<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTER ENDED NOVEMBER 30, 1994, OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________.
COMMISSION FILE NUMBER: 1-7806
FEDERAL EXPRESS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 71-0427007
(State of incorporation) (I.R.S. Employer
Identification No.)
2005 Corporate Avenue
Memphis, Tennessee 38132
(Address of principal (Zip Code)
executive offices)
(901) 369-3600
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /x/ No / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock Outstanding Shares at December 31, 1994
Common Stock, par value $.10 per share 55,944,930
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
PAGE
Condensed Consolidated Balance Sheets
November 30, 1994 and May 31, 1994. . . . . . . . . . . . . . . . . . . 3-4
Condensed Consolidated Statements of Operations
Three and Six Months Ended November 30, 1994 and 1993 . . . . . . . . . 5
Condensed Consolidated Statements of Cash Flows
Six Months Ended November 30, 1994 and 1993 . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . 7-11
Review of Condensed Consolidated Financial Statements
by Independent Public Accountants . . . . . . . . . . . . . . . . . . . 12
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . 13
Management's Discussion and Analysis of Results of Operations
and Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . 14-20
PART II. OTHER INFORMATION
Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . 21
EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
- 2 -
<PAGE>
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
November 30,
1994 May 31,
(Unaudited) 1994
------------ -----------
(In thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . $ 245,965 $ 392,923
Receivables, less allowance for doubtful accounts
of $34,245,000 and $33,933,000. . . . . . . . . . 1,152,679 1,020,511
Spare parts, supplies and fuel. . . . . . . . . . . 174,816 173,993
Deferred income taxes . . . . . . . . . . . . . . . 113,360 113,035
Prepaid expenses and other. . . . . . . . . . . . . 59,080 61,234
----------- -----------
Total current assets . . . . . . . . . . . . . . 1,745,900 1,761,696
----------- -----------
Property and Equipment, at Cost (Note 6) . . . . . . . 7,234,678 6,890,225
Less accumulated depreciation and amortization. . . 3,701,073 3,441,132
----------- -----------
Net property and equipment . . . . . . . . . . . 3,533,605 3,449,093
----------- -----------
Other Assets:
Goodwill. . . . . . . . . . . . . . . . . . . . . . 406,664 415,178
Equipment deposits and other assets (Note 6). . . . 365,843 366,531
----------- -----------
Total other assets . . . . . . . . . . . . . . . 772,507 781,709
----------- -----------
$ 6,052,012 $ 5,992,498
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
- 3 -
<PAGE>
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
November 30,
1994 May 31,
(Unaudited) 1994
------------ -----------
(In thousands)
<S> <C> <C>
Current Liabilities:
Current portion of long-term debt (Note 3). . . . . $ 80,522 $ 198,180
Accounts payable. . . . . . . . . . . . . . . . . . 530,372 518,849
Accrued expenses (Note 2) . . . . . . . . . . . . . 897,806 819,399
----------- -----------
Total current liabilities. . . . . . . . . . . . 1,508,700 1,536,428
----------- -----------
Long-Term Debt, Less Current Portion (Note 3). . . . . 1,470,463 1,632,202
----------- -----------
Deferred Income Taxes. . . . . . . . . . . . . . . . . 1,922 3,563
----------- -----------
Other Liabilities. . . . . . . . . . . . . . . . . . . 989,612 895,600
----------- -----------
Commitments and Contingencies (Notes 6 and 7)
Common Stockholders' Investment (Note 5):
Common Stock, $.10 par value;
200,000,000 shares authorized; 55,955,418 and
55,885,456 shares issued. . . . . . . . . . . . . 5,596 5,589
Other . . . . . . . . . . . . . . . . . . . . . . . 2,075,719 1,919,116
----------- -----------
Total common stockholders' investment. . . . . . 2,081,315 1,924,705
----------- -----------
$ 6,052,012 $ 5,992,498
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
- 4 -
<PAGE>
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
---------------------- ----------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . $2,358,765 $2,121,525 $4,589,892 $4,137,250
---------- ---------- ---------- ----------
Operating Expenses:
Salaries and employee benefits. . . 1,105,875 1,024,819 2,167,683 2,016,880
Rentals and landing fees. . . . . . 199,306 172,323 387,936 338,532
Depreciation and amortization . . . 161,585 147,935 318,517 293,161
Fuel. . . . . . . . . . . . . . . . 127,747 119,076 245,104 233,812
Maintenance and repairs . . . . . . 133,219 115,899 269,402 235,793
Other . . . . . . . . . . . . . . . 454,657 391,755 881,889 767,447
---------- ---------- ---------- ----------
2,182,389 1,971,807 4,270,531 3,885,625
---------- ---------- ---------- ----------
Operating Income . . . . . . . . . . . 176,376 149,718 319,361 251,625
---------- ---------- ---------- ----------
Other Income (Expense):
Interest, net . . . . . . . . . . . (30,462) (36,584) (63,449) (73,851)
Other, net. . . . . . . . . . . . . 5,206 (2,595) 2,475 (6,400)
---------- ---------- ---------- ----------
(25,256) (39,179) (60,974) (80,251)
---------- ---------- ---------- ----------
Income Before Income Taxes . . . . . . 151,120 110,539 258,387 171,374
Income Tax Provision . . . . . . . . . 64,981 50,848 111,106 78,832
---------- ---------- ---------- ----------
Net Income . . . . . . . . . . . . . . $ 86,139 $ 59,691 $ 147,281 $ 92,542
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per Share . . . . . . . . . . $ 1.53 $ 1.07 $ 2.61 $ 1.67
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Common and Common Equivalent
Shares (Note 5) . . . . . . . . . . 56,385 55,850 56,500 55,518
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
- 5 -
<PAGE>
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
November 30,
1994 1993
---------- ----------
(In thousands)
<S> <C> <C>
Net Cash Provided by Operating Activities. . . . . . . $ 465,968 $ 379,167
--------- ---------
Investing Activities:
Purchases of property and equipment, including
deposits on aircraft of $62,130,000 and
$65,667,000 . . . . . . . . . . . . . . . . . . . (479,498) (762,632)
Proceeds from disposition of property
and equipment:
Sale-leaseback transactions . . . . . . . . . . - 581,400
Reimbursements of A300 deposits . . . . . . . . 77,588 -
Other dispositions. . . . . . . . . . . . . . . 15,144 19,397
Other, net. . . . . . . . . . . . . . . . . . . . . 52,801 2,258
--------- ---------
Net cash used in investing activities. . . . . . . . . (333,965) (159,577)
--------- ---------
Financing Activities:
Proceeds from debt issuances. . . . . . . . . . . . 45,460 10,558
Principal payments on debt. . . . . . . . . . . . . (327,431) (51,602)
Proceeds from stock issuances . . . . . . . . . . . 3,010 27,777
Other, net. . . . . . . . . . . . . . . . . . . . . - (2,509)
--------- ---------
Net cash used in financing activities. . . . . . . . . (278,961) (15,776)
--------- ---------
Net increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . . . . . . . (146,958) 203,814
Cash and cash equivalents at beginning of period . . . 392,923 155,456
--------- ---------
Cash and cash equivalents at end of period . . . . . . $ 245,965 $ 359,270
--------- ---------
--------- ---------
Cash payments for:
Interest (net of capitalized interest). . . . . . . $ 79,827 $ 74,404
--------- ---------
--------- ---------
Income taxes. . . . . . . . . . . . . . . . . . . . $ 91,287 $ 68,796
--------- ---------
--------- ---------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
- 6 -
<PAGE>
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The interim financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information, the
instructions to Quarterly Reports on Form 10-Q and Rule 10-01 of Regulation S-X,
and should be read in conjunction with Federal Express Corporation's Annual
Report on Form 10-K for the year ended May 31, 1994. Accordingly, significant
accounting policies and other disclosures normally provided have been omitted
since such items are disclosed therein.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments necessary to present
fairly the consolidated financial position of Federal Express Corporation and
subsidiaries as of November 30, 1994, the consolidated results of their
operations for the three- and six-month periods ended November 30, 1994 and
1993, and their consolidated cash flows for the six-month periods ended
November 30, 1994 and 1993. Operating results for the three- and six-month
periods ended November 30, 1994 are not necessarily indicative of the results
that may be expected for the year ending May 31, 1995.
Certain prior period amounts have been reclassified to conform to the
current presentation.
(2) ACCRUED EXPENSES
<TABLE>
<CAPTION>
November 30,
1994 May 31,
(Unaudited) 1994
----------- --------
(In thousands)
<S> <C> <C>
Compensated absences. . . . . . . . . $185,860 $180,105
Insurance . . . . . . . . . . . . . . 168,998 156,906
Taxes other than income taxes . . . . 133,421 130,801
Employee benefits . . . . . . . . . . 105,254 86,352
Salaries. . . . . . . . . . . . . . . 104,011 82,563
Aircraft overhaul . . . . . . . . . . 58,225 50,933
Federal income taxes. . . . . . . . . 41,369 34,775
Interest. . . . . . . . . . . . . . . 30,218 32,374
Other . . . . . . . . . . . . . . . . 70,450 64,590
-------- --------
$897,806 $819,399
-------- --------
-------- --------
</TABLE>
- 7 -
<PAGE>
(3) LONG-TERM DEBT
<TABLE>
<CAPTION>
November 30,
1994 May 31,
(Unaudited) 1994
----------- --------
(In thousands)
<S> <C> <C>
Unsecured notes payable, interest rates of
6.25% to 10.57%, due through 2013 . . . . . . . $1,187,177 $1,384,942
Unsecured sinking fund debentures, interest . . .
rate of 9.63%, due through 2020 . . . . . . . . 98,289 98,254
Capital lease obligations, Memphis-Shelby County
Airport Authority Special Facilities Revenue
Bonds, due through 2013, interest rates of
6.75% to 8.30%, net of bond reserve funds . . . 199,004 199,004
Other debt, effective rates of 5.83% to 6.80% . . 66,515 148,182
---------- ----------
1,550,985 1,830,382
Less current portion 80,522 198,180
---------- ----------
$1,470,463 $1,632,202
---------- ----------
---------- ----------
</TABLE>
The Company has a revolving credit agreement with domestic and foreign
banks that provides for a commitment of $1,000,000,000 through May 31, 1996, all
of which was available at November 30, 1994. Interest rates on borrowings under
this agreement are generally determined by maturities selected and prevailing
market conditions. Commercial paper borrowings are backed by unused commitments
under this revolving credit agreement and reduce the amount available under the
agreement. Borrowings under this credit agreement and commercial paper
borrowings are classified as long-term based on the Company's ability and intent
to refinance such borrowings.
In September 1994, the City of Indianapolis issued $45,000,000 of 6.80%
City of Indianapolis Airport Facility Revenue Refunding Bonds to retire the
11.25% Indianapolis Special Facilities Revenue Bonds, Series 1984 which were
originally issued to finance the acquisition, construction and equipping of an
express package sorting hub located at the Indianapolis International Airport
and currently leased to the Company. The Refunding Bonds have a maturity date of
April 1, 2017. See Note 6 Commitments for a discussion of additional
commitments relating to the Company's facilities at the Indianapolis Airport.
In 1993, the Company entered into a $140,000,000 foreign bank facility to
provide term loans for predelivery payments on seven Airbus A300 aircraft.
Principal and interest are payable upon delivery of the aircraft. As of
November 30, 1994, the Company had $20,000,000 outstanding under this facility
at an effective interest rate of 5.83%.
- 8 -
<PAGE>
(4) PREFERRED STOCK
The Certificate of Incorporation authorizes the Board of Directors, at its
discretion, to issue up to 4,000,000 shares of Series Preferred Stock. The
stock is issuable in series which may vary as to certain rights and preferences
and has no par value. As of November 30, 1994, none of these shares had been
issued.
(5) COMMON STOCKHOLDERS' INVESTMENT
During the six-month period ended November 30, 1994, 69,962 shares of
common stock were issued under employee incentive plans at prices ranging from
$34.31 to $62.94 per share. During the same period, 3,750 shares of non-vested
restricted common stock were forfeited. The forfeited shares were recorded as
treasury stock at a cost of $61.75 per share.
On September 26, 1994, the stockholders approved an amendment to the
Company's Restated Certificate of Incorporation to increase the authorized
common stock of the Company from 100,000,000 to 200,000,000 shares.
(6) COMMITMENTS
As of November 30, 1994, the Company's purchase commitments for the
remainder of 1995 and annually thereafter under various contracts are as follows
(in thousands):
<TABLE>
<CAPTION>
Aircraft-
Aircraft Related(1) Other(2) Total
-------- ---------- -------- --------
<S> <C> <C> <C> <C>
1995 (remainder) $217,600 $ 39,100 $188,500 $445,200
1996 486,700 5,900 23,900 516,500
1997 234,200 8,300 5,700 248,200
1998 293,500 - 21,300 314,800
1999 - - 15,600 15,600
</TABLE>
(1) Primarily aircraft modifications, rotables, and development and
upgrade of aircraft simulators.
(2) Primarily facilities, vehicles, computers and other equipment.
The Company is committed to purchase 19 Airbus A300, one Airbus A310 and 50
Cessna 208B aircraft to be delivered through 1998. At November 30, 1994,
deposits and progress payments of $289,135,000 had been made toward these
purchases. At November 30, 1994, the Company had options to purchase up to 44
additional Airbus A300 aircraft for delivery beginning in 1997.
- 9 -
<PAGE>
During the six-month period ended November 30, 1994, the Company acquired
four Airbus A300 aircraft under operating leases. These aircraft were included
as purchase commitments as of May 31, 1994. At the time of delivery, the
Company sold its rights to purchase these aircraft to each of four third parties
who reimbursed the Company for its deposits on the aircraft and paid additional
consideration. The Company then entered into operating leases with each of the
third parties who purchased the aircraft from the manufacturer.
In October 1994, the Indianapolis Airport Authority issued $237,755,000 of
7.10% Special Facilities Revenue Bonds, due January 15, 2017, to finance the
acquisition, construction and equipping of express cargo and parcel sorting
facilities. The Company is obligated under an operating lease agreement with
the Indianapolis Airport Authority to pay rentals equal to the principal and
interest on the bonds.
Additional lease commitments for the four Airbus A300 aircraft, two
DC-10-10 aircraft acquired during the period, and the Indianapolis Airport
Authority sorting facilities are as follows (in thousands):
1995 $ 3,225
1996 29,909
1997 33,681
1998 39,117
1999 42,142
Thereafter 1,179,580
(7) LEGAL PROCEEDINGS
The Company has reached a settlement to the shareholder class-action
lawsuit filed in 1990 against it, Frederick W. Smith, Chairman and Chief
Executive Officer, and James L. Barksdale, the Company's former Executive Vice
President and Chief Operating Officer. The settlement was approved on December
21, 1994 and an order dismissing the case with prejudice was entered by the
United States District Court for the Western District of Tennessee. Any appeal
from the order must be filed by January 21, 1995. The settlement was for an
immaterial amount (the Company's portion of which has been recorded in the 1994
financial statements). The Company's insurance carrier will pay a majority of
the settlement amount. Notice of the settlement has been mailed to purchasers
of the Company's common stock affected by the settlement agreement and claims of
the purchasers should be paid in 1995.
The Internal Revenue Service ("IRS") issued an Examination Report on
October 31, 1991 asserting the Company underpaid federal excise taxes for the
calendar quarters ended December 31, 1983 through March 31, 1987. The
Examination Report contains a primary position and a mutually exclusive
alternative position asserting the Company underpaid federal excise taxes by
$54,000,000 and $26,000,000, respectively. Disagreeing with essentially all of
the proposed adjustments contained in the Examination Report, the Company filed
a
- 10 -
<PAGE>
Protest on March 16, 1992, which set forth the Company's defenses to both IRS
positions and a claim for refund of overpaid federal excise taxes of
$23,500,000. On March 19, 1993, the IRS issued another Examination Report to
the Company asserting the Company underpaid federal excise taxes by $105,000,000
for the calendar quarters ended June 30, 1987 through March 31, 1991. On June
17, 1993, the Company filed a Protest contesting the March 19 Examination Report
which set forth the Company's defenses to the IRS position and a claim for
refund of overpaid federal excise taxes of $46,500,000. Interest would be
payable on the amount of any refunds by the IRS to the Company or underpaid
federal excise taxes payable by the Company to the IRS at statutorily determined
rates. The interest rates payable by the Company for underpaid taxes are higher
than the rates payable by the IRS on refund amounts.
The Company is vigorously pursuing its Protests administratively with the
IRS Appeals Division. If it is unsuccessful with the IRS Appeals Division, the
Company intends to pursue its position in court. Pending resolution of this
matter, the IRS can be expected to take positions similar to those taken in
their Examination Reports for periods after March 31, 1991.
Given the inherent uncertainties in the excise tax matter, management is
currently unable to predict with certainty the outcome of this matter or the
ultimate effect, if any, its resolution would have on the Company's financial
condition or results of operations. No amount has been reserved for this
contingency.
The Company is subject to other legal proceedings and claims which arise in
the ordinary course of its business. In the opinion of management, the
aggregate liability, if any, with respect to these other actions will not
materially adversely affect the financial position or results of operations of
the Company.
- 11 -
<PAGE>
REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BY INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, has performed a review of
the condensed consolidated balance sheet of the Company as of November 30, 1994,
and the related condensed consolidated statements of operations for the three-
and six-month periods ended November 30, 1994 and 1993 and the condensed
consolidated statements of cash flows for the six-month periods ended
November 30, 1994 and 1993, included herein, as indicated in their report
thereon included on page 13.
-12 -
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of Federal Express Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of
Federal Express Corporation and subsidiaries as of November 30, 1994 and the
related condensed consolidated statements of operations for the three- and six-
month periods ended November 30, 1994 and 1993 and the condensed consolidated
statements of cash flows for the six-month periods ended November 30, 1994 and
1993. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Federal Express Corporation and
subsidiaries as of May 31, 1994 and the related consolidated statements of
operations, changes in common stockholders' investment and cash flows for the
year then ended. In our report dated June 29, 1994, we expressed an unqualified
opinion on those financial statements, which are not presented herein. In our
opinion, the accompanying condensed consolidated balance sheet as of May 31,
1994 is fairly stated in all material respects in relation to the consolidated
balance sheet from which it has been derived.
Arthur Andersen LLP
Memphis, Tennessee,
December 13, 1994
- 13 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
The Company's second quarter and year-to-date consolidated results reflect
significant year-over-year improvement in its international operations. U.S.
domestic results, because of a continuing trend of declines in revenue per
package (yield) exceeding reductions in cost per package, worsened compared with
the prior year's second quarter and year-to-date periods.
A comparison of second quarter and year-to-date consolidated results is
presented below (in millions, except per share data):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
------------------ ----------------
1994 1993 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues. . . . . . . . . . . . . . $2,359 $2,122 $4,590 $4,137
Operating Income. . . . . . . . . . 176 150 319 252
Pre-tax Income. . . . . . . . . . . 151 111 258 171
Net Income. . . . . . . . . . . . . 86 60 147 93
Earnings per share. . . . . . . . . $ 1.53 $ 1.07 $ 2.61 $ 1.67
</TABLE>
The revenue increases of 11.2% and 10.9% for the quarter and year-to-date
periods, respectively, are primarily attributable to volume growth in U.S.
domestic and international express services. Operating income increases of
17.8% and 26.9% for the quarter and year-to-date periods, respectively, are due
to improvements in the Company's international operations but these improvements
were restrained by continuing declines in U.S. domestic profitability.
Total operating expenses increased 10.7% and 9.9% compared with the prior
year's second quarter and year-to-date periods, respectively. The detail for
total operating expenses is presented below (in millions):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
------------------ ----------------
1994 1993 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Salaries and employee benefits. . . $1,106 $1,025 $2,168 $2,017
Rentals and landing fees. . . . . . 199 172 388 339
Depreciation and amortization . . . 162 148 319 293
Fuel. . . . . . . . . . . . . . . . 128 119 245 234
Maintenance and repairs . . . . . . 133 116 269 236
Other . . . . . . . . . . . . . . . 454 392 882 767
------ ------ ------ ------
$2,182 $1,972 $4,271 $3,886
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
Salaries and employee benefits increases of 7.9% and 7.5% for the quarter
and year-to-date periods, respectively, are primarily due to increases in U.S.
domestic employment levels associated with rising U.S. domestic volumes.
Increased provisions under the Company's performance-based incentive
compensation plans also contributed to year-to-date increases.
- 14 -
<PAGE>
Rentals and landing fees increased 15.7% and 14.6% compared with the prior
year's second quarter and year-to-date periods, respectively, primarily because
of newly leased Airbus A300 and Airbus A310 aircraft acquired in response to
growing U.S. domestic volumes. At November 30, 1994, there were six A300 and
five A310 aircraft under operating leases. No such aircraft were leased at
November 30, 1993. The year-to-date increase in rentals and landing fees is
also attributable to additional MD-11 leases. During the first six months of
1995, the Company had thirteen MD-11 aircraft under operating leases. During
the same period in 1994, the Company increased the number of MD-11s under
operating leases from seven to thirteen aircraft. Aircraft rental expense is
expected to continue to increase for the remainder of 1995 because of additional
DC-10, A300 and A310 leases. The Company expects to be able to convert its A300
purchase commitments into direct operating leases. (See Note 6 Commitments.)
Maintenance and repairs expense increased 14.9% and 14.3% compared with the
prior year's second quarter and year-to-date periods, respectively, due to
increased engine maintenance on B-727 and MD-11 aircraft. The engines of both
aircraft types are the subject of maintenance directives issued by regulatory
agencies. These directives require the Company to assess and, where applicable,
take corrective action on the aircraft engines. Additionally, the older MD-11s
are beginning to enter their initial cycle of scheduled engine maintenance. It
is expected that this trend of increased year-over-year maintenance and repairs
expense will continue for the remainder of 1995.
Other operating expense increases of 16.1% and 14.9% compared with the
prior year's second quarter and year-to-date periods, respectively, are
generally attributable to year-over-year increases in volume. Most notable are
those expenses related to the transportation of packages by outside contractors
and temporary manpower. Advertising expense also contributed to the year-to-
date increase in other operating expense.
OTHER INCOME AND EXPENSE AND INCOME TAXES
Decreases in net interest expense of 16.7% and 14.1% compared with 1994's
second quarter and year-to-date periods is due primarily to lower debt levels.
Other, net includes a $5.9 million distribution ($.06 earnings per share for the
quarter) from the bankruptcy estate of a firm engaged by the Company in 1990 to
remit payments of employees' withholding taxes to the appropriate authorities.
During the third quarter of 1991, the Company recorded a $32 million charge to
other income and expense for an estimated probable loss due to the failure of
the firm to remit taxes due. The Company expects to receive additional
distributions from the firm's bankruptcy estate depending on the outcome of
preference litigation and other pending bankruptcy matters against the firm.
The Company's effective tax rate was 43.0% for the three and six month
periods ended November 30, 1994, compared with 46.0% for the same periods in the
prior year. During the first quarter of 1995, the Company implemented a legal
restructuring of its Mexico operations which permits the one-time deduction in
1995 of certain items for U.S. federal income tax purposes that were not
deductible in prior years.
- 15 -
<PAGE>
U.S. DOMESTIC SERVICES
Operating results and selected statistics for U.S. domestic services are as
follows (dollars in millions, except yields):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
------------------ ----------------
1994 1993* 1994 1993*
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues. . . . . . . . . . . . . . $1,697 $1,538 $3,331 $3,018
Operating Income. . . . . . . . . . 134 148 254 283
Operating Margin. . . . . . . . . . 7.9% 9.6% 7.6% 9.4%
Express Package Statistics:
Average daily packages (000s) . . 2,057 1,781 1,973 1,706
Revenue per package . . . . . . . $12.79 $13.57 $12.95 $13.65
Operating weekdays. . . . . . . . . 63 63 128 128
<FN>
* Certain prior period information reflects a reclassification of certain
revenues and volumes to conform to the current year classification of these
services as express package business.
</TABLE>
The Company's U.S. domestic revenues grew 10.3% and 10.4% for the quarter
and year-to-date periods, respectively, while expenses rose 12.4% and 12.5%
compared to the same periods in the prior year, resulting in continuing declines
in operating margins. These declines in operating margin are primarily a
function of declines in per package revenues (down 5.7% and 5.1% compared with
1994's second quarter and year-to-date periods, respectively) exceeding
reductions in cost per package (down 3.2% and 3.0% compared with 1994's second
quarter and year-to-date periods, respectively). Compared with the same periods
in the prior year, average daily volumes increased 15.5% and 15.6%,
respectively. Additionally, the Company continued to make expenditures which
are expected to reduce unit costs in the future, e.g., pilot training for the
new Airbus A300 and A310 aircraft and improved customer automation systems.
While the Company reduced certain of its domestic costs, other costs related to
maintenance and repairs on B-727 aircraft and expenses related to outside
transportation costs increased. Sales of engine noise reduction kits during the
second quarter contributed an incremental $11 million to operating income.
The Company's U.S. domestic results for the second quarter were affected by
competitive pressures prevalent in the U.S. domestic express market. These
pressures, together with persistent customer demand for high quality express
delivery services at lower prices, have created an extremely price-sensitive
U.S. domestic express market.
The Company has responded to these competitive pressures by offering lower-
priced deferred services and increasing discounting. These actions have
resulted in greater revenues and volumes but lower operating margins because the
Company has not been able to offset declines in revenues per package with
corresponding reductions in unit costs. Yields are expected to continue to fall
because of faster growth in deferred services compared with priority services
and selective discounting.
- 16 -
<PAGE>
The Company is working to improve its current level of U.S. domestic
profitability by seeking ways to lower unit costs, managing the decline in
yield, and cultivating close working relationships with its customers.
The Company is acquiring newer and more efficient Airbus A300 and A310
aircraft. These aircraft have an increased revenue payload and, compared to
B-727 aircraft, have lower unit operating costs for appropriate load factors for
fuel consumption, maintenance and crew manning. The most significant benefit of
these aircraft will ultimately be realized on scheduled routes where more than
one B-727 aircraft can be replaced with a single A300 or A310 aircraft and where
incremental volume can be absorbed without adding additional aircraft. However,
ownership costs, in absolute dollars, are higher for the A300 and A310 aircraft
than for the older B-727 aircraft.
The Company is also reducing the cost of handling packages through
increased automation of its package pick-up, delivery, sorting and
transportation operations. The Airport Improvements Act eliminated many of the
intrastate transportation regulations that restricted the maximum use of the
Company's lower cost ground transportation system. With these regulations
eliminated, management anticipates more effective use of its ground
transportation network which is expected to reduce unit costs in the long term.
In addition, continued investment in customer and hub automation, larger load
carrying vehicles, additional drop-off locations and other programs are expected
to lower unit costs for additional future volumes.
Management recognizes the importance of enhancing effective working
relationships with its customers, especially in the highly competitive market in
which the Company operates. Accordingly, the Company continues to focus on
increasing the number of convenience locations, implementing direct airport
service to new locations, developing alliances with retail businesses and
increasing the placement of customer automation devices. The Company also
intends to intensify its sales and marketing efforts by increasing its
advertising expenditures, adding sales personnel, and targeting selected
customer groups for special marketing programs.
The Company's strategy for its U.S. domestic operations emphasizes those
actions which management believes will produce the greatest long-term benefit.
Competitive pressure and the customers' increased use of deferred services are
expected to continue to cause yields to decline. However, management believes a
combination of more efficient aircraft, improved automation, and expanded use of
ground transportation will over the long term reduce the Company's cost per
package and stabilize the declines in operating profits and margins. In the
near term, however, it is expected that competitive activity and changes in
customer demand patterns will continue to pressure the Company's U.S. domestic
operating profits and margins.
- 17 -
<PAGE>
INTERNATIONAL SERVICES
Operating results and selected package and airfreight statistics for
international operations are as follows (dollars in millions, except yields):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
------------------ ----------------
1994 1993* 1994 1993*
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues:
International Priority Services (IP). . . . . $ 415 $ 326 $ 795 $ 633
International EXPRESSfreight (IXF)
and Airport-to-Airport (ATA)
airfreight services . . . . . . . . . . . . 156 140 299 261
International FedEx Logistics
Services, Charter and other . . . . . . . . . 91 118 165 225
------ ------ ------ ------
662 584 1,259 1,119
------ ------ ------ ------
Operating Income (Loss) . . . . . . . . . . . . $ 43 $ 2 $ 65 $ (31)
Operating Margin. . . . . . . . . . . . . . . . 6.5% 0.4% 5.2% (2.8)%
Package and Airfreight Statistics:
Average daily IP packages (000s). . . . . . . 163 133 156 127
Revenue per package (yield) . . . . . . . . . $40.50 $38.99 $39.94 $38.81
Average daily airfreight pounds (000s). . . . 2,326 1,966 2,203 1,871
Revenue per pound (Yield) . . . . . . . . . . $ 1.07 $ 1.13 $ 1.06 $ 1.09
<FN>
* Certain prior period information reflects a reclassification of certain
revenues and volumes to conform to the current year classification of these
services as express package or airfreight business.
</TABLE>
The Company's international operating results for the quarter and year-to-
date periods reflect continued year-over-year growth in profitability. Revenues
increased 13.4% and 12.5% compared with the prior year's quarter and year-to-
date periods, respectively, while expenses increased 6.5% and 3.8% compared with
these same periods. Most of the improvement in profitability is attributable to
strong growth in the Company's International Priority Services (IP). Revenues,
average daily volumes and yields for IP increased 27.3%, 22.6% and 3.9%,
respectively, compared with the second quarter of 1994 while these same factors
increased 25.6%, 22.1% and 2.9%, respectively, compared with the first six
months of 1994.
Airfreight revenues and average daily volumes increased 11.8% and 18.3%,
respectively, compared with the second quarter of 1994 and increased 14.6% and
17.7%,respectively, compared with the first six months of 1994. Yields declined
5.3% and 2.8% compared with the prior year's second quarter and year-to-date
periods, respectively. Most of the revenue and volume gains are attributable to
growth in the Company's IXF service. To encourage this growth, management
continued its marketing and advertising efforts on IXF, a premium-priced, time-
definite service, and the Company sustained high service levels. Additionally,
during 1994, pricing actions were initiated which narrowed the price
differential between ATA, a lower-priority service whose price is typically
determined by capacity and market
- 18 -
<PAGE>
conditions, and IXF. As a result of these factors, IXF average daily volumes
and revenues grew significantly (61.4% and 35.7%, respectively, over 1994's
second quarter and 73.5% and 47.2%, respectively, over the first six months of
1994). Double-digit increases in airfreight revenues and volumes that the
Company has experienced since the fourth quarter of 1994 are dependent upon
continued customer demand and available capacity.
The revenue decrease in International FedEx Logistics Services, Charter and
other is primarily due to the sale, effective May 31, 1994, of the Company's
German logistics subsidiary.
Sustained improvement in the Company's international operations is
dependent on continued growth in IP, the Company's ability to manage incremental
costs associated with that growth and system efficiencies. To promote IP
growth, aggressive sales and marketing efforts are targeting time-sensitive
industries to capture new business. Also, as economic conditions improve in
certain global markets, the Company's distribution network will be positioned to
benefit from increased volumes associated with business growth. To contain
costs, management will monitor customer demand patterns and make changes to its
distribution network to make optimum use of Company resources. Furthermore,
through technological advances that aid in the sorting, routing and delivery of
packages, the Company has the ability to add limited incremental volume without
adding a corresponding amount of incremental cost.
FINANCIAL CONDITION
CAPITAL EXPENDITURES AND RESOURCES
The Company's operations are capital intensive, characterized by
significant investments in aircraft, package handling facilities, sort
equipment, vehicles, and computer and telecommunication equipment. The amount
and timing of capital additions are dependent on various factors including
volume growth, new or enhanced services, geographical expansion of services,
competition and availability of satisfactory financing.
Capital expenditures for the first six months of 1995 totaled $479 million
and included vehicle and ground support equipment, customer automation and
computer equipment and deposits on future Airbus A300 aircraft. In comparison,
prior year additions totaled $763 million and included five MD-11 aircraft,
three B-727-200 aircraft, deposits on A300 aircraft, vehicle and ground support
equipment, and customer automation and computer equipment.
At November 30, 1994, the Company had commitments aggregating approximately
$1.0 billion, net of deposits and progress payments of $289 million, for the
acquisition of 19 Airbus A300, one Airbus A310 and 50 Cessna 208B aircraft
(scheduled for delivery through 1998), aircraft modifications and related parts
and the development and upgrade of aircraft simulators. An estimated $257
million will be expended in the remainder of 1995, $493 million in 1996, $243
million in 1997 and $294 million in 1998, in connection with these commitments.
- 19 -
<PAGE>
At November 30, 1994, the Company also had options for up to 44 additional
Airbus A300 aircraft for delivery beginning in 1997. In addition, the Company
has other commitments related to facility and other equipment acquisitions that
approximated $255 million at November 30, 1994, of which an estimated $189
million will be expended in the remainder of 1995.
The Company has historically financed its capital investments through the
use of lease, debt and equity financing in addition to the use of internally
generated cash from operations. Management's practice in recent years with
respect to funding new aircraft acquisitions has been to finance such aircraft
through long-term lease transactions that qualify as off balance sheet operating
leases under applicable accounting rules. Management has determined that these
leases provide economic benefits favorable to ownership with respect to residual
value risk, liquidity and after-tax cash flows. The Company has been successful
in obtaining investment capital, both U.S. domestic and international, for
long-term leases on terms acceptable to it although the marketplace for such
capital can become restricted depending on a variety of economic factors beyond
the control of the Company. The Company believes that for the foreseeable
future it will continue to be able to find financing for its needs on acceptable
terms.
In November 1994, the Company filed a shelf registration statement with the
Securities and Exchange Commission relating to $465 million of equipment trust
and pass through certificates. These certificates can be used to finance the
purchase of aircraft or to finance aircraft in leveraged lease transactions.
Management believes that the capital resources available to the Company
provide it with the appropriate flexibility to gain access to the most efficient
market with respect to any particular aircraft acquisition and afford adequate
capital resources for its future capital needs. These resources include
backstop financing for the 19 Airbus A300 aircraft the Company is committed to
purchase in 1995 to 1998, $100 million of unsecured notes available under a
shelf registration filed with the Securities and Exchange Commission in June
1992, $465 million of equipment trust and pass through certificates available as
discussed above, and the ability to draw upon the public and private debt
markets for leveraged lease financing.
LIQUIDITY AND FINANCIAL POSITION
Cash and cash equivalents totaled $246 million at November 30, 1994, a
decrease of $147 million during the first six months of 1995. Cash provided
from operations during the first six months was $466 million compared with $379
million for the same period in the prior year. The Company currently has
available a $1 billion revolving bank credit facility that is generally used to
finance temporary operating cash requirements and to provide support for the
issuance of commercial paper.
- 20 -
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Note 7 Legal Proceedings in Part I is hereby incorporated by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit
Number Description of Exhibit
------- ----------------------
10.1 Indenture dated as of October 1, 1994 between Indianapolis Airport
Authority and NBD Bank, N.A., as Trustee, relating to 7.10%
Special Facilities Revenue Bonds, Series 1994 due January 15,
2017.
10.2 Guaranty dated as of October 1, 1994 from Registrant to NBD Bank,
N.A. relating to 7.10% Special Facilities Revenue Bonds, Series
1994 due January 15, 2017.
10.3 Land and Special Facilities Lease Agreement dated as of October 1,
1994 between Registrant and the Indianapolis Airport Authority
relating to 7.10% Special Facilities Revenue Bonds, Series 1994
due January 15, 2017.
11.1 Statement re Computation of Earnings Per Share.
12.1 Computation of Ratio of Earnings to Fixed Charges.
15.1 Letter re Unaudited Interim Financial Statements.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
During the quarter ended November 30, 1994, the Registrant filed one
Current Report on Form 8-K. The report was dated September 14, 1994 and filed
under Item 7, Financial Statements and Exhibits. The report contained
(1) Registrant's Computation of Ratio of Earnings to Fixed Charges; (2) a press
release dated September 14, 1994; and (3) Appendix A to a Preliminary Official
Statement prepared with respect to the Indianapolis Airport Authority Special
Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project).
- 21 -
<PAGE>
SIGNATURE
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 thereunto duly authorized.
FEDERAL EXPRESS CORPORATION
(Registrant)
Date: January 12, 1995 /s/ JAMES S. HUDSON
------------------------------
JAMES S. HUDSON
VICE PRESIDENT & CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
- 22 -
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------- ----------------------
10.1 Indenture dated as of October 1, 1994 between Indianapolis Airport
Authority and NBD Bank, N.A., as Trustee, relating to 7.10% Special
Facilities Revenue Bonds, Series 1994 due January 15, 2017.
10.2 Guaranty dated as of October 1, 1994 from Registrant to NBD Bank, N.A.
relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due
January 15, 2017.
10.3 Land and Special Facilities Lease Agreement dated as of October 1,
1994 between Registrant and the Indianapolis Airport Authority
relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due
January 15, 2017.
11.1 Statement re Computation of Earnings Per Share.
12.1 Computation of Ratio of Earnings to Fixed Charges.
15.1 Letter re Unaudited Interim Financial Statements.
27.1 Financial Data Schedule.
E-1
<PAGE>
Exhibit 10.1
________________________________________________________________________________
TRUST INDENTURE
BY AND BETWEEN
INDIANAPOLIS AIRPORT AUTHORITY
AND
NBD BANK, N.A., AS TRUSTEE
DATED AS OF OCTOBER 1, 1994
________________________________
AUTHORIZING AND SECURING
INDIANAPOLIS AIRPORT AUTHORITY
SPECIAL FACILITIES REVENUE BONDS, SERIES 1994
(FEDERAL EXPRESS CORPORATION PROJECT)
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 101. Meaning of Words and Terms. . . . . . . . . . . . . . . . . . . 3
Section 102. Rules of Construction . . . . . . . . . . . . . . . . . . . . . 9
Section 103. General Ordinance . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE II DETAILS OF BONDS. . . . . . . . . . . . . . . . . . . . . . . .10
Section 201. Authorized Amount of Bonds. . . . . . . . . . . . . . . . . . .10
Section 202. Authorization of Series 1994 Bonds. . . . . . . . . . . . . . .10
Section 203. Payment on Series 1994 Bonds. . . . . . . . . . . . . . . . . .10
Section 204. Execution and Form of Series 1994 Bonds . . . . . . . . . . . .11
Section 205. Authentication of Series 1994 Bonds . . . . . . . . . . . . . .11
Section 206. Delivery of Series 1994 Bonds . . . . . . . . . . . . . . . . .12
Section 207. Exchange of Series 1994 Bonds . . . . . . . . . . . . . . . . .12
Section 208. Negotiability and Registration of Transfer of
Series 1994 Bonds . . . . . . . . . . . . . . . . . . . . . .12
Section 209. Ownership of Series 1994 Bonds. . . . . . . . . . . . . . . . .14
Section 210. Mutilated, Destroyed, Lost or Stolen Series 1994 Bonds. . . . .14
Section 211. Additional Bonds. . . . . . . . . . . . . . . . . . . . . . . .14
ARTICLE III REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . .17
Section 301. Redemption Generally. . . . . . . . . . . . . . . . . . . . . .17
Section 302. Redemption of Portion of Bonds. . . . . . . . . . . . . . . . .17
Section 303. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . .17
Section 304. Redemption of Series 1994 Bonds . . . . . . . . . . . . . . . .17
Section 305. Selection of Series 1994 Bonds to be Redeemed . . . . . . . . .18
Section 306. Redemption Notice . . . . . . . . . . . . . . . . . . . . . . .18
ARTICLE IV DEPOSIT OF SERIES 1994 BOND PROCEEDS,
CONSTRUCTION FUND . . . . . . . . . . . . . . . . . . . . . .20
Section 401. Construction Fund . . . . . . . . . . . . . . . . . . . . . . .20
Section 402. Payments from Construction Fund . . . . . . . . . . . . . . . .20
Section 403. Reliance upon Requisitions. . . . . . . . . . . . . . . . . . .21
Section 404. Net Proceeds Account. . . . . . . . . . . . . . . . . . . . . .21
- i -
<PAGE>
ARTICLE V REVENUES AND FUNDS. . . . . . . . . . . . . . . . . . . . . . .22
Section 501. Establishment of Funds. . . . . . . . . . . . . . . . . . . . .22
Section 502. Deposits to Bond Fund . . . . . . . . . . . . . . . . . . . . .22
Section 503. Application of Money in the Bond Fund . . . . . . . . . . . . .22
Section 504. Nonpayment on Bonds . . . . . . . . . . . . . . . . . . . . . .23
Section 505. Cancellation of Bonds . . . . . . . . . . . . . . . . . . . . .23
Section 506. Disposition of Fund Balances. . . . . . . . . . . . . . . . . .23
Section 507. Security for the Bonds. . . . . . . . . . . . . . . . . . . . .23
ARTICLE VI SECURITY FOR DEPOSITS, INVESTMENT OF FUNDS. . . . . . . . . . .25
Section 601. Security for Deposits . . . . . . . . . . . . . . . . . . . . .25
Section 602. Investment of Money . . . . . . . . . . . . . . . . . . . . . .25
ARTICLE VII GENERAL COVENANTS AND REPRESENTATIONS . . . . . . . . . . . . .27
Section 701. Payment of Principal, Interest and Premium. . . . . . . . . . .27
Section 702. Covenant to Perform Obligations under this Indenture
and the Agreement . . . . . . . . . . . . . . . . . . . . . .27
Section 703. Further Instruments and Actions . . . . . . . . . . . . . . . .27
Section 704. Representations by the Authority. . . . . . . . . . . . . . . .27
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . .29
Section 801. Extension of Interest Payment . . . . . . . . . . . . . . . . .29
Section 802. Events of Default . . . . . . . . . . . . . . . . . . . . . . .29
Section 803. Acceleration of Maturities. . . . . . . . . . . . . . . . . . .30
Section 804. Enforcement of Remedies . . . . . . . . . . . . . . . . . . . .30
Section 805. The Trustee May File Claim in Bankruptcy. . . . . . . . . . . .30
Section 806. Pro Rata Application of Funds . . . . . . . . . . . . . . . . .31
Section 807. Effect of Discontinuance of Proceedings . . . . . . . . . . . .32
Section 808. Control of Proceedings by Owners. . . . . . . . . . . . . . . .32
Section 809. Restrictions Upon Actions by Individual Owners. . . . . . . . .32
Section 810. Enforcement of Rights of Action . . . . . . . . . . . . . . . .33
Section 811. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . .33
Section 812. Delay Not a Waiver. . . . . . . . . . . . . . . . . . . . . . .33
Section 813. Notice of Default . . . . . . . . . . . . . . . . . . . . . . .34
Section 814. Right to Enforce Payment of Bonds Unimpaired. . . . . . . . . .34
Section 815. Waiver of Event of Default. . . . . . . . . . . . . . . . . . .34
- ii -
<PAGE>
ARTICLE IX THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 901. Acceptance of Trusts. . . . . . . . . . . . . . . . . . . . . .35
Section 902. Indemnification of the Trustee as Condition for Remedial Action
upon Direction of Owners. . . . . . . . . . . . . . . . . . .35
Section 903. Limitations on Obligations and Responsibilities of the Trustee.35
Section 904. The Trustee Not Liable for Failure of the Authority to Act. . .36
Section 905. Compensation of the Trustee . . . . . . . . . . . . . . . . . .36
Section 906. Monthly Statements from the Trustee . . . . . . . . . . . . . .36
Section 907. The Trustee Protected in Relying on Certain Documents . . . . .37
Section 908. Notice of Default . . . . . . . . . . . . . . . . . . . . . . .37
Section 909. The Trustee Not Responsible for Recitals. . . . . . . . . . . .37
Section 910. The Trustee May Deal in Bonds . . . . . . . . . . . . . . . . .37
Section 911. Resignation and Removal of the Trustee Subject to Appointment
of Successor. . . . . . . . . . . . . . . . . . . . . . . . .37
Section 912. Resignation of the Trustee. . . . . . . . . . . . . . . . . . .38
Section 913. Removal of the Trustee. . . . . . . . . . . . . . . . . . . . .38
Section 914. Appointment of Successor Trustee. . . . . . . . . . . . . . . .38
Section 915. Vesting of Duties in Successor Trustee. . . . . . . . . . . . .39
ARTICLE X EXECUTION OF INSTRUMENTS BY OWNERS, PROOF
OF OWNERSHIP OF BONDS, AND DETERMINATION
OF CONCURRENCE OF OWNERS. . . . . . . . . . . . . . . . . . .40
Section 1001. Execution of Instruments by Owners. . . . . . . . . . . . . . .40
ARTICLE XI SUPPLEMENTAL INDENTURE. . . . . . . . . . . . . . . . . . . . .41
Section 1101. Supplemental Indenture Without Owners' Consent. . . . . . . . .41
Section 1102. Supplemental Indenture With Owners' Consent . . . . . . . . . .41
Section 1103. Bonds Affected. . . . . . . . . . . . . . . . . . . . . . . . .42
Section 1104. Supplemental Indentures Part of Indenture . . . . . . . . . . .43
Section 1105. Lessee Consent, Opinion of Bond Counsel Required. . . . . . . .43
ARTICLE XII SUPPLEMENTS AND AMENDMENTS TO AGREEMENT OR
THE SERIES 1994 GUARANTY. . . . . . . . . . . . . . . . . . .44
Section 1201. Supplements and Amendments Not Requiring Consent. . . . . . . .44
Section 1202. Supplements and Amendments Requiring Consent of Owners of
a Majority in Principal Amount of Bonds . . . . . . . . . . .45
Section 1203. Opinion of Bond Counsel . . . . . . . . . . . . . . . . . . . .45
- iii -
<PAGE>
ARTICLE XIII DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 1301. Defeasance of Bonds . . . . . . . . . . . . . . . . . . . . . .46
ARTICLE XIV MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . .48
Section 1401. Effect of Covenants . . . . . . . . . . . . . . . . . . . . . .48
Section 1402. Manner of Giving Notice . . . . . . . . . . . . . . . . . . . .48
Section 1403. Inconsistent Indenture. . . . . . . . . . . . . . . . . . . . .49
Section 1404. Headings Not Part of Indenture. . . . . . . . . . . . . . . . .49
Section 1405. The Authority, the Lessee, the Trustee and the Owners Alone
Have Rights under Indenture . . . . . . . . . . . . . . . . .49
Section 1406. Effect of Partial Invalidity. . . . . . . . . . . . . . . . . .49
Section 1407. State Law Governs . . . . . . . . . . . . . . . . . . . . . . .49
Section 1408. Indenture Effective . . . . . . . . . . . . . . . . . . . . . .49
Section 1409. Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . .49
Section 1410. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .50
EXHIBITS:
A - Project Description
B - Bond Form
C - DTC Letter of Representation
D - Requisition Form
- iv -
<PAGE>
TRUST INDENTURE
This Trust Indenture, dated as of October 1, 1994, by and between the
INDIANAPOLIS AIRPORT AUTHORITY (the "Authority"), a municipal corporation
organized and existing under the laws of the State of Indiana (the "State") and
NBD BANK, N.A., a national banking association, as trustee (the "Trustee")
W I T N E S S E T H:
WHEREAS, the Authority owns and operates a public airport known as the
Indianapolis International Airport (such airport, together with such additions
thereto as may be made from time to time, the "Airport"); and
WHEREAS, the Authority is empowered under the Constitution and laws of the
State, particularly I.C. 8-22-3 (as the same may be amended from time to time,
herein called the "Act"), to undertake the obligations and commitments on its
part herein set forth; and
WHEREAS, the Authority has determined that it is necessary to construct
certain additions to the existing facilities at the Airport leased to Federal
Express Corporation (the "Lessee") and certain other structures, equipment and
improvements for or related to the sorting and distribution of express cargo and
parcels, all as more particularly described in the Land and Special Facilities
Lease Agreement (the "Agreement") of even date herewith between the Authority
and the Lessee and that it is in the best interests of the Authority to lease
the Leased Premises (as defined in the Agreement) to the Lessee; and
WHEREAS, under the authority granted by the Act, the Authority is
authorized, among other things, to
(a) acquire, construct, reconstruct, extend, improve, maintain and
operate airport facilities, including, but not limited to facilities such as the
Special Facilities (as defined in the Agreement); and
(b) to borrow money by issuing revenue bonds for the purpose of
acquiring, constructing, reconstructing, extending, or improving airport
facilities such as the Special Facilities; and
(c) to pledge to the payment of such bonds and interest thereon
revenues from one or more airport facilities such as the Special Facilities; and
WHEREAS, the Authority has determined to provide for the issuance of
revenue bonds payable solely from the Trust Estate (as hereinafter defined);
1
<PAGE>
NOW, THEREFORE, for and in consideration of these premises and the mutual
covenants herein contained, of the acceptance by the Trustee of the trusts
hereby created, of the purchase and acceptance of the Bonds (as hereinafter
defined) by the Owners (as hereinafter defined) thereof and of the sum of one
dollar lawful money of the United States of America, to it duly paid by the
Trustee at or before the execution and delivery of these presents, and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, in order to secure the payment of the principal of, premium, if
any, and interest on the Bonds at any time Outstanding (as hereinafter defined)
under this Indenture according to their tenor and effect, and the performance
and observance by the Authority of all the covenants and conditions expressed or
implied herein and contained in the Bonds, the Authority does hereby assign to
the Trustee, its successors in trust and their assigns forever, and grants to
the Trustee, its successors in trust and their assigns forever, a security
interest in all right, title and interest of the Authority in or to, the Trust
Estate and causes the Lessee to execute the Series 1994 Guaranty (as herein
defined), subject to the provisions of this Indenture permitting the application
thereof for the purposes and on the terms set forth herein;
TO HAVE AND TO HOLD all the same with all privileges and appurtenances
hereby conveyed and assigned, or agreed or intended so to be, to the Trustee,
its successors in trust and their assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the
equal and proportionate benefit and security of all the Owners of the Bonds
issued under and secured by this Indenture without preference, priority or
distinction as to the lien of any Bonds over any other Bonds;
PROVIDED, HOWEVER, that if, after the right, title and interest of the
Trustee in and to the Trust Estate shall have ceased, terminated and become void
in accordance with Article XIII hereof, the principal of, premium, if any, and
interest on the Bonds shall have been paid or duly provided for to the Owners
thereof, and after all other moneys held hereunder shall have been paid to the
Authority pursuant to Section 506 hereof, then and in that case these presents
and the estate and rights hereby granted shall cease, terminate and be void, and
thereupon the Trustee shall cancel and discharge this Indenture and execute and
deliver to the Authority and the Lessee such instruments in writing as shall be
requisite to evidence the discharge hereof; otherwise this Indenture is to be
and to remain in full force and effect; and
THIS TRUST INDENTURE FURTHER WITNESSETH, and it is expressly declared, that
all the Bonds issued and secured hereunder are to be issued, authenticated and
delivered, and the Trust Estate and the other estate and rights hereby granted
are to be dealt with and disposed of, under, upon and subject to the terms,
conditions, stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the Authority has agreed and covenanted, and
2
<PAGE>
does hereby agree and covenant, with the Trustee and with the respective Owners,
from time to time, of the Bonds, as follows:
ARTICLE I
DEFINITIONS
Section 101. MEANING OF WORDS AND TERMS. Capitalized terms not otherwise
defined herein shall have the meaning ascribed to them in the Agreement, unless
some other meaning is plainly intended. In addition to words or terms elsewhere
defined in this Indenture, the following words and terms as used in this
Indenture shall have the following meanings, unless some other meaning is
plainly intended:
"Account" means any separate account within a Fund.
"Additional Bonds" means any Series of Bonds issued under this Indenture,
other than the Series 1994 Bonds.
"Airport Director" means the Authority's Executive Director, the officer
succeeding to his principal duties or such other individual who from time to
time is designated in writing by the Authority to perform the duties of the
Executive Director.
"Agreement" means the Land and Special Facilities Lease Agreement by and
between the Authority and the Lessee, dated as of the date hereof, together with
all amendments and supplements thereto.
"Authority" means the Indianapolis Airport Authority, a municipal
corporation organized and operating under the laws of the State, including the
Act, or any successor thereto or assign thereof.
"Bond" or "Bonds" means the Series 1994 Bonds and any Additional Bonds
authorized under and secured by this Indenture.
"Bond Fund" means the fund created and designated the Bond Fund by Section
501 hereof.
"Business Day" means a day of the year, other than a Saturday or Sunday, on
which commercial banks located in: (i) the city in which the corporate trust
operations office of the Trustee is located, (ii) the city in which the
principal office of the Lessee is located, and (iii) New York, New York, are not
required or authorized to remain closed.
3
<PAGE>
"Code" means, with respect to each Series, the Internal Revenue Code of
1986, as amended (or any subsequent federal income tax statute or code that
replaces or restates the Internal Revenue Code of 1986, as amended) and in
effect on the date of issuance of such Series. References to the Code shall
include all relevant final, temporary and proposed rules and regulations from
time to time in effect.
"Construction Fund" means the fund created and designated the Construction
Fund by Section 401 hereof.
"DTC Letter of Representations" means, with respect to the Series 1994
Bonds, the Letter of Representations between the Authority, the Trustee and the
initial Depository, the form of which is attached hereto as Exhibit C hereof.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interest in bonds, and to
effect transfers of book entry interests in bonds in book entry form, and
includes and means initially The Depository Trust Company (a limited purpose
trust company), New York, New York.
"Eminent Domain" means the eminent domain or condemnation power by which
all or any part of the Special Facilities may be taken, except as provided in
Section 1104 of the Agreement, for another public use or any agreement that is
reached in lieu of proceedings to exercise such power.
"Event of Default" means each of those events of default set forth in
Section 802 of this Indenture.
"Funds" mean those funds established in Section 401 and Section 501 of this
Indenture.
"Government Obligations" means (i) any bonds or other obligations of the
United States of America which, as to principal and interest, constitute direct
non-callable obligations of or are guaranteed by the United States of America;
(ii) any non-callable bonds, debentures, participation certificates, notes or
other obligations of any agency or other corporation which has been or may
hereafter be created by or pursuant to an Act of Congress of the United States
as an agency or instrumentality thereof, the bonds, debentures, participation
certificates, notes or other obligations of which are unconditionally guaranteed
by the United States of America; (iii) obligations of the Government National
Mortgage Association; and (iv) any certificates or other evidences of an
ownership interest in obligations of the character described in clauses (i),
(ii) and (iii) or in specific portions thereof, including, without limitation,
portions consisting solely of the principal thereof or solely of the interest
thereon.
4
<PAGE>
"Indenture" means this Trust Indenture dated as of October 1, 1994, between
the Authority and the Trustee, as supplemented and amended, providing for the
issuance of the Bonds.
"Interest Payment Date" means, with respect to the Series 1994 Bonds each
January 15 and July 15, commencing January 15, 1995, and, with respect to any
Additional Bonds, the interest payment dates provided for in the Series
Indenture relating to such Additional Bonds.
"Investment Obligations" means to the extent permitted by law, including,
without limitation the applicable provisions of I.C. 5-13: (i) Government
Obligations, (ii) obligations of the Federal National Mortgage Association,
(iii) obligations of the Federal Intermediate Credit Banks, (iv) obligations of
Federal Farm Credit Banks, (v) obligations of Federal Home Loan Banks, (vi)
obligations of the Export-Import Bank of the United States, (vii) obligations of
the U.S. Postal Service, (viii) obligations of the Federal Home Loan Mortgage
Corporation, (ix) obligations of the Private Export Funding Corporation, (x)
written repurchase agreements with a bank or trust company, including the
Trustee, that are insured by the FDIC, or with any broker-dealer with retail
customers that fall under Securities Investor Protection Corporation protection,
provided that such repurchase agreements are fully secured by Government
Obligations and provided further that (a) such collateral is held by the Trustee
or any agent acting solely for the Trustee during the term of such repurchase
agreement, (b) such collateral is not subject to liens or claims of third
parties, (c) such collateral has a market value exclusive of accrued interest
(determined daily by the Trustee or any agent holding such collateral for the
Trustee as referred to in (a) of this clause (x)) at least equal to the amount
invested in the repurchase agreement, (d) the Trustee has a perfected first
security interest in the collateral, (e) the agreement shall be for a term not
longer than ninety (90) days and (f) the failure to maintain such collateral at
the level required on (c) above will require the Trustee to liquidate the
collateral, (xi) obligations of a state, territory or possession of the United
States or any political subdivision of the foregoing, the interest on which is
excluded from gross income for federal income taxation purposes and which bear a
rating in one of the two highest rating categories by Standard & Poor's Rating
Group or Moody's Investors Service, (xii) obligations described in clause (xi)
above which have been advance refunded and are secured by obligations described
in clause (i) above, (xiii) interest bearing accounts, interest bearing deposits
or certificates of deposit issued by, or bankers acceptances drawn or accepted
by, banks or trust companies, including the Trustee, organized under the laws of
the United States or any state thereof, (xiv) commercial paper rated A-1 or
better by Standard & Poor's Rating Group or P-1 or better by Moody's Investors
Service, (xv) notes of bank holding companies and banking institutions,
organized under the laws of the United States or any state thereof, (xvi) units
of a taxable government money-market portfolio (which may be managed by the
Trustee) restricted to obligations issued or guaranteed as to payment of
principal and interest by the full faith and credit of the United States or
repurchase agreements collateralized by such obligations; provided, however that
not more than twenty million dollars ($20,000,000) of funds on deposit under the
Indenture may be invested at any one
5
<PAGE>
time in Investment Obligations described in this clause (xvi). Any of the items
described in (xiii) and (xv) hereof shall be only of institutions whose capital
and surplus (or in the case of financial institutions other than banks, net
worth) is in excess of $250,000,000 and whose long term debt is rated AA - or
better by Standard & Poor's Rating Group or Aa3 or better by Moody's Investors
Service.
"Lessee" means Federal Express Corporation, a corporation duly organized
and validly existing under the laws of the State of Delaware and qualified to do
business in the State, or any successor thereto or assign thereof permitted
under the Agreement.
"Net Proceeds" means the gross proceeds derived from insurance or any
Eminent Domain award or agreement in lieu of award in Eminent Domain
proceedings, less payment of attorneys' fees and expenses properly incurred in
the collection of such gross proceeds, but only with respect to the Special
Facilities.
"Outstanding" when used with reference to Bonds means, as of a particular
date, all bonds theretofore authorized under and secured by this Indenture
except:
(a) Bonds theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Bonds the payment of which has been made or duly provided for in
accordance with Section 1301 hereof; and
(c) Bonds in exchange for or in lieu of which other Bonds have been
authenticated and delivered pursuant to this Indenture.
"Owner" or "Holder" means a person in whose name a Bond is registered in
the registration books provided for in Section 208 of this Indenture.
"Redemption Price" means, with respect to a Bond or a portion thereof, the
principal amount of such Bond plus the applicable premium, if any, payable upon
redemption thereof in the manner contemplated in accordance with its terms and
the terms provided by this Indenture.
"Regular Record Date" means, with respect to any Bond, the 1st day of the
month that contains any applicable Interest Payment Date.
"Related Person" means a "related person" within the meaning of Section
147(a) of the Code.
6
<PAGE>
"Serial Bonds" means, with respect to any Additional Bonds, the Additional
Bonds that are designated as Serial Bonds in the applicable Series Indenture.
"Series," whenever used herein with respect to Bonds, means all of the
Bonds designated as being part of the same series.
"Series 1994 Bonds" means the Indianapolis Airport Authority Special
Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project) to
be issued in the aggregate amount of $237,755,000.
"Series 1994 Determination of Taxability" means, subject to the Lessee's
rights in the next succeeding paragraph: (a) the delivery to the Trustee of
notice of a statutory notice of deficiency issued by the Internal Revenue
Service which states, in effect, that a Series 1994 Event of Taxability has
occurred; (b) the delivery to the Trustee of written notice of the rendering of
a final and unappealable decision, judgment, decree or other order by any court
of competent jurisdiction to the effect that a Series 1994 Event of Taxability
has occurred; or (c) the delivery by Bond Counsel selected by the Lessee and
reasonably acceptable to the Trustee of an opinion to the effect that a Series
1994 Event of Taxability has occurred.
A Series 1994 Determination of Taxability shall not be deemed to have
occurred pursuant to (a) above unless the Lessee shall have: (1) concurred in
the occurrence of a Series 1994 Determination of Taxability; (2) failed to
initiate proceedings to contest the occurrence of the Series 1994 Determination
of Taxability in accordance with clause (3) of this paragraph within sixty (60)
days after the occurrence of the Series 1994 Determination of Taxability or
failed to have diligently proceeded with such contest to its conclusion; (3)
contested the occurrence of the Series 1994 Determination of Taxability by
appropriate proceedings, diligently pursued the same, but failed to obtain,
within one year from the occurrence of such Series 1994 Determination of
Taxability, a final and unappealable determination by a court of competent
jurisdiction or a final determination of an administrative agency that is not
reviewable by a court of competent jurisdiction that interest on all of the
Series 1994 Bonds shall continue to be excludable from gross income for federal
income tax purposes; or (4) obtained a final and unappealable determination by a
court of competent jurisdiction or a final determination by an administrative
agency that is not reviewable by a court of competent jurisdiction confirming
the occurrence of such Series 1994 Determination of Taxability. For purposes of
the foregoing, the Lessee shall be deemed to have contested such Series 1994
Determination of Taxability if it proceeds to annul or reverse the occurrence of
such Series 1994 Determination of Taxability or to obtain a determination by a
court of competent jurisdiction that no Series 1994 Event of Taxability has
occurred.
"Series 1994 Event of Taxability" means either (i) the failure of the
Lessee or the Authority to observe any covenant or agreement contained in the
Agreement, this Indenture or
7
<PAGE>
the Series 1994 Tax Representation Certificate, (ii) the misrepresentation of
any representation or warranty contained in the Agreement, this Indenture or the
Series 1994 Tax Representation Certificate, or (iii) the taking of any action by
any tenant of the Special Facilities pursuant to a reletting of the Special
Facilities in accordance with Section 1404 of the Agreement, any of the
foregoing of which results in the interest on any of the Series 1994 Bonds being
includable in the gross income of any Owner thereof for federal income tax
purposes, other than an Owner who is a "substantial user" (as such term is
defined in Section 147(a) of the Code) of the Special Facilities financed with
the proceeds of the Series 1994 Bonds or a Related Person.
"Series 1994 Guaranty" means the Series 1994 Guaranty, dated as of the date
hereof, from the Lessee to the Trustee, as the same may be amended and
supplemented from time to time.
"Series 1994 Tax Representation Certificate" means the tax representation
certificate executed by the Lessee dated the date of issuance of the Series 1994
Bonds.
"Series 1994 Underwriting Agreement" means the Underwriting Agreement
between the Authority and the Underwriter, providing for the purchase of the
Series 1994 Bonds.
"Series Indenture" means the Supplemental Indenture providing for the
issuance of any particular Series of Bonds that is required to be adopted prior
to the issuance of any Series.
"Special Record Date" for the payment of any defaulted interest on Bonds
means a date fixed by the Trustee for such payment.
"State" means the State of Indiana.
"Supplemental Agreement" means any amendment of or supplement to the
Agreement entered into pursuant to Article XII of this Indenture.
"Supplemental Indenture" means any amendment of or supplement to this
Indenture entered into pursuant to Article XI of this Indenture, including each
Series Indenture.
"Term Bonds" means all of the Series 1994 Bonds and, with respect to any
Additional Bonds, the Additional Bonds that are designated as Term Bonds in the
applicable Series Indenture.
"Trust Estate" means:
(a) All moneys on deposit in the Construction Fund and the Bond Fund
and the earnings thereof;
8
<PAGE>
(b) The Special Facilities Rentals;
(c) All amounts payable pursuant to the Series 1994 Guaranty;
(d) All rights granted to the Trustee to enforce certain provisions
of the Agreement pursuant to Section 1402 thereof; and
(e) All additional items of collateral pledged pursuant to any
Supplemental Indenture to the Trustee to secure payment of the Bonds.
"Trustee" means the Trustee at the time serving as such under this
Indenture, which shall initially mean NBD BANK, N.A. and all other successors
thereto.
"Underwriter" means, with respect to the Series 1994 Bonds, CS First Boston
Corporation, as senior manager for the underwriters identified in the Series
1994 Underwriting Agreement and, with respect to any Additional Bonds, the
initial purchaser or purchasers of such Additional Bonds.
Section 102. RULES OF CONSTRUCTION. (a) Words of the masculine gender
shall be deemed and construed to include correlative words of the feminine and
neuter genders. Unless the context shall otherwise indicate, words used herein
shall include the plural as well as the singular number. The word "person"
shall include corporations, firms, associations, partnerships, joint ventures,
joint stock companies, trusts, unincorporated organizations, and public bodies,
as well as natural persons.
(b) When used in connection with the amounts on deposit in or to be
deposited in any Fund or Account created hereunder, the word "money" shall
include Investment Obligations.
(c) All references herein to particular articles or sections are
references to articles or sections of this Indenture unless some other reference
is indicated.
(d) All references to the Authority or any action of the Authority
are references to the Authority as owner of the Special Facilities and shall not
be deemed to refer to the Authority in any other proprietary or governmental
capacity unless the context otherwise requires.
Section 103. GENERAL ORDINANCE. The Bonds issued under this Indenture
shall constitute special purpose facility bonds under the provisions of General
Ordinance No. 6-1985 of the Authority.
9
<PAGE>
ARTICLE II
DETAILS OF BONDS
Section 201. AUTHORIZED AMOUNT OF BONDS. No Bonds may be issued under
this Indenture except in accordance with the provisions of this Article. The
principal amount of the Series 1994 Bonds (other than Series 1994 Bonds issued
in substitution therefor pursuant to Section 207 hereof) that may be issued is
$237,755,000. Additional Bonds may be issued as provided in Section 211 hereof.
Each Series Indenture shall set forth the appropriate details of the Bonds
issued pursuant to such Series Indenture. The principal of, the interest on and
the premium, if any, on all Bonds issued under the provisions of this Indenture
shall be payable solely from the moneys and assets pledged by this Indenture for
their payment. All covenants, agreements and provisions of this Indenture shall
be for the benefit and security of all present and future Owners without
preference, priority or distinction as to lien or otherwise, except as otherwise
hereinafter provided or as provided in any Series Indenture, of any one Bond
over any other Bond by reason of priority in the issue, sale or negotiation
thereof, or otherwise.
Section 202. AUTHORIZATION OF SERIES 1994 BONDS. There shall be issued
under and secured by this Indenture the Series 1994 Bonds of the Authority for
the purpose of providing funds, together with other available funds, to (i) pay
the cost of the construction, acquisition and installation of the Special
Facilities, (ii) fund capitalized interest on the Series 1994 Bonds, and (iii)
pay the costs of issuance of the Series 1994 Bonds. The Series 1994 Bonds shall
be designated "Indianapolis Airport Authority Special Facilities Revenue Bonds,
Series 1994 (Federal Express Corporation Project)," shall be dated October 1,
1994, shall be numbered R-1 and upward, shall be issued in denominations of
$5,000 and integral multiples thereof, shall be in such aggregate principal
amounts and shall bear interest, payable semiannually on each Interest Payment
Date, at the rate of interest equal to seven and one-tenth percent (7.10%) per
annum based upon a three hundred sixty (360) day year consisting of twelve (12)
thirty (30) day months and shall mature (subject to the right of prior
redemption as hereinafter set forth) on January 15, 2017.
Section 203. PAYMENT ON SERIES 1994 BONDS. Each Series 1994 Bond shall
bear interest from the Interest Payment Date next preceding the date on which it
is authenticated, unless it is (a) authenticated after a Regular Record Date,
but on or prior to the Interest Payment Date with respect thereto, in which
event it shall bear interest from such Interest Payment Date, or (b)
authenticated on or prior to the first Regular Record Date, in which event it
shall bear interest from October 1, 1994; provided, however, that if at the time
of authentication any Series 1994 Bond interest is in default, such Series 1994
Bond shall bear interest from the date to which interest has been paid.
10
<PAGE>
The principal of, premium, if any, and the interest on the Series 1994
Bonds shall be payable in any coin or currency of the United States of America
which on the respective dates of payment thereof is legal tender for the payment
of public and private debts. The principal of all the Series 1994 Bonds shall
be payable at the corporate trust operations office of the Trustee. Payment of
the principal of all the Series 1994 Bonds shall be made upon the presentation
and surrender of the Series 1994 Bonds as the same shall become due and payable.
Subject to the provisions of Subsection 208(b) hereof, interest on any
Series 1994 Bond shall be paid by check mailed on the Interest Payment Date to
the person in whose name that Series 1994 Bond is registered at the close of
business on the Regular Record Date for such Interest Payment Date, except that
interest will be transmitted by wire transfer on such Interest Payment Date to
Owners of one million dollars ($1,000,000) or more in aggregate principal amount
of Series 1994 Bonds as of the close of business on such Regular Record Date
which shall have provided written notice to the Trustee not less than 15 days
before such Regular Record Date of their wire transfer addresses in the
continental United States; provided that payments to a Depository for book-entry
only Bonds shall be made in immediately available funds on such Interest Payment
Date.
In connection with any overdue interest, or interest on any overdue amount,
or in connection with any optional or mandatory redemption on a date that is
other than an Interest Payment Date, the Trustee will establish a Special Record
Date not more than thirty days prior to the date set for payment. The Trustee
will mail notice of a Special Record Date to the Owners at least ten days prior
to the Special Record Date.
Section 204. EXECUTION AND FORM OF SERIES 1994 BONDS. All Series 1994
Bonds shall be signed by, or bear the facsimile signatures of, the President and
Secretary of the Authority, and the official seal of the Authority shall be
impressed, or a facsimile thereof imprinted, on the Series 1994 Bonds. In case
any officer whose signature or a facsimile of whose signature appears on any
Series 1994 Bonds ceases to be such officer before the delivery of such Series
1994 Bonds, such signature or such facsimile nevertheless shall be valid and
sufficient for all purposes the same as if he had remained in office until such
delivery, and any Series 1994 Bond may bear the facsimile signature of, or may
be signed by, such as at the actual time of the execution of such Series 1994
Bond are the proper officers to execute such Series 1994 Bond although at the
date of such Series 1994 Bond such persons may not have been such officers. The
Series 1994 Bonds issued under this Indenture shall be substantially in the form
herein set forth with such variations, omissions and insertions as are permitted
or required by this Indenture or deemed necessary by the Trustee.
Section 205. AUTHENTICATION OF SERIES 1994 BONDS. Only such Series 1994
Bonds as have endorsed thereon a certificate of authentication substantially in
the form provided herein and duly executed as provided herein shall be entitled
to any benefit or security under this
11
<PAGE>
Indenture. No Series 1994 Bond shall be valid or obligatory for any purpose
unless and until such certificate of authentication on the Series 1994 Bond has
been duly executed and dated as provided in the Indenture, and such certificate
upon any such Series 1994 Bond shall be conclusive evidence that such Series
1994 Bond has been duly authenticated and delivered under this Indenture. The
certificate of authentication on any Series 1994 Bond shall be deemed to have
been duly executed and dated if signed by an authorized officer of the Trustee
but it shall not be necessary that the same officer sign the certificate of
authentication on all of the Series 1994 Bonds.
Section 206. DELIVERY OF SERIES 1994 BONDS. Upon the execution and
delivery of this Indenture, the Authority shall execute and deliver to the
Trustee the Series 1994 Bonds. The Trustee shall authenticate such Series 1994
Bonds and deliver them to the Underwriter upon receipt of:
(a) An executed or conformed copy of this Indenture;
(b) A certified copy of the ordinance adopted and approved by the
Authority authorizing the execution and delivery of this Indenture, the
Agreement and the issuance of the Series 1994 Bonds;
(c) A written request of the Authority to the Trustee requesting the
Trustee to authenticate and deliver the Series 1994 Bonds to the
Underwriter;
(d) The proceeds of the issuance of the Series 1994 Bonds in the
amount required by the Series 1994 Underwriting Agreement;
(e) An executed or conformed copy of the Agreement; and
(f) An executed or conformed copy of the Series 1994 Guaranty.
The proceeds of the Series 1994 Bonds shall be paid over to the Trustee and
deposited to the credit of the various funds as hereinafter provided under
Section 401 and Section 501 hereof.
Section 207. EXCHANGE OF SERIES 1994 BONDS. Series 1994 Bonds, upon
surrender thereof at the corporate trust office of the Trustee, together with an
assignment duly executed by the Owner or his attorney or legal representative in
such form as shall be satisfactory to the Trustee, may, at the option of the
Owner thereof, be exchanged for an equal aggregate principal amount of Series
1994 Bonds of the same maturity, of any denomination or denominations authorized
by the Indenture, bearing interest at the same rate and in the same form as the
Series 1994 Bonds surrendered for exchange. Each Series 1994 Bond delivered
under this Indenture upon transfer of or in exchange for or in lieu of any other
Series 1994 Bond shall carry all the
12
<PAGE>
rights to interest accrued and unpaid, and to accrue which were carried by such
other Series 1994 Bond and each such Series 1994 Bond shall bear interest from
such date, that neither gain nor loss in interest shall result from such
transfer, exchange or substitution.
The Authority shall make provision for the exchange of Series 1994 Bonds at
the corporate trust office of the Trustee.
Section 208. NEGOTIABILITY AND REGISTRATION OF TRANSFER OF SERIES 1994
BONDS. (a) The Trustee shall keep books for the registration and the
registration of transfer of the Series 1994 Bonds. Said registration books
shall be available at all reasonable times for inspection by the Authority and
by an Owner who shall own at least 10% in aggregate principal amount of Series
1994 Bonds then outstanding hereunder and may be copied by either of the
foregoing and their agents or representatives.
The transfer of any Series 1994 Bond may be registered only upon the books
kept by the Trustee for the registration of transfer of Series 1994 Bonds upon
presentation thereof to the Trustee together with an assignment duly executed by
the Owner or his attorney or legal representative in such form as shall be
satisfactory to the Trustee. No transfer of any Series 1994 Bond shall alter
the ownership of such Series 1994 Bond for purposes of this Indenture unless
such transfer is registered with the Trustee. Upon any such registration of
transfer, the Authority shall, if necessary, execute and the Trustee shall
authenticate and deliver in exchange for such Series 1994 Bond a new Series 1994
Bond or Series 1994 Bonds, registered in the name of the transferee, of any
denomination or denominations authorized by this Indenture.
In all cases in which Series 1994 Bonds shall be exchanged or the transfer
of Series 1994 Bonds shall be registered hereunder, the Authority shall if
necessary, execute and the Trustee shall authenticate and deliver at the
earliest practicable time Series 1994 Bonds in accordance with the provisions of
this Indenture. All Series 1994 Bonds surrendered in any such exchange or
registration of transfer shall forthwith be cancelled by the Trustee. No
service charge shall be made for any registration, transfer, or exchange of
Series 1994 Bonds, but the Authority and the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Series 1994 Bonds. Neither the
Authority nor the Trustee shall be required (i) to transfer or exchange Series
1994 Bonds during a period beginning at the opening of business fifteen (15)
days before the day of the first mailing of a notice of redemption of Series
1994 Bonds and ending at the close of business on the day of such mailing or
(ii) to transfer or exchange any Series 1994 Bond so selected for redemption in
whole or in part.
(b) Anything contained in this Indenture to the contrary
notwithstanding, all of the Series 1994 Bonds shall be issued by means of the
book-entry system provided for in the DTC Letter of Representations. During the
period that such book-entry system is used for the Series
13
<PAGE>
1994 Bonds, one Bond certificate (or such other number of certificates as may be
required by or acceptable to the Depository) in the aggregate principal amount
of such Series 1994 Bonds will be issued, registered as provided by the rules
of the book-entry system, and required to be deposited with the Depository and
immobilized in its custody. The book-entry system will evidence beneficial
ownership of such Series 1994 Bonds in the principal amount of five thousand
dollars ($5,000) or any multiple thereof, with transfers of ownership effected
on the records of the Depository and its system pursuant to rules and procedures
established by the Depository and its system.
(c) If either (i) the Authority or the Trustee receives notice from
the Depository that is currently the Owner of the Series 1994 Bonds to the
effect that such Depository is unable or unwilling to discharge its
responsibility as a Depository for the Series 1994 Bonds or, (ii) the Authority
elects with the prior written consent of the Lessee to discontinue its use of
such Depository as a Depository for the Series 1994 Bonds and the Authority
fails to establish a securities depository/book-entry system relationship with
another Depository, then the Authority and the Trustee each shall do or perform
or cause to be done or performed all acts or things, not adverse to the rights
of the Owners of the Series 1994 Bonds, as are necessary or appropriate to
discontinue use of such Depository as a Depository for the Series 1994 Bonds and
to transfer the ownership of each of the Series 1994 Bonds to such person or
persons, including any other Depository, as the Owners of the Series 1994 Bonds
may direct in accordance with this Indenture. Any expenses of such
discontinuance and transfer, including expenses of printing new certificates to
evidence the Series 1994 Bonds, shall be paid by the Lessee.
Section 209. OWNERSHIP OF SERIES 1994 BONDS. The person in whose name any
Series 1994 Bond is registered shall be deemed and regarded as the absolute
owner thereof for all purposes, and payment of or on account of the principal of
and premium, if any, and interest on, any such Series 1994 Bond shall be made
only to or upon the order of the Owner thereof or his legal representative. All
such payments shall be valid and effectual to satisfy and discharge the
liability upon such Series 1994 Bond to the extent of the sum or sums so paid.
Section 210. MUTILATED, DESTROYED, LOST OR STOLEN SERIES 1994 BONDS. The
Authority shall cause to be executed, and the Trustee shall deliver a new Series
1994 Bond of like date, number and tenor in exchange and substitution for and
upon the cancellation of any mutilated Series 1994 Bond, or in lieu of and in
substitution for any destroyed, lost or stolen Series 1994 Bond, and the Owner
shall pay the reasonable expenses and charges of the Authority in connection
therewith. Prior to the delivery of a substitute Series 1994 Bond the Owner of
any Series 1994 Bond which was destroyed, lost or stolen, shall file with the
Trustee evidence satisfactory to it of the destruction, loss or theft of such
Series 1994 Bond and of the Owner's ownership thereof and shall furnish to the
Authority and to the Trustee such security or indemnity as may be required by
them to save each of them harmless from all risks, however remote.
14
<PAGE>
Every Series 1994 Bond issued pursuant to the provisions of this Section
210 in exchange or substitution for any Series 1994 Bond which is mutilated,
destroyed, lost or stolen shall constitute a separate contractual obligation of
the Authority, whether or not the destroyed, lost or stolen Series 1994 Bonds
are found at any time or are enforceable by anyone, and shall be entitled to all
the benefits and security hereof equally and proportionately with any and all
other Series 1994 Bonds duly issued under this Indenture.
Section 211. ADDITIONAL BONDS. (a) In addition to the Series 1994 Bonds,
Bonds may be issued under this Indenture to (i) finance the completion of the
Special Facilities or (ii) refund any Bonds issued under this Indenture. Except
as to any differences in the maturities thereof, the rate or rates of interest
applicable thereto, and the provisions for redemption, all such Bonds shall be
on a parity with and shall be entitled to the same benefit and security of this
Indenture, including, in particular, the pledge of the Trust Estate.
(b) Additional Bonds shall be executed substantially in the form and
in the manner hereinabove set forth and shall be deposited with the Trustee for
authentication, but before the Bonds shall be authenticated and delivered to the
Trustee for delivery to the purchasers thereof, there will be filed with the
Trustee the following:
(i) a copy, certified by the Secretary of the Authority, of
the Series Indenture executed by the Authority for such
Additional Bonds, which shall provide for the issuance
of such Additional Bonds, the application of the
proceeds thereof for the purposes intended and the
pledge of the Trust Estate with respect thereto;
(ii) a copy, duly certified by the Secretary of the
Authority, of the ordinance adopted and approved by the
Authority authorizing the execution and delivery of the
applicable Series Indenture authorizing the execution
and delivery of such Series Indenture and the issuance
of such Additional Bonds;
(iii) a written statement signed by an Authorized Lessee
Representative: (1) approving the terms, conditions,
manner of issuance, purchase price, delivery and
contemplated disposition of the proceeds of the sale of
such Additional Bonds and (2) certifying that there
exists no Event of Default under Section 802 hereof;
(iv) an executed counterpart of a Supplemental Agreement
providing for the use of the proceeds of the sale of
such Additional Bonds and for the
15
<PAGE>
payment by the Lessee of an increased amount of Special
Facilities Rentals attributable to the issuance of such
Series of Additional Bonds;
(v) an opinion of counsel for the Lessee, which counsel may
be an employee of the Lessee, as to (1) the full
corporate power and authority of the Lessee to execute,
deliver and perform the Supplemental Agreement, and (2)
the authorization, execution and delivery of the
Supplemental Agreement in connection with the issuance
of such Additional Bonds and its legality, validity,
binding effect and enforceability as to the Lessee,
subject to customary exceptions acceptable to the
Authority;
(vi) an executed counterpart of a guaranty from the Lessee
to the Trustee executed in connection with the issuance
of such Additional Bonds, which guaranty and payments
made pursuant thereto shall upon the issuance of such
Additional Bonds become a part of the Trust Estate and
in which guaranty the Lessee shall unconditionally
guarantee the full and prompt payment to the Trustee of
the principal of and premium, if any, and interest on
such Additional Bonds;
(vii) an opinion of Bond Counsel to the effect that the
issuance of such Additional Bonds will not adversely
affect the exclusion from gross income for federal
income tax purposes of the interest on any Tax Exempt
Bonds received by any Owner; and
(viii) such other documents as are required to be delivered to
the Trustee pursuant to the Indenture.
(c) When the documents mentioned in subsection (b) shall have been
filed with the Trustee and when the Additional Bonds shall have been executed
and authenticated as required by this Indenture, the Trustee shall deliver the
Additional Bonds to or upon the order of the purchasers named in the Series
Indenture mentioned in subsection (b) but only upon payment to the Trustee of
the purchase price of the Additional Bonds and the accrued interest, if any,
thereon. The Trustee shall be entitled to rely upon the Series Indenture as to
all matters stated therein.
The proceeds (including accrued interest) of the Additional Bonds shall be
applied simultaneously with the delivery of such Additional Bonds by the Trustee
as provided in the Series Indenture. Each Series of Additional Bonds shall be
stated to mature, subject to the right of prior redemption as provided therein,
on the date or dates and year or years as specified therein.
16
<PAGE>
ARTICLE III
REDEMPTION
Section 301. REDEMPTION GENERALLY. The Bonds of any Series issued under
this Indenture may be made subject to redemption at such time and prices, upon
such terms and conditions and with such effect as may be provided hereby or by
the Series Indenture authorizing the issuance of such Bonds.
Section 302. REDEMPTION OF PORTION OF BONDS. If less than all of an
Outstanding Bond is selected for redemption, the Owner thereof or his attorney
or legal representative shall present and surrender such Bond to the Trustee for
payment of the principal amount thereof so called for redemption, and the
redemption premium, if any, on such principal amount, and the Authority shall,
if necessary, execute and the Trustee shall authenticate and deliver to or upon
the order of such Owner or his attorney or legal representative, without charge,
for the unredeemed portion of the principal amount of the Bond so surrendered, a
new Bond of the same Series and maturity, bearing interest at the same rate and
of any denomination or denominations authorized by this Indenture.
Section 303. CANCELLATION. Bonds presented and surrendered in accordance
with the provisions of this Article shall be cancelled upon the surrender
thereof.
Section 304. REDEMPTION OF SERIES 1994 BONDS.
(a) The Series 1994 Bonds shall not be subject to prior redemption
except as provided in this Section 304.
(b) Series 1994 Bonds are subject to optional redemption by the
Authority upon the receipt of a written direction of the Lessee to exercise such
option, in whole or in part, on any date on or after July 15, 2004 at a
Redemption Price expressed as a percentage of the principal amount of Series
1994 Bonds being redeemed shown below, plus accrued interest to the date of
redemption:
Redemption Dates Redemption Price
---------------- ----------------
July 15, 2004 through July 14, 2005 102%
July 15, 2005 through July 14, 2006 101
July 15, 2006 and thereafter 100
17
<PAGE>
(c) The Series 1994 Bonds shall not be subject to mandatory sinking fund
redemption.
(d) The Series 1994 Bonds are subject to special optional redemption at
the election of the Lessee, in whole or in part as permitted under the
Agreement, at a redemption price equal to one hundred percent (100%) of the
principal amount thereof, without premium, plus accrued interest to the date of
redemption, from the Net Proceeds with respect to the Special Facilities and
other amounts deposited into the Series 1994 Account of the Bond Fund in
accordance with Sections 1101 and 1102 of the Agreement on the earliest
practicable date selected by the Trustee after such deposit.
(e) The Series 1994 Bonds are subject to mandatory redemption by the
Authority, in part, at a redemption price equal to one hundred percent (100%) of
the principal amount thereof, without premium, plus accrued interest to the
redemption date, from amounts that are deposited to the Series 1994 Account of
the Bond Fund from the Series 1994 Account of the Construction Fund pursuant to
Subsection 402(b) of this Indenture on the earliest practicable date selected by
the Trustee after such deposit.
(f) The Series 1994 Bonds are subject to mandatory redemption by the
Authority in whole on any date at a Redemption Price equal to one hundred
percent (100%) of the principal amount thereof, plus accrued interest to the
date of redemption upon a Series 1994 Determination of Taxability. Such
redemption shall occur on a date selected by the Lessee, which shall be not
later than 120 days after the Series 1994 Determination of Taxability.
(g) The Series 1994 Bonds are subject to mandatory redemption by the
Authority in whole at a Redemption Price equal to one hundred percent (100%) of
the principal amount thereof, plus accrued interest to the date of redemption on
any date selected by the Authority which shall be not more than sixty (60) days
after the Authority notifies the Trustee of the Authority's election to
terminate the Agreement pursuant to Section 808 of the Agreement.
(h) If, pursuant to Subsection 401(b) of the Agreement, the termination
date of the Agreement is determined to be prior to the stated maturity date of
the Series 1994 Bonds, the Series 1994 Bonds are subject to mandatory redemption
by the Authority in whole at a redemption price of one hundred percent (100%) of
the principal amount thereof, plus accrued interest to the date of redemption on
the Business Day prior to the final day of the term of the Agreement.
Section 305. SELECTION OF SERIES 1994 BONDS TO BE REDEEMED. The Series
1994 Bonds shall be redeemed only in whole multiples of $5,000 principal amount.
If less than all of the Series 1994 Bonds are to be called for redemption, the
Trustee shall select the Series 1994 Bonds to be redeemed by lot, each $5,000
portion of principal being counted as one Bond for this
18
<PAGE>
purpose; provided that so long as the Series 1994 Bonds are held by a Depository
in a book-entry system, the Depository shall select the Series 1994 Bonds to be
redeemed.
Section 306. REDEMPTION NOTICE. Not more than sixty (60) nor less than
thirty (30) days before the redemption date of any Series 1994 Bonds to be
redeemed, whether such redemption be in whole or in part, the Authority shall
cause a notice of such redemption to be filed with the Trustee and to be mailed,
postage prepaid, to the Owner of each Series 1994 Bond to be redeemed in whole
or in part at his address appearing upon the registration books maintained
pursuant to Section 208 hereof. Prior to giving notice of a redemption pursuant
to Subsections 304(d), 304(e) or 304(g) hereof, the Trustee shall determine that
there are sufficient funds on deposit in the Series 1994 Account of the Bond
Fund for such purpose. Upon the proper giving of such notice, the redemption
shall be irrevocable. With respect to a redemption pursuant to Subsections
304(b), 304(f) or 304(h) hereof, it shall not be a condition precedent to the
giving of such notice that the redemption price be on deposit in the Series 1994
Account of the Bond Fund. Upon the proper giving of notice with respect to a
redemption pursuant to Subsections 304(f) or 304(h), the redemption shall be
irrevocable. In the event of a redemption pursuant to Subsection 304(b) hereof,
the notice shall state that the Lessee may elect prior to 5:00 p.m. Indianapolis
time on the Business Day next preceding the date fixed for redemption to not
proceed with such redemption.
Failure to mail such notice or any defect therein shall not affect the
validity of the redemption as regards Owners to whom such notice was given as
required hereby. Each such notice shall set forth the date designated for
redemption and the redemption price to be paid. Each such notice to the Owners
thereof shall also set forth, if less than all of the Series 1994 Bonds then
Outstanding shall be called for redemption, the distinctive numbers and letters,
if any, of such Series 1994 Bonds to be redeemed and, in the case of any Series
1994 Bond to be redeemed in part only, the portion of the principal amount
thereof to be redeemed. If any Series 1994 Bond is to be redeemed in part only,
the notice of redemption shall state also that on or after the redemption date,
upon surrender of such Series 1994 Bond, a new Series 1994 Bond or Series 1994
Bonds in principal amount equal to the unredeemed portion of such Series 1994
Bond will be issued. On the date fixed for redemption, notice having been given
as aforesaid, the Series 1994 Bonds or portions thereof so called for redemption
shall be due and payable at the redemption price established for the redemption
of such Series 1994 Bonds or portions thereof on such date and, if on the date
fixed for redemption moneys are held by the Trustee in the Series 1994 Account
of the Bond Fund sufficient to pay the redemption price, interest on the Series
1994 Bonds or portions thereof so called for redemption shall cease to accrue on
the redemption date. Notwithstanding the foregoing, in the event of redemption
pursuant to Subsection 304(b) hereof, the Series 1994 Bonds fixed for redemption
shall not be due and payable on the date fixed for redemption if the Lessee
shall give written notice to the Trustee and the Authority on or before 5:00
p.m. Indianapolis time on the Business Day next preceding the date fixed for
redemption of its election not to proceed with such optional redemption.
19
<PAGE>
ARTICLE IV
DEPOSIT OF SERIES 1994 BOND PROCEEDS, CONSTRUCTION FUND
Section 401. CONSTRUCTION FUND. A special fund is hereby established with
the Trustee and designated the "Construction Fund." Unless otherwise prohibited
from doing so, and except as provided in Section 501, any proceeds of the Series
1994 Bonds (other than accrued interest) shall be deposited immediately upon
their receipt in the Series 1994 Account of the Construction Fund.
The money in the Construction Fund and any Accounts therein shall be held
by the Trustee in trust and, pending application thereof shall, to the extent
permitted by law, be subject to a lien and charge in favor of the Trustee and
the Owners of Bonds under this Indenture and shall be held for the security of
the Owners.
Section 402. PAYMENTS FROM CONSTRUCTION FUND. (a) The Trustee shall
disburse moneys held within the Series 1994 Account of the Construction Fund
from time to time to or upon the order of the Lessee in order to pay, or as
reimbursement to the Authority or the Lessee for payment made, the costs of the
Special Facilities, or for payment of interest on the Series 1994 Bonds, in each
case upon receipt by the Trustee of a written request of the Lessee
substantially in the form set forth in EXHIBIT D hereof.
For the purpose of this Indenture, the costs of the Special Facilities
shall include such costs as are eligible costs within the purview of the Act and
are permissible for financing of airport facilities pursuant to Section
142(a)(1) of the Code.
(b) DISPOSITION OF SERIES 1994 ACCOUNT MONEYS UPON COMPLETION OF
CONSTRUCTION. If, after payment by the Trustee of all orders tendered to the
Trustee under the provisions of subsection (a) of this Section 402, except for
orders that are the subject of a disputed claim, and upon receipt by the Trustee
of a certificate of the Lessee to the effect that the Special Facilities are
complete and the Lessee is of the opinion that the Special Facilities have been
fully paid for, except for any disputed claims, there shall remain any balance
of moneys in the Series 1994 Account of the Construction Fund, such money in
excess of amounts necessary to pay any disputed claims shall be used pursuant to
a written direction of the Authorized Lessee Representative delivered to the
Trustee (i) for the redemption of the Series 1994 Bonds, or a portion thereof,
in accordance with Section 304(e) hereof, at the earliest practicable date
selected by the Trustee; (ii) to acquire, construct, install, improve and equip
such additional real and personal property in connection with the Special
Facilities as are designated by the Authorized Lessee Representative as
permissible costs of the Special Facilities; or (iii) for a combination of any
or all of the foregoing as is provided in such direction, in each case subject
to an opinion of Bond Counsel to the effect that such application of such moneys
will not adversely affect the
20
<PAGE>
exclusion from gross income for federal tax purposes of the interest on any Tax
Exempt Bonds received by any Owner. The amounts to be used for redemption of
the Series 1994 Bonds shall be immediately deposited in the Series 1994 Account
of the Bond Fund after the receipt of such direction.
(c) DISPOSITION OF FUNDS UPON COMPLETION AND FINAL PAYMENT CERTIFICATE.
Any funds remaining on deposit in the Construction Fund upon the delivery of the
certificate required by Subsection 305(a) of the Agreement shall be disposed of
in the manner described in subsection (b) of this Section 402.
Section 403. RELIANCE UPON REQUISITIONS. All requisitions submitted
substantially in the form of Exhibit D hereto and opinions received by the
Trustee as conditions of payment from the Series 1994 Account of the
Construction Fund may be relied upon by the Trustee. Such requisitions and
opinions shall be retained by the Trustee for a period of time not less than
that required by the law of the State for the retention of the Authority's
records and shall be subject at all reasonable times to examination by the
Authority and the Owners of Bonds then Outstanding.
Section 404. NET PROCEEDS ACCOUNT. If and when Net Proceeds with respect
to the Special Facilities are received by the Trustee to be used to repair,
rebuild or restore the Special Facilities pursuant to Article XI of the
Agreement, the Trustee shall create a special account in the Construction Fund
to be designated the Net Proceeds Account into which such Net Proceeds shall be
deposited. The Net Proceeds Account shall be applied in accordance with Article
XI of the Agreement.
21
<PAGE>
ARTICLE V
REVENUES AND FUNDS
Section 501. ESTABLISHMENT OF FUNDS. (a) In addition to the Construction
Fund, there is hereby established with the Trustee the Bond Fund and within the
Bond Fund a Series 1994 Account.
(b) The money in the Construction Fund and the Bond Fund shall be held in
trust and applied as hereinafter provided. Pending such application, the money
in the Bond Fund shall be subject to a lien and encumbrance in favor of the
Owners of all Bonds Outstanding.
(c) Each Series Indenture may provide for the creation of a separate
account within the Construction Fund and Bond Fund with respect to each Series
of Bonds, which accounts shall bear the designation of such Series of Bonds.
Section 502. DEPOSITS TO BOND FUND. (a) In addition to the deposit of any
accrued interest received on the Series 1994 Bonds, which shall be deposited
into the Series 1994 Account of the Bond Fund, the Trustee shall deposit into
the Series 1994 Account of the Bond Fund upon receipt, all Special Facilities
Rentals paid under the Agreement with respect to the Series 1994 Bonds, all
payments received under the Series 1994 Guaranty and all amounts to be
transferred thereto pursuant to Subsections 402(b) and (c) hereof. The Trustee
shall also deposit into the Bond Fund all Net Proceeds to be used in the
redemption of Bonds pursuant to paragraph (ii) of Subsection 1101(a) or
paragraph (iii) of Subsection 1102(a) of the Agreement, and upon acceleration of
the Bonds pursuant to Section 803 hereof, shall transfer to the Bond Fund all
funds on deposit in the Construction Fund.
(b) On or before the forty-fifth (45th) day next preceding any date on
which Bonds of a Series are to mature or are to be redeemed, the Authority or
the Lessee may satisfy all or a portion of the Authority's obligation to make
the payments with respect to the principal on the Bonds of such Series required
by paragraph (a) of this Section 502 by delivering to the Trustee Bonds of such
Series maturing or required to be redeemed on such date. The price paid to
purchase any such Bond shall not exceed the Redemption Price plus accrued
interest to the date of purchase applicable to such Bonds at the next redemption
date. Upon such delivery the Authority shall receive a credit against amounts
required to be deposited into the Bond Fund on account of such Bonds.
Section 503. APPLICATION OF MONEY IN THE BOND FUND. Not later than 10:00
a.m. Indianapolis time on each Interest Payment Date, date for the payment of
defaulted interest, date upon which Bonds are to be redeemed, date of
acceleration of Bonds or on such other date as may be specified herein, the
Trustee shall withdraw from the respective account of the Bond
22
<PAGE>
Fund the amounts required for paying interest, principal and redemption
premiums, if any, on the respective Series of Bonds, subject to the provisions
of Section 806 hereof. The Trustee shall remit the amount due and payable to
the Owners as provided herein.
Section 504. NONPAYMENT ON BONDS. All money that the Trustee shall have
withdrawn from the Bond Fund or shall have received from any other source and
set aside for the purpose of paying any of the Bonds hereby secured, either at
maturity or by purchase or call for redemption, shall be held in trust for the
respective Owners.
Any money that is so set aside and that remains unclaimed by the Owners for
a period of five (5) years after the date on which such Bonds have become
payable shall be paid to the Lessee and thereafter the Owners shall look only to
the Lessee for payment and then only to the extent of the amounts so received,
without any interest thereon, and the Trustee shall have no responsibility with
respect to such money.
Section 505. CANCELLATION OF BONDS. Upon receipt of the same, the Trustee
shall cancel all Bonds paid, redeemed or purchased by the Trustee or purchased
by the Authority or the Lessee and delivered to the Trustee, and all Bonds
delivered to the Trustee in exchange for other Bonds or delivered to the Trustee
upon the transfer of any Bond if a new Bond is delivered upon such transfer.
The Trustee shall certify to the Authority and the Lessee the details of all
Bonds so cancelled. All Bonds cancelled under any of the provisions of this
Indenture shall be destroyed by the Trustee, unless otherwise directed by the
Authority. Upon destruction of any Bonds, the Trustee shall execute a
certificate in triplicate, describing the Bonds so destroyed; and executed
certificates shall be filed with the Authority and the Lessee and the third
executed certificate shall be retained by the Trustee.
Section 506. DISPOSITION OF FUND BALANCES. After provision is made for
the payment of all Outstanding Bonds issued under this Indenture, including the
interest thereon and for the payment of all other obligations, expenses and
charges required to be paid under or in connection with this Indenture, and
receipt by the Trustee of a certificate of the Authority to the effect that
there are no other indentures, ordinances, bond ordinances, or other agreements
that impose a continuing lien on the balances hereinafter mentioned, subject to
the provisions of Section 504 hereof, the Trustee shall pay all amounts in any
Fund or Account then held by it under this Indenture to the Lessee. If a
continuing lien has been imposed on any such balance by another indenture,
ordinance, any other agreement, by court order or decree, or by law, the Trustee
shall pay such balance to such person as is entitled to receive the same by law
or under the terms of such indenture, ordinance, agreement, court order, or
decree.
Section 507. SECURITY FOR THE BONDS. As security for the payment of the
Bonds and the interest thereon, the Authority hereby grants to the Trustee a
pledge of the Trust Estate.
23
<PAGE>
It is the intent of the Authority that this pledge shall be effective and
operate immediately and that the Trustee shall have the right to collect and
receive the Trust Estate in accordance with the provisions hereof at all times
during the period from and after the date of delivery of the Bonds issued
hereunder until the Bonds have been fully paid and discharged, including,
without limitation, at all times after the institution and during the pendency
of bankruptcy or similar proceedings.
The aforementioned pledge shall not inhibit the sale or disposition of all
or any portion of the Special Facilities in accordance with this Indenture and
the Agreement or the termination of the Agreement in accordance with the
provisions thereof, and shall not impair or restrict the ability of the
Authority to invest in securities and other forms of investment, subject to the
provisions of this Indenture.
Prior to the delivery of any Bonds issued hereunder, there shall be
delivered to the Trustee a duly executed financing statement evidencing the
prior security interest in the Trust Estate in the form required by the Indiana
Uniform Commercial Code with copies sufficient in number for filing in the
office of the Secretary of State of Indiana.
24
<PAGE>
ARTICLE VI
SECURITY FOR DEPOSITS, INVESTMENT
OF FUNDS
Section 601. SECURITY FOR DEPOSITS. Any and all money received by the
Trustee under the provisions of this Indenture shall be trust funds under the
terms hereof, and, to the extent permitted by law in the case of the
Construction Fund, shall not be subject to any lien or attachment by any
creditor of the Authority or the Lessee other than the Trustee and the Owners.
All money deposited with the Trustee that cannot be invested in Investment
Obligations in accordance with Section 602 hereof, shall be guaranteed by the
Federal Deposit Insurance Corporation or other federal agency or secured, for
the benefit of the Authority, the Lessee and the Owners, either (a) by
depositing with a bank or trust company chosen by the Trustee or, if then
permitted by law, by setting aside under control of the trust department of the
bank holding such deposit, as collateral security, Government Obligations or
other marketable securities eligible as security for the deposit of trust funds
under regulations of the Comptroller of the Currency of the United States or
applicable State law or regulations, having a market value (exclusive of accrued
interest) not less than the amount of such deposit, or (b) if the furnishing of
security as provided in clause (a) above is not permitted by applicable law,
then in such other manner as may then be required or permitted by applicable
state or federal laws and regulations regarding the security for, or granting a
preference in the case of, the deposit of trust funds; provided, however, that
it shall not be necessary for the Trustee to give security for the deposit of
any money with it for the payment of the principal of or the redemption premium
or the interest on any Bonds, or for the Trustee to give security for any money
that shall be represented by obligations purchased under the provisions of this
Article as an investment of such money.
All money deposited with the Trustee shall be credited to the particular
Fund or Account to which such money belongs.
Section 602. INVESTMENT OF MONEY. Money held for the credit of all Funds
and Accounts shall be continuously invested and reinvested by the Trustee in
Investment Obligations to the extent practicable. Investment Obligations shall
mature or be redeemable at the option of the holder thereof not later than the
respective dates when the money held for the credit of such Funds and Accounts
will be required for the purposes intended.
Notwithstanding the foregoing, no Investment Obligations pertaining to any
Series in any Fund, Account may mature on a date beyond the latest maturity date
of the respective Bonds Outstanding at the time such Investment Obligations are
deposited. For purposes of this Section, the maturity date of any repurchase
agreement shall be deemed to be the stated maturity date of such agreement and
not the maturity dates of the underlying Investment Obligations.
25
<PAGE>
The Lessee shall give to the Trustee written directions respecting the
investment of any money required to be invested hereunder, subject, however, to
the provisions of this Article, and the Trustee shall then invest such money as
so directed. The Trustee may request in writing additional direction or
authorization from the Lessee with respect to the proposed investment of money
under the provisions of this Indenture. Upon receipt of such directions, the
Trustee shall invest, subject to the provisions of this Article, such money in
accordance with such directions.
Investment Obligations acquired with money in or credited to any Fund or
Account established under this Indenture shall be deemed at all times to be part
of such Fund or Account. Unless otherwise directed in a Series Indenture, the
interest accruing on Investment Obligations in the Funds and Accounts and all of
its profit or loss realized upon the disposition or maturity of such Investment
Obligations shall be credited to or charged against such Fund or Account. The
Trustee shall sell at the best price obtainable or reduce to cash a sufficient
amount of such Investment Obligations whenever it is necessary so to do to
provide money to make any payment from any such Fund or Account. The Trustee
shall not be liable or responsible for any loss resulting from any such
investment.
Whenever a transfer of money between two or more of the Funds or Accounts
established pursuant to Article V hereof is permitted or required, such transfer
may be made as a whole or in part by transfer of one or more Investment
Obligations at a value determined at the time of such transfer in accordance
with this Article VI, provided that the Investment Obligations transferred are
those in which money of the receiving Fund or Account could be invested at the
date of such transfer.
26
<PAGE>
ARTICLE VII
GENERAL COVENANTS AND REPRESENTATIONS
Section 701. PAYMENT OF PRINCIPAL, INTEREST AND PREMIUM. (a) The
Authority covenants that, solely from the sources herein provided, it shall
cause to be paid, when due, the principal of (whether at maturity, by
acceleration, by call for redemption or otherwise), the premium, if any, and
interest on the Bonds at the places, on the dates and in the manner provided
herein and in the Bonds, according to the intent and meaning thereof.
(b) The Bonds are special obligations payable solely from the Trust
Estate. The Bonds shall be secured as provided in Section 507 hereof. Except
as provided herein, the Series 1994 Bonds shall not be payable from the funds of
the Authority, nor shall they constitute a legal or equitable pledge, lien or
encumbrance upon any of the properties of the Authority or upon any of its
income, receipts or revenues, except as provided in this Indenture. The
principal of, premium, if any, and interest on the Bonds shall not be payable
from the taxing power of the Authority, nor shall the Bonds constitute a legal
or equitable pledge, charge, lien, or encumbrance upon any of the Authority's
property or upon any of its income, receipts or revenues, except as herein
provided. Neither the credit nor the taxing power of the Authority are pledged
for the payment of the principal or interest on the Bonds and no Owner has the
right to compel the exercise of the taxing power by the Authority or the
forfeiture of any of its property in connection with any default thereon. The
Bonds and the interest thereon are not a debt of the Authority within the
meaning of the State Constitution. The Bonds, including interest thereon, are
payable solely from the revenues pledged therefor and the Authority is under no
obligation to pay the Bonds, except from the revenues pledged therefor.
The Trustee, by its acceptance of its duties hereunder, covenants that it
will faithfully perform at all times all of its covenants, undertakings and
agreements contained in this Indenture or in any Bond executed, authenticated
and delivered hereunder or in any proceedings of the Authority pertaining
thereto.
Section 702. COVENANT TO PERFORM OBLIGATIONS UNDER THIS INDENTURE AND THE
AGREEMENT. The Authority covenants that it will faithfully perform at all times
any and all covenants, undertakings, stipulations and provisions contained in
this Indenture, the Bonds and in all proceedings of the Authority pertaining
thereto.
Section 703. FURTHER INSTRUMENTS AND ACTIONS. At the request of the
Lessee or the Trustee, the Authority shall execute and deliver such further
instruments or take such further actions as may be required to carry out the
purposes of this Indenture and the Agreement.
27
<PAGE>
Section 704. REPRESENTATIONS BY THE AUTHORITY. The Authority represents
and warrants that it will: (i) not take any actions that would cause the
interest on any Tax Exempt Bonds to no longer be excludable from gross income
for federal tax purposes; and (ii) take such affirmative actions to protect the
tax status of the Tax Exempt Bonds that the Lessee or the Trustee shall
reasonably request in writing and certify as necessary to preserve the tax
status of the Tax Exempt Bonds; provided that the Authority shall not be
obligated to undertake any such action until (a) it consents in writing to take
such action, which consent shall not be unreasonably withheld, (b) the Authority
has been indemnified to its satisfaction with respect to such action and (c)
provision has been made to reimburse the Authority for any costs incurred in
connection with taking such action. Except as specifically provided above, the
Authority shall have no obligation to take any affirmative actions to protect
the tax status of the Tax Exempt Bonds and shall have no obligation to pay
amounts necessary to comply with this covenant, other than from money received
by the Authority from the Lessee. The Lessee shall have the sole responsibility
for computing any amounts owed to the United States of America pursuant to
Section 148 of the Code and with 615(b) of the Agreement with respect to Tax
Exempt Bonds and providing for the payment of such amounts to the United States
of America in the manner provided in the Series 1994 Tax Representation
Certificate and the tax representation certificate executed contemporaneously
with the issuance of any other Tax Exempt Bonds.
28
<PAGE>
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 801. EXTENSION OF INTEREST PAYMENT. If the time for the payment
of the interest on any Bond is extended, whether or not such extension is by or
with the consent of the Authority, such interest so extended shall not be
entitled in case of an Event of Default hereunder to the benefit or security of
this Indenture and in such case the Owner of the Bond for which the time for
payment of interest was extended shall be entitled only to the payment after
payment in full of the principal of all Bonds then Outstanding and of interest
for the principal of all Bonds then outstanding and of interest for which the
time for payment shall not have been extended.
Section 802. EVENTS OF DEFAULT. Each of the following events is hereby
declared an "Event of Default:"
(a) payment of the interest, principal of and premium, if any, on any of
the Bonds is not made when the same are due and payable, either at maturity or
by redemption or otherwise;
(b) the filing by the Lessee of a voluntary petition in bankruptcy or the
making of any assignment of all or any part of the Lessee's assets for the
benefit of creditors;
(c) the adjudication of the Lessee as a bankrupt pursuant to any
involuntary bankruptcy proceedings;
(d) the taking of jurisdiction by a court of competent jurisdiction of the
Lessee or its assets pursuant to proceedings brought under the provisions of any
Federal reorganization act;
(e) the: (i) appointment of a receiver or a trustee of the Lessee's assets
by a court of competent jurisdiction, or (ii) the filing of an involuntary
petition in bankruptcy and, in either case, the failure of the Lessee to dismiss
the same or reach a voluntary agreement with Lessee's creditors within ninety
(90) days;
(f) the Authority defaults in the due and punctual performance of any
other of the covenants, conditions, agreements and provisions contained in the
Bonds or in this Indenture and such default continues for sixty (60) days after
receipt by the Authority and the Lessee of a written notice from the Trustee
specifying such default and requesting that it be corrected, provided that if
prior to the expiration of such sixty (60)-day period the Authority or the
Lessee institutes action reasonably designed to cure such default, no Event of
Default shall be deemed to have occurred upon the expiration of such sixty (60)-
day period for so long as the Authority or the Lessee pursues such curative
action with reasonable diligence; and
29
<PAGE>
(g) the breach of any covenant, representation or warranty contained in
the Series 1994 Guaranty.
Section 803. ACCELERATION OF MATURITIES. Upon the happening and
continuance of any Event of Default specified in Section 802, the Trustee may,
and upon the written request of the Owners of not less than twenty-five percent
(25%) in aggregate principal amount of Bonds Outstanding shall, by notice in
writing to the Authority and the Lessee, declare the principal of all Bonds then
Outstanding (if not then due and payable) to be due and payable immediately and
upon such declaration the same shall become and be immediately due and payable,
anything contained in the Bonds, the Agreement, the Series 1994 Guaranty or in
this Indenture to the contrary notwithstanding.
Section 804. ENFORCEMENT OF REMEDIES. Upon the happening and continuance
of any Event of Default specified in Section 802, then and in every such case
the Trustee may, and upon the written request of the Owners of not less than
twenty-five percent (25%) in aggregate principal amount of the Bonds then
Outstanding shall, proceed to protect and enforce the rights of the Owners under
federal or State law, under this Indenture, Section 1402 of the Agreement or the
Series 1994 Guaranty by such suits, actions or specific performance of any
covenant or agreement contained in this Indenture, the Series 1994 Guaranty or
the Agreement (but only as contemplated by Section 1402 thereof) or in aid or
execution of any power herein granted or for the enforcement of any proper legal
or equitable remedy, as the Trustee shall deem most effectual to protect and
enforce such rights.
Section 805. THE TRUSTEE MAY FILE CLAIM IN BANKRUPTCY. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Authority or the Lessee or to property of the
Authority or the Lessee or the creditors of either of them, the Trustee
(irrespective of whether the principal of the Bonds shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Lessee for the payments
equal to overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Bonds and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Owners allowed in such judicial proceedings; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
30
<PAGE>
and any receiver, custodian, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Owner to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Owners, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Article IX hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Owner any plan of
reorganization, arrangement, adjustment or composition affecting the Bonds or
the rights of any Owner thereof, or to authorize the Trustee to vote in respect
of the claim of any Owner in any such proceedings unless the Trustee shall
certify that it has been so authorized by the holders of the requisite
percentage of Outstanding Bonds.
Section 806. PRO RATA APPLICATION OF FUNDS. Anything in this Indenture to
the contrary notwithstanding, if at any time the money in the Bond Fund is not
sufficient to pay the interest on or the principal of the Bonds as the same
become due and payable (either by their terms or by acceleration of maturities
under the provisions of Section 803 hereof) such money, together with any money
then available or thereafter becoming available for such purposes, whether
through the exercise of the remedies provided for in this Article or otherwise,
shall be applied as follows:
FIRST: if the principal of the Bonds has not become due and payable, to the
payment of all installments of interest then due, in the order of the maturity
of the installments of such interest;
SECOND: if the principal of less than all of the Bonds has become due and
payable, first to the payment of all installments of interest then due on such
Bonds of which the principal is not overdue, in the order of the maturity of the
installments thereof, and next to the payment of interest at the respective
rates specified in the Bonds on overdue principal, and next to the payment of
the principal of such Bonds then due in order of their due dates;
THIRD: if the principal of all Bonds has become due and payable by
redemption, acceleration or otherwise, to the payment of the interest and
principal then due on the Bonds without distinction of interest over principal
or of principal over interest ratably according to the amount due for principal
and interest; and
FOURTH: if the principal of all Bonds has become due and payable, and all
of the Bonds have been fully paid, together with all interest and premium, if
any, thereon, any surplus then remaining shall be applied as set forth in
Section 506 hereof.
31
<PAGE>
All payments to be made to the Owners pursuant to this Section shall be made
ratably to the persons entitled thereto, without discrimination or preference,
except that if there are insufficient funds to make any payment of interest or
principal then due, the amount to be paid in respect of principal or interest,
as the case may be, on each Bond shall be determined by multiplying the
aggregate amount of the funds available for such payment by a fraction, the
numerator of which is the amount then due as principal or interest, as the case
may be, on each Bond and the denominator of which is the aggregate amount due in
respect of all interest or all principal, as the case may be, on all Bonds.
The provisions of this Section are in all respects subject to the
provisions of Section 801 hereof.
Whenever money is to be applied by the Trustee pursuant to the provisions
of this Section: (a) such money shall be applied by the Trustee at such times
and from time to time as the Trustee in its sole discretion shall determine,
having due regard for the amount of such money available for such application
and the likelihood of additional money becoming available for such application
in the future, (b) setting aside such money as provided herein in trust for the
proper purpose shall constitute proper application by the Trustee, and (c) the
Trustee shall incur no liability whatsoever to the Authority, the Lessee, any
Owner or any other person for any delay in applying any such money so long as
the Trustee acts with reasonable diligence, having due regard for the
circumstances, and ultimately applies the same in accordance with such
provisions of this Indenture as may be applicable at the time of discretion. In
applying such money, it shall fix the date (which shall be an Interest Payment
Date unless the Trustee shall deem another date more suitable) upon which such
application is to be made and upon such date interest on the amounts of
principal to be paid on such date shall cease to accrue. The Trustee shall give
such notice as it may deem appropriate of the fixing of any such date and shall
not be required to make payment to the Owner of any Bond until such Bond is
surrendered to the Trustee for appropriate endorsement or for cancellation if
fully paid.
Section 807. EFFECT OF DISCONTINUANCE OF PROCEEDINGS. If any proceedings
taken by the Trustee or Owners on account of any Event of Default is
discontinued or abandoned for any reason, then and in every such case, the
Authority, the Trustee and the Owners shall be restored to their former
positions and rights hereunder, and all rights, remedies, powers and duties of
the Trustee shall continue as though no proceeding had been taken.
Section 808. CONTROL OF PROCEEDINGS BY OWNERS. Anything in this Indenture
to the contrary notwithstanding, the Owners of a majority in aggregate principal
amount of Bonds at any time Outstanding shall have the right, by an instrument
or concurrent instruments in writing executed and delivered to the Trustee, to
direct the method and place of conducting all remedial proceedings to be taken
by the Trustee hereunder, provided that such direction shall be in
32
<PAGE>
accordance with law and the provisions of this Indenture and indemnification
shall have been provided to the Trustee in accordance with Section 902 hereof.
Section 809. RESTRICTIONS UPON ACTIONS BY INDIVIDUAL OWNERS. Except as
provided in Section 814 hereof, no Owner shall have any right to institute any
suit, action or proceeding in equity or at law on any Bond or for the execution
of any trust hereunder or for any other remedy hereunder unless such Owner
previously shall (a) have given to the Trustee written notice of the Event of
Default on account of which such suit, action or proceeding is to be instituted,
(b) have requested the Trustee to take action after the right to exercise such
powers or right of action, as the case may be, shall have accrued, (c) have
afforded the Trustee a reasonable opportunity either to proceed to exercise the
powers hereinabove granted or to institute such suit, action or proceeding in
its or their name, and (d) have offered to the Trustee reasonable security and
satisfactory indemnity against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee shall have refused or neglected to
comply with such request within a reasonable time. Such notification, request
and offer of indemnity are hereby declared in every such case, at the option of
the Trustee, to be conditions precedent to the execution of the powers and
trusts of the Indenture under this Section or other provisions of this Article.
In the event that the Trustee has been provided such notification, request and
offer and has thereafter refused or neglected to comply with such request within
a reasonable time, the Owners of not less than twenty-five percent (25%) in
aggregate principal amount of Bonds then Outstanding may institute any such
suit, action or proceeding in their own names for the benefit of all Owners
hereunder. It is understood and intended that, except as otherwise above
provided, no one or more Owners shall have any right in any manner whatsoever by
his or their action to affect, disturb or prejudice the security of this
Indenture or to enforce any right hereunder except in the manner provided, that
all proceedings at law or in equity shall be instituted, had and maintained in
the manner herein provided and for the benefit of all Owners and that any
individual right of action or other right given to one or more such Owners by
law is restricted by this Indenture to the rights and remedies herein provided.
Section 810. ENFORCEMENT OF RIGHTS OF ACTION. All rights of action
(including the right to file proof of claim) under this Indenture or under any
Bonds may be enforced by the Trustee without the possession of any Bonds or the
production thereof in any proceeding relating thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its name as the Trustee
without the necessity of joining as plaintiffs or defendants any Owners,and any
recovery of judgment shall be for the equal benefit of the Owners, subject to
the provisions of Section 801 hereof of this Indenture.
Section 811. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Trustee or to the Owners is intended to be exclusive of any
other remedy or remedies herein provided, and each and every such remedy shall
be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity.
33
<PAGE>
Section 812. DELAY NOT A WAIVER. No delay or omission by the Trustee or
of any Owner in the exercise of any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver of any
such default or any acquiescence therein, and every power or remedy given by
this Indenture to the Trustee and to the Owners may be exercised from time to
time and as often as may be deemed expedient.
The Trustee may, and upon written request of the Owners of not less than a
majority in principal amount of the Bonds Outstanding shall, waive any Event of
Default which in its opinion has been remedied before the entry of final
judgment or decree in any suit, action or proceeding instituted by it under the
provisions of this Indenture or before the completion of the enforcement of any
other remedies under this Indenture, but no such waiver shall extend to or
affect any other existing or subsequent Event of Default or impair any rights or
remedies consequent thereon.
Section 813. NOTICE OF DEFAULT. The Trustee shall mail to all Owners at
their addresses as they appear on the registration books maintained by the
Trustee written notice of the occurrence of any Event of Default within thirty
(30) days after the Trustee has notice of the same.
Section 814. RIGHT TO ENFORCE PAYMENT OF BONDS UNIMPAIRED. Nothing in
this Article shall affect or impair the right of any Owner to enforce the
payment of the principal of and interest on his Bonds or the obligation of the
Authority to pay the principal of and interest on each Bond to the Owner thereof
at the time and place specified in said Bond.
Section 815. WAIVER OF EVENT OF DEFAULT. The Trustee shall waive any
Event of Default and its consequences and rescind any declaration of maturity of
principal upon the written request of the Owners of a majority in aggregate
principal amount of the Bonds then Outstanding; provided that there shall not be
waived without the written consent of the Owners of all the Bonds Outstanding
(a) any Event of Default in the payment of the principal of any Outstanding
Bonds at their maturity, upon the redemption (including as a result of
acceleration) thereof, or (b) any Event of Default in the payment when due of
the interest on any such Bonds, unless, prior to such waiver or rescission, all
arrears of interest, or all arrears of payments of principal when due (without
regard to any acceleration of maturity of the Bonds under the provisions of
Section 803 hereof), as the case may be, and all expenses of the Trustee in
connection with such Event of Default shall have been paid or provided for. In
case of any such waiver or rescission, or in case any proceeding taken by the
Trustee on account of any such Event of Default shall have been discontinued or
abandoned or determined adversely, then and in every such case the Authority,
the Lessee, the Trustee and the Owners shall be restored to their former
positions, rights and obligations hereunder, respectively, but no such waiver or
rescission shall extend to any subsequent or other default, or impair any right
consequent thereon.
34
<PAGE>
ARTICLE IX
THE TRUSTEE
Section 901. ACCEPTANCE OF TRUSTS. The Trustee shall signify its
acceptance of the duties and obligations and agree to execute the trusts imposed
upon it by this Indenture by executing the acceptance attached hereto, but only
upon the terms and conditions set forth in this Article and subject to the
provisions of this Indenture, to all of which the Authority, the Trustee and the
respective Owners of the Bonds agree. Unless the Trustee has been given written
notice or otherwise has actual notice that an Event of Default has occurred and
is continuing, the Trustee shall not be responsible except for the performance
of those duties that are expressly set forth in this Indenture, and no implied
covenant or duty shall be read into this Indenture against the Trustee;
provided, however, that nothing herein shall relieve the Trustee from
responsibility for its own gross negligence or willful misconduct.
If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers as are vested in it by this Indenture and
shall 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.
Section 902. INDEMNIFICATION OF THE TRUSTEE AS CONDITION FOR REMEDIAL
ACTION UPON DIRECTION OF OWNERS. The Trustee shall be under no obligation to
take any remedial proceeding under this Indenture upon written direction of the
Owners given in accordance with the terms hereof until it is indemnified to its
satisfaction against any and all costs and expenses, outlays and counsel fees
and other reasonable disbursements, and against all liability, provided that the
Trustee shall have no right to indemnification for any costs, expenses, outlays,
counsel fees or disbursements or against any liability resulting from any
proceeding or action of the Trustee if the Trustee is determined to have acted
in a grossly negligent or intentional manner with respect to such proceeding or
action. However, the Trustee may bring suit, or appear in and defend suit, or
take any remedial proceedings under this Indenture, or take any steps in the
execution of any of the trusts created hereby or in the enforcement of any
rights and powers hereunder, or do anything else in its judgment proper to be
done by it as such Trustee, without indemnity and with or without the direction
of Owners, and in such case the Authority, at the request of the Trustee, shall
cause the Lessee to reimburse the Trustee from payments made under Section 615
of the Agreement for all costs, expenses, outlays and counsel fees and other
reasonable disbursements properly incurred in connection therewith. If the
Authority fails to make such reimbursement, the Trustee may reimburse itself
from any money in its possession under the provisions of this Indenture and
shall be entitled to a preference therefor over any Bonds Outstanding.
Section 903. LIMITATIONS ON OBLIGATIONS AND RESPONSIBILITIES OF THE
TRUSTEE. The Trustee shall be under no obligation to effect or maintain
insurance or to renew any policies of insurance
35
<PAGE>
or to inquire as to the sufficiency of any policies of insurance carried by the
Authority, or to report, make or file claims or proof of loss for any loss or
damage that may occur, or to keep itself informed or advised as to the payment
of any premiums or assessments, or to require any such payment to be made with
respect to the Special Facilities. The Trustee shall have no responsibility in
respect of the validity or sufficiency of this Indenture or, except as to the
authentication thereof, in respect of the validity of the Bonds or the due
execution or issuance thereof.
Section 904. THE TRUSTEE NOT LIABLE FOR FAILURE OF THE AUTHORITY TO
ACT. The Trustee shall not be liable or responsible for the failure of the
Authority or of any of its employees or agents to make any collections or
deposits or to perform any act required of the Authority under this Indenture or
the Agreement. The Trustee shall not be responsible for the application of any
of the proceeds of Bonds or any other money deposited with it and paid out,
withdrawn or transferred hereunder if such application, payment, withdrawal or
transfer is made in accordance with the provisions of this Indenture. The
immunities and exemptions from liability of the Trustee hereunder shall extend
to its directors, officers, employees and agents.
Section 905. COMPENSATION OF THE TRUSTEE. Subject to the provisions of
any contract between the Lessee and the Trustee relating to the compensation of
the Trustee, the Authority shall cause the Trustee to be paid from payments made
by the Lessee pursuant to Section 615 of the Agreement reasonable compensation
for all services performed by the Trustee hereunder and also its reasonable
expenses, charges and other disbursements and those of its attorneys, agents and
employees incurred in and about the administration and the performance of its
powers and duties hereunder, under the Series 1994 Guaranty, or under the
Agreement. If the Authority fails to cause any payment required by this Section
to be made, the Trustee may make such payment from any money in its possession
under the provisions of this Indenture and shall be entitled to a preference
therefor over any Bonds Outstanding hereunder.
Section 906. MONTHLY STATEMENTS FROM THE TRUSTEE. On or before the 15th
day of each month the Trustee shall file with the Authority and the Lessee a
statement setting forth in respect of the preceding calendar month:
(a) the amount withdrawn or transferred by it from, and the amount
deposited in or credited to, each Fund or Account held by it under the
provisions of this Indenture,
(b) the amount on deposit with it at the end of such month in each such
Fund or Account,
(c) a brief description of all obligations held by it as an investment of
money in each such Fund or Account and the investment income or loss that was
charged to any Fund or Account in such month,
36
<PAGE>
(d) the amount applied to the payment, purchase, or redemption of Bonds
under the provisions of Article V of this Indenture, and
(e) any other information that the Authority or the Lessee may reasonably
request.
All records and files pertaining to the Bonds and the Leased Premises in
the custody of the Trustee shall be available at all reasonable times for
inspection by the Authority, the Lessee, any Owner of ten percent (10%) in
aggregate principal amount of Bonds Outstanding and their agents and
representatives.
Section 907. THE TRUSTEE PROTECTED IN RELYING ON CERTAIN DOCUMENTS. The
Trustee shall be protected and shall incur no liability in acting or proceeding,
or in not acting or not proceeding, in good faith and in accordance with the
terms of this Indenture, upon any ordinance, order, notice, request, consent,
waiver, certificate, statement, affidavit, requisition, bond or other paper or
document that it in good faith reasonably believes to be genuine and to have
been adopted or signed by the proper board or person or to have been prepared
and furnished pursuant to any of the provisions of this Indenture, or upon the
written opinion of any independent contractor, agent, attorney, engineer or
accountant believed by the Trustee to be qualified in relation to the subject
matter, and the Trustee shall be under no duty to make any investigation or
inquiry as to any statements contained or matters referred to in any such
instrument except in any case where the Trustee has actual knowledge that such
statements are inaccurate. The Trustee shall not be under any obligation to see
to the recording or filing of this Indenture or otherwise to the giving to any
person of notice of the provisions hereof.
Except as otherwise provided in this Indenture, any request, notice,
certificate or other instrument from the Authority to the Trustee shall be
deemed to have been signed by the proper party or parties if signed by an
authorized Authority representative.
Section 908. NOTICE OF DEFAULT. Except upon the happening of any Event of
Default specified in Subsection 802(a) hereof, the Trustee shall not be obliged
to take notice or be deemed to have notice of any Event of Default under this
Indenture unless specifically notified in writing of such Event of Default by
the Authority, the Lessee or the Owners of not less than 25% in aggregate
principal amount of Bonds then Outstanding.
Section 909. THE TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals,
statements and representations contained herein and in the Bonds (excluding the
Trustee's certificate of authentication of the Bonds) shall be taken and
construed as made by and on the part of the Authority and not by the Trustee,
and the Trustee shall be under no responsibility for the correctness of the
same.
37
<PAGE>
Section 910. THE TRUSTEE MAY DEAL IN BONDS. The bank or trust company
acting as the Trustee under this Indenture, and its directors, officers,
employees or agents, may in good faith, to the extent permitted by applicable
law, buy, sell, own, hold and deal in any of the Bonds and may join in any
action that any Owner of Bonds may be entitled to take with like effect as if
such bank or trust company were not the Trustee under this Indenture.
Section 911. RESIGNATION AND REMOVAL OF THE TRUSTEE SUBJECT TO APPOINTMENT
OF SUCCESSOR. No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 914 hereof.
Section 912. RESIGNATION OF THE TRUSTEE. The Trustee may resign at any
time, for any reason, upon the mailing of written notice to all Owners, the
Authority and the Lessee. Such resignation shall be effective on the later of
thirty (30) days after the mailing of such notice or the date of appointment of
any successor Trustee.
Section 913. REMOVAL OF THE TRUSTEE. While there is no Event of Default
under the Agreement or this Indenture, the Trustee may be removed at any time,
for any reason, by an instrument in writing, executed by the Authority or the
Lessee. Notice of such removal shall be mailed to all Owners by the Authority
or the Lessee, whichever shall have taken the action to remove the Trustee.
Such removal shall be effective on the later of sixty (60) days after the
mailing of such notice or the date of appointment of a successor Trustee, unless
the Owners of not less than twenty-five percent (25%) in aggregate principal
amount of Bonds then Outstanding object to such removal in writing to the
Authority and the Lessee within such sixty (60)-day period, in which case such
removal shall be of no effect.
The Trustee may also be removed at any time for any breach of trust or for
acting or proceeding in violation of, or for failing to act or proceed in
accordance with, any provisions of this Indenture with respect to the duties and
obligations of the Trustee, by any court of competent jurisdiction upon
application of the Authority, the Lessee or the Owners of not less than twenty-
five percent (25%) in aggregate principal amount of Bonds then Outstanding.
Section 914. APPOINTMENT OF SUCCESSOR TRUSTEE. If at any time hereafter
the Trustee resigns, is removed, is dissolved or otherwise becomes incapable of
acting, or the bank or trust company acting as the Trustee is taken over by any
governmental official, agency, department or board, the Lessee shall, with the
approval of the Authority (such approval not to be unreasonably withheld)
appoint a successor Trustee. A successor Trustee shall not be required if the
Trustee sells or assigns substantially all of its trust business and the vendee
or assignee continues in the trust business, or if a transfer of the trust
department of the Trustee is required by operation of law, provided that such
vendee, assignee or transferee qualifies as a successor Trustee under this
Section 914.
38
<PAGE>
At any time within one year after a successor Trustee has been appointed by
the Lessee, the Owners of twenty-five percent (25%) in principal amount of Bonds
then Outstanding, by an instrument or concurrent instruments in writing,
executed by such Owners and filed with the Lessee, may appoint a successor
Trustee, which shall supersede any Trustee theretofore appointed by the Lessee.
Photographic copies of each such instrument shall be delivered promptly by the
Lessee to the predecessor Trustee and to the Trustee so appointed by the Owners.
If no appointment of a successor Trustee by the Lessee is made pursuant to
the foregoing provisions of this Section, any Owner or any retiring Trustee may
apply to any court of competent jurisdiction to appoint a successor Trustee.
Such court may thereupon appoint a successor Trustee.
Any successor Trustee hereafter appointed shall be a bank or trust company
within the State that is in good standing and duly authorized to exercise
corporate trust powers in the State, that is subject to examination by Federal
or State authority, and that has a combined capital, surplus and undivided
profits aggregating not less than Two Hundred and Fifty Million Dollars
($250,000,000).
Section 915. VESTING OF DUTIES IN SUCCESSOR TRUSTEE. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to its
predecessor, and also to the Authority, an instrument in writing accepting such
appointment and the trusts created hereby and thereupon such successor Trustee,
without any further act, shall become fully vested with all the rights,
immunities and powers, and subject to all the duties and obligations, of its
predecessor. Upon receipt of such instrument or upon receipt of a written
request of the Authority and upon payment of the expenses, charges and other
disbursements of such predecessor that are payable pursuant to the provisions of
Sections 902 and 905 hereof, such predecessor Trustee shall execute and deliver
an instrument transferring to such successor Trustee rights, immunities and
powers of such predecessor hereunder and shall deliver all property and money
held by it hereunder to its successor. Should any instrument in writing from
the Authority be required by any successor Trustee for more fully and certainly
vesting in such Trustee the rights, immunities, powers and trusts hereby vested
or intended to be vested in the predecessor Trustee, any such instrument in
writing shall and will, on request, be executed, acknowledged and delivered by
the Authority.
39
<PAGE>
ARTICLE X
EXECUTION OF INSTRUMENTS BY OWNERS, PROOF OF OWNERSHIP OF BONDS, AND
DETERMINATION OF CONCURRENCE OF OWNERS
Section 1001. EXECUTION OF INSTRUMENTS BY OWNERS. Any request, direction,
consent or other instrument in writing required or permitted by this Indenture
to be signed or executed by any Owners may be in any number of concurrent
instruments of similar tenor and may be signed or executed by such Owners or
their attorneys or legal representatives. Proof of the execution of any such
instrument and of the ownership of Bonds shall be sufficient for any purpose of
this Indenture and shall be conclusive in favor of the Trustee and the Authority
with regard to any action taken by either under such instrument if made in the
following manner:
(a) The fact and date of the execution by any person of any such
instrument may be proved by the verification, by any officer in any jurisdiction
who by the laws thereof has power to take affidavits within such jurisdiction,
to the effect that such instrument was subscribed and sworn to before him, or by
an affidavit of a witness to such execution. Where such execution is on behalf
of a person other than an individual, such verification or affidavit shall also
constitute sufficient proof of the authority of the signer thereof.
(b) The ownership of Bonds shall be proved by the registration books kept
under the provisions of Section 208 hereof.
Nothing contained in this Article shall be construed as limiting the
Trustee to such proof, it being intended that the Trustee may accept any other
evidence of the matters herein stated which it may deem sufficient. Any request
or consent of any Owner shall bind every future Owner of the same Bond in
respect of anything done by the Trustee in pursuance of such request or consent.
40
<PAGE>
ARTICLE XI
SUPPLEMENTAL INDENTURE
Section 1101. SUPPLEMENTAL INDENTURE WITHOUT OWNERS' CONSENT. Subject to
Section 1105 hereof, the Authority and the Trustee may enter into, from time to
time and at any time, such indentures supplemental hereto (which Supplemental
Indentures shall thereafter form a part hereof):
(a) to cure any ambiguity or formal defect or omission or to correct or
supplement any provision herein that may be inconsistent with any other
provision herein which does not materially adversely affect the interest of the
Owners; or
(b) to grant to or confer upon the Trustee, for the benefit of the Owners,
any additional rights, remedies, powers, authority or security, including bond
insurance, that may lawfully be granted to or conferred upon the Owners or the
Trustee; or
(c) to add to, amend or make deletions from the conditions, limitations
and restrictions on the issuance of Bonds under the provisions of this Indenture
certain conditions, limitations and restrictions, provided that such addition,
deletion or amendment will not materially adversely affect the rights of the
Owners of the Outstanding Bonds; or
(d) to add to the covenants and agreements of the Authority in this
Indenture other covenants and agreements thereafter to be observed by the
Authority or to surrender any right or power herein reserved to or conferred
upon the Authority, provided that such covenants and agreements and the
surrendering of any such right or power do not materially adversely affect the
rights of the Owners of the Outstanding Bonds;
(e) to approve a Series Indenture authorizing a Series of Bonds subject to
the provisions of this Indenture and the Act; or
(f) to allow the Lessee and the Authority to issue bonds or finance
facilities pursuant to other financing documents.
Section 1102. SUPPLEMENTAL INDENTURE WITH OWNERS' CONSENT. Subject to the
terms and provisions contained in this Section and Section 1105 hereof, and not
otherwise, the Owners of a majority in aggregate principal amount of the Bonds
then Outstanding that will be affected by a proposed supplemental indenture
shall have the right, from time to time, anything contained in this Indenture to
the contrary notwithstanding, to consent to and approve the execution of such
indenture or indentures supplemental hereto as are deemed necessary or desirable
by the Authority and the Lessee for the purpose of modifying, altering,
amending, adding to or
41
<PAGE>
rescinding, in any particular, any of the terms or provisions contained in this
Indenture or in any supplemental Indenture, provided that nothing herein
contained shall permit, or be construed as permitting without the consent of the
Owners of one hundred percent (100%) in principal amount of Bonds Outstanding
(a) an extension of the maturity of the principal of or the interest on any
Bond, or (b) a reduction in the principal amount of any Bond or the redemption
premium or the rate of interest thereon, or (c) the creation of a lien upon or a
pledge of the Trust Estate other than the lien and pledge created by this
Indenture, or (d) a preference or priority of any Bond or Bonds over any other
Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds
required for consent to such Supplemental Indenture. Nothing herein contained,
however, shall be construed as making necessary the approval by the Owners of
the adoption of any Supplemental Indenture as authorized in Section 1101 hereof.
If at any time the Authority determines that it is necessary or desirable
to execute any Supplemental Indenture for any of the purposes of this Section,
the Trustee shall cause notice of the proposed adoption of such Supplemental
Indenture to be mailed, postage prepaid, to all Owners at their addresses as
they appear on the registration books maintained by the Trustee. Such notice
shall briefly set forth the nature of the proposed Supplemental Indenture and
shall state that copies thereof are on file at the office of the Authority for
inspection by all Owners. The Authority shall not, however, be subject to any
liability to any Owner by reason of its failure to cause the notice required by
this Section to be mailed and any such failure shall not affect the validity of
such Supplemental Indenture when consented to and approved as provided in this
Section.
Whenever, at any time within one year after the date of the first mailing
of such notice, the Authority delivers to the Trustee an instrument or
instruments in writing purporting to be executed by the Owners of a majority in
aggregate principal amount of the Bonds then Outstanding that are affected by a
proposed Supplemental Indenture, which instrument or instruments shall refer to
the proposed Supplemental Indenture described in such notice and shall
specifically consent to and approve the adoption thereof in substantially the
form of the copy thereof referred to in such notice, thereupon, but not
otherwise, the Authority may adopt such Supplemental Indenture in substantially
such form, without liability or responsibility to any Owner whether or not such
Owner shall have consented thereto.
If the Owners of a majority in aggregate principal amount of Bonds
Outstanding that are affected by a proposed Supplemental Indenture at the time
of the adoption of such Supplemental Indenture have consented to and approved
the adoption thereof as herein provided, no Owner shall have any right to object
to the adoption of such Supplemental Indenture, to object to any of the terms
and provisions contained therein or the operation thereof, to question the
propriety of the adoption thereof, or to enjoin or restrain the Authority from
adopting the same or from taking any action pursuant to the provisions thereof.
42
<PAGE>
Section 1103. BONDS AFFECTED. For purposes of this Indenture, Bonds shall
be deemed to be "affected" by a Supplemental Indenture if the same adversely
affects or diminishes the rights of Owners against the Authority or the rights
of the Owners in the security for such Bonds. The Trustee may in its discretion
determine whether any Bonds would be affected by any Supplemental Indenture and
any such determination shall be conclusive upon the Owners of all Bonds, whether
theretofore or thereafter authenticated and delivered hereunder. The Trustee
shall not be liable for any such determination made in good faith.
Section 1104. SUPPLEMENTAL INDENTURES PART OF INDENTURE. Any Supplemental
Indenture executed in accordance with the provisions of this Article shall
thereafter form a part of this Indenture, and this Indenture shall be and be
deemed to be modified and amended in accordance therewith. Thereafter, the
respective rights, duties and obligations under this Indenture of the Authority,
the Trustee and all Owners of Bonds shall then be enforced in all respects under
the provisions of this Indenture as so modified and amended. If any
Supplemental Indenture is executed and approved, Bonds issued thereafter may
contain an express reference to such Supplemental Indenture, if deemed necessary
or desirable by the Authority or the Lessee.
Section 1105. LESSEE CONSENT, OPINION OF BOND COUNSEL REQUIRED. Any
Supplemental Indenture will not be effective unless the Lessee shall have
consented in writing to such Supplemental Indenture and, in the opinion of Bond
Counsel delivered to the Trustee, such Supplemental Indenture: (i) will not
adversely affect the exclusion from gross income for federal income tax purposes
of the interest on any Tax Exempt Bonds received by any Owner, and (ii) is
authorized under the terms of this Indenture.
43
<PAGE>
ARTICLE XII
SUPPLEMENTS AND AMENDMENTS TO AGREEMENT
OR THE SERIES 1994 GUARANTY
Section 1201. SUPPLEMENTS AND AMENDMENTS NOT REQUIRING CONSENT. Subject
to Section 1203 hereof, the Lessee and the Authority or the Trustee, as
applicable, may enter into, from time to time and at any time, such amendments
and supplements to the Agreement or the Series 1994 Guaranty (which supplements
and amendments shall thereafter form a part thereof):
(a) to cure any ambiguity or to make any other provisions with respect to
matters or questions arising under the Agreement or the Series 1994 Guaranty and
which shall not, in the opinion of the Trustee, materially adversely affect the
rights of the Owners of Outstanding Bonds; or
(b) to correct or amend any description of, or to reflect changes in, any
properties comprising the Special Facilities which shall not materially
adversely affect the rights by the Owners of the Outstanding Bonds; or
(c) to grant to or confer upon the Authority or the Trustee for the
benefit of the Owners any additional rights, remedies, powers, authority or
security, including bond insurance, that may lawfully be granted to or conferred
upon the Authority or Owners or the Trustee; or
(d) to add to the covenants of the Lessee for the benefit of the Owners or
to surrender any right or power therein conferred upon the Lessee; or
(e) to make any other change which will not reduce the obligation of the
Lessee to make the payments of Special Facilities Rentals due under the
Agreement or the obligation of the Lessee under the Series 1994 Guaranty or
otherwise to make any other change in Agreement or the Series 1994 Guaranty
which does not materially adversely affect the rights of the Owners of
Outstanding Bonds under this Indenture; or
(f) in connection with the issuance of Additional Bonds pursuant to the
requirements of Section 211 hereof;
(g) to provide for additional rental payments under the Agreement to
secure future obligations undertaken by the Authority on behalf of the Lessee,
provided that such additional payments shall be payable on a parity basis or
subordinate to the Special Facilities Rental; or
(h) to exclude a portion of Land from the Leased Premises, provided that,
after giving effect to such exclusion, the Authorized Lessee Representative
certifies that the operating utility
44
<PAGE>
or productive capacity of the remaining Leased Premises is not materially less
than the operating utility or productive capacity of the Leased Premises prior
to such exclusion.
Section 1202. SUPPLEMENTS AND AMENDMENTS REQUIRING CONSENT OF OWNERS OF A
MAJORITY IN PRINCIPAL AMOUNT OF BONDS. Except for supplements or amendments
provided for in Section 1201 hereof, and subject to the provisions of Section
1203 hereof, the Authority shall not enter into and the Trustee shall not enter
into or consent to any supplement or amendment to the Agreement or the Series
1994 Guaranty unless notice of the proposed execution of such supplement or
amendment shall have been given and the Owners of not less than a majority in
aggregate principal amount of the Bonds then Outstanding shall have consented to
and approved the execution thereof, all as provided for in Section 1102 hereof
in the case of supplements to this Indenture and with the same effect as
provided in Section 1104 hereof; provided that without the unanimous consent of
the Owners of the Bonds then Outstanding no such supplement or amendment shall
be consented to by the Trustee which would reduce the payments to be made
pursuant to Section 502 of the Agreement or Section 2.1 of the Series 1994
Guaranty.
Section 1203. OPINION OF BOND COUNSEL REQUIRED. Any supplement or
amendment to the Agreement or the Series 1994 Guaranty will not be effective
unless, in the opinion of Bond Counsel delivered to the Trustee, such supplement
or amendment: (i) will not adversely affect the exclusion from gross income for
federal income tax purposes of the interest on any Tax Exempt Bonds received by
any Owner, and (ii) is authorized under the terms of this Indenture.
45
<PAGE>
ARTICLE XIII
DEFEASANCE
Section 1301. DEFEASANCE OF BONDS. Any Bond shall be deemed to be paid
and no longer Outstanding within the meaning of this Article and for all
purposes of this Indenture when (a) payment of the principal of and premium, if
any, on such Bond, plus interest thereon to the due date thereof (whether such
due date is by reason of maturity or upon redemption as provided herein) either
(i) shall have been made or caused to be made in accordance with the terms
thereof, or (ii) shall have been provided for by irrevocably depositing with the
Trustee, in trust and irrevocably set aside exclusively for such payment, (1)
moneys sufficient to make such payment, when due or (2) Government Obligations
maturing as to principal and interest in such amounts and at such times as will
insure the availability of sufficient moneys to make such payment, when due and
(b) all necessary and proper fees, compensation, indemnities and expenses of the
Trustee and the Authority pertaining to the Bonds with respect to which such
deposit is made shall have been paid or the payment thereof provided for. At
such time as a Bond shall be deemed to be paid hereunder, as aforesaid, such
Bond shall no longer be secured by or entitled to the benefits of this
Indenture, except for the purposes of any such payment from such moneys or
Government Obligations.
Notwithstanding the foregoing, no deposit under clause (a)(ii) of the
immediately preceding paragraph shall be deemed payment of such Bonds as
aforesaid until (a) proper notice of redemption of such Bonds shall have been
previously given in accordance with Article III of this Indenture or the
provision of the Series Indenture with respect thereto or in the event said
Bonds are not by their terms subject to redemption within the next succeeding
sixty (60) days, until the Lessee shall have given the Trustee, in form
satisfactory to the Trustee, irrevocable instructions to notify, as soon as
practicable, the Owners of the Bonds, that the deposit required by (a)(ii) above
has been made with the Trustee and that said Bonds are deemed to have been paid
in accordance with this Section 1301 and stating the maturity or redemption date
upon which moneys are to be available for the payment of the principal of and
the applicable redemption premium, if any, on said Bonds, plus interest thereon
to the due date thereof; or (b) the maturity of such Bonds.
All moneys so deposited with the Trustee as provided in this Section 1301
may also be invested and reinvested, at the written direction of the Lessee, in
Government Obligations, maturing in the amounts and at the times as hereinbefore
set forth, and all income from all Government Obligations in the hands of the
Trustee pursuant to this Section 1301 which is not required for the payment of
principal of the Bonds and interest and premium, if any, thereon with respect to
which such moneys shall have been so deposited shall be deposited in the Bond
Fund as and when realized and collected for use and application as are other
moneys deposited in the Bond Fund.
46
<PAGE>
Notwithstanding any provision of any other Article of this Indenture which
may be contrary to the provisions of this Section 1301, all moneys or Government
Obligations set aside and held in trust pursuant to the provisions of this
Section 1301 for the payment of Bonds (including interest and premium thereon,
if any) shall be applied to and used solely for the payment of the particular
Bonds (including the interest and premium thereon, if any) with respect to which
such moneys or Government Obligations have been so set aside in trust.
Anything in Article XI hereof to the contrary notwithstanding, if moneys or
Government Obligations have been deposited or set aside with the Trustee
pursuant to this Section 1301 for the payment of Bonds and such Bonds shall not
have in fact been actually paid in full, no amendment to the provisions of this
Section 1301 shall be made without the consent of the Owner of each Bond
affected thereby.
47
<PAGE>
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 1401. EFFECT OF COVENANTS. All covenants, stipulations,
obligations and agreements of the Authority contained in this Indenture shall be
deemed to be covenants, stipulations, obligations and agreements of the
Authority the full extent authorized or permitted by law, and all such
covenants, stipulations, obligations and agreements shall bind or inure to the
benefit of the successor or successors thereof from time to time and any
officer, board, body or commission to whom or to which any power or duty
affecting such covenants, stipulations, obligations and agreements is
transferred by or in accordance with law.
Except as otherwise provided in this Indenture, all rights, powers and
privileges conferred and duties and liabilities imposed upon the Authority by
the provisions of this Indenture shall be exercised or performed by such other
officer, board, body or commission as may be required or permitted by law to
exercise such powers or to perform such duties.
No covenant, stipulation, obligation or agreement herein contained shall be
deemed to be a covenant, stipulation, obligation or agreement of any member,
agent or employee of the Authority in his individual capacity, and neither the
members of the Authority nor any official executing the Bonds shall be liable
personally on the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof.
Section 1402. MANNER OF GIVING NOTICE. Any notice, demand, direction,
request or other instrument authorized or required by this Indenture to be given
to or filed with the Authority, the Lessee or the Trustee shall be deemed to
have been sufficiently given or filed for all purposes of this Indenture if and
when sent by Federal Express priority delivery or registered mail, return
receipt requested:
(a) As to the Authority: Indianapolis Airport Authority
Indianapolis International Airport
Box 100
2500 South High School Road
Indianapolis, Indiana 46241-4941
(b) As to the Trustee: NBD BANK, N.A.
One Indiana Square
Indianapolis, Indiana 46266
Attn: Corporate Trust Department
(c) As to the Lessee: Federal Express Corporation
48
<PAGE>
Attn: Vice President and Treasurer
2007 Corporate Avenue
Memphis, TN 38132
with copy to: Federal Express Corporation
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Attention: Legal Department, Managing
Director,
Business Transactions
Any of such addresses may be changed at any time upon written notice of
such change sent by United States registered or certified mail, postage prepaid,
or by Federal Express priority delivery to the other parties by the party
effecting the change.
Section 1403. INCONSISTENT INDENTURE. All indentures, ordinances and
parts thereof that are inconsistent with any of the provisions of this Indenture
are hereby declared to be inapplicable to the provisions of this Indenture.
Section 1404. HEADINGS NOT PART OF INDENTURE. Any headings preceding the
texts of the several Articles and Sections hereof, table of contents, marginal
notes, or footnotes appended to copies hereof shall be solely for convenience of
reference and shall not constitute a part of this Indenture or affect its
meaning, construction or effect.
Section 1405. THE AUTHORITY, THE LESSEE, THE TRUSTEE AND THE OWNERS ALONE
HAVE RIGHTS UNDER INDENTURE. Except as otherwise expressly provided herein,
nothing in this Indenture, expressed or implied, is intended or shall be
construed to confer upon any person, firm or corporation, other than the
Authority, the Lessee, the Trustee, and the Owners of Bonds issued under and
secured by this Indenture, any right, remedy or claim, legal or equitable, under
or by reason of this Indenture. This Indenture is intended to be for the sole
and exclusive benefit of the Authority, the Lessee, the Trustee, and the Owners.
Section 1406. EFFECT OF PARTIAL INVALIDITY. If any one or more of the
provisions of this Indenture or of any Bonds issued hereunder are held to be
illegal or invalid, such illegality or invalidity shall not affect any other
provision of this Indenture or of the Bonds, and this Indenture and the Bonds
shall be construed and enforced as if such illegal or invalid provision had not
been contained herein or therein.
Section 1407. STATE LAW GOVERNS. The Bonds are issued and this Indenture
is adopted with the intent that the laws of the State shall govern their
construction.
49
<PAGE>
Section 1408. INDENTURE EFFECTIVE. This Indenture shall take effect
immediately upon the issuance and delivery of the Series 1994 Bonds.
Section 1409. PAYMENT DATES. In the event that any date on which
principal, premium or interest on the Bonds is due is not a Business Day,
payment shall be made on the next succeeding Business Day with the same force
and effect as if made on the actual date on which such principal, premium or
interest is due.
Section 1410. COUNTERPARTS. This Indenture may be simultaneously executed
in one or more counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
50
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Trustee have executed this Trust
Indenture all as of the date first written above.
INDIANAPOLIS AIRPORT AUTHORITY
By /s/ MICHAEL W. WELLS
Michael W. Wells, President
Attest:
/s/ BETTY J. JOHNSON
Betty J. Johnson, Secretary
51
<PAGE>
NBD BANK, N.A., as Trustee
By: /s/ ROBERT J. KOCHER
Robert J. Kocher, Vice President and
Trust Officer
Attested:
/s/ DARYL F. MERGENTHAL
Daryl F. Mergenthal, Trust Officer
52
<PAGE>
EXHIBIT A
Legal Description of the Land
PARKING LAND
A part of the Southeast quarter of Section 26, Township 15 North, Range 2
East, Decatur Township, Marion County, Indiana, described as follows:
Commencing at a bronze disk found at the Northeast corner of the Southeast
quarter of said Section 26; thence South 00 degrees 04 minutes 04 seconds East
(all bearings are based on the Indiana State Plane Coordinate system, East Zone
(NAD83)) along the East line of said Southeast quarter 1338.76 feet to the
Southeast corner of the North half of said Southeast quarter; thence South 89
degrees 09 minutes 40 seconds West along the South line of said North half,
320.01 feet to the Point of Beginning; thence continuing along said South line,
South 89 degrees 09 minutes 40 seconds West 1002.51 feet to the Southwest corner
of the Northeast quarter of the Southeast quarter of Section 26; thence South 89
degrees 09 minutes 40 seconds West along the South line of the Northwest quarter
of the Southeast Quarter of Section 26, 104.00 feet; thence South 00 degrees 17
minutes 09 seconds East 516.09 feet; thence South 89 degrees 08 minutes 35
seconds West 93.42 feet; thence South 00 degrees 49 minutes 43 seconds East
83.11 feet; thence South 89 degrees 09 minutes 40 seconds West 665.24 feet;
thence North 00 degrees 50 minutes 20 seconds West 1220.21 feet; thence North 89
degrees 09 minutes 40 seconds East 2138.52 feet to the West line of High School
Road; thence South 00 degrees 04 minutes 04 seconds East along said West line
487.45 feet; thence South 89 degrees 09 minutes 40 seconds West 260.00 feet;
thence South 00 degrees 04 minutes 04 seconds East 133.60 feet to the Point of
Beginning. Containing 39.91785 acres, or 1,738,822 square feet, of land, more
or less.
[This portion of the page intentionally left blank]
A-1
<PAGE>
PRIMARY LAND
A part of Section 26, Township 15 North, Range 2 East, Decatur Township,
Marion County, Indiana, described as follows:
Commencing at a bronze disk found at the Southeast corner of the Northeast
quarter of said Section 26; thence North 00 degrees 11 minutes 02 seconds West
(all bearings are based on the Indiana State Plane Coordinate system, East Zone
(NAD83)) along the East line of said Northeast quarter 384.43 feet to the Point
of Beginning; thence South 83 degrees 26 minutes 05 seconds West 1347.35 feet;
thence South 63 degrees 52 minutes 43 seconds West 381.02 feet; thence South 55
degrees 41 minutes 47 seconds West 65.22 feet; thence South 07 degrees 35
minutes 44 seconds East 342.34 feet; thence South 82 degrees 22 minutes 11
seconds West 647.59 feet to the beginning of a curve concave southerly having a
central angle of 28 degrees 03 minutes 52 seconds, a radius of 1986.84 feet and
whose chord bears South 68 degrees 20 minutes 42 seconds West 963.49 feet;
thence westerly along said curve to the left an arc distance of 973.19 feet;
thence North 37 degrees 16 minutes 18 seconds West 80.20 feet; thence South 52
degrees 59 minutes 41 seconds West 163.02 feet; thence South 37 degrees 16
minutes 18 seconds East 80.20 feet; thence South 52 degrees 43 minutes 42
seconds West 1421.56 feet; thence North 45 degrees 03 minutes 18 seconds West
1038.57 feet; thence North 44 degrees 56 minutes 42 seconds East 2638.12 feet;
thence North 64 degrees 58 minutes 06 seconds East 364.41 feet; thence North 44
degrees 56 minutes 42 seconds East 261.80 feet; thence South 45 degrees 03
minutes 18 seconds East 535.34 feet; thence North 44 degrees 56 minutes 42
seconds East 321.00 feet; thence South 45 degrees 03 minutes 18 seconds East
300.82 feet; thence North 44 degrees 56 minutes 42 seconds East 494.35 feet;
thence South 45 degrees 03 minutes 18 seconds East 673.93 feet; thence North 44
degrees 56 minutes 42 seconds East 1234.77 feet; thence South 45 degrees 03
minutes 18 seconds East 458.28 feet; thence South 00 degrees 11 minutes 02
seconds East 902.48 feet to the Point of Beginning. Containing 145.84 acres, or
6,352,790 square feet, of land, more or less.
[This portion of page intentionally left blank]
A-2
<PAGE>
PARKING OPTION LAND
A part of the Southwest Quarter of Section 26 and part of the Southeast
Quarter of Section 26, Township 15 North, Range 2 East, Decatur Township, Marion
County, Indiana described as follows:
Commencing at the Southeast Corner of the Southwest Quarter of Section 26,
Township 15 North, Range 2 East; thence North 00 degrees 30 minutes 14 seconds
West (all bearings are based on the Indiana State Plane Coordinate system, East
Zone (NAD83)) 670.29 feet along the East Line of said Southwest Quarter to the
Southeast Corner of the North Half of the South Half of said Southwest Quarter
and the POINT OF BEGINNING of this description; thence South 89 degrees 29
minutes 26 seconds West along the South Line of the North Half of the South Half
of said Southwest Quarter, 660.00 feet; thence South 00 degrees 30 minutes 15
seconds East to the South line of said Section 26 a distance of 669.03 feet;
thence South 89 degrees 35 minutes 59 seconds West along said South line 1051.51
feet; thence North 00 degrees 36 minutes 21 seconds West 15.00 feet; thence
South 89 degrees 35 minutes 59 seconds West 102.72 feet to a corner of the
right-of-way created with the Interstate 70 right-of-way plans; thence the
following four courses with said right-of-way for Interstate 70: (1) North 79
degrees 05 minutes 19 seconds West 101.97 feet; (2) North 84 degrees 22 minutes
54 seconds West 583.66 feet; (3) North 52 degrees 44 minutes 11 seconds East
2447.30 feet to the beginning of a curve to the right having a central angle of
28 degrees 22 minutes 03 seconds, a radius of 2176.83 feet, and whose chord
bears North 66 degrees 55 minutes 12 seconds East 1066.79 feet; (4) thence
northeasterly 1077.77 feet along said curve; thence South 00 degrees 50 minutes
20 seconds East 1230.84 feet; thence North 89 degrees 09 minutes 40 seconds East
665.24 feet to the western line of a 2.349 acre tract of land described in
instrument #90 93290 in the office of the Recorder of Marion County, Indiana,
the next two courses are along the boundary of said 2.349 acre tract of land;
(1) South 00 degrees 49 minutes 43 seconds East 441.88 feet; (2) thence North 89
degrees 08 minutes 35 seconds East 192.46 feet to the southeastern corner of
said 2.349 acre tract of land on the East Line of the West Half of said
Southeast Quarter which is along the southwestern corner of a 6.092 acre tract
of land described in instrument #90 120938 in said Recorder's office; thence
North 89 degrees 08 minutes 35 seconds East 505.46 feet along the southern
boundary of said 6.092 acre tract of land to its southeastern corner on the
western line of the 80-foot wide ingress and egress easement described in an
INGRESS AND EGRESS EASEMENT AGREEMENT recorded as instrument #92 106542 in said
Recorder's office; thence South 00 degrees 17 minutes 09 seconds East 298.38
feet to the South Line of said Southeast Quarter; thence South 89 degrees 07
minutes 09 seconds West 1822.89 feet along the South Line of said Southeast
Quarter to the Southeast Corner of the Southwest Quarter of Section 26; thence
North 00 degrees 30 minutes 14 seconds West 220.00 parallel with the West Line
of said Southeast Quarter; thence North 89 degrees 07 minutes 09 seconds East
203.00 feet parallel with the South Line of said Southeast Quarter; thence North
00 degrees 30 minutes 14 seconds West 102.00 feet parallel with the West Line of
said Southeast Quarter; thence South 89 degrees 07 minutes 09 seconds West
203.00 feet
A-3
<PAGE>
parallel with the South Line of said Southeast Quarter to the West Line of said
Southeast Quarter and the East Line of said Southwest Quarter; thence North 00
degrees 30 minutes 14 seconds West 348.29 feet along the East Line of said
Southwest Quarter to the Point of Beginning. Containing 83.22238 acres, or
3,625,167 square feet, of land, more or less.
[This portion of the page intentionally left blank]
A-4
<PAGE>
EXHIBIT B
United States of America
State of Indiana
No:R-_______ $_____________
INDIANAPOLIS AIRPORT AUTHORITY
SPECIAL FACILITIES REVENUE BONDS, SERIES 1994
(FEDERAL EXPRESS CORPORATION PROJECT)
INTEREST PRINCIPAL MATURITY ORIGINAL
RATE AMOUNT DATE DATE CUSIP
- -------- --------- -------- -------- -----
January 15, 2017 October 1, 1994
Registered Owner: ________________________________
The Indianapolis Airport Authority (the "Authority"), for value received,
hereby promises to pay, solely from the sources and in the manner hereinafter
provided, to the registered owner referenced above or registered assigns, on the
maturity date set forth above (or earlier as hereinafter referred to), upon the
presentation and surrender hereof, at the principal corporate trust office of
NBD Bank, N.A., Indianapolis, Indiana, (the "Trustee") as Trustee under the
Trust Indenture, dated as of October 1, 1994, (the "Indenture") by and between
the Trustee and the Authority, the principal amount set forth above. The
Authority also promises to pay, solely from said sources, interest on such
principal amount on each January 15 and July 15, commencing January 15, 1995
("Interest Payment Dates") at the interest rate set forth above on the basis of
a three hundred sixty (360) day year consisting of twelve (12) thirty (30) day
months until the principal sum hereof is paid, commencing from the Interest
Payment Date next preceding the date on which this Bond is authenticated unless
it is authenticated on or after a Regular Record Date (as hereinafter defined),
but on or prior to the Interest Payment Date with respect thereto, in which
event it shall bear interest from such Interest Payment Date, or if it is
authenticated prior to January 1, 1995, in which event it shall bear interest
from the Original Date set forth above. The interest payable and punctually
paid or duly provided for, on any Interest Payment Date, will be paid to the
person in whose name this Bond is registered at the close of business on the
Regular Record Date for such Interest Payment Date, which shall be the 1st day
(whether or not a business day) of the calendar month in which such Interest
Payment Date occurs. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the
B-1
<PAGE>
registered owner on such Regular Record Date, and may be paid to the person in
whose name this Bond is registered at the close of business on a Special Record
Date (as defined in the Indenture herein described) for the payment of such
defaulted interest, which date shall be fixed by the Trustee.
Such payment of interest shall be made by check mailed by the Trustee to
the registered owner at his address as it appears on the bond registration books
maintained by the Trustee, except that interest will be transmitted by wire
transfer on such Interest Payment Date to registered owners of $1,000,000 or
more in aggregate principal amount of Series 1994 Bonds as of the close of
business on the relevant Regular Record Date which shall have provided written
notice to the Trustee not less than 15 days before such Regular Record Date of
their wire transfer addresses in the continental United States; provided that
payments to a Depository for book-entry only Bonds shall be made in immediately
available funds on such Interest Payment Date. All payments on this Bond shall
be made in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
This Bond is not payable from the funds of the Authority, nor does it
constitute a legal or equitable pledge, charge, lien or encumbrance upon any of
the properties of the Authority or upon any of its income, receipts or revenues
except as hereinafter provided for. This Bond and the series of which it is a
part, together with the interest thereon, are payable solely from the Trust
Estate (as defined in the Indenture) and do not constitute a general
indebtedness or general obligation of the Authority. The registered owner of
this Bond shall never have the right to demand payment of this Bond or the
interest thereon out of any funds raised or to be raised by taxation.
This Bond is one of a duly authorized series of revenue bonds of the
Authority, designated "Indianapolis Airport Authority Special Facilities Revenue
Bonds, Series 1994 (Federal Express Corporation Project)" (the "Series 1994
Bonds"), issued pursuant to Indiana Code 8-22-3 (the "Act"), the Indenture, and
an ordinance duly adopted by the Board of Directors of the Authority on October
10, 1994, for the purpose of providing funds, together with any other available
funds, to (i) pay the cost of the design, construction and equipping of certain
facilities at the Indianapolis International Airport leased to Federal Express
Corporation (the "Lessee") pursuant to a Land and Special Facilities Lease
Agreement, dated as of October 1, 1994 (herein called the "Agreement"), for or
related to the distribution of express cargo and parcels located at the
Indianapolis International Airport as more particularly described and defined in
the Agreement (the "Special Facilities") to be leased to the Lessee, and (ii)
pay the costs of the issuance of the Series 1994 Bonds. The payment of the
Series 1994 Bonds shall be guaranteed by the Lessee pursuant to a Series 1994
Guaranty, dated as of October 1, 1994 (the "Series 1994 Guaranty").
B-2
<PAGE>
Copies of the Agreement, the Series 1994 Guaranty and the Indenture are on
file and may be inspected at the principal corporate trust office of the
Trustee. Capitalized terms used herein without definition shall have the
meanings defined in the Indenture. By the purchase and acceptance of this
Series 1994 Bond, the registered owner hereof signifies its assent to all of the
provisions of the Indenture. In the event any provision of this Series 1994
Bond conflicts with any provision of the Indenture, the terms of the Indenture
shall prevail.
The Authority has entered into the Agreement with the Lessee pursuant to
which the Authority has agreed to lease the Special Facilities to the Lessee and
the Lessee has agreed to pay to the Authority a rental (the "Special Facilities
Rentals") therefor which, together with other funds deposited under the
Indenture, is equal to the principal of, premium, if any, and interest on all
Series 1994 Bonds issued under the Indenture. The Agreement also provides for
the payment directly to the Authority or the Trustee of other payments that are
not pledged to the payment of Bonds issued under the Indenture.
The Indenture provides for the issuance from time to time under the
conditions, limitations and restrictions therein set forth of Additional Bonds
secured as to the pledge of the Trust Estate pari passu with the Series 1994
Bonds (the Series 1994 Bonds and such Additional Bonds shall be referred to as
the "Bonds").
The Indenture provides for the creation of a special fund designated the
"Bond Fund" (hereinafter called the "Bond Fund"), which is pledged and charged
with the payment of the principal of, premium, if any, and interest on all
Series 1994 Bonds. The Indenture also provides for the deposit to the Bond Fund
of the Special Facilities Rentals, to the extent and in the manner provided in
the Indenture.
OPTIONAL REDEMPTION
The Series 1994 Bonds are subject to optional redemption by the Authority
upon receipt of a written direction of the Lessee to exercise such option, in
whole or in part, by lot at any time during the periods and at the redemption
prices (expressed as a percentage of principal amount of Series 1994 Bonds to be
redeemed), respectively, set forth below, plus interest accrued thereon to the
date of redemption.
Period During Which Redeemed
(both dates inclusive) Redemption Price
July 15, 2004 through July 14, 2005 102%
July 15, 2005 through July 14, 2006 101%
July 15, 2006 and thereafter 100%
B-3
<PAGE>
REDEMPTION FROM CERTAIN NET PROCEEDS
The Series 1994 Bonds are subject to special optional redemption at the
election of the Lessee, in whole or in part as permitted under the Agreement (if
in part, selected by the Authority by lot), from Net Proceeds deposited in the
Bond Fund pursuant to Sections 1101 and 1102 of the Agreement arising from the
condemnation from eminent domain, damage or destruction of the Special
Facilities, at a redemption price equal to one hundred percent (100%) of the
principal amount thereof, without premium, plus accrued interest to the
redemption date on the earliest practicable date selected by the Trustee after
such deposit.
REDEMPTION UPON A SERIES 1994 DETERMINATION OF TAXABILITY
The Series 1994 Bonds are subject to mandatory redemption in whole at a
redemption price equal to one hundred percent (100)% of the principal amount
thereof, plus accrued interest to the redemption date upon a Series 1994
Determination of Taxability.
REDEMPTION UPON CERTAIN TERMINATIONS OF AGREEMENT
The Series 1994 Bonds are subject to mandatory redemption in whole at a
redemption price equal to one hundred percent (100%) of the principal amount
thereof, plus accrued interest to the date of redemption on any date selected by
the Authority within 60 days after notice is given to the Trustee of the
Authority's election to terminate the Agreement in accordance with Section 808
thereof.
If, in the opinion of Bond Counsel, a termination date of the Agreement
prior to the stated maturity date of the Series 1994 Bonds is necessary to
provide that the interest on the Series 1994 Bonds will be excludable from gross
income of the Owner thereof for federal income tax purposes, the Series 1994
Bonds are subject to mandatory redemption by the Authority in whole at a
redemption price of one hundred percent (100%) of the principal amount thereof,
plus accrued interest to the date of redemption on the Business Day prior to the
final day of the term of the Agreement.
EXCESS BOND PROCEEDS REDEMPTION
The Series 1994 Bonds are subject to redemption by the Authority in part by
lot at a redemption price equal to one hundred percent (100%) of the principal
amount thereof, without premium, plus accrued interest to the redemption date
from amounts which are deposited to the Series 1994 Account of the Bond Fund
from the Series 1994 Account of the Construction Fund pursuant to the terms of
the Indenture on the earliest practicable date selected by the Trustee after
such deposit.
B-4
<PAGE>
If less than all of the Series 1994 Bonds are to be called for redemption,
the Trustee shall select the Series 1994 Bonds to be redeemed by lot, each
$5,000 portion of principal being counted as one Bond for this purpose.
Not more than sixty (60) nor less than thirty (30) days before the
redemption date of any Series 1994 Bonds to be redeemed, whether such redemption
be in whole or in part, the Authority shall cause a notice of such redemption to
be filed with the Trustee and given by mail to the registered owners of the
Series 1994 Bonds at the addresses appearing upon the registration books
maintained pursuant to the Indenture. In certain instances, as provided in the
Indenture, the deposit of the redemption price of the Series 1994 Bonds fixed
for redemption shall not be a condition precedent to the giving of such notice.
Further, in the case of a redemption described under the heading OPTIONAL
REDEMPTION the Lessee may elect prior to 5:00 p.m. Indianapolis time on the
Business Day next preceding the date fixed for redemption to cancel such
redemption. In such case the notice shall contain a statement to such effect.
On the date fixed for redemption, notice having been given as aforesaid, the
Series 1994 Bonds or portions thereof so called for redemption shall be due and
payable at the redemption price established for the redemption of such Series
1994 Bonds or portions thereof on such date and, if moneys for payment of such
redemption price and the accrued interest are held by the Trustee as provided in
the Indenture, interest on the Series 1994 Bonds or the portions thereof so
called for redemption shall cease to accrue. Notwithstanding the foregoing, in
the event of redemption as described under the heading OPTIONAL REDEMPTION, the
Series 1994 Bonds fixed for redemption shall not be due and payable on the date
fixed for redemption if the Lessee gives written notice to the Trustee and the
Authority on or prior to 5:00 p.m. Indianapolis time on the Business Day that
next precedes the dated fixed for redemption of its election not to proceed with
such optional redemption. If a portion of this Series 1994 Bond shall be called
for redemption, a new Series 1994 Bond or Bonds in principal amount equal to the
unredeemed portion hereof will be issued to the registered owner of the Series
1994 Bonds upon the surrender hereof.
At the corporate trust operations office of the Trustee, in the manner of
and subject to the conditions provided in the Indenture, Series 1994 Bonds may
be exchanged for an equal aggregate principal amount of Series 1994 Bonds of
authorized denominations and bearing interest at the same rate or rates.
The Trustee shall keep at its corporate trust operations office books of
the Authority for the registration of transfer of Series 1994 Bonds. The
transfer of this Series 1994 Bond may be registered only upon such books and as
otherwise provided in the Indenture upon the surrender hereof to the Trustee
together with an assignment duly executed by the registered owner hereof or his
attorney or legal representative in such form as shall be satisfactory to the
Trustee. Upon any such registration of transfer, the Trustee shall deliver in
exchange for this Series 1994 Bond a new Series 1994 Bond or Bonds, registered
in the name of the transferee, of authorized
B-5
<PAGE>
denominations, in an aggregate principal amount equal to the unredeemed
principal amount of this Series 1994 Bond, bearing interest at the same rate.
The Trustee shall not be required to exchange or register the transfer of
any Series 1994 Bond during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Series 1994
Bonds or any portion thereof and ending at the close of business on the date of
such mailing or of any Series 1994 Bond called for redemption in whole or in
part pursuant to the Indenture.
The registered owner of this Series 1994 Bond shall have no right to
enforce the provisions of the Indenture or to institute action to enforce the
covenants therein, or to take any action with respect to any Event of Default
under the Indenture or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Indenture.
Modifications or alterations of the Indenture or any Supplemental Indenture
may be made only to the extent and in the circumstances permitted by the
Indenture.
This Series 1994 Bond is issued with the intent that the laws of the State
of Indiana shall govern its construction.
All acts, conditions and things required to happen, exist and be performed
precedent to and in the issuance of this Series 1994 Bond and the execution of
the Indenture have happened, exist and have been performed as so required.
This Series 1994 Bond shall not be valid or become obligatory for any
purpose or be entitled to any benefit or security under the Indenture until it
shall have been authenticated by the execution by the Trustee of the Certificate
of Authentication endorsed hereon.
IN WITNESS WHEREOF, the Authority has caused this Series 1994 Bond to be
executed with the manual or facsimile signature of its President and its
official seal to be impressed hereon and this Series 1994 Bond shall be attested
by manual or facsimile signature of its Secretary all as of the Original Date
stated above.
INDIANAPOLIS AIRPORT AUTHORITY
By: ____________________________________________
President
B-6
<PAGE>
[Official Seal]
Attest:
_________________________________
Secretary
CERTIFICATE OF AUTHENTICATION
This Bond is a Bond of the Series designated herein and issued under the
provisions of the within-mentioned Indenture.
NBD Bank, N.A., as Trustee
By: ____________________________________
Authorized Signatory
B-7
<PAGE>
[FORM OF ASSIGNMENT]
[Assignment] FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[Please Print or Typewrite Name and Address of Transferee] the within Bond and
all rights thereunder, and hereby irrevocably constitutes and appoints attorney
to register the transfer of the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED: ________________________________
Signature Guaranteed:
_______________________________________ _______________________________________
NOTICE: NOTICE:
Signature(s) must be guaranteed The signature of this assignment
by an eligible guarantor institution must correspond with the name as it
participating in a Securities Transfer appears upon the face of the within
Association recognized signature bond in every particular, without
guarantee program. alteration or enlargement or any change
whatsoever.
B-8
<PAGE>
EXHIBIT C
DTC Letter of Representations
(See Form Attached)
C-1
<PAGE>
BOOK-ENTRY-ONLY MUNICIPAL BONDS
-------------------------------
LETTER OF REPRESENTATIONS
(To be Completed by Issuer and Agent)
___________________________________________________________
Name of Issuer
___________________________________________________________
Name of Agent
___________________
Date
Attention: Underwriting Dept.
THE DEPOSITORY TRUST COMPANY
55 Water Street, 50th Floor
New York, NY 10041-0099
Re:__________________________________________________
__________________________________________________
__________________________________________________
Issue Description
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Bonds"). Agent will act as
trustee, paying agent, fiscal agent, or other agent of Issuer with respect to
the Bonds. The Bonds will be issued pursuant to a trust indenture, bond
resolution, or other such document authorizing the issuance of the Bonds dated
___________________, 199__, (the "Document"). _____________________________
(the "Underwriters") is distributing the Bonds through The Depository Trust
Company ("DTC").
To induce DTC to accept the Bonds as eligible for deposit at DTC and to act
in accordance with its Rules with respect to the Bonds, Issuer and Agent, if
any, make the following representations to DTC.
1. Prior to closing on the Bonds on __________________, 199__, there
shall be deposited with DTC one Bond certificate registered in the name of DTC's
nominee, Cede &
C-2
<PAGE>
Co. for each stated maturity of the Bonds in the face amounts set forth on
Schedule A hereto, the total of which represents 100% of the principal amount of
such Bonds. If, however, the aggregate principal amount of any maturity exceeds
$150 million, one certificate will be issued with respect to each $150 million
of principal amount and an additional certificate will be issued with respect to
any remaining principal amount. Each $150 million Bond certificate shall bear
the following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation, "DTC," to Issuer or its agent for registration of
transfer exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as
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.
2. In the event of any solicitation of consents from or voting by holders
of the Bonds, Issuer or Agent shall establish a record date for such purposes
with no provision for revocation of consents or votes by subsequent holders and
shall, to the extent possible, send notice of such record date to DTC not less
than 15 calendar days in advance of such record date.
3. In the event of a full or partial redemption or an advance refunding
of part of the outstanding Bonds, Issuer or Agent shall send a notice to DTC
specifying: (a) the amount of the redemption or refunding; (b) in the case of a
refunding, the maturity dates established under the refunding, and (c) the date
such notice is to be mailed to beneficial owners or published the ("Publication
Date"). Such notice shall be sent to DTC by a secure means (e.g., legible
telecopy, registered or certified mail, overnight delivery in a timely manner
designed to assure that such notice is in DTC's possession no later than the
close of business on the business day before the Publication Date. Issuer or
Agent shall forward such notice either in a separate secure transmission for
each CUSIP number or in a secure transmission for multiple CUSIP numbers (if
applicable) which includes a manifest or list of each CUSIP submitted in that
transmission. The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice. The
Publication Date shall be not less than 30 days nor more than 60 days prior to
the redemption date or, in the case of an advance refunding, the date that the
proceeds are deposited in escrow.
4. In the event of an invitation to tender the Bonds, notice by Issuer or
Agent to Bondholders specifying the terms of the tender and the Publication Date
of such notice shall be sent to DTC by a secure means in the manner set forth in
the preceding Paragraph.
C-3
<PAGE>
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Bonds.
6. Notices to DTC pursuant to Paragraph 2 by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and receipt
of such notices shall be continued by telephoning (212) 709-6870. Notices to
DTC pursuant to Paragraph 2 by mail or by any other means shall be sent to:
Supervisor: Proxy
Reorganization Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
7. Notices to DTC pursuant to Paragraph 3 by telecopy shall be sent to
DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190. If the
party sending the notice does not receive a telecopy receipt from DTC confirming
that the notice has been received, such party shall telephone (516) 227-4070.
Notices to DTC pursuant to Paragraph 3 by mail or by other means shall be sent
to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
8. Notices to DTC pursuant to Paragraph 4 and notices of other actions
including mandatory tenders, exchanges, and capital changes by telecopy shall be
sent to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and
receipt of such notices shall be confirmed by telephoning (212) 709-6884.
Notices to DTC pursuant to the above by mail or by any other means shall be sent
to:
Manager: Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
9. Transactions in the Bonds shall be eligible for next-day funds
settlement in DTC's Next-Day Funds Settlement ("NDFS") system.
A. Interest payments shall be received by Cede & Co., as nominee of DTC, or
its registered assigns in next-day funds on each payment date (or the
equivalent in accordance with existing arrangements between Issuer or
Agent and DTC). Such payments shall be made payable to the order of
Cede & Co. Absent any other existing arrangements such payments shall
be addressed as follows:
C-4
<PAGE>
Manager: Cash Receipts
Dividend Department
The Depository Trust Company
7 Hanover Square, 24th Floor
New York, NY 10004-2695
B. Principal payments shall be received by Cede & Co., as nominee of DTC,
or its registered assigns in next-day funds on each payment date (or the
equivalent in accordance with existing arrangements between Issuer or
Agent and DTC). Such payments shall be made payable to the order of
Cede & Co. and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
55 Water Street, 50th Floor
New York, NY 10041-0099
10. DTC may direct Issuer or Agent to use any other telephone number or
address as the number or address to which notices or payments of interest or
principal may be sent.
11. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Agent's
invitations necessitating a reduction in the aggregate principal amount of Bonds
outstanding or an advance refunding of part of the Bonds outstanding, DTC in its
discretion: (a) may request Issuer or Agent to issue and authenticate a new
Bond certificate; or (b) may make an appropriate notation on the Bond
certificate indicating the date and amount of such reduction in principal except
in the case of final maturity, in which case the certificate will be presented
to Issuer or Agent prior to payment if required.
12. In the event that Issuer determines that beneficial owners of Bonds
shall be able to obtain certificated Bonds, Issuer or Agent shall notify DTC of
the availability of Bond certificates. In such event, Issuer or Agent shall
issue transfer, and exchange Bond certificates in appropriate amounts, as
required by DTC and others.
13. DTC may discontinue providing its services as securities depository
with respect to the Bonds at any time by giving reasonable notice to Issuer or
Agent (at which time DTC will confirm with Issuer or Agent the aggregate
principal amount of Bonds outstanding). Under such circumstances, at DTC's
request Issuer and Agent shall cooperate fully with DTC by taking appropriate
action to make available one or more separate certificates evidencing Bonds to
any DTC Participant having Bonds credited to its DTC accounts.
14. Nothing herein shall be deemed to require Agent to advance funds on
behalf of Issuer.
C-5
<PAGE>
Notes:
A. If there is an Agent as defined in this Letter of Representations, Agent as
well as Issuer must sign this Letter. If there is no Agent, in signing this
Letter Issuer itself undertakes to perform all of the obligations set forth
herein.
B. Under Rules of the Municipal Securities Rulemaking Board relating to "good
delivery," a municipal securities dealer must be able to determine the date that
a notice of a partial call or of an advance refunding or a part of an issue
publication date is addressed in Paragraph 3 of the Letter.
C. Schedule B contains statements that DTC believes accurately describe DTC ,
the method of effecting book-entry transfers of securities distributed through
DTC, and certain related matters.
Very truly yours,
___________________________________________
Issuer
By: ________________________________________
Authorized Officer's Signature
____________________________________________
Agent
By: ________________________________________
Authorized Officer's Signature
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: ____________________________
Authorized Officer
cc: Underwriter
Underwriter's Counsel
C-6
<PAGE>
SCHEDULE A
(Describe Issue)
CUSIP PRINCIPAL AMOUNT MATURITY DATE INTEREST RATE
C-7
<PAGE>
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Prepared by DTC - - bracketed material may be applicable only to
certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered in the name of Cede & Co. (DTC's partnership
nominee). One fully-registered Security certificate will be issued for (each
issue of) the Securities, (each) in the aggregate principal amount of such
issue, and will be deposited with DTC. (If, however, the aggregate principal
amount of (any) issue exceeds $150 million, one certificate will be issued with
respect to each $150 million of principal amount and an additional certificate
will be issued with respect to any remaining principal amount of such issue.)
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, cleaning corporations, and certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases or Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser or each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates
C-8
<PAGE>
representing their ownership interest in Securities, except in the event that
use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities: DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. if less than all of
the Securities within an issue are being redeemed. DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date identified in a listing
attached to the Omnibus Proxy.
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on payable date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC, the Agent, or the
issuer, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal and interest to DTC is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to the
(Tender/Remarketing) Agent, and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to the (Tender/Remarketing) Agent. The
requirement for physical delivery of Securities in connection with a demand for
purchase or
C-9
<PAGE>
a mandatory purchase will be deemed satisfied when the ownership rights in the
Securities are transferred by Direct Participants on DTC's records.]
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to the
issuer or the Agent. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to be
printed and delivered.
11. The issuer may decide to discontinue use of the system of book-
entry transfers through DTC (or a successor securities depository). In that
event, Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the issuer believes to be reliable,
but the issuer takes no responsibility for the accuracy thereof.
C-10
<PAGE>
EXHIBIT D
WRITTEN REQUEST FOR DISBURSEMENT
INDIANAPOLIS AIRPORT AUTHORITY
SPECIAL FACILITIES REVENUE BONDS, SERIES 1994
(FEDERAL EXPRESS CORPORATION PROJECT)
(Date) Request No. ________
NBD Bank, N.A.
One Indiana Square, Suite 836
Indianapolis, IN 46266
Attention: Corporate Trust Department
Dear Sir or Madam:
This Requisition is submitted pursuant to the provisions of Section 402
of the Trust Indenture (the "Indenture") dated as of October 1, 1994, by and
between the Indianapolis Airport Authority (the "Authority") and NBD Bank, N.A.,
as Trustee (the "Trustee") and Section 302 of the Land and Special Facilities
Lease Agreement dated as of October 1, 1994 (the "Agreement") between the
Authority and Federal Express Corporation (the "Lessee"). The terms used herein
have the meanings as when used in the Indenture except where the context
otherwise requires.
Please indicate whether payment is requested for interest or other costs
by checking item (1) or (2) below:
(1) _______ Request for payment of interest.
The Lessee hereby directs the Trustee to apply funds in the Series
1994 Account within the Construction Fund to the payment of
interest on the Series 1994 Bonds on ___________________ (insert
applicable Interest Payment Date). The Lessee hereby certifies
that: (a) the payment of such interest from the Construction Fund
is a permissible cost of the Special Facilities in accordance with
the Act and Code; and (b) either (i) at least 95% of the net
proceeds of the Series 1994 Bonds expended to the date of the
payment hereby requested from the Construction Fund will have been
used to acquire, construct and equip an airport facility within
the
- 1 -
<PAGE>
meaning of Section 142 of the Code; or (ii) 100% of the net
proceeds of the Series 1994 Bonds hereby requested from the
Construction Fund, other than amounts requested in (c) below, if
any, will be used to acquire, construct and equip an airport
facility within the meaning of Section 142 of the Code.
OR
(2) _______ Request for payment of other costs.
The Lessee hereby requests the Trustee pay to the payee(s) named in
Exhibit A attached from funds held in the Construction Fund, the amount
specified in Exhibit A attached. In support of this request, (whether under 1
or 2 above) the Lessee states as follows:
(a) Each of the costs listed on Exhibit A are qualified costs under
the Act and have been made or incurred and were necessary for the
designing, constructing or equipping of the Special Facilities
and were made or incurred in accordance with the construction
contracts, plans and specifications thereof then in effect and on
file with the Authority;
(b) The amount paid or to be paid and set forth on Exhibit A is
reasonable and represents a part of the amount payable for the
cost of designing, constructing or equipping the Special
Facilities, and such payment was not paid in advance of the time,
if any, fixed for payment and was made in accordance with the
terms of any contracts applicable thereto and in accordance with
usual and customary practice under existing conditions;
(c) $_______________________ of the costs listed on Exhibit A
represent costs of issuance with respect to the Series 1994 Bonds
(within the meaning of Section 147(g)(2) of the Code). The total
costs of issuance paid to date, including the payments to be made
pursuant to this Requisition, are not in excess of 2% of the
proceeds of the Series 1994 Bonds;
(d) Either (i) at least 95% of the net proceeds of the Series 1994
Bonds expended to the date of the payment hereby requested from
the Construction Fund will have been used to acquire, construct,
and equip an airport facility within the meaning of Section 142
of the Code, or (ii) 100% of the net proceeds of the Series 1994
Bonds hereby requested from the Construction Fund, other than
amounts
- 2 -
<PAGE>
requested in (c) above, if any, will be used to acquire,
construct and equip an airport facility within the meaning of
Section 142 of the Code; and
(e) No part of the costs of the Special Facilities included in this
Requisition was included in any written request previously filed
with the Trustee under the provisions hereof.
In accordance with the provisions of the Indenture and the Agreement, the
Lessee has caused this Requisition to be signed and verified on its behalf by
its duly authorized officer this ______ day of _______________, 19___.
FEDERAL EXPRESS CORPORATION
___________________________________
(Authorized Lessee Representative)
<PAGE>
Exhibit 10.2
________________________________________________________________________
SERIES 1994 GUARANTY
FROM
FEDERAL EXPRESS CORPORATION,
as Guarantor
TO
NBD BANK, N.A.,
as Trustee
Dated as of October 1, 1994
$237,755,000
Indianapolis Airport Authority Special Facilities
Revenue Bonds, Series 1994
(Federal Express Corporation Project)
________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I REPRESENTATIONS AND WARRANTIES OF
GUARANTOR . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Guarantor Representations and Warranties. . . . . . . . . . 1
ARTICLE II COVENANTS AND AGREEMENTS. . . . . . . . . . . . . . . . . . 2
Section 2.1. Obligations Guaranteed. . . . . . . . . . . . . . . . . . . 2
Section 2.2. Obligations Unconditional . . . . . . . . . . . . . . . . . 2
Section 2.3. No Waiver or Set-Off. . . . . . . . . . . . . . . . . . . . 4
Section 2.4. Event of Default. . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5. Waiver of Notice; Expenses. . . . . . . . . . . . . . . . . 5
Section 2.6. The Guarantor to Maintain its Corporate
Existence; Conditions Under Which Exceptions
Permitted . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.7. Benefit and Enforcement . . . . . . . . . . . . . . . . . . 5
ARTICLE III NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.1. Effective Date. . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.2. Remedies Not Exclusive. . . . . . . . . . . . . . . . . . . 6
Section 4.3. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.4. Entire Agreement; Counterparts. . . . . . . . . . . . . . . 6
Section 4.5. Severability. . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 7
<PAGE>
SERIES 1994 GUARANTY
THIS SERIES 1994 GUARANTY (hereinafter this "Guaranty") made and entered
into as of October 1, 1994 from FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Guarantor"), to NBD BANK, N.A., a national banking association
having its principal corporate trust office in Indianapolis, Indiana, as trustee
(the "Trustee").
WITNESSETH:
WHEREAS, the Indianapolis Airport Authority, a municipal corporation (the
"Authority"), intends to issue its Special Facilities Revenue Bonds, Series 1994
(Federal Express Corporation Project), in the aggregate principal amount of
$____________ (the "Series 1994 Bonds") under and pursuant to a Trust Indenture
dated as of October 1, 1994 between the Authority and the Trustee (being herein,
as supplemented or amended from time to time, referred to as the "Indenture");
WHEREAS, the proceeds derived from the sale of the Series 1994 Bonds are to
be used to finance a portion of the costs of the construction and equipping of
certain facilities as more particularly described and defined in the Agreement
defined below (the "Special Facilities") at Indianapolis International Airport
which are to be leased by the Authority to the Guarantor under a Land and
Special Facilities Lease Agreement, dated as of October 1, 1994, between the
Authority and the Guarantor (herein, as amended from time to time, called the
"Agreement"); and
WHEREAS, the Guarantor desires that the Authority issue the Series 1994
Bonds and apply the proceeds for the purpose described above and is willing to
enter into this Guaranty in order to provide for revenues in respect of the
Special Facilities and to enhance the marketability of the Series 1994 Bonds and
thereby achieve interest cost and other savings for the Guarantor, and in order
to provide an inducement to future purchasers of the Series 1994 Bonds (those of
whom becoming at any time the registered owners of the Series 1994 Bonds being
herein referred to collectively as the "Owners");
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor does hereby represent to and agree with the Trustee for the benefit of
the Owners as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF GUARANTOR
Section 1.1. GUARANTOR REPRESENTATIONS AND WARRANTIES The Guarantor does
hereby represent and warrant that it is a corporation duly incorporated and in
good standing under the laws of the State of Delaware and is qualified to do
business and is in good standing in the State of Indiana, has the power to enter
into and perform this Guaranty, has duly authorized the
1
<PAGE>
execution and delivery of this Guaranty by proper corporate action and that such
execution and delivery does not contravene or constitute a default under any
agreement, instrument or indenture or any provision of its restated certificate
of incorporation, or any other requirement of law applicable to the Guarantor.
This Guaranty constitutes the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms, except
as the enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general equitable principles.
ARTICLE II
COVENANTS AND AGREEMENTS
Section 2.1. OBLIGATIONS GUARANTEED.
(a) The Guarantor hereby unconditionally guarantees to the Trustee for the
benefit of the Owners (1) the full and prompt payment of the principal of
and premium, if any, on each Series 1994 Bond when and as the same shall
become due and payable as provided in the Indenture, whether at the stated
maturity thereof, by acceleration, call for redemption or otherwise and (2)
the full and prompt payment of interest on each Series 1994 Bond, and, to
the extent permitted by law, interest on overdue interest and premium, when
and as the same shall become due and payable as provided in the Indenture.
All payments by the Guarantor hereunder shall be paid in lawful money of
the United States of America in immediately available funds. Each and
every default in payment of the principal of, premium, if any, or interest
on any Series 1994 Bond, or interest on overdue interest or premium, or
under this Guaranty shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of
action arises.
(b) The Guarantor further agrees that the obligations of the Guarantor set
forth herein shall constitute an absolute, unconditional, present and
continuing guaranty and promise of payment and not of collection, and
waives any right to require that any resort be had by the Trustee or the
Owners to pursue (1) the Trustee's or any Owner's rights against any other
party, or (2) any other right or remedy available to the Trustee or any
Owner by contract, applicable law or otherwise.
Section 2.2. OBLIGATIONS UNCONDITIONAL. The obligations of the Guarantor
under this Guaranty shall be absolute, unconditional and immediately enforceable
when each payment is due and shall remain in full force and effect until the
entire principal of, premium, if any, and interest on the Series 1994 Bonds,
and, to the extent permitted by law, interest on overdue interest and premium,
shall have been paid in full, or duly provided for in accordance with the
Indenture, and, to the extent permitted by law, such obligations shall not be
affected, modified, released or impaired upon the happening from time to time of
any event, including, without limitation any of the following, whether or not
with notice to, or the consent of, the Guarantor:
2
<PAGE>
(a) the waiver, compromise, settlement, release or termination of any or
all of the obligations, covenants or agreements of the Authority contained
in the Indenture, or of the payment, performance or observance thereof, or
the impossibility of performance or unenforceability of any of such
obligations, covenants or agreements;
(b) the failure to give notice to the Guarantor of the occurrence of any
event of default under the terms and provisions of this Guaranty, the
Indenture or the Agreement;
(c) the transfer, assignment or mortgaging or the purported transfer,
assignment or mortgaging of all or any part of the interest of the
Authority or the Guarantor in the Special Facilities, as defined in the
Agreement, or any failure of title with respect to the Authority's interest
in the Land and the Special Facilities (as defined in the Agreement) or the
invalidity, unenforceability or termination of the Agreement;
(d) the assignment of any of the obligations, covenants and agreements
contained in this Guaranty;
(e) the waiver, compromise, settlement, release or termination of the
Authority's obligations, covenants or agreements contained in the
Agreement, or of the payment, performance or observance thereof, or the
impossibility of performance or unenforceability of any of such
obligations, covenants or agreements;
(f) the waiver, compromise, settlement, release or termination of any of
the obligations, covenants or agreements of the Guarantor under the
Agreement, or of the payment, performance or observance thereof;
(g) the extension of the time for payment of any principal of any premium,
if any, or interest on any Series 1994 Bond, owing or payable on such
Series 1994 Bond or of the time for performance of any obligations,
covenants or agreements under or arising out of the Agreement or the
Indenture or the extension or the renewal of either thereof;
(h) the modification or amendment (whether material or otherwise) of any
obligation, covenant or agreement set forth in the Agreement or the
Indenture;
(i) the taking or the omission to take any of the actions referred to in
the Agreement, the Indenture or this Guaranty;
(j) any failure, omission or delay on the part of the Authority or the
Trustee to enforce, assert or exercise any right, power or remedy conferred
on the Authority, the Trustee or any other person in this Guaranty, the
Agreement or the Indenture, or any other act or acts on the part of the
Authority, the Trustee or any of the Owners;
(k) the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all the assets, marshalling of assets
and liabilities, receivership,
3
<PAGE>
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors or readjustment of,
or other similar proceedings affecting the Guarantor or the Authority or
any or all of the assets of any of them, or any allegation or contest of
the validity of this Guaranty, the Indenture or the Agreement, or the
disaffirmance of this Guaranty, the Indenture or the Agreement in any such
proceeding;
(l) to the extent permitted by law, any event or action that would, in the
absence of this clause, result in the release or discharge by operation of
law of the Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty;
(m) the default or failure of the Guarantor fully to perform any of its
obligations set forth in this Guaranty;
(n) the damage to, or condemnation, destruction, redelivery, repossession
or surrender of, all or any portion of the Special Facilities or the
abandonment, non-completion or curtailment of the Special Facilities, or
the release, substitution or replacement of any property comprising all or
a portion of the Special Facilities;
(o) the release, substitution or replacement of any security pledged under
the Indenture;
(p) any determination of the illegality, irregularity, invalidity or
unenforceability of, or any defect in, the Series 1994 Bonds, the Agreement
or the Indenture or any of the provisions thereof; or
(q) the expiration or earlier termination of the Agreement, whether as a
result of action by the Lessee (as defined in the Agreement), the Authority
or any third person.
Section 2.3. NO WAIVER OR SET-OFF. Nothing in this Guaranty shall be
construed as a waiver by the Guarantor of any rights or claims it may have
against the Authority or the Trustee under this Guaranty or otherwise, but any
recovery upon such rights and claims shall be had from the Authority or the
Trustee separately. No act or omission of any kind or at any time on the part
of the Authority or the Trustee, or their successors and assigns, in respect of
any matter whatsoever shall in any way impair the rights of the Trustee to
enforce any right, power or benefit under this Guaranty, and no set-off,
counterclaim, reduction, or diminution of any obligation, or any defense of any
kind or nature (other than performance by the Guarantor of its obligations
hereunder), which the Guarantor has or may have against the Authority or the
Trustee or any assignee or successor thereof shall be available hereunder to the
Guarantor.
Section 2.4. EVENT OF DEFAULT. In the event of a default in payment of
principal of or premium, if any, on any Series 1994 Bond when and as the same
shall become due, whether at the stated maturity thereof, by acceleration, call
for redemption or otherwise, or in the event of a
4
<PAGE>
default in the payment of any interest on any Series 1994 Bond when and as the
same shall become due, the Trustee may immediately proceed to enforce its rights
hereunder and the Trustee shall have the right to proceed first and directly
against the Guarantor under this Guaranty without proceeding against or
exhausting any other remedies which it may have and without resorting to any
other security held by the Lessor or the Trustee. All moneys recovered pursuant
to this Guaranty shall be applied in accordance with SECTION 502 OR SECTION 806
of the Indenture.
Section 2.5. WAIVER OF NOTICE; EXPENSES. The Guarantor hereby expressly
waives notice from the Trustee or the Owners of their acceptance and reliance on
this Guaranty. The Guarantor agrees to be responsible for reasonable costs,
expenses and fees, including all reasonable attorneys' fees and expenses which
are incurred by the Trustee in enforcing this Guaranty or protecting the rights
of the Trustee or the Owners following any event of default on the part of the
Guarantor hereunder, whether the same shall be enforced by suit or otherwise.
Section 2.6. THE GUARANTOR TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS
UNDER WHICH EXCEPTIONS PERMITTED. The Guarantor shall maintain its corporate
existence, shall remain duly qualified to do business in the State, shall not
dissolve or otherwise dispose of all or substantially all of its assets and
shall not consolidate with or merge into another entity; provided that the
Guarantor may, without violating this Section 2.6, consolidate with or merge
into another entity or permit one or more other entities to consolidate with or
merge into it, or transfer or convey all or substantially all of its property,
assets and licenses to another entity, but only if the entity resulting from or
surviving such merger (if other than the Guarantor) or consolidation or the
entity to which such transfer or conveyance is made shall (1) expressly assume
in writing and agree to perform all of the Guarantor's obligations hereunder,
(2) be qualified to do business in the state of Indiana; and (3) if such entity
shall not be organized and existing under the laws of the United States of
America or any state or territory thereof or the District of Columbia, furnish
to the Trustee an irrevocable consent to service of process in, and to the
jurisdiction of the courts of, the state of Indiana with respect to any action
or suit, at law or in equity, brought by the Trustee to enforce this Guaranty.
Section 2.7. BENEFIT AND ENFORCEMENT. This Guaranty shall not be deemed
to create any right, or to be in whole or in part for the benefit of any person
other than the Trustee, the Guarantor, the Owners and their permitted successors
and assigns. This Guaranty is entered into by the Guarantor for the benefit of
the Owners and may be enforced by or on behalf of the Owners only by the Trustee
in accordance with the provisions hereof and of the Indenture. However, the
Trustee (i) may proceed to enforce this Guaranty without request of the Owners
and (ii) shall proceed to enforce this Guaranty upon written request of the
Owners holding not less than twenty-five percent (25%) in aggregate principal
amount of the Series 1994 Bonds then outstanding, upon being indemnified for its
expenses and any liability to be incurred by the Trustee other than liability
arising from its willful misconduct or negligence in connection with any action
so taken.
5
<PAGE>
ARTICLE III
NOTICES
Section 3.1. NOTICES. Any notice required to be sent to the Guarantor
including process, pleadings or other papers to be served upon the Guarantor
shall be sent by registered or certified mail, postage prepaid, or by Federal
Express priority delivery to Federal Express Corporation, 2007 Corporate Avenue,
Memphis, Tennessee 38132, Attention: Vice President and Treasurer, or to such
other address as may be furnished by the Guarantor to the Trustee in writing. A
copy of any such notice shall also be sent in the same manner to Federal Express
Corporation, 1980 Nonconnah Boulevard, Memphis, Tennessee 38132, Attention:
Legal Department, Managing Director, Business Transactions or to such other
address as may be furnished by the Guarantor to the Trustee in writing.
ARTICLE IV
MISCELLANEOUS
Section 4.1. EFFECTIVE DATE. The obligations of the Guarantor hereunder
shall arise absolutely and unconditionally upon the date of payment for and
delivery of the Series 1994 Bonds.
Section 4.2. REMEDIES NOT EXCLUSIVE. No remedy herein conferred upon or
reserved to the Trustee is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given under this Guaranty or now or
hereafter existing at law or in equity. No delay or omission to exercise any
right or power accruing upon any default, omission or failure of performance
hereunder shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time
and as often as may be deemed expedient. In order to entitle the Trustee to
exercise any remedy reserved to it in this Guaranty, it shall not be necessary
to give any notice. In the event any provision contained in this Guaranty
should be breached, and thereafter duly waived, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder. No waiver, amendment, release or modification of this
Guaranty shall be established by conduct, custom or course of dealing, but
solely by an instrument in writing duly executed by parties to this Guaranty.
Section 4.3. AMENDMENTS. This Guaranty may not be amended or modified
without the consent of the Owners affected by such amendment or modification
pursuant to SECTION 1202 of the Indenture, except to the extent permitted by
SECTION 1201 of the Indenture.
Section 4.4. ENTIRE AGREEMENT; COUNTERPARTS. This Guaranty constitutes
the entire agreement, and supersedes all prior agreements and undertakings, both
written and oral, between
6
<PAGE>
the parties with respect to the subject matter hereof and may be executed
simultaneously in several counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument.
Section 4.5. SEVERABILITY. The invalidity or unenforceability of any one
or more phrases, sentences, clauses or sections contained in this Guaranty shall
not affect the validity or enforceability of the remaining portions of this
Guaranty, or any part thereof.
Section 4.6. GOVERNING LAW. THIS GUARANTY SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TENNESSEE.
IN WITNESS WHEREOF, each of the Guarantor and the Trustee has caused this
Guaranty to be executed in its name and behalf by its duly authorized officer as
of the date first above written.
FEDERAL EXPRESS CORPORATION,
as Guarantor
By: /s/ CHARLES M. BUCHAS, JR.
Charles M. Buchas, Jr., Vice President
and Treasurer
<PAGE>
NBD BANK, N.A.,
as Trustee
By: /s/ ROBERT J. KOCHER
Robert J. Kocher
Title: Vice President and Trust Officer
Attest:
By: /s/ DARYL F. MERGENTHAL
Daryl F. Mergenthal
Title: Trust Officer
<PAGE>
STATE OF TENNESSEE )
) SS:
COUNTY OF SHELBY )
On this 24th day of October, 1994, before me personally appeared
Charles M. Buchas, Jr., to me known, who, being by me duly sworn, did say that
he is the vice president and treasurer of FEDERAL EXPRESS CORPORATION, a
Delaware corporation; and that said instrument was signed on behalf of said
corporation by authority of its Board of Directors, and said officer
acknowledged said instrument to be the free act and deed of said corporation.
/s/ CHARLEDA M. SMITH
Notary Public
My Commission Expires:
October 24, 1995
<PAGE>
STATE OF INDIANA )
) SS:
COUNTY OF MARION )
On this 26th day of October, 1994, before me personally appeared
Robert J. Kocher and Daryl F. Mergenthal, to me known, who, being by me duly
sworn, did say that they are the vice president and trust officer, and trust
officer, respectively, of NBD BANK, N.A.; and that said instrument was signed
on behalf of said Bank by authority of its Board of Directors, and said
officers acknowledged said instrument to be the free act and deed of said Bank.
/s/ BINA AHLUWALIA
Notary Public
My Commission Expires:
April 24, 1998
<PAGE>
Exhibit 10.3
LAND AND SPECIAL FACILITIES
LEASE AGREEMENT
BY AND BETWEEN
FEDERAL EXPRESS CORPORATION
AND
THE INDIANAPOLIS AIRPORT AUTHORITY
DATED AS OF OCTOBER 1, 1994
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS ...................................................2
Section 101. Incorporation of Indenture ....................................2
Section 102. Definitions ...................................................2
ARTICLE II USE OF FACILITIES; REPRESENTATIONS AND WARRANTIES .............6
Section 201. Use of Facilities .............................................6
Section 202. Representations by the Authority ..............................6
Section 203. Representations and Warranties by the Lessee ..................8
ARTICLE III COMMENCEMENT AND COMPLETION OF
FACILITIES; ISSUANCE OF BONDS ...............................10
Section 301. Plans and Specifications, Approvals, Construction,
Construction Contracts; Utilities ...........................10
Section 302. Agreement to Issue Series 1994 Bonds; Application of
Proceeds; the Lessee Required to Pay Costs of Construction
if Bond Proceeds Insufficient ...............................12
Section 303. As-Built Drawings ............................................13
Section 304. Cost of Construction and Preliminary Completion
Certificates ................................................13
Section 305. Establishment of the Completion Date, Other Completion
Certificates 13
Section 306. The Lessee to Pursue Remedies Against Contractors,
Subcontractors and Suppliers and Their Sureties .............13
Section 307. Construction of Additional Facilities. .......................14
Section 308. Ownership of Improvements ....................................15
ARTICLE IV TERM; EXPANSION OPTION .......................................16
Section 401. Term .........................................................16
Section 402. Rights at Expiration .........................................16
Section 403. The Lessee's Option to Expand the Parking Land ...............16
Section 404. Expiration ...................................................17
ARTICLE V RENTALS AND FEES .............................................18
Section 501. Ground Rent ..................................................18
-i-
<PAGE>
Section 502. Special Facilities Rental ....................................19
Section 503. Field Use Charges ............................................20
Section 504. Time and Place of Payments ...................................20
Section 505. Delinquent Rentals ...........................................20
Section 506. Assignment of Rights .........................................20
Section 507. Obligations of the Lessee Hereunder Unconditional ............20
Section 508. Prepayment of Ground Rentals .................................21
ARTICLE VI OBLIGATIONS OF THE LESSEE ....................................22
Section 601. Net Lease ....................................................22
Section 602. Maintenance and Operation ....................................22
Section 603. Utilities ....................................................23
Section 604. Trash, Garbage and Other Refuse, Signs .......................24
Section 605. Hazardous Materials ..........................................24
Section 606. Nondiscrimination ............................................25
Section 607. Affirmative Action ...........................................26
Section 608. Observance of Statutes .......................................26
Section 609. Hazard Lights ................................................27
Section 610. Mechanic's Liens .............................................27
Section 611. The Lessee to Maintain its Corporate Existence;
Conditions Under Which Exceptions Permitted .................27
Section 612. Equipment ....................................................28
Section 613. Security Agreement ...........................................28
Section 614. Tax Exemption ................................................28
Section 615. The Lessee's Covenants Concerning the Series 1994 Bonds ......29
ARTICLE VII OBLIGATIONS OF THE AUTHORITY .................................30
Section 701. Operation as a Public Airport ................................30
Section 702. Ingress and Egress ...........................................30
Section 703. Quiet Enjoyment of Leased Premises ...........................30
Section 704. Maintenance and Operations ...................................30
ARTICLE VIII THE AUTHORITY'S RESERVATIONS .................................31
Section 801. Improvement, Relocation or Removal of Special Facilities .....31
Section 802. Inspection of Leased Premises ................................31
Section 803. Subordination to U.S. Government .............................31
Section 804. War or National Emergency ....................................31
Section 805. No Liability of the Authority ................................31
-ii-
<PAGE>
Section 806. No Warranty of Condition or Suitability ......................32
Section 807. Responsibility for Contracts for Special Facilities
and Payment of Special Facilities Rentals ...................32
Section 808. Option of the Authority to Terminate Lease ...................32
Section 809. Consideration of Amendment ...................................33
ARTICLE IX INDEMNITY AND INSURANCE ......................................34
Section 901. Indemnification ..............................................34
Section 902. Public Liability Insurance ...................................34
Section 903. Fire and Extended Coverage Insurance .........................35
Section 904. Application of Insurance Proceeds ............................35
Section 905. Performance Bonds ............................................35
Section 906. Right of the Authority or Trustee to Pay Insurance
Premiums ....................................................36
ARTICLE X PREPAYMENT OF SPECIAL FACILITIES RENTALS .....................37
Section 1001. In Connection With Optional Redemption of Series 1994 Bonds ..37
Section 1002. In Connection with Defeasance of the Series 1994 Bonds .......37
Section 1003. In Connection with the Termination of this Agreement in the
Event
of Damage or Destruction or Condemnation .....................37
Section 1004. In Connection with a Partial Redemption ......................38
Section 1005. In Connection With a Series 1994 Determination of Taxability..38
ARTICLE XI DAMAGE AND CONDEMNATION ......................................39
Section 1101. Damage and Destruction .......................................39
Section 1102. Condemnation .................................................41
Section 1103. Destruction or Condemnation of Excluded Personal Property
or Lessee Improvements ......................................43
Section 1104. Taking or Condemnation by the Authority ......................43
Section 1105. Destruction or Condemnation of Leased Premises Other Than
Special Facilities or Former Lessee Improvements ............43
ARTICLE XII ADDITIONAL BONDS .............................................45
Section 1201. Additional Bonds .............................................45
ARTICLE XIII TERMINATION OF AGREEMENT BY THE LESSEE .......................46
Section 1301. Termination by the Lessee ....................................46
-iii-
<PAGE>
ARTICLE XIV EVENTS OF DEFAULT ............................................47
Section 1401. Events of Default ............................................47
Section 1402. Remedies of the Trustee for Certain Events of Default ........48
Section 1403. Remedies of the Authority on Default .........................48
Section 1404. The Lessee to Remain Liable for Payments; Reletting ..........49
Section 1405. Disposition of Excluded Personal Property ....................49
Section 1406. No Remedy Exclusive ..........................................49
Section 1407. No Additional Waiver Implied By One Waiver; Consents
to Waiver ...................................................50
Section 1408. Suspension of Agreement ......................................50
Section 1409. Delay not a Waiver ...........................................50
ARTICLE XV DEFAULT BY THE AUTHORITY .....................................51
Section 1501. Default by the Authority; Remedies of the Lessee .............51
ARTICLE XVI RIGHTS UPON TERMINATION ......................................52
Section 1601. Fixed Improvements ...........................................52
Section 1602. Excluded Personal Property ...................................52
ARTICLE XVII ASSIGNMENT AND SUBLETTING ....................................53
Section 1701. Successors and Assignments ...................................53
Section 1702. Subletting ...................................................53
Section 1703. Opinion of Bond Counsel Required .............................53
ARTICLE XVIII GENERAL PROVISIONS ...........................................54
Section 1801. Non-Interference with Operation of Airport ...................54
Section 1802. Attorney's Fees ..............................................54
Section 1803. Taxes ........................................................54
Section 1804. License Fees and Permits .....................................54
Section 1805. Amendments to this Agreement .................................54
Section 1806. Force Majeure ................................................55
Section 1807. References to Bonds, Trustee and the Indenture Ineffective
when Bonds are no Longer Outstanding ........................55
Section 1808. Modifications Hereof and of Indenture; Indenture Subordinate
to Agreement ................................................55
Section 1809. Paragraph Headings ...........................................55
-iv-
<PAGE>
Section 1810. Interpretations ..............................................56
Section 1811. Notices ......................................................56
Section 1812. Party's Consent ..............................................56
Section 1813. Restoration of Existing Facility .............................56
Section 1814. Counterparts .................................................57
Exhibit A Property Description ........................................A-1
Exhibit B Special Facilities ..........................................B-1
Exhibit C Insurance Form ..............................................C-1
Exhibit D Minimum Standards for Installation of Aircraft Fueling
System .....................................................D-1
Exhibit E Development Guidelines for Airside and Corporate Village ....E-1
-v-
<PAGE>
LAND AND SPECIAL FACILITIES LEASE AGREEMENT
THIS LAND AND SPECIAL FACILITIES LEASE AGREEMENT (hereinafter called this
"Agreement") made and entered into as of this 1st day of October 1994, by and
between the Indianapolis Airport Authority, a municipal corporation existing
under and by virtue of the laws of the State of Indiana (hereinafter called the
"Authority"), and Federal Express Corporation, a Delaware corporation with its
principal office at Memphis, Tennessee and authorized to do business in the
State of Indiana (hereinafter called the "Lessee").
WITNESSETH:
WHEREAS, the Authority owns and operates the Indianapolis International
Airport (hereinafter called "Airport"); and
WHEREAS, the Lessee is primarily engaged in the business of distribution of
express cargo and parcels; and
WHEREAS, the Authority has right, title and interest in and to the real
property on the Airport, together with the facilities, easements, rights,
licenses, and privileges hereinafter granted, and the Authority has full power
and authority to enter into this Agreement in respect thereof; and
WHEREAS, the Authority proposes to develop certain real estate described in
EXHIBIT A hereto and acquire and construct thereon certain facilities described
in EXHIBIT B hereto; and
WHEREAS, the Authority proposes to finance the costs of such activities
through the issuance of Special Facilities Revenue Bonds of the Authority issued
under the Indenture herein defined; and
WHEREAS, the Lessee desires to lease such real estate and improvements upon
the terms and conditions hereinafter stated;
NOW, THEREFORE, in consideration of the mutual covenants and considerations
herein contained, the Authority lets and demises to the Lessee and the Lessee
rents from the Authority the Leased Premises and all herein described rights
incident thereto, and the Lessee and the Authority further agree and covenant as
follows:
1
<PAGE>
ARTICLE I
DEFINITIONS
Section 101. INCORPORATION OF INDENTURE. The capitalized terms used
herein and defined in Article I of the Indenture shall, for the purposes of this
Agreement, have the meanings set forth in the Indenture unless the context
otherwise requires.
Section 102. DEFINITIONS. In addition to terms defined elsewhere in this
Agreement, the following terms, for the purposes of this Agreement, shall have
the meanings set forth below:
"Act" means Indiana Code 8-22-3, as amended.
"Airport" means the Indianapolis International Airport.
"Architect" means a licensed architect or a firm of licensed architects
qualified to do business in the State, appointed by the Lessee and acceptable to
the Authority, who shall be responsible for the construction of the Special
Facilities (other than Equipment) and any Lessee Improvements.
"Authority" means the Indianapolis Airport Authority, a municipal
corporation duly organized and operating under the law of the State, including
the Act, or any successor thereto or assign thereof.
"Authorized Lessee Representative" means such officer or employee of the
Lessee authorized by the Lessee to act on its behalf under this Agreement or the
Indenture as certified to the Authority and the Trustee in writing by the
Lessee.
"Bond Counsel" means any nationally recognized firm of attorneys experienced
in the matters relating to the issuance of obligations by municipalities.
"Completion Date" means the date of completion of the acquisition and
construction of the Special Facilities certified in accordance with Section 305
hereof.
"Construction Management Agreement" means the Construction Management
Agreement, dated as of the date hereof, between the Authority and the Lessee.
"Environment, Health and Safety Requirements" means all of the terms and
conditions of all permits, licenses, and other authorizations which are required
under, and all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in, all federal, state and local laws (including rules, regulations,
codes, judgments, orders, decrees, stipulations, injunctions, and demand letters
issued, entered,
2
<PAGE>
promulgated or approved thereunder) relating to public health and safety, worker
health and safety, or pollution or protection of the environment, including Laws
relating to emissions, discharges, releases, or threatened releases of Hazardous
Materials into ambient air, surface water, ground water, or lands or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of Hazardous Materials.
"Equipment" means any equipment, permanent inventory, or tangible personal
property financed from moneys disbursed from the Construction Fund, whether now
owned or hereafter acquired, as the same shall be substituted or replaced from
time to time in accordance with Subsection 612(a) hereof.
"Excluded Personal Property" means the equipment, permanent inventory or
tangible personal property of the Lessee acquired from moneys other than moneys
disbursed from the Construction Fund and installed into or otherwise located on
the Leased Premises pursuant to Subsection 307(b) hereof; provided, that
Excluded Personal Property shall not include equipment, permanent inventory or
tangible personal property purchased in substitution or replacement of Equipment
to the extent such substituted or replacement equipment is necessary to maintain
the operating utility or productive capacity of the Special Facilities as
provided in Subsection 612(a) hereof.
"Facilities" means, collectively, the Leased Premises, the Lessee
Improvements and the Excluded Personal Property.
"Hazardous Materials" means any hazardous or toxic substance, material or
waste which is or becomes regulated by any local governmental authority, the
State of Indiana or the United States Government, including, without limitation,
any material or substance which is (a) petroleum, batteries, or liquid solvents
or similar chemicals, (b) asbestos, (c) radioactive material or waste, (d)
polychlorinated biphenyls (PCBs), (e) designated as a "hazardous substance"
pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C.
Section 1317), (f) defined as a "hazardous waste" pursuant to Section 1004 of
the Federal Resource Conservation and Recovery Act, 42 U.S.C Section 6901 et
seq. (42 U.S.C. Section 6903), or pursuant to Section 13-7-1-12 of the Indiana
Code, or determined to be a "hazardous waste" under Section 13-7-8.5-3(b) of the
Indiana Code, (g) defined as a "hazardous substance" pursuant to Section 101 of
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601), or pursuant to Section
13-7-1.5-1 of the Indiana Code, (h) regulated under the Toxic Substances Control
Act (15 U.S.C. Section 2601 ET SEQ.) or defined as a PCB pursuant to Section
13-7-16.5-1 of the Indiana Code, (i) defined as a "contaminant" pursuant to
Section 13-7-1-7 of the Indiana Code, or (j) any other substance or material
similarly classified by any other federal, state or local statute or ordinance
or by any rule or regulation promulgated or adopted pursuant thereto, whether
now existing or hereinafter enacted.
3
<PAGE>
"Indenture" means the Trust Indenture dated as of October 1, 1994 between
the Authority and NBD Bank, N.A., as amended and supplemented, providing for the
issuance of the Series 1994 Bonds.
"Land" means the Primary Land, the Parking Land and any additional land
which is hereafter leased to the Lessee by the Authority pursuant to this
Agreement by an amendment hereto or supplement hereof.
"Laws" means and shall include, but not be limited to, the Comprehensive
Environmental Response, Compensation and Liability Act, the Solid Waste Disposal
Act, the Occupational Safety and Health Act, the Federal Water Pollution Control
Act, the Clean Air Act, the Safe Drinking Water Act, the Toxic Substances
Control Act, the Refuse Act, the Hazardous Materials Transportation Act, the
Emergency Planning and Community Right-to- Know Act, the Federal Insecticide,
Fungicide and Rodenticide Act, the Endangered Species Act, the National
Environmental Policy Act, the Indiana Air and Water Pollution Control Law, the
Indiana Groundwater Protection Act, the Indiana Hazardous Waste Law, the Indiana
Underground Storage Tanks Act, the Indiana Wastewater Management Law, the
Indiana Fish and Wildlife Act, the Indiana Flood Control Act, and the Indiana
Environmental Policy Act.
"Leased Premises" means: (i) the Land; (ii) the Special Facilities; (iii)
any Lessee Improvements that have been conveyed to the Authority pursuant to the
provisions of Section 308 hereof; and (iv) any other buildings, structures,
additions, improvements, fixtures and facilities constructed on the Land from
time to time, other than Lessee Improvements.
"Lessee" means Federal Express Corporation, a corporation duly organized and
validly existing under the laws of the State of Delaware and qualified to do
business in the State, or any successor thereto or assign thereof permitted by
this Agreement.
"Lessee Improvements" means any additional buildings, structures, additions,
improvements, fixtures or facilities constructed on the Land as provided in
Subsection 307(a) hereof, except to the extent the same have been conveyed to
the Authority pursuant to Section 308 hereof.
"Liability" means any liability (whether known or unknown, whether absolute
or contingent, whether liquidated or unliquidated, and whether due or to become
due), including, without limitation, responsibility under Environment, Health
and Safety Requirements for cleanup, containment, restoration, removal,
remediation, investigation or monitoring relating thereto (collectively,
"Remedial Work"), liability for costs of Remedial Work, liability for costs of
government oversight and other expenses incidental to Remedial Work, liability
for natural resources damage, liability for illness, personal injury or the
increased risk of or fear of illness or personal injury, and liability for
economic losses or other property damage.
4
<PAGE>
"Parking Land" means the real estate located at the Airport as described in
the attached EXHIBIT A under the heading "Parking Land", and, upon the exercise
of an option granted in Section 403 hereof, that portion of real estate
described in the attached EXHIBIT A under the heading "Parking Option Land" for
which the option has been exercised, in each case, including the right of
ingress thereto and egress therefrom.
"Phase" means each discrete portion of the Special Facilities (which are (i)
the employee parking lot, (ii) the freight building and its related Equipment,
(iii) the aircraft ramp, and (iv) the sort facility and its related Equipment)
and each Lessee Improvement.
"Plans and Specifications" means the final plans and specifications for the
Special Facilities and any Lessee Improvement prepared by the Architect and
approved by the Authority and the Lessee.
"Primary Land" means the real estate located at the Airport as described in
the attached EXHIBIT A under the heading "Primary Land", including the right of
ingress thereto and egress therefrom.
"Series 1994 Bonds" means the Indianapolis Airport Authority Special
Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project) to
be issued in the aggregate principal amount not to exceed $237,755,000.
"Special Facilities" means the buildings, structures, improvements,
equipment and facilities financed with moneys disbursed from the Construction
Fund whether now owned or hereafter acquired, including the Equipment.
"Special Facilities Rentals" means the amounts paid or payable by the Lessee
pursuant to Section 502 hereof.
"Supplemental Agreement" means an amendment to or supplement of this
Agreement entered into in accordance with Section 1805 hereof.
"Tax Exempt Bonds" means any Bonds the interest on which, when issued, in
the opinion of Bond Counsel, is excludable from gross income of the holder
thereof for federal income tax purposes, except for interest on such Bond for
any period during which such Bond is held by a "substantial user" of the
facilities financed with the proceeds of such Tax-Exempt Bonds or a "related
person" as defined in Section 147(a) of the Code.
5
<PAGE>
ARTICLE II
USE OF FACILITIES; REPRESENTATIONS AND WARRANTIES
Section 201. (a) USE OF FACILITIES. The Lessee shall use the Facilities for
the operation of its business of distribution of express cargo and parcels and
for other purposes reasonably incidental thereto, subject to the following:
(i) all parking of automobiles and trucks operated by officers,
employees and business invitees of the Lessee incidental to its operation,
except for those vehicles in the process of loading or unloading and
servicing aircraft, shall be confined to the parking lot provided by the
Lessee on the Land;
(ii) all aircraft and ramp equipment stored on the ramp shall be
parked in accordance with a plan approved by the Authority;
(iii) fueling, servicing and minor repairs, as defined in the
Authority's rules and regulations, of aircraft and ramp equipment operated
by or for the Lessee in connection with its operations shall be performed
in accordance with the Authority's rules and regulations;
(iv) no major maintenance of aircraft shall be performed on the
ramp, except for emergency repairs; and
(v) the Facilities shall not be used for any other purposes without
the prior written consent of the Authority.
(b) PROHIBITED USES The Lessee shall not knowingly permit the loading,
unloading or storage of any hazardous animate or inanimate materials or objects
in violation of any applicable law or regulation. The Lessee shall not store or
transport Class-A Explosives as defined in 49 CFR Part 107.3, except in
compliance with applicable law. The Lessee's handling of any hazardous material
shall be in accordance with 49 CFR, parts 100-199, dated December 31, 1976, or
as same may be amended. In no event shall the Lessee knowingly handle any
materials which would void or reduce the insurance coverage of the Facilities
required of the Lessee herein.
Section 202. REPRESENTATIONS BY THE AUTHORITY. The Authority makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) The Authority is duly organized as a municipal corporation pursuant
to the laws of the State and has the power to enter into the transactions
contemplated by this Agreement and
6
<PAGE>
the Indenture and to carry out its obligations hereunder and thereunder. By
proper corporate action, the Authority has been duly authorized to execute and
deliver this Agreement.
(b) This Agreement has been duly executed and delivered by duly authorized
officers of the Authority.
(c) This Agreement constitutes the valid and binding obligation of the
Authority, enforceable against the Authority in accordance with its terms.
(d) No approvals or consents are necessary in order for the Authority to
adopt, execute and deliver this Agreement, the Indenture and the Series 1994
Bonds.
(e) Neither the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Agreement, conflict with or result in a
breach of any of the terms, conditions or provisions of any restriction,
ordinance or any agreement or instrument to which the Authority is now a party
or by which it is bound, or constitute a default under any of the foregoing, or
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of the Authority under the
terms of any instrument or agreement.
(f) There is no litigation now pending or, to the Authority's knowledge,
threatened challenging the powers of the Authority or its directors or in any
way affecting this Agreement, the Indenture or the Series 1994 Bonds.
(g) The Authority represents and warrants that it has good title to the
Leased Premises, free and clear of all material liens and encumbrances having
priority over this Agreement, and that the Authority has full right and
authority to lease the same as set forth herein.
(h) The Authority represents and certifies that to the best of its
knowledge the Leased Premises was not a site used for the storage or disposal of
hazardous waste.
(i) The Authority represents and warrants that it will: (i) not take any
actions that would cause the interest on any Tax Exempt Bonds to no longer be
excludable from gross income for federal tax purposes; and (ii) take such
affirmative actions to protect the tax status of the Tax Exempt Bonds that the
Lessee or the Trustee shall reasonably request in writing and certify as
necessary to preserve the tax status of the Tax Exempt Bonds; provided that the
Authority shall not be obligated to undertake any such action until (a) it
consents in writing to take such action, which consent shall not be unreasonably
withheld, (b) the Authority has been indemnified to its satisfaction with
respect to such action and (c) provision has been made to reimburse the
Authority for any costs incurred in connection with taking such action. Except
as specifically provided above, the Authority shall have no obligation to take
any affirmative
7
<PAGE>
actions to protect the tax status of the Tax Exempt Bonds and shall have no
obligation to pay amounts necessary to comply with this covenant, other than
from money received by the Authority from the Lessee. The Lessee shall have the
sole responsibility for computing any amounts owed to the United States of
America pursuant to Section 148 of the Code and with 615(b) hereof with respect
to Tax Exempt Bonds and providing for the payment of such amounts to the United
States of America in the manner provided in the Series 1994 Tax Representation
Certificate and the tax representation certificate executed contemporaneously
with the issuance of any other Tax Exempt Bonds.
Section 203. REPRESENTATIONS AND WARRANTIES BY THE LESSEE. The Lessee
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:
(a) The Lessee is a corporation duly organized under the laws of the State
of Delaware and duly qualified to do business in the State, is in good standing
in the State of Delaware and the State, has power to execute and enter into this
Agreement, and by proper corporate action has been duly authorized to execute
and deliver this Agreement.
(b) The Lessee will execute the Series 1994 Tax Representation Certificate,
dated the date of delivery of the Series 1994 Bonds, setting forth certain
covenants, representations and warranties, which Series 1994 Tax Representation
Certificate is incorporated herein and included as a part of this Agreement by
reference. The Lessee represents that the representations set forth in the
Series 1994 Tax Representation Certificate will be accurate as of such date and
covenants to comply with the covenants set forth in the Series 1994 Tax
Representation Certificate.
(c) The Lessee hereby makes an irrevocable election not to claim
depreciation or an investment tax credit with respect to the Special Facilities
in accordance with Section 142(b)(1)(B)(i) of the Code, such that the Series
1994 Bonds shall qualify under Section 142(a)(1) of the Code. The tax
identification number of the Lessee is 71-0427007.
(d) This Agreement constitutes the valid and binding obligation of the
Lessee, enforceable against the Lessee in accordance with its terms, subject to
normal exceptions for the effect of creditors' rights and equitable remedies.
(e) No approvals or consents, other than those that have been or will in
normal course be obtained, are necessary in order for the Lessee to execute and
deliver this Agreement.
(f) There is no litigation now pending or, to the Lessee's knowledge,
threatened, challenging the corporate existence of the Lessee and, except for
matters described under "Legal Proceedings" in the Lessee's Annual Report on
Form 10-K for the Lessee's fiscal year ended May 31, 1994, there is no pending,
or to the Lessee's knowledge, threatened action or proceeding before any court
or administrative agency that individually (or in the aggregate in the case of
any
8
<PAGE>
group of related lawsuits) is expected to have a material adverse effect on the
financial condition of the Lessee or the ability of the Lessee to perform its
obligations under this Agreement or the Series 1994 Guaranty.
(g) Neither the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Agreement, will conflict with or result in
a material breach of the Restated Certificate of Incorporation or By-laws of the
Lessee or any of the terms, conditions or provisions of any indenture, agreement
or other instrument to which the Lessee is now a party or by which it is bound,
or constitute a material default under any of the foregoing, or result in the
creation or imposition of any material lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of the Lessee under the terms of
any instrument or agreement.
(h) The Lessee has duly and validly obtained all material certificates,
licenses and permits from all public authorities, both federal and state,
required to enable the Lessee to carry on its business as it is now conducted
and to enter into this Agreement.
9
<PAGE>
ARTICLE III
COMMENCEMENT AND COMPLETION OF FACILITIES;
ISSUANCE OF BONDS
Section 301. PLANS AND SPECIFICATIONS, APPROVALS,CONSTRUCTION,
CONSTRUCTION CONTRACTS; UTILITIES.
(a) LOCATION IMPROVEMENT PERMIT. The Lessee covenants and agrees that,
prior to the preparation of detailed plans and specifications for any of the
Facilities, it shall first obtain an airport location improvement permit from
the Authority by submitting to the Airport Director for approval plans showing
the general site plan, design and character of improvements and their locations
relative to the Leased Premises, including location of drainage, utilities and
roadways.
(b) APPROVAL OF PLANS AND SPECIFICATIONS. In connection with construction
of any of the Facilities, the Lessee shall cause preliminary plans and
specifications, together with the estimated cost of such portion, to be prepared
by the Architect, which shall be submitted to the Authority for its approval.
The Authority shall approve or suggest reasonable revisions to such preliminary
plans and specifications within ten (10) days from the date of receipt thereof,
and shall submit the same to the Lessee. If the Authority fails to respond
within that ten (10) day period, the preliminary plans and specifications shall
be deemed approved. If within said ten (10) day period the Authority notifies
the Lessee of items of which it disapproves, the Lessee shall thereafter cause
such Architect to prepare revised preliminary plans and specifications that take
into consideration any revisions suggested by the Authority, at which time the
revised preliminary plans and specifications shall be submitted to the Authority
for approval in the manner provided herein. After the Authority has approved
such preliminary plans and specifications, the Lessee shall cause the Architect
to prepare final plans and specifications. The final plans and specifications
shall be submitted by the Lessee to the Authority for review and approval in the
same manner as the preliminary plans and specifications were reviewed and
approved. If the Authority fails to respond to the Lessee in writing within ten
(10) days after submission of any of the plans and specifications contemplated
by this Subsection (b), then such plans and specifications shall be deemed
approved for purposes of this Subsection (b). Upon approval such final plans
and specifications shall become the Plans and Specifications.
(c) PROVISIONS CONCERNING DESIGN. The Plans and Specifications for any of
the Facilities shall meet the Authority's design standards for the type of
development proposed. The Lessee covenants and agrees that all construction or
installation of any building, roadway, structure, addition, or improvement on
the Land will be in accordance with such Plans and Specifications and the
Authority's Minimum Standards for Installation of Aircraft Fueling Systems as
outlined in Exhibit "D", attached hereto and the Authority's Development
Guidelines for Airside and Corporate Village as outlined on Exhibit "E" attached
hereto.
10
<PAGE>
(d) PROVISIONS CONCERNING DESIGN CHANGES. The Lessee may initiate
whatever design changes to the Plans and Specifications it deems necessary or
desirable; provided, however, that any such changes shall be subject to approval
by the Authority prior to implementation for consistency with the Plans and
Specifications and the mutually contemplated use of the Facilities as set forth
in Subsection 201(a) of this Agreement. Review of such design changes shall be
conducted in the same time and manner as review of the Plans and Specifications
as set forth in Subsection (b) hereof and shall otherwise comply with Subsection
(c) hereof.
(e) COMPLIANCE WITH LAWS. Contracts relating to the designing, equipping
and constructing of the Facilities shall include those provisions agreed to by
the Lessee and the Authority for the purposes intended and shall comply in all
respects with State and federal law and the provisions of this Agreement. The
Facilities shall be constructed and equipped in compliance with all State,
federal and local laws, ordinances and regulations applicable thereto.
(f) PERMITS. The Lessee, with the cooperation of the Authority, shall
obtain or cause to be obtained all other necessary approvals and permits from
any and all governmental agencies prior to constructing and equipping any of the
Facilities.
(g) OCCUPANCY PERMITS. Upon completion of the construction and equipping
of any of the Facilities, the Lessee shall furnish to the Authority all required
occupancy permits and authorizations from appropriate authorities, if any are
required, authorizing the occupancy and use thereof for the purposes described
herein.
(h) ADDITIONS AND CHANGES. The Lessee may, at its sole cost and expense,
make such additions or changes to the Facilities as it shall desire, provided
that the Lessee:
(1) obtains all requisite governmental permits, licenses
and approvals, including an airport location improvement permit issued
by the Authority in the manner provided in Subsection 301(a) hereof;
and
(2) prosecutes the work in a workmanlike and diligent
manner in compliance with the Plans and Specifications therefor, all
laws and regulations and the other provisions of this Agreement.
(i) LAYOUT. The Lessee may change the location of a structure on the Land
from the location approved in Subsection (a) hereof, subject to submission to
the Authority for its review and approval of any such change in the same manner
as the preliminary plans and specifications are required to be reviewed and
approved hereunder.The provisions of this Subsection (i) shall not constitute an
approval for purposes of Subsection (a) hereof.
(j) The Lessee shall construct with moneys held in the Series 1994 Account
of the Construction Fund or at its expense:
11
<PAGE>
(1) all necessary utility lines required for the Lessee to
connect utility services for the Special Facilities to the line of
existing service in the utility corridor on the Southern boundary of
the Land;
(2) the connecting roadways to the existing roadway
system; and
(3) all necessary utility lines required for the Lessee to
connect the utility services for any portion of the Leased Premises
(other than the Special Facilities) or for any Lessee Improvement.
The Authority agrees to grant to the Lessee all necessary roadway or utility
easements required for the Lessee to meet its obligations under this Subsection
(j).
Section 302. AGREEMENT TO ISSUE SERIES 1994 BONDS; APPLICATION OF PROCEEDS;
THE LESSEE REQUIRED TO PAY COSTS OF CONSTRUCTION IF BOND PROCEEDS INSUFFICIENT.
(a) The Authority shall issue the Series 1994 Bonds upon the execution and
delivery of this Agreement to provide funds for paying the costs of designing,
constructing and equipping of the Special Facilities and related costs of
issuance of and capitalized interest on the Series 1994 Bonds.
(b) The Series 1994 Bonds shall be issued under and in accordance with the
Indenture, the form of which shall be approved by the Lessee prior to the
adoption thereof.
(c) The proceeds of the Series 1994 Bonds shall be deposited with the
Trustee in the Funds and Accounts specified in the Indenture. Proceeds of the
Series 1994 Bonds deposited in the Series 1994 Account of the Construction Fund
shall be disbursed by the Trustee for the payment of costs of the Special
Facilities in accordance with the Indenture.
(d) In the event that funds held in the Series 1994 Account of the
Construction Fund available for payment of the costs of the Special Facilities
are insufficient, the Lessee shall: (i) provide funds to pay for any remaining
costs of the Special Facilities; (ii) appropriately reduce the scope of the
Special Facilities so that such funds will be sufficient if such reduction in
scope, in the opinion of Bond Counsel, will not adversely affect the exclusion
from gross income of the interest on the Series 1994 Bonds for federal income
tax purposes; or (iii) cause the Authority to issue Additional Bonds pursuant to
Article XII hereof to the extent necessary to provide sufficient funds for such
purposes, provided that, in the opinion of Bond Counsel, the issuance of such
Additional Bonds will not affect the exclusion from gross income of the interest
on the Series 1994 Bonds for federal income tax purposes.
12
<PAGE>
(e) The Authority does not make any warranty, either express or implied,
that the Special Facilities can or will be constructed for the estimated cost
therefor, or that the moneys paid into the Series 1994 Account of the
Construction Fund and available for payment of the costs of the Special
Facilities shall be sufficient for that purpose. The Lessee agrees that if,
after exhaustion of such funds, the Lessee pays any portion of the costs of the
Special Facilities for any reason whatsoever, it shall not be entitled to any
reimbursement therefor from the Authority (except reimbursement from the
proceeds of Additional Bonds, if any) nor shall the Lessee be entitled to any
set-off or diminution of the rentals or other amounts payable under this
Agreement.
(f) Lessee is authorized as tenant to design, construct and equip the
Special Facilities pursuant to the provisions of the Construction Management
Agreement.
Section 303. AS-BUILT DRAWINGS. Within thirty (30) days following
completion of the construction of any of the Special Facilities, any Lessee
Improvement or any other improvements on the Land, the Lessee shall present to
the Authority a complete set of reproducible (mylar) "record" drawings
including, but not limited to, specifications and shop drawings. This
information shall be submitted by the Lessee on a computer diskette using
Autocadd Version 11 or any more recent version as of that date (or any successor
technology). Similar record drawings shall be provided by the Lessee as
additional facilities are constructed or if any material alterations are made in
any of the facilities included in the Leased Premises.
Section 304. COST OF CONSTRUCTION AND PRELIMINARY COMPLETION CERTIFICATES.
Within sixty (60) days of the date upon which each Phase of the Special
Facilities has been substantially completed and available for its intended use,
the Lessee shall present to the Authority for examination and approval a sworn
statement setting forth all amounts incurred to such date of substantial
completion by the Lessee as construction manager for the Authority with respect
to such Phase of the Special Facilities and the economic lives of the buildings,
structures, additions, improvements, fixtures, facilities and equipment that
comprise such Phase.
Section 305. ESTABLISHMENT OF THE COMPLETION DATE, OTHER COMPLETION
CERTIFICATES. (a) The Completion Date of the Special Facilities shall be
evidenced to the Authority and the Trustee by a certificate signed by the Lessee
to the effect: (i) that the design, construction and equipping of the Special
Facilities has been completed and (ii) that the Lessee has made a reasonable
investigation of such sources of information it deems necessary and is of the
opinion that the Special Facilities have been fully paid for and that no claim
or claims exist against the Authority or the Lessee or against the properties of
either out of which a lien based on furnishing labor or material for the Special
Facilities might ripen. Such certificate shall be delivered within one hundred
twenty (120) days of the first day on which the conditions set forth in both (i)
and (ii) above have been satisfied.
13
<PAGE>
(b) Within one hundred twenty (120) days of the date each Phase of the
Special Facilities has been finally completed and all amounts due and owing with
respect thereto have been paid, the Lessee shall certify to the Authority the
final amounts paid by the Lessee as construction manager for the Authority with
respect to such Phase.
Section 306. THE LESSEE TO PURSUE REMEDIES AGAINST CONTRACTORS,
SUBCONTRACTORS AND SUPPLIERS AND THEIR SURETIES.
(a) In the event of default or breach by any contractor, subcontractor,
manufacturer or supplier under any contract made in connection with the design,
construction and equipping of the Leased Premises, the Lessee may, in its
discretion, either separately or in conjunction with the Authority, pursue the
remedies of the Authority and/or the Lessee against the contractor,
subcontractor, manufacturer or supplier so in default and against any surety for
the performance of that contractor, subcontractor, manufacturer or supplier, or
against a contractor, subcontractor, manufacturer or supplier for breach of
warranty.
(b) In the event that the Lessee shall, after thirty (30) days written
notice from the Authority, fail to pursue its remedies under such contracts, the
Authority may pursue such remedies and, except as provided in Subsection (c)
hereof, (i) the Lessee shall permit the Authority to be reimbursed from the
Construction Fund for one hundred percent (100%) of its reasonable costs with
respect thereto to the extent that moneys are available in the Construction
Fund; and (ii) if the moneys available in the Construction Fund are not equal to
at least one- half of the Authority's reasonable costs with respect thereto,
then the Lessee shall reimburse the Authority an amount which, when added to the
amount available in the Construction Fund, would total one-half its reasonable
costs with respect thereto.
(c) The Lessee agrees to advise the Authority of any default by a
contractor, subcontractor, manufacturer or supplier in connection with the
construction of all or a portion of the Leased Premises which is material to the
operations of the Leased Premises and of any legal actions or proceedings the
Lessee intends to commence in connection with any such breach or default.
(d) The Authority agrees, if requested by the Lessee, to cooperate with and
assist the Lessee in any such proceeding and to join in any such proceeding, or
allow such proceeding to be brought in its name if necessary. Any amount
recovered by way of damages, refunds, adjustment or otherwise in connection with
the foregoing shall be disbursed in the following order:
(i) for reimbursement of costs to the Lessee if the Lessee pursues the
recovery on its own and for reimbursement of costs proportionately to the
Lessee and the Authority (measured by the costs incurred by each party in
pursuit of such recovery) if the Authority joins in the pursuit or pursues
recovery in lieu of the Lessee;
14
<PAGE>
(ii) for the repair, restoration or completion of the Leased Premises
or the relevant portion thereof; and
(iii) the balance to the Lessee.
Section 307. CONSTRUCTION OF ADDITIONAL FACILITIES..
(a) The Lessee has the right at its own expense to construct additional
buildings or facilities on the Land or to improve, expand or better the Special
Facilities all in compliance with the provisions of this Agreement. In such
event, the use thereof shall be enjoyed by the Lessee during the term hereof
without additional rental therefor. Such buildings, facilities, improvements,
additions and betterments shall be Lessee Improvements and shall be the property
of the Lessee during the term of this Agreement, except as provided in Section
308 hereof. Notwithstanding the provisions of paragraph (ii) of Subsection
602(a) hereof, the Lessee shall have within its sole discretion and subject to
Sections 301 and 303 hereof, the right to remove, replace or renovate any Lessee
Improvement, provided, however, that during the final year of the term hereof
the Lessee shall not remove any Lessee Improvement or otherwise alter such
Lessee Improvement so as to materially decrease the value thereof without first
obtaining the written consent of the Authority.
(b) The Lessee shall also be able to locate on the Leased Premises or
install in the Special Facilities or the Lessee Improvements any Excluded
Personal Property, which Excluded Personal Property shall not become part of the
Special Facilities or the Leased Premises.
Section 308. OWNERSHIP OF IMPROVEMENTS. All Excluded Personal Property and
Lessee Improvements shall be the property of the Lessee during the term of this
Agreement. Notwithstanding the foregoing, the Lessee shall have the right at
all times during the term of this Agreement to convey, and the Authority shall
take, title to all or a portion of the Lessee Improvements. Upon such
conveyance, the buildings, structures, improvements, fixtures and facilities so
conveyed shall cease to be Lessee Improvements and from such point forward shall
constitute a portion of the Leased Premises. Upon the termination of this
Agreement: (i) the Excluded Personal Property shall remain the property of the
Lessee, and (ii) the Lessee Improvements then remaining shall become the
property of the Authority.
15
<PAGE>
ARTICLE IV
TERM; EXPANSION OPTION
Section 401. TERM. (a) The term of this Agreement shall commence on the
date of the execution hereof and shall terminate on January 20, 2017, or such
earlier date determined pursuant to the provisions of Subsection (b) hereof.
Notwithstanding the stated commencement date of this Agreement, the lease for
the Special Facilities shall commence on the weighted average date that the
Special Facilities have been placed in service (within the meaning of Section
147(b)(3) of the Code).
(b) Not more than ninety (90) days after the final Phase of the Special
Facilities is placed in service (within the meaning of Section 147(b)(3) of the
Code), the Lessee shall deliver to the Authority an opinion of Bond Counsel to
the effect that: (i) a termination date for this Agreement of January 20, 2017
will not adversely affect the exclusion from gross income of the interest on the
Tax Exempt Bonds, or (ii) a termination date earlier than January 20, 2017 will
be required in order to maintain the exclusion from gross income of the interest
on the Tax Exempt Bonds (which opinion shall state the latest permissible
termination date, which date shall be deemed to be the date of termination of
this Agreement).
Section 402. RIGHTS AT EXPIRATION.
(a) In the event the Lessee shall continue to occupy the Leased Premises
beyond the Agreement term without the Authority's written renewal thereof, such
holding over shall not constitute a renewal or extension of this Agreement, but
shall create a tenancy from month to month which may be terminated at any time
by the Authority or the Lessee by giving thirty (30) days written notice to the
other party.
(b) The Lessee further agrees that upon the expiration of the term of this
Agreement or sooner cancellation thereof, the Leased Premises will be delivered
to the Authority in good condition, reasonable wear and tear, matters covered by
insurance and damages from condemnation excepted.
(c) The Lessee further agrees that upon the expiration of the term of this
Agreement or sooner cancellation thereof, the Lessee shall execute such
instruments as are necessary to convey title to the Lessee Improvements, to the
Authority, and such Lessee Improvements and the Leased Premises shall be
delivered to the Authority free and clear of all liens not consented to by the
Authority.
Section 403. THE LESSEE'S OPTION TO EXPAND THE PARKING LAND. The Lessee is
granted an option to lease, in whole or in part, an expansion area of real
estate particularly identified on the attached Exhibit A under the heading
"Parking Land Option" and lying contiguous to the Parking
16
<PAGE>
Land. The Lessee may elect to exercise this option to lease part or all of the
expansion area during the term hereof by giving the Authority written notice of
such election and by paying additional rent therefor, commencing ninety (90)
days after such notice is given, at the rate then in effect for the Parking Land
as determined in Section 501. Exercise of the option for a part of the
expansion area shall not terminate the option as to the remainder of the
expansion area. At any time prior to the exercise of such option, the Authority
may give the Lessee written notice of its intent to lease, use, or otherwise
dispose of the expansion area or part thereof specifying therein the intended
use thereof. Upon receipt of such written notice, the Lessee shall have ninety
(90) days to notify the Authority if it intends to exercise its option to lease
the expansion area land specified in the Authority's notice and to begin paying
the appropriate additional rental therefore. In the event such election is not
made within said ninety (90) day period, the option of the Lessee to lease the
specified expansion area land shall terminate; provided, however, if the
transaction contemplated in the Authority's notice to the Lessee is not
consummated within one (1) year of the Authority's notice to the Lessee, the
Lessee's option to lease the specified expansion area land shall be reinstated.
Any portion of the expansion area with respect to which the Lessee's option
is exercised shall become a part of the Parking Land leased hereunder and shall
be subject to the terms of this Agreement. The exercise of an option under this
Subsection shall not serve to extend the term of the Agreement.
Section 404. EXPIRATION. This Agreement shall expire and terminate at the
end of the term specified in Section 401 hereof, and the Lessee shall have no
further right or interest in the Leased Premises except as provided in Section
1405.
17
<PAGE>
ARTICLE V
RENTALS AND FEES
Section 501. GROUND RENT. The Lessee shall pay to the Authority ground
rentals for the Land according to the following schedule:
(a) For the Primary Land:
(i) For the period commencing on the date of execution of this
Agreement and ending on December 31, 1996, a rate of $.152 per square foot per
year for 1,906,193 square feet and a rate of $.05 per square foot per year for
4,446,597 square feet for a total rent for the Primary Land during such period
as follows:
1,906,193 sq. feet @ $.152
$289,741.37
4,446,597 sq. feet @ $.05
222,329.85
----------
Total Annual Rent for Primary Land $512,071.22
Monthly Rent for Primary Land $ 42,672.60
(ii) For the period commencing January 1, 1997 and ending on
December 31, 2006, a rate of $.166 per square foot per year for 1,906,193
square feet and a rate of $.07 per square foot for 4,446,597 square feet
for a total rent for the Primary Land during such period as follows:
1,906,193 sq. feet @ $.166
$316,428.04
4,446,597 sq. feet @ $.07 311,261.79
----------
Total Annual Rent for Primary Land $627,689.83
Monthly Rent for Primary Land $52,307.49
(iii) For the period commencing January 1, 2007 and continuing
thereafter through the term of this Agreement at a rate of $.196 per square
foot per year for 1,906,193 square feet and a rate of $.10 per square foot
per year for 4,446,597 square feet for a total rent for the Primary Land
during such period as follows:
18
<PAGE>
1,906,193 sq. feet @ $.196
$373,613.83
4,446,597 sq. feet @ $.10 444,659.70
----------
Total Annual Rent for Primary Land $818,273.53
Monthly Rent for Primary Land $68,189.46
(b) For the Parking Land
(i) For the period commencing on the earlier of the date the
parking lot Phase of the Special Facilities has been substantially
completed and available for its intended use or January 1, 1995 (the
"Commencement Date") and ending on the fifth anniversary of the
Commencement Date a rate of $.10 per square foot for 1,738,922 square feet
of the Parking Land per year, for a total rent for the Parking Land during
such period as follows:
Total Annual Rent for Parking Land $173,882.20
Monthly Rent for Parking Land $ 14,490.18
(ii) Beginning with the fifth anniversary of the Commencement Date
described in paragraph (1) above and on each fifth anniversary thereafter,
the ground rental rates for the Parking Land will be adjusted for each
succeeding five (5) year period. Rental for each five (5) year period shall
be the greater of either the preceding period rental or such preceding
period rental plus any increase in the cost of living during said five (5)
year period reflected by the "United States Bureau of Labor Statistics,
Consumer Price Index, All Urban." Such monthly increase during each rental
period shall be computed by multiplying the preceding period rental by a
fraction, the numerator of which shall be such index figure as of the third
month next preceding the end of the then current period and the denominator
of which shall be such index figure as of the third month prior to
commencement of the then current period. In the event that the Bureau of
Labor Statistics shall change its base period (1982-84 = 100), the new
index numbers shall be substituted for the old index numbers in making the
above computations. In the event the Consumer Price Index of the United
States Bureau of Labor Statistics is discontinued, comparable statistics on
the purchasing power on the consumer dollar, as published at the time of
said discontinuance by a responsible financial periodical of recognized
authority shall be used for making such computation.
(c) If at any time during the term hereof the Primary Land or Parking Land
is substituted with other land due to a condemnation, such substituted land
shall become a part of
19
<PAGE>
the Primary Land or Parking land, respectively, and the total rents due pursuant
to (a) and (b) hereof shall take into effect any increase or decrease of the
area of such Primary Land or Parking Land.
Section 502. SPECIAL FACILITIES RENTAL.
So long as any Bond is Outstanding, the Lessee shall pay to the Authority,
by depositing with the Trustee, a rental (the "Special Facilities Rentals")
payable without demand, either: (i) in next day funds pursuant to an automated
clearinghouse transfer, one (1) Business Day prior to the date on which
principal of, interest and premium, if any, are due on the Bonds, or (ii) in
same day funds prior to 10:00 a.m. Indianapolis time on the date on which
principal of, interest or premium, if any, are due on the Bonds, in either case
in an amount equal to such principal of, interest or premium payments due on the
Bonds whether at maturity, upon redemption, by acceleration or otherwise;
provided that in the case of each payment the amount thereof shall be reduced by
an amount equal to any amount then held by the Trustee in the Bond Fund which is
available for such payment.
Section 503. FIELD USE CHARGES. The Lessee is not granted hereunder the
right to use any aircraft parking apron or taxiway not on the Land for the use
of itself or its tenants, but nothing herein shall abrogate any rights the
Lessee may have for such use pursuant to other agreements with the Authority.
Any use of aircraft operational areas outside of the Land by the Lessee or the
Lessee's tenants or agents shall be by separate agreement and payment of
appropriate fees. Nothing in this Section, however, shall prohibit the Lessee
or its tenants from the joint use with others at the Airport of interior and
exterior roadways serving the Land in accordance with Airport rules, regulations
and/or restrictions.
Section 504. TIME AND PLACE OF PAYMENTS.
(a) The ground rentals due under Section 501 hereof shall be payable in
equal monthly installments in advance on or before the first business day of
each calendar month of the term at the office of the Airport Director at the
address set forth in Section 1811 hereof.
(b) The Special Facilities Rentals payable pursuant to Section 502 hereof
shall be payable to the Authority at the principal corporate trust office of the
Trustee for deposit in the Bond Fund.
Section 505. DELINQUENT RENTALS. In the event ground rentals due pursuant
to Section 501 hereof shall not be paid by the Lessee on the due date thereof,
the Lessee shall pay to the Authority as additional rental, an interest charge
at the interest rate established by ordinance by the Airport Authority Board,
from time to time, on the amount due for each full calendar month of delinquency
computed as simple interest. No interest shall be
20
<PAGE>
charged upon that portion of any ground rental which, in good faith, is not paid
because it is in dispute. No interest shall be charged until payment is thirty
(30) days overdue, but such interest when assessed thereafter, shall be computed
from the due date.
Section 506. ASSIGNMENT OF RIGHTS. As security for the payment of the
Bonds, the Authority shall assign to the Trustee the Trust Estate. The Lessee
hereby assents to the assignment of such rights hereunder. The Trustee shall
not be responsible for those rights and obligations of the Authority not
assigned to the Trustee as part of the Trust Estate.
Section 507. OBLIGATIONS OF THE LESSEE HEREUNDER UNCONDITIONAL. The
obligation of the Lessee to make the payments required under Section 502 hereof
and to pay the premiums or charges necessary to maintain or cause to be
maintained the insurance required by Article IX shall be absolute and
unconditional and shall not be subject to any defense (other than payment) or
any right of set-off, counterclaim, abatement or otherwise. The Lessee shall
not suspend, postpone, discontinue or permit the suspension, postponement or
discontinuance of any such payments referred to in Section 502. Each payment
referred to in Section 502 made by the Lessee pursuant to this Agreement shall
be final and the Lessee shall not seek to recover all or any part of such
payment from the Trustee or any holder of the Bonds for any reason whatsoever.
Nothing contained in this Section 507 shall be construed to relieve the
Authority or the Trustee from the performance of any of the agreements on their
part contained herein or in the Indenture or to constitute a waiver by the
Lessee of its rights to enforce the performance thereof or to recover from the
Authority damages for the Authority's failure to perform its covenants
hereunder.
Section 508. PREPAYMENT OF GROUND RENTALS. Any prepayment of ground
rentals due pursuant to Section 501 hereof shall be applied by the Authority to
the next ensuing payments in order of their due dates.
21
<PAGE>
ARTICLE VI
OBLIGATIONS OF THE LESSEE
Section 601. NET LEASE. It shall be the sole responsibility of the Lessee
to maintain, repair and operate the entirety of the Facilities at the Lessee's
sole cost and expense.
Section 602. MAINTENANCE AND OPERATION.
(a) The Lessee shall at its own expense: (i) keep the Facilities in as
reasonably safe, neat and attractive condition as its operation shall permit and
in good repair; (ii) keep the Leased Premises in good repair and in good
operating condition, making from time to time all necessary repairs thereto
(including external and structural repairs) and renewals and replacements
thereof, ordinary wear and tear, matters covered by insurance and damages from
condemnation excepted (subject to the rights of the Lessee set forth in
Subsection 307(a) hereof with respect to any Lessee Improvement); and (iii)
shall repaint the Facilities as necessary.
(b) The Lessee shall be responsible for and perform all maintenance of the
Facilities, including but not limited to:
(i) janitorial services, providing janitorial supplies, window
washing, rubbish, and trash removal;
(ii) supply and replacement of light bulbs in and on all buildings,
obstruction lights and replacement of all glass in the Facilities,
including plate glass;
(iii) cleaning of stoppages in plumbing fixtures, drain lines and
septic system to the first manhole outside the Facilities;
(iv) maintenance of all building and overhead doors and door
operating systems including weather stripping;
(v) interior and exterior maintenance to the Facilities;
(vi) removal of snow on the Facilities in a manner which does not
interfere with the Authority's Airport operations or damage to the
Facilities;
(vii) maintenance on utilities to (i) the point where connected to
the main source of supply, (ii) the first manhole outside of the Facilities
or (iii) the utility corridor, whichever is closest to the Facilities; and
(viii) maintenance and relamping of all lights in and on the
Facilities.
22
<PAGE>
(c) The Lessee shall:
(i) repair or replace electrical, mechanical and plumbing equipment
in the Facilities, including but not limited to air conditioning and
heating equipment but excluding Excluded Personal Property. (All repairs to
electrical and mechanical equipment shall be made by licensed personnel.
Other repairs shall be made by craftsmen skilled in work done and
performing such work regularly as a trade);
(ii) advise the Authority and obtain the Authority's consent in
writing before making changes involving structural changes to the Leased
Premises, including any penetration of the roof thereof, modifications or
additions to plumbing, electrical or other utilities;
(iii) prevent the voiding of roof bond(s) and shall maintain correct
records with respect thereto;
(iv) maintain electric loads within the designed capacity of the
system. (Prior to any change desired by the Lessee in the electrical
loading which would exceed such capacity, written consent shall be obtained
from the Airport Director);
(v) provide and maintain hand fire extinguishers for the interior
of the Facilities, including shop, parking and storage areas in accordance
with applicable safety codes;
(vi) maintain the grounds and replace all landscaping on the Land as
originally approved and installed, and will not allow the removal of trees
without permission of the Authority.
(vii) on or before the date that is five years after the final Phase
of the Special Facilities has been substantially completed and available
for its intended use and every fifth year thereafter, supply its
maintenance plan for the Leased Premises to the Authority; and
(viii) consider in good faith any recommendation of the Authority as
to necessary repairs of the Leased Premises.
(d) No waste shall be committed to the Leased Premises.
Section 603. UTILITIES. The Lessee shall assume and pay for all costs or
charges for utilities services furnished to the Lessee during the term hereof.
The Lessee shall have the right
23
<PAGE>
to connect to any and all storm and sanitary sewers and water and utility
outlets at its own cost and expense; and the Lessee shall pay for any and all
service charges incurred therefor.
Section 604. TRASH, GARBAGE AND OTHER REFUSE, SIGNS.
(a) The Lessee shall pick up, and provide for, a complete and proper
arrangement for the adequate sanitary handling and disposal, away from the
Airport, of all trash, garbage, and other refuse caused as a result of its
operation on the Land. The Lessee shall provide and use suitable covered metal
receptacles for all such garbage, trash, and other refuse on the Land or in the
Facilities.
(b) Piling of boxes, cartons, barrels, pallets, debris, or similar items in
an unsafe or unreasonably unkempt manner, on or about the Facilities, shall not
be permitted.
(c) The Lessee shall not erect, maintain, or display upon the outside of
any of the Facilities any billboards or advertising signs; provided, however,
that the Lessee may maintain on the outside of said buildings its own name and
services on signs, the size, location and design of which shall be subject to
prior written approval by the Authority.
Section 605. HAZARDOUS MATERIALS.
(a) The Lessee shall use, store and dispose of any Hazardous Materials used
or knowingly transported by it only in compliance with all Laws. The Lessee
shall furnish to the Authority a list of such Hazardous Materials, except for
items shipped or stored by the Lessee for its customers. The Lessee shall
remediate any Hazardous Materials or cause any Hazardous Materials to be
remediated so as to avoid Liability under any Environmental, Health and Safety
Requirements if the Hazardous Materials were first placed on, present at,
manufactured at, stored at, disposed of from, released from or emitted from the
Facilities after the date of delivery of the Facilities. If the presence of any
such Hazardous Materials in or on the Facilities results in any contamination,
the Lessee shall promptly take all actions at its sole expense as are necessary
to return the Facilities to the conditions existing prior to the placement,
presence, manufacture, storage, disposal, release or emission of such Hazardous
Materials; provided that the Authority must first approve of such actions, which
approval shall not be unreasonably withheld so long as such actions would not
potentially have a material adverse long-term or short-term effect on the
Facilities or any other portion of the Airport. If the presence of such
Hazardous Materials on or the release of such Hazardous Materials from the
Facilities was caused by a third person, the Authority agrees to cooperate with
the Lessee in pursuing the third person for the collection of remediation costs
and other damages resulting therefrom; provided, that the Authority shall be
permitted to recover proportionately with the Lessee the Authority's expenses
and costs associated with pursuing such actions.
24
<PAGE>
(b) The Lessee shall indemnify, defend and hold the Authority harmless from
any and all claims, judgments, damages, penalties, fines, costs, Liabilities or
losses asserted against, resulting to, imposed upon or suffered by the Authority
to the extent arising from, attributable to, or relating in any manner to (i) a
breach by the Lessee of the obligations in Subsection (a) of this Section 605 or
(ii) injury to person or property as a result of the presence or release of
Hazardous Materials on or from the Facilities on or after the date of delivery
of the Leased Premises, which is caused or permitted by or on behalf of the
Lessee, including Hazardous Materials knowingly or unknowingly transported by
the Lessee for its customers. This indemnification of the Authority by the
Lessee includes, without limitation, costs incurred by the Authority in
connection with any investigation of site conditions or any cleanup, remedial,
removal, restoration or monitoring work performed by any individual or entity,
regardless of whether that investigation or work is required by any federal,
state or local governmental agency or political subdivision because of the
presence or release of Hazardous Materials in the soil or ground water on or
from the Facilities, and shall survive the cancellation, termination or
expiration of the term of this Agreement.
(c) The Lessee covenants and agrees to provide to the Authority, within
five (5) Business Days of receipt, copies of any correspondence, notices,
pleading, citation, indictment, complaint, order, decree or other document from
any source asserting or alleging a circumstance or condition that requires, or
may require, a clean-up, removal, remedial action, or other response by or on
the part of the Lessee at the Facilities under Laws or which seek criminal or
punitive penalties from the Lessee for an alleged violation of any Laws. The
Lessee further agrees to advise the Authority in writing as soon as the Lessee
becomes aware of any condition or circumstance which may result in a potential
violation of any Laws.
(d) The Lessee agrees, upon the reasonable request of the Authority where
the Authority has a reasonable basis to believe that a Law has been violated, to
permit an environmental audit solely for the benefit of the Authority, to be
conducted by the Authority or an independent agent selected by the Authority.
If an audit reveals that a contamination of the Leased Premises exists, then the
Lessee shall pay for the costs incurred in obtaining the audit. Otherwise, the
Authority shall pay for such audit. This provision shall not relieve the Lessee
from conducting its own environmental audits or taking all steps necessary to
comply with Laws.
(e) If there exists any uncorrected violation by the Lessee of a Law or
any condition, caused directly or indirectly by the Lessee, which requires a
cleanup, removal or other remedial action by the Lessee under any Laws, and such
cleanup, removal or other remedial action is not initiated within thirty (30)
days from the date of written notice from the Authority to the Lessee and
diligently pursued to completion, the same shall, at the election of the
Authority, constitute an Event of Default hereunder.
Section 606. NONDISCRIMINATION. (a) The Lessee, for itself, its personal
representatives, successors in interest, and assigns, as part of the
consideration hereof, does hereby covenant and agree that it will comply with
pertinent statutes, Executive Orders and such rules that are
25
<PAGE>
promulgated to assure that (1) no person on the grounds of race, color, creed,
sex, age or national origin shall be excluded from participation in, denied the
benefits of, or otherwise be subjected to discrimination in the use of the
Facilities; (2) that in the construction of any improvements on, over, or under
such land and the furnishing of services thereof no person on the grounds of
race, color, creed, sex, age or national origin shall be excluded from
participation in, denied the benefits of, or otherwise be subjected to
discrimination; (3) that the Lessee shall use the Facilities in compliance with
all other requirements imposed by or pursuant to Title 49, Code of Federal
Regulations, Department of Transportation, Subtitle A, Office of the Secretary,
Part 21, Nondiscrimination in Federally-assisted programs of the Department of
Transportation, Effectuation of Title VI of the Civil Rights Act of 1964, and as
said Regulations may be amended, to the extent that said requirements are
applicable, as a matter of law, to the Lessee.
(b) With respect to the Facilities, the Lessee agrees to furnish services on
a fair, equal and not unjustly discriminatory basis to all users thereof, and to
charge fair, reasonable and not unjustly discriminatory prices for each unit or
service; provided, that the Lessee may be allowed to make reasonable and
nondiscriminatory discounts, rebates, or other similar types of price reductions
to volume purchasers.
(c) Lessee assures that it will comply with pertinent statutes, Executive
Orders and such rules as are promulgated to assure that no person shall, on the
grounds of race, creed, color, national origin, sex, age, or handicap be
excluded from participating in any activity conducted with or benefiting from
Federal assistance. This Subsection (c) obligates the Lessee or its transferee
for the period during which Federal assistance is extended to the airport
program, except where Federal assistance is to provide, or is in the form of
personal property or real property or interest therein or structures or
improvements thereon. In these cases, this Subsection (c) obligates the Lessee
or any transferee for the longer of the following periods: (a) the period during
which the property is used by the Authority, the Lessee or any transferee for a
purpose for which Federal assistance is extended, or for another purpose
involving the provision of similar services or benefits; or (b) the period
during which the Authority, the Lessee or any transferee retains ownership or
possession of the Leased Premises.
Section 607. AFFIRMATIVE ACTION. With respect to the Facilities, the
Lessee assures that it will undertake an affirmative action program as required
by 14 CFR Part 152, Subpart E, to insure that no person shall, on the grounds of
race, creed, color, national origin or sex, be excluded from participating in
any employment activities covered in 14 CFR Part 152, Subpart E; that no person
shall be excluded on these grounds from participating in or receiving the
services or benefits of any program or activity covered by that Subpart; and
that it will require that its covered suborganizations provide assurance to the
Lessee that they similarly will undertake affirmative action programs, and that
they will require assurances from their suborganizations, as required by 14 CFR
Part 152, Subpart E, to the same effect, to the extent that said requirements
are applicable, as a matter of law, to the Lessee.
26
<PAGE>
Section 608. OBSERVANCE OF STATUTES. The granting of this Agreement and
its acceptance by the Lessee is conditioned upon the right to use the Airport in
common with others authorized to do so, provided, however, that the Lessee shall
observe and comply with any and all requirements of the constituted public
authorities and with all federal, State or local statutes, ordinances,
regulations and standards applicable to the Lessee for its use of the
Facilities, including but not limited to, rules and regulations promulgated from
time to time by the Airport Director for the administration of the Airport.
Section 609. HAZARD LIGHTS. The Lessee shall, at its expense, provide and
maintain hazard lights on any structure erected by the Lessee on the Land, if
required by the Authority or Federal Aviation Administration ("FAA")
regulations. Any hazard lights so required shall comply with the specifications
and standards established for such installations by the FAA.
Section 610. MECHANIC'S LIENS.
(a) The Lessee herein agrees that if any mechanic's lien is filed upon any
portion of the Facilities, the Lessee shall protect and save harmless the
Authority against any loss, liability or expense whatsoever by reason thereof
and shall proceed with or defend, at its own expense, such action or proceedings
as may be necessary to remove such lien from the records to the extent that the
Leased Premises or any portion thereof is affected. Upon receipt of notice
thereof by the Authority, the Authority shall promptly give the Lessee written
notice of the existence of any such mechanic's lien on the Facilities, but the
failure of the Authority to give such notice shall not affect the
responsibilities of the Lessee as set forth in this Section 610.
(b) The Lessee may, however, in good faith and with due diligence, contest
any mechanic's lien or other lien filed or established against all or any
portion of the Facilities, and in such event may permit such lien or charge to
remain undischarged and unsatisfied during the period of such contest and appeal
therefrom, if (i) the Lessee shall effectively prevent or stay the execution,
foreclosure or enforcement of such lien or charge, or (ii) such contest or
appeal shall prevent or stay the execution or enforcement or foreclosure of such
lien or charge. If such lien or charge is so stayed and such stay thereafter
expires or the Authority gives the Lessee written notice that by nonpayment of
any such items the Leased Premises or any portion thereof will be subject to
loss or forfeiture, then the Lessee shall forthwith pay and cause to be
satisfied and discharged such lien or charge or secure such payment by posting a
bond, in form satisfactory to the Authority. The Authority shall cooperate
fully with the Lessee in any such contest.
(c) If the Lessee shall fail to contest, discharge or pay any such lien as
required by Subsections (a) and (b) hereof, the Authority may, after having
given the Lessee at least sixty (60) days' written notice of such failure,
contest, discharge or pay any such lien which the Authority may determine to be
necessary in order to protect its interest in the Leased Premises. In such
event, the Lessee agrees to reimburse the Authority for any and all reasonable
expenses and costs incurred by the Authority in respect thereto.
27
<PAGE>
Section 611. THE LESSEE TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS
UNDER WHICH EXCEPTIONS PERMITTED. The Lessee shall maintain its corporate
existence, shall remain duly qualified to do business in the State, shall not
dissolve or otherwise dispose of all or substantially all of its assets and
shall not consolidate with or merge into another entity; provided that the
Lessee may, without violating this Section 611, consolidate with or merge into
another entity or permit one or more other entities to consolidate with or merge
into it, or transfer or convey all or substantially all of its property, assets
and licenses to another entity, but only if the entity resulting from or
surviving such merger (if other than the Lessee) or consolidation or the entity
to which such transfer or conveyance is made shall (1) expressly assume in
writing and agree to perform all of the Lessee's obligations hereunder, (2) be
qualified to do business in the State; and (3) if such entity shall not be
organized and existing under the laws of the United States of America or any
state or territory thereof or the District of Columbia, furnish to the Authority
and the Trustee an irrevocable consent to service of process in, and to the
jurisdiction of the courts of, the State with respect to any action or suit, at
law or in equity, brought by the Authority or the Trustee to enforce this
Agreement.
Section 612. EQUIPMENT.
(a) The Lessee shall acquire (or shall cause the Authority to acquire from
moneys in the Construction Fund) the necessary equipment, fixtures, permanent
inventory and other tangible personal property for use at the Special Facilities
in order to operate the Special Facilities as contemplated by this Agreement.
The Lessee shall continue to maintain in good working order and repair and keep
fully insured each piece of Equipment, including, but not limited to, the
furnishing of all parts, mechanisms and devices required to keep the Equipment
in good mechanical and working order and repair, unless the same becomes
irreparable, worn out, obsolete or is no longer needed by the Lessee to conduct
its operations at the Special Facilities. The Lessee shall replace or
substitute any Equipment necessary to maintain the operating utility or
productive capacity of the Special Facilities (unless the same is not needed by
the Lessee in the conduct of its operations) with replacement equipment of equal
functional value and utility to the item replaced and such replacement equipment
shall become a part of the Equipment when installed by the Lessee.
(b) The Lessee shall undertake diligent efforts to properly identify the
Equipment by appropriate tags or other means of identification. The Lessee
shall, on or before each anniversary of the date the final Phase of the Special
Facilities has been substantially completed and available for its intended use
and at the expiration of the term or earlier termination of this Agreement,
certify to the Authority a true and correct current itemized list of the
Equipment indicating with particularity any changes from the previous
certification.
Section 613. SECURITY AGREEMENT. The Lessee shall have entrances and gates
to the Air Operations Area (as defined in applicable regulations of the Federal
Aviation Administration)
28
<PAGE>
and shall execute, in connection with this Agreement, an Airport Security
Agreement as required by the Authority in accordance with FAA regulations, Title
14 CFR Part 107, which agreement requires the Lessee to control and regulate any
doors, openings or entrances to the Air Operations Area.
Section 614. TAX EXEMPTION. The Lessee shall not take any action or suffer
or permit any other action to be taken or condition to exist which causes or may
cause the interest on any of the Tax Exempt Bonds to become included in gross
income for purposes of federal income taxation; provided, however, that no Event
of Default shall result from a breach of this covenant so long as the Lessee is
complying with the provisions of Section 1005 hereof.
Section 615. THE LESSEE'S COVENANTS CONCERNING THE SERIES 1994 BONDS.
(a) The Lessee shall pay the ordinary fees and expenses of the Trustee for
serving as the Trustee under the Indenture and the Series 1994 Guaranty and
shall also pay to the Trustee all extraordinary fees and expenses incurred by
the Trustee in enforcing the provisions of this Agreement, the Indenture or the
Series 1994 Guaranty or otherwise serving in the capacity as the Trustee under
the Indenture and the Series 1994 Guaranty.
(b) The Lessee shall maintain or cause the Trustee to maintain accurate
investment records for the purpose of determining the amount of arbitrage rebate
that shall be owed with respect to the Series 1994 Bonds to the United States in
order to comply with the requirements of Section 148 of the Code with respect to
the Series 1994 Bonds . The Lessee shall compute and cause to be paid, in the
manner and time provided in the Series 1994 Tax Representation Certificate, the
arbitrage rebate that is required to be paid to the United States pursuant to
Section 148 of the Code in order to preserve the tax status of the interest on
the Series 1994 Bonds.
(c) INVESTMENT OF FUNDS AND ACCOUNTS UNDER THE INDENTURE. Any moneys held
in the Funds or Accounts established under the Indenture shall, at the written
direction of the Lessee, be invested or reinvested by the Trustee in Investment
Obligations in accordance with the provisions of the Indenture.
(d) ADVANCES BY THE AUTHORITY AND TRUSTEE. In the event the Lessee shall
fail to comply with any covenant or agreement set forth in this Agreement, the
Authority or the Trustee may (but shall be under no obligation to) comply with
said covenants and agreements. All amounts advanced by the Authority or the
Trustee to comply with such agreements and covenants shall be paid by the Lessee
to the one making the advancements, together with interest thereon at the
Trustee's prime rate of interest
29
<PAGE>
ARTICLE VII
OBLIGATIONS OF THE AUTHORITY
Section 701. OPERATION AS A PUBLIC AIRPORT. The Authority covenants and
agrees that at all times it will operate and maintain the Airport as a public
airport consistent with and pursuant to the sponsor's assurances given by the
Authority to the United States Government under the Federal Airport and Airways
Act.
Section 702. INGRESS AND EGRESS. The Lessee shall have the right of
ingress to and egress from the Facilities for the Lessee, its officers,
employees, agents, servants, customers, vendors, suppliers, patrons, and
invitees over the roadway provided by the Authority serving the Facilities. The
Authority's roadway shall be used jointly with other tenants on the Airport, and
the Lessee shall not interfere with the rights and privileges of other persons
or firms using said roadway and shall be subject to such weight and use
restrictions promulgated in the Authority's rules and regulations.
Section 703. QUIET ENJOYMENT OF LEASED PREMISES. By keeping and performing
the covenants and agreement herein contained to be performed by it, the Lessee
shall at all times throughout the term of this Agreement, have the right,
subject to the provisions of this Agreement, to peaceably and quietly possess
and enjoy the Leased Premises without suit, trouble or hindrance. The Authority
shall defend the Lessee's right to such peaceable and quiet possession at the
Authority's expense.
Section 704. MAINTENANCE AND OPERATIONS. The Authority shall be
responsible for snow removal from the runways, taxiways and public use areas of
the Airport, but not from the Leased Premises.
30
<PAGE>
ARTICLE VIII
THE AUTHORITY'S RESERVATIONS
Section 801. IMPROVEMENT, RELOCATION OR REMOVAL OF SPECIAL FACILITIES.
Subject to Section 1104 hereof, the Authority, at its sole discretion, reserves
the right to further develop or improve the Aircraft Operating Area (as defined
in Federal Aviation Administration regulations) and other portions of the
Airport, including the right to remove or relocate any structure on the Airport,
as it sees fit, and to take any action it considers necessary to protect the
aerial approaches of the Airport against obstructions, together with the right
to prevent the Lessee from erecting or permitting to be erected, any buildings
or other structure on the Airport which, in the reasonable opinion of the
Authority, would limit the usefulness of the Airport, constitute a hazard to
aircraft or violate Federal Aviation Administration standards or regulations.
Section 802. INSPECTION OF LEASED PREMISES. The Authority, through its
duly authorized agent, shall have at any reasonable time the right to enter the
Leased Premises for the purpose of periodic inspection for fire protection,
maintenance and to investigate compliance with the terms of this Agreement;
provided, however, that except in the case of emergency, such right shall be
exercised upon twenty-four (24) hours prior notice to the Lessee and with an
opportunity for the Lessee to have an employee or agent present. The Authority
will comply with the Lessee's security procedures and will conduct such
inspections in a manner that does not unduly interfere with or disrupt the
Lessee's normal business operations.
Section 803. SUBORDINATION TO U.S. GOVERNMENT. This Agreement shall be
subordinate to the provisions of any existing or future agreement(s) between the
Authority and the United States Government, relative to the operation and
maintenance of the Airport, the terms and execution of which have been or may be
required as a condition precedent to the expenditure or reimbursement to the
Authority for Federal funds for the development of the Airport.
Section 804. WAR OR NATIONAL EMERGENCY. During the time of war or national
emergency, the Authority shall have the right to lease the Airport or any part
thereof to the United States Government for military use, and if any such lease
is executed, the provisions of this Agreement insofar as they are inconsistent
with the lease to the United States Government shall be suspended, and in that
event, a just and proportionate part of the ground rent due under Section 501
hereof shall be abated.
Section 805. NO LIABILITY OF THE AUTHORITY. The Bonds shall be special and
limited obligations of the Authority, payable solely and only out of the Trust
Estate. No holder of any Bond shall have the right to compel any exercise of
the taxing power of the State or any political subdivision thereof, including
the Authority, to pay principal of, premium, if any, or interest on the Bonds,
and the Bonds shall not constitute an indebtedness of the State or any political
31
<PAGE>
subdivision thereof, including the Authority, or a loan of credit thereof within
the meaning of any constitutional or statutory provision or limitation or
indebtedness.
Section 806. NO WARRANTY OF CONDITION OR SUITABILITY. The Authority makes
no warranty, either express or implied, as to the condition of the Leased
Premises or that it shall be suitable for the Lessee's purposes or needs. The
Authority shall not be responsible for any latent defect or change of condition
in the Leased Premises and the Lessee shall not, under any circumstances,
withhold any rentals or other amounts payable to the Authority hereunder on
account of any defect in the Leased Premises, nor for any change in the
condition thereof nor for any damage accruing thereto. By its entry onto the
Leased Premises, the Lessee accepts the Leased Premises as being free and clear
from all defects and in good, safe, clean and orderly condition and repair, and
agrees to maintain the same.
Section 807. RESPONSIBILITY FOR CONTRACTS FOR SPECIAL FACILITIES AND
PAYMENT OF SPECIAL FACILITIES RENTALS. The Authority shall not be responsible
to the Lessee for the performance of the contractor or contractors for the
construction, modification, expansion and installation of the Special
Facilities. The Authority shall not be required to pay or provide any monies
for the construction, modification, expansion or installation of the Special
Facilities, except to the extent of the moneys in the Construction Fund.
Failure of the contractor or contractors to complete the construction,
modification, expansion and installation of the Special Facilities shall in no
way affect the payment obligations of the Lessee under Section 502 of this
Agreement.
Section 808. OPTION OF THE AUTHORITY TO TERMINATE LEASE. The Authority may
elect, within its sole discretion, at any time to cancel this Agreement, upon at
least twenty-four (24) months prior written notice to the Lessee, in order to
use the Leased Premises for essential airport purposes of general applicability
for all airport users (which shall not include, by way of example only, use of
the Leased Premises for any purpose for which the Lessee is using the Leased
Premises or the construction of facilities on the Land for another potential or
actual user for the same purposes as the Leased Premises is being used by the
Lessee) and, upon the payment by the Authority of the amounts specified in this
Section 808, this Agreement shall forthwith cease and terminate, and the parties
hereto shall be released and discharged of and from all further obligations
hereunder other than as described in this Section 808, without prejudice,
however, to any claims which may have occurred prior thereto in favor of either
party against the other. The Authority, upon the exercise of the option
provided for in this Section 808, shall use its best efforts to provide an
alternate site to the Lessee at the Airport for the Lessee to build and operate
a facility substantially similar to the Leased Premises upon the terms and
conditions to be agreed upon by the Authority and the Lessee. Any determination
by the Authority that the use of the Leased Premises is for essential airport
purposes as defined in this Section 808 shall be conclusive.
Notwithstanding anything in this Section 808 to the contrary, the Authority
shall have the right following cancellation of this Agreement pursuant to this
Section 808 to temporarily release
32
<PAGE>
the Leased Premises to any person for any purpose for a period not to exceed
twenty-four (24) months following cancellation of this Agreement if, in its sole
discretion, the demolition of the Leased Premises is not then required for
essential airport purposes. A right of first refusal to lease the Leased
Premises will be given to the Lessee to lease the Leased Premises during this
period on the terms and conditions provided for in leases to other tenants of
the Authority at the Airport for similar space; provided such terms are at least
as favorable to the Lessee as terms set forth herein.
In the event that the Authority elects to exercise its option to terminate
this Lease pursuant to this Section 808, the Authority shall prior to delivery
of any written notice that it intends to terminate this Agreement irrevocably
pay to the Trustee the amount necessary in accordance with Section 1301 of the
Indenture to pay or provide for the payment of the principal of and interest on
the Bonds then Outstanding to effect a redemption of such Bonds in accordance
with Subsection 304(g) of the Indenture on the soonest practicable date as well
as any costs associated with such redemption. The Authority shall also pay to
the Lessee the reasonable costs it incurs in relocating its operations from the
Leased Premises. If the Authority, after having given the notice of termination
to the Lessee, shall thereafter withdraw such notice and elect to continue this
Agreement, then the Authority shall pay to the Lessee the reasonable costs
incurred by the Lessee in downsizing its operation in anticipation of the
termination of this Agreement. Notwithstanding the delivery of such notice to
the Lessee and the provision for payment of the Bonds, the Lessee shall continue
to pay a rental to the Authority equal in amount to the Special Facilities
Rentals that would be due had provision for the payment of the Bonds not been
made until the date this Agreement is terminated pursuant to this Section.
Section 809. CONSIDERATION OF AMENDMENT. In the event that the Federal
Aviation Administration, or its successors, requires modifications or changes in
this Agreement as a condition precedent to the granting of funds for the
improvement of the Airport, Lessee agrees to consider in good faith such
amendments, modifications, revisions, supplements or deletions of any of the
terms, conditions or requirements of this Agreement as may be reasonably
required to obtain such funds; provided, however, that in no event will Lessee
be required, pursuant to this Section, to agree to an increase in the rent
provided for hereunder or to a change in the use (provided it is an authorized
use hereunder) to which Lessee has put the Facilities.
33
<PAGE>
ARTICLE IX
INDEMNITY AND INSURANCE
Section 901. INDEMNIFICATION. Except as governed by Subsection 605(b)
hereof, the Lessee covenants and agrees fully to indemnify, defend, save, and
hold harmless the Authority, the Trustee, all of their directors, members,
officers, successors, assigns, employees, and agents (collectively, the
"Indemnified Parties") from and against any and all claims, demands, suits,
proceedings, expenses, penalties, fines, damages, losses, and Liabilities
(collectively, "Claims") of any character and nature whatsoever (and all
reasonable expenses incidental to the investigation and defense thereof,
including reasonable attorneys' fees) based on or arising out of the use,
occupancy, activities, or operations by the Lessee at or on the Leased Premises,
including, without limitation, any Claims based on or arising out of death or
injury to a person or persons, damages to property or the Lessee's actions under
the Construction Management Agreement; provided that the Lessee shall not be
liable for any injuries, death, damage, or loss to the extent that any such
injury, death, damage, or loss is caused or contributed to by the fault or
negligence of the Indemnified Parties, their agents or employees; and further
provided that the Indemnified Parties shall give the Lessee prompt and
reasonable notice of any Claims. The Lessee also covenants and agrees at its
expense to pay, and to indemnify and save the Indemnified Parties harmless, from
and against, all costs, reasonable counsel fees, expenses and liabilities
incurred by them or by the Lessee in any action or proceeding brought by reason
of any such Claim. If any action or proceeding is brought against any of the
Indemnified Parties by reason of any Claim, the Lessee, upon notice from any of
the Indemnified Parties, agrees to defend the Claim unless caused or contributed
to by the fault or negligence of the Indemnified Parties. The Lessee also
covenants and agrees, at its expense, to pay, and to indemnify the Indemnified
Parties from and against, all costs, expenses and charges, including reasonable
attorneys' fees, incurred in obtaining possession of the Leased Premises or the
Special Facilities upon the occurrence of an Event of Default. Each Indemnified
Party shall have the right to retain separate counsel in any such action and to
participate in the defense thereof but shall bear the fees and expenses of such
counsel unless (i) the Lessee shall have specifically authorized the retaining
of such counsel or (ii) the parties to such suit include such Indemnified Party,
and the Lessee and such Indemnified Party have been advised by such counsel that
one or more legal defenses may be available to it which may not be available to
the Lessee, in which case the Lessee shall not be entitled to assume the defense
of such suit notwithstanding its obligation to bear the fees and expenses of
such counsel, unless caused or contributed to by the fault or negligence of the
Indemnified Parties.
Section 902. PUBLIC LIABILITY INSURANCE. The Lessee shall, at its expense,
procure, maintain and keep in force, at all times during the term of this
Agreement from financially sound and reputable companies reasonably acceptable
to the Authority, commercial general liability insurance, insuring the Lessee,
the Trustee and the Authority against liability for bodily injury and property
damage with respect to the risks set forth in Exhibit C attached hereto.
Without
34
<PAGE>
limiting its liability, the Lessee agrees to carry and keep in force insurance
with single limit liability for bodily injury or death and property damage in a
sum not less than $120,000,000 with said policy designating the Authority and
the Trustee as additional insureds to the extent the Lessee is required to
indemnify the Authority pursuant to Section 901 hereof. The Lessee shall
furnish the Authority and the Trustee with a certificate of insurance as
evidence of such coverage. Said insurance shall not be cancelled or materially
modified except upon ten (10) days' advance written notice to the Authority and
the Trustee.
Section 903. FIRE AND EXTENDED COVERAGE INSURANCE. The Lessee shall, at
its expense, procure and keep in force at all times during the term of this
Agreement with financially sound and reputable companies reasonably acceptable
to the Authority, replacement cost insurance on the Leased Premises against loss
and damage by fire, aircraft and extended coverage perils. Such policy shall be
in an amount of not less than eighty percent (80%) of the replacement cost of
the Leased Premises. Said policy shall designate the Authority and the Trustee
as additional insureds. The Lessee shall furnish the Authority and the Trustee
with a certificate of insurance as evidence of such coverage. Said policy shall
not be cancelled or materially modified except upon ten (10) days' advance
written notice to the Authority and the Trustee.
Section 904. APPLICATION OF INSURANCE PROCEEDS.
(a) The proceeds of insurance maintained pursuant to the provisions of
Section 902 shall be paid to the Lessee, except to the extent necessary for the
Lessee to comply with its covenants set forth in Section 901 hereof.
(b) The proceeds of the insurance required to be maintained in accordance
with the provisions of Section 903 hereof shall be paid and disbursed in
accordance with the provisions of Article XI hereof.
Section 905. PERFORMANCE BONDS. At any time that the Lessee undertakes any
construction pursuant to Article III hereof, the Lessee shall, at its own cost
and expense, cause to be made, executed, and delivered to the Authority separate
performance bonds, as follows:
(a) Prior to the date of commencement of such construction, a contract
surety bond in a sum equal to the full amount of the construction contract
awarded. Said bond shall be drawn in a form and from a financially sound and
reputable company reasonably acceptable to the Authority; shall guarantee the
faithful performance of necessary construction and completion of improvements in
accordance with the Plans and Specifications therefor; and shall guarantee the
Authority against any losses and liability, damages, expenses, claims and
judgments caused by or resulting from any failure of the Lessee to perform
completely, the work described therein.
(b) Prior to the date of commencement of such construction, a payment bond
with the Lessee's contractor or contractors as principal, in a sum equal to the
full amount of the
35
<PAGE>
construction contract awarded. Said bond shall guarantee payment of all wages
for labor and services engaged and of all bills for materials, supplies and
equipment used in the performance of said construction contract.
Section 906. RIGHT OF THE AUTHORITY OR TRUSTEE TO PAY INSURANCE PREMIUMS.
In the event that the Lessee shall fail to maintain full insurance coverage
required by this Agreement, the Authority or the Trustee may (but shall be under
no obligation to) take out the required policies of insurance, pay the required
premiums or otherwise comply with the covenants set forth in Sections 902 and
903 hereof. All amounts advanced by the Authority or the Trustee in payment of
the required premiums for such insurance or otherwise to comply with the
covenants set forth in such Sections shall be paid by the Lessee to the one
making the advances, together with interest thereon at the Trustee's prime rate
of interest. Any amounts advanced by the Authority shall be considered for all
purposes to be a rental due pursuant to Section 501.
36
<PAGE>
ARTICLE X
PREPAYMENT OF SPECIAL FACILITIES RENTALS
Section 1001. IN CONNECTION WITH OPTIONAL REDEMPTION OF SERIES 1994 BONDS.
The Lessee shall have the option to prepay the Special Facilities Rentals due
pursuant to Section 502 hereof with respect to the Series 1994 Bonds for the
purpose of providing for the redemption of the Series 1994 Bonds then
Outstanding in accordance with Subsection 304(b) of the Indenture. In order to
exercise such right, the Lessee shall: (i) give conditional written notice of
the exercise of such right to the Authority and the Trustee not more than one
hundred twenty (120) days nor less than forty-five (45) days prior to the date
the Lessee has selected for the redemption of the Series 1994 Bonds; and (ii)
irrevocably deposit with the Trustee in the Series 1994 Account of the Bond Fund
on or prior to such redemption date sufficient moneys, which, together with
investment earnings thereon to such redemption date and other moneys in such
Account in the Bond Fund available therefor, shall be sufficient to provide for
the payment of the principal, redemption premium, if any, and interest on the
Series 1994 Bonds to be redeemed on such redemption date.
Section 1002. IN CONNECTION WITH DEFEASANCE OF THE SERIES 1994 BONDS. The
Lessee shall have the option to prepay the Special Facilities Rentals due
pursuant to Section 502 hereof with respect to the Series 1994 Bonds for the
purpose of providing for the defeasance of the Series 1994 Bonds in accordance
with Section 1301 of the Indenture. In order to exercise such right, the Lessee
shall: (i) give written notice of the exercise of such right to the Authority
and the Trustee; and (ii) irrevocably deposit with the Trustee in the Series
1994 Account of the Bond Fund on or prior to the date of such defeasance
sufficient moneys, which, together with investment earnings thereon and other
moneys in such Account in the Bond Fund available therefor, shall be sufficient
to provide for the payment of principal of, redemption premium, if any, and
interest on the Series 1994 Bonds to the date the Lessee has selected for the
redemption thereof or the date of maturity, as the case may be, in accordance
with Section 1301 of the Indenture.
Section 1003. IN CONNECTION WITH THE TERMINATION OF THIS AGREEMENT IN THE
EVENT OF DAMAGE OR DESTRUCTION OR CONDEMNATION. The Lessee shall have and is
hereby granted the option, in accordance with paragraph (ii) of Subsection
1101(a) and paragraph (iii) of Subsection 1102(a) hereof, to prepay the Special
Facilities Rentals due pursuant to Section 502 and to terminate this Agreement
in the event of a destruction or damage to or condemnation of the Special
Facilities for the purpose of redeeming the Bonds. In order to exercise such
right, the Lessee shall: (i) give written notice of the exercise of such right
to the Authority and the Trustee not more than one hundred twenty (120) days nor
less than forty-five (45) days prior to the date the Lessee has selected for the
redemption of the Bonds; and (ii) irrevocably deposit with the Trustee in the
Bond Fund on or prior to such redemption date sufficient moneys which, together
with interest thereon to such redemption date and other moneys in the Bond Fund
available
37
<PAGE>
therefor, shall be sufficient to provide for the payment of the principal of and
interest on all the Bonds then Outstanding in accordance with the provisions of
Subsection 304(d) of the Indenture.
Section 1004. IN CONNECTION WITH A PARTIAL REDEMPTION. The Lessee shall
have the option, in accordance with paragraph (iii) of Subsection 1102(a) hereof
to prepay the Special Facilities Rentals due pursuant to Section 502 hereof for
the purpose of providing for the redemption of the Bonds in accordance with
Subsection 304(d) of the Indenture. In order to exercise such right, the Lessee
shall: (i) give written notice of the exercise of such right to the Authority
and the Trustee not more than one hundred twenty (120) days nor less than
forty-five (45) days prior to the date the Lessee has scheduled for the
redemption of the Bonds; and (ii) irrevocably deposit with the Trustee in the
Bond Fund on or prior to such redemption date sufficient moneys, which, together
with investment earnings thereon to such redemption date and other moneys in the
Bond Fund available therefor, shall be sufficient to provide for the payment of
the principal of and interest on the Bonds to such redemption date.
Section 1005. IN CONNECTION WITH A SERIES 1994 DETERMINATION OF TAXABILITY.
The Lessee shall be obligated to prepay the Special Facilities Rentals due
pursuant to Section 502 hereof with respect to the Series 1994 Bonds in the
event of a Series 1994 Determination of Taxability. Such redemption shall occur
at a date to be selected by the Lessee not more than one hundred twenty (120)
days after the occurrence of the Series 1994 Determination of Taxability. The
Lessee shall irrevocably deposit with the Trustee in the Series 1994 Account of
the Bond Fund on or prior to such redemption date sufficient moneys, which,
together with investment earnings thereon to such redemption date and other
moneys in the Series 1994 Account of the Bond Fund available therefor, shall be
sufficient to provide for the payment of the principal of and interest on the
Series 1994 Bonds to such redemption date.
38
<PAGE>
ARTICLE XI
DAMAGE AND CONDEMNATION
Section 1101. DAMAGE AND DESTRUCTION.
(a) If prior to full payment of the Bonds (or provision for payment thereof
having been made in accordance with the provisions of the Indenture) the Special
Facilities are destroyed (in whole or in part) or are damaged by fire or other
casualty, the Lessee shall promptly give written notice thereof to the Authority
and the Trustee. All Net Proceeds in an amount less than one million dollars
($1,000,000) per casualty shall be paid to the Lessee to be applied to repair,
rebuild or restore the property damaged. Any remaining balance after payment
for such repair, rebuilding or restoration shall be retained by the Lessee. Net
Proceeds of insurance in excess of one million dollars ($1,000,000) per casualty
resulting from such claims for losses shall be paid to and held by the Trustee
in the Net Proceeds Account of the Construction Fund created under the
Indenture, whereupon the Lessee shall elect to proceed in accordance with
paragraphs (i) or (ii) hereof:
(i) The Lessee will proceed promptly to repair, rebuild or restore
the property damaged or destroyed to substantially the same condition as it
existed prior to the event causing such damage or destruction, with such
changes, alterations and modifications (including the substitution and
addition of other property) as may be desired by the Lessee and as will not
impair productive capacity or the character of the Special Facilities, and
the Trustee will apply so much as may be necessary of the Net Proceeds to
payment of the costs of such repair, rebuilding or restoration, either on
completion thereof or as the work progresses as directed by the Lessee. In
the event said Net Proceeds are not sufficient to pay in full the costs of
such repair, rebuilding or restoration, the Lessee will, nonetheless,
complete the work thereof and will pay that portion of the costs thereof in
excess of the amount of said Net Proceeds, or will advance to the Authority
the moneys necessary to complete said work, in which case the Authority
will proceed so to complete said work. Any balance of such Net Proceeds
remaining after payment of all the costs of such repair, rebuilding or
restoration shall be paid to the Lessee.
(ii) The Lessee shall: (A) cause the Special Facilities to be
returned to the Authority either in the condition the Special Facilities
then exist or in the same condition in which the Special Facilities existed
prior to the execution of this Agreement, whichever shall be acceptable to
the Authority; (B) transfer all amounts in the Net Proceeds Account in the
Construction Fund not used pursuant to clause (A) to the Bond Fund and
prepay all of the Special Facilities Rentals due pursuant to Section 502
hereof pursuant to the provisions of Section 1003 hereof and the
corresponding provisions of the Indenture and cause the Authority and the
Trustee to provide for the redemption of all
39
<PAGE>
Bonds then Outstanding under the Indenture in whole in accordance with the
provisions thereof; (C) if any Bonds have previously been redeemed or
provision for their payment has been made pursuant to Subsection 304(b) of
the Indenture, reimburse itself for such prepayment in an amount equal to
the amount that would have been necessary (on the date of receipt of such
Net Proceeds), to redeem or provide for the payment of such Bonds to the
next practicable redemption date, but not less than the actual amount paid
by the Lessee; and (D) apportion the remaining Net Proceeds between the
Authority and the Lessee, with the Authority receiving the same proportion
of the remaining Net Proceeds as the then expired portion of the term of
this Agreement bears to the full term plus ten (10) years and the Lessee
shall be entitled to the remainder of the Net Proceeds; provided, that if
the Lessee proceeds under this paragraph (ii) hereof, it shall provide for
the completion of the requirements of clauses (A) and (B) hereof, whether
or not the Net Proceeds are sufficient for such purposes. The Lessee may
elect to proceed pursuant to this option (ii) only if the Special
Facilities have been damaged or destroyed by fire or other casualty (x) to
such extent that, in the opinion of the Lessee expressed within a period of
six consecutive months following such damage or destruction, it is not
practicable or desirable to rebuild, repair or restore the Special
Facilities, or (y) to such extent that, in the opinion of the Lessee, the
Lessee is or will be thereby prevented from carrying on its normal
operations at the Special Facilities for a period of six consecutive
months.
Any moneys held by the Trustee in the Net Proceeds Account shall, at the
written direction of the Lessee, be invested or reinvested by the Trustee in
Investment Obligations permitted in accordance with the Indenture. The Lessee
shall forthwith pay to the Trustee the amount of any net losses with respect to
principal on such investments.
(b) If the Bonds have been fully paid (or provision for the payment thereof
has been made in accordance with the Indenture) and the Special Facilities are
destroyed (in whole or in part) or are damaged by fire or other casualty, all
Net Proceeds will be paid to NBD Bank, N.A., Indianapolis, Indiana or a mutually
acceptable third party, with any disbursements to be approved by the Lessee and
the Authority, and the Lessee shall elect to proceed in accordance with
paragraphs (i) or (ii) hereof:
(i) The Lessee will proceed promptly to repair, rebuild or restore the
property damaged or destroyed to substantially the same condition as it
existed prior to the event causing such damage or destruction, with such
changes, alterations and modifications (including the substitution and
addition of other property) as may be desired by the Lessee and as will not
impair productive capacity or the character of the Special Facilities, and
the Lessee will apply so much as may be necessary of the Net Proceeds to
payment of the costs of such repair, rebuilding or restoration, either on
completion thereof or as the work progresses as directed by the Lessee. In
the event the Net Proceeds are not sufficient to pay in full the costs of
such repair, rebuilding or restoration, the
40
<PAGE>
Lessee will, nonetheless, complete the work thereof and will pay that
portion of the costs thereof in excess of the amount of the Net Proceeds,
or will advance to the Authority the moneys necessary to complete said
work, in which case the Authority will proceed so to complete said work.
Any balance of the Net Proceeds remaining after payment of all the costs of
such repair, rebuilding or restoration shall be paid to the Lessee.
(ii) The Lessee will (A) cause the Special Facilities to be returned
to the Authority either in the condition the Special Facilities then exist
or in the same condition in which the Special Facilities existed prior to
the execution of this Agreement, whichever shall be acceptable to the
Authority, (B) if any Bonds have previously been redeemed or provision for
their payment has been made pursuant to Subsection 304(b) of the Indenture,
reimburse itself for such prepayment in an amount equal to the amount that
would have been necessary (on the date of receipt of such Net Proceeds) to
redeem or provide for the payment of such Bonds to the next practicable
redemption date, but not less than the actual amount paid by the Lessee and
(C) apportion the remaining Net Proceeds between the Authority and the
Lessee, with the Authority receiving the same proportion of such remaining
Net Proceeds as the then expired portion of the term of this Agreement
bears to the full term, plus ten (10) years, and the Lessee shall be
entitled to the remainder of the Net Proceeds.
(c) The Lessee shall not, by reason of the payment of the costs (whether by
direct payment thereof or advances to the Authority or Trustee therefor) of
replacing or repairing of any property damaged or destroyed in excess of the Net
Proceeds be entitled to any reimbursement from the Authority, the Trustee, or
the holders or owners of the Bonds, or any abatement or diminution of the rents
payable under Article V hereof.
(d) Within this Section 1101, "Net Proceeds" means the gross proceeds from
the insurance with respect to which that term is used remaining after payment of
all expenses (including attorneys expenses and any extraordinary fees and
expenses of the Trustee), incurred in the collection of such gross proceeds.
Section 1102. CONDEMNATION.
(a) In the event that title to, or the temporary use of, the Special
Facilities or the leasehold estate of the Lessee in the Special Facilities
created by this Agreement or any part of either thereof shall be taken under the
exercise of the power of eminent domain by any governmental body or by any
person, firm or corporation acting under governmental authority, in each case
other than the Authority, while any Bonds are Outstanding, the Lessee shall be
obligated to continue to pay the Special Facilities Rental and other amounts due
to the Trustee. Any Net Proceeds derived for the temporary use or condemnation
of the Special Facilities shall be paid to the Lessee. The Authority, the
Lessee and the Trustee will cause any other Net Proceeds received by them or any
of them from any award made in such eminent domain
41
<PAGE>
proceedings with respect to the Special Facilities, to be paid to and held by
the Trustee in the Net Proceeds Account, to be applied in one or more of the
following ways as shall be directed in writing by the Lessee:
(i) The restoration of the Special Facilities to substantially the
same condition as existed prior to the exercise of the said power of
eminent domain.
(ii) The acquisition, by construction or otherwise, by the Lessee of
other improvements suitable for the Lessee's operations (which improvements
shall be deemed a part of the Special Facilities and available for use and
occupancy by the Lessee without the payment of any rent other than the
Special Facilities Rental to the same extent as if such other improvements
were specifically described herein and demised hereby).
(iii) Redemption of any of the Bonds together with accrued interest
thereon to the date of redemption; provided, that no part of any such
condemnation award may be applied for such redemption, unless all of the
Bonds are to be redeemed or, in the event that less than all of the Bonds
are to be redeemed, the Lessee shall certify to the Authority and the
Trustee that (A) the property forming a part of the Special Facilities that
was taken by such condemnation proceedings is not essential to the Lessee's
use or occupancy of the Special Facilities, or (B) the Special Facilities
have been restored to a condition substantially equivalent to its condition
prior to the taking by such condemnation proceedings, or (C) improvements
have been acquired which are suitable for the Lessee's operations at the
Special Facilities as contemplated by the foregoing paragraph (ii) of this
Subsection 1102(a). The Lessee may elect to proceed pursuant to this
paragraph (iii) only if the Special Facilities have been condemned (x) to
such extent that, in the opinion of the Lessee expressed within a period of
six consecutive months following such condemnation it is not practicable or
desirable to rebuild, repair or restore the Special Facilities, or (y) to
such extent that, in the opinion of the Lessee, the Lessee is or will be
thereby prevented from carrying on its normal operations at the Special
Facilities for a period of six consecutive months.
(b) The Lessee shall direct the Authority and the Trustee in writing as to
which of the ways specified in this Section the Lessee elects to have the
condemnation award applied. Any balance of the Net Proceeds of the award in
such eminent domain proceedings in an amount necessary to redeem the then
Outstanding Bonds shall be paid into the Bond Fund. If the Bonds have been
fully paid (or provision for payment thereof has been made in accordance with
the provisions of the Indenture), all Net Proceeds will be apportioned between
the Authority and the Lessee, with the Authority receiving the same portion of
such proceeds as the then expired portion of the Agreement term bears to the
term of the Agreement, plus ten (10) years, and the Lessee receiving the
balance, provided, however, that if any Bonds have been previously redeemed or
provision for their payment has been made pursuant to Subsection 304(d) of the
Indenture, prior to any such apportionment the Lessee shall receive Net Proceeds
in an amount
42
<PAGE>
(determined on the date of the receipt of such Net Proceeds) that would have
been necessary to redeem such Bonds to the next practicable redemption date, but
not less than the actual amount paid by the Lessee.
(c) Any moneys held by the Trustee under the provisions of the preceding
paragraph shall, at the written request of the Lessee, be invested or reinvested
by the Trustee in Investment Obligations in accordance with the provisions of
the Indenture. The Lessee shall forthwith pay to the Trustee the amount of any
net losses with respect to principal on such investments.
(d) Within this Section 1102, "Net Proceeds" means the gross proceeds
derived from the condemnation award with respect to which that term is used
after payment of all expenses (including attorney's expenses and any
extraordinary expenses of the Trustee) incurred in connection with the
collection of such gross proceeds.
(e) The Authority shall cooperate fully with the Lessee in the handling and
conduct of any prospective or pending condemnation proceedings with respect to
the Special Facilities or any part thereof and will, to the extent it may
lawfully do so, permit the Lessee to litigate in any such proceedings in the
name and behalf of the Authority. In no event will the Authority voluntarily
settle, or consent to the settlement of, any prospective or pending condemnation
proceeding with respect to the Special Facilities or any part thereof without
the written consent of the Lessee.
Section 1103. DESTRUCTION OR CONDEMNATION OF EXCLUDED PERSONAL PROPERTY OR
LESSEE IMPROVEMENTS. The Lessee shall also be entitled to the net proceeds of
any insurance or condemnation award or portion thereof made for damages to or
takings of the Excluded Personal Property or any portion thereof, the Lessee
Improvements or any portion thereof, as well as any portion of the Leased
Premises that at one time was Lessee Improvements.
Section 1104. TAKING OR CONDEMNATION BY THE AUTHORITY. In the event the
Authority requires the Facilities for expansion, improvement, development of the
Airport or in the event the Authority exercises its right of condemnation or
eminent domain with respect to all or substantially all of the Facilities for
the purposes set forth in Section 801 hereof, the Authority reserves the right,
on six (6) months notice, to relocate or replace the Facilities in substantially
similar form at another comparable location on the Airport. The Authority shall
identify the comparable location by appending to this Agreement revised Exhibits
A and B and adjust the ground rental with respect thereto as provided in
Subsection 501(c) hereof. The new location shall constitute thereafter the Land
and the facilities or improvements located thereon shall constitute the
Facilities for purposes of this Agreement. The relocation of the Facilities
shall be at no cost to the Lessee and the new Facilities must be ready for
occupancy by the Lessee prior to the date of required relocation.
43
<PAGE>
If the Authority complies with the provisions of this Section, such remedies
shall be in lieu of any remedies the Lessee may have pursuant to law or equity
with respect to the actions taken by the Authority in condemning or relocating
the Facilities.
Section 1105. DESTRUCTION OR CONDEMNATION OF LEASED PREMISES OTHER THAN
SPECIAL FACILITIES OR FORMER LESSEE IMPROVEMENTS. The Lessee shall direct the
Authority to apply the net proceeds of any insurance or condemnation award
(other than condemnation by the Authority) or any portion thereof made for
damages or takings of Leased Premises (other than Special Facilities or former
Lessee Improvements) to restore such Leased Premises to substantially the same
condition as existed prior to such damage or condemnation or acquire, by
construction or otherwise, other improvements of similar character suitable for
the Lessee's operations. To the extent that such net proceeds are insufficient
to effect the foregoing, the Lessee shall: (i) pay all costs in excess of the
net proceeds required for such redemption; (ii) develop Plans and Specifications
which can accomplish such restoration with the net proceeds available therefor;
or (iii) terminate this Agreement with respect to those Leased Premises
condemned or destroyed, in which case, such net proceeds shall be retained by
the Authority. Any excess net proceeds shall be retained by the Authority.
44
<PAGE>
ARTICLE XII
ADDITIONAL BONDS
Section 1201. ADDITIONAL BONDS. If the Lessee is not in default hereunder,
the Authority will, on request of the Lessee, from time to time, use its best
efforts to issue pursuant to the Indenture the amount of Additional Bonds
specified by the Lessee to provide funds to pay or to reimburse the Lessee for
costs incurred by the Lessee for any one or more of the following: (a) the
costs of completing the Special Facilities, (b) the costs of the issuance and
sale of the Additional Bonds and other costs reasonably related to the financing
as shall be agreed upon by the Lessee and the Authority and (c) the refunding of
Outstanding Bonds; provided that:
(i) the terms of such Additional Bonds, the purchase price to be paid
therefor, and the manner in which the proceeds therefrom are to be
disbursed, shall have been approved in writing by the Lessee;
(ii) the Lessee and the Authority shall have entered into a
Supplemental Agreement to provide for additional rent in an amount at least
sufficient to pay principal of, interest, and premium, if any, on the
Additional Bonds when due;
(iii) the Authority shall have otherwise complied with the provisions
of the Indenture with respect to the issuance of such Additional Bonds; and
(iv) the Lessee shall provide to the Trustee an opinion of Bond Counsel
to the effect that the issuance of such Additional Bonds shall not
adversely affect the exemption from gross income for federal income tax
purposes of interest on the Outstanding Tax Exempt Bonds.
45
<PAGE>
ARTICLE XIII
TERMINATION OF AGREEMENT BY THE LESSEE
Section 1301. TERMINATION BY THE LESSEE. So long as no Bonds remain
Outstanding under the Indenture, the Lessee may terminate this Agreement and
terminate its obligations hereunder at any time that the Lessee is not in
default in the payment of ground rentals and other amounts payable to the
Authority hereunder by giving the Authority sixty (60) days advance written
notice to be served as hereinafter provided, and by surrender of the Leased
Premises, upon or after the happening of any one of the following events:
(a) The issuance by any court of competent jurisdiction of an injunction in
any way preventing or restraining the use of the Airport, so as to substantially
affect the Lessee's use of the system at the Airport, and the remaining in force
of such injunction for a period of at least ninety (90) days; provided, however,
that such injunction is not due solely to the Lessee's violation of this
Agreement.
(b) Failure by the Authority to observe and perform any covenant, condition
or agreement on its part to be observed or performed, for a period of sixty (60)
days after written notice to the Authority, specifying such failure and
requesting that it be remedied, given to the Authority by the Lessee, unless the
Lessee shall agree in writing to an extension of such time prior to its
expiration. If a failure under this Subsection is such that it cannot be
corrected within the applicable period, the Lessee shall not terminate this
Agreement if corrective action is instituted by the Authority within the
applicable period and diligently pursued until the failure is corrected.
(c) The assumption by the United States Government or any authorized agency
thereof of the operation, control, or use of the Airport or the Facilities, or
any substantial part or parts thereof, in a manner which substantially restricts
the Lessee for a period of at least ninety (90) days from full use of the
Facilities.
The provisions of this Section 1301 shall be subject to the provisions of
Section 1806 hereof.
46
<PAGE>
ARTICLE XIV
EVENTS OF DEFAULT
Section 1401. EVENTS OF DEFAULT. The following shall constitute Events of
Default:
(a) the failure to pay any installment of rent then due (with interest)
under Section 501 hereof within thirty (30) days after receipt by the Lessee of
written notice to pay such rent;
(b) the failure of the Lessee to pay any installment of Special Facilities
Rentals pursuant to Section 502 hereof when due;
(c) the filing by the Lessee of a voluntary petition in bankruptcy or the
making of an assignment of all or any part of the Lessee's assets for the
benefit of creditors;
(d) the adjudication of the Lessee as a bankrupt pursuant to any
involuntary bankruptcy proceedings;
(e) the taking of jurisdiction by a court of competent jurisdiction of the
Lessee or its assets pursuant to proceedings brought under the provisions of any
Federal reorganization act;
(f) the: (i) appointment of a receiver or a trustee of the Lessee's assets
by a court of competent jurisdiction or (ii) the filing of an involuntary
petition in bankruptcy and, in each case, the failure of the Lessee within
ninety (90) days to dismiss the same or reach a voluntary agreement with
Lessee's creditors;
(g) (i) failure by the Lessee to observe and perform any covenant,
condition or agreement on its part to be observed or performed pursuant to
Sections 201 or 611 hereof, or (ii) any violation of a Federal Aviation
Administration or United States Department of Transportation regulation that (A)
deprives the Authority of the use of or the power to operate all or a portion of
the Airport or (B) prevents the Authority from obtaining an airport development
grant in aid from the United States Government, where such occurrence set forth
in (i) or (ii) shall continue for a period of sixty (60) days after written
notice to the Lessee specifying such failure and requesting that it be remedied,
given to the Lessee by the Authority, unless the Authority shall agree in
writing to an extension of such time prior to its expiration. If a failure
under this Subsection is such that it cannot be corrected within the applicable
period, it shall not constitute an Event of Default if corrective action is
instituted by the Lessee within the applicable period and diligently pursued
until the failure is corrected; or
(h) (i) failure by the Lessee to observe and perform any covenant,
condition or agreement on its part to be observed or performed, other than as
referred to in Subsections (a) through (g) above, for a period of sixty (60)
days after written notice to the Lessee, specifying
47
<PAGE>
such failure and requesting that it be remedied, given to the Lessee by the
Authority, unless the Authority shall agree in writing to an extension of such
time prior to its expiration. If a failure under this Subsection is such that
it cannot be corrected within the applicable period, it shall not constitute an
Event of Default if corrective action is instituted by the Lessee within the
applicable period and diligently pursued until the failure is corrected, or (ii)
election of the Authority to declare an Event of Default as provided in
Subsection 605(e) hereof.
The provisions of Subsections (g) and (h) shall be subject to the provisions
of Section 1806 hereof.
Section 1402. REMEDIES OF THE TRUSTEE FOR CERTAIN EVENTS OF DEFAULT. Upon
the occurrence of any Event of Default described in Subsections 1401(b)-(f), the
Trustee may in its discretion and shall upon the direction of the Owners of at
least twenty-five percent (25%) of the principal amount of Bonds Outstanding,
join in or separately initiate whatever action at law or in equity as may appear
necessary or desirable to collect the Special Facilities Rentals due and owing
and any other amounts then due to the Trustee under this Agreement. No waiver
by the Authority of an Event of Default described in Subsections 1401 (b)-(f)
shall adversely affect the Trustee's rights under this Section 1402.
Section 1403. REMEDIES OF THE AUTHORITY ON DEFAULT.
(a) If any Event of Default shall have occurred, the Authority may, in its
own name and for its own account, without impairing the ability of the Authority
to pursue any other remedy provided for in this Agreement or now or hereafter
existing at law or in equity or by statute, institute such action against the
Lessee as may appear necessary or desirable to collect such rentals and any
other amounts then due under this Agreement, or to enforce performance and
observance of such covenant, condition or obligation of the Lessee hereunder, or
to recover damages for the Lessee's nonpayment, non-performance or
non-observance of the same.
(b) Upon the occurrence of any Event of Default described in Subsections
1401(a) or (c)-(g), the Authority may (i) by giving the Lessee written notice
upon the occurrence of any Event of Default described in Subsections 1401(a) and
(g) and without giving the Lessee notice upon the occurrence of an Event of
Default described in Subsections 1401(c)-(f), declare this Agreement to be
terminated, except for the Lessee's continuing obligation pursuant to Subsection
1404(a) hereof to make payments due hereunder, (ii) exclude the Lessee from
possession of the Leased Premises and reenter the same; and (iii) take whatever
action at law or in equity as may appear necessary or desirable to collect the
rentals and any other amounts then due, to enforce performance and observance of
any covenant, condition or obligation of the Lessee hereunder, or to recover
damages for the Lessee's non-payment, nonperformance or non-observance of the
same; provided that the Authority shall be required to mitigate its damages to
the extent required by law and Subsection 1404(b) hereof.
48
<PAGE>
(c) The Lessee shall pay all of the Authority's reasonable fees and
expenses, including reasonable attorneys' fees, in enforcing any covenant to be
observed by the Lessee or pursuing any remedy upon an Event of Default. Such
amounts shall for all purposes of this Agreement be considered additional rent
due under Section 501 hereof.
Section 1404. THE LESSEE TO REMAIN LIABLE FOR PAYMENTS; RELETTING.
(a) Notwithstanding the exercise by the Authority of its remedies pursuant
to Section 1403 hereof or the exercise by the Trustee of its remedies pursuant
to Section 1402 hereof or the Indenture, the Lessee shall continue to be liable
for the payment of all rentals payable under Article V hereof and other amounts
payable under this Agreement and the Lessee shall make such payments at the same
times and in the same manner as provided in this Agreement, except as provided
in Subsection 1404(b) hereof.
(b) Whether or not any Bonds are Outstanding, the Authority shall use
reasonable efforts to relet the Leased Premises for the maximum rental it may
reasonably obtain, provided, however, that the Authority shall have no
obligation to relet the Leased Premises to any person who will not use the
Leased Premises for aviation related purposes requiring airfield access. Any
such rentals received prior to the stated termination date of this Agreement
shall be applied first to the payment of expenses incurred by the Authority in
connection with such reletting, second, to the payment of the ground rent that
would have been due to the Authority had this Agreement not been terminated,
third to the Lessee in an amount equal to the sum of the principal amount of the
Bonds Outstanding on the date of such termination and the principal amount and
any premium paid on Bonds no longer Outstanding, and fourth to the Authority.
All such rentals paid to the Authority after the stated termination date of this
Agreement should be retained by the Authority.
Section 1405. DISPOSITION OF EXCLUDED PERSONAL PROPERTY. If there shall
remain any Excluded Personal Property upon the Authority's reentry of the Leased
Premises, the Authority may, but without any obligation to do so, remove such
property and hold it for the Lessee and the Lessee shall reimburse the Authority
for any expense incurred by the Authority in connection with such removal and
storage of such property. The Authority shall have the right to sell or rent
such Excluded Personal Property; provided that it shall give to the Lessee not
less than thirty (30) days' prior written notice that it intends to conduct such
a sale or rental. The proceeds of such sale or letting shall be applied first,
to the cost of such sale, second, to the payment of the charges for storage,
third, to the payment of any other amounts which may then be due from the Lessee
to the Authority under this Agreement, except Sections 502 hereof, fourth, so
long as any Bonds are Outstanding, to the payment, redemption, purchase in the
open market or defeasance of such Bonds, and the balance, if any, shall be paid
to the Lessee.
49
<PAGE>
Section 1406. NO REMEDY EXCLUSIVE. No remedy herein conferred upon the
Authority is intended to be exclusive of any other available remedy or remedies,
and each such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law or in
equity or by statute. No delay or omission to exercise any right or power
accruing upon any default granted under this Agreement shall impair any right or
power or shall be construed to be a waiver thereof, and any such right or power
may be exercised from time to time and as often as may be deemed expedient, and
the exercise of any one right or remedy shall not impair the right of the
Authority to any or all other remedies under this Agreement.
Section 1407. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER; CONSENTS TO
WAIVER. The waiver of either party of any breach by the other party of any
covenant, condition or obligation under this Agreement shall not operate as a
waiver of any subsequent breach of the same or a waiver of any breach of any
other covenant, condition or obligation under this Agreement, nor shall any
forbearance by the non-defaulting party not breaching to seek a remedy for any
breach by the other party be a waiver by such non-defaulting party not breaching
any of its rights and remedies with respect to such breach or any subsequent
breach of the same or with respect to any other breach.
Section 1408. SUSPENSION OF AGREEMENT. During the time of war or national
emergency, the Authority shall have the right to lease the landing area or any
part thereof to the United States Government for military use. If any such
lease is executed, any provisions of this instrument which are inconsistent with
the provisions of the lease to the Government shall be suspended; provided that
the term of this Agreement shall be extended by the amount of the period of
suspension; provided that such shall not affect the Lessee's obligations to pay
Special Facilities Rentals pursuant to Section 502 and provided that the
Authority obtains an opinion of Bond Counsel that such extension does not affect
the exemption from gross income of interest on the Series 1994 Bonds for federal
income tax purposes.
Section 1409. DELAY NOT A WAIVER. No delay or omission by the Authority of
the exercise of any right or power accruing upon any Event of Default shall
impair any such right or power or shall be construed to be a waiver of any such
Event of Default or any acquiescence therein, and every power or remedy given by
this Agreement to the Authority may be exercised from time to time and as often
as may be deemed expedient. The Authority may waive any Event of Default which
in its opinion has been remedied before the entry of final judgment or decree in
any suit, action or proceeding instituted by it under the provisions of this
Agreement or before the completion of the enforcement of any other remedies
under this Agreement. No such waiver shall extend to or affect any other
existing or subsequent Event of Default or impair any rights or remedies
consequent thereon.
50
<PAGE>
ARTICLE XV
DEFAULT BY THE AUTHORITY
Section 1501. DEFAULT BY THE AUTHORITY; REMEDIES OF THE LESSEE. The
Authority shall in no event be in default in the performance of any of its
obligations hereunder unless and until the Authority shall have failed to
perform such obligation within thirty (30) days, or such additional time as is
reasonably required in the opinion of the Lessee and the Trustee, to correct any
such default, after notice by the Lessee to the Authority and, so long as any of
the Bonds are outstanding, to the Trustee, properly specifying wherein the
Authority has failed to perform any such obligation; but, so long as any of the
Bonds are Outstanding, neither the occurrence nor existence of any default by
the Authority shall relieve the Lessee of any of its obligations hereunder,
including, without limitation, its obligation to pay Special Facilities Rentals
under Section 502 hereunder or to provide insurance under Sections 902 and 903
hereof; provided, however, the Lessee may institute such action against the
Authority as the Lessee may deem necessary to compel performance or recover its
damages for non-performance. The Lessee shall have the right, to the extent
permitted by law, to perform the obligations of the Authority hereunder if the
Authority does not so perform and any costs associated therewith and not
reimbursed by the Authority, shall be abated against the ground rental payable
under this Agreement. The Lessee shall have the right in addition to
instituting any such action, to terminate this Agreement upon sixty (60) days'
notice to the Authority and the Trustee, and upon payment to the Trustee of that
amount which, together with any monies available for that purpose under the
provisions of the Indenture, will be sufficient to pay or redeem, or provide for
such payment or redemption of, the Bonds then Outstanding on the first
practicable retirement or redemption date thereof, including principal, premium,
if any, and interest to the redemption date, this Agreement shall forthwith
cease and determine and the parties hereto shall be released and discharged of
and from all further obligations hereunder, without prejudice, however, to any
claim which may have accrued prior thereto in favor of either party against the
other.
51
<PAGE>
ARTICLE XVI
RIGHTS UPON TERMINATION
Section 1601. FIXED IMPROVEMENTS. It is the intent of this Agreement that
the Leased Premises shall be and remain the property of the Authority during the
entire term of this Agreement and thereafter.
Section 1602. EXCLUDED PERSONAL PROPERTY. Upon termination of this
Agreement, the Lessee shall remove all Excluded Personal Property from the
Leased Premises within thirty (30) days (or such longer period as shall be
reasonably necessary) after the effective date of the termination and make all
necessary or appropriate repairs to the Leased Premises resulting from such
removal so as to restore the Leased Premises to proper operating condition,
ordinary wear and tear and damage by casualty or condemnation excepted. If the
Lessee fails to remove all or any portion of the Excluded Personal Property, the
Authority may thereafter elect to remove the Excluded Personal Property (or any
part thereof) at the Lessee's expense or elect to deem such Excluded Personal
Property or any part thereof as abandoned by the Lessee to the Authority.
52
<PAGE>
ARTICLE XVII
ASSIGNMENT AND SUBLETTING
Section 1701. SUCCESSORS AND ASSIGNMENTS. Except as provided in Section
611 hereof, but subject to the provisions of Section 1703 hereof, the Lessee
shall not assign this Agreement or any part thereof in any manner whatsoever or
assign any of the privileges recited herein without the prior written consent of
the Authority. Such consent shall not be unreasonably withheld, having in mind
the particular requirements of the Authority in maintaining its public service
air transportation facilities. No such consent shall be granted unless the
Leased Premises shall be continued to be used for aviation related purposes
requiring airfield access. In the event of such assignment, the Lessee shall
remain liable to the Authority for the remainder of the term of the Agreement to
pay to the Authority or the Trustee the rentals provided for in Sections 501 and
502 hereof and to otherwise comply with the provisions of the Agreement for the
term of this Agreement and the Lessee's assignee shall agree to comply with the
applicable provisions of this Agreement. Said assignee shall not further assign
its interest in this Agreement except with the prior written approval of the
Authority and the Lessee; and any assignment by the Lessee shall contain a
clause to this effect. Any assignment in violation of this Section 1701 shall
be void.
Section 1702. SUBLETTING. Except as otherwise provided herein, but subject
to the provisions of Section 1703 hereof, the Lessee shall not sublease or
permit any part of the Leased Premises to be occupied by others without the
prior written consent of the Authority. No such consent shall be granted unless
the Leased Premises shall be continued to be used for aviation related purposes
requiring airfield access. Such consent shall not be unreasonably withheld,
having in mind the particular requirements of the Authority in maintaining its
public service air transportation facilities. In the event of such sublease,
the Lessee shall remain liable to the Authority and the Trustee for the
remainder of the term of this Agreement to pay to the Authority and the Trustee
the rentals provided for in Section 501 and 502 hereof and to otherwise comply
with the provisions of this Agreement for the term of this Agreement and the
sublessee shall agree to comply with the applicable provisions of this
Agreement. Said sublessee shall not further sublease its interest in this
Agreement except with the prior written approval of the Authority and the
Lessee; and any sublease shall contain a clause to this effect. Any subletting
in violation of this Section 1702 shall be void.
Section 1703. OPINION OF BOND COUNSEL REQUIRED. No assignment of this
Agreement or sublease of the Special Facilities will be effective unless, in the
opinion of Bond Counsel delivered to the Trustee, such assignment or sublease
will not adversely affect the exclusion from gross income for federal income tax
purposes of the interest on any Tax Exempt Bonds received by any Owner.
53
<PAGE>
ARTICLE XVIII
GENERAL PROVISIONS
Section 1801. NON-INTERFERENCE WITH OPERATION OF AIRPORT. The Lessee, by
accepting this Agreement, expressly agrees for itself and its successors and
assigns that it will not make use of the Leased Premises in any manner which
might interfere with the landing and taking off of aircraft at the Airport or
otherwise constitute a hazard. In the event the aforesaid covenant is breached,
the Authority reserves the right to enter upon the Leased Premises and cause the
abatement of such interference at the expense of the Lessee.
The Authority shall maintain and keep in repair the Airport landing areas,
including taxiways and aircraft parking apron located outside the Leased
Premises and shall have the right to direct and control all activities of the
Lessee in this regard.
Section 1802. ATTORNEY'S FEES. In any action brought by any party to this
Agreement or the Trustee for the enforcement of the provisions hereof, the
prevailing party shall be entitled to recover interest and its reasonable
attorney's fees.
Section 1803. TAXES. The Lessee shall pay any property taxes which may be
assessed against equipment, merchandise, or other personal property included in
or located on the Land or other permitted portions of the Airport, including
without limitation the Excluded Personal Property. The Land and Special
Facilities are owned by the Authority and are exempt from ad valorem taxes.
The parties recognize that the proposed use of the Land and Special Facilities
is reasonably necessary to carry out the public purpose of the Authority as
defined by the Act and that as such the leasehold interest of the Lessee of the
Land and Special Facilities is exempt from taxation. The value of such
exemption was considered in establishing the rental rates. In the event an ad
valorem tax shall be levied on the leasehold interest of the Lessee in the Land
and paid by the Lessee such payment shall be a credit against the ground rent
due under Section 501 hereof. This credit shall be allowed only if the Lessee
shall promptly forward to the Authority all notices and demands pertaining to
such a tax levy and cooperate with the Authority and its attorneys in defense.
Such cooperation shall include the execution of all documents, giving
depositions and testimony and court appearances, including appeals. Litigation
expenses of the Lessee shall not be a rent credit.
Section 1804. LICENSE FEES AND PERMIT. The Lessee shall obtain and pay for
all licenses, permits, fees or other authorization or charges as required under
federal, State or local laws and regulations insofar as they are necessary to
comply with the requirements of this Agreement and the privileges extended
hereunder.
Section 1805. AMENDMENTS TO THIS AGREEMENT. If at any time that Bonds are
then Outstanding (including if provisions have been made for the payment thereof
in accordance with
54
<PAGE>
the provisions of the Indenture), and the Lessee and the Authority shall wish to
amend, modify, change, alter or terminate this Agreement by execution of a
Supplemental Agreement, and pursuant to Article XII of the Indenture the consent
of the Trustee to such Supplemental Agreement is necessary, such alteration,
amendment, change, modification or termination shall become effective only upon
the prior written consent of the Trustee obtained in accordance with the
provisions of Article XII of the Indenture. The Lessee and the Authority
specifically reserve the right to execute a Supplemental Agreement, without the
consent of the Trustee, (i) to provide for additional rental payments to secure
future obligations undertaken by the Authority on behalf of the Lessee, provided
that such additional payments shall be payable on a parity basis or subordinate
to the Special Facilities Rental, or (ii) to exclude certain Land from the
Leased Premises, provided that, giving effect to such exclusion, the operating
utility or productive capacity of the remaining Leased Premises is not
materially less than the operating utility or productive capacity of the Leased
Premises prior to such exclusion.
Section 1806. FORCE MAJEURE. Neither the Authority nor the Lessee shall be
deemed to be in breach of this Agreement and no default shall arise hereunder by
reason of failure to perform any of its obligations hereunder, if, while, and to
the extent that such failure is due to strikes, boycotts, labor disputes,
embargoes, shortages of materials, acts of God, acts of the public enemy, acts
of superior governmental authority, weather conditions, floods, riots,
rebellion, sabotage, or any other circumstances for which it is not responsible,
and which are not within its control. This provision shall not apply to
failures by the Lessee to pay rents, fees, or other charges, or to make any
other money payments required by this Agreement. This provision shall not
prevent the Authority from exercising its rights upon the occurrence of an Event
of Default described in Subsections 1401(a)-(f) hereof.
Section 1807. REFERENCES TO BONDS, TRUSTEE AND THE INDENTURE INEFFECTIVE
WHEN BONDS ARE NO LONGER OUTSTANDING. From and after such time as there are no
longer any Bonds Outstanding, and all fees and charges of the Trustee and any
paying agents for the Bonds have been paid or provided for, to their respective
satisfaction, all references in this Agreement to the Bonds, the Trustee and the
Indenture shall be ineffective and neither the Trustee nor the Owners of any of
the Bonds shall thereafter have any rights hereunder, saving and excepting those
that shall have theretofore vested.
Section 1808. MODIFICATIONS HEREOF AND OF INDENTURE; INDENTURE SUBORDINATE
TO AGREEMENT. So long as an Event of Default shall not have occurred and be
continuing hereunder, the Authority will not, without the written consent of the
Lessee, agree with the Trustee to effectively amend, supplement, change, modify
or alter the Indenture in any manner. The Lessee shall provide the Trustee with
an executed copy of any instrument altering, amending, modifying, or rescinding
this Agreement. So long as no Event of Default has occurred hereunder, the
Indenture shall be subordinate in all respects to the provisions of this
Agreement.
55
<PAGE>
Section 1809. PARAGRAPH HEADINGS. The paragraph headings contained herein
are for convenience in reference and are not intended to define or limit the
scope of any provision of this Agreement.
Section 1810. INTERPRETATIONS. This Agreement shall be interpreted in
accordance with the laws of the State.
Section 1811. NOTICES. Whenever any notice or payment is required by this
Agreement to be made, given or transmitted to the parties hereto, such notice or
payment shall be enclosed in an envelope with sufficient postage attached to
insure delivery and deposited in the United States Mail or Federal Express
Priority Overnight delivery, addressed to the Authority:
Airport Director
Indianapolis Airport Authority
Indianapolis International Airport
Box 100
2500 S. High School Road
Indianapolis, Indiana 46241
to the Lessee to:
Vice President - Property and Facilities
Federal Express Corporation
2003 Corporate Avenue
Memphis, Tennessee 38132
to the Trustee to:
NBD Bank, N.A.
One Indiana Square
Indianapolis, Indiana 46266
Attn: Corporate Trust Department
or such places as either party shall by written directive designate in the
manner herein provided.
Section 1812. PARTY'S CONSENT. Whenever any provision of this Agreement
requires the approval, consent or exercise of discretion of any party to this
Agreement, such action shall not be unreasonably withheld, conditioned, delayed
or exercised.
Section 1813. RESTORATION OF EXISTING FACILITY. Upon the expiration or
earlier termination of either this Agreement or the Amended and Restated Lease
(the "Existing Lease"), dated August 20, 1993, between the Lessee and the
Authority, at the direction of the Authority,
56
<PAGE>
the Lessee shall make such changes to the buildings, structures and improvements
located on the premises described in the Existing Lease and to any of the
Facilities as shall be necessary for the Authority to occupy or lease the
premises of the Existing Lease or the Leased Premises as the case may be,
separate from any remaining property leased to the Lessee under either the
Existing Lease or this Agreement whichever shall not then be terminating. The
provisions of this Section 1813 shall not apply if the Lessee and the Authority
enter into a new lease providing for the letting of the facilities described in
the terminating Existing Lease or this Agreement whichever shall not then be
terminating.
Section 1814. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
57
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the date first above mentioned at Indianapolis, Indiana.
INDIANAPOLIS AIRPORT AUTHORITY
By: /s/MICHAEL W. WELLS
Michael W. Wells, President
By: /s/ GORDON ST. ANGELO
Gordon St. Angelo, Vice President
By: /s/ BETTY J. JOHNSON
Betty J. Johnson, Secretary
By: /s/ LAWRENCE A. O'CONNOR, JR.
Lawrence A. O'Connor, Jr.
By: /s/ MURVIN S. ENDERS
Murvin S. Enders
FEDERAL EXPRESS CORPORATION
By: /s/GILBERT MOOK
Title: Vice President Properties and Facilities
Date of Execution: 10-26-94
This instrument prepared by Philip C. Genetos, Esq., Ice Miller Donadio &
Ryan, One American Square, Box 82001, Indianapolis, Indiana 46282-0002.
58
<PAGE>
EXHIBIT A
Property Description
PARKING LAND
A part of the Southeast quarter of Section 26, Township 15 North, Range 2
East, Decatur Township, Marion County, Indiana, described as follows:
Commencing at a bronze disk found at the Northeast corner of the Southeast
quarter of said Section 26; thence South 00 degrees 04 minutes 04 seconds East
(all bearings are based on the Indiana State Plane Coordinate system, East Zone
(NAD83)) along the East line of said Southeast quarter 1338.76 feet to the
Southeast corner of the North half of said Southeast quarter; thence South 89
degrees 09 minutes 40 seconds West along the South line of said North half,
320.01 feet to the Point of Beginning; thence continuing along said South line,
South 89 degrees 09 minutes 40 seconds West 1002.51 feet to the Southwest corner
of the Northeast quarter of the Southeast quarter of Section 26; thence South 89
degrees 09 minutes 40 seconds West along the South line of the Northwest quarter
of the Southeast Quarter of Section 26, 104.00 feet; thence South 00 degrees 17
minutes 09 seconds East 516.09 feet; thence South 89 degrees 08 minutes 35
seconds West 93.42 feet; thence South 00 degrees 49 minutes 43 seconds East
83.11 feet; thence South 89 degrees 09 minutes 40 seconds West 665.24 feet;
thence North 00 degrees 50 minutes 20 seconds West 1220.21 feet; thence North 89
degrees 09 minutes 40 seconds East 2138.52 feet to the West line of High School
Road; thence South 00 degrees 04 minutes 04 seconds East along said West line
487.45 feet; thence South 89 degrees 09 minutes 40 seconds West 260.00 feet;
thence South 00 degrees 04 minutes 04 seconds East 133.60 feet to the Point of
Beginning. Containing 39.91785 acres, or 1,738,822 square feet, of land, more
or less.
[This portion of the page intentionally left blank]
A - 1
<PAGE>
PRIMARY LAND
A part of Section 26, Township 15 North, Range 2 East, Decatur Township,
Marion County, Indiana, described as follows:
Commencing at a bronze disk found at the Southeast corner of the Northeast
quarter of said Section 26; thence North 00 degrees 11 minutes 02 seconds West
(all bearings are based on the Indiana State Plane Coordinate system, East Zone
(NAD83)) along the East line of said Northeast quarter 384.43 feet to the Point
of Beginning; thence South 83 degrees 26 minutes 05 seconds West 1347.35 feet;
thence South 63 degrees 52 minutes 43 seconds West 381.02 feet; thence South 55
degrees 41 minutes 47 seconds West 65.22 feet; thence South 07 degrees 35
minutes 44 seconds East 342.34 feet; thence South 82 degrees 22 minutes 11
seconds West 647.59 feet to the beginning of a curve concave southerly having a
central angle of 28 degrees 03 minutes 52 seconds, a radius of 1986.84 feet and
whose chord bears South 68 degrees 20 minutes 42 seconds West 963.49 feet;
thence westerly along said curve to the left an arc distance of 973.19 feet;
thence North 37 degrees 16 minutes 18 seconds West 80.20 feet; thence South 52
degrees 59 minutes 41 seconds West 163.02 feet; thence South 37 degrees 16
minutes 18 seconds East 80.20 feet; thence South 52 degrees 43 minutes 42
seconds West 1421.56 feet; thence North 45 degrees 03 minutes 18 seconds West
1038.57 feet; thence North 44 degrees 56 minutes 42 seconds East 2638.12 feet;
thence North 64 degrees 58 minutes 06 seconds East 364.41 feet; thence North 44
degrees 56 minutes 42 seconds East 261.80 feet; thence South 45 degrees 03
minutes 18 seconds East 535.34 feet; thence North 44 degrees 56 minutes 42
seconds East 321.00 feet; thence South 45 degrees 03 minutes 18 seconds East
300.82 feet; thence North 44 degrees 56 minutes 42 seconds East 494.35 feet;
thence South 45 degrees 03 minutes 18 seconds East 673.93 feet; thence North 44
degrees 56 minutes 42 seconds East 1234.77 feet; thence South 45 degrees 03
minutes 18 seconds East 458.28 feet; thence South 00 degrees 11 minutes 02
seconds East 902.48 feet to the Point of Beginning. Containing 145.84 acres, or
6,352,790 square feet, of land, more or less.
[This portion of page intentionally left blank]
A - 2
<PAGE>
PARKING OPTION LAND
A part of the Southwest Quarter of Section 26 and part of the Southeast
Quarter of Section 26, Township 15 North, Range 2 East, Decatur Township, Marion
County, Indiana described as follows:
Commencing at the Southeast Corner of the Southwest Quarter of Section 26,
Township 15 North, Range 2 East; thence North 00 degrees 30 minutes 14 seconds
West (all bearings are based on the Indiana State Plane Coordinate system, East
Zone (NAD83)) 670.29 feet along the East Line of said Southwest Quarter to the
Southeast Corner of the North Half of the South Half of said Southwest Quarter
and the POINT OF BEGINNING of this description; thence South 89 degrees 29
minutes 26 seconds West along the South Line of the North Half of the South Half
of said Southwest Quarter, 660.00 feet; thence South 00 degrees 30 minutes 15
seconds East to the South line of said Section 26 a distance of 669.03 feet;
thence South 89 degrees 35 minutes 59 seconds West along said South line 1051.51
feet; thence North 00 degrees 36 minutes 21 seconds West 15.00 feet; thence
South 89 degrees 35 minutes 59 seconds West 102.72 feet to a corner of the
right-of- way created with the Interstate 70 right-of-way plans; thence the
following four courses with said right-of-way for Interstate 70: (1) North 79
degrees 05 minutes 19 seconds West 101.97 feet; (2) North 84 degrees 22 minutes
54 seconds West 583.66 feet; (3) North 52 degrees 44 minutes 11 seconds East
2447.30 feet to the beginning of a curve to the right having a central angle of
28 degrees 22 minutes 03 seconds, a radius of 2176.83 feet, and whose chord
bears North 66 degrees 55 minutes 12 seconds East 1066.79 feet; (4) thence
northeasterly 1077.77 feet along said curve; thence South 00 degrees 50 minutes
20 seconds East 1230.84 feet; thence North 89 degrees 09 minutes 40 seconds East
665.24 feet to the western line of a 2.349 acre tract of land described in
instrument #90 93290 in the office of the Recorder of Marion County, Indiana,
the next two courses are along the boundary of said 2.349 acre tract of land;
(1) South 00 degrees 49 minutes 43 seconds East 441.88 feet; (2) thence North 89
degrees 08 minutes 35 seconds East 192.46 feet to the southeastern corner of
said 2.349 acre tract of land on the East Line of the West Half of said
Southeast Quarter which is along the southwestern corner of a 6.092 acre tract
of land described in instrument #90 120938 in said Recorder's office; thence
North 89 degrees 08 minutes 35 seconds East 505.46 feet along the southern
boundary of said 6.092 acre tract of land to its southeastern corner on the
western line of the 80-foot wide ingress and egress easement described in an
INGRESS AND EGRESS EASEMENT AGREEMENT recorded as instrument #92 106542 in said
Recorder's office; thence South 00 degrees 17 minutes 09 seconds East 298.38
feet to the South Line of said Southeast Quarter; thence South 89 degrees 07
minutes 09 seconds West 1822.89 feet along the South Line of said Southeast
Quarter to the Southeast Corner of the Southwest Quarter of Section 26; thence
North 00 degrees 30 minutes 14 seconds West 220.00 parallel with the West Line
of said Southeast Quarter; thence North 89 degrees 07 minutes 09 seconds East
203.00 feet parallel with the South Line of said Southeast Quarter; thence North
00 degrees 30 minutes 14 seconds West 102.00 feet parallel with the West Line of
said Southeast Quarter; thence South 89 degrees 07 minutes 09 seconds West
203.00 feet parallel with the South Line of said Southeast Quarter to the West
Line of said Southeast Quarter
A - 3
<PAGE>
and the East Line of said Southwest Quarter; thence North 00 degrees 30 minutes
14 seconds West 348.29 feet along the East Line of said Southwest Quarter to the
Point of Beginning. Containing 83.22238 acres, or 3,625,167 square feet, of
land, more or less.
[This portion of the page intentionally left blank]
A - 4
<PAGE>
EXHIBIT B
Special Facilities
The Special Facilities, which will be financed from the proceeds of the
sale of the Series 1994 Bonds, will consist of an automated sort system, five
buildings, an aircraft ramp with underground utility services, fueling/glycol
distribution systems, an employee parking lot, equipment staging area and an
expansion of the Company's existing facilities at the Airport and may include
other structures, improvements and equipment permitted by the Act and the Code.
B - 1
<PAGE>
EXHIBIT C
INSURANCE FORM
(Requirements)
- --------------------------------------------------------------------------------
DESCRIPTIVE SCHEDULE
- --------------------------------------------------------------------------------
LIMITS OF LIABILITY
KIND OF INSURANCE OF NOT LESS THAN
----------------- ----------------
------------------------------------------------------------
Aircraft Liability: $120,000,000
Single Limit (PL, PD & PASS)
------------------------------------------------------------
Public Liability: $120,000,000
Single Limit (Bodily Injury,
Death, Property Damage)
- Premises/Operations
- Contractual Liability
- Independent Contractors
- Products/Completed Operations
- Personal Injury
------------------------------------------------------------
Automobile $2,000,000
------------------------------------------------------------
Workers Compensation As required by law
C - 1
<PAGE>
EXHIBIT D
Minimum Standards for
Installation of Aircraft Fueling System
D - 1
<PAGE>
Indianapolis
International
Airport
Minimum Standards
for Installation of
Aircraft Fueling Systems
Indianapolis Airport Authority
January, 1992
HNTB
HOWARD NEEDLES TAMMEN & BERGENDOFF
ARCHITECTS ENGINEERS PLANNERS
<PAGE>
MINIMUM STANDARDS FOR INSTALLATION
OF AIRCRAFT FUELING SYSTEMS
INDIANAPOLIS INTERNATIONAL AIRPORT
Prepared for:
INDIANAPOLIS AIRPORT AUTHORITY
<PAGE>
TABLE OF CONTENTS
PAGE
I. INTENT 1
II. REGULATORY REQUIREMENTS 2
III. STORAGE 3
IV. MATERIALS 5
V. SPILL MANAGEMENT 5
Vl. LEAKING MONITORING 7
VII. SAFETY 7
VIII. OPERATIONS PLANS 9
IX. REVIEW PROCESS 9
X. PUBLIC APPROVALS 15
XI. CONSTRUCTION 15
XII. PERIODIC INSPECTIONS 16
XIII. INSURANCE 17
<PAGE>
TABLE OF CONTENTS
(continued)
I. APPENDIX A INSTALLATION OF UNDERGROUND STORAGE
TANKS AND PIPING
II. APPENDIX B STRUCTURAL AND IMPROVEMENT LOCATION
PERMIT APPLICATION
III. APPENDIX C APPLICATION FOR WORK PERMIT
IV. APPENDIX D METROPOLITAN PLAN COMMISSION ORDINANCE
V. APPENDIX E RESOLUTION NO. 9-1990
<PAGE>
I. INTENT
A. Introductory
These standards implement the Indianapolis Airport Authority
Fuel and Hazardous Liquid Policy adopted by the Board of
Directors as Resolution No 9-1990 on June 20, 1990. The
standards stated are minimum standards.
These standards are to be followed in the design and
installation of new aircraft fueling facilities. If conflicting
requirements are set forth by applicable codes or regulations,
the most stringent requirements shall apply.
It is important that design of facilities be entrusted to those
engineers with a thorough knowledge of the handling of
hydrocarbon fuels and the specific requirements of aircraft
refueling.
B. Storage Location
Location of fuel storage facilities requires careful
consideration. Factors to be taken into consideration shall
include safety, flight patterns, ground movements of aircraft
traffic, accessibility of roads, location of storm and sanitary
sewers, proximity of fire protection, proximity of property
lines and buildings, geotechnical information, future expansion
of the airport, and aesthetics.
<PAGE>
C. Environment
The design of the fuel facilities will be controlled by the
effects on the environment, such as air, water, or soil.
Protection shall be provided to meet applicable codes and
standards including need for vapor balance and oil\water
separators where applicable.
-2-
<PAGE>
II. REGULATORY REQUIREMENTS
A. All standards shall be the latest edition.
B. Installation shall meet the requirements of FAA Advisory
Circular 150/5230-4. Aircraft Fuel Storage/Handling and
Dispensing on Airports.
C. Installation shall meet the requirements of the following NFPA
requirements:
NFPA 407 Standard for Aircraft Servicing
NFPA 30 Flammable and Combustible Liquids Code
NFPA 70 National Electric Code
NFPA 78 Lighting Protection Code
NFPA 77 Static Electricity
NFPA 415 Aircraft Fueling Ramp Drainage
D. Installation shall meet the requirements of the Indiana
Flammable Liquids Code 675, IAC 22-2.
E. Installation shall meet the requirements of 40 CFR 280 and 281
stated in "Underground Storage Tanks - Environmental Protection
Agency Regulations."
F. Installation shall meet the requirements of 150/5320-5B "Airport
Drainage" for spill containment design.
G. Installation of above ground tanks shall meet the requirements
of 40 CFR 112 "Oil Pollution Prevention - Environmental
Protection Agency Regulations."
-3-
<PAGE>
H. lnstallation shall meet the requirements of the following
bulletins published by the American Petroleum Institute.
Bulletin 650 Welded Steel Tanks for Oil Storage
Bulletin 1500 Storage and Handling of Aviation Fuel
at Airports
Bulletin 1523 Fueling Turbine-Powered Aircraft
Bulletin 1542 Aircraft Equipment, Marking for Fuel
Identification
Bulletin 1581 Specification and Qualifications
Procedures for Aviation Jet Fuel Filter
Separators
Bulletin 1800 Corrosion Control
Bulletin RP2003 Recommend Practice for Protection
Against Ignitions Arising Out of
Static, Lightning, and Stray Currents
I. Installation shall meet the design guidelines stated in
"Development Guidelines for Airside and Corporate Village,"
published by the Indianapolis Airport Authority.
-4-
<PAGE>
III. STORAGE
A. General
1. All fuel shall be stored in aboveground tanks.
2. The use of underground storage tanks will only be permitted
if extenuating circumstances prohibit the use of aboveground
tanks. Special permission of the Indianapolis Airport
Authority must be obtained. If approval is granted, the
installation must comply with the requirements indicated in
Appendix A.
3. Location of unloading facilities for the delivery of fuel to
the storage tanks shall be so arranged that the delivery tank
truck does not enter the secure area of the airport. Under
no circumstances will unauthorized vehicles or personnel be
allowed on the airport grounds.
B. Tank Capacities
1. Fuel shall be stored in tanks with a maximum capacity of
20,000 gallons in any one tank.
2. Where the aggregate fuel storage capacity for any lessee at
a location exceeds 100,000 gallons, the concept shall be
reviewed and approved by the Indianapolis Airport Authority
prior to beginning design.
-5-
<PAGE>
C. Tank Capacities
1. All above ground tanks for the storage of fuel shall be
constructed of steel, in accordance with the requirement of
U.L. 142 for horizontal tanks or APl 650 for vertical tanks.
2. Tanks shall have constructed around and under them a
secondary containment system. If dikes are used, they shall
conform to NFPA 30. The secondary containment system
including the area under the tanks shall be impervious to the
fuels stored. In addition, any part of tanks that rest on or
in the soil shall be coated and cathodically protected for a
minimum or 30 years life. The cathodic protection design,
installation and tests shall be supervised by corrosion
professionals.
-6-
<PAGE>
IV. MATERIALS
A. Piping
1. All piping shall be located aboveground, or located
underground in double wall containment piping with an
approved leak detection system.
2. All piping shall be designed for the maximum pressures that
can be encountered and be compatible with materials used.
3. All piping shall be designed to withstand physical abuse and
fire.
4. All piping shall be capable of withstanding ultraviolet
radiation.
B. Miscellaneous Materials
1. All materials shall be designed for the handling of fuels.
2. All materials shall bear the seal of a recognized national testing
organization.
-7-
<PAGE>
V. SPILL MANAGEMENT
A. Spill Prevention
1. All fueling systems shall have safety devices to prevent the
accidental discharge of fuel.
2. Systems shall incorporate dead man controls into the normal
operation of the fueling system.
B. Spill Containment
1. Area around the tank truck unloading shall be diked and/or
sloped to contain any leakage.
2. Area around filters, pumps, etc. that have a tendency to leak
or that require periodic maintenance where fuel can discharge
from the system shall be diked and/or sloped to contain any
leakage.
3. Stormwater `from areas where containment is required shall be
directed to an oil/water separator where any oil or
hydrocarbons in the stormwater shall be separated and
contained.
4. Capacity of containment vessel shall be adequate to hold the
largest volume of a tank truck that is used to deliver fuel
to the site and/or used at the site.
5. Alarms shall be provided to indicate that a spill has
occurred and that the containment vessel can no longer accept
the full volume of an additional accidental discharge.
-8-
<PAGE>
C. Overflow Control
1. Alarms shall be provided on each storage tank to indicate
when the tank is filled to 90% and 95% of capacity as
required by regulations.
2. A separate alarm and control shall be provided on each
storage tank to stop the filling operation and isolate the
storage tank prior to the tank being filled beyond its
capacity.
3. A report of any accidental discharge of fuel shall be sent to
the Indianapolis Airport Authority within 24 hours of the
spill. Report shall indicate the amount of the spill, the
cause of the spill, and what corrective action has been
taken.
-9-
<PAGE>
VI. LEAK MONITORING
A. A weekly visual inspection shall be made by the lessee's qualified
personnel to detect the presence of any accidental discharge from
the system.
B. Lessee shall report to the Indianapolis Airport Authority in
writing within 24 hours whenever any leaks have been detected, the
cause of the leak and the action taken.
C. An alarm system shall be operable twenty-four hours a day with
indication in the lessee's facility with visual indication to the
Indianapolis Airport Authority police and fire dispatch.
-10-
<PAGE>
VII. SAFETY
A. Fire Protection
1. Aircraft fueling systems shall be located so as not to
endanger building and public access in the event of a fire.
2. Water/foam spray monitors shall be provided for all storage
tank installations where tanks are located within 50 feet of
the property line or 100 feet of an important building or a
property line that can be built on.
3. Provisions shall be made for adequate access to water
supplies for use in fire fighting.
4. Fire extinguishers shall be provided at all dispensing and
unloading stations.
5. Static electricity control on delivery systems and equipment
shall meet the requirements of U.L.
B. Inspection
1. Final inspection by the Indiana Fire Prevention and Building
Safety shall be made prior to any fuel being placed in the
system.
2. The Indianapolis Airport Authority shall inspect and approve
the installation prior to any fuel being placed in the
system.
3. Written documentation of all required approvals shall be
submitted to the Indianapolis Airport Authority.
-11-
<PAGE>
C. Testing
1. All tanks shall be pressure tested in accordance with the
appropriate codes and regulations.
2. All piping shall be pressure tested in accordance with the
appropriate codes and regulations.
3. All electrical equipment shall be U.L. listed.
4. Copies of all test reports shall be submitted to the
Indianapolis Airport Authority.
5. All containment piping and vessels shall be pressure tested
after installation in accordance with the manufacturer's
recommendations but at a pressure of not less than 1.5 times
the design pressure.
D. Miscellaneous Requirements
1. Area lighting shall be provided for the safe operation of the
system at night.
2. Provisions shall be made for disposal of samples, waste fuel
or recoverable fuel in compliance with applicable
regulations.
3. Where aboveground tanks and/or piping can be isolated,
adequate provisions shall be made to relive the pressure
developed due to temperature variations within the system. If
pressure relief valves are used, they shall discharge to a
containment area.
-12-
<PAGE>
VIII. OPERATION PLANS
A. A spill prevention control and countermeasure (SPCC) plan shall be
prepared in accordance with Federal Regulations before the
facility is in operation with a copy of the plan provided to the
Indianapolis Airport Authority two months prior to operation.
B. A Standard Operating Procedure (SOP) shall be provided for use by
fuel handling personnel. This shall be prepared following
guidelines in FAA AC150/5230-4 paragraphs 16 and 17. A copy of
this shall be provided to the Indianapolis Airport Authority one
month prior to the facility being in operation.
-13-
<PAGE>
IX. REVIEW PROCESS
Approvals Mandatory
Signed plan approval by the Indianapolis Airport Authority is required
prior to the undertaking of any site improvements, construction or
installation, including clearing, grading, paving, signs, structures,
landscaping, building additions or alterations and subdivisions.
Review should also be coordinated with state and local agencies to
include the Indiana Department of Fire and Building Services and the
Indianapolis Department of Metropolitan Development.
Following is the step-by-step process required by the Indianapolis
Airport Authority for obtaining approvals for any new building project:
A. Obtain a Lease Agreement with the Indianapolis Airport Authority.
B. Application for the Indianapolis Airport Authority Improvement
Location Permit. See Appendix B.
C. Schematic/preliminary review and approval of project by the
Indianapolis Airport Authority.
D. Final approval by Airport Authority Board of final plans and
specifications.
E. Submittal and approval of building project construction documents
and Marion County review process.
-14-
<PAGE>
F. Issuance of Work Permit by the Indianapolis Airport Authority.
See Appendix C.
Copies of required Indianapolis Airport Authority forms are in the Appendix
of this document and are available at the office of the Indianapolis Airport
Authority.
Two-Step Process
Plans shall be submitted to the Airport Authority at the completion of the
following stages of planning and design:
A. Schematic/Preliminary
1. Plans of proposed aircraft fueling system shall be submitted
for review to the Indianapolis Airport Authority at the
preliminary design phase. Signed approval shall be obtained
prior to proceeding with final design.
B. Construction Documents
At each stage the following elements will be considered:
1. Site Plan
2. Building Design (if required)
3. Landscaping
4. Signage
-15-
<PAGE>
i. Proposed easements
j. Site drainage
k. Grades, existing and proposed
l. Truck loading and service areas
m. Developed area in square feet as a percentage of total lease
area
n. Fencing and security plan, if applicable
B. Building Design, if required for pumping processes
1. Elevations, in color or with color samples
2. Perspective rendering (optional)
3. Building materials
4. Description of proposed operation and estimate of maximum
number of employees.
C. Signage
1. In accordance with the requirements of the State of Indiana
and the FAA.
-16-
<PAGE>
D. Construction Documents Approval
At the second review, engineering, architectural, site development and
landscape working drawings and specifications shall be submitted to The
Indianapolis Airport Authority for review. Three sets of plans shall be
submitted for review. One set of plans with Airport comments will be
returned for update and correction. Three sets of construction plans plus
original marked up preliminary plans shall be returned for Airport Authority
review. In addition, samples of all exterior material of texture and color
shall be submitted for review and approval. A sample panel of exterior
materials may be required. Approval will be granted or a set of plans
returned to the lessee for revision. Plans shall be submitted to the
Indianapolis Airport Authority for final review at least thirty (30) days
prior to submission for the Improvement Location Permit and Building Permit
required by Marion County. This will allow for a thirty (30) day review and
approval, or disapproval process. If the Indianapolis Airport Authority
does not approve the final plans and specifications within the thirty (30)
day time period, they are to be deemed disapproved. Upon completion of the
final design, the plans and specifications for the aircraft fueling system
shall be submitted to the Indiana Fire Prevention and Building Services for
approval.
E. As-Built Drawings
Within thirty (30) days following completion of the initial construction and
any subsequent additions, alterations or improvements, Lessee shall present
to the Indianapolis Airport Authority a complete set of reproducible
(mylars) "record" drawings. This submittal shall include a copy of the
specifications and shop drawings. As built drawings shall be mylar
reproducible copies. In addition, complete specifications including all
amendments and changes issued during construction shall be included. The
exterior site and utilities as built
-17-
<PAGE>
drawings shall also be provided in IAA AutoCAD Drawing File Standards format
on computer disks.
F. Basis for Approval
Review and approval shall be based on standards set forth in this Minimum
Standards. Plans shall be reviewed not only for the quality of the specific
proposal, but also for the development's effect and impact on its neighbors
and on the general surroundings. Evaluation shall be made of spatial
relationships among buildings and between buildings and other surrounding
elements.
With the intent of minimizing detrimental visual impact, careful concern
will be given to location and treatment of utility and service facilities.
Site ingress and egress may be limited to permit efficient flow of traffic
on abutting streets.
G. Interpretation and Waiver
The Indianapolis Airport Authority's interest in reviewing the above items
is to assure that a high quality of compatible development and safety is
consistently achieved. When questions of judgment or interpretation arise,
the decision of the Indianapolis Airport Authority is final. All issues not
covered specifically by these Minimum Standards will be resolved by the
Airport Authority on a case-by-case basis.
-18-
<PAGE>
In order to meet special situations which may not be foreseen, it will be
desirable from time to time for the Airport Authority to allow variances of
certain requirements. Any variance granted is made with the welfare of the
overall development in mind and is not to be considered precedent setting.
XI. CONSTRUCTION
Construction activity shall commence after the review process and public
approvals are completed. Proper submittal of construction schedules and
coordination with the Indianapolis Airport Authority shall be completed,
during, and prior to the start of activity. Periodic meetings shall be set
as required by the Indianapolis Airport Authority and the lessee to install
a fueling system to coordinate the construction and minimize problems to the
existing facility operations.
A. Upon completion of the final design, the plans and specifications
for the aircraft fueling system shall be submitted to the Indiana
Fire Prevention and Building Services for approval.
B. Submit application for air, waste water and fuel storage tank
permits as applicable to governing county, state and/or federal
agencies.
C. Upon approval of the Indiana Fire Prevention and Building Safety
and other governing county, state and/or federal agencies, the
plans and specifications shall be submitted to the Indianapolis
Airport Authority for approval. No work shall commence until
signed approval by the Indianapolis Airport Authority has been
obtained.
-19-
<PAGE>
D. Submit proof to the Indianapolis Airport Authority that the fuel
system installer has been properly trained in the installation of
such systems. Submit this information to the Indianapolis Airport
Authority prior to commencement of installation.
E. If removal of existing storage tanks or other utilities are
required, obtain necessary permits and comply with applicable
regulations.
-20-
<PAGE>
XII. PERIODIC INSPECTIONS
A. All tanks and piping shall be inspected annually to ensure the
system is operating satisfactorily .
B. Inspections shall be made by an independent organization that is
qualified to make the inspections and is acceptable to the
Indianapolis Airport Authority.
C. Results of inspections in the form of a report shall be
submitted to the Indianapolis Airport Authority within 20 days
of the inspection.
D. Any failure of the aircraft fueling system shall be corrected
within 10 days of the date of the inspection or the system
shutdown and all fuel removed from the system.
E. If the fuel has been removed from the system, the lessee shall
submit documentation of what corrective action has been taken
and obtain written authorization from the Indianapolis Airport
Authority before fuel is to be placed in the system.
-21-
<PAGE>
APPENDIX A
<PAGE>
APPENDIX A
INSTALLATION OF
UNDERGROUND STORAGE TANKS
AND PIPING
Where it has been determined by the Indianapolis Airport Authority that
underground storage tanks and/or piping can be used for an aircraft
fueling system, the system shall be designed to meet these additional
minimum criteria.
A. Underground Tanks
1. Underground storage tanks shall be designed, constructed,
and installed in accordance with the requirements of
Federal Underground Storage Tank (UST) Regulations.
2. Underground storage tanks shall be a 30-year warranted,
U.L. approved fiberglass reinforced plastic (FRP) tank, a
30-year limited warranty steel tank constructed in
accordance with requirements of the Steel Tank Institute's
sti-P3 standards or approved FRP laminated steel tank
constructed in accordance with Underwriters Laboratory 58.
3. All tanks shall be of 360 degree double wall construction
with all connections installed in manholes so that, in the
event of a leak, all fuel is contained by the double wall
containment vessel.
4. Cathodic protection shall be installed for all ferrous
metal tanks. Design, installation and testing of cathodic
protection system shall be performed by experienced and
qualified personnel. Satisfactory proof of experience and
certification shall be provided to IAA.
5. Tanks shall be installed in accordance with the
manufacturer's instructions.
6. All underground tanks shall be installed with an approved
anchoring method so designed to prevent the movement of an
empty tank upon encountering a high water table.
B. Underground Piping
1. All piping under ground shall be of double wall construction.
The containment pipe shall be designed for the same pressures
as the carrier pipe or measures taken so that the containment
pipe will not be subjected to pressures greater than its
pressure rating.
A-1
<PAGE>
2. All underground piping shall have cathodic protection.
C. Leak Detection
1. Leak detection and alarm system shall be provided on all
underground piping and underground tanks.
2. Leak detection, system shall continuously monitor the
underground piping and tanks for the presence of water and
hydrocarbon fuels.
3. Upon detection of a leak, the alarm shall be indicated in the
lessee's facility and a visual indication to Indianapolis
Airport Authority, police and fire dispatch.
<PAGE>
APPENDIX B
<PAGE>
STRUCTURAL & IMPROVEMENT LOCATION PERMIT APPLICATION Appendix B
A. LOCATION OF IMPROVEMENT
AIRPORT Indianapolis International Mt. Comfort Eagle Creek
Metropolitan Speedway Heliport
ADDRESS OF _______________________________________________________________
IMPROVEMENT Number Street City Zip Code
B. AIRPORT TENANT INFORMATION
NAME _______________________________________________________________
Lessee that has agreement with Airport Authority
ADDRESS _______________________________________________________________
Number Street City Zip Code
LEASE DATE ______________________ Telephone # of Lessee __________________
USE Is the proposed improvement permitted:
1. In the designated area of the airport layout plan? _____ _____
YES NO
2. In the Lease Agreement cited above? _____ _____
YES NO
COST Estimated cost of improvements $_____________________________________
THE LESSEE HAS AUTHORIZED THE UNDERSIGNED TO SECURE THE IMPROVEMENT
LOCATION PERMIT. INFORMATION CONTAINED ON THIS FORM AND ON THE SECURED
PLOT PLAN IS COMPLETE AND ACCURATE. I UNDERSTAND THAT APPROVAL OF A
PERMIT GRANTED UNDER THIS FORM DOES NOT ALLEVIATE' THE NEED TO COMPLY
WITH APPLICABLE TERMS AND CONDITIONS OF THE LEASE AGREEMENT DATED ABOVE,
INCLUDIGN SUBMITTAL FOR APPROVAL BY THE BOARD OF FINAL PLANS AND
SPECIFICATIONS FOR THIS IMPROVEMENT, AND OBTAINING THE APPLICABLE
PERMITS OR APPROVALS REQUIRED BY CITY/COUNTY ORDINANCES OR STATE LAW.
__________________________________
Lessee
__________________________________
Title
__________________________________
Phone Number
- - - - - - - AIRPORT USE ONLY BELOW THIS LINE - - - - - - - - - -
C. IAA Permit # _______________________________
(1) DOT Driveway Permit # _______________________________
(1) DPW (Drainage) Permit # _______________________________
County Permit # _______________________________
State Building Commission Approval _______________________________
Sewer ____________________Septic System _______________________________
APPROVED WAIVED(2)
Proposed use ___________________________ _____________ ____________
Building and right-of-way setbacks _____________ ____________
Maximum height _____________________MSL _____________ ____________
Lease area ______________________ sq. ft. _____________ ____________
Developed area sq. ft. ______________ % _____________ ____________
Drainage & Sediment Control Plan 24-1800 _____________ ____________
Utility locations and connections _____________ ____________
Security Plan _____________ ____________
Site Plan and Survey _____________ ____________
Sign location and size _____________ ____________
FAA Notice of Construction (Form 7460 _____________ ____________
Remarks: __________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
APPROVED ________________________________
_________________________________________
Daniel C. Orcutt, Executive Director
(1) Manon County only
(2) List separately reasons and date Board waiver given.
B-1
<PAGE>
APPENDIX C
<PAGE>
Appendix C
APPLICATION FOR WORK PERMIT
---------------------------
DATE_______________________
Indianapolis Airport Authority - Indianapolis International Airport
EXECUTIVE DIRECTOR - DANIEL C. ORCUTT
ORGANIZATION REQUESTING PERMIT________________INDIANAPOLIS, INDIANA 46241-(317)
248-9594 CABLE WORLDPORT -
INDIANAPOLIS
STREET ADDRESS OR P.O. BOX #___________________________________________________
CITY______________________________,STATE______________ZIP______________________
PHONE (INCLUDING AREA CODE)____________________________________________________
PERSON TO CONTACT WITH QUESTIONS________________________PHONE__________________
LOCATION OF PROPOSED WORK______________________________________________________
COMPLETE DESCRIPTION OF PROPOSED WORK__________________________________________
_______________________________________________________________________________
_______________________________ESTIMATED COST $________________________________
CONTRACTOR/VENDOR_____________________________PHONE____________________________
ADDRESS____________________________CITY_______________, STATE______ZIP_________
PROPOSED START DATE________________ESTIMATED COMPLETION________________________
- -------------------------DO NOT WRITE BELOW THIS LINE--------------------------
PLANS SUBMITTED_________________PROOF OF INS___________________
SPECS SUBMITTED_________________OTHER__________________________
APPROVED DISAPPROVED DATE
EXECUTIVE DIRECTOR-------------------- __________ ____________ _________
MANAGING DIRECTOR ADMINISTRATION-------__________ ____________ _________
MANAGING DIRECTOR OPERATIONS-----------__________ ____________ _________
DIRECTOR PLANNING & DEVELOPMENT--------__________ ____________ _________
DIRECTOR BUILDING OPERATIONS-----------__________ ____________ _________
DIRECTOR AIRFIELD MAINTENANCE----------__________ ____________ _________
APPROVED_____RESUBMIT AS DIRECTED_______DENIED______PERMIT NO._________________
SIGNED________________________________________________DATE_____________________
RESTRICTIONS, IF ANY___________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
BOARD MEMBERS: JOHN M. VAUGHAN - GORDON ST. ANGELO - CECIL D. ROSS -
PRESIDENT VICE PRESIDENT SECRETARY
LAWRENCE A. O'CONNOR, JR.- JAMES L. TUOHY
MEMBER MEMBER
<PAGE>
APPENDIX D
<PAGE>
Appendix D
METROPOLITAN PLAN COMMISSION
DOCKET NO. 61-A0-4
ORDINANCE
BE IT ORDAINED by the Marion County Council of Marion County, Indiana,
that Marion County Council Ordinance No. 8-1957, adopted by The Marion
County Council on March 28, 1957, and subsequently amended pursuant to
Section 85 of Chapter 283 of the Indiana General Assembly for 1955, as
amended, and all zoning ordinances adopted as parts thereof, be amended by
the addition of the following zoning district:
SECTION 1.00 ESTABLISHMENT OF AIRPORT SPECIAL USE DISTRICT
AIRPORT SPECIAL USE DISTRICT, which primary zoning district shall
permit the following uses:
PUBLIC AIRPORTS municipally owned or operated, including all
necessary navigation and flight operation facilities, and accessory
uses including, but not limited to, terminal, storage and servicing
facilities for airplanes or other aircraft, air research
laboratories and other accessory uses directly related to the
operation of such airport and an integral part thereof, including,
but not limited to, transportation, restaurant, hotel or motel
facilities and similar related services for the comfort and
accommodation of air passengers and the public; - subject to the
following requirements:
SECTION 2.00 AIRPORT SPECIAL USE DISTRICT REGULATIONS
1. No use permitted in the AIRPORT SPECIAL USE DISTRICT shall cause
injury or damage to adjacent land uses, property or the public
health, safety or welfare. Provided, however, that compliance by
such public airport with all applicable safety and operational
standards and regulations of the Federal Aviation Agency and other
applicable federal aviation regulatory authorities shall be deemed
compliance with this sub-section's requirements, as applied to
navigation and flight operational uses.
2. All uses with the AIRPORT SPECIAL USE DISTRICT shall be served by
and have access only from interior access roads located within said
DISTRICT to carry vehicular traffic to and from major entrances and
exits serving the airport, and designed and constructed in
accordance with local street specifications of the Subdivision
Control Ordinance of Marion County, Indiana, Ordinance 58-AC-13, as
amended.
3. For each use permitted within the AIRPORT SPECIAL USE DISTRICT,
adequate off-street parking area with concrete or bituminous paved
surface shall provided. Such parking area shall not be located
within one hundred (100) feet of any boundary of the AIRPORT SPECIAL
USE DISTRICT, unless a compact hedge or row of shrubbery of at least
four (4) feet in height is provided between such parking area and
District boundary. In no case shall such parking area be located
closer to a District boundary than ten (10) feet.
4. No building or structure, or part thereof, shall be located within
one hundred (100) feet of any boundary of the AIRPORT SPECIAL USE
DISTRICT, and such one hundred (100) foot buffer area shall be
maintained in turf, plant material or as off-street parking area, as
provided in sub-section (3) above.
5. Prior to improvement location permit issuance for any building or
structure within the AIRPORT SPECIAL USE DISTRICT, the plot or site
plan for such building or structure, in conformity with all
applicable zoning requirements, shall be filed with the Metropolitan
Planning Department of Marion County, Indiana.
D-1
<PAGE>
SECTION 3.00 ZONING MAPS DESIGNATION
BE IT FURTHER ORDAINED that all land within said district shall be
designated upon the applicable zoning maps (adopted as a part of said
zoning ordinances and Ordinance No. 8-1957) by the symbol "A" superimposed
in the approximate geographic center of such district, the boundaries of
which district to be designated and outlined by a dashed line.
BE IT FURTHER ORDAINED that an emergency exists for the passage of this
ordinance, and that the same shall be in full force and effect from and
after this date.
Beurt R. SerVaas
------------------------------
Ronald E. Bingman
------------------------------
Wm. A. Brown
------------------------------
H. Norris Cottingham
------------------------------
James A. Buck
------------------------------
Edwin J. Koch
------------------------------
THE MARION COUNTY COUNCIL OF
MARION COUNTY, INDIANA
Date: January 7, 1963
----------------------------
Attest: John T. Sutton by Charlotte Newman, Deputy
-----------------------------------------------
AUDITOR OF MARION COUNTY, INDIANA
D-2
<PAGE>
APPENDIX E
<PAGE>
Appendix E
RESOLUTION NO. 9-1990
WHEREAS, there are 82 underground hazardous liquid storage tanks on
Indianapolis International Airport with a total capacity of 921,000
gallons of active underground storage; and
WHEREAS, 850,000 gallons of hazardous liquid storage are stored in
one (1) above-ground tank; and
WHEREAS, there are federal, state, and local agencies involved in the
regulation of the handling and storage of hazardous liquids which
regulation imposes potential liability upon Authority as landowner for the
acts or omissions of its tenants with respect to environmental impairment;
and
WHEREAS, the Indianapolis Airport Authority requested the
Indianapolis Center for Advanced Research, Inc., to prepare
recommendations on the Storage of Hazardous Liquids at Authority's
airports; and
WHEREAS, the Indianapolis Center for Advanced Research, Inc., has
recommended that hazardous liquids be stored in as few geologically
suitable locations as possible and that hazardous liquid storage and
dispensing systems provide for leak detection and secondary containment;
and, that hazardous liquid storage and dispensing systems be designed to
minimize the total length of underground piping; and
WHEREAS, the Indianapolis Airport Authority has developed a fuel and
other hazardous liquid storage and dispensing policy to minimize its
liability exposure for environmental impairment:
E-1
<PAGE>
NOW, THEREFORE, BE IT RESOLVED by the Board of the Indianapolis
Airport Authority to adopt the following fuel and hazardous liquid policy:
FUEL AND HAZARDOUS LIQUID POLICY
A. Tenant fuel storage and fueling systems shall be limited to
common carriers and fixed-based operators and owners of corporate hangars.
B. Fuel storage and fueling systems shall be located only in those
areas that are geologically suitable for natural containment of leaks.
C. Fuel storage and fueling systems shall be limited to above-
ground installations unless space or critical safety requirements require
underground installation.
D. Fuel storage and fueling systems shall be designed to minimize
total length of underground piping. All piping shall provide secondary
containment.
E. Fuel and other hazardous liquids shall be stored in as few
different locations on the airport as possible. Fuel and other
underground hazardous storage tanks shall not exceed 20,000 gallons in
capacity.
F. All fuel and other hazardous liquid storage and dispensing
systems, either above ground or underground, shall provide for adequate
secondary containment and for automated leak detection as approved by
Authority and in compliance with all Federal, State, and local ordinances,
rules and regulations.
G. Tenant operating fuel storage and other hazardous liquid storage
and dispensing systems shall comply with minimum insurance requirements as
established by Federal or State law, which bonds and insurance shall
designate Authority as an additional insured.
E-2
<PAGE>
H. Tenant's compliance with Federal, State and local laws or
regulations shall be monitored by Authority by inspection and receipt of a
copy of any report received by Tenant which may be issued by any Federal,
State, or local agency charged with enforcement of regulatory standards
for fuel or other hazardous liquid storage or dispensing equipment with
respect to Tenant's compliance or non-compliance with such regulatory
standards. Strict compliance with all environmental regulations by Tenant
shall be required.
I. The Staff is authorized to develop such procedures to implement
the foregoing policy.
Adopted this 22nd day of June, 1990.
INDIANAPOLIS AIRPORT AUTHORITY
/s/ JOHN M. VAUGHAN
John M. Vaughan, President
/s/ GORDON ST. ANGELO
Gordon St. Angelo, Vice President
/s/ LAWRENCE A. O'CONNOR, JR.
Lawrence A. O'Connor, Jr., Secretary
/s/ JAMES L. TUONY
James L. Tuony, Member
/s/ BETTY J. JOHNSON
Betty J. Johnson, Member
E-3
<PAGE>
EXHIBIT E
Development Guidelines for
Airside and Corporate Village
<PAGE>
INDIANAPOLIS
INTERNATIONAL
AIRPORT
DEVELOPMENT GUIDELINES
FOR
AIRSIDE AND CORPORATE VILLAGE
INDIANAPOLIS AIRPORT AUTHORITY
SEPTEMBER 1990
HOWARD NEEDLES TAMMEN & BERGENDOFF
ARCHlTECTS ENGINEERS PLANNERS
<PAGE>
TABLE OF CONTENTS
PAGE
INTENT 1
INTRODUCTION 2
REVIEW PROCESS 4
PUBLIC APPROVALS 8
LAND USE RESTRICTIONS 9
SITE DEVELOPMENT STANDARDS 10
BUILDING DESIGN 23
UTILITY AND SERVICE REQUIREMENTS 25
SIGNAGE AND GRAPHIC REQUIREMENTS 26
SITE LIGHTING REQUIREMENTS 29
LANDSCAPE REQUIREMENTS 32
IRRIGATION 38
OTHER REQUIREMENTS 39
APPENDIX
A. Structural & Improvement Location Permit Application A-1
B. Request for Work Permit B-1
C. FAA Form 7460 C-1
D. Ordinance D-1
E. Approved Plant List E-1
i
<PAGE>
LIST OF FIGURES
FIGURES PAGE
1 Site Location Map 3
2 Site Development Criteria - Plan 11
3 Site Development Criteria - Section 12
4 Standard Curb Detail 14
5 Parking Lot Layout 15
6 Standard Handicap Parking Space 16
7 Fence Detail 21
8 Fence Gate Detail 22
9 Building Identification Sign 27
10 Lighted Bollard Detail 30
11 Unlighted Bollard Detail 31
12 Parking Lot Planting 34
13 Parking Lot Island Planting 35
14 Sideyard Landscape Treatment 36
15 Mounding and Mound Planting 37
ii
<PAGE>
INTENT
All improvements constructed on the Airside and Corporate Village property
are subject to the standards and requirements set forth in this document for
the following purposes:
a. to establish aesthetic values designed to complement and benefit
all Airside and Corporate Village facilities;
b. to develop the Airside and Corporate Village with a park-like
character ensuring it is a continuing asset to the Indianapolis
Metropolitan area and to the State of Indiana;
c. to ensure proper, desirable use and appropriate development and
improvement of each site within the airport;
d. to protect lessees and/or tenants of buildings against improper and
undesirable use of surrounding building sites which will depreciate
the value of their properties;
e. to guard against the erection of structures built of improper or
unsuitable materials:
f. to encourage the erection of attractive improvements with
appropriate locations on building sites;
g. to ensure and maintain proper setbacks from streets, highways, and
adequate open spaces between structures which will ensure a
park-like character;
h. in general, to provide for high quality of improvements of said
property;
i. to protect the health, safety and welfare of the community
utilizing these facilities;
j. to conserve natural resources inherent in said property.
-1-
<PAGE>
INTRODUCTION
This document outlines the Indianapolis Airport Authority's developmental
guidelines associated with the Airside and Corporate Village. Full
compliance will be expected except in those cases where the provisions are
not applicable. Any deviations from the regulations outlined herein must be
approved by the Airport Authority. Authority reserves the right to make
periodic inspections to ensure compliance with these provisions and to
initiate appropriate corrective measures.
The developmental guidelines, while generally designed to promote the
harmonious aesthetics and appropriate development of the Properties as a
whole as well as specific Parcels, may differ in content and applications
depending on the approved use for a Parcel. Such development parameters for
the Properties common to all Parcels may appear herein but may not be
applicable to the specific Parcel hereby leased.
Prospective lessees are encouraged to review and understand the criteria
established within these developmental guidelines. Inquiries are advised to
prevent needless and costly delays.
-2-
<PAGE>
Figure 1
Site
Location
Map
HNTB
<PAGE>
REVIEW PROCESS
APPROVALS MANDATORY
Signed plan approval by the Indianapolis Airport Authority is required prior
to the undertaking of any site improvements, construction or installation,
including clearing, grading, paving, signs, structures, landscaping,
building additions or alterations, and subdivisions. Review should also be
coordinated with state and local agencies to include the Indiana Department
of Fire and Building Services and the Indianapolis Department of
Metropolitan Development.
Following is the step-by-step process required by the Indianapolis Airport
Authority for obtaining approvals for any new building project:
1. Obtain a Lease Agreement with Indianapolis Airport Authority.
2. Application for Indianapolis Airport Authority Improvement
Location Permit. See Appendix A.
3. Schematic/preliminary review and approval of project with
Indianapolis Airport Authority.
4. Final approval by Airport Authority Board of final plans and
specifications.
5. Submittal and approval of project construction documents and
Marion County review process.
6. Issuance of Work Permit by Indianapolis Airport Authority. See
Appendix B.
Copies of required Indianapolis Airport Authority forms are in the Appendix
of this document and are available at the office of the Indianapolis Airport
Authority.
TWO-STEP PROCESS
Plans must be submitted to the Airport Authority at the completion of the
following stages of planning and design:
1. Schematic/Preliminary
2. Construction Documents
-4-
<PAGE>
At each stage the following elements will be considered:
1. Site Plan
2. Building Design
3. Landscaping
4. Signage
1. PRELIMINARY APPROVAL
At the initial or schematic/preliminary review, three (3) sets of plans
will be submitted to include:
a. SITE PLAN
(1) Site location including certified plat and legal description
described from Airport Authority monumentation system and the
establishment of state plane coordinates for all lease
corners
(2) Site topographic survey in accordance with Indiana
Administrative Code, Title 864, Article 1.1, Chapter 13
(3) Building location, orientation, overall dimensions
(4) Setbacks
(5) Pedestrian and vehicular circulation
(6) Landscape areas including quantity, location and type, i.e.,
ornamental tree or shrub, evergreen tree or shrub, deciduous
tree or shrub, groundcover, annuals or perennials
(7) Site lighting plan
(8) Connections to existing utility lines
(9) Proposed easements
(10) Site drainage
(11) Grades, existing and proposed
(12) Number and location of employee and guest parking
(13) Truck loading and service areas
(14) Developed area in square feet as a percentage of total lease
area
(15) Fencing and security plan, if applicable
(16) FAA Form 7460, "Notice of Construction"
-5-
<PAGE>
b. BUILDING DESIGN
(1) Elevations, in color or with color samples
(2) Perspective rendering (optional)
(3) Building materials
(4) Description of proposed operation and estimate of maximum
number of employees
c. SIGNAGE
2. CONSTRUCTION DOCUMENTS APPROVAL
At the second review, engineering, architectural, site development
and landscape working drawings and specifications will be submitted
for review. Three sets of construction plans plus original marked up
preliminary plans will be returned for Airport Authority review. In
addition, samples of all exterior material of texture and color will
be submitted for review and approval. A sample panel of exterior
materials may be required. Approval will be granted or a set of
plans returned to the lessee for revision. Plans will be submitted
to Airport Authority for final review at least thirty (30) days prior
to submission for the Improvement Location Permit and Building Permit
required by Marion County. This will allow for a thirty (30) day
review and approval, or disapproval, process. If the Airport
Authority does not approve the final plans and specifications within
the thirty (30) day time period, they are to be deemed disapproved.
3. AS-BUILT DRAWINGS
Within thirty (30) days following completion of the initial
construction and any subsequent additions, alterations or
improvements, lessee shall present to Authority a complete set of
reproducible (mylars) "record" drawings. This submittal will include
a copy of the specifications and shop drawings. In addition, this
information will be presented on a computer diskette, using the
AutoCAD format.
BASIS FOR APPROVAL
Review and approval will be based on standards set forth in these
Development Guidelines. Plans will be reviewed not only for the quality
of the specific proposal, but also for the development's effect and impact
on its neighbors and on the general surroundings. Evaluation will be made
of spatial relationships among buildings and between buildings and other
surrounding elements.
-6-
<PAGE>
With the intent of minimizing detrimental visual impact, careful concern
will be given to location and treatment of utility and service facilities.
Site ingress and egress may be limited to permit efficient flow of traffic
on abutting streets.
INTERPRETATION AND WAIVER
The Airport Authority's interest in reviewing the above items is to assure
that a high quality of compatible development is consistently achieved.
When questions of judgment or interpretation arise, the decision of the
Airport Authority is final. All issues not covered specifically by these
Development Guidelines will be resolved by the Airport Authority on a
case-by-case basis.
In order to meet special situations which may not be foreseen, it will be
desirable from time to time for the Airport Authority to allow variances of
certain requirements. Any variance granted is made with the welfare of the
overall development in mind and is not to be considered precedent setting.
-7-
<PAGE>
PUBLIC APPROVALS
All pertinent requirements of public agencies must be adhered to in the
development of this property, and all plans must be routed through the
typical permits procedures for the City of Indianapolis and State of
Indiana, i.e., drainage, improvement location, driveway, building, etc.
Prior to development, each lessee must verify the current code requirements
as they may be amended. These Development Guidelines may be more
restrictive than local land use, site development standards, landscape
requirements, or in other matters. In every case in which these guidelines
are at variance with public agency requirements, the more restrictive
regulations will govern.
-8-
<PAGE>
LAND USE RESTRICTIONS
Permitted uses for the Airside and Corporate Village are established by the
Airport Authority subject to any limitations in Ordinance 61-A0-4, as
amended. See Appendix D. The Airside and Corporate Village is zoned Airport
Special Use, and restrictions are as indicated in that ordinance. Certain
land uses are prohibited, and they are as follows:
- Heavy manufacturing/industrial.
- Storage of any hazardous animate or inanimate materials or
objects.
- Storage or transport of Class-A explosives, as defined in 49
CFR Part 107.3.
- Storage, manipulation, or transport of any materials which
would adversely affect the insurance coverage of the premises
required of any tenants.
-9-
<PAGE>
SITE DEVELOPMENT STANDARDS
1. BUILDING HEIGHT: Will be restricted in accordance with Airport
requirements and FAA regulations.
2. LOT COVERAGE: Must provide yards as specified herein, and parking must
respect setbacks and other criteria set forth in Figures 2 and 3. If
the leased area is less than 15 acres, development shall not exceed 75%
of the leased area; and if the leased area is more than 15 acres,
development shall not exceed 85% of the leased area.
3. MINIMUM BUILDING SETBACK REQUIREMENTS: All yards will be as required as
follows:
a. FRONT YARD WITH STREET FRONTAGE: 70 feet from lease line.
b. SIDE YARD WITH STREET FRONTAGE: 70 feet from lease line.
c. SIDE AND REAR YARD WITHOUT STREET FRONTAGE: 50 feet from lease
line.
4. MINIMUM LANDSCAPE REQUIREMENTS WITHIN BUILDING SETBACK: The basic plant
materials to provide overall landscape continuity are trees, shrubbery,
groundcover, and lawn. As a rule, all trees should be of the minimum
size indicated on the Approved Plant List at the time of planting. See
Appendix E. The basic lawn plantings will be supplemented by
appropriate trees, shrubs, and groundcovers selected from the Approved
Plant List also. Plants will be arranged to highlight building
entries, soften and provide scale to building masses and site
development. Landscape easements may be required of parcels adjacent
to the entries to ensure an adequate buffer.
a. STREET FRONTAGE: First 25 feet beyond lease line will be a
landscaped area along all roadways.
b. SIDE AND REAR YARD: First 5 feet along property line will be
fully landscaped. If a parking area is located in the side or rear
yards, the minimum landscaped area will be 15 feet. No
landscaping is required on the taxiway side of a building.
c. GREEN SPACE BETWEEN PARKING AND BUILDING: A minimum of 10 feet
landscaped area or lawn will be provided on all sides of the
building. These areas need not be uniform in shape as long as the
required amount of square footage is landscaped.
d. PARKING AND DRIVES: With the exception of entrance drives,
parking and drives may not be located within any required
landscaped areas.
-10-
<PAGE>
Figure 2
Site
Development
Criteria
Plan
HNTB
<PAGE>
Section A-A
Buildings in the Airside and Corporate Village
Figure 3
Site
Development
Criteria
Plan
HNTB
<PAGE>
e. SIDEWALKS: Sidewalks may be located within landscape area between
pavement and building but will not occupy the entire area on any
side of a building.
f. TRUCK DOCKS AND BUILDING ENTRIES: No landscape area will be
required at access points to the building.
5. VEHICULAR AND PEDESTRIAN CIRCULATION: Vehicular and pedestrian
circulation within all parcel developments will be designed to function
in a safe and efficient manner.
The number of vehicular access points per site will be based upon size
of development and its relationship to public health, safety, and
welfare. In all instances, access points will be kept to a minimum.
Curb cuts along the lease line of lots will be at least 200 feet from
a street intersection and a minimum of 24 feet wide. Joint cuts may be
developed to serve abutting parcels. In addition, multiple entry
drives will not be located closer than 150 feet and will be aligned
with other drive entries directly across and sharing the same street
right-of-way. All distances will be measured from centerline to
centerline. All access and entrances must be approved by the
Indianapolis Airport Authority.
6. CURBS: All roads provided in the Airside and Corporate Village will
have a concrete roll curb and gutter. See Figure 4. Expansion joints
will be located along the curbs every 10 feet (+).
-
It will be the responsibility of the lessee to remove the curbs for
their entrance drives at expansion joints to accommodate the drive and
necessary turning radii. The lessee will replace the same style of
curbs up to these expansion joints. No sawcutting of curbs will be
allowed. Proposed entrance drives will match existing road pavement
grades, and adequate drainage will be provided by the lessee in this
area.
7. PARKING: The overall parking layout will be designed to function in a
safe and efficient manner in accordance with the requirements of the
Indianapolis Airport Authority. Additional requirements may be added
by Indianapolis Airport Authority on a case-by-case basis.
The minimum allowable stall dimensions will be 180 square feet, 9 feet
by 20 feet, with a minimum auto circulation aisle width of 24 feet
adjacent to parking stalls. All parking lot striping and other
markings will be white. Landscaped islands will be a minimum of 20
feet wide and provided every 15 parking spaces in an alternating
pattern. See Figure 5. Parking islands along the perimeter of the
parking lot will be provided every 15 parking spaces.
-13-
<PAGE>
Figure 4
Standard
Curb &
Gutter
Detail
HNTB
<PAGE>
Figure 5
Parking Lot
Layout
HNTB
<PAGE>
Figure 6
Standard
Handicapped
Parking
Space
HNTB
<PAGE>
All separator island parking areas and drives must be curbed.
Parking space for the physically handicapped will be provided in
proximity to building entrances. The parking requirements and related
curb cuts and ramps for the physically handicapped will comply with the
Indiana Handicapped Accessibility Code. See Figure 6.
8. PAVING:
a. Parking lots, drives, roads, and areas of this category as a
minimum shall consist of
(1) 1" Hot Asphaltic Concrete Surface Type "B"
(2) 2" Hot Asphaltic Concrete Binder
(3) 4" Hot Asphaltic Concrete Base
or
(1) 1" Hot Asphaltic Concrete Surface Type "B"
(2) 4" Hot Asphaltic Concrete Base
(3) 8" Crushed Limestone Base with Prime Coat
(4) Will be approved only if proper subgrade drainage is
installed
b. Service, loading, and all other paving shall consist of Portland
cement that complies with the "Standard Specifications for
Portland Cement," ASTM Designation C-150 (latest edition),
Concrete Aggregates that conform to the "Standard Specifications
for Concrete Aggregates", ASTM Designation C-33 (latest revision),
Metal Reinforcement that conforms to latest ASTM Specification No.
A 615, and water. Any pavement areas which are planned to receive
transport aircraft or vehicles shall be designed and constructed
in compliance with the Federal Aviation Administration's
"Standards for Specifying Construction of Airports," AC
150-5370-10, dated October 24, 1974, and subsequent amendments.
All other design criteria (for each project) shall be developed
and specified by Authority.
9. LOADING. SERVICE. AND OUTSIDE STORAGE:
a. OFF-STREET: Each site development plan will provide sufficient
on-site loading facilities to accommodate site activities. All
loading movements, including turn-arounds, will be made off the
right-of-way.
b. VISIBILITY: Loading docks will be located and screened so as to
minimize the visibility from any street or building entrance area.
Dumpsters, trash receptacles, compactors, condensers, and like
items must also be screened.
-17-
<PAGE>
c. SCREENING: Screening of service area dumpsters and like items may
consist of an approved combination of architectural elements and
materials mounds and landscaping.
d. OUTSIDE STORAGE: No materials, supplies, or equipment will be
permitted to remain outside any building.
e. RUBBISH AND GARBAGE: Rubbish and garbage facilities will be
screened so as not to be visible from any street, adjacent lot, or
building entrances.
10. SITE GRADING:
a. Site grading will be planned to address the following objectives:
(1) Satisfactory drainage of open areas.
(2) Minimum soil erosion and siltation.
b. The following measures are recommended to reduce soil erosion and
sediment deposits in downstream areas:
(1) Remove no more vegetation than necessary.
(2) Install temporary mulching on areas to be left bare of plant
material for an extended period of time.
(3) Provide de-silting basins to remove sediment from runoff
water during development.
(4) Straw bales and other erosion control measures must be
removed within 12 months of placement.
(5) Install permanent landscaping as soon as practical.
11. DRAINAGE AND STORM WATER MANAGEMENT: Development of Airport Authority
land is intended to achieve a high degree of water management through
the use of internal storm sewers. A drainage plan must be submitted
for each site as part of the Preliminary Plan Review Process.
The storm water management shall be designed in accordance with 'The
Storm Water Management Plan" for Indianapolis International Airport,
May 1981, by HNTB and subsequent amendments in accordance with the
Department of Public Works, Marion County, Indiana.
Swales and storm sewers are constructed to convey the storm runoff to
the specified drainage basins. Easements are established to provide
access to the drainage basins by all building sites.
-18-
<PAGE>
The major drainage easements are along the access road rights-of-way.
The basic concept for individual site design is to provide storm sewers
for drainage as opposed to open ditches, with downstrearn sites
providing capacity for upstream sites.
12. SITE FURNISHINGS REQUIREMENTS: It is the intent that street
furnishings will be coordinated throughout the Airside and Corporate
Village. This section establishes the standards for the street
furnishings which will include, but not limited to, benches, trash
receptacles, planters, drinking fountains, and picnic tables.
a. STREET FURNISHINGS STANDARDS AND SELECTIONS: The following are
the approved styles and models for street furnishings and site
furniture to be used in the Airside and Corporate Village:
Architectural Precast, Inc.
2021 Longwood Avenue
P.O.Box 23110
Columbus, Ohio 43223
Telephone: (614) 875-0963
(1) BENCHES: Architectural Precast, Inc. Models: BE-8416, BE-72,
BE-60, BE4816 Smooth Finish
(2) TABLES: Architectural Precast, Inc. Models TA-8433, TA-7233,
TA-6033, TA-4833 Smooth Finish
(3) TRASH RECEPTACLES: Architectural Precast, Inc.
Models: TR-27-RC, TR-22-S, TR-22-RC
Smooth Finish
(4) TREE GRATES: Neenah
R8611 or approved equivalent
Indianapolis Airport Authority retains the right to approve
location of said furnishings.
-19-
<PAGE>
b. MAINTENANCE: All of the above street or site furnishings will be
maintained in a safe and attractive manner so as to preserve the
aesthetic qualities established for the Airside and Corporate
Village. In the event street or site furnishings are not
maintained and become in need of repair, a notice of said
disrepair will be delivered to the responsible lessee. If repair
is not initiated within seven (7) days, the Indianapolis Airport
Authority will undertake repairs at lessee's expense.
13. FENCING:
a. SECURITY FENCING: Each development will have security fencing
separating the taxiway and aprons from all parking areas, public
access areas, and other developments. Security fencing will
conform with Federal Aviation Administration "Standards for
Specifying Construction of Airports," publication number Ac
150-5370-10, dated October 24, 1974, plus all subsequent
amendments.
b. ORNAMENTAL FENCING: In addition to security fencing, each
development in the corporate village only will provide ornamental
fencing as part of its overall development plan. Ornamental
fencing will be required along all lease lines where security
fencing is not required.
Fencing material will be steel, with corrugated poles,
manufactured by Fortress Fence Company, or approved equivalent.
Minimum fence height will be 6 feet; fence color will be black,
brown, or green; painted or polyester coated (see Figures 7 and
8).
-20-
<PAGE>
Figure 7
Fence
Detail
Map
HNTB
<PAGE>
Figure 8
Fence
Gate
Details
HNTB
<PAGE>
BUILDING DESIGN
1. INTRODUCTION:
All buildings will convey a character of high technology and quality
materials. Compliance with this image will be reviewed and approved by the
Indianapolis Airport Authority.
2.. DESIGN:
a. Ancillary building areas (e.g., office areas, storage buildings,
equipment rooms, etc.) will be integrated with the overall
building character. There will be no noticeable attachments or
appendages to the primary building, with the exception of screen
walls for loading docks, dumpsters or ground-mounted mechanical
equipment.
b. Generally, there shall be no out buildings, with the exception of
those requested and approved.
c. All screen walls for such items as ground-mounted mechanical
equipment, loading docks, dumpsters, etc., will be attached to the
building and integrated with the overall building character.
d. Building-mounted signage and/or "super graphics" are prohibited in
the Corporate Village. Building-mounted signs are permitted in
the airside development area, but the surface of any sign shall be
limited to 50% or 300 square feet, whichever is less. Reference
Signage and Graphic Requirements.
e. Site lighting and loading dock lighting, building mounted or
otherwise, will be shielded to eliminate glare and spillage.
3. MATERIALS:
a. Materials for building facades will be limited in number to three,
one of which will be the predominant material.
b. Glass will not be used as the predominant exterior wall material
on any given structure.
c. Glass will be tinted glass with an outdoor reflectance of not more
than 20%.
-23-
<PAGE>
d. Exterior building materials not permitted include painted or
stained wood, light gauge steel, aluminum or vinyl siding, metal
facia or simulated materials such as plastic or metal siding,
roofing tiles, or adhesive-applied brick. Preformed steel and
aluminum panel systems shall be permitted upon an individual
product basis by Indianapolis Airport Authority. Example exterior
wall panel systems are:
(1) Inryco; PS; M, IW and deep-rib.
(2) Bally Engineered Structures; Alply System, Ballywall.
(3) Smith Construction Products: Formwall; "V"-Panel; "B"-Panel;
Varispan, "D"-Panel Systems.
e. All materials used will reflect a high degree of quality,
durability, and craftsmanship.
f. Building coloration will consist predominantly of a neutral
overall color that compliments the building's surroundings.
Accent colors are encouraged and will be reviewed by Indianapolis
Airport Authority along with the overall building color scheme.
4. ROOF AND ROOF APPURTENANCES:
a. Sloping roofs will be screened by flat parapets and sloped to
interior drains. Exterior gutters and downspouts will not be
permitted except on pitched roofs.
b. All roof appurtenances projecting above the roof, such as exhaust
fans, heating and air conditioning units, condensers, electrical
equipment, plumbing vents and stacks, will be screened from view.
Such screening may be achieved by extending exterior walls above
the roof to form a parapet or through the use of other opaque
walls to be constructed of materials compatible in texture, color,
and quality with exterior walls of the building.
-24-
<PAGE>
UTILITY AND SERVICE REQUIREMENTS
INTRODUCTION
This section will establish the standards pertaining to utilities and
services.
LOCATION OF LINES AND CONNECTIONS
The Indianapolis Airport Authority has or will have installed underground
primary feeder lines and other utility lines which the Indianapolis Airport
Authority may approve for service. All utility lines will be located
underground in a systematic manner. All transformers, air conditioning
equipment, meters, and other necessary equipment will be screened from
public view.
SECURITY
Utility lines, connections, and related functions will be designed and
constructed with regard to public safety, health, and welfare.
MAINTENANCE
All of the above utility and service requirements will be maintained in a
safe and attractive condition so as to preserve the aesthetic qualities
established for the Airside and Corporate Village. In the event utility
services are not maintained and become in need of repair, a notice of said
disrepair will be delivered to the lessee. If repair is not initiated
within seven (7) days, the Indianapolis Airport Authority will undertake
repairs at the lessee's expense.
-25-
<PAGE>
SIGNAGE AND GRAPHIC REQUIREMENTS
INTRODUCTION
This section will establish the guidelines for the design of signage and
graphics within the Airside and Corporate Village. In general, signage and
graphics will be designed with a total sense of continuity and an additional
unifying element within the overall development.
Only those signs as addressed within this section will be allowed in the
Airside and Corporate Village, unless otherwise approved. No sign will be
erected until plans, elevations, sections, details and specifications have
been reviewed and approved.
1. OVERALL DESIGN
a CONCEPT: All signs in the Airside and Corporate Village will be
ASI 1073 or an equivalent.
b. MATERIAL: Fiberglass.
c. COLOR AND TEXTURE: Dark travertine/white graphics.
d. FORM: Signs will be low, with horizontal wording. No vertical
signs and no diagonal or vertical wording.
e. LIGHTING: Ground-mounted building identification signs shall be
internally illuminated.
f LANDSCAPING: If any.
2. LOCATION AND CHARACTER: A hierarchy of signs will be established as
follows:
a. SPECIAL ENTRY SIGNS: These signs will be installed by the
Indianapolis Airport Authority and maintained as a part of the
common area of the Airside and Corporate Village.
b. BUILDING IDENTIFICATION SIGN: Each building in the Corporate
Village, assuming one building per parcel, will have one (1)
identification sign (see Figure 9). If the building houses
several businesses, a building identification sign will be
allowed, with additional identification for each business to be
considered on an individual basis. Building-mounted signs are
permitted in the airside development area, but the surface of any
sign shall be limited to 5% or 300 square feet whichever is less.
-26-
<PAGE>
Figure 9
Building
Identification
Sign
HNTB
<PAGE>
It is recognized that many businesses have their corporate
identities expressed in signage and graphics; information allowed
on the identification sign will be the name of the business and
the identifying corporate symbol and colors. In no case will the
corporate identity or logo occupy more than 10% of the total sign
area.
c. TEMPORARY SIGNS AND LOCATIONS: Each parcel may have one (1) sign
designated for leasing or project construction identification, as
applicable.
d. OTHER SIGNS: Traffic signs such as Stop, One Way, Speed Limit, and
other similar signs will be incorporated, designed, and provided
by the Indianapolis Airport Authority as a part of the overall
signage concept.
3. MANUFACTURING AND INSTALLATION STANDARDS: All signs will be
manufactured and installed by competent professionals. Graphics will be
accomplished in a professional manner. Under no circumstances will
conduits, ballasts, transformers, and manufacturer labels be located
within public view. Upon completion of installation, the affected
construction site will be restored to a finish condition.
4. MAINTENANCE: All of the above signage requirements will be maintained
in a safe and attractive condition so as to preserve the aesthetic
qualities established for the Airside and Corporate Village. In the
event that signage is not maintained and becomes in need of repair, a
notice of said disrepair will be delivered to the lessee. If repair is
not initiated within seven (7) days, the Indianapolis Airport Authority
will undertake repair at the lessee's expense.
-28-
<PAGE>
SITE LIGHTING REQUIREMENTS
INTRODUCTION
The following section will provide guidelines in reference to site lighting.
The overall use of site lighting will be designed as a unifying and
aesthetic element in terms of lighting fixture style and lighting levels.
LIGHTING STANDARDS AND SELECTIONS
1. CONCEPT: Site lighting is intended to be low-key. Exterior building
lights may be used to accent entrances and special features. Overall
high levels of light are not desired; intensity should be no greater
than required for automobile and pedestrian safety. To minimize the
number of lighting standards, overflow light from inside the building
should be used wherever possible. Only discrete floodlighting of
buildings will be permitted. All aircraft apron lighting shall be
designed and constructed in accordance with the Federal Aviation
Administration's "Standards for Specifying Construction of Airports,"
AC 150-5370-10, dated October 24, 1974, and subsequent amendments.
2. FIXTURES: Fixtures will be a height of 25 feet and located in such a
manner as to minimize potential vehicular damage; lighting poles in
parking lots will be located within parking medians or islands. The
fixture shall be surface mounted to an appropriate concrete base flush
with the existing grade. The lighting fixture will be manufactured by
"Kim Lighting, Inc.", EKG501, Finish: NA-NE, or equivalent. Lamps will
be 250 watt, high pressure sodium. A minimum of one-foot candle will be
maintained within parking lots and along pedestrian access ways to
building. All other pedestrian circulation lighting will be a minimum
of 1/2-foot candle.
Pedestrian circulation lighting will use a bollard type light unit (see
Figure 10).
Signage lighting, when utilized, will be by internal illumination.
3. MAINTENANCE: The site lighting will be maintained in a safe and
attractive manner so as to preserve the aesthetic qualities established
by the Airside and Corporate Village.
In the event site lighting is not maintained and becomes in need of
repair, a notice of said disrepair will be delivered to the lessee. If
repair is not initiated within seven (7) days, the Indianapolis Airport
Authority will undertake repairs at the lessee's expense.
-29-
<PAGE>
Figure 10
Lighted
Bollard
HNTB
<PAGE>
Figure 11
Unlighted
Bollard
HNTB
<PAGE>
LANDSCAPING REQUIREMENTS
INTRODUCTION
The following section will provide guidelines for the use of plant materials
within the Airside and Corporate Village.
1. DESIGN CONCEPT: The overall intention is the creation of a simple,
strong landscape setting, in scale with the large buildings, wide
streets and broad parking areas. This result can be achieved through
the use of a limited plant palette, with skillfully arranged massing of
similar plant materials, especially along street frontages and at
vehicular entries. Except within internal courtyards, small scale,
residential garden landscaping will not be acceptable.
2. LANDSCAPE CONTINUITY: Because a wide variety in architectural design
is permitted, it is necessary that the landscape design approach be
consistent in order to maintain overall visual continuity throughout
the Airside and Corporate Village. All open unpaved space including,
but not limited to, front, side, and rear yard setback areas will be
planted and landscaped according to an approved plan.
3. PLANT MATERIAL: The basic plant materials to provide overall landscape
continuity are trees, shrubbery, groundcover, and lawn. As a rule, all
trees should be of the minimum size indicated on the Approved Plant
List at the time of planting. See Appendix E. The basic lawn plantings
will be supplemented by appropriate trees, shrubs, and groundcovers
selected from the Approved Plant List also. Plants will be arranged to
highlight building entries, soften and provide scale to building masses
and site development. Landscape easements may be required of parcels
adjacent to the entries to ensure an adequate buffer.
4. SHADE TREES: A designated shade tree will be planted at a minimum
height and spread of 12 feet by 6 feet, according to the Approved Plant
List.
5. INFORMAL TREE MASSING: Trees fronting a drainage basin will be planted
informally. The planting scheme will be in a loose arrangement to allow
views through them from buildings and roads. See Figure 14.
-32-
<PAGE>
6. RESPONSIBILITY OF RIGHT-OF-WAY LANDSCAPING: Roadside landscaping from
the road to the property lease line will be installed by the
Indianapolis Airport Authority and maintained by the lessee. All
landscape installation within the individual parcels is the
responsibility of the lessee.
7. PARKING AREAS: Parking lot entries consist of single road or divided
road driveways. Intended landscape character is shown on Figure 13.
The parking lot layout requirement is shown on Figure 12.
8. SIDE YARD LANDSCAPING: Typical side yard landscaping will consist of
accent framing or screening, depending on specific circumstances. See
Figure 14.
Truck access side or rear yard areas will consist of informal tree
planting of approved species. A 6-foot screen on the property line is
required, through the use of a combination of shrubs of approved
species and mounding. See section on Loading, Service and Outside
Storage for screening treatments of these areas.
9. LANDSCAPE MOUNDING: Where mounding or earth contouring is required,
smooth transitions with soft natural forms are desired. See Figure 15.
Trees are not to be planted directly on top of mounds in a formal
straight line.
10. SUGGESTED PLANT MATERIALS: To maintain continuity and a sense of
order, the Approved Plant List (Appendix D) will comply with the
American National Standards Institute (ANSI) Z60.1 Nursery Stock design
as established by the American Association of Nurserymen.
11. EDGING: Where mulches abutt grass areas, steel edging or an approved
equivalent will be installed in order to maintain a proper materials
separation. Plastic or aluminum edging will not be acceptable.
12. LANDSCAPE MAINTENANCE: Lessee will maintain, at lessee's expense, all
individual parcels within the Airside and Corporate Village including,
but not limited to, irrigation (if applicable), lawn mowing, tree and
shrub trimming (including replacement of dead trees or shrubs),
fertilization, and weed and insect control.
-33-
<PAGE>
Figure 12
Parking Lot
Planting
HNTB
<PAGE>
Figure 13
Parking
Lot Island
Planting
HNTB
<PAGE>
Figure 14
Sideyard
Landscape
Treatment
HNTB
<PAGE>
Figure 15
Mounding
and Mound
Planting
HNTB
<PAGE>
IRRIGATION
It is the responsibility of the individual lessee in the Corporate Village
to provide irrigation for all planting areas within the leased area. The
irrigation system will provide 100% coverage and will use water which will
not cause rust staining on paving, walls, etc.
In landscape areas adjacent to roadways, it is the responsibility of the
lessee to install the sprinkler irrigation and relate it to the adjoining
lessee irrigation systems.
By doing this, a complete and uniform irrigation system will be installed
for the roadways throughout the Corporate Village.
-38-
<PAGE>
OTHER REQUIREMENTS
The operation of all ground equipment, mobile or stationary, required for
construction, repair, or any other purpose within the limits of the airfield
shall be governed as follows:
1. All equipment and materials when not in use or about to be installed
shall be left in spaces approved for this purpose by the Executive
Director. All equipment on the field, when in use or not in use, shall
be properly marked with yellow, or orange and white checkered flags of
a size not less than 2 feet square during the day and with amber
electric flasher lights at night. No equipment shall be parked within
750 feet of the centerline of any runway or within 250 feet of the
centerline of any taxiway, unless specifically authorized by the
Executive Director. Equipment parked on the airfield area shall be
kept to an absolute minimum and restricted to equipment actually used
in the work under progress.
2. Nothing shall be placed on the airfield without the permission of the
Executive Director.
3. Parking areas for Contractor equipment, supplies, materials, and
employee vehicles will be as established by the Executive Director or
as indicated on the plans.
4. Neither equipment nor personnel shall use any runway, taxiway, or apron
for the purpose of hauling materials or access to the work, unless
approved by the Executive Director. Authorized equipment operating on
any hard surfaces is limited to that equipment with pneumatic tires.
Prior to use of any hard surface, permission shall be obtained from the
Executive Director. All drivers shall be instructed to be alert for
aircraft and to follow routes designated for vehicular traffic. All
vehicles will be clearly marked to identify owner. No privately-owned
vehicle will be operated on runway or taxiways.
5. Prior to initiation of operations which will require the crossing of
any hard surface used by aircraft, the Contractor shall assure himself
that a signalman, with visual or radio contact with the air traffic
control tower, is on duty at the site of the crossing to regulate
traffic. Moving aircraft have priority over all other traffic on the
field. Only equipment equipped with pneumatic tires shall be allowed to
cross paved areas. It shall be the responsibility of the Contractor to
keep paved surfaces free of any material at all times that might drop
from moving vehicles while crossing paved areas.
6. Contractor shall conform to the requirements of the Executive Director
as to the placement, type and service of special barricades,
obstruction and hazard making and lighting devices used to identify
danger areas to aircraft.
-39-
<PAGE>
7. Hauling across clear zones of any runway will not be permitted, unless
authorized by the Executive Director.
8. Contractor must agree to permit only his bona fide employees and those
of his subcontractors access and use of the airfield during actual
hours of work.
The lessee shall require lessee's contractor's doing work on airport to have
the following insurance coverage:
CONTRACTOR'S LIABILlTY INSURANCE
A. Lessee shall demand that each Contractor shall take out and maintain
insurance of such types and in such amounts as are necessary to cover
his responsibilities and liabilities on all projects, and shall require
all his subcontractors to carry similar insurance.
(1) The Airport Authority will accept, in lieu of all subcontractors
carrying similar insurance, an "Owner's and Contractor's
Protective Liability Policy" paid for by the Contractor and
written in the name of the Airport Authority for the amounts
specified hereinafter including all the special coverages. Said
policy must protect the Airport Authority for all claims for
bodily injury and/or property damage arising out of operations for
the named insured by said Contractor, or any subcontractor of said
Contractor.
B. No Contractor or Subcontractor shall commence work under this contract
until he has obtained all insurance required under this Section and
such insurance has been approved by the Airport Authority.
C. Each Contractor shall file, with the Airport Authority and Architect,
a Certificate of Insurance. Any certificate submitted and found to be
altered or incomplete will be returned as unsatisfactory.
D. If requested by the Airport Authority, Contractor shall furnish the
Airport Authority with true copies of each policy required of him or
his subcontractors. Said policies will not be canceled or materially
altered, except after ten (10) days advance written notice to the
Airport Authority and Architect, mailed to the addresses indicated
herein.
E. Insurance under this Section, as a minimum, shall include the following
coverages:
-40-
<PAGE>
(1) Workers' Compensation and Employer's Liability Insurance:
a. The Contractor agrees to procure and maintain at its expense,
insurance of the kind and in the amount hereinafter provided,
by companies authorized to do such business in the State of
Indiana, covering all operations under this Contract whether
performed by them or by an approved Subcontractor. Before
commencing the work, the Contractor shall furnish to the
Airport Authority a certificate, or certificates, in a form
satisfactory to the Airport Authority, showing that they have
complied with this paragraph, which certificate, or
certificates, shall designate the Airport Authority as an
additional named insured.
b. The kinds of amounts of insurance required as follows:
Policy covering the obligations of the Contractor in
accordance with the provisions of Indiana's Workers'
Compensation Law.
(2) Comprehensive General Liability Insurance covering:
Policies of bodily injury, liability and property damage liability
insurance, of the types hereinafter specified, each with limits of
liability of not less than $500,000.00 for all damages arising out
of bodily injury, including death, at any time resulting therefrom
sustained by one person in any one accident, and not less than
$500,000.00 for all damages arising out of injury to or
destruction of property. The required types of coverages are
listed below commencing with (a).
Umbrella liability coverage with the limit of $5,000,000.00 at
Indianapolis International and $2,000,000.00 at the Satellite
Airports and Heliport.
(a) Operations -- Premises Liability:
including, but not limited to, Bodily Injury, including death
at any time resulting therefrom, to any person or Property
Damage resulting from execution of the work provided for in
this contract, or due to or arising in any manner from any
act or omission or negligence of the Contractor and any
Subcontractor, their respective employees or agents.
-41-
<PAGE>
(b) Elevator Liability:
including, but not limited to, Bodily Injury, including death
at any time resulting therefrom, to any person or Property
Damage resulting from operation or use of any elevator or
hoist, if either or both are operated or used in connection
with execution of this contract.
(c) Contractor's Protective Liability:
including, but not limited to, Bodily Injury, including death
at any time resulting therefrom, to any person or Property
Damage arising from acts or omissions of any subcontractor,
their employees or agents.
(d) Products:
including, but not limited to, Bodily Injury, including death
at any time resulting therefrom to any person or Property
Damage because of goods, products, materials, or equipment
used or installed under this contract.
(e) Contractual Liability:
Each and every policy for liability insurance, carried by
each Contractor and Subcontractor, as required by this
Section shall specifically include Contractual Liability
coverage with respect to Section F of this Division.
(f) Special Requirements:
The insurance required under paragraph (2) of this Section
shall specifically include the following special hazards:
Property Damage caused by conditions otherwise subject
to exclusions "x,c,u" Explosion, Collapse, or
Underground Damage.
Broad Form Property Damage endorsement which has
reference to property in the "care, custody, or control"
of the insured.
"Occurrence" Bodily Injury coverage in lieu of "caused
by accident".
"Occurrence" Property Damage coverage in lieu of "caused
by accident".
-42-
<PAGE>
(3) Comprehensive Automobile Liability covering:
(a) All owned, hired, or non-owned vehicles including the loading
or unloading thereof.
(b) Special Requirements:
The insurance required under paragraph (3) of this Section
shall specifically include the following special hazards:
"Occurrence" Bodily Injury in lieu of "caused by accident".
"Occurrence" Property Damage in lieu of "caused by accident".
(c) The insurance under paragraph (3) of this Section shall be
written in the following limits of liability as a minimum:
Automobile Bodily Injury
Each Person $500,000.00
Each Occurrence $1,000,000.00
Automobile Property Damage
Each Occurrence $250,000.00
F. Responsibilities for Claims and Liabilities:
(1) The Contractor shall be responsible for all damage to life and
property due to negligent activities of the Contractor, approved
subcontractors, agents, or employees in connection with such
services, and shall be responsible for all parts of their work,
both temporary and permanent.
(2) It is expressly understood the Contractor shall indemnify and save
harmless the Airport Authority from all claims, suits, actions,
damages, defense costs, including attorney's fees, and all other
costs of every name and description arising out of or resulting
from the negligent services of the Contractor under this Contract
and such indemnity shall not be limited by reason of the
enumeration of any insurance coverage hereinafter provided.
-43-
<PAGE>
APPENDIX
<PAGE>
STRUCTURAL & IMPROVEMENT LOCATION
Appendix A
PERMIT APPLICATION
A. LOCATION OF IMPROVEMENT
AIRPORT Indianapolis International Mt. Comfort Eagle Creek
Metropolitan Speedway Heliport
ADDRESS OF _________________________________________________________________
IMPROVEMENT Number Street City Zip Code
B. AIRPORT TENANT INFORMATION
NAME _________________________________________________________________
Lessee that has agreement with Airport Authority
ADDRESS _________________________________________________________________
Number Street City Zip Code
LEASE DATE ________________________ Telephone # of Lessee ________________
USE Is the proposed improvement permitted:
1. In the designated area of the airport layout plan? _______ _______
YES NO
2. In the Lease Agreement cited above? _______ _______
YES NO
COST Estimated cost of improvements $ ______________________________________
THE LESSEE HAS AUTHORIZED THE UNDERSIGNED TO SECURE THE IMPROVEMENT
LOCATION PERMIT. INFORMATION CONTAINED ON THIS FORM AND ON THE SECURED
PLOT PLAN IS COMPLETE AND ACCURATE. I UNDERSTAND THAT APPROVAL OF A PERMIT
GRANTED UNDER THIS FORM DOES NOT ALLEVIATE THE NEED TO COMPLY WITH
APPLICABLE TERMS AND CONDITIONS OF THE LEASE AGREEMENT DATED ABOVE,
INCLUDING SUBMITTAL FOR APPROVAL BY THE BOARD OF FINAL PLANS AND
SPECIFICATIONS FOR THIS IMPROVEMENT, AND OBTAINING THE APPLICABLE PERMITS
OR APPROVALS REQUIRED BY CITY/COUNTY ORDINANCES OR STATE LAW.
___________________________________
Lessee
___________________________________
Title
___________________________________
Phone Number
------- AIRPORT USE ONLY BELOW THIS LINE -------
C. IAA Permit # ______________________________
(1) DOT Driveway Permit # ______________________________
(1) DPW (Drainage) Permit # ______________________________
County Permit # ______________________________
State Building Commission Approval ______________________________
Sewer __________________Septic System ______________________________
APPROVED WAIVED(2)
Proposed use ____________________________ _____________ _____________
Building and right-of-way setbacks _____________ _____________
Maximum height ______________________MSL _____________ _____________
Lease area __________________ sq. ft. _____________ _____________
Developed area sq. ft. _______ % _____________ _____________
Drainage & Sediment Control Plan 24-1800 _____________ _____________
Utility locations and connections _____________ _____________
Security Plan _____________ _____________
Site Plan and Survey _____________ _____________
Sign location and size _____________ _____________
FAA Notice of Construction (Form 7460) _____________ _____________
Remarks: ______________________________________________________________________
________________________________________________________________________________
APPROVED ___________________________________
Date
_____________________________________________
Daniel C. Orcutt, Executive Director
(1) Manon County only
(2) List separately reasons and date Board waiver given.
A-1
<PAGE>
Appendix B
INDIANAPOLIS AIRPORT AUTHORITY
REQUEST FOR WORK PERMIT
DATE_______________________
DATE: _____________
ORGANIZATION REQUESTING PERMIT:_________________________________________________
ADDRESS:______________________________________________PHONE:____________________
PERSON REQUESTING PERMIT:_____________________________PHONE:____________________
ADDRESS (if different from above):______________________________________________
LOCATION OF PROPOSED WORK:______________________________________________________
________________________________________________________________________________
DESCRIPTION OF PROPOSED WORK ___________________________________________________
________________________________________________________________________________
________________________________________ESTIMATED COST:$________________________
CONTRACTOR/VENDOR:____________________________________PHONE:____________________
ADDRESS:______________________________________________PHONE:____________________
PROPOSED START DATE:__________________ESTIMATED COMPLETION DATE:________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR IAA USE
PLANS SUBMITTED:_________________ PROOF OF INSURANCE SUBMITTED:_______________
SPECS SUBMITTED:_________________ OTHER:______________________________________
APPROVED DISAPPROVED DATE
EXECUTIVE DIRECTOR: __________ ____________ _________
MANAGING DIRECTOR ADMINISTRATION: __________ ____________ _________
MANAGING DIRECTOR OPERATIONS: __________ ____________ _________
DIRECTOR PLANNING & DEVELOPMENT: __________ ____________ _________
DIRECTOR BUILDING OPERATIONS: __________ ____________ _________
DIRECTOR AIRFIELD MAINTENANCE: __________ ____________ _________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AUTHORIZATION
APPROVED:_____RESUBMIT AS DIRECTED:_____DENIED:_____PERMIT NO:__________________
SIGNED:_______________________________________DATE:_____________________________
cfc: blue; file; pink; applicant;
B-1
<PAGE>
Exhibit C
Before completing this form it is recommended that the following excerpts from
the Federal Aviation Regulations, Part 77, Subchapter B Below be reviewed.
USE BACK OF THIS SHEET AS WORKSHEET
NOTICE OF PROPOSED CONSTRUCTION OR ALTERATION
SECTION 77.13 CONSTRUCTION OR ALTERATION REQUIRING NOTICE.
(a) Except as provided in Section 77.15, each sponsor who proposes any of
the following construction or alteration shall notify the Administrator in the
form and manner prescribed in Section 77.17.
(1) Any construction or alteration of more than 200 feet in height
above the ground level at its site.
(2) Any construction or alteration of greater height than an
imaginary surface extending outward and upward at one of the following slopes:
(i) 100 to 1 for a horizontal distance of 20,000 feet
from the nearest point of the nearest runway of each
airport specified in subparagraph (5) of this paragraph
with at least one runway more than 3,200 feet in actual
length, excluding heliports.
(ii) 50 to 1 for a horizontal distance of 10,000
feet from the nearest point of the nearest runway
of each airport specified in subparagraph (5) of
this paragraph with its longest runway no more
than 3,200 feet in actual length, excluding
heliports.
(iii) 25 to 1 for a horizontal distance of 5,000
feet from the nearest point of the nearest landing
and takeoff area of each heliport specified in
subparagraph (5) of this paragraph.
(3) Any highway, railroad, or other traverse way for mobile objects,
of a height which, if adjusted upward 17 feet for an Interstate Highway that is
part of the National System of Military and Interstate Highways where
overcrossings are designed for a minimum of 17 feet vertical distance, 15 feet
for any other public roadway, 10 feet or the height of the highest mobile object
that would normally traverse the road, whichever is greater, for a private road,
23 feet for a railroad, and for a waterway or any other traverse way not
previously mentioned, an amount equal to the height of the highest mobile object
that would normally traverse it, would exceed a standard of subparagraph (1) or
(2) of this paragraph.
(4) When requested by the FAA, any construction or alteration that
would be in an instrument approach area (defined in the FAA standards governing
instrument approach procedures) and available indicates it might exceed a
standard of Subpart C of this part.
C-1
<PAGE>
(5) Any construction or alteration on any of the following airports
(including heliports):
(i) An airport that is available for public use and is
listed in the Airport Directory of the current Airman's
Information Manual or in either the Alaska or Pacific
Airman's Guide and Chart Supplement.
(ii) An airport under construction, that is the
subject of a notice or proposal on file with the
Federal Aviation Administration, and except for
military airports, it is clearly indicated that
airport will be available for public use.
(iii) An airport that is operated by an armed
force of the United States.
(b) Each sponsor who proposes construction or alteration that is the
subject of a notice under paragraph (a) of this section and is advised by an FAA
regional office that a supplemental notice is required shall submit that notice
on a prescribed form to be received by the FAA regional office at least 48 hours
before the start of the construction or alteration.
(c) Each sponsor who undertakes construction or alteration that is the
subject of a notice under paragraph (a) of this section shall, within 5 days
after that construction or alteration reaches its greatest height, submit a
supplemental notice on a prescribed form to the FAA regional office having
jurisdiction over the area involved if ___
(1) The construction or alteration is more than 200 feet above the
surface level of its site; or
(2) An FAA regional office advises him that submission of the form is
required.
SECTION 77.15 CONSTRUCTION OR ALTERATION NOT REQUIRING NOTICE.
No person is required to notify the Administrator for any of the following
construction or alteration:
(a) Any object that would be shielded by existing structures of a
permanent and substantial character or by natural terrain or topographic
features of equal or greater height, and would be located in the congested area
of a city, town or settlement where it is evident beyond all reasonable doubt
that the structure so shielded will not adversely affect safety in air
navigation.
(b) Any antenna structure of 20 feet or less in height except one that
would increase the height of another antenna structure.
(c) Any air navigation facility, airport visual approach or landing and,
aircraft arresting device, or meteorological device, of a type approved by the
Administrator, or an appropriate military service on military airports, the
location and height of which is fixed by its functional purpose.
(d) Any construction or alteration for which notice is required by any
other FAA regulation.
C-2
<PAGE>
SECTION 77.17 FORM AND TIME OF NOTICE.
(a) Each person who is required to notify the Administrator under Section
77.13 (a) shall send one executed form set of FAA Form 7460-1, Notice of
Proposed Construction or Alteration, to the Manager, Air Traffic Division, FAA
Regional Office having jurisdiction over the area within which the construction
or alteration will be located. Copies of FAA Form 7460-1 may be obtained from
the headquarters of the Federal Aviation Administration and the regional
offices.
(b) The notice required under Section 77.13(a)(1) through (4) must be
submitted at least 30 days before the earlier of the following dates ___
(1) The date the proposed construction or alteration is to begin.
(2) The date an application for a construction permit is to be filed.
However, a notice relating to proposed construction or alteration that is
subject to the licensing requirements of the Federal Communications Act may be
sent to the FAA at the same time the application for construction is filed with
the Federal Communications Commission, or at any time before that filing.
(c) A proposed structure of an alteration to an existing structure that
exceeds 2,000 feet in height above the ground will be presumed to be a hazard to
air navigation and to result in an inefficient utilization of airspace and the
applicant has the burden of overcoming that presumption. Each notice submitted
under the pertinent provisions of Part 77 proposing a structure in excess of
2,000 feet above ground, or an alteration that will make an existing structure
exceed that height must contain a detailed showing directed to meeting this
burden. Only in exceptional cases, where the FAA concludes that a clear and
compelling showing has been made that it would not result in an inefficient
utilization of the airspace and would not result in a hazard to air navigation,
will a determination of no hazard be issued.
(d) In the case of an emergency involving essential public services,
public health, or public safety, that requires immediate construction or
alteration, the 30 day requirement in paragraph (b) of this section does not
apply and the notice may be sent by telephone, telegraph, or other expeditious
means, with an executed FAA Form 7460-1 submitted within five days thereafter.
Outside normal business hours, emergency notices by telephone or telegraph may
be submitted to the nearest FAA Flight Service Station.
(e) Each person who is required to notify the Administrator by paragraph
(b) or (c) of Section 77.13, or both, shall send an executed copy of FAA Form
7460-2. Notice of Actual Construction or Alteration, to the Manager Air Traffic
Division, FAA Regional Office having jurisdiction over the area involved.
C-3
<PAGE>
ADDRESSES OF THE REGIONAL AND SAN JUAN OFFICES
Alaska Region Central Region
AK NE, IA, MO, KS
------------------------------- -----------------------------
Alaskan Regional Office Central Regional Office
Air Traffic Division AAL-530 Air Traffic Division ACE-530
701 "C" Street 601 East 12th Street
Anchorage, AK 99513 Kansas City, MO 64106
Mail Address: Tel. 816-374-3408
701 "C" Street, Box 14
Anchorage, AK 99513
Tel. 907-271-5892
Northwest Mountain Region Eastern Region
WA, OR, MT, ID, WY, UT, CO NY, PA, WV, VA, DC, MD,
DE, NJ
------------------------------- -----------------------------
Northwest Mountain Regional Office Eastern Regional Office
Air Traffic Division ANM-530 Air Traffic Division AEA-530
17900 Pacific Hwy. South JFK International Airport
C-68968 Fitzgerald Federal Building
Seattle, WA 98168 Jamaica, NY 11430
Tel. 206-431-2530 Tel. 718-917-1228
Great Lakes Region New England Region
ND, WI, MI, SD, IL, OH, MN, IN MA, NH, VT, RI, CT, ME
------------------------------- -----------------------------
Great Lakes Regional Office New England Regional Office
Air Traffic Division AGL-530 Air Traffic Division ANE-530
2300 East Devon Avenue 12 New England Executive Park
Des Plaines, IL 60018 Burlington, MA 01803
Tel. 312-694-7458 Tel. 617-273-7141
C-4
<PAGE>
Western-Pacific Region Southern Region
HI, CA, NV, AZ, GU KY, TN, NC, SC, GA, AL, MS, FL
------------------------------- ------------------------------
Western-Pacific Regional Office Southern Regional Office
Air Traffic Division AWP-530 Air Traffic Division ASO-530
15000 Aviation Boulevard 3400 Norman Berry Drive
Hawthorne, CA 90260 East Point, GA 30344
Mail Address: Mail Address:
AWP-530 P. O. Box 20636
P. O. Box 92007 Atlanta, GA 30320
Worldly Postal Center Tel. 404-763-7646
Los Angeles, CA 90009
Tel. 213-297-1182
Southwest Region San Juan Office
NM, TX, OK, AR, LA VI, PR
------------------------------- -----------------------------
Southwest Regional Office DOT/FAA
Air Traffic Division ASW-530 San Juan CERAP
4400 Blue Mound Road ATTN: ML & SO
Fort Worth, TX 76106 GOP Section
Mail Address: San Juan, PR 00936
P. O. Box 1689 Tel. 809-791-1615
Fort Worth, TX 76101
Tel. 817-877-2640
C-5
<PAGE>
Appendix C
DO NOT REMOVE CARBONS FORM APPROVED OMB NO. 2120-0001
- --------------------------------------------------------------------------------
Aeronautical Study Number
NOTICE OF PROPOSED CONSTRUCTION OR ALTERATION
U.S. Department of Transportation
Federal Aviation Administration
<TABLE>
<CAPTION>
<S> <C>
________________________________________________________________________________________________________________________________
1. NATURE OF PROPOSAL 2. COMPLETE DESCRIPTION OF STRUCTURE
________________________________________________________________________________________________________________________________
A. Type B. Class C. Work Schedules Dates A. Include effective radiated power and assigned frequency of
__ New Construction __ Permanent Beginning ____________ all existing, proposed or modified AM, FM, or TV
__ Alteration __ Temporary End________________ broadcast stations utilizing this structure.
(Duration ___ months) B. Include size and configuration of power transmission lines
and their supporting towers in the vicinity of FAA
facilities and public airports.
3A. NAME AND ADDRESS OF INDIVIDUAL, COMPANY, CORPORATION, C. Include information showing site orientation, dimen-
ETC. PROPOSING THE CONSTRUCTION OR ALTERATION. (NUMBER, sions, and construction materials of the proposed
STREET, CITY, STATE AND ZIP CODE) structure.
( ) _____________________
AREA CODE TELEPHONE NUMBER
-------- --------
| |
| |
| |
| |
| |
-------- --------
(IF MORE SPACE IS REQUIRED, CONTINUE ON A
SEPARATE SHEET.)
B. Name, address and telephone number of proponent's representative if
different than 3 above.
________________________________________________________________________________________________________________________________
4. LOCATION OF STRUCTURE 5. HEIGHT AND ELEVATION (COMPLETE TO
NEAREST FOOT)
A. Coordinates B. Nearest City or Town C. Name of nearest airport, A. Elevation of site above mean sea
(TO NEAREST SECOND) and State heliport, flightpark, or sea- level.
plane base.
____________________ _____________________ __________________________ ______________________________________
Degrees ' " (1) Distance to 4B (1) Distance from structure B. Height of Structure including all
________ ____ ____ ____________ Miles to nearest point of nearest appurtenances and lighting (if any)
Latitude runway. above ground, or water if so situated.
________________________ ______________________________________
(2) Direction to 4B (2) Direction from structure to C. Overall height above mean sea level
Degrees ' " airport. (A + B)
________ ____ ____ _____________________ ________________________ ______________________________________
Longitude
</TABLE>
C-6
<PAGE>
- --------------------------------------------------------------------------------
D. Description of location of site with respect to highways, streets, airports,
prominent terrain features, existing structures, etc.
Attach a U.S. Geological Survey quadrangle map or equivalent showing the
relationship of construction site to nearest airport(s). (IF MORE SPACE IS
REQUIRED, CONTINUE ON A SEPARATE SHEET OF PAPER AND ATTACH TO THIS NOTICE).
- --------------------------------------------------------------------------------
NOTICE IS REQUIRED BY PART 77 OF THE FEDERAL AVIATION REGULATIONS (14 C.F.R.
PART 77) PURSUANT TO SECTION 1101 OF THE FEDERAL AVIATION ACT OF 1958, AS
AMENDED (49 U.S.C. 1101). PERSONS WHO KNOWINGLY AND WILLINGLY VIOLATE THE
NOTICE REQUIREMENTS OF PART 77 ARE SUBJECT TO A FINE (CRIMINAL PENALTY) OF NOT
MORE THAN $500 FOR THE FIRST OFFENSE AND NOT MORE THAN $2,000 FOR SUBSEQUENT
OFFENSES, PURSUANT TO SECTION 902(A) OF THE FEDERAL AVIATION ACT OF 1958, AS
AMENDED [49 U.S.C. 1472(A)].
- --------------------------------------------------------------------------------
I HEREBY CERTIFY that all of the above statements made by me are true, complete,
and correct to the best of my knowledge. In addition, I agree to obstruction
mark and/or light the structure in accordance with established marking &
lighting standards if necessary.
- --------------------------------------------------------------------------------
Date Typed Name/Title of Person Filing Notice Signature
- --------------------------------------------------------------------------------
FOR FAA USE ONLY
- --------------------------------------------------------------------------------
THE PROPOSAL
___ Does not require a notice to FAA
___ Is not identified as an obstruction under any standard of FAR Part 77
Subpart C and would not be a hazard for air navigation.
___ Is identified as an obstruction under the standards of FAR Part 77
Subpart C, but would not be a hazard to air navigation.
___ Should be obstruction marked and lighted per FAA Advisory Circular
707460-1, Chapter(s) __________.
___ Obstruction marking and lighting are not necessary.
Supplemental Notice of Construction FAA Form 7460-2 is required any time the
project is abandoned for:
___ At least 8 hours before the start of construction
___ Within five days after the construction reaches its greatest height.
This determination expires on ___________________________________ unless:
(a) amended, revised or terminated by the issuing office;
(b) the construction is subject to the licensing authority of the Federal
Communication and application for a construction permit is made to the
FCC on or before the above expiration date. In such case, the
determination expires on the date prescribed by the FCC for completion of
construction on the date the FCC denies the application.
C-7
<PAGE>
NOTE: Request for extension of the effective period of this determination must
be postmarked or delivered to issuing office at _____???________ to the
expiration date.
If the structure is subject to the licensing authority of the FCC, a copy of
this determination will be sent to this Agency.
REMARKS:
C-8
<PAGE>
THIS IS YOUR WORKSHEET FORM APPROVED OMB NO. 2120-0001
- --------------------------------------------------------------------------------
Aeronautical Study Number
NOTICE OF PROPOSED CONSTRUCTION OR ALTERATION
U.S. Department of Transportation
Federal Aviation Administration
<TABLE>
<CAPTION>
<S> <C>
________________________________________________________________________________________________________________________________
1. NATURE OF PROPOSAL 2. COMPLETE DESCRIPTION OF STRUCTURE
________________________________________________________________________________________________________________________________
A. Type B. Class C. Work Schedules Dates A. Include effective radiated power and assigned frequency of
__ New Construction __ Permanent Beginning ____________ all existing, proposed or modified AM, FM, or TV
__ Alteration __ Temporary End________________ broadcast stations utilizing this structure.
(Duration ___ months) B. Include size and configuration of power transmission lines
and their supporting towers in the vicinity of FAA
facilities and public airports.
3A. NAME AND ADDRESS OF INDIVIDUAL, COMPANY, CORPORATION, C. Include information showing site orientation, dimen-
ETC. PROPOSING THE CONSTRUCTION OR ALTERATION. (NUMBER, sions, and construction materials of the proposed
STREET, CITY, STATE AND ZIP CODE) structure.
( ) _____________________
AREA CODE TELEPHONE NUMBER
-------- --------
| |
| |
| |
| |
| |
-------- --------
(IF MORE SPACE IS REQUIRED, CONTINUE ON A
SEPARATE SHEET.)
B. Name, address and telephone number of proponent's representative if
different than 3 above.
________________________________________________________________________________________________________________________________
4. LOCATION OF STRUCTURE 5. HEIGHT AND ELEVATION (COMPLETE TO
NEAREST FOOT)
A. Coordinates B. Nearest City or Town C. Name of nearest airport, A. Elevation of site above mean sea
(TO NEAREST SECOND) and State heliport, flightpark, or sea- level.
plane base.
____________________ _____________________ __________________________ ______________________________________
Degrees ' " (1) Distance to 4B (1) Distance from structure B. Height of Structure including all
________ ____ ____ ____________ Miles to nearest point of nearest appurtenances and lighting (if any)
Latitude runway. above ground, or water if so situated.
________________________ ______________________________________
(2) Direction to 4B (2) Direction from structure to C. Overall height above mean sea level
Degrees ' " airport. (A + B)
________ ____ ____ _____________________ ________________________ ______________________________________
Longitude
</TABLE>
C-9
<PAGE>
- --------------------------------------------------------------------------------
D. Description of location of site with respect to highways, streets, airports,
prominent terrain features, existing structures, etc. Attach a U.S.
Geological Survey quadrangle map or equivalent showing the relationship of
construction site to nearest airport(s). (IF MORE SPACE IS REQUIRED,
CONTINUE ON A SEPARATE SHEET OF PAPER AND ATTACH TO THIS NOTICE).
- --------------------------------------------------------------------------------
NOTICE IS REQUIRED BY PART 77 OF THE FEDERAL AVIATION REGULATIONS (14 C.F.R.
PART 77) PURSUANT TO SECTION 1101 OF THE FEDERAL AVIATION ACT OF 1958, AS
AMENDED (49 U.S.C. 1101). PERSONS WHO KNOWINGLY AND WILLINGLY VIOLATE THE
NOTICE REQUIREMENTS OF PART 77 ARE SUBJECT TO A FINE (CRIMINAL PENALTY) OF NOT
MORE THAN $500 FOR THE FIRST OFFENSE AND NOT MORE THAN $2,000 FOR SUBSEQUENT
OFFENSES, PURSUANT TO SECTION 902(A) OF THE FEDERAL AVIATION ACT OF 1958, AS
AMENDED [49 U.S.C. 1472(A)].
- --------------------------------------------------------------------------------
I HEREBY CERTIFY that all of the above statements made by me are true, complete,
and correct to the best of my knowledge. In addition, I agree to obstruction
mark and/or light the structure in accordance with established marking &
lighting standards if necessary.
- --------------------------------------------------------------------------------
Date Typed Name/Title of Person Filing Notice Signature
----------------------------------------------------------------
NOTICE TO PREPARER OF FORM
-------------------------------------------------------
1. Retain this Work Sheet as your copy.
2. Complete and return the remaining copies. Do not remove carbons.
3. Be sure all copies are legible.
4. Print or type all items. The address area will be used to return
a copy of this form. (see above)
5. Notification to the FAA does not waive the requirements of any
other Government Agency.
6. FAA will acknowledge this notice within approximately 30 days of
its receipt.
________________________________________________________________________________
AA Form 7460-1 (8-85) THIS IS YOUR WORKSHEET
C-10
13714.MEM2
<PAGE>
Appendix D
METROPOLITAN PLAN COMMISSION
DOCKET NO. 61-AO-4
ORDINANCE
BE IT ORDAINED by the Marion County Council of Marion County, Indiana, that
Marion County Council Ordinance No. 8-1957, adopted by The Marion County Council
on March 28,1957, and subsequently amended pursuant to Section 85 of Chapter 283
of the Acts of the Indiana General Assembly for 1955, as amended, and all zoning
ordinances adopted as parts thereof, be amended by the addition of the following
zoning district:
SECTION 1.00 ESTABLISHMENT OF AIRPORT SPECIAL USE DISTRICT
AIRPORT SPECIAL USE DISTRICT, which primary zoning district shall permit the
following uses:
PUBLIC AIRPORTS municipally owned or operated, including all necessary
navigation and flight operation facilities, and accessory uses including,
but not limited to, terminal, storage and servicing facilities for
airplanes or other aircraft, air research laboratories and other
accessory uses directly related to the operation of such airport and an
integral part thereof, including, but not limited to, transportation,
restaurant, hotel or motel facilities and similar related services for
the comfort and accommodation of air passengers and the public; - subject
to the following requirements:
SECTION 2.00 AIRPORT SPECIAL USE DISTRICT REGULATIONS
1. No use permitted in the AIRPORT SPECIAL USE DISTRICT shall cause injury
or damage - to adjacent land uses, property or the public health, safety
or welfare. Provided, however, that compliance by such public airport
with all applicable safety and operational standards and regulations of
the Federal Aviation Agency and other applicable federal aviation
regulatory authorities shall be deemed compliance with this sub-section's
requirements, as applied to navigation and flight operational uses.
2. All uses within the AIRPORT SPECIAL USE DISTRICT shall be served by and
have access only from interior access roads located within said DISTRICT
to carry vehicular traffic to and from major entrances and exits serving
the airport, and designed and constructed in accordance with local street
specifications of the Subdivision Control Ordinance of Marion County,
Indiana, Ordinance 58-AO-13, as amended.
3. For each use permitted within the AIRPORT SPECIAL USE DISTRICT, adequate
off-street parking area with concrete or bituminous paved surface shall
be provided. Such parking area shall not be located within one hundred
(100) feet of any boundary of the Al AIRPORT SPECIAL USE DISTRICT, unless
a compact hedge or row of shrubbery of at least four (4) feet in height
is provided between such parking area and District boundary. In no case
shall such parking area be located closer to a District boundary than ten
(10) feet.
4. No building or structure, or part thereof, shall be located within one
hundred (100) feet of any boundary of the AIRPORT SPECIAL USE DISTRICT,
and such one hundred (100) foot
<PAGE>
buffer area shall be maintained in turf, plant material or as off-street
parking area, as provided in sub-section (3) above.
5. Prior to improvement location permit issuance for any building or
structure within the AIRPORT SPECIAL USE DISTRICT, the plot or site plan
for such building or structure, in conformity with all applicable zoning
requirements, shall be filed with the Metropolitan Planning Department of
Marion County, Indiana.
SECTION 3.00 ZONING MAPS DESIGNATION
BE IT FURTHER ORDAINED that all land within said district snail be designated
upon the applicable zoning maps (adopted as a part of said zoning ordinances and
Ordinance No. 8-1957) by the symbol "A" superimposed in the approximate
geographic center of such district, the boundaries of which district to be
designated and outlined by a dashed line.
BE IT FURTHER ORDAINED that an emergency exists for the passage of this
ordinance, and that the same shall be in full force and effect from and after
this date.
Beurt R. SerVaas
-----------------------------------
Ronald E. Bingman
-----------------------------------
Wm. A. Brown
-----------------------------------
H. Norris Cottingham
-----------------------------------
James A. Buck
-----------------------------------
Edwin J. Koch
-----------------------------------
THE MARION C0UNTY COUNCIL OF
MARION COUNTY, INDIANA
Date: January 7, 1963
-----------------------------------------------
Attest: John T. Sutton by Charlotte Newman, Deputy
---------------------------------------------
AUDITOR OF MARION COUNTY, INDIANA
<PAGE>
Appendix E
APPROVED PLANT LIST
BOTANICAL NAME COMMON NAME SIZE
___________________________________________________________________________
SHADE TREES:
Acer platanoides Norway Maple 2-1/2" - 3"
Acer rubrum Red Maple 2-1/2" - 3"
Acer saccharum Sugar Maple 2-1/2" - 3"
Fraxinus pennsylvanica Green Ash 2-1/2" - 3"
Celtis occidentalis Hackberry 2-1/2" - 3"
Liquidambar styraciflua Sweet Gum 2-1/2" - 3"
Platanus occidentalis American Sycamore 2-1/2" - 3"
Quercus alba White Oak 2-1/2" - 3"
Quercus imbricaria Shingle Oak 2-1/2" - 3"
Gleditsia triacanthos Honey Locust 2-1/2" - 3"
ORNAMENTAL TREES:
Acer ginnala Amur Maple 8' Ht.
Acer griseum Paperbark Maple 8' Ht.
Acer palmatum Japanese Maple 5' Ht.
Acer tataricum Tatarian Maple 8' Ht.
Cornus florida Flowering Dogwood 6' Ht.
Crataegus phaenopyrum Washington Hawthorne 1-1/2" Cal.
Magnolia ~ soulangiana Sancer MagnoLia 6' Ht.
MagnoLia stellata Star MagnoLia 6' Ht.
Malus floribunda Japanese Flowering
Crabapple 6' Ht.
Malus sargentii Sargent Crabapple 1-1/2" Cal.
Malus x zumi Zumi Crabapple 1-1/2" Cal.
Pyrus calleryana `Redspire' Redspire Pear 1-3/4" Cal.
EVERGREEN TREES:
Abies concolor White Fir 6' - 8' Ht.
Picea abies Norway Spruce 6' - 8' Ht.
Picea pungens Colorado Spruce 6' - 8' Ht.
Pinus densiflora Japanese Red Pine 6' - 8' Ht.
Pinus nigra Black Pine 6' - 8' Ht.
Pinus resinosa Red Pine 6' - 8' Ht.
Pinus strobus Eastern White Pine 6' - 8' Ht.
Pinus sylvestris Scots Pine 6' - 8' Ht.
E-1
<PAGE>
BOTANICAL NAME COMMON NAME SIZE
___________________________________________________________________________
SHRUBS:
Calycanthus floridus Carolina Allspice 18"-24"
Cotoneaster apiculata Cranberry Cotoneaster 18"-24"
Cotoneaster divaricata Spreading Cotoneaster 18"-24"
Euonyrnus alata Burning Bush 18"-24"
Juniperus chinensis Chinese Juniper 15"
Juniperus horizontalis Creeping Juniper 12"
Rhododendron catawbiense Catawba Rhododendron 18"-24"
Spirea x bumalda Bumalda Spirea 18"-24"
Taxus x media Intermediate Yew 18"-24"
Viburnum x burkwoodii Burkwood Viburnum 30"
Viburnum carlesii Korean Spice Viburnum 18"-24"
Viburnum dentatum Arrowwood 30"
Viburnum lantana Wayfaring Tree 30"
Viburnum opulus European Cranberry
Bush 30"
Viburnum plicatum Japanese Snowball 36"
GROUND COVERS:
Enonymus fortunei Wintercreeper 2 - 1/2" Peat Pots
Hedera helix English Ivy 2 - 1/2" Peat Pots
Pachysandra terminalis Japanese Spurge 2 - 1/2" Peat Pots
Vinca minor Periwinkle 2 - 1/2" Peat Pots
RECOMMENDED SOD AND SEED MIXTURE: Will be addressed at final review as part of
landscape plans.
E-2
<PAGE>
Appendix A to Exhibit 10.3
Narrative Description of Graphics
Exhibit E. To Exhibit 10.3 Lease Agreement, contains 15 diagrams of site
development details. The pages on which these diagrams appear are labeled
"Figure 1" through "Figure 15" and contain a brief description of the relevant
diagram.
<PAGE>
EXHIBIT 11.1
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Net income applicable to common and common equivalent shares and the
weighted average number of shares used in the calculation of earnings per share
for the three- and six-month periods ended November 30, 1994 and 1993 were as
follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Three Months Six Months
Ended November 30, Ended November 30,
-------------------- --------------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income applicable to common
and common equivalent shares . . . . $ 86,139 $ 59,691 $147,281 $ 92,542
-------- -------- -------- --------
-------- -------- -------- --------
Average shares of common stock
outstanding. . . . . . . . . . . . . 55,943 55,143 55,924 54,965
Common Equivalent Shares:
Assumed exercise of outstanding
dilutive options . . . . . . . . . 2,177 3,353 2,513 2,667
Less shares repurchased from
proceeds of assumed exercise
of options . . . . . . . . . . . . (1,735) (2,646) (1,937) (2,114)
-------- -------- -------- --------
Average common and common
equivalent shares. . . . . . . . . . 56,385 55,850 56,500 55,518
-------- -------- -------- --------
Earnings per share . . . . . . . . . . $ 1.53 $ 1.07 $ 2.61 $ 1.67
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
The computation of the number of shares repurchased from the proceeds of
the assumed exercise of outstanding dilutive options is based upon the average
market price of the Company's common stock during the periods. Common
equivalent shares are excluded in periods in which their assumed exercise would
have an anti-dilutive effect.
Fully diluted earnings per share are substantially the same as earnings per
share.
<PAGE>
Exhibit 12.1
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
Year Ended May 31, November 30,
------------------------------------------------------- --------------------
1990 1991 1992 1993 1994 1994 1993
-------- -------- --------- -------- -------- -------- --------
(In thousands, except ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income (loss) before income taxes. . . . $218,423 $ 40,942 $(146,828) $203,576 $378,462 $258,387 $171,374
Add back: Interest expense, net of
capitalized interest . . . . 199,237 196,982 176,321 168,762 152,170 71,692 78,145
Amortization of debt
issuance costs . . . . . . . 2,989 1,634 2,570 4,906 2,860 1,327 1,504
Portion of rent expense
representative of
interest factor. . . . . . . 248,830 292,840 299,012 262,724 285,261 155,701 136,005
-------- -------- -------- -------- -------- -------- --------
Earnings as adjusted . . . . . . . . . . $669,479 $532,398 $ 331,075 $639,968 $818,753 $487,107 $387,028
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Fixed Charges:
Interest expense, net of
capitalized interest . . . . . . . . . $199,237 $196,982 $ 176,321 $168,762 $152,170 $ 71,692 $ 78,145
Capitalized interest . . . . . . . . . . 16,986 35,442 26,603 31,256 29,738 11,970 16,311
Amortization of debt issuance costs. . . 2,989 1,634 2,570 4,906 2,860 1,327 1,504
Portion of rent expense
representative of interest factor. . . 248,830 292,840 299,012 262,724 285,261 155,701 136,005
-------- -------- -------- -------- -------- -------- --------
$468,042 $526,898 $504,506 $467,648 $470,029 $240,690 $231,965
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Ratio of Earnings to Fixed Charges . . . 1.4 1.0 (A) 1.4 1.7 2.0 1.7
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
<FN>
(A) Earnings were inadequate to cover fixed charges by $173.4 million for the year ended May 31, 1992.
</TABLE>
<PAGE>
EXHIBIT 15.1
December 13, 1994
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
We are aware that Federal Express Corporation will be incorporating by reference
in its previously filed Registration Statements No. 2-74000, 2-95720, 33-20138,
33-38041, 33-47176, 33-50013, 33-51623, 33-55055 and 33-56569 its Report on Form
10-Q for the quarter ended November 30, 1994, which includes our report dated
December 13, 1994 covering the unaudited interim financial information contained
therein. Pursuant to Regulation C of the Securities Act of 1933, that report is
not considered part of these registration statements prepared or certified by
our firm or a report prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.
Very truly yours,
Arthur Andersen LLP
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated balance sheets and condensed consolidated statements
of operations on pages 3-5 of the Company's Form 10Q for the quarterly
period ended November 30, 1994, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-START> JUN-01-1994
<PERIOD-END> NOV-30-1994
<CASH> 245,965
<SECURITIES> 0
<RECEIVABLES> 1,186,924
<ALLOWANCES> 34,245
<INVENTORY> 174,816
<CURRENT-ASSETS> 1,745,900
<PP&E> 7,234,678
<DEPRECIATION> 3,701,073
<TOTAL-ASSETS> 6,052,012
<CURRENT-LIABILITIES> 1,508,700
<BONDS> 1,470,463
<COMMON> 5,596
0
0
<OTHER-SE> 2,075,719
<TOTAL-LIABILITY-AND-EQUITY> 6,052,012
<SALES> 0
<TOTAL-REVENUES> 4,589,892
<CGS> 0
<TOTAL-COSTS> 4,270,531
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 63,449
<INCOME-PRETAX> 258,387
<INCOME-TAX> 111,106
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 147,281
<EPS-PRIMARY> 2.61
<EPS-DILUTED> 2.61
</TABLE>
