
Airframe is subject to a continuous maintenance program, there will be no
time-before-overhaul requirement. If, at the time of return of the Aircraft,
the Engines are not being maintained under an on-condition maintenance
program, then the average number of hours on such Engines remaining until the
next scheduled engine heavy maintenance visit shall be at least 25% of the
allowable hours between engine heavy maintenance visits permitted under the
Lessee's FAA-approved maintenance program. If, at the time of return of the
Aircraft, the Engines are subject to an on-condition maintenance program,
there will be no time-before-overhaul requirement. With respect to
maintenance under the Lessee's maintenance program approved by the Aeronautics
Authority, the Lessee shall have treated the Aircraft in a nondiscriminatory
manner with other Airbus A300F-600 series aircraft in the Lessee's fleet, and
the Aircraft shall be free and clear of all Liens and rights of others other
than 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.
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)(2)(B) of the definition of Event of Loss, this
Lease shall not terminate but shall continue in full force and effect until
the expiration of the six-month period (or, such shorter period referred to in
said clause (iii)(2)(B)) after the scheduled end of the Term, provided that
(i) Stipulated Loss Value and Termination 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 daily equivalent of the average
Basic Rent paid during the Basic Term and any then expiring Renewal Term, in
each case with such Basic Rent to include for this purpose the amounts
referred to in Section 3.01 hereof, 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) 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 hereof), the Lessee shall pay on demand as Basic Rent for each day
of such delay an amount equal to the Rent per diem at a rate equal to the Fair
Market Rental and this Lease shall continue for up to six (6) months after the
end of the 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 or claims with respect thereto 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.
Section 12.06. Storage. Upon any expiration or termination of this
Lease, at the written request of the Lessor given at least 45 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 by the
Lessor to move the Aircraft from one storage facility to another, such move
shall be at the risk and expense of the Lessor. 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, 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 such property (including, if possible, coverage through
its fleet policy).
Section 12.07. Special Markings. If requested by the Lessor, the
Lessee shall, at the Lessee's cost, remove or paint over all insignias and
other distinctive markings of the Lessee or any sublessee on the Aircraft and
repaint the stripped down areas in a workmanlike manner to match 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 (taking into account the provisions of this
Lease) 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) of Section 9.02(b) hereof as the Lessor may request.
ARTICLE 13
INSURANCE
Section 13.01. Comprehensive Airline Liability and Property Damage
Liability Insurance. (a) Comprehensive Airline Liability and Property Damage
Liability Insurance. The Lessee, at its own cost and expense, will maintain
or cause to be maintained with respect to the Aircraft, comprehensive airline
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 in no event
shall the limits of liability for all comprehensive airline liability
insurance be less than the amount, per occurrence, as set forth on the
insurance certificate delivered on the Delivery Date unless and only so long
as the Aircraft is not operated and appropriate insurance for the Aircraft on
the ground is maintained. The Lessee will also be required to maintain war
risk insurance if the Aircraft is operated in a war zone or, in the Lessee's
reasonable judgment, area of recognized hostilities, if such insurance is
available on commercially reasonable terms and if it is the custom for major
international Air Carriers flying comparable routes to carry such insurance.
(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 Indenture Trustee in its capacity as
such, the Owner Participant and each of their respective officers and
directors 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 any
action or inaction of 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 (other than any breach or violation of any
warranty, declaration or condition by such Additional Insured) as defined
under the policy of insurance required under this Section 13.01;
(iii) provide that if such insurance is cancelled 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 or
such insurers' broker of such cancellation, change or lapse;
(iv) provide that the insurers shall waive any rights of subrogation
against each Additional Insured, to the extent that the Lessee has waived
its rights under this Lease and the Participation Agreement; 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;
(v) 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;
(vi) 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;
(vii) provide that no Additional Insured shall have any obligation or
liability for premiums or other payments, if any, in connection with such
insurance; and
(viii) 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.
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 in
the country of registry) with such retentions (subject to the limitations set
forth in Section 13.06 hereof) and in such form, upon such terms and
conditions (including coverage for cost of claims), and in 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 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 on an agreed-value basis for an amount not less than an amount
equal to the Stipulated Loss Value for the relevant period for the Aircraft as
set forth on Schedule III to this Lease.
(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 (or, so long as the Indenture 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 the aggregate
in excess of $6,000,000, 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, a Bankruptcy 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
$6,000,000 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, a Bankruptcy 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, a Bankruptcy Default or an Event
of Default, such payment shall be made to the Indenture Trustee);
(iii) provide that if such insurance is cancelled 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 the Loss Payee for thirty days (except in the case
of war-risk coverage in which event the applicable period shall be seven
(7) days or such other period as may be customary) after receipt by the
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 or the Loss Payee (other than any action or inaction of such
Loss Payee) and shall insure the Lessor (in its individual capacity and as
Owner Trustee), the Owner Participant and the Indenture Trustee regardless
of any breach or violation of any warranty, declaration or condition
contained in such policies by the Lessee or the Loss Payee (other than any
breach or violation of any warranty, declaration or condition by the Loss
Payee) 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 and the Indenture Trustee to the extent that the Lessee
has waived its rights under this Lease or the Participation Agreement;
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) be primary and without rights of contribution from any other
insurance which is carried by the Loss Payee with respect to its interest
in the Aircraft;
(vii) provide that (except in the case of insurance with respect to
Engines and spare parts that have been removed from the Aircraft and
replaced with other Engines or engines, or spare parts, as the case may be)
such insurer shall waive any right of such insurer to any set-off or
counterclaim or any other deduction, whether by attachment or otherwise, in
respect of any liability of the Loss Payee;
(viii) provide that (except in the case of insurance with respect to
Engines and spare parts that have been removed from the Aircraft and
replaced with other Engines or engines or spare parts, as the case may be)
no Loss Payee shall have any obligation or liability for premiums or other
payments, if any, in connection with such insurance; and
(ix) in the event that separate policies are maintained to cover
all-risk ground and flight aircraft, hull and war risks and allied perils
insurance, include a 50/50 provisional claims settlement clause as
contained in the policies of insurance maintained by the Lessee with
respect to all other aircraft in the Lessee's fleet, and a copy of the
50/50 provisional claims settlement clause in effect on the Delivery Date
shall be attached to the insurance certificate issued on the Delivery Date.
Section 13.03. Application of Insurance Proceeds. (a) Generally. All
insurance proceeds (other than proceeds from policies carried by the Lessor,
the Indenture Trustee or the Owner Participant) 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 and the Lessee has elected or is deemed to have elected the
alternative set forth in Section 11.02 hereof, 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, Bankruptcy
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 (unless applied) 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 the Airframe or the
Airframe and the Engines or engines then installed on the Airframe and the
Lessee has elected the alternative set forth in Section 11.03 hereof, or if
such proceeds are received with respect to an Engine not then installed on
the Airframe and not replaced by an Engine or engine under the
circumstances contemplated by Section 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 Sections
11.03 or 11.04 hereof, as applicable, with respect to the Event of Loss for
which such proceeds are paid, provided that no Payment Default, Bankruptcy
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 (unless applied) 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
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,
Bankruptcy 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 (unless applied) 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 Delivery Date and thereafter
annually on or before the scheduled expiration date for such policy during the
Term, the Lessee shall cause an aviation insurance broker to furnish to the
Lessor and the Indenture Trustee a signed report, stating in reasonable detail
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 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 Indenture Trustee and
the Owner Participant 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. 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, the Indenture Trustee
or the Owner Participant 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, the Indenture Trustee or the Owner Participant shall
not result in a reduction of coverage or amounts payable under insurance
required 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, the Indenture Trustee or the Owner
Participant 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 policy 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 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 the Lessee to discriminate as
between insurance coverage on the Aircraft and insurance which the 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 reasonable times, and upon at
least five (5) Business Days' prior written notice to the Lessee, the Lessor,
the Indenture Trustee or the Owner Participant, or their respective authorized
representatives, may inspect the Aircraft and upon at least ten (10) Business
Days' prior written notice, all Aeronautics Authority required books and
records of the Lessee or any sublessee and all books and records required to
be maintained by the Lessee under its FAA-approved maintenance program (or
books and records required to be maintained by the aeronautical authority of
any other country of registry of the Aircraft) relating to the maintenance of
the Aircraft and such Persons shall keep any information obtained thereby
confidential and shall not disclose the same to any Person, except to a Person
described in Section 18.01 of the Participation Agreement. Any such
inspection of the Aircraft shall be a visual, walk-around inspection of the
interior and exterior of the Aircraft and shall not include opening any panel,
bays or the like without the express consent of the Lessee (except to the
extent any such inspection takes place when any such panel, bays or the like
are open). Notwithstanding the previous sentence, unless a Payment Default,
Bankruptcy Default, material Default relating to maintenance (without giving
effect to the provisos to Section 7.01(b) hereof) or an Event of Default shall
have occurred and be continuing, the Lessor, the Indenture Trustee, the Owner
Participant or their respective authorized representatives shall each be
entitled to inspect the Aircraft only one time during any consecutive
twelve-month period provided, however, that during the final year of the Basic
Term the Lessor shall be entitled to inspect on two (2) occasions. The Lessee
shall make any permitted sublease or transfer permitted under Section 7.02
hereof expressly subject to inspection rights consistent with this Article 14.
Section 14.02. No Obligation to Inspect. None of the Lessor, the
Indenture Trustee or the Owner Participant shall have any duty to make any
inspection pursuant to Section 14.01 hereof and no such party shall incur any
liability or obligation by reason of making or 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 domestic subsidiary of the Lessee which shall be a
certificated U.S. Air Carrier. Any such assignment, conveyance or sublease
shall in no way relieve the Lessee from any obligation hereunder or under 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 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 permitted assigns,
and shall inure, to the extent expressly provided herein and therein, 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 permitted assigns.
Section 15.02. Citizenship. The Lessee will at all times be a duly
certificated U.S. Air Carrier under the Transportation Code.
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 Interim Rent, Basic
Rent, Renewal Rent, Stipulated Loss Value or Termination Value, as the case
may be, within ten Business Days after the date when due (except that with
respect to any failure to pay Excepted Payments, such failure shall
constitute an Event of Default at the discretion of the Owner Participant);
or
(b) the Lessee shall fail to make any payment of Supplemental Rent
(other than amounts described in clause (a) above) within 20 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 in accordance with the
provisions of Article 13 or such insurance lapses or is cancelled, provided
that no such lapse or cancellation shall constitute an Event of Default
until the earlier of (A) 30 days (or seven days or such shorter time as may
be standard in the industry with respect to war risk coverage) after
receipt by any Additional Insured of written notice of such lapse or
cancellation and (B) the date that such lapse or cancellation is effective
as to any Additional Insured and provided further that such failure shall
not constitute an Event of Default as long as the Aircraft remains grounded
and is insured as required while on the ground and not operated, or (ii)
the Aircraft shall be operated at any time when comprehensive airline
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 the Tax Indemnity Agreement) 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 after the Lessee
shall have received written notice from the Lessor 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 Lessee receives
notice thereof which undertaking shall be diligently and continuously
pursued using the Lessee's reasonable 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
Transportation Code pursuant to the Lessee's covenants and agreement in
Section 6.03(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,
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 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 ninety (90) 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 ninety (90)
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 ninety (90) 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) 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 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 this Lease shall be
deemed declared in default without any further act or notice), and at any time
thereafter the Lessor may do, and the Lessee shall comply with, one or more
of the following with respect to all or any part of the Airframe and the
Engines, 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 all or such part of the Airframe and the Engines as
the Lessor may demand in the manner and condition required by, and
otherwise in accordance with all of the provisions of this Lease (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 such Airframe or Engines are
located or believed to be located and take immediate possession of and
remove such Airframe and Engines (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 or any Engine, 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
Interim Rent, Basic Rent and Renewal Rent due on or before the date of such
sale (and, if Interim Rent, Basic Rent or Renewal Rent is payable in
arrears, the pro rata portion of the installment of Interim Rent, 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 Indenture
Trustee, the Owner Participant or any Holder 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 Interim Rent,
Basic Rent or Renewal Rent due on Rent Payment Dates occurring after the
payment date specified in such notice), any installment of Interim Rent,
Basic Rent, Renewal Rent and any Supplemental Rent due on or before such
payment date (and, to the extent Interim Rent, Basic Rent or Renewal Rent
is payable in arrears, the pro rata portion of the installment of Interim
Rent, Basic Rent or Renewal Rent due on the next succeeding Rent Payment
Date in respect of the period commencing on the Stipulated Loss Value
Determination Date referred to below and ending on the date of such
payment), 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 such
Stipulated Loss Value Determination Date, together with (A), if Interim
Rent or Basic Rent is payable in advance, interest, to the extent permitted
by applicable law, at the Debt Rate on the amount of such Stipulated Loss
Value from such Stipulated Loss Value Determination Date to the date for
payment set forth in such notice from the Lessor and (B) in all cases,
interest, to the extent permitted by applicable law at the Past Due Rate on
the excess of such Stipulated Loss Value over such Fair Market Value, from
the date as of which such Stipulated Loss Value is payable 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), the Fair
Market Value of the Aircraft or such portion shall, at the option of the
Lessor to the extent legally enforceable, be zero and, if the Fair Market
Value of the Aircraft is deemed to be zero, 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) all of its right, title and interest in the
Aircraft or such portion, to the Lessee;
(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 Interim Rent, Basic Rent or
Renewal Rent due after the date on which such sale occurs) any unpaid
Interim Rent, Basic Rent or Renewal Rent due on or before the date on which
such sale occurs (and, to the extent Interim Rent, Basic Rent or Renewal
Rent is payable in arrears, the pro rata portion of the installment of
Interim Rent, Basic Rent or Renewal Rent due on the next succeeding Rent
Payment Date in respect of any period commencing on the Stipulated Loss
Value Determination Date referred to below and ending on the date of such
sale), 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 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 (x), if Interim Rent or Basic Rent is payable in advance, interest, to
the extent permitted by applicable law, at the Debt Rate on such Stipulated
Loss Value from such Stipulated Loss Value Determination Date to the date
of such sale and (y) in all cases, 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, the Indenture Trustee or the Owner
Participant 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 hereof or in placing the
Airframe or Engines in the condition and airworthiness required by such
Article or in connection with any inspection, use, operation, maintenance,
insurance, 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 any 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, the Lessor 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, and
it being understood that the Lessor shall not be liable for any act or
omission of the Indenture Trustee or any other Person claiming through the
Indenture Trustee) 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
Section 19.01. Further Assurances. Promptly upon the execution and
delivery of this Lease, the Trust Agreement and the Indenture, the Lessee will
cause each of them to be duly filed for recordation in accordance with the
Transportation Code 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 the Indenture, in recordable
form, subjecting to this Lease and the Indenture any Replacement Airframe
and/or Replacement Engines delivered by the Lessee pursuant to Section 11.03
hereof and any Replacement Engine delivered by the Lessee pursuant to Section
11.04 hereof 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 that the obligations of the Lessee
to pay all costs and expenses of every character, whether seen or unforeseen,
ordinary or extraordinary, or structural or nonstructural, 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 (unless expressly excluded from
the terms hereof, the costs and expenses of the Lessor and the Owner
Participant shall include the reasonable fees and expenses of their respective
outside counsel), 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. 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 set-off (except to the extent set forth in Section 3.05
hereof), 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 or the Owner Participant or 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 Transportation Code (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 or any doctrine of force majeure or
impossibility of performance;
(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;
(iv) any Liens, encumbrances or rights of any other Person with
respect to the Aircraft, the invalidity or unenforceability or lack of due
authorization or other infirmity of this Lease or any other Operative
Agreement or document or instrument executed pursuant hereto or thereto, or
any lack of right, power or authority of the Lessor or the Lessee or any
sublessee or any other party to any other Operative Agreement to enter into
this Lease or any other Operative Agreement or any such document or
instrument; or
(v) 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 suspend performance under,
terminate, cancel, quit, rescind or surrender this Lease, the Airframe, or any
Engine or part thereof, other than in accordance with the terms hereof.
(c) 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, except the
Lessee has the right to the extent provided in Section 3.05 hereof to offset a
portion of payments due from the Lessee to the Lessor pursuant thereto.
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 a 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. Intentionally Left Blank.
Section 22.03. Consent of Lessee to Assignment of Lease as Security.
The Lessee hereby acknowledges and consents to the Indenture Trustee's rights
pursuant to the terms of the Indenture to receive payments (other than
Excepted Payments) due under this Lease, 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.
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 Payment
Default, Bankruptcy Default or Event of Default, and, at such times as there
shall not be continuing a Payment Default, Bankruptcy 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, 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 (which may include the
Owner Trustee or the Indenture Trustee in their respective individual
capacities or any Affiliate thereof), having a combined capital and surplus
of at least $500,000,000 and having a rating of "A" or better from Moody's
or S&P; or
(iv) commercial paper rated A-1/P-1 by S&P and Moody's respectively
(or if neither such organization shall rate such commercial paper at any
time, by any nationally recognized statistical rating organization in the
United States of America) equal to the highest rating assigned by such
rating organization (which may include commercial paper issued by the Owner
Trustee or the Indenture Trustee in their respective individual capacities
or any Affiliate thereof).
(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, Taxes and
expenses, if any, incurred by the Lessor or the Owner Participant in
connection with such investment), unless a Payment Default, Bankruptcy 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, Taxes and expenses, if any, incurred by the Indenture Trustee or
the Lessor or the Owner Participant in connection with such investment), such
amount to be disposed of in accordance with the terms of the Indenture or the
Lease, 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 NBD 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 the Lessor herein are for the purpose and with the intention of binding
only the Lessor's Estate, and that in no case whatsoever shall NBD 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 and the Indenture
Trustee, that nothing herein contained shall be construed as creating any
liability on NBD, 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 of NBD, and that so far as NBD, 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 by the
Lessor of any of its obligations 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 NBD in its individual capacity set forth in
the Participation Agreement or the Trust Agreement. The term "Lessor" as used
in this Lease shall include any trustee succeeding NBD 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 Lease 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 mail and (c) if given by FedEx (or, if a Default or Event of
Default shall have occurred and be continuing, by other comparable courier
service), 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, facsimile (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 and the Owner Participant;
(b) If to the Lessor or Owner Trustee, to its office at 611 Woodward
Avenue, Detroit, Michigan 48226, Attention: Corporate Trust Administration
Department; telephone (313) 225-3185, facsimile (313) 225-3420; 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 Owner Participant at
the Owner Participant's address as provided in subsection (c) below;
(c) If to the Owner Participant, in accordance with the Participation
Agreement; and
(d) If to the Indenture Trustee, to its office at 4 Chase Metrotech
Center, 3rd Floor, Brooklyn, New York 11245, Attention: Corporate Trust
Administration; telephone (718) 242-5854, facsimile (718) 242-3529; or to
such other address as the Indenture Trustee shall from time to time
designate in writing to the Lessor, the Lessee and the Owner Participant.
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Headings 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 provisions of Section 8.01 and
Article XIII 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 chattel-paper counterpart, which shall
be the counterpart containing the receipt executed by the Indenture Trustee on
its signature page.
Section 26.07. Counterparts. 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 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 by signing any such counterpart.
Section 26.08. Public Release of Information. Provided no Event of
Default shall have occurred and be continuing, each party shall in each
instance obtain the prior written approval of each party concerning the exact
text and timing of news releases, articles and other informational releases to
the public media concerning this Lease.
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties. It is the intent of the parties
to this Lease that for all purposes (including, without limitation, U.S.
Federal income tax purposes) this Lease will be a true lease, 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 Lease and
the other Operative Agreements in respect of the Aircraft 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.
Section 27.03. Finance Lease. This Lease is a "finance lease" within
the meaning of Section 2-A-103(g) of the Uniform Commercial Code.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Lease to be duly executed as of the date first above written.
LESSOR: NBD BANK,
not in its individual capacity,
but solely as Owner Trustee
By: ______________________________________________
Name:
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By: _______________________________________________
Name:Robert D. Henning
Title:Assistant Treasurer and
Managing Director - Structured Finance
Receipt of this original counterpart of the Lease is hereby
acknowledged on this __ day of October 1995.
Indenture Trustee: THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
not in its individual capacity,
but solely as Indenture Trustee
By: _____________________________________________
Name:
Title:
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require. In the
case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
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 other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. In the case
of amounts payable to the Lessor, the Owner Participant, or any corporate
Affiliate 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.
Agent. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns as Agent for the Original Loan Participants
pursuant to Article 16 of the Original Participation Agreement.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty dated the Delivery Date executed by the
Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe (or any permitted substitute airframe)
together with the two Engines (or any Replacement Engine or Engines) whether
or not any of such initial or Replacement Engines may from time to time be
installed on such Airframe or may be installed on any other airframe or on any
other aircraft, including any aircraft substituted pursuant to Section 11.03
of the Lease.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) leased by the Lessor to the Lessee
pursuant to the Lease and the initial Lease Supplement and having the United
States FAA Registration Number and manufacturer's serial number specified in
the initial Lease Supplement, including (i) all Parts in respect thereof and
(ii) any replacement airframe which may be substituted pursuant to Section
11.03 of the Lease.
Amendment No. 1 to the Original Tax Indemnity Agreement. Amendment
No. 1 to the Original Tax Indemnity Agreement, dated as of October 26, 1995.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on the Delivery Date or the Refunding Date or any date thereafter in
connection with the transactions contemplated by the Operative Agreements, as
such agreement may be amended and supplemented from time to time with the
consent of the Lessor and delivered to the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Owner Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N660FE), dated September 20, 1995 among the Lessee, the
Owner Trustee, not in its individual capacity, but solely as Owner Trustee,
the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant (with a copy of such report to the Lessee) on the
Delivery Date pursuant to Section 4.01(n) of the Original Participation
Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France, and its successors and assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as of
September 1, 1995, executed by AVSA, as the same may be amended, modified or
supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and dated the
Delivery Date.
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 either does or with the giving of notice or lapse of
time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft throughout
the Basic Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 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 July 2, 2020, 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.
Breakage Costs. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York and Memphis, Tennessee, and after the
Lien of the Indenture is discharged, Detroit, Michigan.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N660FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
refunding of the Original Loan Certificates.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Commencement Date. July 2, 1996.
Consent and Agreement. The Consent and Agreement dated as of
September 1, 1995 executed by the Manufacturer, as the same may be amended,
modified or supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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 Participant
and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner Trustee
located at 611 Woodward Avenue, Detroit, Michigan 48226, or such other office
at which the Owner Trustee's corporate trust business shall be administered
which the Owner Trustee shall have specified by notice in writing to the
Lessee, the Owner Participant and the Indenture Trustee.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
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 Date. September 20, 1995.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts related thereto. 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.
The term "Engines" means, as of any date of determination, both Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of September 1, 1995,
executed by the Engine Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N660FE), dated as of September 1, 1995 between
the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 90 days due to theft or disappearance or such longer
period, not to exceed 90 days from the end of such initial 90-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by 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,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine as of the end of the Lease Term 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
A300F-600 series aircraft equipped with engines of the same make and model as
the Engines for a period not to exceed six (6) consecutive months, unless the
Lessee, prior to the expiration of such six (6) month period, shall be
diligently carrying forward in a similar manner as are then being carried
forward with respect to other aircraft of the Lessee so as to not discriminate
against the Aircraft by reason of its leased status, all steps which are
necessary or desirable to permit the normal use of the Aircraft or Airframe
or, in any event, if such use of the Aircraft or the Airframe shall have been
prohibited for a period of eighteen (18) consecutive months or until the end
of the Term, if earlier. The date of such Event of Loss shall be (s) the 91st
day or the 180th day, as the case may be, following loss of such property or
its use due to theft or disappearance (or the end of the Term or the Lessee's
abandonment of diligent efforts to recover such property, if earlier); (t) the
61st day following the date of any destruction, damage beyond economic repair
or rendition of such property permanently unfit for normal use; (u) the date
of any insurance settlement on the basis of a total loss or constructive or
compromised total loss; (v) the date of any condemnation, confiscation,
seizure or requisition of title of such property; (w) the 181st day following
condemnation, confiscation, seizure or requisition for use of such property by
a foreign government referred to in clause (iii)(2)(A) above (or the end of
the Term or the date of any insurance settlement described therein, if earlier
than such 181st day); (x) the last day of the Term in the case of requisition
for use of such property by the Government; (y) the last day of the six (6)
month or eighteen (18) month period, referred to in clause (iv) above (or if
earlier, the end of the Term or abandonment of the Lessee's efforts to restore
the normal use of the Aircraft). 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. If an Event of Loss described in any of clauses (i)
(A), (iii) or (iv) above shall occur, Lessor may elect, within 30 days
following the date upon which such Event of Loss is deemed to have occurred,
to waive such Event of Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments (and
interest thereon to the extent provided in the Operative Agreements) paid or
payable by the Lessee in respect of the Owner Participant, the Owner Trustee
in its individual capacity or any of their respective successors, permitted
assigns, directors, officers, employees, servants and agents or Affiliates,
pursuant to the Participation Agreement or any indemnity hereafter granted to
the Owner Participant or the Owner Trustee in its individual capacity pursuant
to the Lease or the Participation Agreement, (ii) proceeds of public liability
insurance (or government indemnities in lieu thereof) in respect of the
Aircraft payable as a result of insurance claims paid for the benefit of, or
losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Section 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) payments constituting increases
in Interim Rent or Basic Rent attributable to payments arising pursuant to
Section 5 of the Tax Indemnity Agreement and (vi) any right to demand, collect
or otherwise receive and enforce the payment of any amount described in
clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other property) is
unencumbered by the 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; provided that in connection
with any determination pursuant to or for the purposes of Article 17 of the
Lease, the Aircraft shall be appraised on an "as is, where is" basis. Fair
Market Value shall be determined in accordance with the provisions of Section
4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed Renewal
Term equal to 50% of the average actual semi-annual Basic Rent payable during
the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as of
September 1, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as Owner
Trustee and Lessor, the Agent (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Owner Participant, the Original
Loan Participants (to the extent set forth in Articles 8 and 9 of the Original
Participation Agreement), the Indenture Trustee, in its individual capacity
and as trustee, any Owner Participant Guarantor, 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 and the Trust Indenture Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N660FE) dated as of September 1, 1995, as
amended and restated as of October 26, 1995, between the Lessor and the
Indenture Trustee, as supplemented by the Indenture and Security Agreement
Supplement, and as said Indenture may from time to time be further
supplemented or amended, including any amendment or supplement thereto entered
into from time to time pursuant to the applicable provisions of the Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N660FE) dated September 20, 1995, as such Indenture and Security Agreement
Supplement shall be amended or supplemented from time to time and any other
supplement to the Indenture, substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event or condition which with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture Estate 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 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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft throughout
the Interim Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant Payment
Date and ending at the end of the day immediately preceding the Commencement
Date.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N660FE) dated as of September 1, 1995, as amended and restated as of October
26, 1995, entered into by the Lessor and the Lessee concurrently with the
execution and delivery of the Indenture, 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 one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995, as such Lease
Supplement shall be amended or supplemented from time to time and any other
supplement to the Lease, substantially in the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of
Sale, the Airbus Guaranty, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the AVSA Consent and Agreement, the
Consent and Guaranty (to the extent assigned by the Purchase Agreement
Assignment), the GTA, the Engine Warranty Assignment, the Engine Consent, any
warranty with respect to the Airframe and the Engines, all amounts of Interim
Rent, Basic Rent and Supplemental Rent, including without limitation,
insurance proceeds (other than insurance proceeds payable to or for the
benefit of the Owner Trustee 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) not include any
Excepted Payment and (ii) include all property intended to be subjected to the
Indenture by the Granting Clause thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust Indenture
Estate arising as a result of (i) claims against 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)
acts or omissions 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 or expressly prohibited under
the Operative Agreements and any act or omission of the Owner Participant
which 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, Owner Participant, Lessor's Estate or the trust created by the
Trust Agreement which are not required to be indemnified against by the Lessee
pursuant to the Participation Agreement by reason of Section 8.01(b) or
9.01(b) thereof and which are not required to be indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement, or (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 other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
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 Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of
(i) the present values of all remaining scheduled payments of such principal
amount or portion thereof 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 the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
unpaid principal amount of such Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of the
Lease, discounted at a rate per semi-annual period equal to the Debt Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, if any, the Owner Trustee
Guaranty, if any, any Ancillary Agreement entered into by or with the written
consent of the Indenture Trustee, which by its terms is an Operative
Agreement, the Certificates outstanding at the time of reference, the
Indenture, the Indenture and Security Agreement Supplement, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the Engine Consent and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Original Agreements. The documents and instruments delivered on the
Delivery Date in connection with the transactions contemplated by the Original
Participation Agreement.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N660FE) dated as of September
1, 1995 between the Owner Trustee and the Indenture Trustee, which together
with the Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N660FE) dated September 20, 1995 attached thereto was
recorded as one instrument by the FAA on September 21, 1995 and assigned
Conveyance Number 2A267705.
Original Lease. The Lease Agreement (Federal Express Corporation
Trust No. N660FE) dated as of September 1, 1995 between the Owner Trustee as
lessor, and the Lessee, which together with Lease Supplement No. 1 (Federal
Express Corporation Trust No. N660FE) dated September 20, 1995 attached
thereto was recorded as one instrument by the FAA on September 21, 1995 and
assigned Conveyance Number 2A267706.
Original Loan Certificates. The loan certificates issued on the
Delivery Date to the Original Loan Participants.
Original Loan Participants. The entities listed on Schedule I to the
Original Participation Agreement and their successors and assigns (other than
any assignees in connection with the Refunding Date).
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N660FE) among the Lessee, the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Original Loan
Participants as it was originally executed as of September 1, 1995.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N660FE) between the Lessee and the
Owner Participant as it was originally executed as of September 1, 1995.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N660FE) between the Owner Participant and the Owner
Trustee as it was originally executed as of September 1, 1995 and filed with
the FAA on September 20, 1995.
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.
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, its right, title and
interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Amount. The amount described in Section 2.03 of the
Participation Agreement and set forth on Schedule II to the Lease.
Owner Participant Guarantor. The provider of an Owner Participant
Guaranty.
Owner Participant Guaranty. Any guaranty delivered in compliance with
Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement, and its successors and permitted
assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Interim Rent, Basic
Rent, Stipulated Loss Value and Termination Value percentages or the EBO
Price, as the case may be, as such assumptions may be adjusted for events
which have been the basis of adjustments to Rent pursuant to Section 3.04 of
the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N660FE), dated as of September 1, 1995, as amended and
restated as of October 26, 1995, among the Lessee, the Original Loan
Participants, the Owner Trustee not in its individual capacity except as
otherwise expressly provided therein, but solely as owner trustee, the Owner
Participant, the Indenture Trustee not in its individual capacity except as
otherwise expressly provided therein, but solely as indenture trustee and the
Pass Through Trustee not in its individual capacity except as otherwise
expressly provided therein, but solely as pass through trustee, 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, prior to
replacement thereof in accordance with the Lease, which may be removed
therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
February 1, 1993, as amended and restated as of October 1, 1995 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 1995 Pass Through Certificates,
Series B1, 1995 Pass Through Certificates, Series B2 or 1995 Pass Through
Certificates, Series B3, 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 Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust, 1995-B1,
Federal Express Pass Through Trust, 1995-B2 or Federal Express Pass Through
Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. The Owner Participant Payment Date, and each January 2
and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date and
ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates having a
Maturity in 2014, November 7, 2007 and with respect to the Certificates having
a Maturity in 2018, October 7, 2017.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N660FE), dated as of September 1, 1995
between the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the Owner
Participant Payment Date, December 18 for January 2 Payment Dates and June 17
for July 2 Payment Dates, whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least ten (10) Business Days
prior to such expected Refunding Date.
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.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
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 or more terms 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 Interim
Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July 2, 1996.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) manufactured after October 22,
1994 of the same or of equal or greater value, remaining useful life and
utility as the Engine being replaced, together with all Parts relating to such
engine; provided, however, that if such replacement engine is not a General
Electric CF6-80C2-A5F engine, such replacement engine must then be commonly
used in the commercial aviation industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or Corporate
Trust Administration, as the case may be, designated by such Person to perform
obligations under the Operative Agreements, with respect to the Owner
Participant, the president or any vice president with direct responsibility
for the transactions contemplated by the Operative Agreements, and with
respect to any other party, any corporate officer or (except in the case of
the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be executed and
delivered by the Lessee and the Pass Through Trustee, the Series Supplement
1995-B2 to be executed and delivered by the Lessee and the Pass Through
Trustee or the Series Supplement 1995-B3 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.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Term, the amount determined by multiplying the Purchase Price
by the percentage set forth in Schedule III of the Lease under the heading
"Stipulated Loss Value Factor" opposite such date (as such Schedule III may be
adjusted from time to time as provided in Section 3.04 of the Lease), and
during any Renewal Term, the amount determined pursuant to Section 4.01(b) of
the Lease. Notwithstanding any other provisions of the Lease or the
Participation Agreement or the Indenture, each Stipulated Loss Value shall be,
under any circumstances and in any event, an amount, together with so much of
the arrears portion of Interim Rent and Basic Rent due and owing through the
date of payment of Stipulated Loss Value as does not constitute an Excepted
Payment, at least sufficient to pay in full as of such date of payment the
aggregate unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on Schedule
III of the Lease, for dates other than Rent Payment Dates on which arrears
Interim Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent and,
accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
Substantial Authority. For Federal income tax purposes, shall have
the meaning applicable for purposes of Section 6662 of the Code and relevant
Treasury regulations.
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 any Ancillary Agreement
or any other Operative Agreement to the Lessor, the Owner Participant or
others, including, without limitation, payments of Stipulated Loss Value, EBO
Price and amounts calculated by reference to Termination Value and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement or the Tax Indemnity
Agreement or any other Operative Agreement, but excluding Interim Rent and
Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Original Tax Indemnity Agreement as
amended by Amendment No. 1 to the Original Tax Indemnity Agreement, as from
time to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Preliminary Term, the Interim Term and the Basic Term of
the lease for the Aircraft under the Lease and, if renewed pursuant to Section
4.01 of the Lease, each Renewal Term for the Aircraft for which the Lease is
renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease, and in the
case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling on
July 2, 2008 or January 2, 2012, (ii) Section 4.02(a)(D) or (E) of the Lease,
a Rent Payment Date that is on or after the fifth anniversary of the
Commencement Date and (iii) Section 4.02(a)(F) of the Lease, January 2, 2015.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code (which, among
other things, recodified the Federal Aviation Act of 1958, as amended to the
time of such recodification), as amended and in effect on the date of the
Lease or as subsequently amended, or any successor or substituted legislation
at the time in effect and applicable, and the regulations promulgated pursuant
thereto.
Treasury Yield. (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N660FE), dated as of September 1, 1995, as amended and restated as
of October 26, 1995, between the Owner Participant and the Owner Trustee in
its individual capacity, as from time to time modified, amended or
supplemented pursuant to its applicable provisions and in accordance with the
Operative Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the Underwriting
Agreement.
Underwriting Agreement. The Underwriting Agreement dated October 26,
1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
SCHEDULE II
OWNER PARTICIPANT AMOUNT
(As a Percentage of Purchase Price)
Date Amount
March 19, 1996 6.66323108%
INTERIM RENT
(As a Percentage of Purchase Price)
Rent
Payment
Date Advance Arrears
[On each Payment Date, Lessee will pay as Interim 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 Payment Date, together with
the accrued and unpaid interest thereon.]
BASIC RENT
(As a Percentage of Purchase Price)
Rent
Payment
Date Advance Arrears
[On each 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 Payment Date, together with
the accrued and unpaid interest thereon.]
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
(D) Purchase Option Referred to in Section 4.02(a)(D) of the Lease.
In the event of any Significant Expenditure (as defined below) with respect
to the Aircraft, which the Lessee has certified in a certificate of the
Lessee's President, Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer, Treasurer or Assistant Treasurer furnished to the
Lessor, the Indenture Trustee and the Owner Participant, is (as determined
in the Lessee's sole discretion) necessary, desirable or required to be
made at any time on or after the fifth anniversary of the Commencement
Date, the Lessee may elect to terminate the Lease and purchase the Aircraft
on the first Rent Payment Date occurring at least six months after the
Owner Participant has notified the Lessee that they will not permit such
Significant Expenditure to be financed as contemplated in clause (ii) of
the definition of "Significant Expenditure" below, for, at the Lessee's
option, either (1) the payment to the Lessor in immediately available funds
of an amount equal to the greater of the Fair Market Value of the Aircraft
and 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 7.11 of the Participation Agreement and Section 2.12 of the
Indenture, of all of the Lessor's obligations 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, and (II) the Fair Market Value of the Aircraft, both computed as
of such Rent Payment Date, over (B) the unpaid principal of the
Certificates outstanding plus accrued interest as of such date; it being
understood that the Fair Market Value for this purpose shall be determined
without regard to any Significant Expenditure not yet made.
For purposes of this paragraph (D) the term "Significant Expenditure"
means a single expenditure or a series of related 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 (i) in
the Lessee's reasonable judgment would exceed $5,000,000, (ii) the Owner
Participant will not permit to be financed on similar terms and conditions
then available for similar transactions through the issuance of additional
non-recourse notes of the Lessor or through additional equity investments
of the Owner Participant or both (it being understood that this Section
4.02(a)(D) shall not impose any obligation on the Owner Participant to
provide such financing) and (iii) are improvements which the Lessee has
performed or is in the process of performing in respect of at least 25% of
the A300-600 series aircraft (including the Aircraft) operated by the
Lessee. The Lessee, prior to notifying the Owner Participant and the
Indenture Trustee in accordance with Paragraph (F) of this Schedule V of
its election to purchase the Aircraft pursuant to Section 4.02(a)(D) of the
Lease, shall notify the Owner Participant of the non-severable improvements
which would satisfy the conditions described in clauses (i) and (iii) of
the preceding sentence, and provide the Owner Participant with a reasonable
opportunity to permit the financing thereof as contemplated in clause (ii)
of such sentence. The Owner Participant shall notify the Lessee of their
decision with respect to such financing within 60 days after the Lessee has
given the notice described in the preceding sentence.
(E) Purchase Option Referred to in Section 4.02(a)(E) of the Lease.
In the event that a Burdensome Indemnity Payment shall occur at any time on
or after the fifth anniversary of the Commencement Date, 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 for, at the Lessee's option, either (1) the
payment to the Lessor in immediately available funds of an amount equal to
the greater of the Fair Market Value of the Aircraft and 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 7.11 of the Participation Agreement and Section 2.12 of the
Indenture, 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
and (II) the Fair Market Value of the Aircraft, both computed as of the
Burdensome Indemnity Payment Date, over (B) the unpaid principal of the
Certificates outstanding plus accrued interest as of such date.
For purposes of this paragraph (E), the term "Burdensome Indemnity
Payment" means a Loss as defined in the Tax Indemnity Agreement which under
the circumstances cannot be commercially reasonably avoided by the Lessee
which causes the aggregate net present value as of the determination date,
discounted semi-annually at the Debt Rate, of all such Losses (but
excluding any Losses for which the Owner Participant shall have waived its
right to payment under the Tax Indemnity Agreement) paid or payable by the
Lessee which can be avoided through a purchase by the Lessee of the
Aircraft, to exceed 2.5% of the Purchase Price.
(F) Notice from the Lessee. The Lessee shall give the Lessor, the
Owner Participant and the Indenture Trustee not more than 180 days nor less
than 90 days prior written notice of its election to purchase pursuant to
Section 4.02(a)(D) or 4.02(a)(E) of the Lease. Such notice shall either
direct the Lessor to prepay the Certificates in full on such Termination
Date pursuant to Section 6.02 of the Indenture or state that the Lessee
shall exercise its option to assume the Certificates pursuant to Section
7.11 of the Participation Agreement and Section 2.12 of the Indenture. The
Lessee's notice pursuant to Section 4.02(a)(D) or 4.02(a)(E) hereof shall
become irrevocable 10 days prior to the applicable purchase date designated
in such notice but if any such notice is revoked, the Lessee shall no
longer be entitled to purchase the Aircraft as a result of the facts and
circumstances originally giving rise to such right and will pay all
reasonable expenses of the Owner Participant, the Owner Trustee and the
Indenture Trustee in connection therewith.
Exhibit A
to
Lease Agreement
THE INTEREST OF LESSOR UNDER THIS LEASE SUPPLEMENT
NO. __ IS SUBJECT TO A SECURITY INTEREST
LEASE SUPPLEMENT NO. __
(Federal Express Corporation Trust No. N660FE)
LEASE SUPPLEMENT NO. __ (Federal Express Corporation Trust No.
N660FE), dated ________ __, ____, between NBD BANK, a Michigan banking
corporation, not in its individual capacity, but solely as Owner Trustee under
the Trust Agreement (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, as amended and restated as of October 26, 1995 (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 (Federal Express Corporation Trust No. N660FE) dated as of
September 1, 1995, as amended and restated as of October 26, 1995 (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. __, for the purpose of leasing under the Lease the aircraft and
engines described below ("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. Delivered 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 A300F4-605R
Aircraft (the "Delivered Aircraft"), which Delivered Aircraft as of the date
of this Lease Supplement consists of the following:
(a) Airbus A300F4-605R Airframe; U.S. Registration Number ______;
Manufacturer's Serial No. ___; and
(b) Two (2) General Electric CF6-80C2-A5F Engines bearing,
respectively, Manufacturer's Serial Nos. ___-___ and ___-___ (each of which
engines has 750 or more rated takeoff horsepower or the equivalent of such
horsepower).
Section 2. Delivery Date. The Delivery Date of the Delivered
Aircraft is the date of this Lease Supplement.
Section 3. Purchase Price. The Purchase Price of the Delivered
Aircraft shall be the amount set forth in Ancillary Agreement I.
Section 4. Term. The Term for the Delivered Aircraft shall commence
on the Delivery Date, and shall terminate on ______, ____, unless earlier
terminated or extended pursuant to the terms of the Lease.
Section 5. Rent. The Lessee hereby agrees to pay the Lessor Rent
for the Delivered Aircraft throughout the Term thereof in accordance with the
terms and provisions of the Lease.
Section 6. Lessee's Acceptance of Delivered Aircraft. The Lessee
hereby confirms to the Lessor that the Delivered Aircraft has been duly marked
in accordance with Section 7.03 of the Lease and that the Lessee has accepted
the Delivered Aircraft for all purposes hereof and of the Lease, and 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 AVSA, the Manufacturer, the Engine Manufacturer or any vendor of
equipment included in the Aircraft.
Section 7. 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 8. 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 9. Agreement as Chattel Paper. To the extent that this Lease
Supplement 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 Supplement may be created through the transfer or
possession of any counterpart other than the original chattel-paper
counterpart, which shall be the counterpart containing the receipt executed by
the Indenture Trustee on its signature page.
Section 10. 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: NBD BANK,
not in its individual capacity,
but solely as Owner Trustee
By: ____________________________________________
Name:
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By: ___________________________________________
Name: Robert D. Henning
Title:Assistant Treasurer and
Managing Director -
Structured Finance
Receipt of this original counterpart of the Lease Supplement is hereby
acknowledged on this __ day of _________ 1995.
Indenture Trustee: THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
not in its individual capacity,
but solely as Indenture Trustee
By: _________________________________________
Name:
Title:
LEASE AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N661FE)
Dated as of October 15, 1995
Amended and Restated as of October 26, 1995
between
NBD BANK,
Not in its Individual Capacity,
but Solely as Owner Trustee,
AS LESSOR
and
FEDERAL EXPRESS CORPORATION,
AS LESSEE
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 760, REGISTRATION NO. N661FE
CERTAIN OF THE RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE
AGREEMENT OF NBD BANK, AS OWNER TRUSTEE, HAS BEEN ASSIGNED TO AND IS
SUBJECT TO A LIEN AND SECURITY INTEREST IN FAVOR OF THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), AS INDENTURE TRUSTEE UNDER THE TRUST INDENTURE
AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N661FE)
DATED AS OF OCTOBER 15, 1995, AS AMENDED AND RESTATED AS OF OCTOBER 26,
1995 FOR THE BENEFIT OF THE HOLDERS OF THE CERTIFICATES REFERRED TO IN SUCH
TRUST INDENTURE AND SECURITY AGREEMENT. THIS LEASE AGREEMENT HAS BEEN
EXECUTED IN SEVERAL COUNTERPARTS. ONLY THE CHATTEL-PAPER "ORIGINAL"
COUNTERPART CONTAINS THE RECEIPT THEREFOR EXECUTED BY THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), AS INDENTURE TRUSTEE, ON THE SIGNATURE PAGES
THEREOF.
TABLE OF CONTENTS
Page
Initial Recitals.............................................................1
ARTICLE 1
DEFINITIONS
ARTICLE 2
ACCEPTANCE UNDER THE LEASE
Section 2.01. Affirmation of Acceptance under the Lease................ 2
ARTICLE 3
RENT AND RENT ADJUSTMENT
Section 3.01. Owner Participant Payment................................ 2
Section 3.02. Interim Rent and Basic Rent.............................. 2
Section 3.03. Supplemental Rent........................................ 3
Section 3.04. Adjustments to Interim Rent, Basic Rent, Stipulated Loss
Value, Termination Value and the EBO Price After
the Delivery Date....................................... 3
Section 3.05. Minimum Interim Rent and Basic Rent...................... 5
Section 3.06. Payment to Indenture Trustee............................. 6
Section 3.07. Costs and Expenses....................................... 6
ARTICLE 4
RENEWAL OPTIONS AND PURCHASE OPTIONS
Section 4.01. Renewal Options.......................................... 6
Section 4.02. Purchase Options......................................... 7
Section 4.03. Appraisal Procedures..................................... 9
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.01. Disclaimer of Representations and Warranties............. 11
Section 5.02. No Modification of Other Warranties...................... 12
Section 5.03. Certain Agreements of the Lessee......................... 12
ARTICLE 6
LIENS
Section 6.01. Liens.................................................... 12
ARTICLE 7
AIRCRAFT REGISTRATION, MAINTENANCE AND OPERATION
Section 7.01. Registration, Maintenance and Operation.................. 14
Section 7.02. Possession and Permitted Transfer and Sublease........... 16
Section 7.03. Insignia................................................. 20
ARTICLE 8
REPLACEMENT AND POOLING OF PARTS
Section 8.01. Replacement of Parts..................................... 21
Section 8.02. Pooling of Parts......................................... 22
ARTICLE 9
ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section 9.01. Required Alterations and Modifications................... 23
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 Aircraft by the Lessor..................... 27
Section 10.03. Voluntary Termination as to Engines..................... 28
ARTICLE 11
LOSS, DESTRUCTION, REQUISITION
Section 11.01. Lessee's Election Rights................................ 28
Section 11.02. Payment of Stipulated Loss Value........................ 29
Section 11.03. Replacement of Airframe and Engines..................... 30
Section 11.04. Event of Loss with Respect to an Engine................. 33
Section 11.05. Application of Payments from the Government or Others... 35
Section 11.06. Requisition of an Airframe and the Installed Engines
for Use by Government ................................. 36
Section 11.07. Requisition for Use by Government of an Engine
Not Installed on the Airframe.......................... 37
Section 11.08. Application of Payments During Existence of Certain
Defaults............................................... 37
ARTICLE 12
RETURN OF AIRCRAFT
Section 12.01. Return of Aircraft...................................... 37
Section 12.02. Return of Engines....................................... 38
Section 12.03. Return of Manuals....................................... 38
Section 12.04. Condition of Aircraft................................... 39
Section 12.05. Delayed Return of Aircraft.............................. 40
Section 12.06. Storage................................................. 41
Section 12.07. Special Markings........................................ 41
Section 12.08. Lessor's Option to Purchase Parts....................... 41
ARTICLE 13
INSURANCE
Section 13.01. Comprehensive Airline Liability and Property Damage
Liability Insurance.................................... 42
Section 13.02. Insurance Against Loss or Damage to Aircraft
and Engines............................................ 44
Section 13.03. Application of Insurance Proceeds....................... 46
Section 13.04. Reports................................................. 47
Section 13.05. Lessor's Insurance...................................... 48
Section 13.06. Self-Insurance.......................................... 48
ARTICLE 14
INSPECTION
Section 14.01. Right of Inspection..................................... 48
Section 14.02. No Obligation to Inspect................................ 49
ARTICLE 15
ASSIGNMENT
Section 15.01. Lessee's Right to Assign................................ 49
Section 15.02. Citizenship............................................. 49
ARTICLE 16
EVENTS OF DEFAULT
Section 16.01. Events of Default....................................... 50
ARTICLE 17
REMEDIES
Section 17.01. Remedies Upon Lessee's Default.......................... 52
Section 17.02. Cumulative Remedies..................................... 55
Section 17.03. Waiver.................................................. 55
Section 17.04. Lessor's Right to Perform for Lessee.................... 55
ARTICLE 18
COVENANT OF QUIET ENJOYMENT
Section 18.01. Quiet Enjoyment......................................... 56
ARTICLE 19
FURTHER ASSURANCES
Section 19.01. Further Assurances...................................... 56
ARTICLE 20
NET LEASE
Section 20.01. Nature of Lease......................................... 57
ARTICLE 21
SUCCESSOR LESSOR
Section 21.01. Successor Lessor........................................ 58
ARTICLE 22
SECURITY FOR LESSOR'S OBLIGATIONS
Section 22.01. Security for Lessor's Obligations to Holders............ 59
Section 22.02. Intentionally Left Blank................................ 59
Section 22.03. Consent of Lessee to Assignment of Lease as Security.... 59
ARTICLE 23
SECURITY FUNDS
Section 23.01. Investment of Security Funds............................ 59
ARTICLE 24
CONCERNING THE LESSOR
Section 24.01. Lessor's Entry Into Lease............................... 61
ARTICLE 25
NOTICES
Section 25.01. Notices................................................. 61
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Headings and Captions........................... 62
Section 26.02. References.............................................. 62
Section 26.03. APPLICABLE LAW.......................................... 62
Section 26.04. Severability............................................ 63
Section 26.05. No Oral Modification.................................... 63
Section 26.06. Agreement as Chattel Paper.............................. 63
Section 26.07. Counterparts............................................ 63
Section 26.08. Public Release of Information........................... 63
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties................................... 64
Section 27.02. Section 1110 Compliance................................. 64
Section 27.03. Finance Lease........................................... 64
Schedule I Definitions
Schedule II Owner Participant Amount, Interim Rent and Basic Rent
Schedule III Stipulated Loss Values
Schedule IV Termination Values
Schedule V Purchase Option Schedule
Exhibit A Form of Lease Supplement
LEASE AGREEMENT
(Federal Express Corporation Trust No. N661FE)
Lease Agreement (Federal Express Corporation Trust No. N661FE) dated
as of October 15, 1995, as amended and restated as of October 26, 1995 (this
"Lease"), between NBD BANK, a Michigan banking corporation, 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, the Lessor and the Lessee have heretofore entered into
the Original Lease dated as of October 15, 1995 as supplemented by Lease
Supplement No. 1 dated October 25, 1995.
WHEREAS, the Original Lease was recorded by the FAA on October 25,
1995 and assigned Conveyance Number 2A267995.
WHEREAS, pursuant to Article 15 of the Original Participation
Agreement, the Lessee, the Original Loan Participants, the Owner Participant,
the Indenture Trustee and the Lessor desire to refinance, in full, the
Original Loan Certificates on the Refunding Date; and
WHEREAS, in connection with such refinancing, the Lessee, the Owner
Participant, the Lessor and the Indenture Trustee desire that the Original
Lease be amended and restated in its entirety as provided herein;
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 that the
Original Lease be and the same is hereby amended and restated in its entirety
as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, 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. Affirmation of Acceptance under the Lease. The Lessor,
having accepted delivery of the Aircraft from AVSA on the Delivery Date and
having simultaneously leased the Aircraft to the Lessee, and the Lessee,
having leased the Aircraft from the Lessor on the Delivery Date, as evidenced
by the execution by the Lessor and the Lessee of the initial Lease Supplement
(which is incorporated by reference herein), hereby affirm the terms and
conditions of the Original Lease as herein amended and restated and of the
Purchase Agreement Assignment. This Lease shall last for the Term, at all
times during which full legal title to the Aircraft shall remain vested with
the Lessor to the exclusion of the Lessee, notwithstanding the possession and
use thereof by the Lessee or any other Person.
ARTICLE 3
RENT AND RENT ADJUSTMENT
Section 3.01. Owner Participant Payment. The Owner Participant
has agreed, so long as no Event of Default has occurred and is continuing,
to make available to the Lessor funds sufficient to pay to the Indenture
Trustee on the Owner Participant Payment Date an amount equal to the
amounts scheduled to be paid on the Certificates on such date, all in
accordance with the provisions of Section 2.03 of the Participation
Agreement. To the extent such amount is not paid when due on the Owner
Participant Payment Date, the Lessee shall make an advance on behalf of the
Owner Participant as described in Section 3.05 hereof equal to such amount
and, if not otherwise reimbursed, the Lessee shall have the right to offset
such amount pursuant to Section 3.05 hereof.
Section 3.02. Interim Rent and Basic Rent. No Rent (other than
Supplemental Rent, if any) shall be payable for the Preliminary Term. The
Lessee agrees to pay to the Lessor in immediately available funds on the
Commencement Date, Interim Rent in the amount set forth on Schedule II
hereto for such date, subject to increase or decrease as provided in
Section 3.04 hereof, with such Interim Rent being allocated to the Interim
Term. The Lessee agrees to pay to the Lessor in immediately available
funds, on each Rent Payment Date, Basic Rent for the Aircraft during the
Basic Term, each payment being set forth on Schedule II hereto opposite the
applicable Rent Payment Date, subject to increase or decrease as provided
in Sections 3.04 of this Lease. Each payment of Interim Rent and Basic
Rent shall be made in arrears or in advance, all as stated in Schedule II
hereto. Each payment of Basic Rent designated as advance rent shall be
allocated over the six-month period beginning on the Rent Payment Date on
which such advance rent payment is scheduled to be made, and each
installment of Basic Rent that is designated as payable in arrears 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
is scheduled to be made and each installment of Interim Rent that is
designated as payable in arrears shall be accrued over the Interim Term.
Section 3.03. 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 Interim Rent or 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
Interim Rent or 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, the Lessee will
pay to the Lessor, as Supplemental Rent, in the case of any prepayment of
the Certificates pursuant to Section 6.02 of the Indenture (except in the
case of an Indenture Event of Default in the absence of any Event of
Default) or any prepayment or purchase of the Certificates pursuant to
clause (ii) of the first sentence of Section 8.02(a) of the Indenture, an
amount equal to the aggregate amount of any Make-Whole Premium payable on
such prepayment or purchase. The expiration or other termination of the
Lessee's obligation to pay Interim Rent or Basic Rent shall not limit or
otherwise modify the obligations of the Lessee with respect to the payment
of Supplemental Rent.
Section 3.04. Adjustments to Interim Rent, Basic Rent, Stipulated
Loss Value, Termination Value and the EBO Price After the Delivery Date.
The percentages for Interim Rent and Basic Rent referred to in Schedule II
hereto and for Stipulated Loss Value and Termination Value in Schedule III
and Schedule IV, respectively, hereto and the EBO Price shall be adjusted
(upward or downward) subject to the minimum value established by Section
3.05 hereof and the definitions of Stipulated Loss Value and Termination
Value to reflect (i) any costs and expenses paid by the Lessor or the Owner
Participant pursuant to Section 10.01 of the Participation Agreement being
greater or less than the Estimated Expense Amount, (ii) any Refinancing
pursuant to Section 15.01 of the Participation Agreement, (iii) any
reoptimization pursuant to Section 15.02 of the Participation Agreement,
(iv) the Owner Participant Amount being different from the amount set forth
on Schedule II hereto or paid, in whole or in part, on a date other than as
set forth on Schedule II hereto or (v) payments pursuant to Section 5 of
the Tax Indemnity Agreement by an adjustment of Interim Rent and Basic
Rent. Each such adjustment pursuant to clause (i), (ii), (iv) or (v) of
the first sentence of this Section 3.04 shall maintain the Owner's Economic
Return (and, while maintaining such Return, minimize the aggregate Net
Present Value of Rents to the Lessee) and shall not cause the EBO Price to
be less than the greater of (i) the Termination Value as of such Rent
Payment Date and (ii) the estimate set forth in the Appraisal of the Fair
Market Value of the Aircraft at the time of exercise of the purchase option
under Section 4.02(a)(F) hereof. In the event of an adjustment pursuant to
clause (iii) of the first sentence of this Section 3.04, the Owner
Participant may recalculate Interim Rent and Basic Rent as set forth in
Schedule II hereto in order to maintain the Owner's Economic Return,
recalculate the Owner Participant Amount set forth in Schedule II hereto
and, subject to the provisions of Section 15.02 of the Participation
Agreement, recalculate the schedule of principal repayments, the Stipulated
Loss Value percentages set forth in Schedule III hereto, the Termination
Value percentages set forth in Schedule IV hereto and the EBO Price in a
manner consistent with such recalculation of Interim Rent and Basic Rent;
provided that any such recalculations may not (A) increase the Net Present
Value of Rents to the Lessee, (B) increase as of any date the sum of (1)
the Net Present Value of Rents to the Lessee payable through such date plus
(2) the present value of the Stipulated Loss Value, the Termination Value
or the EBO Price as of such date, in each case discounted at the Debt Rate,
beyond such net present values prior to such adjustment, or (C) otherwise
result in any adverse impact (including tax consequences) to the Lessee for
which the Owner Participant has not agreed to indemnify the Lessee on terms
reasonably acceptable to the Lessee. The Owner Participant shall promptly
notify the Lessee and the Lessor and the Lessee shall promptly notify the
Owner Participant and the Lessor of the need for any such adjustment. As
promptly as feasible after any such notification, the Lessor shall furnish
the Lessee with a notice setting forth the amount of any such adjustments
together with the calculations upon which the adjustments are based;
provided, however, that the Lessor and the Owner Participant shall not be
required to disclose to the Lessee in such notice any confidential or
proprietary information (including methodology or assumptions) relating to
such calculations. At the request and, subject to the next succeeding
sentence, expense of the Lessee, the accuracy of the calculation of such
adjustments and the consistency of the calculation with the calculation
used to determine Interim Rent, Basic Rent, Stipulated Loss Values,
Termination Values and the EBO Price shall be verified first, by First
Chicago Leasing Corporation or such other financial advisor chosen by the
Lessee and second, if such adjustments are still believed to be in error
and are not reconciled with the Owner Participant within fifteen (15)
Business Days, by a firm of nationally recognized independent public
accountants selected by the Lessee and reasonably acceptable to the Owner
Participant and, in order to enable them to verify such adjustments, the
Owner Participant shall make available to such accountants (for their own
confidential use and not to be disclosed to the Lessee or any other Person
and subject to the execution of a confidentiality agreement reasonably
satisfactory to the Owner Participant) all information reasonably necessary
for such verification, including the name of the lease analysis program
used by the Owner Participant to calculate such adjustments. The Lessee
will pay the reasonable costs and expenses of the verification process
under this Section 3.04 unless as a result of such verification process by
the independent public accountants Interim Rent or Basic Rent is adjusted
and such adjustment causes the Net Present Value of Rents to decline by 10
or more basis points (in which event the Owner Participant shall pay the
reasonable costs and expenses of such verification process). The Lessor
and the Lessee shall execute and deliver an amendment to this Lease to
reflect each adjustment under this Section 3.04.
All adjustments under this Section 3.04 shall be in compliance
with the requirements of Revenue Procedure 75-21, 1975-1 C.B. 715 and
Sections 4.02(5), 4.07(1), 4.07(2) and 4.08(1) of Revenue Procedure 75-28,
1975-1 C.B. 752 and shall be structured so as to not cause the Lease to be
a "disqualified leaseback or long-term agreement" within the meaning of
Section 467 of the Code.
Section 3.05. Minimum Interim Rent and Basic Rent.
Notwithstanding any other provisions of the Operative Agreements to the
contrary, each installment of Interim Rent and Basic Rent due on each Rent
Payment Date and not constituting an Excepted Payment shall be, under any
and all circumstances, an amount 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 Article 17 hereof) on such
Rent Payment Date. To the extent that the Owner Participant does not
provide the Lessor with funds on the Owner Participant Payment Date as
referred to in Section 3.01 hereof if and when due, the Lessee shall on
such date advance on behalf of the Owner Participant (and such advance
shall be deemed a demand loan owing to the Lessee from the Owner
Participant bearing interest at the Past Due Rate plus 3%) an amount equal
to the funds not so provided. Unless otherwise reimbursed, the Lessee
shall, in addition to all other rights and remedies under applicable law
but subject to Article 20 hereof, be entitled to offset against any
payments due from the Lessee to the Lessor (including, without limitation,
Interim Rent, Basic Rent and payments due to the Lessor under Article 9 of
the Participation Agreement but not including the fees and expenses payable
to NBD or to the Owner Participant under the Tax Indemnity Agreement and
Excepted Payments), until the Lessee has fully offset such advance plus
interest thereon at the Past Due Rate plus 3% from the date of such advance
until the date of such reimbursement or offset; provided, however, that in
the case of any payment due from the Lessee which is distributable under
the terms of the Indenture, the Lessee's right of offset shall be limited
to the amount distributable to the Lessor thereunder (and shall not include
any amounts distributable to the Indenture Trustee in its individual
capacity or to the Holders of the Certificates or any of them). No such
offset or aggregate combined effect of separate offsets shall reduce the
amount of any installment of Interim Rent and Basic Rent, or the amount of
Stipulated Loss Value, Termination Value or EBO Price, to an amount
insufficient to pay in full the payments then required to be made on
account of the principal of and interest on the Certificates then
Outstanding. If the Owner Participant is not required to provide such
funds under Section 3.01 hereof, the Lessee shall make a payment of
Supplemental Rent in an amount equal to the Owner Participant Amount.
Section 3.06. Payment to Indenture Trustee. All Rent payable by
the Lessee to the Lessor shall be paid to the Lessor at its principal
office at 611 Woodward Avenue, Detroit, Michigan 48226, Attention:
Corporate Trust Department, 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 10:30 a.m., New York time on the due date of such payment; provided,
however, that so long as the Indenture shall not have been discharged the
Lessor hereby directs, and the Lessee agrees, that all Rent (other than
Excepted Payments, which shall be paid by the Lessee directly to the Person
entitled thereto) (all without set-off or counterclaim as and to the
extent provided in Article 20 hereof) and all amounts referred to in
Section 3.01 hereof shall be paid directly to the Indenture Trustee at its
principal office at 4 Chase Metrotech Center, 3rd Floor, Brooklyn, New York
11245, Attention: Corporate Trust Administration, or as the Indenture
Trustee may otherwise direct within the United States by wire transfer of
immediately available funds in U.S. Dollars no later than 10:30 a.m., New
York 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 without interest thereon
for the period of such extension (provided that payment is made on such
next succeeding Business Day).
Section 3.07. Global 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 or Purchase.
The Lessee shall provide the Lessor with irrevocable written notice (the
"Preliminary Notice") not more than 360 days nor less than 180 days prior
to the end of the Basic Term or the preceding Renewal Term, as the case may
be, 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)(B) hereof or, if a further Renewal Term is available,
pursuant to Section 4.02(a)(C) hereof. If, following delivery of a
Preliminary Notice, the Lessee shall not have notified the Lessor, at least
30 days prior to the end of the Basic Term or a current Renewal Term, that
it is renewing this Lease in accordance with this Section 4.01, the
Lessee's Preliminary Notice shall be deemed an irrevocable notice of
purchase satisfying Section 4.02(a)(B) hereof. Provided that (i) no 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 timely delivered the respective Preliminary Notice, the
Lessee may, by irrevocable written notice delivered to the Lessor not less
than 30 days prior to the end of the Basic Term, extend the Term for a
Fixed Renewal Term of one (1) or two (2) years commencing on the expiration
of the Basic Term. If the Lessee elects to extend the Term for a Fixed
Renewal Term of one (1) year as described in the preceding sentence and so
elects upon 30 days' written notice to the Lessor prior to the end of such
one-year Fixed Renewal Term, the Lessee may elect to extend the Term for a
further Fixed Renewal Term of one year, provided that the conditions of
clauses (i), (ii) and (iii) of the preceding sentence are met. The Lessee
shall pay the Fixed Renewal Rent during any Fixed Renewal Term.
In addition, provided that (i) no 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, on no more than two occasions, by
written notice delivered to the Lessor not less than 30 days prior to the
end of the Basic Term or the preceding Renewal Term, as the case may be,
elect to extend the Term for a Renewal Term or further Renewal Term
commencing on the expiration of the Basic Term or the preceding Renewal
Term and ending one, two or three years thereafter for a rent equal to the
then-current Fair Market Rental of the Aircraft. The Term may be extended
pursuant to this paragraph for an aggregate of no more than three years
following the Basic Term or any Fixed Renewal Term. The Lessee shall pay
the Fair Market Rental during any Fair Market Renewal Term.
(b) Terms and Conditions. Any such renewal shall be on the same
terms and conditions as provided herein, except that (i) rent for the
Aircraft due during any Renewal Term shall be payable semi-annually in
arrears on the dates corresponding to the Rent Payment Dates during such
Renewal Term, and (ii) during any Renewal Term, the Stipulated Loss Value
for the Aircraft shall as of any Stipulated Loss Value Determination Date
during the Renewal Term be equal to the higher of the Stipulated Loss Value
and the Fair Market Value of the Aircraft as of the end of the Basic Term
or the next preceding Renewal Term, if applicable.
Section 4.02. Purchase Options. (a) Election to Purchase.
Provided that (i) this Lease has not otherwise expired or terminated, (ii)
either no Event of Default shall have occurred and be continuing at the
time of the notice provided below or, if an Event of Default occurs after
such notice has been given, the Lessee shall have provided evidence
reasonably satisfactory to the Lessor and the Owner Participant of its
financial ability to purchase the Aircraft and (iii) the Lessee shall have
previously given the Preliminary Notice under Section 4.01(a) hereof (in
the case of paragraph (B) below or, if a further Renewal Term is available,
paragraph (C) below) or the applicable notice for each other paragraph
below, as the case may be, the Lessee may:
(A) by written notice delivered to the Lessor and the Owner
Participant, not more than 180 nor less than 90 days prior to the
applicable Rent Payment Date, elect to terminate the Lease and purchase
the Aircraft on July 2, 2011 or July 2, 2013, for, at the Lessee's
option, either (1) an amount in immediately available funds equal to the
greater of the Fair Market Value or the Termination Value on such date
or (2)(i) the assumption by the Lessee, pursuant to Section 7.11 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 (ii) the payment to the Lessor of an amount equal to the
excess of (A) the greater of the Fair Market Value or the Termination
Value on such date over (B) the unpaid principal of the Certificates
plus accrued interest as of such date. Such notice (which shall be
revocable by the Lessee upon written notice no later than the Business
Day prior to the date 15 days prior to the applicable Rent Payment Date)
shall either direct the Lessor to prepay the Certificates in full on
such Termination Date pursuant to Section 6.02 of the Indenture or state
that the Lessee shall exercise its option to assume the Certificates
pursuant to Section 7.11 of the Participation Agreement and Section 2.12
of the Indenture; or
(B) by irrevocable written notice delivered to the Lessor and the
Owner Participant not more than 180 nor less than 30 days prior to the
end of the Basic Term (or deemed given pursuant to the second sentence
of Section 4.01(a) hereof), elect to purchase the Aircraft on the last
day of the Basic Term for an amount equal to the Fair Market Value
thereof on such date; or
(C) by irrevocable written notice delivered to the Lessor and the
Owner Participant not more than 270 days nor less than 30 days prior to
the end of any Renewal Term, elect to terminate the Lease and purchase
the Aircraft on the last day of such Renewal Term at a price equal to
the Fair Market Value of the Aircraft on such day; provided, however,
that the Lessee shall have paid all Rent due and payable under this
Lease on or prior to the expiration of any such Renewal Term; 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 shall be in an amount not less than the
greater of the amount specified in Schedule V hereto and the Fair Market
Value;
(E) exercise the purchase option in this Section 4.02(a)(E) which
is more particularly described in Schedule V hereto by reference to this
Section 4.02(a)(E) and which shall be in an amount not less than the
greater of the amount specified in Schedule V hereto and the Fair Market
Value; or
(F) by irrevocable written notice delivered to the Lessor and the
Owner Participant not more than 180 nor less than 90 days prior to July
2, 2015, elect to terminate this Lease and purchase the Aircraft on such
Rent Payment Date for an amount equal to the percentage of the Purchase
Price set forth in Ancillary Agreement I with respect to this Section
4.02(a)(F) which amount shall not be less than the greater of (i) the
Termination Value as of such Rent Payment Date and (ii) the estimate set
forth in the Appraisal of the Fair Market Value at the time of exercise
of the option under this Section 4.02(a)(F).
The Lessee shall give the Lessor, the Owner Participant and the
Indenture Trustee not more than 180 and not less than 90 days' prior
written notice of its election to purchase pursuant to Section 4.02(a)(D)
or 4.02(a)(E) hereof. Such notice shall be revocable by the
Lessee upon written notice no later than the Business Day prior to the date
15 days prior to the applicable Rent Payment Date and such notice shall
either direct the Lessor to prepay the Certificates in full on such
Termination Date pursuant to Section 6.02 of the Indenture or state that
the Lessee shall exercise its option to assume the Certificates pursuant to
Section 7.11 of the Participation Agreement and Section 2.12 of the
Indenture. In the event that the Lessee shall have given notice to
purchase the Aircraft under Section 4.02(a)(A), 4.02(a)(D) or 4.02(a)(E)
hereof and shall fail to make payment (and, if applicable,
assume the Certificates) on the applicable Termination Date, the Lease
shall continue and the Lessee shall pay to the Owner Trustee any losses,
costs and expenses of the Owner Participant incurred in connection with
such failure.
(b) Terms and Conditions. If the Lessee elects to purchase the
Aircraft pursuant to Section 4.02(a) hereof, the Lessee shall pay to the
Lessor on the applicable Termination Date by wire transfer of immediately
available funds any Basic Rent payable on such Termination Date (to the
extent payable in arrears but not to the extent payable in advance), the
applicable purchase price together with any other amounts past due
hereunder or due on the applicable Termination Date and all other
Supplemental Rent then due under this Lease including, without limitation,
the aggregate amount of any Make-Whole Premium applicable to any
Certificate (if such purchase occurs prior to the Premium Termination Date
for such Certificate) and amounts due under the Participation Agreement and
the Tax Indemnity Agreement, whereupon (and upon discharge of the Lien of
the Indenture in accordance with Section 14.01 thereof) 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 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
such other documents as the Lessee may reasonably require. In connection
with any termination or proposed termination of this 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 by the date 60 days prior to the date for exercise of the
applicable option, such amount shall be determined by independent appraisal
conducted by appraisers selected pursuant to Section 4.03(b) hereof. At
any time prior to final determination of such amount pursuant to Section
4.03(b) hereof, 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
further determination shall be excluded, the remaining two determinations
shall be averaged, and such average shall be final and binding upon the
Lessor and the Lessee. Otherwise, the average of all three determinations
shall be final and binding upon the Lessor 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 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 under Section 4.02 hereof, in which case
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 EACH 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 (IN ITS INDIVIDUAL
CAPACITY OR AS OWNER TRUSTEE), THE INDENTURE TRUSTEE, THE OWNER PARTICIPANT
OR ANY HOLDER. THE LESSOR LEASES THE AIRFRAME AND EACH ENGINE, AS-IS,
WHERE-IS, AND NEITHER THE LESSOR (IN ITS INDIVIDUAL CAPACITY OR AS OWNER
TRUSTEE), THE INDENTURE TRUSTEE, THE OWNER PARTICIPANT NOR ANY HOLDER
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, AIRWORTHINESS,
WORKMANSHIP, CONDITION, VALUE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE,
DESIGN, OPERATION OR MERCHANTABILITY OF THE AIRFRAME, EACH 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, (E) THE LESSOR'S TITLE THERETO, (F) THE LESSEE'S OR ANY SUBLESSEE'S
RIGHT TO THE QUIET ENJOYMENT THEREOF (EXCEPT AS PROVIDED IN ARTICLE 18
HEREOF) OR (G) ANY OTHER MATTER WHATSOEVER. IT IS AGREED THAT ALL RISKS
INCIDENT TO THE MATTERS DISCUSSED IN THE PRECEDING SENTENCE, AS AMONG THE
LESSOR, THE INDENTURE TRUSTEE, THE OWNER PARTICIPANT AND THE LESSEE, ARE TO
BE BORNE BY THE LESSEE. The provisions of this Section 5.01 have been
negotiated by the Lessor and the Lessee and, except as provided in Article
7 of the Participation Agreement, are intended to be a complete exclusion
and negation of any representations or warranties of the Lessor, the
Indenture Trustee and the Owner Participant, 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, AVSA, the
Manufacturer or the Engine Manufacturer or any of their respective
subcontractors or suppliers, with respect to the Airframe, the Engines or
any Parts incorporated or installed in or attached to the Airframe or
Engines, or to release the Lessee, AVSA, the Manufacturer or the Engine
Manufacturer or any of their respective subcontractors or suppliers from
any such representation, warranty or obligation. 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
Manufacturer, AVSA or Engine Manufacturer or any of their respective
subcontractors or suppliers, and any other claims against the Manufacturer,
AVSA 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 Manufacturer, AVSA and Engine Manufacturer are
obligated to provide and do provide pursuant to the Purchase Agreement or
the GTA with respect to the Aircraft; 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; provided that 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.
Section 5.03. Certain Agreements of the Lessee. The Lessee agrees
with the Lessor for the benefit of the Owner Participant 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, 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 or other Person
under a sublease, transfer, assignment or other such arrangement
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 Section
7.03(b), 7.04(b) or 7.05(b) of the Participation Agreement;
(d) 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 material danger of the
sale, forfeiture or loss of the Lessor's Estate, the Aircraft, the
Airframe or any Engine or any interest therein or any material risk of
civil liabilities (unless the Owner Trustee, the Indenture Trustee and
the Owner Participant shall be indemnified to its satisfaction against
such liabilities by the Lessee) or any risk of the assertion of criminal
charges against the Lessor, the Owner Participant, the Indenture Trustee
or any Holder;
(e) 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 material danger of
the sale, forfeiture or loss of the Lessor's Estate, the Aircraft, the
Airframe or any Engine or any interest therein; and
(f) Liens arising from judgments 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 material danger of the
sale, forfeiture or loss of the Lessor's Estate, the Aircraft, Airframe
or any Engine or any interest therein.
ARTICLE 7
AIRCRAFT REGISTRATION, MAINTENANCE AND OPERATION
Section 7.01. Registration, Maintenance and Operation. The Lessee,
at its own cost and expense, shall:
(a) cause the Aircraft to remain at all times duly registered in
the name of the Lessor as owner, pursuant to the Transportation Code
and, subject to the proviso to Section 6.03(b) of the Participation
Agreement, to remain at all times duly registered pursuant to the
Transportation Code and at all times act 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 6.03(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 Aircraft) in
as good operating condition as when delivered to the Lessor on the
Delivery Date, 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 pursuant to Section 6.03(b) of the
Participation Agreement and the Lessee's maintenance program approved by
the Aeronautics Authority or such agency or body, (ii) in the same
manner and with the same care used by the Lessee with respect to other
A300-600 series aircraft and CF6-80C2-A5F series engines (or other
engines permitted by the terms of this Lease to be used on the Aircraft)
owned, operated or leased 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 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, and (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 Transportation
Code 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;
(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 Transportation Code (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 11.03 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 interest in the
Aircraft;
(e) not maintain, service, repair, overhaul, use or operate the
Aircraft or any Engine in violation of any airworthiness certificate or
registration relating thereto, or in violation of any law or any
license, rule, regulation or order of or by any government or
governmental authority having jurisdiction over the Lessee or the
Aircraft or any Engine or for any purpose for which the Aircraft or any
Engine is not designed; provided, however, that the Lessee (or if a
sublease shall then be in effect, the sublessee thereunder) may in good
faith contest the validity or application of any such law, license,
rule, regulation or order in any manner that does not adversely affect
the Lessor, its right, title or interest in the Aircraft or any Engine
or the interests of the Indenture Trustee or the Owner Participant
therein, or in any Operative Agreement (excluding any interests
indemnified for under the Tax Indemnity Agreement) and such contest or
non-compliance will not result in any material risk of loss, forfeiture
or damage to the Aircraft or in any risk of criminal liability to the
Lessor, 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 the same therewith at
its own cost and expense and will maintain the Aircraft or any Engine in
compliance with such law, license, rule, regulation or order; and
(f) not operate or locate the Airframe or any Engine, or suffer
the Airframe or any Engine to be operated or located in any area
excluded from coverage by any insurance policy required by the terms of
Article 13 hereof, unless the Lessee has obtained, prior to the
operation or location of the Airframe or any Engine in such area,
indemnification from the Government, or other insurance, against the
risks and in the amounts required by, and in compliance with, Article 13
hereof covering such area (except, in the case of a requisition for use
by the Government and in the absence of indemnities, to the extent that
the Lessee certifies that such insurance is unobtainable after diligent
effort or is obtainable only at unreasonably high rates or on unduly
financially burdensome terms and conditions) (and naming the Lessor, or
so long as this Lease is assigned to the Indenture Trustee, the
Indenture Trustee, as loss payee in respect of indemnification or
insurance payable in respect of casualties to the Aircraft) or unless
the Aircraft is only temporarily located in such area as a result of an
isolated occurrence attributable to a hijacking, medical emergency,
equipment malfunction, weather conditions, navigational error or other
similar unforeseen circumstances and the Lessee is using its good faith
efforts to remove the Aircraft from such area.
The Lessee may, at any time during the Term, install an engine or
engines on the Airframe and operate the Aircraft with such engine or
engines installed thereon and the Lessor shall have no right, title or
interest in and to any such engine until such time, if any, that such
engine is returned to the Lessor under Section 12.02 hereof.
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) in the case of clause (i)
below, no Event of Default shall have occurred and be continuing, (ii) the
Lien of the Indenture is not impaired thereby, (iii) all applicable
governmental approvals in connection therewith have been obtained and (iv)
the Lessee shall comply with the provisions of Article 13 hereof, the
Lessee may without the prior written consent of the Lessor:
(i) so long as the sublessee is generally meeting its material
obligations as they come due and is not subject to a proceeding or final
order under applicable bankruptcy, insolvency or reorganization laws on
the date the sublease is entered into and with 30 days' prior written
notice to the Lessor and the Owner Participant, (A) sublease the
Aircraft or any Engine to a U.S. Air Carrier, (B) sublease the Aircraft
or any Engine to an Air Carrier which is principally based in and
domiciled in one of the countries listed on Schedule III of the
Participation Agreement, (C) sublease the Aircraft or any Engine to an
Air Carrier that is principally based in and a domiciliary of a country
which is a party to the International Convention on the Recognition of
Rights in Aircraft, or (D) sublease the Aircraft or any Engine to any
other Air Carrier not described in this Section which shall be
reasonably acceptable to the Lessor as evidenced by its prior written
consent; provided, that, with respect to clauses (B) and (C) above, at
the time of any such sublease the United States of America maintains
full diplomatic relations with the country in which such Air Carrier is
principally based and domiciled. 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 except that, in
the case of subparagraph (iv), possession of the Aircraft may only be
transferred at the direction of the Lessee) and (z) such sublease shall
expire not later than the expiration of the Basic Term or any applicable
Renewal Term hereof. Prior to any sublease to an Air Carrier permitted
under Section 7.02(a)(i)(C) above: (I) the maintenance standards of the
aeronautical authority of the country of domicile or principal operation
of the sublessee taken as a whole shall not be materially less stringent
than those of the FAA or at least comparable to those, taken as a whole,
required by the central civil aviation authority of any of the United
Kingdom, France, Canada, Japan or Germany; (II) the Lessee will provide
opinions of counsel (such counsel and the form and substance of such
opinions to be reasonably satisfactory to the Lessor and the Indenture
Trustee) with respect to (A) the legality, validity and enforceability
of the Operative Agreements and the sublease in such country, (B) that
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 Aircraft in the event of a
requisition of use or title by such government, (C) the Lessor's title
to the subleased equipment will be recognized, (D) 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), (E) that 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, (F) 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 to the Owner Participant and is provided at
or before the execution of such a sublease, at the Lessee's cost and
expense), (G) that there exist no possessory rights in favor of such
sublessee under the laws of such country which would, upon bankruptcy or
insolvency of the Lessee (and assuming that at such time such sublessee
is not bankrupt or insolvent) or of the sublessee, prevent the return of
the Aircraft in accordance with the terms of this Lease and (H) all
necessary governmental approvals required for the subleased equipment,
the Airframe or any Engine, as the case may be, to be imported and, to
the extent reasonably obtainable, exported from the applicable country
of domicile upon repossession of such subleased equipment by the Lessor
(and the Lessee as sublessor), shall have been procured at the Lessee's
own cost and expense by the Lessee prior to commencement of any such
sublease; (III) duties and tariffs, if applicable, shall be paid for by
the Lessee and (IV) the Lessee shall effect or cause to be effected at
the Lessee's own cost and expense all recordings and filings that are
required, or reasonably requested by the Lessor, to continue the
Lessor's right, title and interest to the Aircraft and rights under the
Lease (and sublease) and to perfect and maintain the priority of the
Lien of the Indenture;
(ii) subject the Airframe or permit the Airframe to be subjected
to normal interchange agreements or subject the Engines or permit any
Engine to be subjected to normal interchange or pooling agreements or
arrangements, in each case customary in the airline industry, entered
into by the 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 full diplomatic relations or (x) any United States air
carrier certificated under Section 41102(a) of the Transportation Code
or any successor provision or (y) any "foreign air carrier" (as such
term is defined in the Transportation Code) as to which there is in
force a permit granted under Section 41302 of the Transportation Code
and 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 full diplomatic relations, (III) is a party
to the Convention on the International Recognition of Rights in Aircraft
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 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 any
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. 12056, as amended, or any
similar or substitute programs of the Government, 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 Lessor and 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 then-current Renewal
Term, the Basic Term or the Renewal Term, as applicable, shall be
automatically extended (including the obligation to pay Rent per diem at
a rate equal to the Fair Market Rental) for six (6) months after the end
of the Term (or, if shorter, until the date of return of the Aircraft);
(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
Lessee 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),
operation, use 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 promptly provide
the Lessor, the Owner Participant and the Indenture Trustee a copy of any
sublease (if so requested by the Lessor) 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 any 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 Indenture Trustee or the Owner Participant
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 Owner Participant, the Indenture Trustee and the Lessor incurred in
connection with any subleasing or proposed subleasing.
Section 7.03. Insignia. (a) Nameplate. On or prior to the
Delivery Date 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 "NBD BANK, AS OWNER TRUSTEE, OWNER AND LESSOR," and, so long as
such Airframe or Engines shall be subject to the Lien of the Indenture, the
additional inscription "THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS
INDENTURE TRUSTEE, MORTGAGEE" (such nameplate to be replaced, if necessary,
from time to time with a nameplate reflecting the name of any successor
Lessor or successor Indenture Trustee, in each case as permitted by the
Operative Agreements).
(b) Lessee's Marks. Except as provided in Section 7.03(a)
hereof, the Lessee will not allow the name of any Person to be placed on
the Airframe or any Engine as a designation that might be interpreted as a
claim of ownership; provided, that during the Term, the Lessee may cause
the 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 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 hereof)
and shall thereupon be and become a Part; 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 U.S. 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 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 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 or sublessee, as the case may be, may in
good faith contest the validity or application of any such requirements in
any reasonable manner that does not involve any material risk of civil
liabilities (unless indemnified by the Lessee) or any risk of criminal
penalties being imposed on or against the Indenture Trustee, the Owner
Participant or the Lessor, that does not involve any material risk or
danger of loss, forfeiture or sale of the Aircraft or any Engine and that
does not adversely affect the Lessor, its title or interest in the Aircraft
or any Engine, the first and prior perfected Lien and security interest of
the Indenture, or the interests of the Indenture Trustee or the Owner
Participant in the Airframe or any Engine, or in any Operative Agreement
(excluding any interests indemnified for under the Tax Indemnity
Agreement). All such alterations, modifications or additions shall be made
on or before the date mandated therefor, taking into account authorized
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.
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 in its
usual course of maintenance, 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, remaining useful life, or utility of
the Airframe or the value or utility of any Engine or impair its condition
or airworthiness below its value, remaining useful life (in the case of the
Airframe only), utility, condition and state of 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, except that the value (but not
the remaining useful life, utility, condition or airworthiness) of the
Aircraft may be reduced by the value, if any, of any such Obsolete Parts
which shall have been removed; provided that in no event shall the
aggregate value of all such Obsolete Parts which shall have been so removed
and not replaced exceed $500,000.
(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 9.01 or 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 Delivery Date or
any Part in replacement of, or substitution for, any such Part;
(ii) such Part is not required to be incorporated or installed in or
attached or added to the Airframe or such Engine pursuant to the terms of
Article 7 hereof or the first sentence of Section 9.01 hereof; and
(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 or remaining useful life of the Airframe
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.
(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 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 shall have
occurred and be continuing, the Lessee shall have the right, at its option,
on any Termination Date, on no more than 180 days' and at least 90 days'
prior written notice (which notice shall state the proposed Termination
Date (the "Proposed Termination Date")) to the Lessor and the Owner
Participant to terminate this Lease as of a Termination Date 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 the Lessee that the Aircraft is obsolete or surplus to its
needs. Unless the Lessor has elected to retain the Aircraft as herein
provided, the Lessee shall have the right to revoke its notice of
termination no later than the Business Day prior to the date 15 days prior
to the Proposed Termination Date whereupon this Lease shall continue in
full force and effect and the Lessee shall reimburse the Owner Participant
for reasonable costs and expenses incurred by the Owner Participant in
connection with such proposed termination.
(b) Sale Procedure. During the period from the giving of notice
pursuant to Section 10.01(a) hereof 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 the Aircraft. On the Proposed 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 so directed by the Owner Participant, seek to obtain such
bids. The Owner Participant shall not inspect any bids received by the
Lessee with respect to the Aircraft, 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 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 sum of the applicable Termination Value, the aggregate amount
of any Make-Whole Premium and all other expenses incurred by the Lessor,
the Owner Participant and the Indenture Trustee in connection with the
sale. 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) 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 and upon discharge of the Lien
of the Indenture in accordance with Article XIV thereof, 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 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, 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 Proposed Termination Date over the Net Sales Price;
plus
(ii) the installment of Basic Rent due with respect to the Aircraft
on the Proposed Termination Date to the extent payable in arrears but
not to the extent payable in advance; plus
(iii) all other amounts then due and payable by the Lessee
(including, without limitation, the aggregate amount of any Make-Whole
Premium, if the Proposed Termination Date occurs prior to the applicable
Premium Termination Date) under this Lease and any other Operative
Agreement.
(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 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
(determined as described in Section 10.01(b) above) 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 in Section 10.01(c)
hereof.
(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 with respect to the Aircraft shall cease for
any Rent Payment Date occurring after the Proposed Termination Date and the
Term shall end effective as of the Proposed 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 Indenture Trustee and the Owner Participant in connection
with the proposed sale.
Section 10.02. Retention of Aircraft by the Lessor. (a)
Generally. Notwithstanding Section 10.01 hereof, 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) hereof, by giving the Lessee and the Indenture Trustee written
irrevocable notice of such election not less than sixty (60) 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 the sum of:
(i) the installment of Basic Rent due with respect to the Aircraft
on the Proposed Termination Date to the extent payable in arrears but
not to the extent payable in advance; plus
(ii) all other amounts then due and payable by the Lessee under
this Lease and any other Operative Agreement, including the aggregate
amount of any Make- Whole Premium (if the Proposed Termination Date
occurs prior to the applicable Premium Termination Date), on or prior to
the Payment Date.
(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) hereof) shall have
paid to the Holders and such Holders shall have received the entire
outstanding principal amount of, the aggregate amount of any Make-Whole
Premium and accrued interest on the Certificates on the Termination Date
and all other sums due and owing to the Indenture Trustee and the Holders
on or prior to the Termination Date under this Lease, the Indenture or any
other Operative Agreement.
(c) Delivery of Aircraft to Lessor; Title to Engines. If the
Lessor elects to retain the 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
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 with respect to the
Aircraft shall cease for any Rent Payment Date occurring after the
Termination Date and the Term shall end effective as of the Termination
Date.
Section 10.03. Voluntary Termination as to Engines. The Lessee
shall have the right at its option and at any time, on at least thirty (30)
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 Election Rights. The Lessee shall notify
the Lessor, the Indenture Trustee and the Owner Participant as soon as
practicable but in no event more than 10 Business Days following the
occurrence of an event which constitutes, or would with the passage of time
constitute, an Event of Loss with respect to the Airframe or with respect
to the Airframe and the Engines or engines then installed on the Airframe.
By written notice to the Lessor, the Indenture Trustee and the Owner
Participant delivered within 60 days of the occurrence of any Event of
Loss, the Lessee shall have the right to elect the alternative set forth in
Section 11.02 hereof or the alternative set forth in Section 11.03 hereof.
The Lessee's failure to make such election within said 60-day period shall
be deemed to be an election of the alternative set forth in Section 11.02
hereof.
Section 11.02. Payment of Stipulated Loss Value. (a) The Lessee
shall, if it has so elected or is deemed to have so elected under Section
11.01 hereof, pay to the Lessor, by wire transfer of immediately available
funds on the earlier of (i) the fifteenth 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 120th 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 for the Aircraft, 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
Interim Rent and 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,
plus (D) all other amounts owing by the Lessee or the Owner Trustee to the
Indenture Trustee or the Holders under the Indenture and the other
Operative Agreements, plus (E) 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, minus (F) if the relevant Stipulated Loss Value Determination Date
is a Rent Payment Date, the portion, if any, of the Interim Rent and Basic
Rent installment due and paid by the Lessee on such Stipulated Loss Value
Determination Date pursuant to Section 3.02 hereof to the extent such
Interim Rent and Basic Rent installment (or portion thereof) is designated
on Schedule II hereto as being payable in advance, together with an imputed
interest amount in respect of such advance payment of Interim Rent and
Basic Rent (or portion thereof) at the Debt Rate from the date of payment
of such Interim Rent and Basic Rent installment (or portion thereof) by the
Lessee to the Loss Payment Date; provided that in no event shall there be
subtracted pursuant to clause (F) an amount such that the Holders shall not
be paid in full.
(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 Interim Rent and 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), all of the Lessor's right, title and interest, if any, in
and to the Airframe, Engines and engines 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, and will deliver to the
Lessee such instrument as the Lessor shall have received from the Indenture
Trustee, releasing such Aircraft from the Lien of the Indenture.
Section 11.03. Replacement of Airframe and Engines. (a)
Generally. So long as no Payment Default, Bankruptcy Default or Event of
Default shall have occurred and be continuing, and subject to Section 11.01
hereof, if the Lessee has elected to replace the Airframe and Engines
suffering an Event of Loss pursuant to this Section 11.03, the Lessee shall
cause to be duly conveyed to the Lessor within one hundred twenty (120)
days after the occurrence of such Event of Loss, as replacement for the
Airframe and Engines with respect to which such Event of Loss has occurred,
good and marketable title to an Airbus A300F4-605R airframe manufactured
after October 22, 1994 (the "Replacement Airframe") and good and marketable
title to a number of Replacement Engines equal to the number of Engines
with respect to which an Event of Loss has occurred, provided that
following compliance with all other terms of this Section 11.03 each Engine
shall be of identical make and model and manufactured after October 22,
1994 and, in the case of such Replacement Airframe and each such
Replacement Engine, owned by the Lessee free and clear of all Liens not
excepted in Section 6.01(a), (b), (c) and (e) hereof, duly certified as an
airworthy aircraft by the Aeronautics Authority, and having in the case of
the Replacement Airframe a value, remaining useful life and utility, and in
the case of the Replacement Engines a value and utility, at least equal to,
and being in as good operating condition as, the Airframe and Engines with
respect to which such Event of Loss occurred, assuming that the Airframe
and Engines were then in the condition and state of airworthiness required
to be maintained by the terms of this Lease immediately prior to the
occurrence of such Event of Loss. In such case and as a condition to such
substitution the Lessee, at its own cost and expense, will also promptly:
(i) furnish the Indenture Trustee with originals of, and the
Lessor with copies of, full warranty bills of sale, in form and
substance satisfactory to the Lessor and the Indenture Trustee, with
respect to such Replacement Airframe and Replacement Engines 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 or manufacturers to
such assignment;
(ii) cause such Replacement Airframe and Replacement Engines to be
duly registered in the name of the Lessor pursuant to the Transportation
Code or the applicable laws of any other jurisdiction in which the
Aircraft may then be registered in accordance with Section 6.03(b) of
the Participation Agreement;
(iii) cause a Lease Supplement with respect to such Replacement
Airframe and Replacement Engines to be duly executed by the Lessee and
recorded pursuant to the Transportation Code, or the applicable laws, rules
and regulations of any other jurisdiction in which the Aircraft may then be
registered as permitted by Section 6.03(b) of the Participation Agreement;
(iv) furnish the Lessor, the Indenture Trustee and the Owner
Participant with an appraisal or other report of a nationally recognized
aircraft appraiser based on an inspection of such Replacement Airframe
and Replacement Engines reasonably satisfactory to the Indenture Trustee
and the Owner Participant certifying that such Replacement Airframe has
a value, remaining useful life and utility, and such Replacement Engines
have a utility and, in the aggregate, value, at least equal to, and are
in as good operating condition as, the Airframe and Engines replaced,
assuming such Airframe and Engines were in the condition and repair
required by the terms of this Lease immediately prior to the occurrence
of such Event of Loss;
(v) furnish the Lessor, the Indenture Trustee and the Owner
Participant with such evidence as the Lessor or the Indenture Trustee
may reasonably request of compliance with the insurance provisions of
Article 13 hereof with respect to such Replacement Airframe and
Replacement Engines;
(vi) provide the Owner Participant and the Lessor with (A) an opini
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 consequence not otherwise indemnified for as of the Delivery
Date as a result of such substitution or (B) an indemnity reasonably
acceptable to the Lessor and the Owner Participant against such
consequences;
(vii) comply with the provisions of Section 9.08 of the Indenture;
(viii) cause an Indenture Supplement with respect to such
Replacement Airframe and Replacement Engines to be duly executed by the
Lessor and the Indenture Trustee and recorded pursuant to the
Transportation Code, or the applicable laws, rules and regulations of
any other jurisdiction in which the Aircraft may then be registered as
permitted by Section 6.03(b) of the Participation Agreement in order
that the Lien of the Indenture shall constitute a first and prior
perfected Lien and security interest on and in respect of such
Replacement Airframe and Replacement Engines;
(ix) take such other action, including the filing of UCC financing
statements naming the Indenture Trustee as a secured party with the
Secretary of State of Michigan and the filing of a notice with the
Secretary of State of Tennessee, as the Lessor or the Indenture Trustee
may reasonably request in order that such Replacement Airframe and
Replacement Engines shall 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 Airframe and Engines;
(x) furnish 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 and the
Owner Participant to the effect that (A) the Lessor has good title to
such Replacement Airframe and Replacement Engines, and (B) such
Replacement Airframe and Replacement Engines have been validly subjected
to the Lien of the Indenture (with the effect and result that the
Indenture constitutes a first priority duly perfected security interest
and Lien on such Replacement Airframe and Replacement Engines); and
(xi) cause to be delivered to the Lessor, the Owner Participant
and the Indenture Trustee (a) an opinion of counsel to the Lessee
addressed to the Lessor, the Owner Participant and the Indenture Trustee
as to the due registration of the Aircraft and the due recordation of
the requisite documents or instruments and the validity and perfection
of the Lien in such Replacement Airframe and Replacement Engines and (b)
a certificate signed by the Vice President and Treasurer or any other
duly authorized officer of the Lessee stating that no Payment Default,
Bankruptcy Default or Event of Default has occurred or is continuing.
(b) Title to Replaced Equipment. Upon compliance by the Lessee
with the terms of Section 11.03(a) 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), all of the Lessor's
right, title and interest, if any, in and to the Airframe and Engines 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 of the
Airframe and Engines with respect to which such Event of Loss occurred from
the Indenture and such other documents as the Lessee reasonably requests,
all at the Lessee's sole cost and expense. Any Engine constituting part of
the Aircraft, but not installed on the Airframe when such Event of Loss
occurred, shall continue to be property of the Lessor and leased under this
Lease as part of the same equipment as the Replacement Airframe and
Replacement Engines.
(c) Definitions. Each Replacement Airframe and Replacement Engine
shall be deemed part of the property leased under this Lease, each such
Replacement Airframe shall be deemed an "Airframe," each such Replacement
Engine shall be deemed an "Engine" and each such Replacement Airframe and
Replacement Engine shall be deemed part of the same Aircraft as was the
Airframe or Engine replaced.
(d) Rent Adjustments. An Event of Loss covered by this Section
11.03 shall not result in any change in Interim Rent, Basic Rent, Stipulated
Loss Values or Termination Values except as may be provided pursuant to the
Tax Indemnity Agreement and the Participation Agreement.
(e) Time Limitations. If the Lessee has elected to proceed under
this Section 11.03 but has not fully performed its obligations under this
Section 11.03 within 120 days of the occurrence of the applicable Event of
Loss, in the event that any amounts held by the Lessor (or, so long as the
Indenture shall be in effect, the Indenture Trustee) in respect of such
Event of Loss are less than the Stipulated Loss Value thereof, the Lessee
will deposit with the Lessor or the Indenture Trustee, as the case may be,
the amount of any deficiency as security on such 120th day. If the Lessee
has elected to proceed under this Section 11.03 but has not fully performed
its obligations under this Section 11.03 within 180 days of the occurrence
of such Event of Loss, the Lessee shall be deemed to have elected to
proceed under Section 11.02 hereof and shall immediately perform its
obligations thereunder, and the Indenture Trustee, or the Lessor if the
Indenture shall have been discharged, shall apply the amounts held by it
pursuant to the preceding sentence as a credit against such obligations.
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 Engine 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) and (e) hereof and
having a value and utility at least equal to, and being in as good
operating condition as, the Engine with respect to which such Event of Loss
occurred, assuming such Engine was of the value and utility and in the
condition and repair required by the terms of this Lease immediately prior
to the occurrence of such Event of Loss, provided that after any
replacement, each Engine 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, 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 Transportation Code, or the applicable laws, rules and regulations
of any other jurisdiction in which the Aircraft may then be registered
as permitted by Section 6.03(b) of the Participation Agreement and, if
the Engine being replaced was registered under the applicable laws of
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 a nationally recognized aircraft appraiser reasonably
satisfactory to the Lessor and the Indenture Trustee 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 Delivery Date as a result of such substitution or (B) an
indemnity reasonably acceptable to the Lessor and the Owner Participant
against such consequences;
(vi) comply with the provisions of Section 9.08 of the Indenture;
(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 Transportation Code, or the
applicable laws, rules and regulations of any other jurisdiction in
which the Aircraft may be registered as permitted by Section 6.03(b) of
the Participation Agreement in order that the Indenture shall constitute
a first priority duly perfected Lien and security interest on and in
respect of such Replacement Engine;
(viii) take such other action, including the filing of UCC
financing statements naming the Indenture Trustee as Secured Party with
the Secretary of State of Michigan and a notice filing with the
Secretary of State of Tennessee, 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 and the Owner Participant 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 priority duly 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), 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 of the Engine with respect to which
such Event of Loss occurred from the Indenture and such other documents as
the Lessee reasonably requests, 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 Interim Rent, Basic Rent,
Stipulated Loss Values or Termination Values, 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 the
Airframe and the Lessee has elected the alternative set forth in Section
11.02 hereof, so much of such payments as shall not exceed the payments
required to be paid by the Lessee pursuant to clauses (A) and (B) of
Section 11.02(a) hereof shall be paid to the Lessor (or, if the Lien of the
Indenture has not been discharged, the Indenture Trustee) in reduction of
the Lessee's obligations under clauses (A) and (B) of Section 11.02(a)
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 if the Lessee Elects Replacement. If the payments
described in Section 11.05(a) hereof are received with respect to the
Airframe or with respect to the Airframe and the Engines or engines then
installed on the Airframe and the Lessee has elected the alternative set
forth in Section 11.03 hereof, or if such payments 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 11.03 or Section 11.04 hereof, as the case may be, with
respect to the Event of Loss for which such payments are made.
Section 11.06. Requisition of an Airframe and the Installed Engines
for Use by Government. In the event of the requisition for use by the
Government or any other government of registry of the Aircraft, or any
agency or instrumentality 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 with respect to such Airframe and Engines or engines 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 and,
subject to Section 7.01(f) hereof, the maintenance of required insurance)
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
unless a Payment Default, Bankruptcy Default or Event of Default shall have
occurred and be continuing (in which case such proceeds shall be held
(unless applied) pursuant to Section 23.01 hereof as security for Lessee's
obligations hereunder and under the Participation Agreement). 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).
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 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 to the extent not
theretofore applied as provided herein, shall be paid to the Lessee.
ARTICLE 12
RETURN OF AIRCRAFT
Section 12.01. Return of Aircraft. Unless the 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 10 or
Article 17 hereof or otherwise, 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 or on the Termination Date, as the case may be, at the Lessee's
principal maintenance facility in Memphis, Tennessee or such other location
specified by the Lessee (and reasonably acceptable to the Owner Participant
(or the Lessor so long as the Lien of the Indenture is in effect)), within
or outside of the continental United States (on the Lessee's route
structure as in effect on the return date and provided that the Lessee
shall pay any incremental expenses incurred in connection with a redelivery
outside the United States) and the Airframe shall be fully equipped with
two Engines of the same or an improved make and model as were delivered on
the Delivery 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 agreements or
arrangements, it being understood that all 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 15 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 any 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 (i) transfer to the Lessee, without recourse or warranty
(except as to the absence of Lessor's Liens), and subject to the
disclaimers provided 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" and (ii)
deliver to the Lessee such instrument as the Lessor shall have received
from the Indenture Trustee, releasing such Engine 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 all original (or photocopied or
microfilmed copies thereof, if then permitted to be maintained in such form
under applicable law) logs, manuals, certificates and technical data, and
inspection, modification and overhaul records pertaining to the Airframe,
Engines or engines, which are required to be maintained under applicable
rules and regulations of the Aeronautics Authority or pursuant to the
Lessee's or any permitted sublessee's Aeronautics Authority-approved
maintenance program and all original (or photocopied or microfilmed copies
thereof, if then permitted to be maintained in such form under applicable
law) records required to be maintained with respect to the Aircraft under
the maintenance program approved by the aeronautical authority of any other
country of registry of the Aircraft. All records shall be returned in the
format necessary to allow the Lessee or any sublessee to comply with
Section 12.04(a)(i) hereof.
Section 12.04. Condition of 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, unless otherwise requested by the Lessor not less
than 90 days prior to the end of the Term to retain the then-existing
registration of the Aircraft, be duly registered in the name of the
Lessor or its designee pursuant to the Transportation Code;
(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), both of the same make and model, installed
thereon, together with the equipment, accessories or parts installed
thereon on the Delivery 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 12.04(b)
hereof and in as good operating condition as when delivered to the
Lessor on the Delivery Date, 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) to be terminated during the Term of the Lease and each
Engine (including any Replacement Engine) shall be serviceable in
accordance with the Lessee's FAA-approved maintenance program;
(vii) it shall be free and clear of all Liens and rights of others
(other than 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; and
(viii) it shall be in a standard cargo configuration.
(b) Remaining Time. If, at the time of return of the Aircraft,
the Airframe is not being maintained under a continuous maintenance
program, then the Airframe shall have remaining until the next scheduled
"C" check at least 1,000 hours of operation. If, at the time of return of
the Aircraft, the Airframe is subject to a continuous maintenance program,
there will be no time-before-overhaul requirement. If, at the time of
return of the Aircraft, the Engines are not being maintained under an
on-condition maintenance program, then the average number of hours on such
Engines remaining until the next scheduled engine heavy maintenance visit
shall be at least 25% of the allowable hours between engine heavy
maintenance visits permitted under the Lessee's FAA-approved maintenance
program. If, at the time of return of the Aircraft, the Engines are
subject to an on-condition maintenance program, there will be no
time-before-overhaul requirement. With respect to maintenance under the
Lessee's maintenance program approved by the Aeronautics Authority, the
Lessee shall have treated the Aircraft in a nondiscriminatory manner with
other Airbus A300F-600 series aircraft in the Lessee's fleet, and the
Aircraft shall be free and clear of all Liens and rights of others other
than 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.
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)(2)(B) of the definition of Event of
Loss, this Lease shall not terminate but shall continue in full force and
effect until the expiration of the six-month period (or, such shorter
period referred to in said clause (iii)(2)(B)) after the scheduled end of
the Term, provided that (i) Stipulated Loss Value and Termination 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 daily equivalent of the average Basic Rent paid during the Basic
Term and any then expiring Renewal Term, in each case with such Basic Rent
to include for this purpose the amounts referred to in Section 3.01 hereof,
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) 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 hereof), the Lessee shall pay on demand as Basic Rent for
each day of such delay an amount equal to the Rent per diem at a rate equal
to the Fair Market Rental and this Lease shall continue for up to six (6)
months after the end of the 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 or claims with respect thereto 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.
Section 12.06. Storage. Upon any expiration or termination of this
Lease, at the written request of the Lessor given at least 45 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; provided that if storage
is available at no additional cost or expense to the Lessee at the location
at which the Lessor has specified pursuant to Section 12.01 hereof that
return of the Aircraft shall take place, the Lessee shall provide storage
at such location. 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 Lessor. 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, 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 such property (including, if
possible, coverage through its fleet policy).
Section 12.07. Special Markings. If requested by the Lessor, the
Lessee shall, at the Lessee's cost, remove or paint over all insignias and
other distinctive markings of the Lessee or any sublessee on the Aircraft and
repaint the stripped down areas in a workmanlike manner to match 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 (taking
into account the provisions of this Lease) 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) of
Section 9.02(b) hereof as the Lessor may request.
ARTICLE 13
INSURANCE
Section 13.01. Comprehensive Airline Liability and Property Damage
Liability Insurance. (a) Comprehensive Airline Liability and Property
Damage Liability Insurance. The Lessee, at its own cost and expense, will
maintain or cause to be maintained with respect to the Aircraft,
comprehensive airline 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 in no event shall the limits of
liability for all comprehensive airline liability insurance be less than
the amount, per occurrence, as set forth on the insurance certificate
delivered on the Delivery Date unless and only so long as the Aircraft is
not operated and appropriate insurance for the Aircraft on the ground is
maintained. The Lessee will also be required to maintain war risk
insurance if the Aircraft is operated in a war zone or, in the Lessee's
reasonable judgment, area of recognized hostilities, if such insurance is
available on commercially reasonable terms and if it is the custom for
major international Air Carriers flying comparable routes to carry such
insurance.
(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 capacit
and as owner of the Aircraft, the Indenture Trustee in its capacity as
such, the Owner Participant and each of their respective officers and
directors 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 any action or inaction of 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 (other than any breach or
violation of any warranty, declaration or condition by such Additional
Insured) as defined under the policy of insurance required under this
Section 13.01;
(iii) provide that if such insurance is cancelled 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 or
such insurers' broker of such cancellation, change or lapse;
(iv) provide that the insurers shall waive any rights of subrogation
against each Additional Insured, to the extent that the Lessee has waived
its rights under this Lease and the Participation Agreement; 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;
(v) provide that all of the provisions of such policy shall operat
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;
(vi) 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;
(vii) provide that no Additional Insured shall have any obligation or
liability for premiums or other payments, if any, in connection with such
insurance; and
(viii) 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.
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 in
the country of registry) with such retentions (subject to the limitations set
forth in Section 13.06 hereof) and in such form, upon such terms and
conditions (including coverage for cost of claims), and in 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 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 on an agreed-value basis for an amount not less than an amount
equal to the Stipulated Loss Value for the relevant period for the Aircraft as
set forth on Schedule III to this Lease.
(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 (or, so long as the Indenture
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 the aggregate
in excess of $6,000,000, 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, a Bankruptcy 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
$6,000,000 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, a Bankruptcy 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, a Bankruptcy Default or an Event
of Default, such payment shall be made to the Indenture Trustee);
(iii) provide that if such insurance is cancelled 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 the Loss Payee for thirty days
(except in the case of war-risk coverage in which event the applicable
period shall be seven (7) days or such other period as may be customary)
after receipt by the 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 or the Loss Payee (other than any
action or inaction of such Loss Payee) and shall insure the Lessor (in
its individual capacity and as Owner Trustee), the Owner Participant and
the Indenture Trustee regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by the
Lessee or the Loss Payee (other than any breach or violation of any
warranty, declaration or condition by the Loss Payee) 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 and the Indenture Trustee to the extent
that the Lessee has waived its rights under this Lease or the
Participation Agreement; 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) be primary and without rights of contribution from any other
insurance which is carried by the Loss Payee with respect to its interest
in the Aircraft;
(vii) provide that (except in the case of insurance with respect to
Engines and spare parts that have been removed from the Aircraft and
replaced with other Engines or engines, or spare parts, as the case may be)
such insurer shall waive any right of such insurer to any set-off or
counterclaim or any other deduction, whether by attachment or otherwise, in
respect of any liability of the Loss Payee;
(viii) provide that (except in the case of insurance with respect to
Engines and spare parts that have been removed from the Aircraft and
replaced with other Engines or engines or spare parts, as the case may be)
no Loss Payee shall have any obligation or liability for premiums or other
payments, if any, in connection with such insurance; and
(ix) in the event that separate policies are maintained to cover
all-risk ground and flight aircraft, hull and war risks and allied perils
insurance, include a 50/50 provisional claims settlement clause as
contained in the policies of insurance maintained by the Lessee with
respect to all other aircraft in the Lessee's fleet, and a copy of the
50/50 provisional claims settlement clause in effect on the Delivery Date
shall be attached to the insurance certificate issued on the Delivery Date.
Section 13.03. Application of Insurance Proceeds. (a)
Generally. All insurance proceeds (other than proceeds from policies
carried by the Lessor, the Indenture Trustee or the Owner Participant)
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 and the Lessee has elected or is deemed to
have elected the alternative set forth in Section 11.02 hereof, 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, Bankruptcy 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 (unless
applied) 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 the
Airframe or the Airframe and the Engines or engines then installed on
the Airframe and the Lessee has elected the alternative set forth in
Section 11.03 hereof, or if such proceeds are received with respect to
an Engine not then installed on the Airframe and not replaced by an
Engine or engine under the circumstances contemplated by Section 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 Sections 11.03 or 11.04 hereof, as
applicable, with respect to the Event of Loss for which such proceeds
are paid, provided that no Payment Default, Bankruptcy 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 (unless
applied) 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
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,
Bankruptcy 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 (unless applied) 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 Delivery Date and
thereafter annually on or before the scheduled expiration date for such
policy during the Term, the Lessee shall cause an aviation insurance broker
to furnish to the Lessor and the Indenture Trustee a signed report, stating
in reasonable detail 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 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 Indenture Trustee and the Owner Participant 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. 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, the Indenture
Trustee or the Owner Participant 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, the Indenture Trustee or the Owner
Participant shall not result in a reduction of coverage or amounts payable
under insurance required 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, the Indenture
Trustee or the Owner Participant 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 policy 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 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 the Lessee to discriminate as between insurance coverage on the
Aircraft and insurance which the 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 reasonable times, and upon
at least five (5) Business Days' prior written notice to the Lessee, the
Lessor, the Indenture Trustee or the Owner Participant, or their respective
authorized representatives, may inspect the Aircraft and upon at least ten
(10) Business Days' prior written notice, all Aeronautics Authority
required books and records of the Lessee or any sublessee and all books and
records required to be maintained by the Lessee under its FAA-approved
maintenance program (or books and records required to be maintained by the
aeronautical authority of any other country of registry of the Aircraft)
relating to the maintenance of the Aircraft and such Persons shall keep any
information obtained thereby confidential and shall not disclose the same
to any Person, except to a Person described in Section 18.01 of the
Participation Agreement. Any such inspection of the Aircraft shall be a
visual, walk-around inspection of the interior and exterior of the Aircraft
and shall not include opening any panel, bays or the like without the
express consent of the Lessee (except to the extent any such inspection
takes place when any such panel, bays or the like are open).
Notwithstanding the previous sentence, unless a Payment Default, Bankruptcy
Default, material Default relating to maintenance (without giving effect to
the provisos to Section 7.01(b) hereof) or an Event of Default shall have
occurred and be continuing, the Lessor, the Indenture Trustee, the Owner
Participant or their respective authorized representatives shall each be
entitled to inspect the Aircraft only one time during any consecutive
twelve-month period provided, however, that during the final year of the
Basic Term the Lessor shall be entitled to inspect on two (2) occasions.
The Lessee shall make any permitted sublease or transfer permitted under
Section 7.02 hereof expressly subject to inspection rights consistent with
this Article 14.
Section 14.02. No Obligation to Inspect. None of the Lessor, the
Indenture Trustee or the Owner Participant shall have any duty to make any
inspection pursuant to Section 14.01 hereof and no such party shall incur any
liability or obligation by reason of making or 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 domestic subsidiary of the Lessee which
shall be a certificated U.S. Air Carrier. Any such assignment, conveyance
or sublease shall in no way relieve the Lessee from any obligation
hereunder or under 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 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 permitted assigns, and shall
inure, to the extent expressly provided herein and therein, 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 permitted assigns.
Section 15.02. Citizenship. The Lessee will at all times be a duly
certificated U.S. Air Carrier under the Transportation Code.
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 Interim Rent,
Basic Rent, Renewal Rent, Stipulated Loss Value or Termination Value, as
the case may be, within ten Business Days after the date when due
(except that with respect to any failure to pay Excepted Payments, such
failure shall constitute an Event of Default at the discretion of the
Owner Participant); or
(b) the Lessee shall fail to make any payment of Supplemental Rent
(other than amounts described in clause (a) above) within 30 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 or such insurance lapses or is
cancelled, provided that no such lapse or cancellation shall constitute
an Event of Default until the earlier of (A) 30 days (or seven days or
such shorter time as may be standard in the industry with respect to war
risk coverage) after receipt by any Additional Insured of written notice
of such lapse or cancellation and (B) the date that such lapse or
cancellation is effective as to any Additional Insured and provided
further that such failure shall not constitute an Event of Default as
long as the Aircraft is insured as required while on the ground and not
operated, or (ii) the Aircraft shall be operated at any time when
comprehensive airline 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 the Tax Indemnity Agreement) 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 after
the Lessee shall have received written notice from the Lessor 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 Lessee receives notice thereof which undertaking shall be
diligently and continuously pursued using the Lessee's reasonable 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 Transportation Code pursuant to
the Lessee's covenants and agreement in Section 6.03(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, 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
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 ninety (90) 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
ninety (90) 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 ninety (90) 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) 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 this
Lease shall be deemed declared in default without any further act or
notice), and at any time thereafter the Lessor may do, and the Lessee shall
comply with, one or more of the following with respect to all or any part
of the Airframe and the Engines, 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 all or such part of the Airframe and the Engines as
the Lessor may demand in the manner and condition required by, and
otherwise in accordance with all of the provisions of this Lease (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 such Airframe or Engines are
located or believed to be located and take immediate possession of and
remove such Airframe and Engines (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 or any Engine, 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 Interim Rent, Basic Rent and Renewal Rent due on or before the date
of such sale (and, if Interim Rent, Basic Rent or Renewal Rent is
payable in arrears, the pro rata portion of the installment of Interim
Rent, 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 Indenture Trustee, the Owner
Participant or any Holder 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 Interim Rent, Basic Rent or Renewal Rent due on Rent Payment
Dates occurring after the payment date specified in such notice), any
installment of Interim Rent, Basic Rent, Renewal Rent and any
Supplemental Rent due on or before such payment date (and, to the extent
Interim Rent, Basic Rent or Renewal Rent is payable in arrears, the pro
rata portion of the installment of Interim Rent, Basic Rent or Renewal
Rent due on the next succeeding Rent Payment Date in respect of the
period commencing on the Stipulated Loss Value Determination Date
referred to below and ending on the date of such payment), 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 such Stipulated Loss
Value Determination Date, together with (A), if Interim Rent or Basic
Rent is payable in advance, interest, to the extent permitted by
applicable law, at the Debt Rate on the amount of such Stipulated Loss
Value from such Stipulated Loss Value Determination Date to the date for
payment set forth in such notice from the Lessor and (B) in all cases,
interest, to the extent permitted by applicable law at the Past Due Rate
on the excess of such Stipulated Loss Value over such Fair Market Value,
from the date as of which such Stipulated Loss Value is payable 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), the Fair Market Value of the Aircraft or such portion
shall, at the option of the Lessor to the extent legally enforceable, be
zero and, if the Fair Market Value of the Aircraft is deemed to be zero,
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)
all of its right, title and interest in the Aircraft or such portion, to
the Lessee;
(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
Interim Rent, Basic Rent or Renewal Rent due after the date on which
such sale occurs) any unpaid Interim Rent, Basic Rent or Renewal Rent
due on or before the date on which such sale occurs (and, to the extent
Interim Rent, Basic Rent or Renewal Rent is payable in arrears, the pro
rata portion of the installment of Interim Rent, Basic Rent or Renewal
Rent due on the next succeeding Rent Payment Date in respect of any
period commencing on the Stipulated Loss Value Determination Date
referred to below and ending on the date of such sale), 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 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 (x), if Interim Rent or Basic Rent is payable in advance,
interest, to the extent permitted by applicable law, at the Debt Rate on
such Stipulated Loss Value from such Stipulated Loss Value Determination
Date to the date of such sale and (y) in all cases, 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, the Indenture Trustee or the Owner
Participant 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 hereof or in placing the
Airframe or Engines in the condition and airworthiness required by such
Article or in connection with any inspection, use, operation, maintenance,
insurance, 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 any 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, the Lessor 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, and it being understood that the Lessor shall not be liable for any
act or omission of the Indenture Trustee or any other Person claiming
through the Indenture Trustee) 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
Section 19.01. Further Assurances. Promptly upon the execution and
delivery of this Lease, the Trust Agreement and the Indenture, the Lessee
will cause each of them to be duly filed for recordation in accordance with
the Transportation Code 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
the Indenture, in recordable form, subjecting to this Lease and the
Indenture any Replacement Airframe and/or Replacement Engines delivered by
the Lessee pursuant to Section 11.03 hereof and any Replacement Engine
delivered by the Lessee pursuant to Section 11.04 hereof 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 that the obligations of the
Lessee to pay all costs and expenses of every character, whether seen or
unforeseen, ordinary or extraordinary, or structural or nonstructural, 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
(unless expressly excluded from the terms hereof, the costs and expenses of
the Lessor and the Owner Participant shall include the reasonable fees and
expenses of their respective outside counsel), 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. 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 set-off (except to the extent set forth in Section 3.05
hereof), 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 or the Owner Participant or 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 Transportation Code (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 or any
doctrine of force majeure or impossibility of performance;
(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;
(iv) any Liens, encumbrances or rights of any other Person with
respect to the Aircraft, the invalidity or unenforceability or lack of
due authorization or other infirmity of this Lease or any other
Operative Agreement or document or instrument executed pursuant hereto
or thereto, or any lack of right, power or authority of the Lessor or
the Lessee or any sublessee or any other party to any other Operative
Agreement to enter into this Lease or any other Operative Agreement or
any such document or instrument; or
(v) 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 suspend performance under,
terminate, cancel, quit, rescind or surrender this Lease, the Airframe, or any
Engine or part thereof, other than in accordance with the terms hereof.
(c) 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, except the
Lessee has the right to the extent provided in Section 3.05 hereof to offset a
portion of payments due from the Lessee to the Lessor pursuant thereto.
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 a 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. Intentionally Left Blank.
Section 22.03. Consent of Lessee to Assignment of Lease as
Security. The Lessee hereby acknowledges and consents to the Indenture
Trustee's rights pursuant to the terms of the Indenture to receive payments
(other than Excepted Payments) due under this Lease, 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.
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 Payment Default, Bankruptcy Default or Event of Default,
and, at such times as there shall not be continuing a Payment Default,
Bankruptcy 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, 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;
(iii) certificates of deposit issued by, or bankers' acceptances of,
or time deposits or a deposit account with, any bank, trust company or
national banking association incorporated or doing business under the laws
of the United States of America or one of its States (which may include the
Owner Trustee or the Indenture Trustee in their respective individual
capacities or any Affiliate thereof), having a combined capital and surplus
of at least $500,000,000 and having a rating of "A" or better from Moody's
or S&P; or
(iv) commercial paper rated A-1/P-1 by S&P and Moody's
respectively (or if neither such organization shall rate such commercial
paper at any time, by any nationally recognized statistical rating
organization in the United States of America) equal to the highest
rating assigned by such rating organization (which may include
commercial paper issued by the Owner Trustee or the Indenture Trustee in
their respective individual capacities or any Affiliate thereof).
(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, Taxes and
expenses, if any, incurred by the Lessor or the Owner Participant in
connection with such investment), unless a Payment Default, Bankruptcy
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, Taxes and expenses, if any, incurred
by the Indenture Trustee or the Lessor or the Owner Participant in
connection with such investment), such amount to be disposed of in
accordance with the terms of the Indenture or the Lease, 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 NBD 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 the Lessor herein are for
the purpose and with the intention of binding only the Lessor's Estate, and
that in no case whatsoever shall NBD 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 and the Indenture Trustee, that nothing herein
contained shall be construed as creating any liability on NBD, 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 of
NBD, and that so far as NBD, 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 by the Lessor of any of
its obligations 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 NBD in its individual capacity set forth
in the Participation Agreement or the Trust Agreement. The term "Lessor"
as used in this Lease shall include any trustee succeeding NBD 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 Lease 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 mail and (c) if given by FedEx (or, if a
Default or Event of Default shall have occurred and be continuing, by other
comparable courier service), 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, facsimile (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 and the Owner Participant;
(b) If to the Lessor or Owner Trustee, to its office at 611
Woodward Avenue, Detroit, Michigan 48226, Attention: Corporate Trust
Administration Department; telephone (313) 225-3185, facsimile (313)
225-3420; 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 Owner Participant at the Owner Participant's address as provided
in subsection (c) below;
(c) If to the Owner Participant, in accordance with the
Participation Agreement; and
(d) If to the Indenture Trustee, to its office at 4 Chase
Metrotech Center, 3rd Floor, Brooklyn, New York 11245, Attention:
Corporate Trust Administration; telephone (718) 242-5854, facsimile
(718) 242-3529; or to such other address as the Indenture Trustee shall
from time to time designate in writing to the Lessor, the Lessee and the
Owner Participant.
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Headings 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
provisions of Section 8.01 and Article XIII 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 chattel-paper counterpart, which
shall be the counterpart containing the receipt executed by the Indenture
Trustee on its signature page.
Section 26.07. Counterparts. 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 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 by signing any such counterpart.
Section 26.08. Public Release of Information. Provided no Event of
Default shall have occurred and be continuing, each party shall in each
instance obtain the prior written approval of each party concerning the exact
text and timing of news releases, articles and other informational releases to
the public media concerning this Lease.
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties. It is the intent of the
parties to this Lease that for all purposes (including, without limitation,
U.S. Federal income tax purposes) this Lease will be a true lease, 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 provisio
herein or elsewhere contained to the contrary, it is understood and agreed
among the parties hereto that the transactions contemplated by this Lease and
the other Operative Agreements in respect of the Aircraft 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.
Section 27.03. Finance Lease. This Lease is a "finance lease"
within the meaning of Section 2-A-103(g) of the Uniform Commercial Code.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Lease to be duly executed as of the date first above written.
LESSOR: NBD BANK,
not in its individual capacity,
but solely as Owner Trustee
By: ______________________________________________
Name:
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By: _______________________________________________
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director - Structured Finance
Receipt of this original counterpart of the Lease is hereby
acknowledged on this __ day of October 1995.
Indenture Trustee: THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
not in its individual capacity,
but solely as Indenture Trustee
By: _____________________________________________
Name:
Title:
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require. In the
case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
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 other Person directly
or indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including
"controlled by" and "under common control with") shall mean the power,
directly or indirectly, to direct or cause the direction of the management
and policies of such Person whether through the ownership of voting
securities or by contract or otherwise. In no event shall the Owner
Trustee or the Lessor be deemed an Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed
to have been received by a Person (the "Original Payment") shall be
supplemented by a further payment to such Person so that the sum of the two
payments shall be equal to the Original Payment, after taking into account
(x) all Taxes that would result from the receipt or accrual of such
payments and (y) any reduction in Taxes that would result from such
increased Taxes. In the case of amounts payable to the Lessor, the Owner
Participant, or any corporate Affiliate 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.
Agent. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns as Agent for the Original Loan
Participants pursuant to Article 16 of the Original Participation
Agreement.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier"
(as defined in the Transportation Code) as to which there is in force a
permit granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty dated the Delivery Date executed by
the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe (or any permitted substitute airframe)
together with the two Engines (or any Replacement Engine or Engines)
whether or not any of such initial or Replacement Engines may from time to
time be installed on such Airframe or may be installed on any other
airframe or on any other aircraft, including any aircraft substituted
pursuant to Section 11.03 of the Lease.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines
or engines from time to time installed thereon) leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having
the United States FAA Registration Number and manufacturer's serial number
specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any replacement airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Amendment No. 1 to the Original Tax Indemnity Agreement.
Amendment No. 1 to the Original Tax Indemnity Agreement, dated as of
October 26, 1995.
Ancillary Agreement. Any written agreement of the Lessee to which
the Lessor is a party or to which the Lessor has consented in
writing entered into on the Delivery Date or the Refunding Date or
any date thereafter in connection with the transactions
contemplated by the Operative Agreements, as such agreement may be
amended and supplemented from time to time with the consent of the
Lessor and delivered to the Owner Trustee, the Indenture Trustee,
the Pass Through Trustee and the Owner Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N661FE), dated October 25, 1995 among the Lessee, the
Owner Trustee, not in its individual capacity, but solely as Owner Trustee,
the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant (with a copy of such report to the Lessee) on the
Delivery Date pursuant to Section 4.01(n) of the Original Participation
Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France, and its successors and assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as of
October 15, 1995, executed by AVSA, as the same may be amended, modified or
supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and dated the
Delivery Date.
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 either does or with the giving of notice or lapse of
time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft throughout
the Basic Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 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 July 2, 2020, 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.
Breakage Costs. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Business Day. Any day on which commercial banks are not
authorized or required to close in New York, New York and Memphis,
Tennessee, and after the Lien of the Indenture is discharged, Detroit,
Michigan.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N661FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
refunding of the Original Loan Certificates.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Commencement Date. July 2, 1996.
Consent and Agreement. The Consent and Agreement dated as of October
15, 1995 executed by the Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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 Participant
and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner
Trustee located at 611 Woodward Avenue, Detroit, Michigan 48226, or such
other office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in
writing to the Lessee, the Owner Participant and the Indenture Trustee.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
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 Date. October 25, 1995.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts related thereto. 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.
The term "Engines" means, as of any date of determination, both Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of October 15, 1995,
executed by the Engine Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment
(Federal Express Corporation Trust No. N661FE), dated as of October 15,
1995 between the Lessor and the Lessee, as the same may be amended,
modified or supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use
(A) for a period in excess of 60 days due to theft or disappearance or such
longer period, not to exceed 180 days from the end of such initial 60-day
period, if and so long as the location of such property is known to the
Lessee and the Lessee is diligently pursuing recovery of such property, or
to the end of the Term, if less (unless such theft or disappearance
constitutes an Event of Loss pursuant to (i)(B) or (ii) hereof) or (B) for
a period in excess of 60 days due to the destruction, damage beyond
economic repair or rendition of such property permanently unfit for normal
use by 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, or (2)
condemnation, confiscation, or seizure of, or requisition or taking of, use
of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the
date of return of the Aircraft, if shorter, so long as the Lessor receives
at least six months notice of such date of return) beyond the end of the
Term in the event that the Aircraft, the Airframe or any Engine as of the
end of the Lease Term 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 A300F-600 series
aircraft equipped with engines of the same make and model as the Engines
for a period of twelve (12) consecutive months, unless the Lessee, prior to
the expiration of such twelve (12) 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 of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if
earlier. The date of such Event of Loss shall be (s) the 61st day or the
241st day, as the case may be, following loss of such property or its use
due to theft or disappearance (or the end of the Term or the Lessee's
abandonment of diligent efforts to recover such property, if earlier); (t)
the 61st day following the date of any destruction, damage beyond economic
repair or rendition of such property permanently unfit for normal use; (u)
the date of any insurance settlement on the basis of a total loss or
constructive or compromised total loss; (v) the date of any condemnation,
confiscation, seizure or requisition of title of such property; (w) the
181st day following condemnation, confiscation, seizure or requisition for
use of such property by a foreign government referred to in clause
(iii)(2)(A) above (or the end of the Term or the date of any insurance
settlement described therein, if earlier than such 181st day); (x) the
last day of the Term in the case of requisition for use of such property by
the Government; (y) the last day of the 12 month or 24 month period,
referred to in clause (iv) above (or if earlier, the end of the Term or
abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). 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.
If an Event of Loss described in any of clauses (i) (A), (iii) or (iv)
above shall occur, Lessor may elect, within 30 days following the date upon
which such Event of Loss is deemed to have occurred, to waive such Event of
Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments
(and interest thereon to the extent provided in the Operative Agreements)
paid or payable by the Lessee in respect of the Owner Participant, the
Owner Trustee in its individual capacity or any of their respective
successors, permitted assigns, directors, officers, employees, servants and
agents or Affiliates, pursuant to the Participation Agreement or any
indemnity hereafter granted to the Owner Participant or the Owner Trustee
in its individual capacity pursuant to the Lease or the Participation
Agreement, (ii) proceeds of public liability insurance (or government
indemnities in lieu thereof) in respect of the Aircraft payable as a result
of insurance claims paid for the benefit of, or losses suffered by, the
Owner Trustee or the Indenture Trustee in their respective individual
capacities or by the Owner Participant, or their respective successors,
permitted assigns or Affiliates, (iii) proceeds of insurance maintained
with respect to the Aircraft by the Owner Participant (whether directly or
through the Owner Trustee) maintained in accordance with Section 13.05 of
the Lease but not required under Section 13 of the Lease, (iv) payments of
Supplemental Rent by the Lessee in respect of any amounts payable under the
Tax Indemnity Agreement, (v) payments constituting increases in Interim
Rent or Basic Rent attributable to payments arising pursuant to Section 5
of the Tax Indemnity Agreement and (vi) any right to demand, collect or
otherwise receive and enforce the payment of any amount described in
clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee
has exercised its option to renew the Lease pursuant to the second
paragraph of Section 4.01(a) thereof and with respect to which the
conditions set forth in the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other
property) is unencumbered by the Lease. 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; provided that in connection with any determination pursuant to or
for the purposes of Article 17 of the Lease, the Aircraft shall be
appraised on an "as is, where is" basis. Fair Market Value shall be
determined in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed Renewal
Term equal to 50% of the average actual semi-annual Basic Rent payable during
the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as of
October 15, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between
the Engine Manufacturer and the Lessee related to the purchase by the
Lessee of the Engines as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
General Terms Agreement relates to the Engines, to the extent assigned to
the Owner Trustee pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as Owner
Trustee and Lessor, the Agent (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Owner Participant, the Original
Loan Participants (to the extent set forth in Articles 8 and 9 of the Original
Participation Agreement), the Indenture Trustee, in its individual capacity
and as trustee, any Owner Participant Guarantor, 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 and the Trust Indenture Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N661FE) dated as of October 15, 1995, as amended
and restated as of October 26, 1995, between the Lessor and the Indenture
Trustee, as supplemented by the Indenture and Security Agreement Supplement,
and as said Indenture may from time to time be further supplemented or
amended, including any amendment or supplement thereto entered into from time
to time pursuant to the applicable provisions of the Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N661FE) dated October 25, 1995, as such Indenture and Security Agreement
Supplement shall be amended or supplemented from time to time and any other
supplement to the Indenture, substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event or condition which with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture Estate 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 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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft throughout
the Interim Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant Payment
Date and ending at the end of the day immediately preceding the Commencement
Date.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N661FE) dated as of October 15, 1995, as amended and restated as of October
26, 1995, entered into by the Lessor and the Lessee concurrently with the
execution and delivery of the Indenture, 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 one or more Lease
Supplements entered into pursuant to the applicable provisions of the
Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N661FE) dated October 25, 1995, as such Lease Supplement
shall be amended or supplemented from time to time and any other supplement to
the Lease, substantially in the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of
the Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of
Sale, the Airbus Guaranty, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the AVSA Consent and Agreement, the
Consent and Guaranty (to the extent assigned by the Purchase Agreement
Assignment), the GTA, the Engine Warranty Assignment, the Engine Consent,
any warranty with respect to the Airframe and the Engines, all amounts of
Interim Rent, Basic Rent and Supplemental Rent, including without
limitation, insurance proceeds (other than insurance proceeds payable to or
for the benefit of the Owner Trustee 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) not include any Excepted Payment and (ii) include all
property intended to be subjected to the Indenture by the Granting Clause
thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust
Indenture Estate arising as a result of (i) claims against 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) acts or omissions 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 or
expressly prohibited under the Operative Agreements and any act or omission
of the Owner Participant which 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, Owner Participant, Lessor's
Estate or the trust created by the Trust Agreement which are not required
to be indemnified against by the Lessee pursuant to the Participation
Agreement by reason of Section 8.01(b) or 9.01(b) thereof and which are not
required to be indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement, or (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 other than a transfer of the
Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
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
Trustee or the Owner Participant or any interests of the Owner Participant
unless all Certificates then outstanding shall be held by the Owner
Participant, (ii) the Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the 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, if
any, of (i) the present values of all remaining scheduled payments of such
principal amount or portion thereof 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 the Treasury Yield, all as determined by the Independent
Investment Banker over (ii) the unpaid principal amount of such
Certificate.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of the
Lease, discounted at a rate per semi-annual period equal to the Debt Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, if any, the Owner Trustee
Guaranty, if any, any Ancillary Agreement entered into by or with the written
consent of the Indenture Trustee, which by its terms is an Operative
Agreement, the Certificates outstanding at the time of reference, the
Indenture, the Indenture and Security Agreement Supplement, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the Engine Consent and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Original Agreements. The documents and instruments delivered on the
Delivery Date in connection with the transactions contemplated by the Original
Participation Agreement.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N661FE) dated as of October
15, 1995 between the Owner Trustee and the Indenture Trustee, which together
with the Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N661FE) dated October 25, 1995 attached thereto was
recorded as one instrument by the FAA on October 25, 1995 and assigned
Conveyance Number 2A267994.
Original Lease. The Lease Agreement (Federal Express Corporation
Trust No. N661FE) dated as of October 15, 1995 between the Owner Trustee as
lessor, and the Lessee, which together with Lease Supplement No. 1 (Federal
Express Corporation Trust No. N661FE) dated October 25, 1995 attached thereto
was recorded as one instrument by the FAA on October 25, 1995 and assigned
Conveyance Number 2A267995.
Original Loan Certificates. The loan certificates issued on the
Delivery Date to the Original Loan Participants.
Original Loan Participants. The entities listed on Schedule I to the
Original Participation Agreement and their successors and assigns (other than
any assignees in connection with the Refunding Date).
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N661FE) among the Lessee, the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Original Loan
Participants as it was originally executed as of October 1, 1995.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N661FE) between the Lessee and the
Owner Participant as it was originally executed as of October 15, 1995.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N661FE) between the Owner Participant and the Owner
Trustee as it was originally executed as of October 1, 1995 and filed with the
FAA on October 25, 1995.
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.
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, its right, title and
interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Amount. The amount described in Section 2.03 of
the Participation Agreement and set forth on Schedule II to the Lease.
Owner Participant Guarantor. The provider of an Owner Participant
Guaranty.
Owner Participant Guaranty. Any guaranty delivered in compliance
with Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement, and its successors and permitted
assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Interim Term
and the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Interim Rent, Basic
Rent, Stipulated Loss Value and Termination Value percentages or the EBO
Price, as the case may be, as such assumptions may be adjusted for events
which have been the basis of adjustments to Rent pursuant to Section 3.04
of the Lease.
Participation Agreement. The Participation Agreement (Federal
Express Corporation Trust No. N661FE), dated as of October 1, 1995, as
amended and restated as of October 26, 1995, among the Lessee, the Original
Loan Participants, the Owner Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as owner trustee, the
Owner Participant, the Indenture Trustee not in its individual capacity
except as otherwise expressly provided therein, but solely as indenture
trustee and the Pass Through Trustee not in its individual capacity except
as otherwise expressly provided therein, but solely as pass through
trustee, 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, prior to replacement thereof in accordance with the Lease, which may be
removed therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated as
of February 1, 1993, as amended and restated as of October 1, 1995 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 1995 Pass Through
Certificates, Series B1, 1995 Pass Through Certificates, Series B2 or 1995
Pass Through Certificates, Series B3, 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 Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust,
1995-B1, Federal Express Pass Through Trust, 1995-B2 or Federal Express Pass
Through Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the interest rate applicable to such
Certificate and (ii) in the case of any other such amount, 2% plus the Debt
Rate.
Payment Date. The Owner Participant Payment Date, and each January 2
and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date and
ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates having a
Maturity in 2014, November 7, 2007 and with respect to the Certificates having
a Maturity in 2019, October 7, 2017.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase
Agreement, dated as of July 3, 1991 between AVSA and the Lessee, including
all exhibits, appendices and letter agreements attached thereto as
originally executed or as modified, amended or supplemented in accordance
with the terms thereof, but only to the extent that the foregoing relates
to the Aircraft and to the extent assigned pursuant to the Purchase
Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N661FE), dated as of October 15, 1995
between the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the Owner
Participant Payment Date, December 18 for January 2 Payment Dates and June 17
for July 2 Payment Dates, whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least three (3) Business Days
prior to such expected Refunding Date.
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.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
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 or more terms 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 Interim
Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July 2,
1996.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) manufactured after October 22,
1994 of the same or of equal or greater value, remaining useful life and
utility as the Engine being replaced, together with all Parts relating to such
engine; provided, however, that if such replacement engine is not a General
Electric CF6-80C2-A5F engine, such replacement engine must then be commonly
used in the commercial aviation industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or Corporate
Trust Administration, as the case may be, designated by such Person to perform
obligations under the Operative Agreements, with respect to the Owner
Participant, the president or any vice president with direct responsibility
for the transactions contemplated by the Operative Agreements, and with
respect to any other party, any corporate officer or (except in the case of
the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be executed and
delivered by the Lessee and the Pass Through Trustee, the Series Supplement
1995-B2 to be executed and delivered by the Lessee and the Pass Through
Trustee or the Series Supplement 1995-B3 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.
Stipulated Loss Value. As of any Stipulated Loss Value
Determination Date during the Term, the amount determined by multiplying
the Purchase Price by the percentage set forth in Schedule III of the Lease
under the heading "Stipulated Loss Value Factor" opposite such date (as
such Schedule III may be adjusted from time to time as provided in Section
3.04 of the Lease), and during any Renewal Term, the amount determined
pursuant to Section 4.01(b) of the Lease. Notwithstanding any other
provisions of the Lease or the Participation Agreement or the Indenture,
each Stipulated Loss Value shall be, under any circumstances and in any
event, an amount, together with so much of the arrears portion of Interim
Rent and Basic Rent due and owing through the date of payment of Stipulated
Loss Value as does not constitute an Excepted Payment, at least sufficient
to pay in full as of such date of payment the aggregate unpaid principal
amount of and accrued interest on the Certificates outstanding on such date
of payment. Subject to the immediately preceding sentence, it is
understood and agreed that the amounts set forth on Schedule III of the
Lease, for dates other than Rent Payment Dates on which arrears Interim
Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent
and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
Substantial Authority. For Federal income tax purposes, shall have
the meaning applicable for purposes of Section 6662 of the Code and relevant
Treasury regulations.
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 any Ancillary Agreement
or any other Operative Agreement to the Lessor, the Owner Participant or
others, including, without limitation, payments of Stipulated Loss Value, EBO
Price and amounts calculated by reference to Termination Value and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement or the Tax Indemnity
Agreement or any other Operative Agreement, but excluding Interim Rent and
Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Original Tax Indemnity Agreement as
amended by Amendment No. 1 to the Original Tax Indemnity Agreement, as from
time to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Preliminary Term, the Interim Term and the Basic Term of
the lease for the Aircraft under the Lease and, if renewed pursuant to Section
4.01 of the Lease, each Renewal Term for the Aircraft for which the Lease is
renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease, and in the
case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling on
July 2, 2011 or July 2, 2013, (ii) Section 4.02(a)(D) or (E) of the Lease, a
Rent Payment Date that is on or after the fifth anniversary of the
Commencement Date and (iii) Section 4.02(a)(F) of the Lease, July 2, 2015.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code (which,
among other things, recodified the Federal Aviation Act of 1958, as amended
to the time of such recodification), as amended and in effect on the date
of the Lease or as subsequently amended, or any successor or substituted
legislation at the time in effect and applicable, and the regulations
promulgated pursuant thereto.
Treasury Yield. (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N661FE), dated as of October 1, 1995, as amended and restated as of
October 26, 1995, between the Owner Participant and the Owner Trustee in its
individual capacity, as from time to time modified, amended or supplemented
pursuant to its applicable provisions and in accordance with the Operative
Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the Underwriting
Agreement.
Underwriting Agreement. The Underwriting Agreement dated October 26,
1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
SCHEDULE II
OWNER PARTICIPANT AMOUNT
(As a Percentage of Purchase Price)
Date Amount
---- ------
March 19, 1996 2.12964039%
INTERIM RENT
(As a Percentage of Purchase Price)
Rent
Payment
Date Advance Arrears
------- ------- -------
[On each Payment Date, Lessee will pay as Interim 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 Payment Date, together with
the accrued and unpaid interest thereon.]
BASIC RENT
(As a Percentage of Purchase Price)
Rent
Payment
Date Advance Arrears
------- ------- -------
[On each 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 Payment Date, together with
the accrued and unpaid interest thereon.]
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
(D) Purchase Option Referred to in Section 4.02(a)(D) of the
Lease. In the event of any Significant Expenditure (as defined below)
with respect to the Aircraft, which the Lessee has certified in a
certificate of the Lessee's President, Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer, Treasurer or Assistant
Treasurer furnished to the Lessor, the Indenture Trustee and the Owner
Participant, is (as determined in the Lessee's sole discretion)
necessary, desirable or required to be made at any time on or after the
fifth anniversary of the Commencement Date, the Lessee may elect to
terminate the Lease and purchase the Aircraft on the first Rent Payment
Date occurring at least six months after the Owner Participant has
notified the Lessee that they will not permit such Significant
Expenditure to be financed as contemplated in clause (ii) of the
definition of "Significant Expenditure" below, for, at the Lessee's
option, either (1) the payment to the Lessor in immediately available
funds of an amount equal to the greater of the Fair Market Value of the
Aircraft and 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 7.11 of the Participation Agreement and Section 2.12
of the Indenture, of all of the Lessor's obligations 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, and (II) the Fair Market Value of
the Aircraft, both computed as of such Rent Payment Date, over (B) the
unpaid principal of the Certificates outstanding plus accrued interest
as of such date; it being understood that the Fair Market Value for this
purpose shall be determined without regard to any Significant
Expenditure not yet made.
For purposes of this paragraph (D) the term "Significant
Expenditure" means a single expenditure or a series of related
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 (i) in the Lessee's reasonable judgment would
exceed $5,000,000, (ii) the Owner Participant will not permit to be
financed on similar terms and conditions then available for similar
transactions through the issuance of additional non-recourse notes of
the Lessor or through additional equity investments of the Owner
Participant or both (it being understood that this Section 4.02(a)(D)
shall not impose any obligation on the Owner Participant to provide such
financing) and (iii) are improvements which the Lessee has performed or
is in the process of performing in respect of at least 25% of the
A300-600 series aircraft (including the Aircraft) operated by the Lessee.
The Lessee, prior to notifying the Owner Participant and the Indenture
Trustee in accordance with Paragraph (F) of this Schedule V of its
election to purchase the Aircraft pursuant to Section 4.02(a)(D) of the
Lease, shall notify the Owner Participant of the non-severable
improvements which would satisfy the conditions described in clauses (i)
and (iii) of the preceding sentence, and provide the Owner Participant
with a reasonable opportunity to permit the financing thereof as
contemplated in clause (ii) of such sentence. The Owner Participant
shall notify the Lessee of their decision with respect to such financing
within 60 days after the Lessee has given the notice described in the
preceding sentence.
(E) Purchase Option Referred to in Section 4.02(a)(E) of the
Lease. In the event that a Burdensome Indemnity Payment shall occur at
any time on or after the fifth anniversary of the Commencement Date, 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 for, at the Lessee's
option, either (1) the payment to the Lessor in immediately available
funds of an amount equal to the greater of the Fair Market Value of the
Aircraft and 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 7.11 of the Participation Agreement
and Section 2.12 of the Indenture, 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 and (II) the Fair Market
Value of the Aircraft, both computed as of the Burdensome Indemnity
Payment Date, over (B) the unpaid principal of the Certificates
outstanding plus accrued interest as of such date.
For purposes of this paragraph (E), the term "Burdensome Indemnity
Payment" means a Loss as defined in the Tax Indemnity Agreement which
under the circumstances cannot be commercially reasonably avoided by the
Lessee which causes the aggregate net present value as of the
determination date, discounted semi-annually at the Debt Rate, of all
such Losses (but excluding any Losses for which the Owner Participant
shall have waived its right to payment under the Tax Indemnity
Agreement) paid or payable by the Lessee which can be avoided through a
purchase by the Lessee of the Aircraft, to exceed 2.5% of the Purchase
Price.
(F) Notice from the Lessee. The Lessee shall give the Lessor,
the Owner Participant and the Indenture Trustee not more than 180 days
nor less than 90 days prior written notice of its election to purchase
pursuant to Section 4.02(a)(D) or 4.02(a)(E) of the Lease. Such notice
shall either direct the Lessor to prepay the Certificates in full on
such Termination Date pursuant to Section 6.02 of the Indenture or state
that the Lessee shall exercise its option to assume the Certificates
pursuant to Section 7.11 of the Participation Agreement and Section 2.12
of the Indenture. The Lessee's notice pursuant to Section 4.02(a)(D) or
4.02(a)(E) hereof shall become irrevocable 10 days prior to the
applicable purchase date designated in such notice but if any such
notice is revoked, the Lessee shall no longer be entitled to purchase
the Aircraft as a result of the facts and circumstances originally
giving rise to such right and will pay all reasonable expenses of the
Owner Participant, the Owner Trustee and the Indenture Trustee in
connection therewith.
Exhibit A
to
Lease Agreement
THE INTEREST OF LESSOR UNDER THIS LEASE SUPPLEMENT
NO. __ IS SUBJECT TO A SECURITY INTEREST
LEASE SUPPLEMENT NO. __
(Federal Express Corporation Trust No. N661FE)
LEASE SUPPLEMENT NO. __ (Federal Express Corporation Trust No.
N661FE), dated ________ __, ____, between NBD BANK, a Michigan banking
corporation, not in its individual capacity, but solely as Owner Trustee
under the Trust Agreement (Federal Express Corporation Trust No. N661FE)
dated as of October 1, 1995, as amended and restated as of October 26, 1995
(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 (Federal Express Corporation Trust No. N661FE) dated as of
October 15, 1995, as amended and restated as of October 26, 1995 (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. __, for the purpose of leasing under the Lease the aircraft
and engines described below ("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. Delivered 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
A300F4-605R Aircraft (the "Delivered Aircraft"), which Delivered Aircraft
as of the date of this Lease Supplement consists of the following:
(a) Airbus A300F4-605R Airframe; U.S. Registration Number ______;
Manufacturer's Serial No. ___; and
(b) Two (2) General Electric CF6-80C2-A5F Engines bearing,
respectively, Manufacturer's Serial Nos. ___-___ and ___-___ (each of
which engines has 750 or more rated takeoff horsepower or the equivalent
of such horsepower).
Section 2. Delivery Date. The Delivery Date of the Delivered
Aircraft is the date of this Lease Supplement.
Section 3. Purchase Price. The Purchase Price of the Delivered
Aircraft shall be the amount set forth in Ancillary Agreement I.
Section 4. Term. The Term for the Delivered Aircraft shall
commence on the Delivery Date, and shall terminate on ______, ____, unless
earlier terminated or extended pursuant to the terms of the Lease.
Section 5. Rent. The Lessee hereby agrees to pay the Lessor Rent
for the Delivered Aircraft throughout the Term thereof in accordance with
the terms and provisions of the Lease.
Section 6. Lessee's Acceptance of Delivered Aircraft. The Lessee
hereby confirms to the Lessor that the Delivered Aircraft has been duly
marked in accordance with Section 7.03 of the Lease and that the Lessee has
accepted the Delivered Aircraft for all purposes hereof and of the Lease,
and 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 AVSA, the Manufacturer, the Engine
Manufacturer or any vendor of equipment included in the Aircraft.
Section 7. 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 8. 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 9. Agreement as Chattel Paper. To the extent that this
Lease Supplement 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 Supplement may be created through the
transfer or possession of any counterpart other than the original
chattel-paper counterpart, which shall be the counterpart containing the
receipt executed by the Indenture Trustee on its signature page.
Section 10. 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: NBD BANK,
not in its individual capacity,
but solely as Owner Trustee
By: ________________________________________
Name:
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By: ________________________________________
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director -
Structured Finance
Receipt of this original counterpart of the Lease Supplement is
hereby acknowledged on this __ day of _________ 1995.
Indenture Trustee: THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
not in its individual capacity,
but solely as Indenture Trustee
By: ________________________________________
Name:
Title:
LEASE AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N663FE)
Dated as of October 26, 1995
between
NBD BANK,
Not in its Individual Capacity,
but Solely as Owner Trustee,
AS LESSOR
and
FEDERAL EXPRESS CORPORATION,
AS LESSEE
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 766, REGISTRATION NO. N663FE
CERTAIN OF THE RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE
AGREEMENT OF NBD BANK, AS OWNER TRUSTEE, HAS BEEN ASSIGNED TO AND IS SUBJECT
TO A LIEN AND SECURITY INTEREST IN FAVOR OF THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), AS INDENTURE TRUSTEE UNDER THE TRUST INDENTURE AND SECURITY
AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N663FE) DATED AS OF OCTOBER
26, 1995 FOR THE BENEFIT OF THE HOLDERS OF THE CERTIFICATES REFERRED TO IN
SUCH TRUST INDENTURE AND SECURITY AGREEMENT. THIS LEASE AGREEMENT HAS BEEN
EXECUTED IN SEVERAL COUNTERPARTS. ONLY THE CHATTEL-PAPER "ORIGINAL"
COUNTERPART CONTAINS THE RECEIPT THEREFOR EXECUTED BY THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), AS INDENTURE TRUSTEE, ON THE SIGNATURE PAGES THEREOF.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
ARTICLE 2
ACCEPTANCE UNDER THE LEASE
Section 2.01. Sale and Lease of Aircraft; Term.................... 1
ARTICLE 3
RENT AND RENT ADJUSTMENT
Section 3.01. Owner Participant Payment........................... 2
Section 3.02. Interim Rent and Basic Rent......................... 2
Section 3.03. Supplemental Rent................................... 3
Section 3.04. Adjustments to Interim Rent, Basic Rent, Stipulated
Loss Value, Termination Value and the EBO Price
After the Delivery Date........................... 3
Section 3.05. Minimum Interim Rent and Basic Rent................. 5
Section 3.06. Payment to Indenture Trustee........................ 6
Section 3.07. Costs and Expenses.................................. 6
ARTICLE 4
RENEWAL OPTIONS AND PURCHASE OPTIONS
Section 4.01. Renewal Options..................................... 6
Section 4.02. Purchase Options.................................... 7
Section 4.03. Appraisal Procedures................................ 9
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.01. Disclaimer of Representations and Warranties........ 11
Section 5.02. No Modification of Other Warranties................. 11
Section 5.03. Certain Agreements of the Lessee.................... 12
ARTICLE 6
LIENS
Section 6.01. Liens............................................... 12
ARTICLE 7
AIRCRAFT REGISTRATION, MAINTENANCE AND OPERATION
Section 7.01. Registration, Maintenance and Operation............. 14
Section 7.02. Possession and Permitted Transfer and Sublease...... 16
Section 7.03. Insignia............................................ 20
ARTICLE 8
REPLACEMENT AND POOLING OF PARTS
Section 8.01. Replacement of Parts................................ 21
Section 8.02. Pooling of Parts.................................... 22
ARTICLE 9
ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section 9.01. Required Alterations and Modifications.............. 23
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 Aircraft by the Lessor................. 27
Section 10.03. Voluntary Termination as to Engines................. 28
ARTICLE 11
LOSS, DESTRUCTION, REQUISITION
Section 11.01. Lessee's Election Rights............................ 28
Section 11.02. Payment of Stipulated Loss Value.................... 29
Section 11.03. Replacement of Airframe and Engines................. 30
Section 11.04. Event of Loss with Respect to an Engine............. 33
Section 11.05. Application of Payments from the Government or
Others............................................ 35
Section 11.06. Requisition of an Airframe and the Installed Engines
for Use by Government............................. 36
Section 11.07. Requisition for Use by Government of an Engine Not
Installed on the Airframe......................... 37
Section 11.08. Application of Payments During Existence of Certain
Defaults.......................................... 37
ARTICLE 12
RETURN OF AIRCRAFT
Section 12.01. Return of Aircraft.................................. 37
Section 12.02. Return of Engines................................... 38
Section 12.03. Return of Manuals................................... 38
Section 12.04. Condition of Aircraft............................... 39
Section 12.05. Delayed Return of Aircraft.......................... 40
Section 12.06. Storage............................................. 41
Section 12.07. Special Markings.................................... 41
Section 12.08. Lessor's Option to Purchase Parts................... 41
ARTICLE 13
INSURANCE
Section 13.01. Comprehensive Airline Liability and Property Damage
Liability Insurance............................... 42
Section 13.02. Insurance against Loss or Damage to Aircraft and
Engines........................................... 44
Section 13.03. Application of Insurance Proceeds................... 46
Section 13.04. Reports............................................. 47
Section 13.05. Lessor's Insurance.................................. 48
Section 13.06. Self-Insurance...................................... 48
ARTICLE 14
INSPECTION
Section 14.01. Right of Inspection................................. 48
Section 14.02. No Obligation to Inspect............................ 49
ARTICLE 15
ASSIGNMENT
Section 15.01. Lessee's Right to Assign............................ 49
Section 15.02. Citizenship......................................... 49
ARTICLE 16
EVENTS OF DEFAULT
Section 16.01. Events of Default................................... 50
ARTICLE 17
REMEDIES
Section 17.01. Remedies upon Lessee's Default...................... 52
Section 17.02. Cumulative Remedies................................. 55
Section 17.03. Waiver.............................................. 55
Section 17.04. Lessor's Right to Perform for Lessee................ 55
ARTICLE 18
COVENANT OF QUIET ENJOYMENT
Section 18.01. Quiet Enjoyment..................................... 56
ARTICLE 19
FURTHER ASSURANCES
Section 19.01. Further Assurances.................................. 56
ARTICLE 20
NET LEASE
Section 20.01. Nature of Lease..................................... 57
ARTICLE 21
SUCCESSOR LESSOR
Section 21.01. Successor Lessor.................................... 58
ARTICLE 22
SECURITY FOR LESSOR'S OBLIGATIONS
Section 22.01. Security for Lessor's Obligations to Holders........ 59
Section 22.02. Intentionally Left Blank............................ 59
Section 22.03. Consent of Lessee to Assignment of Lease as
Security.......................................... 59
ARTICLE 23
SECURITY FUNDS
Section 23.01. Investment of Security Funds........................ 59
ARTICLE 24
CONCERNING THE LESSOR
Section 24.01. Lessor's Entry into Lease........................... 61
ARTICLE 25
NOTICES
Section 25.01. Notices............................................. 61
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Headings and Captions....................... 62
Section 26.02. References.......................................... 62
Section 26.03. APPLICABLE LAW...................................... 62
Section 26.04. Severability........................................ 63
Section 26.05. No Oral Modification................................ 63
Section 26.06. Agreement as Chattel Paper.......................... 63
Section 26.07. Counterparts........................................ 63
Section 26.08. Public Release of Information....................... 63
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties............................... 64
Section 27.02. Section 1110 Compliance............................. 64
Section 27.03. Finance Lease....................................... 64
Schedule I Definitions
Schedule II Owner Participant Amount, Interim Rent and Basic Rent
Schedule III Stipulated Loss Values
Schedule IV Termination Values
Schedule V Purchase Option Schedule
Exhibit A Form of Lease Supplement
Exhibit B Form of Purchase Agreement Assignment, Consent and
Agreement and AVSA Consent and Agreement
Exhibit C Form of Engine Warranty Assignment and Engine Consent
LEASE AGREEMENT
(Federal Express Corporation Trust No. N663FE)
Lease Agreement (Federal Express Corporation Trust No. N663FE) dated
as of October 26, 1995 (this "Lease"), between NBD BANK, a Michigan banking
corporation, 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 on the
Delivery Date (as hereinafter defined) 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 otherwise specifically provided herein, 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. Sale and Lease of Aircraft; Term. The Lessor,
subject to satisfaction or waiver of the conditions set forth in this Lease
and in the Participation Agreement, hereby agrees to purchase the Aircraft
from AVSA on the Delivery Date and agrees immediately thereafter to lease
the Aircraft to the Lessee pursuant to this Lease, and the Lessee hereby
agrees to lease the Aircraft from the Lessor, such lease to be evidenced by
the execution by the Lessor and the Lessee of a Lease Supplement leasing
the Aircraft hereunder. Such lease shall last for the Term, at all times
during which full legal title to the Aircraft shall remain vested with the
Lessor to the exclusion of the Lessee, notwithstanding the possession and
use thereof by the Lessee or any other Person. The Lessee agrees that the
Lessor will authorize one or more employees of the Lessee, designated by
the Lessee in writing, as the authorized representative or representatives
of the Lessor to accept delivery of the Aircraft pursuant to the sale of
the Aircraft described in the Participation Agreement. The Lessee hereby
agrees that in the event delivery of the Aircraft shall be accepted by an
employee or employees of the Lessee pursuant to such authorization by the
Lessor, such acceptance of delivery by such employee or employees on behalf
of the Lessor shall, without further act, irrevocably constitute acceptance
by the Lessee of the Aircraft for all purposes of this Lease.
ARTICLE 3
RENT AND RENT ADJUSTMENT
Section 3.01. Owner Participant Payment. The Owner Participant has
agreed, so long as no Event of Default has occurred and is continuing, to make
available to the Lessor funds sufficient to pay to the Indenture Trustee on
the Owner Participant Payment Date an amount equal to the difference between
the amounts scheduled to be paid on the Certificates on such date and the
amount required to be paid by the Lessee on such date pursuant to Section
17.02(b) of the Participation Agreement (without regard to Section 3.05
hereof), all in accordance with the provisions of Section 3.07 of the
Participation Agreement. To the extent such amount is not paid when due on
the Owner Participant Payment Date, the Lessee shall make an advance on behalf
of the Owner Participant as described in Section 3.05 hereof equal to such
amount and, if not otherwise reimbursed, the Lessee shall have the right to
offset such amount pursuant to Section 3.05 hereof.
Section 3.02. Interim Rent and Basic Rent. No Rent (other than
Supplemental Rent, if any) shall be payable for the Preliminary Term. The
Lessee agrees to pay to the Lessor in immediately available funds on the
Commencement Date, Interim Rent in the amount set forth on Schedule II hereto
for such date, subject to increase or decrease as provided in Section 3.04
hereof, with such Interim Rent being allocated to the Interim Term. The
Lessee agrees to pay to the Lessor in immediately available funds, on each
Rent Payment Date, Basic Rent for the Aircraft during the Basic Term, each
payment being set forth on Schedule II hereto opposite the applicable Rent
Payment Date, subject to increase or decrease as provided in Sections 3.04 of
this Lease. Each payment of Interim Rent and Basic Rent shall be made in
arrears or in advance, all as stated in Schedule II hereto. Each payment of
Basic Rent designated as advance rent shall be allocated over the six-month
period beginning on the Rent Payment Date on which such advance rent payment is
scheduled to be made, and each installment of Basic Rent that is designated as
payable in arrears 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 is scheduled to be made and each installment of Interim Rent
that is designated as payable in arrears shall be accrued over the Interim
Term.
Section 3.03. 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 Interim Rent or 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 Interim Rent or 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, the Lessee will pay to the Lessor, as Supplemental Rent, in
the case of any prepayment of the Certificates pursuant to Section 6.02 of the
Indenture (except in the case of an Indenture Event of Default in the absence
of any Event of Default) or any prepayment or purchase of the Certificates
pursuant to clause (ii) of the first sentence of Section 8.02(a) of the
Indenture, an amount equal to the aggregate amount of any Make-Whole Premium
payable on such prepayment or purchase. The expiration or other termination
of the Lessee's obligation to pay Interim Rent or Basic Rent shall not limit
or otherwise modify the obligations of the Lessee with respect to the payment
of Supplemental Rent.
Section 3.04. Adjustments to Interim Rent, Basic Rent, Stipulated Loss
Value, Termination Value and the EBO Price After the Delivery Date. The
percentages for Interim Rent and Basic Rent referred to in Schedule II hereto
and for Stipulated Loss Value and Termination Value in Schedule III and
Schedule IV, respectively, hereto and the EBO Price shall be adjusted (upward
or downward) subject to the minimum value established by Section 3.05 hereof
and the definitions of Stipulated Loss Value and Termination Value to reflect
(i) any costs and expenses paid by the Lessor or the Owner Participant
pursuant to Section 10.01 of the Participation Agreement being greater or less
than the Estimated Expense Amount, (ii) any Refinancing pursuant to Section
15.01 of the Participation Agreement, (iii) any reoptimization pursuant to
Section 15.02 of the Participation Agreement, (iv) the Owner Participant
Amount being different from the amount set forth on Schedule II hereto or
paid, in whole or in part, on a date other than as set forth on Schedule II
hereto, (v) payments pursuant to Section 5 of the Tax Indemnity Agreement by
an adjustment of Interim Rent and Basic Rent or (vi) the Delivery Date being
other than November 20, 1995. Each such adjustment pursuant to clause (i),
(ii), (iv), (v) or (vi) of the first sentence of this Section 3.04 shall
maintain the Owner's Economic Return (and, while maintaining such Return,
minimize the aggregate Net Present Value of Rents to the Lessee) and shall not
cause the EBO Price to be less than the greater of (i) the Termination Value
as of such Rent Payment Date and (ii) the estimate set forth in the Appraisal
of the Fair Market Value of the Aircraft at the time of exercise of the
purchase option under Section 4.02(a)(F) hereof. In the event of an
adjustment pursuant to clause (iii) of the first sentence of this Section
3.04, the Owner Participant may recalculate Interim Rent and Basic Rent as set
forth in Schedule II hereto in order to maintain the Owner's Economic Return,
recalculate the Owner Participant Amount set forth in Schedule II hereto and,
subject to the provisions of Section 15.02 of the Participation Agreement,
recalculate the schedule of principal repayments, the Stipulated Loss Value
percentages set forth in Schedule III hereto, the Termination Value
percentages set forth in Schedule IV hereto and the EBO Price in a manner
consistent with such recalculation of Interim Rent and Basic Rent; provided
that any such recalculations may not (A) increase the Net Present Value of
Rents to the Lessee, (B) increase as of any date the sum of (1) the Net
Present Value of Rents to the Lessee payable through such date plus (2) the
present value of the Stipulated Loss Value, the Termination Value or the EBO
Price as of such date, in each case discounted at the Debt Rate, beyond such
net present values prior to such adjustment, or (C) otherwise result in any
adverse impact (including tax consequences) to the Lessee for which the Owner
Participant has not agreed to indemnify the Lessee on terms reasonably
acceptable to the Lessee. The Owner Participant shall promptly notify the
Lessee and the Lessor and the Lessee shall promptly notify the Owner
Participant and the Lessor of the need for any such adjustment. As promptly
as feasible after any such notification, the Lessor shall furnish the Lessee
with a notice setting forth the amount of any such adjustments together with
the calculations upon which the adjustments are based; provided, however, that
the Lessor and the Owner Participant shall not be required to disclose to the
Lessee in such notice any confidential or proprietary information (including
methodology or assumptions) relating to such calculations. At the request and,
subject to the next succeeding sentence, expense of the Lessee, the accuracy
of the calculation of such adjustments and the consistency of the calculation
with the calculation used to determine Interim Rent, Basic Rent, Stipulated
Loss Values, Termination Values and the EBO Price shall be verified first, by
First Chicago Leasing Corporation or such other financial advisor chosen by
the Lessee and second, if such adjustments are still believed to be in error
and are not reconciled with the Owner Participant within fifteen (15)
Business Days, by a firm of nationally recognized independent public
accountants selected by the Lessee and reasonably acceptable to the Owner
Participant and, in order to enable them to verify such adjustments, the Owner
Participant shall make available to such accountants (for their own
confidential use and not to be disclosed to the Lessee or any other Person and
subject to the execution of a confidentiality agreement reasonably
satisfactory to the Owner Participant) all information reasonably necessary
for such verification, including the name of the lease analysis program used
by the Owner Participant to calculate such adjustments. The Lessee will pay
the reasonable costs and expenses of the verification process under this
Section 3.04 unless as a result of such verification process by the
independent public accountants Interim Rent or Basic Rent is adjusted and such
adjustment causes the Net Present Value of Rents to decline by 10 or more
basis points (in which event the Owner Participant shall pay the reasonable
costs and expenses of such verification process). The Lessor and the Lessee
shall execute and deliver an amendment to this Lease to reflect each
adjustment under this Section 3.04.
All adjustments under this Section 3.04 shall be in compliance with
the requirements of Revenue Procedure 75-21, 1975-1 C.B. 715 and Sections
4.02(5), 4.07(1), 4.07(2) and 4.08(1) of Revenue Procedure 75-28, 1975-1 C.B.
752 and shall be structured so as to not cause the Lease to be a "disqualified
leaseback or long-term agreement" within the meaning of Section 467 of the
Code.
Section 3.05. Minimum Interim Rent and Basic Rent.
Notwithstanding any other provisions of the Operative Agreements to the
contrary, each installment of Interim Rent and Basic Rent due on each Rent
Payment Date and not constituting an Excepted Payment shall be, under any
and all circumstances, an amount 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 Article 17 hereof) on such
Rent Payment Date. To the extent that the Owner Participant does not
provide the Lessor with funds on the Owner Participant Payment Date as
referred to in Section 3.01 hereof if and when due, the Lessee shall on
such date advance on behalf of the Owner Participant (and such advance
shall be deemed a demand loan owing to the Lessee from the Owner
Participant bearing interest at the Past Due Rate plus 3%) an amount equal
to the funds not so provided. Unless otherwise reimbursed, the Lessee
shall, in addition to all other rights and remedies under applicable law
but subject to Article 20 hereof, be entitled to offset against any
payments due from the Lessee to the Lessor (including, without limitation,
Interim Rent, Basic Rent and payments due to the Lessor under Article 9 of
the Participation Agreement but not including the fees and expenses payable
to NBD or to the Owner Participant under the Tax Indemnity Agreement and
Excepted Payments), until the Lessee has fully offset such advance plus
interest thereon at the Past Due Rate plus 3% from the date of such advance
until the date of such reimbursement or offset; provided, however, that in
the case of any payment due from the Lessee which is distributable under
the terms of the Indenture, the Lessee's right of offset shall be limited
to the amount distributable to the Lessor thereunder (and shall not include
any amounts distributable to the Indenture Trustee in its individual
capacity or to the Holders of the Certificates or any of them). No such
offset or aggregate combined effect of separate offsets shall reduce the
amount of any installment of Interim Rent and Basic Rent, or the amount of
Stipulated Loss Value, Termination Value or EBO Price, to an amount
insufficient to pay in full the payments then required to be made on
account of the principal of and interest on the Certificates then
Outstanding. If the Owner Participant is not required to provide such
funds under Section 3.01 hereof, the Lessee shall make a payment of
Supplemental Rent in an amount equal to the Owner Participant Amount.
Section 3.06. Payment to Indenture Trustee. All Rent payable by the
Lessee to the Lessor shall be paid to the Lessor at its principal office at
611 Woodward Avenue, Detroit, Michigan 48226, Attention: Corporate Trust
Department, 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 10:30 a.m., New
York time on the due date of such payment; provided, however, that so long as
the Indenture shall not have been discharged the Lessor hereby directs, and
the Lessee agrees, that all Rent (other than Excepted Payments, which shall be
paid by the Lessee directly to the Person entitled thereto) (all without
set-off or counterclaim as and to the extent provided in Article 20 hereof)
and all amounts referred to in Section 3.01 hereof shall be paid directly to
the Indenture Trustee at its principal office at 4 Chase Metrotech Center, 3rd
Floor, Brooklyn, New York 11245, Attention: Corporate Trust Administration, or
as the Indenture Trustee may otherwise direct within the United States by wire
transfer of immediately available funds in U.S. Dollars no later than 10:30
a.m., New York 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 without interest
thereon for the period of such extension (provided that payment is made on
such next succeeding Business Day).
Section 3.07. 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 or Purchase.
The Lessee shall provide the Lessor with irrevocable written notice (the
"Preliminary Notice") not more than 360 days nor less than 180 days prior to
the end of the Basic Term or the preceding Renewal Term, as the case may be,
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)(B)
hereof or, if a further Renewal Term is available, pursuant to Section
4.02(a)(C) hereof. If, following delivery of a Preliminary Notice, the Lessee
shall not have notified the Lessor, at least 30 days prior to the end of the
Basic Term or a current Renewal Term, that it is renewing this Lease in
accordance with this Section 4.01, the Lessee's Preliminary Notice shall be
deemed an irrevocable notice of purchase satisfying Section 4.02(a)(B) hereof.
Provided that (i) no 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 timely delivered the respective Preliminary
Notice, the Lessee may, by irrevocable written notice delivered to the Lessor
not less than 30 days prior to the end of the Basic Term, extend the Term for
a single Fixed Renewal Term of not less than one (1) nor more than three (3)
years commencing on the expiration of the Basic Term. The Lessee shall pay
the Fixed Renewal Rent during any Fixed Renewal Term.
In addition, provided that (i) no 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 written notice delivered to the Lessor
not less than 30 days prior to the end of the Basic Term or the preceding
Renewal Term, as the case may be, elect to extend the Term for a Renewal Term
or further Renewal Term commencing on the expiration of the Basic Term or the
preceding Renewal Term and ending one or more years thereafter for a rent
equal to the then-current Fair Market Rental of the Aircraft. The Lessee
shall pay the Fair Market Rental during any Fair Market Renewal Term.
(b) Terms and Conditions. Any such renewal shall be on the same
terms and conditions as provided herein, except that (i) rent for the Aircraft
due during any Renewal Term shall be payable semi-annually in arrears on the
dates corresponding to the Rent Payment Dates during such Renewal Term, and
(ii) during any Renewal Term, the Stipulated Loss Value for the Aircraft shall
as of any Stipulated Loss Value Determination Date during the Renewal Term be
equal to the higher of the Stipulated Loss Value and the Fair Market Value of
the Aircraft as of the end of the Basic Term or the next preceding Renewal
Term, if applicable.
Section 4.02. Purchase Options. (a) Election to Purchase. Provided
that (i) this Lease has not otherwise expired or terminated, (ii) either no
Event of Default shall have occurred and be continuing at the time of the
notice provided below or, if an Event of Default occurs after such notice has
been given, the Lessee shall have provided evidence reasonably satisfactory to
the Lessor and the Owner Participant of its financial ability to purchase the
Aircraft and (iii) the Lessee shall have previously given the Preliminary
Notice under Section 4.01(a) hereof (in the case of paragraph (B) below or, if
a further Renewal Term is available, paragraph (C) below) or the applicable
notice for each other paragraph below, as the case may be, the Lessee may:
(A) by written notice delivered to the Lessor and the Owner
Participant, not more than 180 nor less than 90 days prior to July 2, 2009
or July 2, 2012, as the case may be, elect to terminate the Lease and
purchase the Aircraft on July 2, 2009 or July 2, 2012, for, at the Lessee's
option, either (1) an amount in immediately available funds equal to the
greater of the Fair Market Value or the Termination Value on such date or
(2)(i) the assumption by the Lessee, pursuant to Section 7.11 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 (ii) the payment to the Lessor of an amount equal to the excess of (A)
the greater of the Fair Market Value or the Termination Value on such date
over (B) the unpaid principal of the Certificates plus accrued interest as
of such date. Such notice (which shall be revocable by the Lessee upon
written notice no later than the Business Day prior to the date 15 days
prior to the applicable Rent Payment Date) shall either direct the Lessor
to prepay the Certificates in full on such Termination Date pursuant to
Section 6.02 of the Indenture or state that the Lessee shall exercise its
option to assume the Certificates pursuant to Section 7.11 of the
Participation Agreement and Section 2.12 of the Indenture; or
(B) by irrevocable written notice delivered to the Lessor and the
Owner Participant not more than 180 nor less than 30 days prior to the end
of the Basic Term (or deemed given pursuant to the second sentence of
Section 4.01(a) hereof), elect to purchase the Aircraft on the last day of
the Basic Term for an amount equal to the Fair Market Value thereof on such
date; or
(C) by irrevocable written notice delivered to the Lessor and the
Owner Participant not more than 180 days nor less than 30 days prior to the
end of any Renewal Term, elect to purchase the Aircraft on the last day of
such Renewal Term at a price equal to the Fair Market Value of the Aircraft
on such day; provided, however, that the Lessee shall have paid all Rent
due and payable under this Lease on or prior to the expiration of any such
Renewal Term; 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 shall be in an amount not less than the
greater of the amount specified in Schedule V hereto and the Fair Market
Value;
(E) exercise the purchase option in this Section 4.02(a)(E) which is
more particularly described in Schedule V hereto by reference to this
Section 4.02(a)(E) and which shall be in an amount not less than the
greater of the amount specified in Schedule V hereto and the Fair Market
Value; or
(F) by irrevocable written notice delivered to the Lessor and the
Owner Participant not more than 180 nor less than 90 days prior to January
2, 2015, elect to terminate this Lease and purchase the Aircraft on such
Rent Payment Date for an amount specified in Ancillary Agreement I (the
"EBO Price") with respect to this Section 4.02(a)(F) which amount shall not
be less than the greater of (i) the Termination Value as of such Rent
Payment Date and (ii) the estimate set forth in the Appraisal of the Fair
Market Value at the time of exercise of the option under this Section
4.02(a)(F).
The Lessee shall give the Lessor, the Owner Participant and the
Indenture Trustee not more than 180 and not less than 90 days' prior written
notice of its election to purchase pursuant to Section 4.02(a)(D) or
or 4.02(a)(E) hereof. Such notice shall be revocable by the Lessee upon
written notice no later than the Business Day prior to the date 15 days prior
to the applicable Rent Payment Date and such notice shall either direct the
Lessor to prepay the Certificates in full on such Termination Date pursuant to
Section 6.02 of the Indenture or state that the Lessee shall exercise its
option to assume the Certificates pursuant to Section 7.11 of the
Participation Agreement and Section 2.12 of the Indenture. In the event that
the Lessee shall have given notice to purchase the Aircraft under Section
4.02(a)(A), 4.02(a)(D) or 4.02(a)(E) hereof and shall fail to
make payment (and, if applicable, assume the Certificates) on the applicable
Termination Date, the Lease shall continue and the Lessee shall pay to the
Owner Trustee any losses, costs and expenses of the Owner Participant incurred
in connection with such failure.
(b) Terms and Conditions. If the Lessee elects to purchase the
Aircraft pursuant to Section 4.02(a) hereof, the Lessee shall pay to the
Lessor on the applicable Termination Date by wire transfer of immediately
available funds any Basic Rent payable on such Termination Date (to the extent
payable in arrears but not to the extent payable in advance), the applicable
purchase price together with any other amounts past due hereunder or due on
the applicable Termination Date and all other Supplemental Rent then due under
this Lease including, without limitation, the aggregate amount of any
Make-Whole Premium applicable to any Certificate (if such purchase occurs
prior to the Premium Termination Date for such Certificate) and amounts due
under the Participation Agreement and the Tax Indemnity Agreement, whereupon
(and upon discharge of the Lien of the Indenture in accordance with Section
14.01 thereof) 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 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 such other documents as the Lessee may reasonably require.
In connection with any termination or proposed termination of this 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 by the
date 60 days prior to the date for exercise of the applicable option, such
amount shall be determined by independent appraisal conducted by appraisers
selected pursuant to Section 4.03(b) hereof. At any time prior to final
determination of such amount pursuant to Section 4.03(b) hereof, 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 further determination
shall be excluded, the remaining two determinations shall be averaged, and
such average shall be final and binding upon the Lessor and the Lessee.
Otherwise, the average of all three determinations shall be final and binding
upon the Lessor 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 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 under Section
4.02 hereof, in which case 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 EACH 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 (IN ITS INDIVIDUAL
CAPACITY OR AS OWNER TRUSTEE), THE INDENTURE TRUSTEE, THE OWNER PARTICIPANT OR
ANY HOLDER. THE LESSOR LEASES THE AIRFRAME AND EACH ENGINE, AS-IS, WHERE-IS,
AND NEITHER THE LESSOR (IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE), THE
INDENTURE TRUSTEE, THE OWNER PARTICIPANT NOR ANY HOLDER 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, AIRWORTHINESS, WORKMANSHIP, CONDITION, VALUE,
FITNESS FOR ANY PARTICULAR USE OR PURPOSE, DESIGN, OPERATION OR
MERCHANTABILITY OF THE AIRFRAME, EACH 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, (E) THE LESSOR'S
TITLE THERETO, (F) THE LESSEE'S OR ANY SUBLESSEE'S RIGHT TO THE QUIET
ENJOYMENT THEREOF (EXCEPT AS PROVIDED IN ARTICLE 18 HEREOF) OR (G) ANY OTHER
MATTER WHATSOEVER. IT IS AGREED THAT ALL RISKS INCIDENT TO THE MATTERS
DISCUSSED IN THE PRECEDING SENTENCE, AS AMONG THE LESSOR, THE INDENTURE
TRUSTEE, THE OWNER PARTICIPANT AND THE LESSEE, ARE TO BE BORNE BY THE LESSEE.
The provisions of this Section 5.01 have been negotiated by the Lessor and the
Lessee and, except as provided in Article 7 of the Participation Agreement,
are intended to be a complete exclusion and negation of any representations or
warranties of the Lessor, the Indenture Trustee and the Owner Participant,
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, AVSA, the Manufacturer
or the Engine Manufacturer or any of their respective subcontractors or
suppliers, with respect to the Airframe, the Engines or any Parts incorporated
or installed in or attached to the Airframe or Engines, or to release the
Lessee, AVSA, the Manufacturer or the Engine Manufacturer or any of their
respective subcontractors or suppliers from any such representation, warranty
or obligation. 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 Manufacturer, AVSA or Engine Manufacturer or any of their
respective subcontractors or suppliers, and any other claims against the
Manufacturer, AVSA 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 Manufacturer, AVSA and Engine Manufacturer are
obligated to provide and do provide pursuant to the Purchase Agreement or the
GTA with respect to the Aircraft; 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; provided that 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.
Section 5.03. Certain Agreements of the Lessee. The Lessee agrees with
the Lessor for the benefit of the Owner Participant 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, 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 or other Person under a
sublease, transfer, assignment or other such arrangement 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 Section 7.03(b),
7.04(b) or 7.05(b) of the Participation Agreement;
(d) 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 material danger of the sale,
forfeiture or loss of the Lessor's Estate, the Aircraft, the Airframe or
any Engine or any interest therein or any material risk of civil
liabilities (unless the Owner Trustee, the Indenture Trustee and the Owner
Participant shall be indemnified to its satisfaction against such
liabilities by the Lessee) or any risk of the assertion of criminal charges
against the Lessor, the Owner Participant, the Indenture Trustee or any
Holder;
(e) 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 material danger of the sale,
forfeiture or loss of the Lessor's Estate, the Aircraft, the Airframe or
any Engine or any interest therein; and
(f) Liens arising from judgments 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 material danger of the sale,
forfeiture or loss of the Lessor's Estate, the Aircraft, Airframe or any
Engine or any interest therein.
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 payment by the Lessor of the Purchase Price on the Delivery
Date, cause the Aircraft to be duly registered in the name of the Lessor as
owner, pursuant to the Transportation Code and, subject to the proviso to
Section 6.03(b) of the Participation Agreement, to remain at all times duly
registered pursuant to the Transportation Code and at all times act 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
6.03(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 Aircraft) in as good
operating condition as when delivered to the Lessor on the Delivery Date,
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 pursuant to Section 6.03(b) of the Participation
Agreement and the Lessee's maintenance program approved by the Aeronautics
Authority or such agency or body, (ii) in the same manner and with the same
care used by the Lessee with respect to other A300-600 series aircraft and
CF6-80C2-A5F series engines (or other engines permitted by the terms of
this Lease to be used on the Aircraft) owned, operated or leased 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 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, and (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 Transportation Code 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;
(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
Transportation Code (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 11.03 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 interest in the
Aircraft;
(e) not maintain, service, repair, overhaul, use or operate the
Aircraft or any Engine in violation of any airworthiness certificate or
registration relating thereto, or in violation of any law or any license,
rule, regulation or order of or by any government or governmental authority
having jurisdiction over the Lessee or the Aircraft or any Engine or for
any purpose for which the Aircraft or any Engine is not designed; provided,
however, that the Lessee (or if a sublease shall then be in effect, the
sublessee thereunder) may in good faith contest the validity or application
of any such law, license, rule, regulation or order in any manner that does
not adversely affect the Lessor, its right, title or interest in the
Aircraft or any Engine or the interests of the Indenture Trustee or the
Owner Participant therein, or in any Operative Agreement (excluding any
interests indemnified for under the Tax Indemnity Agreement) and such
contest or non-compliance will not result in any material risk of loss,
forfeiture or damage to the Aircraft or in any risk of criminal liability
to the Lessor, 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 the same therewith at its
own cost and expense and will maintain the Aircraft or any Engine in
compliance with such law, license, rule, regulation or order; and
(f) not operate or locate the Airframe or any Engine, or suffer the
Airframe or any Engine to be operated or located in any area excluded from
coverage by any insurance policy required by the terms of Article 13
hereof, unless the Lessee has obtained, prior to the operation or location
of the Airframe or any Engine in such area, indemnification or other
insurance from the Government, or other insurance acceptable to the Lessor
in its sole discretion, against the risks and in the amounts required by,
and in compliance with, Article 13 hereof covering such area (and naming
the Lessor, or so long as this Lease is assigned to the Indenture Trustee,
the Indenture Trustee, as loss payee in respect of indemnification or
insurance payable in respect of casualties to the Aircraft) or unless the
Aircraft is only temporarily located in such area as a result of an
isolated occurrence attributable to a hijacking, medical emergency,
equipment malfunction, weather conditions, navigational error or other
similar unforeseen circumstances and the Lessee is using its good faith
efforts to remove the Aircraft from such area.
The Lessee may, at any time during the Term, install an engine or
engines on the Airframe and operate the Aircraft with such engine or engines
installed thereon and the Lessor shall have no right, title or interest in and
to any such engine until such time, if any, that such engine is returned to
the Lessor under Section 12.02 hereof.
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) in the case of clause (i) below, no Event of
Default shall have occurred and be continuing, (ii) the Lien of the Indenture
is not impaired thereby, (iii) all applicable governmental approvals in
connection therewith have been obtained and (iv) the Lessee shall comply with
the provisions of Article 13 hereof, the Lessee may without the prior written
consent of the Lessor:
(i) so long as the sublessee is generally meeting its material
obligations as they come due and is not subject to a proceeding or final
order under applicable bankruptcy, insolvency or reorganization laws on the
date the sublease is entered into, (A) sublease the Aircraft or any Engine
to a U.S. Air Carrier, (B) sublease the Aircraft or any Engine to an Air
Carrier which is principally based in and domiciled in one of the countries
listed on Schedule III of the Participation Agreement, (C) sublease the
Aircraft or any Engine to an Air Carrier that is principally based in and
a domiciliary of a country which is a party to the International Convention
on the Recognition of Rights in Aircraft, or (D) sublease the Aircraft or
any Engine to any other Air Carrier not described in this Section which
shall be reasonably acceptable to the Lessor as evidenced by its prior
written consent; provided, that, with respect to clauses (B) and (C) above,
at all times during any such sublease the United States of America
maintains normal diplomatic relations with the country in which such Air
Carrier is principally based and domiciled. 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 except that, in
the case of subparagraph (iv), possession of the Aircraft may only be
transferred at the direction of the Lessee) and (z) such sublease shall
expire not later than the expiration of the Basic Term or any applicable
Renewal Term hereof. Prior to any sublease to an Air Carrier permitted
under Section 7.02(a)(i)(B) or (C) above: (I) the maintenance standards of
the aeronautical authority of the country of domicile or principal
operation of the sublessee taken as a whole shall not be materially less
stringent than those of the FAA or at least comparable to those, taken as a
whole, required by the central civil aviation authority of any of the
United Kingdom, France, Canada, Japan or Germany; (II) the Lessee will
provide opinions of counsel (such counsel and the form and substance of
such opinions to be reasonably satisfactory to the Lessor and the Indenture
Trustee) with respect to (A) the legality, validity and enforceability of
the Operative Agreements and the sublease in such country, (B) that 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 Aircraft in the event of a requisition
of use or title by such government, (C) the Lessor's title to the subleased
equipment will be recognized, (D) 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), (E) that 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, (F) 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 to the Owner Participant and is provided at or before the
execution of such a sublease, at the Lessee's cost and expense), (G) that
there exist no possessory rights in favor of such sublessee under the laws
of such country which would, upon bankruptcy or insolvency of the Lessee
(and assuming that at such time such sublessee is not bankrupt or
insolvent) or of the sublessee, prevent the return of the Aircraft in
accordance with the terms of this Lease and (H) all necessary governmental
approvals required for the subleased equipment, the Airframe or any Engine,
as the case may be, to be imported and, to the extent reasonably
obtainable, exported from the applicable country of domicile upon
repossession of such subleased equipment by the Lessor (and the Lessee as
sublessor), shall have been procured at the Lessee's own cost and expense
by the Lessee prior to commencement of any such sublease; (III) duties and
tariffs, if applicable, shall be paid for by the Lessee and (IV) the Lessee
shall effect or cause to be effected at the Lessee's own cost and expense
all recordings and filings that are required, or reasonably requested by
the Lessor, to continue the Lessor's right, title and interest to the
Aircraft and rights under the Lease (and sublease) and to perfect and
maintain the priority of the Lien of the Indenture;
(ii) subject the Airframe or permit the Airframe to be subjected to
normal interchange agreements or subject the Engines or permit any Engine
to be subjected to normal interchange or pooling agreements or
arrangements, in each case customary in the airline industry, entered into
by the 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 or (x) any United States air carrier
certificated under Section 41102(a) of the Transportation Code or any
successor provision or (y) any "foreign air carrier" (as such term is
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code and 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, (III) is a party to the Convention
on the International Recognition of Rights in Aircraft 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 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 any 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. 12056, as amended, or any
similar or substitute programs of the Government, 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
Lessor and 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 then-current Renewal Term, the Basic Term or
the Renewal Term, as applicable, shall be automatically extended (including
the obligation to pay Rent per diem at a rate equal to the Fair Market
Rental) for six (6) months after the end of the Term (or, if shorter, until
the date of return of the Aircraft);
(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 Lessee 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 be for a term shorter than the Lease (as such Lease shall have
been extended in accordance with its terms) and shall include appropriate
provisions for the maintenance, inspection (as required by Section 14.01
hereof), operation, use 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
within ten (10) Business Days after the consummation of any sublease which has
a term greater than one year. The Lessee shall promptly provide the Lessor,
the Owner Participant and the Indenture Trustee a copy of any sublease (if so
requested by the Lessor) 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 any 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 Indenture Trustee or the Owner Participant 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 Owner Participant, the
Indenture Trustee and the Lessor incurred in connection with any subleasing or
proposed subleasing.
Section 7.03. Insignia. (a) Nameplate. On or prior to the Delivery
Date 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 "NBD
BANK, AS OWNER TRUSTEE, OWNER AND LESSOR," and, so long as such Airframe or
Engines shall be subject to the Lien of the Indenture, the additional
inscription "THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS INDENTURE
TRUSTEE, MORTGAGEE" (such nameplate to be replaced, if necessary, from time to
time with a nameplate reflecting the name of any successor Lessor or successor
Indenture Trustee, in each case as permitted by the Operative Agreements).
(b) Lessee's Marks. Except as provided in Section 7.03(a) hereof,
the Lessee will not allow the name of any Person to be placed on the Airframe
or any Engine as a designation that might be interpreted as a claim of
ownership; provided, that during the Term, the Lessee may cause the 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 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 hereof)
and shall thereupon be and become a Part; 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 U.S. 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 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 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
or sublessee, as the case may be, may in good faith contest the validity or
application of any such requirements in any reasonable manner that does not
involve any material risk of civil liabilities (unless indemnified by the
Lessee) or any risk of criminal penalties being imposed on or against the
Indenture Trustee, the Owner Participant or the Lessor, that does not involve
any material risk or danger of loss, forfeiture or sale of the Aircraft or any
Engine and that does not adversely affect the Lessor, its title or interest in
the Aircraft or any Engine, the first and prior perfected Lien and security
interest of the Indenture, or the interests of the Indenture Trustee or the
Owner Participant in the Airframe or any Engine, or in any Operative Agreement
(excluding any interests indemnified for under the Tax Indemnity Agreement).
All such alterations, modifications or additions shall be made on or before
the date mandated therefor, taking into account authorized 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.
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 in its usual course
of maintenance, 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, remaining useful life, or utility of the Airframe or the value or
utility of any Engine or impair its condition or airworthiness below its
value, remaining useful life (in the case of the Airframe only), utility,
condition and state of 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,
except that the value (but not the remaining useful life, utility, condition
or airworthiness) of the Aircraft may be reduced by the value, if any, of any
such Obsolete Parts which shall have been removed; provided that in no event
shall the aggregate value of all such Obsolete Parts which shall have been so
removed and not replaced exceed $500,000.
(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
9.01 or 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 Delivery Date or
any Part in replacement of, or substitution for, any such Part;
(ii) such Part is not required to be incorporated or installed in or
attached or added to the Airframe or such Engine pursuant to the terms of
Article 7 hereof or the first sentence of Section 9.01 hereof; and
(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 or remaining useful life of the Airframe
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.
(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 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 shall have occurred
and be continuing, the Lessee shall have the right, at its option, on any
Termination Date, on no more than 180 days' and at least 90 days' prior
written notice (which notice shall state the proposed Termination Date (the
"Proposed Termination Date")) to the Lessor and the Owner Participant to
terminate this Lease as of a Termination Date 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 the Lessee
that the Aircraft is obsolete or surplus to its needs. Unless the Lessor
has elected to retain the Aircraft as herein provided, the Lessee shall
have the right on no more than two occasions to revoke its notice of
termination no later than the Business Day prior to the day that is 15 days
prior to the Proposed Termination Date whereupon this Lease shall continue
in full force and effect. The Lessee shall reimburse any reasonable
expenses incurred by the Owner Participant in connection with any proposed
termination whether or not revoked.
(b) Sale Procedure. During the period from the giving of notice
pursuant to Section 10.01(a) hereof 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
the Aircraft. On the Proposed 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 so directed by
the Owner Participant, seek to obtain such bids. The Owner Participant shall
not inspect any bids received by the Lessee with respect to the Aircraft,
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 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 sum of the applicable Termination Value, the aggregate
amount of any Make-Whole Premium and all other expenses incurred by the
Lessor, the Owner Participant and the Indenture Trustee in connection with the
sale. 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) 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 and
upon discharge of the Lien of the Indenture in accordance with Article XIV
thereof, 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 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, 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 Proposed Termination Date over the Net Sales Price; plus
(ii) the installment of Basic Rent due with respect to the Aircraft on
the Proposed Termination Date to the extent payable in arrears but not to
the extent payable in advance; plus
(iii) all other amounts then due and payable by the Lessee (including,
without limitation, the aggregate amount of any Make-Whole Premium, if the
Proposed Termination Date occurs prior to the applicable Premium Termination
Date) under this Lease and any other Operative Agreement.
(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 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 (determined as
described in Section 10.01(b) above) 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 in Section 10.01(c) hereof.
(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 with respect to the Aircraft shall cease for any Rent Payment Date
occurring after the Proposed Termination Date and the Term shall end effective
as of the Proposed 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 Indenture Trustee and the Owner
Participant in connection with the proposed sale.
Section 10.02. Retention of Aircraft by the Lessor. (a) Generally.
Notwithstanding Section 10.01 hereof, 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) hereof, by
giving the Lessee and the Indenture Trustee written irrevocable notice of such
election not less than sixty (60) 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 the sum of:
(i) the installment of Basic Rent due with respect to the Aircraft on
the Proposed Termination Date to the extent payable in arrears but not to
the extent payable in advance; plus
(ii) all other amounts then due and payable by the Lessee under this
Lease and any other Operative Agreement, including the aggregate amount of
any Make- Whole Premium (if the Proposed Termination Date occurs prior to
the applicable Premium Termination Date), on or prior to the Payment Date.
(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) hereof) shall have paid to the
Holders and such Holders shall have received the entire outstanding principal
amount of, the aggregate amount of any Make-Whole Premium and accrued interest
on the Certificates on the Termination Date and all other sums due and owing
to the Indenture Trustee and the Holders on or prior to the Termination Date
under this Lease, the Indenture or any other Operative Agreement.
(c) Delivery of Aircraft to Lessor; Title to Engines. If the Lessor
elects to retain the 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 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 with respect to the Aircraft shall
cease for any Rent Payment Date occurring after the Termination Date and the
Term shall end effective as of the Termination Date.
Section 10.03. Voluntary Termination as to Engines. The Lessee shall
have the right at its option and at any time, on at least thirty (30) 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 Election Rights. The Lessee shall notify the
Lessor, the Indenture Trustee and the Owner Participant as soon as practicable
but in no event more than 10 Business Days following the occurrence of an
event which constitutes, or would with the passage of time constitute, an
Event of Loss with respect to the Airframe or with respect to the Airframe and
the Engines or engines then installed on the Airframe. By written notice to
the Lessor, the Indenture Trustee and the Owner Participant delivered within
60 days of the occurrence of any Event of Loss, the Lessee shall have the
right to elect the alternative set forth in Section 11.02 hereof or the
alternative set forth in Section 11.03 hereof. The Lessee's failure to make
such election within said 60-day period shall be deemed to be an election of
the alternative set forth in Section 11.02 hereof.
Section 11.02. Payment of Stipulated Loss Value. (a) The Lessee
shall, if it has so elected or is deemed to have so elected under Section
11.01 hereof, pay to the Lessor, by wire transfer of immediately available
funds on the earlier of (i) the fifteenth 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 120th 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
for the Aircraft, 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 Interim Rent and 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, plus (D) all other amounts owing by the
Lessee or the Owner Trustee to the Indenture Trustee or the Holders under the
Indenture and the other Operative Agreements, plus (E) 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, minus (F) if the relevant Stipulated Loss Value
Determination Date is a Rent Payment Date, the portion, if any, of the Interim
Rent and Basic Rent installment due and paid by the Lessee on such Stipulated
Loss Value Determination Date pursuant to Section 3.02 hereof to the extent
such Interim Rent and Basic Rent installment (or portion thereof) is
designated on Schedule II hereto as being payable in advance, together with
an imputed interest amount in respect of such advance payment of Interim Rent
and Basic Rent (or portion thereof) at the Debt Rate from the date of payment
of such Interim Rent and Basic Rent installment (or portion thereof) by the
Lessee to the Loss Payment Date; provided that in no event shall there be
subtracted pursuant to clause (F) an amount such that the Holders shall not be
paid in full.
(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 Interim Rent and 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), all
of the Lessor's right, title and interest, if any, in and to the Airframe,
Engines and engines 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, and will deliver to the Lessee such instrument as the
Lessor shall have received from the Indenture Trustee, releasing such Aircraft
from the Lien of the Indenture.
Section 11.03. Replacement of Airframe and Engines. (a) Generally.
So long as no Payment Default, Bankruptcy Default or Event of Default shall
have occurred and be continuing, and subject to Section 11.01 hereof, if the
Lessee has elected to replace the Airframe and Engines suffering an Event of
Loss pursuant to this Section 11.03, the Lessee shall cause to be duly
conveyed to the Lessor within one hundred twenty (120) days after the
occurrence of such Event of Loss, as replacement for the Airframe and Engines
with respect to which such Event of Loss has occurred, good and marketable
title to an Airbus A300F4-605R airframe manufactured after October 22, 1994
(the "Replacement Airframe") and good and marketable title to a number of
Replacement Engines equal to the number of Engines with respect to which an
Event of Loss has occurred, provided that following compliance with all other
terms of this Section 11.03 each Engine shall be of identical make and model
and manufactured after October 22, 1994 and, in the case of such Replacement
Airframe and each such Replacement Engine, will be owned by the Lessee free
and clear of all Liens not excepted in Section 6.01(a), (b), (c) and (e)
hereof, duly certified as an airworthy aircraft by the Aeronautics Authority,
and having in the case of the Replacement Airframe a value, remaining useful
life and utility, and in the case of the Replacement Engines a value and
utility, at least equal to, and being in as good operating condition as, the
Airframe and Engines with respect to which such Event of Loss occurred,
assuming that the Airframe and Engines were then in the condition and state of
airworthiness required to be maintained by the terms of this Lease immediately
prior to the occurrence of such Event of Loss. In such case and as a
condition to such substitution the Lessee, at its own cost and expense, will
also promptly:
(i) furnish the Indenture Trustee with originals of, and the Lessor
with copies of, full warranty bills of sale, in form and substance
satisfactory to the Lessor and the Indenture Trustee, with respect to such
Replacement Airframe and Replacement Engines 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 or manufacturers to such assignment;
(ii) cause such Replacement Airframe and Replacement Engines to be duly
registered in the name of the Lessor pursuant to the Transportation Code or
the applicable laws of any other jurisdiction in which the Aircraft may
then be registered in accordance with Section 6.03(b) of the Participation
Agreement;
(iii) cause a Lease Supplement with respect to such Replacement
Airframe and Replacement Engines to be duly executed by the Lessee and
recorded pursuant to the Transportation Code, or the applicable laws, rules
and regulations of any other jurisdiction in which the Aircraft may then be
registered as permitted by Section 6.03(b) of the Participation Agreement;
(iv) furnish the Lessor, the Indenture Trustee and the Owner
Participant with an appraisal or other report of a nationally recognized
aircraft appraiser based on an inspection of such Replacement Airframe and
Replacement Engines reasonably satisfactory to the Indenture Trustee and
the Owner Participant certifying that such Replacement Airframe has a
value, remaining useful life and utility, and such Replacement Engines have
a utility and, in the aggregate, value, at least equal to, and are in as
good operating condition as, the Airframe and Engines replaced, assuming
such Airframe and Engines were in the condition and repair required by the
terms of this Lease immediately prior to the occurrence of such Event of
Loss;
(v) furnish the Lessor, the Indenture Trustee and the Owner
Participant with such evidence as the Lessor or the Indenture Trustee may
reasonably request of compliance with the insurance provisions of Article
13 hereof with respect to such Replacement Airframe and Replacement Engines;
(vi) 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 consequence not otherwise indemnified for as a result of such
substitution or (B) an indemnity reasonably acceptable to the Lessor and
the Owner Participant against such consequences;
(vii) comply with the provisions of Section 9.08 of the Indenture;
(viii) cause an Indenture Supplement with respect to such Replacement
Airframe and Replacement Engines to be duly executed by the Lessor and the
Indenture Trustee and recorded pursuant to the Transportation Code, or the
applicable laws, rules and regulations of any other jurisdiction in which
the Aircraft may then be registered as permitted by Section 6.03(b) of the
Participation Agreement in order that the Lien of the Indenture shall
constitute a first and prior perfected Lien and security interest on and in
respect of such Replacement Airframe and Replacement Engines;
(ix) take such other action, including the filing of UCC financing
statements naming the Indenture Trustee as a secured party with the
Secretary of State of Michigan and the filing of a notice with the
Secretary of State of Tennessee, as the Lessor or the Indenture Trustee may
reasonably request in order that such Replacement Airframe and Replacement
Engines shall 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 Airframe and Engines;
(x) furnish 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 and the Owner
Participant to the effect that (A) the Lessor has good title to such
Replacement Airframe and Replacement Engines, and (B) such Replacement
Airframe and Replacement Engines have been validly subjected to the Lien of
the Indenture (with the effect and result that the Indenture constitutes a
first priority duly perfected security interest and Lien on such
Replacement Airframe and Replacement Engines); and
(xi) cause to be delivered to the Lessor, the Owner Participant and the
Indenture Trustee (a) an opinion of counsel to the Lessee addressed to the
Lessor, the Owner Participant and the Indenture Trustee as to the due
registration of the Aircraft and the due recordation of the requisite
documents or instruments and the validity and perfection of the Lien in
such Replacement Airframe and Replacement Engines and (b) a certificate
signed by the Vice President and Treasurer or any other duly authorized
officer of the Lessee stating that no Payment Default, Bankruptcy Default
or Event of Default has occurred or is continuing.
(b) Title to Replaced Equipment. Upon compliance by the Lessee with
the terms of Section 11.03(a) 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), all of the Lessor's right, title
and interest, if any, in and to the Airframe and Engines 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 of the Airframe and Engines with respect
to which such Event of Loss occurred from the Indenture and such other
documents as the Lessee reasonably requests, all at the Lessee's sole cost and
expense. Any Engine constituting part of the Aircraft, but not installed on
the Airframe when such Event of Loss occurred, shall continue to be property
of the Lessor and leased under this Lease as part of the same equipment as the
Replacement Airframe and Replacement Engines.
(c) Definitions. Each Replacement Airframe and Replacement Engine
shall be deemed part of the property leased under this Lease, each such
Replacement Airframe shall be deemed an "Airframe," each such Replacement
Engine shall be deemed an "Engine" and each such Replacement Airframe and
Replacement Engine shall be deemed part of the same Aircraft as was the
Airframe or Engine replaced.
(d) Rent Adjustments. An Event of Loss covered by this Section
11.03 shall not result in any change in Interim Rent, Basic Rent, Stipulated
Loss Values or Termination Values except as may be provided pursuant to the
Tax Indemnity Agreement and the Participation Agreement.
(e) Time Limitations. If the Lessee has elected to proceed under
this Section 11.03 but has not fully performed its obligations under this
Section 11.03 within 120 days of the occurrence of the applicable Event of
Loss, in the event that any amounts held by the Lessor (or, so long as the
Indenture shall be in effect, the Indenture Trustee) in respect of such Event
of Loss are less than the Stipulated Loss Value thereof, the Lessee will
deposit with the Lessor or the Indenture Trustee, as the case may be, the
amount of any deficiency as security on such 120th day. If the Lessee has
elected to proceed under this Section 11.03 but has not fully performed its
obligations under this Section 11.03 within 180 days of the occurrence of such
Event of Loss, the Lessee shall be deemed to have elected to proceed under
Section 11.02 hereof and shall immediately perform its obligations thereunder,
and the Indenture Trustee, or the Lessor if the Indenture shall have been
discharged, shall apply the amounts held by it pursuant to the preceding
sentence as a credit against such obligations.
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 Engine 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) and (e) hereof and having a value and
utility at least equal to, and being in as good operating condition as, the
Engine with respect to which such Event of Loss occurred, assuming such Engine
was of the value and utility and in the condition and repair required by the
terms of this Lease immediately prior to the occurrence of such Event of Loss,
provided that after any replacement, each Engine 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, 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
Transportation Code, or the applicable laws, rules and regulations of any
other jurisdiction in which the Aircraft may then be registered as
permitted by Section 6.03(b) of the Participation Agreement and, if the
Engine being replaced was registered under the applicable laws of 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 a nationally recognized aircraft appraiser reasonably satisfactory to
the Lessor and the Indenture Trustee 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 a result of such
substitution or (B) an indemnity reasonably acceptable to the Lessor and
the Owner Participant against such consequences;
(vi) comply with the provisions of Section 9.08 of the Indenture;
(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 Transportation Code, or the applicable laws, rules
and regulations of any other jurisdiction in which the Aircraft may be
registered as permitted by Section 6.03(b) of the Participation Agreement
in order that the Indenture shall constitute a first priority duly
perfected Lien and security interest on and in respect of such Replacement
Engine;
(viii) take such other action, including the filing of UCC financing
statements naming the Indenture Trustee as Secured Party with the Secretary
of State of Michigan and a notice filing with the Secretary of State of
Tennessee, 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 and the Owner Participant 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 priority duly
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), 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 of the Engine with respect to which such Event of Loss
occurred from the Indenture and such other documents as the Lessee reasonably
requests, 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 Interim Rent, Basic Rent, Stipulated Loss Values or Termination
Values, 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 the Airframe
and the Lessee has elected the alternative set forth in Section 11.02 hereof,
so much of such payments as shall not exceed the payments required to be paid
by the Lessee pursuant to clauses (A) and (B) of Section 11.02(a) hereof shall
be paid to the Lessor (or, if the Lien of the Indenture has not been
discharged, the Indenture Trustee) in reduction of the Lessee's obligations
under clauses (A) and (B) of Section 11.02(a) 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 if the Lessee Elects Replacement. If the payments
described in Section 11.05(a) hereof are received with respect to the Airframe
or with respect to the Airframe and the Engines or engines then installed on
the Airframe and the Lessee has elected the alternative set forth in Section
11.03 hereof, or if such payments 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 11.03 or Section 11.04
hereof, as the case may be, with respect to the Event of Loss for which such
payments are made.
Section 11.06. Requisition of an Airframe and the Installed Engines
for Use by Government. In the event of the requisition for use by the
Government or any other government of registry of the Aircraft, or any agency
or instrumentality 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 with
respect to such Airframe and Engines or engines 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 and, subject to Section 7.01(f)
hereof, the maintenance of required insurance) 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 unless a Payment Default, Bankruptcy Default or Event
of Default shall have occurred and be continuing (in which case such proceeds
shall be held (unless applied) pursuant to Section 23.01 hereof as security
for Lessee's obligations hereunder and under the Participation Agreement).
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).
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 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 to the extent not theretofore applied as provided
herein, shall be paid to the Lessee.
ARTICLE 12
RETURN OF AIRCRAFT
Section 12.01. Return of Aircraft. Unless the 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 10 or Article 17 hereof
or otherwise, 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 or on the
Termination Date, as the case may be, at the Lessee's principal maintenance
facility in Memphis, Tennessee or such other location specified by the Lessee
(and reasonably acceptable to the Owner Participant (or the Lessor so long as
the Lien of the Indenture is in effect)), within the continental United States
(on the Lessee's route structure as in effect on the return date) and the
Airframe shall be fully equipped with two Engines of the same or an improved
make and model as were delivered on the Delivery 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 agreements or arrangements, it being understood that all 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 15 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 any 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 (i) transfer to
the Lessee, without recourse or warranty (except as to the absence of Lessor's
Liens), and subject to the disclaimers provided 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" and (ii) deliver to the Lessee such instrument as the Lessor
shall have received from the Indenture Trustee, releasing such Engine 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 all original (or photocopied or
microfilmed copies thereof, if then permitted to be maintained in such form
under applicable law) logs, manuals, certificates and technical data, and
inspection, modification and overhaul records pertaining to the Airframe,
Engines or engines, which are required to be maintained under applicable rules
and regulations of the Aeronautics Authority or pursuant to the Lessee's or
any permitted sublessee's Aeronautics Authority-approved maintenance program
and all original (or photocopied or microfilmed copies thereof, if then
permitted to be maintained in such form under applicable law) records required
to be maintained with respect to the Aircraft under the maintenance program
approved by the aeronautical authority of any other country of registry of the
Aircraft. All records shall be returned in the format necessary to allow the
Lessee or any sublessee to comply with Section 12.04(a)(i) hereof.
Section 12.04. Condition of 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, unless otherwise requested by the Lessor not less than
90 days prior to the end of the Term to retain the then-existing
registration of the Aircraft, be duly registered in the name of the Lessor
or its designee pursuant to the Transportation Code;
(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), both of the same make and model, installed thereon,
together with the equipment, accessories or parts installed thereon on the
Delivery 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 12.04(b) hereof
and in as good operating condition as when delivered to the Lessor on the
Delivery Date, 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) to be terminated during the Term of the Lease and each Engine
(including any Replacement Engine) shall be serviceable in accordance with
the Lessee's FAA-approved maintenance program;
(vii) it shall be free and clear of all Liens and rights of others
(other than 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; and
(viii) it shall be in a standard cargo configuration.
(b) Remaining Time. If, at the time of return of the Aircraft, the
Airframe is not being maintained under a continuous maintenance program, then
the Airframe shall have remaining until the next scheduled "C" check at least
1,000 hours of operation. If, at the time of return of the Aircraft, the
Airframe is subject to a continuous maintenance program, there will be no
time-before-overhaul requirement. If, at the time of return of the Aircraft,
the Engines are not being maintained under an on-condition maintenance
program, then the average number of hours on such Engines remaining until the
next scheduled engine heavy maintenance visit shall be at least 25% of the
allowable hours between engine heavy maintenance visits permitted under the
Lessee's FAA-approved maintenance program. If, at the time of return of the
Aircraft, the Engines are subject to an on-condition maintenance program,
there will be no time-before-overhaul requirement. With respect to
maintenance under the Lessee's maintenance program approved by the Aeronautics
Authority, the Lessee shall have treated the Aircraft in a nondiscriminatory
manner with other Airbus A300F-600 series aircraft in the Lessee's fleet, and
the Aircraft shall be free and clear of all Liens and rights of others other
than 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.
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)(2)(B) of the definition of Event of Loss, this
Lease shall not terminate but shall continue in full force and effect until
the expiration of the six-month period (or, such shorter period referred to in
said clause (iii)(2)(B)) after the scheduled end of the Term, provided that
(i) Stipulated Loss Value and Termination 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 daily equivalent of the average
Basic Rent paid during the Basic Term and any then expiring Renewal Term, in
each case with such Basic Rent to include for this purpose the amounts
referred to in Section 3.01 hereof, 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) 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 hereof), the Lessee shall pay on demand as Basic Rent for each day
of such delay an amount equal to the Rent per diem at a rate equal to the Fair
Market Rental and this Lease shall continue for up to six (6) months after the
end of the 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 or claims with respect thereto 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.
Section 12.06. Storage. Upon any expiration or termination of this
Lease, at the written request of the Lessor given at least 45 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 by the
Lessor to move the Aircraft from one storage facility to another, such move
shall be at the risk and expense of the Lessor. 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, 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 such property (including, if possible, coverage through
its fleet policy).
Section 12.07. Special Markings. If requested by the Lessor, the
Lessee shall, at the Lessee's cost, remove or paint over all insignias and
other distinctive markings of the Lessee or any sublessee on the Aircraft and
repaint the stripped down areas in a workmanlike manner to match 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 (taking into account the provisions of this
Lease) 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) of Section 9.02(b) hereof as the Lessor may request.
ARTICLE 13
INSURANCE
Section 13.01. Comprehensive Airline Liability and Property Damage
Liability Insurance. (a) Comprehensive Airline Liability and Property Damage
Liability Insurance. The Lessee, at its own cost and expense, will maintain
or cause to be maintained with respect to the Aircraft, comprehensive airline
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 in no event
shall the limits of liability for all comprehensive airline liability
insurance be less than the amount, per occurrence, as set forth on the
insurance certificate delivered on the Delivery Date unless and only so long
as the Aircraft is not operated and appropriate insurance for the Aircraft on
the ground is maintained. The Lessee will also be required to maintain war
risk insurance if the Aircraft is operated in a war zone or, in the Lessee's
reasonable judgment, area of recognized hostilities, if such insurance is
available on commercially reasonable terms and if it is the custom for major
international Air Carriers flying comparable routes to carry such insurance.
(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 Indenture Trustee in its capacity as
such, the Owner Participant and each of their respective officers and
directors 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 any
action or inaction of 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 (other than any breach or violation of any
warranty, declaration or condition by such Additional Insured) as defined
under the policy of insurance required under this Section 13.01;
(iii) provide that if such insurance is cancelled 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 or
such insurers' broker of such cancellation, change or lapse;
(iv) provide that the insurers shall waive any rights of subrogation
against each Additional Insured, to the extent that the Lessee has waived
its rights under this Lease and the Participation Agreement; 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;
(v) 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;
(vi) 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;
(vii) provide that no Additional Insured shall have any obligation or
liability for premiums or other payments, if any, in connection with such
insurance; and
(viii) 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.
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 in
the country of registry) with such retentions (subject to the limitations set
forth in Section 13.06 hereof) and in such form, upon such terms and
conditions (including coverage for cost of claims), and in 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 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 on an agreed-value basis for an amount not less than an amount
equal to the Stipulated Loss Value for the relevant period for the Aircraft as
set forth on Schedule III to this Lease.
(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 (or, so long as the Indenture 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 the aggregate
in excess of $6,000,000, 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, a Bankruptcy 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
$6,000,000 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, a Bankruptcy 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, a Bankruptcy Default or an Event
of Default, such payment shall be made to the Indenture Trustee);
(iii) provide that if such insurance is cancelled 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 the Loss Payee for thirty days (except in the case
of war-risk coverage in which event the applicable period shall be seven
(7) days or such other period as may be customary) after receipt by the
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 or the Loss Payee (other than any action or inaction of such
Loss Payee) and shall insure the Lessor (in its individual capacity and as
Owner Trustee), the Owner Participant and the Indenture Trustee regardless
of any breach or violation of any warranty, declaration or condition
contained in such policies by the Lessee or the Loss Payee (other than any
breach or violation of any warranty, declaration or condition by the Loss
Payee) 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 and the Indenture Trustee to the extent that the Lessee
has waived its rights under this Lease or the Participation Agreement;
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) be primary and without rights of contribution from any other
insurance which is carried by the Loss Payee with respect to its interest
in the Aircraft;
(vii) provide that (except in the case of insurance with respect to
Engines and spare parts that have been removed from the Aircraft and
replaced with other Engines or engines, or spare parts, as the case may be)
such insurer shall waive any right of such insurer to any set-off or
counterclaim or any other deduction, whether by attachment or otherwise, in
respect of any liability of the Loss Payee;
(viii) provide that (except in the case of insurance with respect to
Engines and spare parts that have been removed from the Aircraft and
replaced with other Engines or engines or spare parts, as the case may be)
no Loss Payee shall have any obligation or liability for premiums or other
payments, if any, in connection with such insurance; and
(ix) in the event that separate policies are maintained to cover
all-risk ground and flight aircraft, hull and war risks and allied perils
insurance, include a 50/50 provisional claims settlement clause as
contained in the policies of insurance maintained by the Lessee with
respect to all other aircraft in the Lessee's fleet, and a copy of the
50/50 provisional claims settlement clause in effect on the Delivery Date
shall be attached to the insurance certificate issued on the Delivery Date.
Section 13.03. Application of Insurance Proceeds. (a) Generally.
All insurance proceeds (other than proceeds from policies carried by the
Lessor, the Indenture Trustee or the Owner Participant) 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 and the Lessee has elected or is deemed to have elected the
alternative set forth in Section 11.02 hereof, 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, Bankruptcy
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 (unless applied) 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 the Airframe or the
Airframe and the Engines or engines then installed on the Airframe and the
Lessee has elected the alternative set forth in Section 11.03 hereof, or if
such proceeds are received with respect to an Engine not then installed on
the Airframe and not replaced by an Engine or engine under the
circumstances contemplated by Section 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 Sections
11.03 or 11.04 hereof, as applicable, with respect to the Event of Loss for
which such proceeds are paid, provided that no Payment Default, Bankruptcy
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 (unless applied) 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
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,
Bankruptcy 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 (unless applied) 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 Delivery Date and thereafter
annually on or before the scheduled expiration date for such policy during the
Term, the Lessee shall cause an aviation insurance broker to furnish to the
Lessor and the Indenture Trustee a signed report, stating in reasonable detail
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 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 Indenture Trustee and
the Owner Participant 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. 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, the Indenture Trustee
or the Owner Participant 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, the Indenture Trustee or the Owner Participant shall
not result in a reduction of coverage or amounts payable under insurance
required 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, the Indenture Trustee or the Owner
Participant 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 policy 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 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 the Lessee to discriminate as
between insurance coverage on the Aircraft and insurance which the 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 reasonable times, and upon at
least five (5) Business Days' prior written notice to the Lessee, the Lessor,
the Indenture Trustee or the Owner Participant, or their respective authorized
representatives, may inspect the Aircraft and upon at least ten (10) Business
Days' prior written notice, all Aeronautics Authority required books and
records of the Lessee or any sublessee and all books and records required to
be maintained by the Lessee under its FAA-approved maintenance program (or
books and records required to be maintained by the aeronautical authority of
any other country of registry of the Aircraft) relating to the maintenance of
the Aircraft and such Persons shall keep any information obtained thereby
confidential and shall not disclose the same to any Person, except to a Person
described in Section 18.01 of the Participation Agreement. Any such
inspection of the Aircraft shall be a visual, walk-around inspection of the
interior and exterior of the Aircraft and shall not include opening any panel,
bays or the like without the express consent of the Lessee (except to the
extent any such inspection takes place when any such panel, bays or the like
are open). Notwithstanding the previous sentence, unless a Payment Default,
Bankruptcy Default, material Default relating to maintenance (without giving
effect to the provisos to Section 7.01(b) hereof) or an Event of Default shall
have occurred and be continuing, the Lessor, the Indenture Trustee, the Owner
Participant or their respective authorized representatives shall each be
entitled to inspect the Aircraft only one time during any consecutive
twelve-month period provided, however, that during the final year of the Basic
Term the Lessor shall be entitled to inspect on two (2) occasions. The Lessee
shall make any permitted sublease or transfer permitted under Section 7.02
hereof expressly subject to inspection rights consistent with this Article 14.
Section 14.02. No Obligation to Inspect. None of the Lessor, the
Indenture Trustee or the Owner Participant shall have any duty to make any
inspection pursuant to Section 14.01 hereof and no such party shall incur any
liability or obligation by reason of making or 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 domestic subsidiary of the Lessee which shall be a
certificated U.S. Air Carrier. Any such assignment, conveyance or sublease
shall in no way relieve the Lessee from any obligation hereunder or under 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 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 permitted assigns,
and shall inure, to the extent expressly provided herein and therein, 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 permitted assigns.
Section 15.02. Citizenship. The Lessee will at all times be a duly
certificated U.S. Air Carrier under the Transportation Code.
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 Interim Rent, Basic
Rent, Renewal Rent, Stipulated Loss Value or Termination Value, as the case
may be, or any payment pursuant to Section 17.02 of the Participation
Agreement, within ten Business Days after the date when due (except that
with respect to any failure to pay Excepted Payments, such failure shall
constitute an Event of Default at the discretion of the Owner Participant);
or
(b) the Lessee shall fail to make any payment of Supplemental Rent
(other than amounts described in clause (a) above) within 20 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 in accordance with the
provisions of Article 13 or such insurance lapses or is cancelled, provided
that no such lapse or cancellation shall constitute an Event of Default
until the earlier of (A) 30 days (or seven days or such shorter time as may
be standard in the industry with respect to war risk coverage) after
receipt by any Additional Insured of written notice of such lapse or
cancellation and (B) the date that such lapse or cancellation is effective
as to any Additional Insured and provided further that such failure shall
not constitute an Event of Default as long as the Aircraft remains grounded
and is insured as required while on the ground and not operated, or (ii)
the Aircraft shall be operated at any time when comprehensive airline
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 the Tax Indemnity Agreement) 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 after the Lessee
shall have received written notice from the Lessor 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 Lessee receives
notice thereof which undertaking shall be diligently and continuously
pursued using the Lessee's reasonable 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
Transportation Code pursuant to the Lessee's covenants and agreement in
Section 6.03(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,
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 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 ninety (90) 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 ninety (90)
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 ninety (90) 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) 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 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 this Lease shall be
deemed declared in default without any further act or notice), and at any time
thereafter the Lessor may do, and the Lessee shall comply with, one or more
of the following with respect to all or any part of the Airframe and the
Engines, 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 all or such part of the Airframe and the Engines as
the Lessor may demand in the manner and condition required by, and
otherwise in accordance with all of the provisions of this Lease (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 such Airframe or Engines are
located or believed to be located and take immediate possession of and
remove such Airframe and Engines (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 or any Engine, 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
Interim Rent, Basic Rent and Renewal Rent due on or before the date of such
sale (and, if Interim Rent, Basic Rent or Renewal Rent is payable in
arrears, the pro rata portion of the installment of Interim Rent, 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 Indenture
Trustee, the Owner Participant or any Holder 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 Interim Rent,
Basic Rent or Renewal Rent due on Rent Payment Dates occurring after the
payment date specified in such notice), any installment of Interim Rent,
Basic Rent, Renewal Rent and any Supplemental Rent due on or before such
payment date (and, to the extent Interim Rent, Basic Rent or Renewal Rent
is payable in arrears, the pro rata portion of the installment of Interim
Rent, Basic Rent or Renewal Rent due on the next succeeding Rent Payment
Date in respect of the period commencing on the Stipulated Loss Value
Determination Date referred to below and ending on the date of such
payment), 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 such
Stipulated Loss Value Determination Date, together with (A), if Interim
Rent or Basic Rent is payable in advance, interest, to the extent permitted
by applicable law, at the Debt Rate on the amount of such Stipulated Loss
Value from such Stipulated Loss Value Determination Date to the date for
payment set forth in such notice from the Lessor and (B) in all cases,
interest, to the extent permitted by applicable law at the Past Due Rate on
the excess of such Stipulated Loss Value over such Fair Market Value, from
the date as of which such Stipulated Loss Value is payable 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), the Fair
Market Value of the Aircraft or such portion shall, at the option of the
Lessor to the extent legally enforceable, be zero and, if the Fair Market
Value of the Aircraft is deemed to be zero, 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) all of its right, title and interest in the
Aircraft or such portion, to the Lessee;
(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 Interim Rent, Basic Rent or
Renewal Rent due after the date on which such sale occurs) any unpaid
Interim Rent, Basic Rent or Renewal Rent due on or before the date on which
such sale occurs (and, to the extent Interim Rent, Basic Rent or Renewal
Rent is payable in arrears, the pro rata portion of the installment of
Interim Rent, Basic Rent or Renewal Rent due on the next succeeding Rent
Payment Date in respect of any period commencing on the Stipulated Loss
Value Determination Date referred to below and ending on the date of such
sale), 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 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 (x), if Interim Rent or Basic Rent is payable in advance, interest, to
the extent permitted by applicable law, at the Debt Rate on such Stipulated
Loss Value from such Stipulated Loss Value Determination Date to the date
of such sale and (y) in all cases, 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, the Indenture Trustee or the Owner
Participant 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 hereof or in placing the
Airframe or Engines in the condition and airworthiness required by such
Article or in connection with any inspection, use, operation, maintenance,
insurance, 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 any 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, the Lessor 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, and
it being understood that the Lessor shall not be liable for any act or
omission of the Indenture Trustee or any other Person claiming through the
Indenture Trustee) 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
Section 19.01. Further Assurances. Promptly upon the execution and
delivery of the Lease Supplement and the Indenture Supplement, the Lessee will
cause each of them and this Lease, the Trust Agreement and the Indenture to be
duly filed for recordation in accordance with the Transportation Code 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 the Indenture, in recordable
form, subjecting to this Lease and the Indenture any Replacement Airframe
and/or Replacement Engines delivered by the Lessee pursuant to Section 11.03
hereof and any Replacement Engine delivered by the Lessee pursuant to Section
11.04 hereof 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 that the obligations of the Lessee
to pay all costs and expenses of every character, whether seen or unforeseen,
ordinary or extraordinary, or structural or nonstructural, 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 (unless expressly excluded from
the terms hereof, the costs and expenses of the Lessor and the Owner
Participant shall include the reasonable fees and expenses of their respective
outside counsel), 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. 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 set-off (except to the extent set forth in Section 3.05
hereof), 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 or the Owner Participant or 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 Transportation Code (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 or any doctrine of force majeure or
impossibility of performance;
(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;
(iv) any Liens, encumbrances or rights of any other Person with
respect to the Aircraft, the invalidity or unenforceability or lack of due
authorization or other infirmity of this Lease or any other Operative
Agreement or document or instrument executed pursuant hereto or thereto, or
any lack of right, power or authority of the Lessor or the Lessee or any
sublessee or any other party to any other Operative Agreement to enter into
this Lease or any other Operative Agreement or any such document or
instrument; or
(v) 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 suspend performance under,
terminate, cancel, quit, rescind or surrender this Lease, the Airframe, or any
Engine or part thereof, other than in accordance with the terms hereof.
(c) 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, except the
Lessee has the right to the extent provided in Section 3.05 hereof to offset a
portion of payments due from the Lessee to the Lessor pursuant thereto.
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 a 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. Intentionally Left Blank.
Section 22.03. Consent of Lessee to Assignment of Lease as Security.
The Lessee hereby acknowledges and consents to the Indenture Trustee's rights
pursuant to the terms of the Indenture to receive payments (other than
Excepted Payments) due under this Lease, 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.
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 Payment
Default, Bankruptcy Default or Event of Default, and, at such times as there
shall not be continuing a Payment Default, Bankruptcy 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, 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 (which may include the
Owner Trustee or the Indenture Trustee in their respective individual
capacities or any Affiliate thereof), having a combined capital and surplus
of at least $500,000,000 and having a rating of "A" or better from Moody's
or S&P; or
(iv) commercial paper rated A-1/P-1 by S&P and Moody's respectively
(or if neither such organization shall rate such commercial paper at any
time, by any nationally recognized statistical rating organization in the
United States of America) equal to the highest rating assigned by such
rating organization (which may include commercial paper issued by the Owner
Trustee or the Indenture Trustee in their respective individual capacities
or any Affiliate thereof).
(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, Taxes and
expenses, if any, incurred by the Lessor or the Owner Participant in
connection with such investment), unless a Payment Default, Bankruptcy 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, Taxes and expenses, if any, incurred by the Indenture Trustee or
the Lessor or the Owner Participant in connection with such investment), such
amount to be disposed of in accordance with the terms of the Indenture or the
Lease, 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 NBD 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 the Lessor herein are for the purpose and with the intention of binding
only the Lessor's Estate, and that in no case whatsoever shall NBD 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 and the Indenture
Trustee, that nothing herein contained shall be construed as creating any
liability on NBD, 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 of NBD, and that so far as NBD, 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 by the
Lessor of any of its obligations 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 NBD in its individual capacity set forth in
the Participation Agreement or the Trust Agreement. The term "Lessor" as used
in this Lease shall include any trustee succeeding NBD 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 Lease 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 mail and (c) if given by FedEx (or, if a Default or Event of
Default shall have occurred and be continuing, by other comparable courier
service), 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, facsimile (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 and the Owner Participant;
(b) if to the Lessor or Owner Trustee, to its office at 611 Woodward
Avenue, Detroit, Michigan 48226, Attention: Corporate Trust Administration
Department; telephone (313) 225-3185, facsimile (313) 225-3420; 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 Owner Participant at
the Owner Participant's address as provided in subsection (c) below;
(c) if to the Owner Participant, in accordance with the Participation
Agreement; and
(d) if to the Indenture Trustee, to its office at 4 Chase Metrotech
Center, 3rd Floor, Brooklyn, New York 11245, Attention: Corporate Trust
Administration; telephone (718) 242-5854, facsimile (718) 242-3529; or to
such other address as the Indenture Trustee shall from time to time
designate in writing to the Lessor, the Lessee and the Owner Participant.
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Headings 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 provisions of Section 8.01 and
Article XIII 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 chattel-paper counterpart, which shall
be the counterpart containing the receipt executed by the Indenture Trustee on
its signature page.
Section 26.07. Counterparts. 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 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 by signing any such counterpart.
Section 26.08. Public Release of Information. Provided no Event of
Default shall have occurred and be continuing, each party shall in each
instance obtain the prior written approval of each party concerning the exact
text and timing of news releases, articles and other informational releases to
the public media concerning this Lease.
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties. It is the intent of the parties
to this Lease that for all purposes (including, without limitation, U.S.
Federal income tax purposes) this Lease will be a true lease, 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 Lease and
the other Operative Agreements in respect of the Aircraft 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.
Section 27.03. Finance Lease. This Lease is a "finance lease" within
the meaning of Section 2-A-103(g) of the Uniform Commercial Code.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Lease to be duly executed as of the date first above written.
LESSOR: NBD BANK,
not in its individual capacity,
but solely as Owner Trustee
By: ______________________________________________
Name:
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By: _______________________________________________
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director - Structured Finance
Receipt of this original counterpart of the Lease is hereby
acknowledged on this __ day of October 1995.
Indenture Trustee: THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
not in its individual capacity,
but solely as Indenture Trustee
By: _____________________________________________
Name:
Title:
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement
and the Series Supplements) referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require. In the
case of any conflict between the provisions of this Schedule and the
provisions of any Operative Agreement, the provisions of such Operative
Agreement shall control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
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 other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. In the case
of amounts payable to the Lessor, the Owner Participant, or any corporate
Affiliate 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.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee
pursuant to the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe) together with the two Engines (or any
Replacement Engine or Engines) whether or not any of such initial or
Replacement Engines may from time to time be installed on such Airframe or may
be installed on any other airframe or on any other aircraft, including any
aircraft substituted pursuant to Section 11.03 of the Lease. Prior to
delivery of the initial Lease Supplement, references in Section 3.05 of the
Participation Agreement to Aircraft shall mean the Airbus A300F4-605R
airframe bearing FAA Registration Number N663FE and Manufacturer's serial
number 766, together with the two General Electric CF6-80C2-A5F engines
bearing Manufacturer's serial numbers 705-233 and 705-234.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number and manufacturer's serial number
specified in the initial Lease Supplement, including (i) all Parts in respect
thereof and (ii) any replacement airframe which may be substituted pursuant to
Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee and the Owner Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N663FE), to be dated the Certificate Closing Date
among the Lessee, the Owner Trustee, not in its individual capacity, but
solely as Owner Trustee, the Owner Participant and the Indenture Trustee
not in its individual capacity, but solely as Indenture Trustee, as
originally executed or as amended, modified or supplemented with the
consent of all the parties thereto.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with a copy of such report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France, and its successors and assigns.
AVSA Consent and Agreement. The Consent and Agreement dated as of
October 26, 1995, executed by AVSA, as the same may be amended, modified or
supplemented from time to time.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
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 either does or with the giving of notice or lapse of
time or both would constitute an Event of Default.
Basic Rent. The periodic rent payable for the Aircraft throughout
the Basic Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 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 July 2, 2020, 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.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York and Memphis, Tennessee, and after the
Lien of the Indenture is discharged, Detroit, Michigan.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N663FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Chase. The Chase Manhattan Bank (National Association) and its
successors and permitted assigns.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
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 Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Commencement Date. July 2, 1996.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of October
26, 1995, executed by the Manufacturer, as the same may be amended, modified
or supplemented from time to time.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The principal office of the
Indenture Trustee located at 4 Chase Metrotech Center, 3rd Floor, Brooklyn,
New York 11245, or such other office 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 Participant
and the Owner Trustee.
Corporate Trust Department. The principal office of the Owner Trustee
located at 611 Woodward Avenue, Detroit, Michigan 48226, or such other office
at which the Owner Trustee's corporate trust business shall be administered
which the Owner Trustee shall have specified by notice in writing to the
Lessee, the Owner Participant and the Indenture Trustee.
Cut-Off Date. December 29, 1995.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
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 Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, 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 Section 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts related thereto. 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.
The term "Engines" means, as of any date of determination, both Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of October 26, 1995,
executed by the Engine Manufacturer, as the same may be amended, modified or
supplemented from time to time.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995 between
the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. Has the meaning set forth in Section 7.06 of the
Participation Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 90 days due to theft or disappearance or such longer
period, not to exceed 90 days from the end of such initial 90-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by 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,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, 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 six months (or the date of return of
the Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine as of the end of the Lease Term 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
A300F-600 series aircraft equipped with engines of the same make and model as
the Engines for a period not to exceed six (6) consecutive months, unless the
Lessee, prior to the expiration of such six (6) month period, shall be
diligently carrying forward in a similar manner as are then being carried
forward with respect to other aircraft of the Lessee so as to not discriminate
against the Aircraft by reason of its leased status, all steps which are
necessary or desirable to permit the normal use of the Aircraft or Airframe
or, in any event, if such use of the Aircraft or the Airframe shall have been
prohibited for a period of eighteen (18) consecutive months or until the end
of the Term, if earlier. The date of such Event of Loss shall be (s) the 91st
day or the 180th day, as the case may be, following loss of such property or
its use due to theft or disappearance (or the end of the Term or the Lessee's
abandonment of diligent efforts to recover such property, if earlier); (t) the
61st day following the date of any destruction, damage beyond economic repair
or rendition of such property permanently unfit for normal use; (u) the date
of any insurance settlement on the basis of a total loss or constructive or
compromised total loss; (v) the date of any condemnation, confiscation,
seizure or requisition of title of such property; (w) the 181st day following
condemnation, confiscation, seizure or requisition for use of such property by
a foreign government referred to in clause (iii)(2)(A) above (or the end of
the Term or the date of any insurance settlement described therein, if earlier
than such 181st day); (x) the last day of the Term in the case of requisition
for use of such property by the Government; (y) the last day of the six (6)
month or eighteen (18) month period, referred to in clause (iv) above (or if
earlier, the end of the Term or abandonment of the Lessee's efforts to restore
the normal use of the Aircraft). 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. If an Event of Loss described in any of clauses (i)
(A), (iii) or (iv) above shall occur, Lessor may elect, within 30 days
following the date upon which such Event of Loss is deemed to have occurred,
to waive such Event of Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments (and
interest thereon to the extent provided in the Operative Agreements) paid or
payable by the Lessee in respect of the Owner Participant, the Owner Trustee
in its individual capacity or any of their respective successors, permitted
assigns, directors, officers, employees, servants and agents or Affiliates,
pursuant to the Participation Agreement or any indemnity hereafter granted to
the Owner Participant or the Owner Trustee in its individual capacity pursuant
to the Lease or the Participation Agreement, (ii) proceeds of public liability
insurance (or government indemnities in lieu thereof) in respect of the
Aircraft payable as a result of insurance claims paid for the benefit of, or
losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Section 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) payments constituting increases
in Interim Rent or Basic Rent attributable to payments arising pursuant to
Section 5 of the Tax Indemnity Agreement and (vi) any right to demand, collect
or otherwise receive and enforce the payment of any amount described in
clauses (i) through (v) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
the second paragraph of Section 4.01(a) are met.
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 the Aircraft. 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, assuming that the Aircraft (or other property) is
unencumbered by the 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; provided that in connection
with any determination pursuant to or for the purposes of Article 17 of the
Lease, the Aircraft shall be appraised on an "as is, where is" basis. Fair
Market Value shall be determined in accordance with the provisions of Section
4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rent. Semi-annual payments during the Fixed Renewal
Term equal to 50% of the average actual semi-annual Basic Rent payable during
the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
French Pledge Agreement. The French Pledge Agreement dated as of
October 26, 1995 between the Owner Trustee and the Indenture Trustee.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of
the Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of NBD, in its individual capacity and as Owner
Trustee and Lessor, the Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, any Owner Participant Guarantor, 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 and the Trust Indenture
Estate.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N663FE) dated as of October 26, 1995, between
the Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement, and as said Indenture may from time to time be
further supplemented or amended, including any amendment or supplement thereto
entered into from time to time pursuant to the applicable provisions of the
Indenture.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N663FE) to be dated the Delivery Date, as such Indenture and Security
Agreement Supplement shall be amended or supplemented from time to time and
any other supplement to the Indenture, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. The Chase Manhattan Bank (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 document included in the Trust Indenture Estate 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 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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Interim Rent. The periodic rent payable for the Aircraft throughout
the Interim Term pursuant to Section 3.02 of the Lease, adjusted pursuant to
Article 3 of the Lease.
Interim Term. The period commencing on the Owner Participant Payment
Date and ending at the end of the day immediately preceding the Commencement
Date.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N663FE) dated as of October 26, 1995, entered into by the Lessor and the
Lessee concurrently with the execution and delivery of the Indenture, 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 one or more Lease
Supplements entered into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N663FE) to be dated the Delivery Date, as such Lease
Supplement shall be amended or supplemented from time to time and any other
supplement to the Lease, substantially in the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and permitted assigns.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. NBD Bank, a Michigan banking corporation, 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 the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA Bill
of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the GTA, the Engine Warranty
Assignment, the Engine Consent, any warranty with respect to the Airframe and
the Engines, all amounts of Interim Rent, Basic Rent and Supplemental Rent,
including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee 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) not include any Excepted Payment and (ii) include all property
intended to be subjected to the Indenture by the Granting Clause thereof.
Lessor's Liens. Liens on the Lessor's Estate or the Trust Indenture
Estate arising as a result of (i) claims against 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)
acts or omissions 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 or expressly prohibited under
the Operative Agreements and any act or omission of the Owner Participant
which 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, Owner Participant, Lessor's Estate or the trust created by the
Trust Agreement which are not required to be indemnified against by the Lessee
pursuant to the Participation Agreement by reason of Section 8.01(b) or
9.01(b) thereof and which are not required to be indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement, or (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 other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Article 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.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings 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.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
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 Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the 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, if any, of
(i) the present values of all remaining scheduled payments of such principal
amount or portion thereof 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 the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
unpaid principal amount of such Certificate.
Manufacturer. Airbus Industrie G.I E., a groupement d'interet
economique formed under the laws of France, and its successors and assigns.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
NBD. NBD Bank, a Michigan banking corporation.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Interim Rent and Basic Rent set forth in Schedule II of the
Lease, discounted at a rate per semi-annual period equal to the Debt Rate.
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, (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 are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, if any, the Owner Trustee
Guaranty, if any, any Ancillary Agreement entered into by or with the written
consent of the Indenture Trustee, which by its terms is an Operative
Agreement, the Certificates outstanding at the time of reference, the
Indenture, the Indenture and Security Agreement Supplement, the Consent and
Agreement, the AVSA Consent and Agreement, the Consent and Guaranty (to the
extent assigned by the Purchase Agreement Assignment), the Engine Consent and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
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.
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, its right, title and
interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Amount. The amount described in Section 3.07 of the
Participation Agreement.
Owner Participant Guarantor. The provider of an Owner Participant
Guaranty.
Owner Participant Guaranty. Any guaranty delivered in compliance with
Section 7.03(d) of the Participation Agreement.
Owner Participant Payment Date. March 19, 1996.
Owner Trustee. NBD, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement, and its successors and permitted
assigns.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Interim Rent, Basic
Rent, Stipulated Loss Value and Termination Value percentages or the EBO
Price, as the case may be, as such assumptions may be adjusted for events
which have been the basis of adjustments to Rent pursuant to Section 3.04 of
the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N663FE), dated as of October 26, 1995, among the Lessee,
the Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee and the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee, 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, prior to
replacement thereof in accordance with the Lease, which may be removed
therefrom.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
February 1, 1993, as amended and restated as of October 1, 1995 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 1995 Pass Through Certificates,
Series B1, 1995 Pass Through Certificates, Series B2 or 1995 Pass Through
Certificates, Series B3, 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 Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust, 1995-B1,
Federal Express Pass Through Trust, 1995-B2 or Federal Express Pass Through
Trust, 1995-B3, 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. The Chase Manhattan Bank (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% 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% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. The Owner Participant Payment Date, and each January 2
and July 2 commencing July 2, 1996.
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).
Preliminary Term. The period commencing on the Delivery Date and
ending at the end of the day on the day immediately preceding the Owner
Participant Payment Date.
Premium Termination Date. With respect to the Certificates having a
Maturity in 2014, November 7, 2007 and with respect to the Certificates having
a Maturity in 2019, October 7, 2017.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N663FE), dated as of October 26, 1995
between the Lessor and the Lessee, as the same may be amended, modified or
supplemented from time to time.
Purchase Price. Has the meaning specified in Schedule IV to the
Participation Agreement.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), March 4, 1996 for the Owner
Participant Payment Date, December 18 for January 2 Payment Dates and June 17
for July 2 Payment Dates, whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 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 or more terms 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 Interim
Rent, Basic Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each January 2 and July 2 commencing July 2, 1996.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) manufactured after October 22,
1994 of the same or of equal or greater value, remaining useful life and
utility as the Engine being replaced, together with all Parts relating to such
engine; provided, however, that if such replacement engine is not a General
Electric CF6-80C2-A5F engine, such replacement engine must then be commonly
used in the commercial aviation industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee or the
Indenture Trustee, any officer in its Corporate Trust Department or Corporate
Trust Administration, as the case may be, designated by such Person to perform
obligations under the Operative Agreements, with respect to the Owner
Participant, the president or any vice president with direct responsibility
for the transactions contemplated by the Operative Agreements, and with
respect to any other party, any corporate officer or (except in the case of
the Owner Participant) 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.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Securities Act. The Securities Act of 1933, as amended.
Series Supplement. The Series Supplement 1995-B1 to be executed and
delivered by the Lessee and the Pass Through Trustee, the Series Supplement
1995-B2 to be executed and delivered by the Lessee and the Pass Through
Trustee or the Series Supplement 1995-B3 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.
Specified Investments. Direct obligations of the United States of
America and obligations fully guaranteed by the United States of America
maturing within 30 days of the date of purchase.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Term, the amount determined by multiplying the Purchase Price
by the percentage set forth in Schedule III of the Lease under the heading
"Stipulated Loss Value Factor" opposite such date (as such Schedule III may be
adjusted from time to time as provided in Section 3.04 of the Lease), and
during any Renewal Term, the amount determined pursuant to Section 4.01(b) of
the Lease. Notwithstanding any other provisions of the Lease or the
Participation Agreement or the Indenture, each Stipulated Loss Value shall be,
under any circumstances and in any event, an amount, together with so much of
the arrears portion of Interim Rent and Basic Rent due and owing through the
date of payment of Stipulated Loss Value as does not constitute an Excepted
Payment, at least sufficient to pay in full as of such date of payment the
aggregate unpaid principal amount of and accrued interest on the Certificates
outstanding on such date of payment. Subject to the immediately preceding
sentence, it is understood and agreed that the amounts set forth on Schedule
III of the Lease, for dates other than Rent Payment Dates on which arrears
Interim Rent and Basic Rent is due, fully reflect appropriate Interim Rent and
Basic Rent accruals and credits of unearned Interim Rent and Basic Rent and,
accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
Substantial Authority. For Federal income tax purposes, shall have
the meaning applicable for purposes of Section 6662 of the Code and relevant
Treasury regulations.
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 any Ancillary Agreement
or any other Operative Agreement to the Lessor, the Owner Participant or
others, including, without limitation, payments of Stipulated Loss Value, EBO
Price and amounts calculated by reference to Termination Value and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement or the Tax Indemnity
Agreement or any other Operative Agreement, but excluding Interim Rent and
Basic Rent.
Tax. Shall have the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N663FE), dated as of October 26, 1995, between
the Lessee and the Owner Participant, as from time to time modified, amended
or supplemented pursuant to its applicable provisions.
Term. The Preliminary Term, the Interim Term and the Basic Term of
the lease for the Aircraft under the Lease and, if renewed pursuant to Section
4.01 of the Lease, each Renewal Term for the Aircraft for which the Lease is
renewed, or 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 July 2, 2001 in the case of Article 10 of the Lease, and in the
case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling on
July 2, 2009 or July 2, 2012, (ii) Section 4.02(a)(D) or (E) of the Lease, a
Rent Payment Date that is on or after the fifth anniversary of the
Commencement Date and (iii) Section 4.02(a)(F) of the Lease, January 2, 2015.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code (which, among
other things, recodified the Federal Aviation Act of 1958, as amended to the
time of such recodification), as amended and in effect on the date of the
Lease or as subsequently amended, or any successor or substituted legislation
at the time in effect and applicable, and the regulations promulgated pursuant
thereto.
Treasury Yield. (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the 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.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N663FE), dated as of October 26, 1995, between the Owner Participant
and the Owner Trustee in its individual capacity, as from time to time
modified, amended or supplemented pursuant to its applicable provisions and in
accordance with the Operative Agreements.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. The several Underwriters named in the Underwriting
Agreement.
Underwriting Agreement. The Underwriting Agreement dated October 26,
1995 among the Lessee, Goldman Sachs & Co., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated.
United States, U.S. or U.S. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
SCHEDULE II
OWNER PARTICIPANT AMOUNT
(As a Percentage of Purchase Price)
Date Amount
March 19, 1996 7.32977613%
INTERIM RENT
(As a Percentage of Purchase Price)
Rent
Payment
Date Advance Arrears
[On each Payment Date, Lessee will pay as Interim 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 Payment Date, together with
the accrued and unpaid interest thereon.]
BASIC RENT
(As a Percentage of Purchase Price)
Rent
Payment
Date Advance Arrears
[On each 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 Payment Date, together with
the accrued and unpaid interest thereon.]
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
(D) Purchase Option Referred to in Section 4.02(a)(D) of the Lease.
In the event of any Significant Expenditure (as defined below) with respect
to the Aircraft, which the Lessee has certified in a certificate of the
Lessee's President, Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer, Treasurer or Assistant Treasurer furnished to the
Lessor, the Indenture Trustee and the Owner Participant, is (as determined
in the Lessee's sole discretion) necessary, desirable or required to be
made at any time on or after the fifth anniversary of the Commencement
Date, the Lessee may elect to terminate the Lease and purchase the Aircraft
on the first Rent Payment Date occurring at least six months after the
Owner Participant has notified the Lessee that they will not permit such
Significant Expenditure to be financed as contemplated in clause (ii) of
the definition of "Significant Expenditure" below, for, at the Lessee's
option, either (1) the payment to the Lessor in immediately available funds
of an amount equal to the greater of the Fair Market Value of the Aircraft
and 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 7.11 of the Participation Agreement and Section 2.12 of the
Indenture, of all of the Lessor's obligations 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, and (II) the Fair Market Value of the Aircraft, both computed as
of such Rent Payment Date, over (B) the unpaid principal of the
Certificates outstanding plus accrued interest as of such date; it being
understood that the Fair Market Value for this purpose shall be determined
without regard to any Significant Expenditure not yet made.
For purposes of this paragraph (D) the term "Significant Expenditure"
means a single expenditure or a series of related 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 (i) in
the Lessee's reasonable judgment would exceed $5,000,000, (ii) the Owner
Participant will not permit to be financed on similar terms and conditions
then available for similar transactions through the issuance of additional
non-recourse notes of the Lessor or through additional equity investments
of the Owner Participant or both (it being understood that this Section
4.02(a)(D) shall not impose any obligation on the Owner Participant to
provide such financing) and (iii) are improvements which the Lessee has
performed or is in the process of performing in respect of at least 25% of
the A300-600 series aircraft (including the Aircraft) operated by the
Lessee. The Lessee, prior to notifying the Owner Participant and the
Indenture Trustee in accordance with Paragraph (F) of this Schedule V of
its election to purchase the Aircraft pursuant to Section 4.02(a)(D) of the
Lease, shall notify the Owner Participant of the non-severable improvements
which would satisfy the conditions described in clauses (i) and (iii) of
the preceding sentence, and provide the Owner Participant with a reasonable
opportunity to permit the financing thereof as contemplated in clause (ii)
of such sentence. The Owner Participant shall notify the Lessee of their
decision with respect to such financing within 60 days after the Lessee has
given the notice described in the preceding sentence.
(E) Purchase Option Referred to in Section 4.02(a)(E) of the Lease.
In the event that a Burdensome Indemnity Payment shall occur at any time on
or after the fifth anniversary of the Commencement Date, 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 for, at the Lessee's option, either (1) the
payment to the Lessor in immediately available funds of an amount equal to
the greater of the Fair Market Value of the Aircraft and 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 7.11 of the Participation Agreement and Section 2.12 of the
Indenture, 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
and (II) the Fair Market Value of the Aircraft, both computed as of the
Burdensome Indemnity Payment Date, over (B) the unpaid principal of the
Certificates outstanding plus accrued interest as of such date.
For purposes of this paragraph (E), the term "Burdensome Indemnity
Payment" means a Loss as defined in the Tax Indemnity Agreement which under
the circumstances cannot be commercially reasonably avoided by the Lessee
which causes the aggregate net present value as of the determination date,
discounted semi-annually at the Debt Rate, of all such Losses (but
excluding any Losses for which the Owner Participant shall have waived its
right to payment under the Tax Indemnity Agreement) paid or payable by the
Lessee which can be avoided through a purchase by the Lessee of the
Aircraft, to exceed 2.5% of the Purchase Price.
(F) Notice from the Lessee. The Lessee shall give the Lessor, the
Owner Participant and the Indenture Trustee not more than 180 days nor less
than 90 days prior written notice of its election to purchase pursuant to
Section 4.02(a)(D) or 4.02(a)(E) of the Lease. Such notice shall either
direct the Lessor to prepay the Certificates in full on such Termination
Date pursuant to Section 6.02 of the Indenture or state that the Lessee
shall exercise its option to assume the Certificates pursuant to Section
7.11 of the Participation Agreement and Section 2.12 of the Indenture. The
Lessee's notice pursuant to Section 4.02(a)(D) or 4.02(a)(E) hereof shall
become irrevocable 10 days prior to the applicable purchase date designated
in such notice but if any such notice is revoked, the Lessee shall no
longer be entitled to purchase the Aircraft as a result of the facts and
circumstances originally giving rise to such right and will pay all
reasonable expenses of the Owner Participant, the Owner Trustee and the
Indenture Trustee in connection therewith.
Exhibit A
to
Lease Agreement
THE INTEREST OF LESSOR UNDER THIS LEASE SUPPLEMENT
NO. __ IS SUBJECT TO A SECURITY INTEREST
LEASE SUPPLEMENT NO. __
(Federal Express Corporation Trust No. N663FE)
LEASE SUPPLEMENT NO. __ (Federal Express Corporation Trust No.
N663FE), dated ________ __, ____, between NBD BANK, a Michigan banking
corporation, not in its individual capacity, but solely as Owner Trustee under
the Trust Agreement (Federal Express Corporation Trust No. N663FE) dated as of
October 26, 1995 (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 (Federal Express Corporation Trust No. N663FE) dated as of
October 26, 1995 (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. __, for the purpose of leasing under the
Lease the aircraft and engines described below ("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. Delivered 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 A300F4-605R
Aircraft (the "Delivered Aircraft"), which Delivered Aircraft as of the date
of this Lease Supplement consists of the following:
(a) Airbus A300F4-605R Airframe; U.S. Registration Number ______;
Manufacturer's Serial No. ___; and
(b) Two (2) General Electric CF6-80C2-A5F Engines bearing,
respectively, Manufacturer's Serial Nos. ___-___ and ___-___ (each of which
engines has 750 or more rated takeoff horsepower or the equivalent of such
horsepower).
Section 2. Delivery Date. The Delivery Date of the Delivered
Aircraft is the date of this Lease Supplement.
Section 3. Purchase Price. The Purchase Price of the Delivered
Aircraft shall be the amount set forth in Ancillary Agreement I.
Section 4. Term. The Term for the Delivered Aircraft shall commence
on the Delivery Date, and shall terminate on ______, ____, unless earlier
terminated or extended pursuant to the terms of the Lease.
Section 5. Rent. The Lessee hereby agrees to pay the Lessor Rent
for the Delivered Aircraft throughout the Term thereof in accordance with the
terms and provisions of the Lease.
Section 6. Lessee's Acceptance of Delivered Aircraft. The Lessee
hereby confirms to the Lessor that the Delivered Aircraft has been duly marked
in accordance with Section 7.03 of the Lease and that the Lessee has accepted
the Delivered Aircraft for all purposes hereof and of the Lease, and 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 AVSA, the Manufacturer, the Engine Manufacturer or any vendor of
equipment included in the Aircraft.
Section 7. 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 8. 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 9. Agreement as Chattel Paper. To the extent that this Lease
Supplement 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 Supplement may be created through the transfer or
possession of any counterpart other than the original chattel-paper
counterpart, which shall be the counterpart containing the receipt executed by
the Indenture Trustee on its signature page.
Section 10. 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: NBD BANK,
not in its individual capacity,
but solely as Owner Trustee
By: __________________________________________
Name:
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By: ___________________________________________
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director -
Structured Finance
Receipt of this original counterpart of the Lease Supplement is hereby
acknowledged on this __ day of _________ 1995.
Indenture Trustee: THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
not in its individual capacity,
but solely as Indenture Trustee
By: ___________________________________________
Name:
Title:
Exhibit B
to
Lease Agreement
PURCHASE AGREEMENT ASSIGNMENT
(Federal Express Corporation Trust No. N663FE)
PURCHASE AGREEMENT ASSIGNMENT (Federal Express Corporation Trust
No. N663FE), dated as of October 26, 1995 between FEDERAL EXPRESS CORPORATION,
a Delaware corporation (the "Assignor" or "Lessee"), and NBD Bank, a Michigan
banking corporation, not in its individual capacity but solely as Owner
Trustee ("NBD" or the "Lessor") under the Trust Agreement (Federal Express
Corporation Trust No. N663FE), dated as of October 26, 1995 (as amended,
modified or supplemented from time to time, the "Trust Agreement"), between
Chrysler Capital Corporation (the "Owner Participant") and NBD.
W I T N E S S E T H :
WHEREAS, the Assignor and AVSA (as hereinafter defined) are
parties to the Purchase Agreement (as hereinafter defined), providing, among
other things, for the delivery by AVSA to the Assignor of certain aircraft,
including the Aircraft (as hereinafter defined) covered by the Participation
Agreement (as hereinafter defined); and
WHEREAS, pursuant to the Consent and Guaranty (as hereinafter
defined), the Guarantor (as hereinafter defined) has agreed, among other
things, to unconditionally guarantee the due and punctual performance by AVSA
of all of its liabilities and obligations as set forth in the Purchase
Agreement; and
WHEREAS, pursuant to the Lease (as hereinafter defined), the
Lessor will lease the Aircraft to the Assignor; and
WHEREAS, on the terms and conditions hereof and of the Consents
and Agreements (as hereinafter defined), (a) the Assignor desires to assign
to the Lessor (i) the Assignor's right under the Purchase Agreement and the
Consent and Guaranty (insofar as it relates to the Purchase Agreement) to
purchase the Aircraft and (ii) certain of the Assignor's remaining rights,
title and interests in, to and under the Purchase Agreement and the Consent
and Guaranty (insofar as they relate to the Purchase Agreement and the
Aircraft) and (b) the Lessor desires to accept the assignments and, except
as otherwise provided herein, to assume the obligations of the "Buyer"
under the Purchase Agreement, to the extent assigned to it pursuant hereto;
and
WHEREAS, pursuant to the Indenture (as herewith defined), the
Lessor will assign, inter alia, its rights hereunder to the Indenture Trustee
(as herewith defined); and
WHEREAS, such assignments and acceptances are intended to permit
consummation of the transactions contemplated by the Participation Agreement;
and
WHEREAS, AVSA and the Guarantor are willing to execute and deliver
their respective Consents and Agreements;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Defined Terms. For all purposes of this Assignment, except
as otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following meanings:
"Aircraft" shall mean the Airbus A300F4-605R Freighter aircraft,
bearing manufacturer's serial number 766, delivered under the Purchase
Agreement, including the two General Electric Model CF6-80C2A5 (Fadec
equipped) engines installed on such aircraft on the date of delivery
thereof pursuant to the Purchase Agreement.
"AVSA" shall mean AVSA, S.A.R.L., a French societe a
responsabilite limitee, and its successors and assigns.
"AVSA Consent and Agreement" shall mean the Consent and Agreement
of AVSA attached hereto, as amended, modified or supplemented from time
to time.
"Bill of Sale" shall mean the bill of sale for the Aircraft to be
delivered by AVSA.
"Certificates" shall have the meaning ascribed thereto in the
Participation Agreement.
"Consent and Guaranty" shall mean the Consent and Guaranty of the
Guarantor attached to the Purchase Agreement, together with all
amendments, waivers, and consents heretofore entered into or heretofore
granted thereunder.
"Consents and Agreements" shall mean the AVSA Consent and Agreement
and the Guarantor Consent and Agreement.
"Delivery Date" shall have the meaning ascribed thereto in the
Purchase Agreement with respect to the Aircraft.
"Guarantor" shall mean Airbus Industrie G.I.E., a French groupement
d'interet economique, and its successors and assigns.
"Guarantor Consent and Agreement" shall mean the Consent and
Agreement of the Guarantor attached hereto, as amended, modified or
supplemented from time to time.
"Indenture" shall mean the Trust Indenture and Security Agreement
(Federal Express Corporation Trust No. N663FE), dated as of October 26,
1995, between the Lessor and the Indenture Trustee (as herewith
defined), as amended, modified or supplemented from time to time.
"Indenture Trustee" shall mean The Chase Manhattan Bank (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.
"Lease" shall mean the Lease Agreement (Federal Express
Corporation Trust No. N663FE), dated as of October 26, 1995, between the
Lessor and the Assignor, as amended, modified or supplemented from time
to time.
"Participation Agreement" shall mean the Participation Agreement
(Federal Express Corporation Trust No. N663FE), dated as of October 26,
1995, among the Assignor, the Owner Participant (as defined herein), the
Lessor, the Indenture Trustee and the Pass Through Trustee (as defined
therein), as amended, modified or supplemented from time to time.
"Purchase Agreement" shall mean the Airbus A300-600F Purchase
Agreement, dated as of July 3, 1991, between the Assignor and AVSA,
together with all exhibits, appendices and letter agreements thereto and
all amendments, waivers and consents granted thereunder.
All other terms used herein in capitalized form that are
defined in the Lease shall, when used herein, have the meanings specified
in the Lease.
2. Assignment. (a) Generally. The Assignor has sold,
assigned, transferred and set over and does hereby sell, assign, transfer and
set over unto the Lessor (i) the right upon valid tender of the Aircraft by
AVSA in accordance with the Purchase Agreement to purchase the Aircraft
pursuant to the Purchase Agreement for the amount specified in the invoice in
respect thereof to be delivered by AVSA on the Delivery Date therefor
(including, without limitation, the right to accept delivery of the Aircraft
through an appointed representative which may be an employee of the Assignor)
and the right to be named the "Buyer" in the Bill of Sale and the right to
enforce the same under the Consent and Guaranty, (ii) the right to take and
hold the Aircraft and (iii) all of the Assignor's other right, title and
interest in and to the Purchase Agreement and the Consent and Guaranty
(insofar as it relates to the Purchase Agreement), as and to the extent that
the same relates to the Aircraft and, except to the extent reserved below or
as otherwise set forth in Section 2(b) below, the operation of the Aircraft,
including, without limitation, in such assignment to the Lessor (A) all claims
for damages in respect of such Aircraft arising as a result of any default by
AVSA under the Purchase Agreement, including, without limitation, all
warranty, service life policy and indemnity provisions in the Purchase
Agreement in respect of the Aircraft and all claims thereunder and under the
Consent and Guaranty and (B) any and all rights of the Assignor to compel
performance of the terms of the Purchase Agreement and the Consent and
Guaranty in respect of the Aircraft, including all warranty and
indemnification provisions in the Purchase Agreement and the Consent and
Guaranty and claims thereunder with respect to the Aircraft; reserving to the
Assignor, however,
(1) all the Assignor's rights and interests in and to the Purchase
Agreement and the Consent and Guaranty as and to the extent that the
Purchase Agreement and the Consent and Guaranty relate to aircraft other
than the Aircraft and the purchase and operation of such aircraft and to
the extent that the Purchase Agreement and the Consent and Guaranty
relate to any other matters not directly pertaining to the Aircraft,
(2) all the Assignor's rights and interests in or arising out of any
payments, advance payments or deposits made by the Assignor in respect
of the Aircraft under the Purchase Agreement or amounts credited or to
be credited or paid or to be paid by the Guarantor or AVSA to the
Assignor in respect of the Aircraft or otherwise (except amounts
credited with respect to warranty claims to the extent set forth in
Section 2(b) hereof)as of the date of purchase,
(3) the rights to demand, accept and retain all rights in and to all
property (other than the Aircraft), data and service, other than data
and service provided under Clauses 12 and 13 of the Purchase Agreement,
that AVSA and the Guarantor are obligated to provide or do provide
pursuant to the Purchase Agreement and the Consent and Guaranty,
respectively, with respect to the Aircraft,
(4) all of the Assignor's right, title and interest in and to the
Purchase Agreement and the Consent and Guaranty as and to the extent
that the same relates to specification changes, performance and
operation pertaining to the Aircraft, other than sub-Clause 2.1 and
Clauses 12 and 13 of the Purchase Agreement and under the Consent and
Guaranty to the extent relating thereto,
(5) the right to obtain services, training, data and demonstration and
test flights pursuant to the Purchase Agreement,
(6) the right to maintain plant representatives at the Guarantor's plant
pursuant to the Purchase Agreement, and
(7) all rights set forth in any exhibits, appendices and letter
agreements, as at any time amended, modified or supplemented, to the
Purchase Agreement, and under the Consent and Guaranty to the extent
relating thereto; provided, however, that the reservation set forth in
this Section 2(a)(7) shall not in any way limit the rights of the Lessor
arising under Sub-clause 2.1 and Clauses 12 and 13 of the Purchase
Agreement.
(b) Assignment of Rights. If and so long as there shall not
exist and be continuing an Event of Default, the Lessor hereby authorizes
the Lessee, to the exclusion of the Lessor, to exercise in the Lessee's
name all rights and powers of the "Buyer" under the Purchase Agreement and
to retain any recovery or benefit resulting from the enforcement of any
warranty or indemnity in respect of the Aircraft, except that the Lessee
may not enter into any change order or other amendment, modification or
supplement to the Purchase Agreement without the written consent or
countersignature of the Lessor if such change order, amendment,
modification or supplement would result in any rescission, cancellation or
termination of the Purchase Agreement in respect of the Aircraft or in any
way limit the rights of the Lessor arising under Clauses 12 and 13 of the
Purchase Agreement or any of the other rights assigned hereunder.
(c) Acceptance of Assignment. Subject to the terms hereof the
Lessor accepts the assignment contained in this Section 2.
(d) Requirement of Notice to AVSA. For all purposes of this
Assignment, AVSA shall not be deemed to have knowledge of and need not
recognize any Event of Default, unless and until AVSA shall have received
written notice thereof from the Lessor or the Indenture Trustee addressed to
its Chief Executive Officer, 2, Rond Point Maurice Bellonte, 31700 Blagnac,
France (telex 521155F) and, in acting in accordance with the terms of the
Purchase Agreement and this Assignment, AVSA may act with acquittance and
conclusively rely upon any such notice.
3. Certain Rights and Obligations of the Parties. (a)
Assignor Remains Liable. It is expressly agreed that, anything herein
contained to the contrary notwithstanding: (a) the Assignor shall at all
times remain liable to AVSA under the Purchase Agreement to perform all the
duties and obligations of the "Buyer" thereunder to the same extent as if this
Assignment had not been executed; (b) the exercise by the Lessor of any of the
rights assigned hereunder shall not release the Assignor from any of its
duties or obligations to AVSA under the Purchase Agreement except to the
extent that such exercise by the Lessor shall constitute performance of such
duties and obligations; and (c) except as provided in the next succeeding
paragraph, none of the Lessor, the Indenture Trustee, the Owner Participant or
the Pass Through Trustee shall have any obligation or liability under the
Purchase Agreement by reason of, or arising out of, this Assignment or be
obligated to perform any of the obligations or duties of the Assignor under
the Purchase Agreement or to make any payment or to make any inquiry as to the
sufficiency of any payment received by any of them or to present or file any
claim or to take any other action to collect or enforce any claim for any
payment assigned hereunder.
(b) Lessor Bound by Purchase Agreement. Without in any way
releasing the Assignor from any of its duties or obligations under the
Purchase Agreement, the Lessor confirms for the benefit of AVSA that, insofar
as the provisions of the Purchase Agreement relate to the Aircraft, in
exercising any rights under the Purchase Agreement, or in making any claim
with respect to the Aircraft or other goods and services delivered or to be
delivered pursuant to the Purchase Agreement, the terms and conditions of the
Purchase Agreement disclosed to the Lessor in writing shall apply to, and be
binding upon, the Lessor to the extent of its respective interests assigned
hereunder to the same extent as the Assignor.
(c) Limit of Effect of this Assignment. Nothing contained
herein shall (i) subject AVSA or the Guarantor to any liability to which it
would not otherwise be subject under the Purchase Agreement or (ii) modify in
any respect the contractual rights of AVSA or the Guarantor thereunder
(except, in each case, as provided in the attached Consents and Agreements).
(d) Appointment as Attorney-in-Fact. The Assignor does hereby
constitute, effective at any time after an Event of Default shall have
occurred and be continuing, the Lessor and its successors and assigns to be
the Assignor's true and lawful attorney, irrevocably, with full power (in the
name of the Assignor or otherwise) to ask, require, demand, receive, compound
and give acquittance for any and all monies and claims for monies due and to
become due under, or arising out of, the Purchase Agreement and the Consent
and Guaranty in respect of the Aircraft, to the extent that the same have been
assigned as provided in this Assignment and, for such period as the Lessor,
its successors and assigns may exercise rights with respect thereto under this
Assignment, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute (or, if
previously commenced, assume control of) any proceedings and to obtain any
recovery in connection therewith which the Lessor, its successors and assigns,
may deem to be necessary or advisable in the premises.
4. Further Assurances. The Assignor and the Lessor each agree
that, at any time and from time to time, upon the written request of any other
party hereto, it will promptly and duly execute and deliver any and all such
further instruments and documents and take such further action as the other
may reasonably request in order to obtain the full benefits of this Assignment
and of the rights and powers herein granted.
5. Assignor's Representations, Warranties and Covenants. The
Assignor does hereby represent and warrant that (a) the Purchase Agreement,
insofar as it relates to the Aircraft, is in full force and effect and is
enforceable against the Assignor 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,
and the Assignor is not in default thereunder and (b) the Assignor has not
assigned or pledged, and hereby covenants that it will not assign or pledge,
the whole or any part of the rights hereby assigned or any of its rights with
respect to the Aircraft under the Purchase Agreement not assigned hereby, to
anyone other than the Lessor as herein provided.
6. No Amendment of Purchase Agreement. So long as the Lease is
in effect, the Lessor agrees that it shall not enter into any agreement that
would amend, modify, supplement, rescind, cancel or terminate the Purchase
Agreement or the Consent and Guaranty in any respect or in any way limit the
rights of the Assignor arising under Clauses 12 and 13 of the Purchase
Agreement or any of the other rights assigned hereunder (except as set forth
above when there has been an Event of Default) without the prior written
consent of the Assignor.
7. Execution of Assignment. This Assignment is executed by the
Assignor and the Lessor concurrently with the execution and delivery of the
Participation Agreement and the Lease.
8. Confidentiality. The Lessor agrees that it will not
disclose to any third party the terms of the Purchase Agreement or this
Assignment, except (a) as required by applicable law or governmental
regulation, (b) as contemplated in the Lease or the Participation Agreement
(including as set forth in Section 17.01 of the Participation Agreement) or
(c) with the consent of the Assignor, the Guarantor and AVSA.
9. Assignment as Collateral. Each party hereto consents to the
assignment and pledge by the Lessor to the Indenture Trustee, as security for
the Certificates to be issued under the Indenture and the other obligations
secured thereby as specified in the Indenture, of all of the Lessor's right,
title and interest in and to the Purchase Agreement and the Consent and
Guaranty under this Assignment.
10. Counterparts. This Assignment 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.
11. GOVERNING LAW. THIS ASSIGNMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
12. Successors and Assigns. This Assignment shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
13. Notices. All notices with respect to the matters contained
herein shall be delivered in the manner and to the addresses provided in
Article 14 of the Participation Agreement.
14. No Oral Amendments. Neither this Assignment nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against whom
the enforcement of such termination, amendment, supplement, waiver or
modification is sought.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
to be duly executed as of the day and year first above written.
FEDERAL EXPRESS CORPORATION
By ______________________
Title:
NBD BANK,
not in its individual capacity,
but solely as Lessor
By ______________________
Title:
AIRBUS INDUSTRIE CONSENT AND AGREEMENT
The undersigned, Airbus Industrie G.I.E., a groupement d'interet
economique established under Ordonnance No. 67-821 dated September 23, 1967 of
the Republic of France (the "Guarantor"), hereby acknowledges notice of and
consents to all of the terms of the Purchase Agreement Assignment, between
Federal Express Corporation, a Delaware corporation, and NBD Bank, a Michigan
banking corporation, not in its individual capacity, but solely as Lessor,
with respect to Federal Express Corporation Trust No. N663FE, dated as of
October 26, 1995, (hereinafter called the "Assignment", the defined terms
therein being hereinafter used with the same meaning), and hereby confirms to
the Assignor and the Lessor and their respective successors and assigns that:
(i) except as provided in the Assignment, all representations,
warranties, and agreements of the Guarantor under the Consent and
Guaranty with respect to the Aircraft shall inure to the benefit of the
Lessor and its respective successors and assigns, to the same extent as
if the Lessor and its successors and assigns had originally been named
the "Buyer" of the Aircraft therein;
(ii) the Guarantor will pay to the person or entity entitled to
receive the corresponding payment from AVSA under the terms of the
Assignment all amounts required to be paid by the Guarantor with respect
to the Aircraft;
(iii) the Guarantor consents to the sale of the Aircraft by AVSA
to the Lessor, the assignment of Assignor's rights and interests under
the Purchase Agreement and the Consent and Guaranty to the Lessor
pursuant to the Purchase Agreement Assignment, the assignment of the
Lessor's rights and interests in the Assignment to the Indenture Trustee
pursuant to the Indenture, the lease of the Aircraft by the Lessor to
the Assignor under the Lease; and
(iv) from and after the delivery of the Aircraft pursuant to the
Purchase Agreement and payment in full for the Aircraft as described in
the Participation Agreement, the Guarantor will not assert any lien or
claim against the Aircraft or any part thereof or the Lessee, the
Lessor, the Owner Participant or the Indenture Trustee arising on or
prior to such delivery or in respect of any work or services performed
on or prior thereto.
The Guarantor hereby represents and warrants that:
(A) the Guarantor is a groupement d'interet economique duly
organized and existing in good standing under the laws of the Republic
of France and has the requisite power and authority to enter into and
perform its obligations under the Consent and Guaranty, the Airbus
Guaranty and this Consent and Agreement;
(B) the making and performance, in accordance with their terms of
the Consent and Guaranty, the Airbus Guaranty and this Consent and
Agreement have been duly authorized by all necessary corporate action on
the part of the Guarantor, do not require the consent or approval of the
members of the Guarantor, do not require the consent or approval of,or
the giving of notice to, or registration with, or the taking of any
other action in respect of, any French governmental authority or agency
except for those that have already been obtained and do not contravene
any law binding on the Guarantor or contravene the Guarantor's charter
documents or any indenture, credit agreement or other contractual
agreement to which the Guarantor is a party or by which it is bound;
(C) the Consent and Guaranty constituted, as of the date thereof
and at all times thereafter to and including the date of this Consent
and Agreement, and each of this Consent and Agreement and the Airbus
Guaranty constitutes, binding obligations of the Guarantor enforceable
against the Guarantor in accordance with their respective terms; and
(D) the Consent and Guaranty is in full force and effect.
THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Dated as of October ____, 1995
AIRBUS INDUSTRIE G.I.E.
By _____________________
Name:
Title:
AVSA CONSENT AND AGREEMENT
The undersigned, AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France
("AVSA"), hereby acknowledges notice of and consents to all of the terms of
the Purchase Agreement Assignment between Federal Express Corporation, a
Delaware corporation, and NBD Bank, a Michigan banking corporation, not in
its individual capacity, but solely as Lessor, with respect to Federal
Express Corporation Trust No. N663FE, dated as of October 26, 1995,
(hereinafter called the "Assignment", the defined terms therein being
hereinafter used with the same meaning), and hereby confirms to the
Assignor and the Lessor and their respective successors and assigns that:
(i) except as provided in the Assignment, all representations,
warranties, indemnities and agreements of AVSA under the Purchase
Agreement with respect to the Aircraft shall inure to the benefit of the
Lessor and its respective successors and assigns to the same extent as
if the Lessor and its successors and assigns had originally been named
the "Buyer" of the Aircraft therein;
(ii) AVSA will pay to the Assignor all payments required to be
paid by it under the Purchase Agreement, unless and until AVSA shall
have received written notice from the Indenture Trustee or the Lessor
(or, after the Indenture shall have been discharged in full, the Lessor)
addressed to it at the address and in the manner set forth in the
Assignment that an Event of Default has occurred and is continuing,
whereupon AVSA will make any and all payments thereafter required to be
made by it under the Purchase Agreement, to the extent that the right to
receive such payment has been assigned under the Assignment ("AVSA
Payments"), directly to the Indenture Trustee (or, after the Indenture
shall have been discharged in full, the Lessor) if AVSA shall have
received notice as aforesaid that an Event of Default has occurred and
is continuing;
(iii) The Lessor shall not be liable for any of the obligations or
duties of the Assignor under the Purchase Agreement, nor shall the
Assignment give rise to any duties or obligations whatsoever on the part
of the Lessor owing to AVSA, except for the agreements of the Lessor set
forth in the Assignment, including, but not limited to Section 3(b) of
the Assignment;
(iv) AVSA consents to the assignment of the Lessor's rights and
interests in the Assignment to the Indenture Trustee pursuant to the
Indenture and to the lease of the Aircraft by the Lessor to the Lessee
under the Lease; and
(v) from and after the delivery of the Aircraft pursuant to the
Purchase Agreement and payment in full for the Aircraft as described in
the Participation Agreement and the Assignment, AVSA will not assert any
lien or claim against the Aircraft or any part thereof arising on or
prior to such delivery or in respect of any work or services performed
on or prior thereto.
AVSA hereby represents and warrants that:
(A) AVSA is a societe a responsabilite limitee duly organized and
existing in good standing under the laws of the Republic of France and
has the requisite power and authority to enter into and perform its
obligations under the Purchase Agreement and this Consent and Agreement;
(B) the making and performance, in accordance with their terms,
of the Purchase Agreement and this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of AVSA, do not
require any approval of AVSA's shareholders, do not require the consent
or approval of, the giving notice to, or registration with, or the
taking of any other action in respect of, any French governmental
authority or agency except for those that have already been obtained and
do not contravene any law binding on AVSA or contravene AVSA's charter
documents or any indenture, credit agreement or other contractual
agreement to which AVSA is a party or by which it is bound;
(C) each of the Purchase Agreement and this Consent and Agreement
constitutes a binding obligation of AVSA enforceable against AVSA in
accordance with its terms, subject to: (i) the limitations of applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally; and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), which principles do not make the
remedies available at law or in equity with respect to the Purchase
Agreement and this Consent and Agreement inadequate for the practical
realization of the benefits intended to be provided thereby and
(D) the Purchase Agreement is in full force and effect as to
AVSA.
THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Dated as of October ____, 1995
AVSA, S.A.R.L.
By:_______________________
Name:
Title:
Exhibit C
to
Lease Agreement
ENGINE WARRANTY ASSIGNMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N663FE)
Words and phrases appearing in this Engine Warranty Assignment, (the
"Assignment") shall have the respective meanings as defined below:
A. General Terms Agreement means that agreement dated as of July 3, 1991,
(the "GTA") by and between the Engine Manufacturer and Federal Express
Corporation ("Fed Ex"), including the Engine Product Support Plan at
Exhibit B, insofar as such Product Support Plan relates to the Engine
Warranties (the "Product Support Plan"), but excluding any and all
letter agreements attached thereto.
B. Engine Warranties means the Engine Manufacturer's New Engine Warranty,
New Parts Warranty, Ultimate Life Warranty and Campaign Change
Warranty, as set forth in the Engine Manufacturer's Product Support
Plan which forms a part of the GTA, and as limited by the applicable
terms of such GTA and Product Support Plan.
C. Engine means each of the CF6-80C2-A5F series engines installed on the
aircraft at the time of delivery to the Assignor, each bearing Engine
Manufacturer's serial numbers 705-233 and 705-234, respectively.
D. Replacement Engine means each of the CF6-80C2-A5F series engines which
are not subject to this Assignment and are a replacement or
substitute for an Engine, excluding, however, any engines obtained
from the Engine Manufacturer's lease pool which are installed on the
aircraft for the limited purpose of permitting the continued
operation of the aircraft during the period necessary to effect or
complete repairs or overhaul of an Engine.
E. Lease means the Lease Agreement (Federal Express Corporation Trust No.
N663FE), dated as of October 26, 1995, (the "Lease") between NBD Bank
(not in its individual capacity, but solely as Owner Trustee), as
Lessor ("Lessor") and Fed Ex, as Lessee, as amended, modified or
supplemented from time to time.
All other capitalized terms used and not defined herein that are in the
Lease shall, when used herein, have the meanings specified in the Lease.
1
Fed Ex, pursuant to the terms and conditions herein, hereby sells, assigns,
transfers and sets over unto Lessor all of its rights, claims and interests in
and under the GTA and the Product Support Plan, as such apply to the Engines,
to enforce in Lessor's own name such rights as Fed Ex may have with respect to
the Engine Warranties, to the extent the same relate to the Engines, and to
retain any benefit resulting therefrom; provided, however, that there is
reserved to Fed Ex all of its other rights, claims and interests under the GTA
except as expressly stated above; and provided, further, that Fed Ex shall,
during the term of the Lease (but only so long as no Event of Default shall
have occurred and be continuing), have the benefit of and shall be entitled to
enforce (as it shall deem appropriate), either in its own name or (at the cost
of Fed Ex) in the name of the Lessor for the use and benefit of Fed Ex, any
and all Engine Warranties available to the Lessor under the GTA in respect of
the Engines and each Part thereof, and the Lessor agrees (but only so long as
no Event of Default shall have occurred and be continuing) at Fed Ex's expense
to do, execute and deliver such further acts, deeds, matters or things as may
be reasonably requested by Fed Ex and necessary to enable Fed Ex to obtain
customary warranty services furnished for the Engines or any Part thereof
pursuant to the Engine Warranties. Fed Ex shall, at the Lessor's expense,
cooperate with the Lessor and take such action as the Lessor reasonably deems
necessary to enable the Lessor to enforce such rights, claims and interests as
assigned herein.
2
Notwithstanding anything in this Assignment or the Consent attached hereto
and incorporated herein to the contrary, Fed Ex and Lessor confirm expressly
for the benefit of the Engine Manufacturer that:
A. Lessor agrees that it will not, without the prior written consent of
the Engine Manufacturer, disclose, directly or indirectly, to any
third party, any of the terms of the Engine Warranties disclosed to
it by the Engine Manufacturer incident to effecting the assignment
herein; provided, however, that (1) Lessor may use, retain and
disclose such information to its special counsel, bank examiners or
similar regulatory authorities, auditors and public accountants, who
shall not further disclose such terms, (2) Lessor may use, retain and
disclose such information to the Owner Participant, the Indenture
Trustee and any Certificate Holder, as the case may be, and their
special counsel, bank examiners or similar regulatory authorities,
auditors and public accountants, who shall not further disclose such
terms, (3) Lessor may disclose such information as required by
applicable laws, governmental regulations, subpoena, or other written
demand under color of legal right, but it shall first, as soon as
practicable upon receipt of such demand and to the extent permitted
by applicable laws, furnish a copy thereof to Fed Ex and to the
Engine Manufacturer, and Lessor, to the extent permitted by applicable
law, shall afford Fed Ex and the Engine Manufacturer reasonable
opportunity, at the moving party's cost and expense, to obtain a
protective order or other assurance reasonably satisfactory to the
Engine Manufacturer of confidential treatment of the information
required to be disclosed, (4) Lessor may disclose such information as
required to enforce its rights under the Engine Warranties assigned
to it pursuant to this Assignment, and (5) Lessor may disclose such
information to any bona fide potential purchaser of the Aircraft
and/or Engines (subject to the execution by such prospective
purchaser of a written confidentiality statement setting forth the
same or substantially similar terms as those referred to in this
paragraph).
B. Without in any way releasing Fed Ex from any of its duties or
obligations under the GTA, Lessor agrees that, insofar as the
provisions of the GTA relate to the Engines, in exercising any rights
under such Engine Warranties or in making any claim with respect
thereto, the applicable terms and conditions of the GTA, including
Article Eight (Limitation of Liability) and the Product Support Plan,
shall apply to, and be binding upon, Lessor to the same extent as Fed
Ex.
C. Insofar as the provisions of the GTA relate to the Engines, in
exercising any rights under the Engine Warranties or in making any
claim with respect thereto, the applicable terms and conditions of
the GTA and the Product Support Plan or the Consent attached hereto
and incorporated herein shall apply to, and be binding upon, Lessor
to the same extent as if named "Airline" therein. It is expressly
agreed that Fed Ex shall at all times remain liable to the Engine
Manufacturer under the GTA to perform all the duties and obligations
of Fed Ex thereunder to the same extent as if this Assignment had not
been executed, and except as provided in the preceding sentence, the
Lessor shall not be deemed to have assumed any obligations
thereunder. The performance by Lessor of any of the rights assigned
hereunder shall not release Fed Ex from any of its duties or
obligations to the Engine Manufacturer under the GTA except to the
extent that such exercise by Lessor shall constitute performance of
such duties and obligations.
D. Nothing contained in this Assignment shall subject the Engine
Manufacturer to any obligation or liability to which it would not
otherwise be subject under the GTA or modify in any respect the
Engine Manufacturer's contract rights thereunder, or subject the
Engine Manufacturer to any multiple or duplicative liability or
obligation under the GTA. The Engine Manufacturer recognizes and it
is consented to by all parties to the Assignment that Lessor shall
assign its rights under the Lease and this Assignment and will
mortgage the Aircraft and Engines, to The Chase Manhattan Bank
(National Association) as Indenture Trustee under the Trust Indenture
and Security Agreement (Federal Express Corporation Trust No.
N663FE), dated as of October 26, 1995; however, no further extension
or assignment of any remaining Engine Warranties, including but not
limited to extensions or assignments for security purposes, are
permitted without the prior written consent of the Engine
Manufacturer.
E. Exclusive of the assignment noted in Section 2D above, the Engine
Manufacturer shall not be deemed to have knowledge of any change in
the authority of Fed Ex or Lessor, as the case may be, to exercise
the rights established hereunder until the Engine Manufacturer has
received written notice thereof from the Indenture Trustee or the
Lessor. Such notice shall be sent to: Commercial Contracts
Director, GE Aircraft Engines, Mail Drop F17, One Neumann Way, Box
156301, Cincinnati, Ohio 45215-6301, facsimile: (513) 243-8068.
F. This Assignment shall apply only in respect to each Engine and shall
not extend to any replacement or substitute engine. If, during the
term of this Assignment and the Lease, it becomes necessary to
replace or substitute an Engine due to a Failure (as such term is
defined in the Engine Product Support Plan, excluding normal wear,
tear and deterioration which can be restored by overhaul and repair),
damage or loss, the Assignor shall give the Engine Manufacturer
written notice of such Failure, damage or loss. The notice shall
include (i) a description of the event or circumstances which
constitute a Failure, damage or loss, and (ii) the serial numbers of
the (a) failed, damaged or lost Engine and (b) Replacement Engine and
shall be sent to: Customer Support Manager, GE Aircraft Engines, 111
Merchant Street, Room 450, Cincinnati, Ohio 45246. The Engine
Manufacturer shall not be deemed to have knowledge of the need for a
replacement engine until it has received the aforementioned notice.
In the event an Engine subject to this Assignment fails, is damaged
or lost, and such Engine is replaced by a Replacement Engine, the
Assignor and the Assignee shall, prior to, or contemporaneous with,
the delivery of such Replacement Engine, obtain the written consent
of the Engine Manufacturer that the Engine Warranties as set forth in
the Engine Product Support Plan shall apply to such Replacement
Engines. The Engine Manufacturer shall not incur any obligation or
liability for a Replacement Engine under the Engine Warranties until
the execution of the aforementioned consent.
G. At any time and upon the written request of the Engine Manufacturer,
Fed Ex and Lessor shall promptly and duly execute and deliver any and
all such further assurances, instruments and documents and take all
such further action as the Engine Manufacturer may reasonably request
in order to obtain the full benefit of Fed Ex and Lessor's agreement
as set forth in this Assignment and the Consent attached hereto and
incorporated herein.
Any performance by the Engine Manufacturer that discharges its
obligation under the Engine Warranties will satisfy the respective
interests of Fed Ex and Lessor. So long as the Engine Manufacturer
acts in good faith in accordance with this Assignment, the Engine
Manufacturer may rely conclusively on any such notice without
inquiring as to the accuracy of, or the entitlement of the party to
give, such notice.
3
The Engine Manufacturer shall reserve to Fed Ex all those rights, claims and
interests, as and to the extent such relates to the purchase and operation of
engines other than the Engines subject to the Assignment, as well as other
matters not directly pertaining to the Engines, and Fed Ex will have or retain
under the GTA such rights, claims and interest not expressly assigned to
Lessor hereunder.
4
The Engine Manufacturer warrants each new Reverser (as such is defined in
the Engine Product Support Plan) installed on the Aircraft at the time of
delivery to Fed Ex under the terms of the New Engine Warranty; however,
administration of such New Engine Warranty, with respect to both installed and
replacement Reversers, shall be performed by Martin Marietta.
5
If at some point in time, the Engine Manufacturer receives written
notification from the Indenture Trustee or the Lessor that the Lessor is or
becomes entitled to possession of the Engines, pursuant to an Event of
Default, and desires to sell or lease the Engines to a party who is not
currently a party to a General Terms Agreement with the Engine Manufacturer,
the Engine Manufacturer agrees if such agreement is permissible under
applicable U.S. law, that it will offer to such purchaser or lessee, subject
to the execution of an agreement to sell or lease such Engines, a General
Terms Agreement on the Engine Manufacturer's standard terms and conditions.
If, however, such purchaser or lessee is currently a party to a General Terms
Agreement with the Engine Manufacturer, the remaining portion of the terms of
such General Terms Agreement shall be extended to and apply to such subsequent
purchase or lease; provided, however, that the written consent of the Engine
Manufacturer to such an extension is obtained prior to the transaction's
occurrence.
This Assignment shall be governed by the laws of the State of New York,
including all matters of construction, validity and performance, as applicable
to contracts between citizens of that state to be performed wholly within that
state, and without reference to conflicts of law principles.
In witness whereof, General Electric Company, Federal Express Corporation
and NBD Bank have caused this Engine Warranty Assignment to be duly executed
and delivered as of the date hereof.
General Electric Company
_____________________________
Name:
Title:
Federal Express Corporation
_____________________________
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director -
Structured Finance
NBD Bank
not in its individual capacity,
but solely as Owner Trustee
_____________________________
Name:
Title:
CONSENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N663FE)
The Engine Manufacturer, General Electric Company (the "Engine
Manufacturer"), a New York corporation, hereby consents to the Engine Warranty
Assignment attached hereto and acknowledges notice of (i) the Purchase
Agreement Assignment (Federal Express Corporation Trust No. N663FE), dated as
of October 26, 1995 and entered into by and between Federal Express
Corporation, as Assignor ("Fed Ex") and NBD Bank (not in its individual
capacity, but solely as Owner Trustee) as Assignee ("Lessor"), (the "Purchase
Agreement Assignment"); and (ii) the Lease Agreement (Federal Express
Corporation Trust No. N663FE), dated as of October 26, 1995 and entered into
by and between Fed Ex, as Lessee and Lessor, as Lessor (as in effect from time
to time, the "Lease") and (iii) the Trust Indenture and Security Agreement
(Federal Express Corporation Trust No. N663FE), dated as of October 26, 1995
(the "Indenture"), between the Lessor and The Chase Manhattan Bank (National
Association), as Indenture Trustee ("Indenture Trustee"). The Purchase
Agreement Assignment and Lease cover two GE CF6-80C2-A5F series engines
bearing Engine Manufacturer's serial numbers 705-233 and 705-234,
respectively, (the "Engines") as installed on the Airbus A300F4-605R series
aircraft bearing Manufacturer's serial number 766 (the "Aircraft"). In
connection with such Purchase Agreement Assignment and Lease, reference is
made to the General Terms Agreement No. 6-9034 dated as of July 3, 1991,
between the Engine Manufacturer and Fed Ex (the "General Terms Agreement"),
under which the Engine Manufacturer agreed to support certain GE CF6-80C2-A5F
series engines, including the Engines and spare parts therefor to be purchased
by Fed Ex from the Engine Manufacturer, as installed on certain Airbus
A300F4-605R series aircraft, including the Aircraft. Recognizing that Lessor
and Fed Ex have entered into the Lease which provides for the lease by Lessor
to Fed Ex of the Aircraft and Engines and that Lessor has granted a security
interest in the Engines and assigned certain of its rights under the Lease to
the Indenture Trustee, the Engine Manufacturer agrees that in furtherance of
the Lease, it will so support such Engines and spare parts therefor, subject
to the applicable terms and conditions of the General Terms Agreement,
including Article Eight (Limitation of Liability).
The Engine Manufacturer represents and warrants that:
1. it is a corporation existing in good standing under the laws of
the State of New York;
2. the making and performance of this Consent in accordance with
its terms has been duly authorized by all necessary corporate
action on the part of the Engine Manufacturer, does not require
any shareholder approval and does not contravene its
certificate of incorporation or by-laws or any debenture,
credit agreement or other contractual agreement to which the
Engine Manufacturer is a party or by which it is bound or any
law binding on the Engine Manufacturer;
3. the making and performance of the Engine Warranties, as defined
in the Engine Warranty Assignment attached hereto (the "Engine
Warranties") in accordance with their terms have been duly
authorized by all necessary corporate action on the part of the
Engine Manufacturer, do not require any shareholder approval
and do not contravene the Engine Manufacturer's certificate of
incorporation or by-laws or any debenture, credit agreement or
other contractual agreement to which the Engine Manufacturer is
a party or by which it is bound or any law binding on the
Engine Manufacturer; and
4. the Engine Warranties constitute, as of the date on which they
were made and at all times thereafter, and this Consent and the
Engine Warranty Assignment attached hereto are, binding
obligations of the Engine Manufacturer enforceable against the
Engine Manufacturer in accordance with its terms subject to:
(a) the limitation of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights
of creditors generally; and
(b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
This Consent shall be governed by the laws of the State of New York,
including all matters of construction, validity and performance, as applicable
to contracts between citizens of that state to be performed wholly within that
state, and without reference to conflicts of law principles.
General Electric Company
______________________________
Name:
Title:
EXHIBIT 5.b
October 27, 1995
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Attention: Chief Financial Officer
Re: Federal Express Corporation --
Pass Through Certificates --
Shelf Registration
------------------------------
Dear Sirs:
We have acted as special counsel to The Chase Manhattan Bank
(National Association), a national banking association, in its capacity as
pass through trustee (the "Pass Through Trustee"), under a Pass Through
Trust Agreement dated as of February 1, 1993, as amended and restated as of
October 1, 1995 (the "Agreement") entered into between Federal Express
Corporation (the "Corporation") and the Pass Through Trustee. Pursuant to
the Agreement and one or more supplemental agreements thereto to be entered
into between the Corporation and the Pass Through Trustee, the Pass Through
Trustee will execute, authenticate and deliver, upon the Corporation's
request, pass through certificates in one or more series in an aggregate
principal amount of up to $195,000,000 (the "Pass Through Certificates"),
to be registered with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933, as amended (the "1933 Act"), under the
Corporation's Registration Statement on Form S-3 filed on the date hereof
with the SEC (the "Registration Statement").
As such counsel, we have examined the forms of the Agreement
and the Pass Through Certificate which you have furnished to us and which
will be filed as exhibits to the Registration Statement. We have also
examined and relied upon originals, or copies certified or otherwise
identified to our satisfaction, of such documents, corporate records and
other instruments as we have deemed necessary or appropriate for the
purposes of this opinion. With respect to the discussion in the Prospectus
forming part of the Registration Statement entitled "Certain New York
Taxes," the assumptions set forth therein are specifically incorporated
herein. In addition, we have assumed that each Pass Through Trust will not
be classified as an association taxable as a corporation for federal income
tax purposes, but rather, will be classified as a grantor trust under
Subpart E, Part I of Subchapter J of the Internal Revenue Code of 1986, as
amended, and we have further assumed that the Pass Through Trust does not
otherwise engage in business in New York.
The opinions set forth herein are limited to the laws of New
York and the federal laws of the United States of America governing the
banking and trust powers of the Pass Through Trustee. In addition, the
opinions set forth below are based on the assumption that the Corporation
has duly authorized, executed and delivered the Agreement and, at the time
of such authorization, execution and delivery, had the full power,
authority and legal right to have done so.
Based on the foregoing, we are of the opinion that:
1. The Pass Through Trustee is a national banking
association validly existing under the laws of the United States of America
holding a valid certificate to do business as a national banking association,
with trust powers.
2. The execution, authentication, issuance and delivery by
the Pass Through Trustee of the Pass Through Certificates and the Agreement
have been duly authorized by the Pass Through Trustee.
3. With respect to the Pass Through Certificates of each
series, when (a) the Agreement establishing the terms of the Pass Through
Certificates of such series and forming the related Pass Through Trust
shall have been duly authorized, executed and delivered by the Corporation
and the Pass Through Trustee in accordance with the terms and conditions of
the Agreement (assuming that (x) the terms and conditions of the Agreement
are in compliance with then applicable laws at the time of such
authorization, execution and delivery and (y) the Pass Through Trustee
continues in existence as a national banking association holding a valid
certificate to do business, with trust powers, at the time of such
authorization, execution and delivery), and (b) the Pass Through
Certificates of such series shall have been duly executed, authenticated,
issued and delivered by the Pass Through Trustee and sold as contemplated
by each of the Registration Statement and the Prospectus included therein
relating to the Pass Through Certificates, the supplement or supplements to
such Prospectus relating to the Pass Through Certificates of such series,
the purchase agreement or underwriting agreement between the Corporation
and the purchasers or underwriters named therein, as the case may be,
relating thereto, the Agreement (assuming that (x) the terms of the Pass
Through Certificates of such series are in compliance with then applicable
laws at the time of such authorization, execution and delivery and (y) the
Pass Through Trustee continues in existence as a national banking
association holding a valid certificate to do business, with trust powers,
at the time of such authorization, execution and delivery), (i) the
Agreement will constitute a valid and binding obligation of the Pass
Through Trustee in accordance with its terms, except as the provisions
thereof may be limited by bankruptcy, reorganization, insolvency,
arrangement, fraudulent conveyance, moratorium, or other similar laws
generally affecting creditors' rights or debtors' relief from time to time
in effect, and (ii) each of the Pass Through Certificates of such series
will be validly issued and will be entitled to the benefits of the
Agreement pursuant to which it was issued. The opinions expressed above as
to the enforceability of the documents referred to above further are
subject in each case to applicable laws and usual equitable principles that
may render certain remedial provisions in the documents referred to above
invalid or unenforceable.
4. The discussion in the Prospectus Supplement forming part
of the Registration Statement entitled "Certain New York Taxes," insofar as it
relates to statements of law or legal conclusions, is correct in all material
respects.
Very truly yours,
DEWEY BALLANTINE
