As filed with the Securities and Exchange Commission on July 5, 1996
Registration No. 33-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_______________________
FEDERAL EXPRESS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 71-0427007
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2005 Corporate Avenue
Memphis, Tennessee 38132
(901) 369-3600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
KENNETH R. MASTERSON, ESQ.
Executive Vice President, General Counsel and Secretary
Federal Express Corporation
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
(901) 395-3388
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_______________________
Copies to:
SARAH JONES BESHAR, ESQ.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
_______________________
Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this registration statement as determined
in light of market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933 (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities Being Price Offering Registration
Being Registered Registered Per Unit Price(1) Fee
- ------------------- ---------- -------- --------- -------------
Equipment Trust
Certificates
Pass Through
Certificates
Debt Securities
Preferred Stock(2)
Common Stock,
par value $.10
per share(3) $1,000,000,000 100% $1,000,000,000 $307,773.79
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(1) Estimated solely for purposes of determining the registration fee.
(2) Such indeterminate number of shares of Preferred Stock as may,
from time to time, be issued at indeterminate prices.
(3) Such indeterminate number of shares of Common Stock as may,
from time to time, be issued at indeterminate prices.
Pursuant to Rule 429 under the Securities Act, the Prospectuses filed
as part of this Registration Statement relate to the securities registered
hereby and to the remaining unsold $100,000,000 amount of Debt Securities
and $7,456,000 amount of Equipment Trust Certificates and Pass Through
Certificates previously registered by Federal Express Corporation under its
Registration Statements on Form S-3, File Nos. 33-47176 and 33-56569,
respectively.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
==============================================================================
EXPLANATORY NOTE
This Registration Statement contains four forms of prospectus: each,
as supplemented, to be used in connection with offerings of (1) equipment
trust certificates; (2) pass through certificates; (3) debt securities;
or (4) common stock and preferred stock, respectively. No prospectus will
be used to consummate sales of securities unless accompanied by a
prospectus supplement applicable to the securities offered thereby.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 5, 1996
PROSPECTUS
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[COMPANY LOGO]
EQUIPMENT TRUST CERTIFICATES
_____________________
Up to $1,000,000,000 aggregate principal amount of Equipment Trust
Certificates (the "Certificates") may be offered for sale from time to time
pursuant to this Prospectus and one or more Prospectus Supplements. The
Certificates may be offered in one or more Series in amounts, at prices and on
terms to be determined at the time of sale. The Certificates of each Series
will be issued as nonrecourse obligations by an Owner Trustee, acting not in
its individual capacity but solely as the Owner Trustee of a separate Owner
Trust, and authenticated by the Indenture Trustee, acting not in its
individual capacity but solely as the Indenture Trustee under an Indenture
among the Owner Trustee, the Indenture Trustee and Federal Express Corporation
(the "Corporation"), to finance or refinance a portion of the payment by such
Owner Trustee of the purchase price for a specified aircraft (an "Aircraft"),
which has been or will be leased to the Corporation in connection with a
leveraged lease transaction. The Prospectus Supplement relating to each
offering will describe certain terms of the Certificates offered thereby, the
Indentures and Leases and the leveraged lease transactions and Aircraft
relating to such Certificates.
For each Aircraft, the related Owner Trustee will issue Certificates of the
related Series, each of which may have a different principal amount, maturity
date and interest rate, which will be set forth on the cover of the related
Prospectus Supplement. The Certificates of each Series will be secured by a
security interest in the related Aircraft and by the Lease relating thereto,
including the right to receive rent payable by the Corporation under such
Lease. Although the Certificates will not be obligations of, nor guaranteed
by, the Corporation, the amounts payable by the Corporation under such Lease
will be sufficient to pay in full when due all principal of and interest on
the Certificates related to such Aircraft.
Interest will be payable on the Certificates of each Series on the dates
and at the rates per annum set forth for such Certificates in the applicable
Prospectus Supplement. Principal will be payable on the Certificates of each
Series in scheduled amounts and on specified dates as set forth in the
applicable Prospectus Supplement. The Certificates will be issued in
registered form only and, unless otherwise specified in the applicable
Prospectus Supplement, in accordance with a book-entry system.
The Certificates may be sold to or through underwriters or directly to
other purchasers or through agents. The Prospectus Supplement relating to
each offering will set forth the names of any underwriters, dealers or agents
involved in the sale of the Certificates in connection with which this
Prospectus is being delivered, the amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters or agents.
Prior to their issuance there will have been no market for the Certificates
of any Series and there can be no assurance that one will develop. Unless
otherwise indicated in the applicable Prospectus Supplement, the Corporation
does not intend to apply for the listing of any Series of Certificates on a
national securities exchange.
This Prospectus may not be used to consummate sales of any Certificates
unless accompanied by the Prospectus Supplement applicable to the Certificates
being sold.
____________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
___________________________
The date of this Prospectus is July , 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
AVAILABLE INFORMATION
Federal Express Corporation (the "Corporation") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy and information statements and other information filed by the
Corporation with the Commission can be inspected, and copies may be obtained
at prescribed rates, at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
Regional Offices of the Commission: Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and New York Regional Office,
7 World Trade Center, New York, New York 10048. Such material can also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. and inspected and copied at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, herein referred to as the
"Registration Statement") filed by the Corporation under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus does not contain all
of the information included in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to the
Corporation and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission in accordance with the
provisions of the Exchange Act are incorporated herein by reference and made a
part hereof:
1. The Corporation's Annual Report on Form 10-K for the fiscal
year ended May 31, 1995 filed August 4, 1995.
2. The Corporation's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1995, November 30, 1995 and February 29,
1996, respectively, filed October 13, 1995, January 12, 1996 and
April 12, 1996, respectively.
3. The Corporation's Current Reports on Form 8-K dated August 14,
1995, August 16, 1995, September 14, 1995, October 17, 1995, October
25, 1995, October 26, 1995, January 12, 1996, March 14, 1996, April
30, 1996, June 5, 1996 and June 7, 1996, respectively, filed August
15, 1995, August 18, 1995, September 19, 1995, October 18, 1995,
October 27, 1995, October 30, 1995, January 16, 1996, March 26, 1996,
June 5, 1996, June 10, 1996 and June 21, 1996, respectively.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Corporation will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all documents incorporated by
reference in this Prospectus, without exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to: Thomas L. Holland, Managing
Director -- Investor Relations, Federal Express Corporation, by mail at Box
727, Memphis, Tennessee 38194-1854 or by telephone at (901) 395-3478.
FEDERAL EXPRESS CORPORATION
The Corporation offers a wide range of express services for the
time-definite transportation of documents, packages and freight throughout the
world using an extensive fleet of aircraft and vehicles and leading-edge
information technologies. Corporate headquarters are located at 2005
Corporate Avenue, Memphis, Tennessee 38132, telephone (901) 369-3600.
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
Nine Months Ended
Year Ended May 31 February 28 February 29
---------------------------- ----------------------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
Ratio of Earnings
to Fixed Charges(a) 1.0x (b) 1.4x 1.7x 2.0x 2.0x 1.8x
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(a) Earnings included in the calculation of the ratio of earnings to
fixed charges represent income before income taxes plus fixed charges
(other than capitalized interest). Fixed charges include interest
expense, capitalized interest, amortization of debt issuance costs and
a portion of rent expense representative of interest.
(b) Earnings were inadequate to cover fixed charges by $173.4 million for
the year ended May 31, 1992.
USE OF PROCEEDS
The proceeds from the sale of the equipment trust certificates (the
"Certificates") of each series (a "Series") offered pursuant to this
Prospectus and a related Prospectus Supplement will be used to finance or
refinance the debt portion and, in certain cases, to refinance some of the
equity portion of a separate leveraged lease transaction entered into by
the Corporation, as lessee, with respect to an aircraft (an "Aircraft")
specified in such Prospectus Supplement. For each Aircraft, unless
otherwise specified in the applicable Prospectus Supplement, the debt
portion financed or refinanced will not exceed 80% of the purchase price
for such Aircraft.
The discounts and commissions relating to the offering of the Certificates
of each Series will be paid by the Owner Participant (as defined below). The
other expenses relating to the issuance and offering of such Certificates
(other than certain expenses to be paid directly by the Corporation) will be
paid by the Owner Participant as such other expenses become due or, if
previously paid by the Corporation, will be reimbursed to the Corporation by
the Owner Participant.
OUTLINE OF LEVERAGED LEASE TRANSACTIONS
Each Prospectus Supplement will specify the type and model of Aircraft
relating to the Certificates offered thereby, the engines with which such
Aircraft is equipped and when such Aircraft was delivered new by the
manufacturer to the Corporation, the Owner Trustee or any prior owner, as the
case may be. Each Aircraft has been or will be sold to First Security Bank,
National Association, or another bank or trust company, not in its individual
capacity but solely as owner trustee (the "Owner Trustee") of a trust (an
"Owner Trust" created pursuant to a "Trust Agreement") for the benefit of the
owner participant named in the related Trust Agreement (the "Owner
Participant"). Simultaneously with such sale, the Owner Trustee has leased or
will lease the Aircraft to the Corporation pursuant to a lease (a "Lease")
between the Owner Trustee, as lessor, and the Corporation, as lessee. Each of
the leveraged lease transactions was or will be effected pursuant to a
separate participation agreement (a "Participation Agreement") among the Owner
Participant, the Owner Trustee, the Indenture Trustee (as defined below), the
Corporation and, in the case of a refinancing, each holder of a loan
certificate issued under the Indenture as originally executed.
For each Aircraft, the related Certificates will be issued as a separate
Series by the Owner Trustee, as nonrecourse obligations, and authenticated by
State Street Bank and Trust Company, or another bank or trust company, as
indenture trustee (the "Indenture Trustee") pursuant to a separate trust
indenture and security agreement between the Owner Trustee, the Indenture
Trustee and the Corporation (an "Indenture"). Each Owner Participant will
have provided or will provide, from sources other than the related
Certificates, unless otherwise specified in the applicable Prospectus
Supplement, at least 20% of the purchase price for the related Aircraft.
DESCRIPTION OF THE CERTIFICATES
The discussion that follows is a summary and does not purport to be
complete. The summary includes descriptions of the material terms of the
Indenture and the Certificates, the forms of which have been filed as exhibits
to the Registration Statement of which this Prospectus is a part. For the
Certificates offered pursuant to this Prospectus and any Prospectus
Supplement, this summary will be qualified in its entirety by the detailed
information appearing in such Prospectus Supplement, as well as by the form of
the Certificates of each Series offered thereby and the related Indenture,
Lease and Participation Agreement which will be filed as exhibits to a
post-effective amendment to this Registration Statement, a Current Report on
Form 8-K, a Quarterly Report on Form 10-Q or an Annual Report on Form 10-K, as
applicable, to be filed with the Commission in connection with the issuance of
such Certificates. This summary makes use of terms defined in and is
qualified in its entirety by reference to the form of Indenture referred to
above.
Each Prospectus Supplement will include a glossary of certain terms used in
connection with the Certificates offered thereby. Except as otherwise
indicated below or as described in the applicable Prospectus Supplement, the
following summary will apply to the Certificates, the Indenture, the Lease and
the Participation Agreement relating to each Aircraft. Additional provisions
with respect to the Indentures, the Certificates, the Leases and the
Participation Agreements relating to any particular offering of Certificates
will be described in the applicable Prospectus Supplement. To the extent that
any provision in any Prospectus Supplement is inconsistent with any provision
of this summary, the provision of such Prospectus Supplement will control.
General
The Certificates of each Series will be issued as nonrecourse obligations
by the Owner Trustee, acting for a separate Owner Trust for the benefit of an
Owner Participant, and will be authenticated under the related Indenture by
the Indenture Trustee for the benefit of the registered holders of the
Certificates of such Series (the "Holders"). All of the Certificates issued
under the same Indenture will relate to a specific Aircraft which will be
leased by the Owner Trustee to the Corporation pursuant to a separate Lease
between the Owner Trustee and the Corporation. The Aircraft subject to each
Lease and the Certificates issued under the related Indenture, will be
specified in the applicable Prospectus Supplement. The Corporation will be
obligated to make rental payments under each Lease that will be sufficient to
pay the principal of and interest on the related Certificates when and as due
and payable. The Corporation's obligations to pay rent and to cause other
payments to be made under each Lease will be general obligations of the
Corporation. The Certificates will not, however, be obligations of, or
guaranteed by, the Corporation.
The Certificates will not be obligations of the Owner Trustee, in its
individual capacity, or the Owner Participant; and neither the Owner Trustee,
in its individual capacity, nor the Owner Participant will be liable for
payment of any principal of, or premium, if any, or interest on the
Certificates.
Book-Entry Procedures
Unless otherwise specified in the applicable Prospectus Supplement, the
Certificates will be subject to the provisions described below. The
Certificates will be fully registered and issued in the form of one or more
temporary or permanent global security or securities without coupons, in
minimum denominations of $1,000 or any integral multiple of $1,000. Each
global certificate will be deposited with, or on behalf of, DTC, and registered
in its name or in the name of Cede, its nominee. No Certificateholder will be
entitled to receive a Certificate in certificated form, except as set forth
below.
DTC has advised the Corporation that DTC is a limited purpose trust company
organized under the laws of the State of New York, 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 Section
17A of the Exchange Act. DTC was created to hold securities for its
participants ("DTC Participants") and to facilitate the clearance and
settlement of securities transactions between DTC Participants through
electronic book-entries, thereby eliminating the need for physical movement of
certificates. DTC Participants include securities brokers and dealers, banks,
trust companies and clearing corporations. Access to DTC's book-entry system
is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
Certificateholders that are not DTC Participants but desire to purchase,
sell or otherwise transfer ownership of, or other interests, in Certificates
may do so only through DTC Participants. In addition, Certificateholders will
receive all distributions of principal and interest from the Indenture Trustee
through the DTC Participants. Under the rules, regulations and procedures
creating and affecting DTC and its operation, DTC is required to make
book-entry transfers of Certificates among DTC Participants on whose behalf it
acts and to receive and transmit distributions of principal of, and interest
on, the Certificates. Under the book-entry system, Certificateholders may
experience some delay in receipt of payments, since such payments will be
forwarded by the Indenture Trustee to Cede, as nominee for DTC, and DTC in
turn will forward the payments to the appropriate DTC Participants.
Distributions by DTC Participants to Certificateholders will be the
responsibility of such DTC Participants and will be made in accordance with
customary industry practices. Accordingly, although Certificateholders will
not have possession of the Certificates, the rules of DTC provide a mechanism
by which participants will receive payments and will be able to transfer their
interests. Although the DTC Participants are expected to convey the rights
represented by their interests in any global security to the related
Certificateholders, because DTC can only act on behalf of DTC Participants,
the ability of Certificateholders to pledge Certificates to persons or
entities that are not DTC Participants or to otherwise act with respect to
such Certificates, may be limited due to the lack of physical certificates for
such Certificates.
None of the Corporation, the Indenture Trustee or any other agent of the
Corporation or the Indenture Trustee will have any responsibility or liability
for any aspect of the records relating to, or payments made on account of,
beneficial ownership interests in the Certificates or for supervising or
reviewing any records relating to such beneficial ownership interests. Since
the only "Certificateholder" will be Cede, as nominee of DTC,
Certificateholders will not be recognized by the Indenture Trustee as
Certificateholders, as such term is used in the Indenture, and
Certificateholders will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and DTC Participants. DTC has
advised the Corporation that it will take any action permitted to be taken by
a Certificateholder under the Indenture and any Prospectus Supplement only at
the direction of one or more DTC Participants to whose accounts with DTC the
related Certificates are credited. Additionally, DTC has advised the
Corporation that it will take such actions with respect to any percentage of
the beneficial interest of Certificateholders only at the direction of and on
behalf of DTC Participants whose holders include undivided interests that
satisfy any such percentage. DTC may take conflicting actions with respect to
other undivided interests to the extent that such actions are taken on behalf
of DTC Participants whose holders include such undivided interests.
Same-Day Settlement and Payment. All payments made by the Corporation to
the Indenture Trustee under each Lease will be in immediately available funds
and will be passed through to DTC in immediately available funds.
The Certificates will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Certificates will be
required by DTC to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds
on trading activity in the Certificates.
Certificated Form. The Certificates will be issued in fully registered,
certificated form to Certificateholders, or their nominees, rather than to DTC
or its nominee, only if DTC advises the Indenture Trustee in writing that it
is no longer willing or able to discharge properly its responsibilities as
depository with respect to the Certificates and the Corporation is unable to
locate a qualified successor or if the Corporation, at its option, elects to
terminate the book-entry system through DTC. In such event, the Indenture
Trustee will notify all Certificateholders through DTC Participants of the
availability of such certificated Certificates. Upon surrender by DTC of the
definitive global certificate representing the series of Certificates and
receipt of instructions for reregistration, the Indenture Trustee will reissue
the Certificates in certificated form to Certificateholders or their nominees.
Principal and Interest Payments
Interest will be payable on the Certificates of each Series on the dates
and at the rates per annum set forth for such Certificates in the applicable
Prospectus Supplement. Interest will be calculated on the basis of a 360-day
year consisting of twelve 30-day months. Principal will be payable on the
Certificates of each Series in scheduled amounts and on specified dates as set
forth in the applicable Prospectus Supplement. Unless otherwise set forth in
the applicable Prospectus Supplement, the record date for each interest and
principal payment date will be the fifteenth day prior to such payment date.
If the Certificates are issued in certificated form as discussed above,
principal of, premium, if any, and interest on the Certificates of each Series
will be payable at the corporate trust office of the Indenture Trustee in
Boston, Massachusetts or at such other office or agency, including the office
or agency of a paying agent that may be appointed by the Indenture Trustee (a
"Paying Agent"), maintained for the payment of the Certificates of a Series.
All amounts payable by the Indenture Trustee under the terms of the Indenture
may, however, at the option of the Indenture Trustee or Paying Agent, be paid
by check mailed to the person entitled thereto at the address shown in the
register maintained by the Indenture Trustee or other registrar, if any.
(Indenture, Sections 2.04, 3.02 and 3.04) Such Certificates may be
surrendered for registration of transfer or exchange for Certificates of the
same Series, maturity and interest rate at facilities established for such
purpose by the Indenture Trustee in Boston, Massachusetts. No service charge
will be levied on any Holder for any transfer or exchange of Certificates, but
payment may be required from such Holder of any tax or other governmental
charges that may be imposed in connection therewith. (Indenture, Sections
2.04, 2.06 and 3.02)
Prepayment
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the related Certificates may or
must be prepaid prior to the stated maturity date thereof, in whole or in part,
the premium, if any, applicable upon certain prepayments and other terms
applying to the prepayment of such Certificates.
Security
The Certificates of each Series will be secured by:
(i) an assignment by the Owner Trustee to the Indenture Trustee of the
Owner Trustee's rights (except for certain limited rights described
below) under the related Lease, including the right to receive rent
and other payments thereunder;
(ii) a security interest in the related Aircraft, subject to the rights
of the Corporation under such Lease and to certain other liens and
encumbrances; and
(iii)an assignment to the Indenture Trustee of the Owner Trustee's
rights relating to such Aircraft and the related engines under any
agreements for the purchase thereof between the Corporation and
the respective manufacturers of such Aircraft and of such engines.
See "Registration of the Aircraft" below.
The assignment by the Owner Trustee to the Indenture Trustee of its rights
under each Lease will exclude rights of the Owner Trustee and the Owner
Participant relating to:
(i) indemnification by the Corporation for certain matters;
(ii) proceeds of public liability insurance payable to the Owner
Trustee in its individual capacity and to the Owner Participant under
insurance maintained by the Corporation under such Lease; and
(iii) proceeds of any insurance policies separately maintained by the
Owner Trustee in its individual capacity or by the Owner Participant.
The right of the Indenture Trustee, however, to exercise any of the rights of
the Owner Trustee under the related Lease, except the right to receive
payments of rent due thereunder, will be subject to certain limitations as
described in the applicable Prospectus Supplement. (Indenture, Granting
Clause and Section 8.01)
There will be no cross-collateralization provisions in the Indentures and
consequently the Certificates issued in respect of one of the Aircraft will
not be secured by any other Aircraft or the Leases related thereto. There will
be no cross-default provisions in the Indentures and consequently events
resulting in an Indenture Event of Default under any particular Indenture may
not result in an Indenture Event of Default occurring under any other
Indenture.
The proceeds from the sale of the Certificates of any Series will, if such
proceeds are received by the Indenture Trustee on a day that is prior to the
delivery date for the related Aircraft or, in the case of a refinancing, the
refunding date for the related original loan certificate, be deposited with
and held by the Indenture Trustee in the investments described in the
following sentence, at the direction and risk of the Corporation, as security
for such Certificates pending the delivery of the Aircraft or the consummation
of the refunding. Funds, if any, held from time to time by the Indenture
Trustee with respect to any Aircraft as a result of (i) the occurrence of an
Indenture Event of Default, which may cause the Indenture Trustee to hold
funds otherwise distributable to the Owner Trustee, (ii) an Event of Loss with
respect to such Aircraft or (iii) otherwise, will be invested in obligations
either of, or fully guaranteed by, the United States of America; certificates
of deposit, bankers' acceptances or time deposits made with or by certain
banks, trust companies or national banking associations; or commercial paper
issued by a U.S. corporation whose commercial paper is rated at least A-1/P-1
by Standard & Poor's Corporation and Moody's Investors Service, Inc.,
respectively, or if neither such organization rates such commercial paper, the
highest rating by another nationally recognized rating organization. Any
income realized as a result of such investments, net of the Indenture
Trustee's reasonable fees and expenses incurred in making such investment, will
be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, after
taking into account such earnings and such reasonable fees and expenses, will
be charged against the principal amount invested, in which case the
Corporation will be responsible for any losses. (Indenture, Section 5.08)
Registration of the Aircraft
The Corporation will be required, except under certain circumstances, to
register and keep each Aircraft registered under Title 49 of the United States
Code (the "Transportation Code"), in the name of the Owner Trustee, and to
record and maintain the recordation of the Indenture and the Lease relating to
each such Aircraft under the Transportation Code. Such recordation will give
the Indenture Trustee a security interest in each such Aircraft perfected
under the Transportation Code, which perfected security interest will, with
certain limited exceptions, be recognized in those jurisdictions that have
ratified the Convention on the International Recognition of Rights in Aircraft
(the "Convention").
The Corporation will be able, in certain circumstances, to re-register any
Aircraft in certain countries other than the United States. Unless otherwise
specified in the applicable Prospectus Supplement, prior to any such change
in the jurisdiction of registry, the Indenture Trustee and the related Owner
Participant must receive certain assurances, including that such other country
would provide substantially equivalent protection for the rights of owner
participants, lessors and lenders in similar transactions as is provided under
United States law, except that, for the purpose of such determination, rights
and remedies similar to those available under Section 1110 of the United
States Bankruptcy Code (the "Bankruptcy Code") will not be required in the
absence of restrictions of rights and remedies of lessors and secured parties
that are similar to those imposed by Sections 362, 363 and 1129 of the
Bankruptcy Code. While such assurances are intended to provide that the
Corporation's or the Owner Trustee's title to the Aircraft and the Indenture
Trustee's lien thereon will be recognized in such jurisdiction and that the
Indenture Trustee may exercise the rights granted to it in the Indentures,
there is no guarantee that, even if such jurisdiction is a party to the
Convention, as a practical matter, the Indenture Trustee would be able to
realize upon its security interest in the case of an Indenture Event of
Default.
Each Aircraft may also be operated by the Corporation or placed under
sublease or interchange arrangements with carriers domiciled outside of the
United States. The ability of the Indenture Trustee in the case of an
Indenture Event of Default, to realize upon its security interest in the
Aircraft could be adversely affected as a legal or practical matter if the
Aircraft were located outside the United States.
Payments and Limitation of Liability
All payments of principal of, premium, if any, and interest on the
Certificates of each Series will be made only from the assets subject to the
Lien of the applicable Indenture or the income and proceeds received by the
Indenture Trustee therefrom, including rent payable by the Corporation under
the related Lease. See "The Leases -- Terms and Rentals" below. The
Corporation's obligations to pay rent and to cause other payments to be made
under each Lease will be general obligations of the Corporation. The
Certificates will not be direct obligations of, and will not be guaranteed by,
the Corporation.
Neither the Owner Trustee nor the Indenture Trustee (in their individual
capacities) will be liable to any Holder or, in the case of the Owner Trustee,
in its individual capacity, to the Corporation or the Indenture Trustee for any
amounts payable or for any liability under the Certificates or the Indentures,
except as provided in the Indentures and the Participation Agreements and
except for the gross negligence or willful misconduct of the Owner Trustee.
(Indenture, Section 2.05)
Merger, Consolidation and Transfer of Assets
With respect to each Series of Certificates, the Corporation will be
prohibited from consolidating with or merging into any other corporation under
circumstances in which the Corporation is not the surviving corporation, or
from transferring all or substantially all of its assets as an entirety to any
other corporation, unless, among other things:
(i) the successor or transferee corporation is a U.S. Citizen, an "air
carrier" within the meaning of and operating under the Transportation
Code and a corporation organized and existing under the laws of the
United States or a political subdivision thereof, and such corporation
expressly assumes all the obligations of the Corporation contained in
the related Indenture, the Participation Agreement, the Lease, the
Purchase Agreement and the Purchase Agreement Assignment;
(ii) immediately after giving effect to such consolidation,
merger or transfer, the successor or transferee is in compliance
with all of the terms and conditions of such documents; and
(iii)such consolidation, merger or transfer does not give rise
to a Lease Event of Default.
The Indentures contain no debt covenants or provisions that would afford
the Holders protection in the event of a highly leveraged transaction
involving the Corporation.
Events of Default, Notice and Waiver
The Indenture Events of Default under each Indenture for the Certificates
to be offered pursuant to this Prospectus and any Prospectus Supplement will
be set forth in such Prospectus Supplement. There will be no cross-default
provisions in the Indentures and consequently events resulting in an Indenture
Event of Default under any particular Indenture may not result in an Indenture
Event of Default occurring under any other Indenture.
Each Indenture will provide that the Indenture Trustee must, within 90 days
after the occurrence of any event actually known to a responsible officer of
the Indenture Trustee that is an Indenture Default thereunder, give notice
thereof to the Holders of outstanding Certificates issued thereunder. Under
no circumstances, however, may the Indenture Trustee give such notice until
the expiration of a period of 60 days from the occurrence of such Indenture
Default. The Indenture Trustee will be protected in withholding such notice,
except in the case of a default in the payment of the principal of, premium,
if any, or interest on any Certificate issued thereunder, if it in good faith
determines that the withholding of such notice is in the interests of the
Holders of such Certificates. (Indenture, Section 7.12)
The Holders of not less than 50% in aggregate principal amount of the
outstanding Certificates issued under an Indenture to which an Indenture
Default relates may on behalf of all Holders waive certain past Indenture
Defaults thereunder and their consequences. Consent from each Holder of an
outstanding Certificate issued under an Indenture, however, is required with
respect to a waiver of an Indenture Default in the payment of the principal
of, premium, if any, or interest on any Certificate then outstanding under
such Indenture or in respect of any covenant or provision of such Indenture or
any other related Operative Agreement that, pursuant to the provisions of such
Indenture, cannot be modified or amended without the consent of each Holder
affected thereby. (Indenture, Section 7.11)
Under each Indenture the Owner Trustee or the related Owner Participant
will have the right under certain circumstances, as specified in the
applicable Prospectus Supplement, to cure an Indenture Event of Default that
results from the occurrence of a Lease Event of Default under the related
Lease. If the Owner Trustee or the related Owner Participant exercises such
cure right, the Indenture Event of Default will be deemed to be cured.
Remedies
Each Indenture will provide that if an Indenture Event of Default has
occurred and is continuing thereunder, the Indenture Trustee may exercise
certain rights or remedies available to it under applicable law, including, if
a Lease Event of Default under the related Lease has occurred, one or more of
the remedies with respect to the Aircraft pledged under such Indenture
afforded to the Owner Trustee by the related Lease for Lease Events of Default
thereunder. The exercise by the Indenture Trustee of such rights or remedies
in connection with a Lease Event of Default will be subject, however, to the
right, if any, of the Owner Trustee or the related Owner Participant, as the
case may be, to cure certain defaults or to prepay the Certificates. The
applicable Prospectus Supplement will describe any limitation on the exercise
of remedies by the Indenture Trustee. Such remedies may be exercised by the
Indenture Trustee to the exclusion of the Owner Trustee and the Owner
Participant. Any Aircraft sold in the exercise of such remedies will be free
and clear of any rights of those parties, including the rights of the
Corporation under the applicable Lease, provided that no exercise of any
remedies by the Indenture Trustee may affect the rights of the Corporation
under a Lease unless a Lease Event of Default under such Lease has occurred
and is continuing. (Indenture, Section 7.02(a))
It is impossible to predict the resale value for any Aircraft to be sold
upon the exercise of the Indenture Trustee's remedies under the related
Indenture. The market for aircraft, whether new or used, is and will be
affected by many factors including, among other things, the supply of
similarly equipped aircraft of the same make and model, the demand for such
aircraft by air carriers and the cost and availability of financing to
potential purchasers of such aircraft. Each of these factors, in turn, will
be affected by various circumstances including, among other things, current
and anticipated demand for passenger and cargo air services, the relative
capacity of air carriers to provide such services, the current and projected
profitability of providing such services, the economic condition of the
domestic and international airline industries and global economic and
financial developments generally.
The marketability of a particular aircraft will be affected by factors such
as the reputation and actual performance record of the air carrier operating
the aircraft with respect to maintenance, the compliance of the aircraft with
federal noise and other environmental standards and the degree of technical
and other support available from the manufacturer of the aircraft. Since the
market for aircraft will fluctuate over time to reflect changes in these
circumstances, and because of the unique factors that would affect market
value in a forced disposition of an aircraft, there can be no assurance that
the net proceeds realized from the sale or other disposition of any Aircraft
in the exercise of such remedies will be sufficient to satisfy in full amounts
due and payable on the related Certificates.
If an Indenture Event of Default occurs under an Indenture as a result of
certain specified events of bankruptcy, insolvency or reorganization of the
Owner Trustee, the related Owner Participant or the Corporation, then the
unpaid principal of all outstanding Certificates issued under such Indenture,
together with interest accrued but unpaid thereon and all other amounts due
thereunder and under such Indenture, immediately and without further act, will
become due and payable. If any other Indenture Event of Default occurs and is
continuing under an Indenture, the Indenture Trustee, acting on its own or at
the direction of the Holders of not less than 25% in aggregate principal
amount of the outstanding Certificates of each Series issued under such
Indenture, may declare the principal of all such Certificates immediately due
and payable, together with interest accrued but unpaid thereon and all other
amounts due thereunder and under such Indenture, by written notice or notices
to the Owner Trustee and the Corporation.
The Holders of not less than 50% in aggregate principal amount of the
outstanding Certificates of such Series may rescind any such declaration by
the Indenture Trustee or by such Holders at any time prior to the sale or
disposition of the property subject to the Lien of the Indenture provided
there has been paid to or deposited with the Indenture Trustee an amount
sufficient to pay:
(a) all overdue installments of interest on all such Certificates
(together, to the extent permitted by law, with interest on such
overdue installments of interest);
(b) the principal on any Certificates that has become due
otherwise than by such declaration;
(c) all amounts paid or advanced by the Indenture Trustee under
such Indenture; and
(d) certain other expenses
or all Indenture Events of Default under such Indenture (other than the
non-payment of principal that has become due solely because of such
declaration) have been cured or waived. (Indenture, Sections 7.02(b) and (c))
In the event of the bankruptcy of the Owner Participant, it is possible
that, notwithstanding the fact that the applicable Aircraft will be owned by
the Owner Trustee in trust, such Aircraft and the related Lease and
Certificates might become part of such bankruptcy proceeding. In such event,
payments under such Lease or Certificates might be interrupted and the ability
of the Indenture Trustee to exercise its remedies under such Indenture might be
restricted, although the Indenture Trustee would retain its status as a
secured creditor in respect of such Lease and Aircraft.
The right of any Holder of a Certificate to institute an action for any
remedy under the Indenture pursuant to which such Certificate was issued
(including the right to enforce payment of the principal of, premium, if any,
and interest on such Certificates when due) will be subject to certain
conditions precedent, including a written request to the Indenture Trustee by
the Holders of not less than 25% in aggregate principal amount of outstanding
Certificates issued pursuant to such Indenture to take action, and an offer to
the Indenture Trustee of reasonable indemnification against costs, expenses
and liabilities incurred by it in doing so. (Indenture, Sections 7.08 and
7.09)
The Holders of not less than 50% in aggregate principal amount of
outstanding Certificates of each Series may direct the time, method and place
of conducting any proceeding for any remedy available to the Indenture Trustee
or of exercising any trust or power conferred on the Indenture Trustee but, in
such event, the Indenture Trustee is entitled to be indemnified by the Holders
of such Series before proceeding to act and the Indenture Trustee may not be
held liable for any such action taken in good faith. (Indenture, Section 7.10
and Article XI)
Section 1110 of the Bankruptcy Code provides that the right of lessors,
conditional vendors and holders of security interests with respect to aircraft
capable of carrying ten or more individuals or 6,000 pounds or more of cargo
used by air carriers operating under certificates issued by the Secretary of
Transportation under Chapter 447 of the Transportation Code to take possession
of such aircraft in compliance with the provisions of the lease, conditional
sale contract or security agreement, as the case may be, is not affected by:
(a) the automatic stay provision of the Bankruptcy Code, which
provision enjoins the taking of any action against a debtor by a
creditor;
(b) the provision of the Bankruptcy Code allowing the trustee in
in reorganization or the debtor-in-possession to use, sell or lease
property of the debtor;
(c) the confirmation of a plan by the bankruptcy court; and
(d) any power of the bankruptcy court to enjoin a repossession.
Section 1110 provides, however, that the right of a lessor, conditional vendor
or holder of a security interest to take possession of an aircraft in the
event of a default may not be exercised for 60 days following the date of
commencement of the reorganization proceedings (unless specifically permitted
by the bankruptcy court) and may not be exercised at all if, within such
60-day period, the trustee in reorganization or the debtor-in-possession agrees
to perform the debtor's obligations that become due on or after such date and
cures all existing defaults (other than defaults resulting solely from the
financial condition, bankruptcy, insolvency or reorganization of the debtor).
The Prospectus Supplement for each offering will discuss the availability of
the benefits of Section 1110 of the Bankruptcy Code with respect to the
related Aircraft.
If an Indenture Event of Default occurs and is continuing, any amounts held
or received by the Indenture Trustee may be applied to reimburse the Indenture
Trustee for any tax, expense, charge or other loss incurred by it and to pay
any other amounts due the Indenture Trustee prior to any payments to Holders
of the Certificates with respect to which such Indenture Event of Default
relates. (Indenture, Sections 5.03 and 9.11)
Modification of Agreements
The provisions of the Indenture, the Lease, the Participation Agreement and
the Trust Agreement with respect to any Series may be amended or modified,
except to the extent indicated below, with the consent of the Holders of more
than 50% in aggregate principal amount of outstanding Certificates of such
Series. (Indenture, Section 13.02)
The following changes may be made to the Indenture pursuant to which a
Certificate was issued or the related Lease or Participation Agreement only
with the consent of all Holders of the outstanding Certificates affected
thereby:
(a) reductions in the principal amount of, or premium, if any, or
interest payment payable on such Certificate or changes in the date
on which any such principal, premium, if any, or interest payment
is due and payable or otherwise affect the terms of payment of
such Certificate;
(b) reductions in, and modifications or amendments to, any
indemnities payable by the related Owner Participant in favor of
such Holder;
(c) reductions in the amount of any rent payable by the Corporation
below the amount required to pay all principal of, premium, if any,
and interest on all such Certificates as and when due and payable;
(d) creations of any security interest with respect to the property
subject to the Lien of such Indenture ranking prior to or on a
parity with the security interest created by such Indenture or
deprivation to the Holder of any such Certificate of the benefit of
the Lien of such Indenture upon the property subject thereto; or
(e) reductions in the percentage of the aggregate principal amount of
such Certificates necessary to modify or amend any provision of such
Indenture or to waive compliance therewith. (Indenture, Article XIII)
Certain provisions of the Indentures, the Leases, the Participation
Agreements and the Trust Agreements may be modified by the Owner Trustee, the
Lessee and the Indenture Trustee without the consent of the Holders of the
outstanding Certificates related thereto. (Indenture, Section 13.01)
The Indenture Trustee
Unless otherwise indicated in the applicable Prospectus Supplement, State
Street Bank and Trust Company will be the Indenture Trustee under each
Indenture. State Street Bank and Trust Company acts as trustee under other
indentures with respect to other indebtedness of the Corporation, and the
Corporation from time to time borrows from, and maintains deposit accounts
with, State Street Bank and Trust Company and its affiliates.
In accordance with the Trust Indenture Act of 1939, as amended, each
Indenture will be deemed to provide that in the case of any Indenture Event of
Default thereunder, the Indenture Trustee shall exercise such of the rights and
powers vested in it by such Indenture and use the same degree of care and
skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of its own affairs. Generally, the Indenture
Trustee will not be liable for any error of judgment made in good faith,
unless the Indenture Trustee was negligent in ascertaining the pertinent
facts, or for any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than 50% in aggregate
principal amount of the outstanding Certificates issued under such Indenture.
Subject to such provisions, the Indenture Trustee will be under no obligation
to exercise any of its rights or powers under such Indenture at the request of
any Holders of Certificates issued thereunder unless they shall have offered
to the Indenture Trustee reasonable security or indemnity. Each Indenture
will provide that the Indenture Trustee and the Owner Trustee may acquire and
hold Certificates issued thereunder and, subject to certain conditions, the
Indenture Trustee may otherwise deal with the Owner Trustee with the same
rights it would have if it were not the Indenture Trustee. (Indenture,
Sections 9.02, 9.03 and 9.05)
The Indenture Trustee may resign as trustee under any Indenture at any
time. If the Indenture Trustee ceases to be eligible to continue as Indenture
Trustee under an Indenture or becomes incapable of acting as Indenture Trustee
or becomes insolvent, the Owner Trustee may remove the Indenture Trustee. Any
Holder of a related Certificate who has been a Holder for at least six months
may, on behalf of such Holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Indenture Trustee and
the appointment of a successor trustee. In addition, the Indenture Trustee
under any Indenture may be removed without cause by the Holders of more than
50% in aggregate unpaid principal amount of the related outstanding
Certificates or by the Owner Trustee, with the consent of the Corporation and
such Holders. (Indenture, Section 12.02)
In the case of the resignation or removal of the Indenture Trustee under an
Indenture, the Holders of more than 50% in aggregate unpaid principal amount
of the related outstanding Certificates, or the Owner Trustee, with the
consent of the Corporation and such Holders, may appoint a successor Indenture
Trustee. The resignation or removal of the Indenture Trustee under any
Indenture and the appointment of the successor trustee under such Indenture
does not become effective until acceptance of the appointment by the successor
trustee. (Indenture, Section 12.02) Pursuant to such resignation and
successor trustee provisions, it is possible that a different trustee could
be appointed to act as the successor trustee under each Indenture. All
references in this Prospectus to the Indenture Trustee are to the trustee
acting in such capacity under each of the Indentures and should be read to take
into account the possibility that each of the Indentures could have a
different successor trustee in the event of such a resignation or removal.
The Leases
Terms and Rentals. Each Aircraft will be leased separately by the related
Owner Trustee to the Corporation for a term commencing on the date of the
delivery of the related Aircraft to the Owner Trustee and expiring on a date
not earlier than the latest maturity date of the Certificates issued with
respect to such Aircraft, unless previously terminated or extended, as
permitted by the related Lease. The scheduled rental payments by the
Corporation under each Lease will be payable on the dates specified in the
applicable Prospectus Supplement. The respective payments will be assigned
under the related Indenture by the Owner Trustee to the Indenture Trustee to
provide the funds necessary to make payments of principal and interest due
from such Owner Trustee on the Certificates issued under such Indenture.
Although in certain cases the scheduled rental payments under the Leases may
be adjusted, under no circumstances will such payments that the Corporation
will be unconditionally obligated to make or cause to be made under any Lease
be less than the scheduled payments of principal of and interest on the
Certificates issued under the Indenture relating to such Lease. See "Payments
and Limitations of Liability" above. Scheduled payments of principal of and
interest on the Certificates will be made on the dates specified in the
applicable Prospectus Supplement.
Net Lease. The Corporation's obligations under each Lease in respect of
the related Aircraft will be those of a lessee under a "net lease."
Accordingly, the Corporation will be obligated to pay all costs of operating
the Aircraft and, at its expense, to maintain, service, repair and overhaul
the Aircraft so as to keep the Aircraft in good condition, ordinary wear and
tear excepted, and to enable the airworthiness certification thereof to be
maintained in good standing at all times under the Transportation Code or,
under certain circumstances, under the applicable requirements of the
aeronautical authority of another country of registry. If, however, the
Aircraft loses its airworthiness certification and such loss is curable and
the Corporation, using its reasonable best efforts, undertakes such cure
promptly, diligently and continuously, then the Corporation will not be in
default with respect to such obligation.
Generally, the Corporation will be obligated to replace or cause to be
replaced all parts that may from time to time be incorporated or installed in
or attached to any Aircraft (including in or on any engine) and that may become
worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair
or permanently rendered unfit for use. The Corporation will have the right to
make other alterations, modifications and additions to an Aircraft so long as
such alterations, modifications or additions do not materially decrease the
value or utility of such Aircraft or impair its condition or airworthiness
below its value, utility, condition and airworthiness immediately prior to such
alteration, modification or addition, assuming that such Aircraft was then in
the condition and airworthiness required by the related Lease. Also, in
certain circumstances, the Corporation will be permitted to remove parts
(without replacement) from an Aircraft or any engine (and therefore from the
Lien of the applicable Indenture) if the Corporation deems such parts to be
obsolete or no longer suitable or appropriate for use thereon so long as such
removals do not decrease the utility, condition or airworthiness of such
Aircraft or any such engine, although the value of such Aircraft or any such
engine may be reduced by such removal. The applicable Prospectus Supplement
will contain a description of certain limitations, if any, applicable to the
provisions described above.
Insurance. Unless otherwise indicated in the applicable Prospectus
Supplement, the Corporation will be obligated to carry insurance with insurers
of recognized responsibility with respect to each Aircraft, at its own cost
and expense, in such amounts, against such risks, with such deductibles or
retentions (i) in the case of hull insurance, as the Corporation customarily
maintains with respect to other aircraft in the Corporation's fleet of the
same type and model and operating on the same routes as the respective
Aircraft and (ii) in the case of liability insurance, as is usually carried by
similar corporations engaged in the same or similar business and similarly
situated as the Corporation, owning or operating aircraft similar to the
Aircraft. The Corporation will be permitted to maintain coverage below
certain stipulated values and may be permitted to self-insure (including by
way of deductibles and retentions) in certain circumstances, subject to
certain limits. Therefore, there is no assurance that any insurance will be
carried in the future or, if it is carried, as to the amount of such insurance.
The Corporation and any permitted sublessee of an Aircraft will be named as
insured parties under all insurance policies required by the related Lease.
The Indenture Trustee, Owner Trustee and related Owner Participant will be
named additional insureds, which will afford each of them the rights but not
the obligations of an additional insured. Unless otherwise specified in the
applicable Prospectus Supplement, liability insurance proceeds will be
distributed to the respective parties as their interests may appear and hull
insurance proceeds in excess of certain specified amounts will be distributed
to the Indenture Trustee. The applicable Prospectus Supplement will contain
a description of certain limitations, if any, applicable to the provisions
described in this paragraph.
Lease Events of Default; Remedies. The applicable Prospectus Supplement
will describe the Lease Events of Default under the related Leases, the
remedies that the Owner Trustee may exercise with respect to the related
Aircraft, and other provisions relating to the occurrence of a Lease Event of
Default and the exercise of remedies.
The Participation Agreements
The Corporation will be required to indemnify each Owner Participant, the
Owner Trustee, the Indenture Trustee and certain parties affiliated with the
foregoing (but not including Holders) for certain liabilities, losses, fees
and expenses and for certain other matters arising out of the transactions
described herein or relating to the applicable Aircraft or the use thereof.
In addition, under certain circumstances the Corporation will be required to
indemnify such persons against certain taxes, levies, duties, withholdings and
for certain other matters relating to such transactions or the applicable
Aircraft.
Subject to certain restrictions and unless otherwise provided in the
related Prospectus Supplement, each Owner Participant may convey all of its
interest in the related Owner Trust. Although the matter is not entirely free
from doubt, Davis Polk & Wardwell has advised the Corporation that an Owner
Participant's conveyance of its right, title and interest in the related Owner
Trust will not constitute a taxable event to the Holders of the related
Certificates. However, if so provided in the applicable Prospectus
Supplement, in certain limited instances the Corporation may assume an Owner
Trust's obligations under the related Certificates on a full recourse basis.
In this event, Holders will recognize gain or loss on the related Certificates
for federal income tax purposes.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement,
Certificates may not be purchased by, or with the assets of, any employee
benefit plan subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or individual retirement account or plan
subject to Section 4975 of the Code. Certain governmental plans and
non-electing church plans, however, are not subject to Title I of ERISA or
Section 4975 of the Code and, therefore, may purchase the Certificates.
PLAN OF DISTRIBUTION
The Certificates may be sold to or through underwriters, directly to other
purchasers or through agents.
The distribution of the Certificates may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Certificates, underwriters or agents may
receive compensation from the Corporation or from purchasers of Certificates
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Certificates to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters or commissions from the purchasers for whom
they may act as agents. Underwriters, dealers and agents that participate in
the distribution of Certificates may be deemed to be underwriters, and any
discounts or commissions received by them from the Corporation and any profit
on the resale of Certificates by them may be deemed to be underwriting
discounts and commissions, under the Securities Act. Any such underwriter or
agent will be identified, and any such compensation received from the
Corporation will be described, in the applicable Prospectus Supplement.
Offers to purchase Certificates may be solicited directly and the sale
thereof may be made directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with
respect to any resale thereof. The terms of any such sales will be described
in the Prospectus Supplement relating thereto.
Under agreements which may be entered into by the Corporation, underwriters
and agents who participate in the distribution of Certificates may be entitled
to indemnification by the Corporation against certain liabilities, including
liabilities under the Securities Act.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation does not intend to apply for the listing of any Series of
Certificates on a national securities exchange. If the Certificates of any
Series are sold to or through underwriters, the underwriters may make a market
in such Certificates, as permitted by applicable laws and regulations. No
underwriter would be obligated, however, to make a market in such
Certificates, and any such market-making could be discontinued at any time at
the sole discretion of the underwriters. Accordingly, no assurance can be
given as to the liquidity of, or trading markets for, the Certificates of any
Series.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for, the Corporation in
the ordinary course of business.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
legality of the Certificates offered hereby will be passed upon for the
Corporation by Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York
10017, and by counsel for any agents, dealers or underwriters ("Underwriters'
Counsel"). Unless otherwise indicated in the applicable Prospectus
Supplement, both Davis Polk & Wardwell and Underwriters' Counsel may rely on
the opinion of counsel for the Owner Trustee, individually and as Owner
Trustee, as to matters relating to the authorization, execution and delivery
of each Indenture and of the related Series of Certificates by the Owner
Trustee, and of George W. Hearn, Vice President - Law of the Corporation, as
to the Corporation's authorization, execution and delivery of the Indentures.
At July 3, 1996, Mr. Hearn owned zero shares of the Corporation's common stock
and had been granted options to purchase 20,800 shares of the Corporation's
common stock. Of the options granted, 3,750 were vested at such date.
EXPERTS
The consolidated financial statements and schedules of the Corporation
included or incorporated by reference in the Corporation's Annual Report on
Form 10-K for the year ended May 31, 1995 and incorporated by reference
herein, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm
as experts in giving said reports.
With respect to the unaudited interim financial information for the
quarters ended August 31, 1995, November 30, 1995 and February 29, 1996,
included in the Corporation's Quarterly Reports on Form 10-Q for such periods,
which are incorporated by reference in this Prospectus, Arthur Andersen LLP
has applied limited procedures in accordance with professional standards for a
review of such information. However, their separate reports thereon state that
they did not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on their reports on
that information should be restricted in light of the limited nature of the
review procedures applied. In addition, the accountants are not subject to the
liability provisions of Section 11 of the Securities Act for their reports on
the unaudited interim financial information because those reports are not
"reports" or a "part" of the Registration Statement, of which this Prospectus
is a part, prepared or certified by the accountants within the meaning of
Sections 7 and 11 of the Securities Act.
====================================== ======================================
No dealer, salesperson or other
individual has been authorized to
give any information or to make any
representation not contained in this $1,000,000,000
Prospectus in connection with the
offering covered by this Prospectus.
If given or made, such information
or representation must not be relied [COMPANY LOGO]
upon as having been authorized by the
Corporation or the Underwriters. This
Prospectus does not constitute an
offer to sell, or the solicitation $1,000,000,000
of an offer to buy, the Certificates
in any jurisdiction where, or to any
person to whom, it is unlawful to
make such offer or solicitation.
Neither the delivery of this Prospectus Equipment Trust Certificates
nor any sale made hereunder shall,
under any circumstances, create an
implication that there has not been
any change in the facts set forth in --------------------
this Prospectus or in the affairs of P R O S P E C T U S
the Corporation since the date hereof. --------------------
TABLE OF CONTENTS
Page
----
Available Information.............. 3
Incorporation of Certain
Documents by Reference........... 3
Federal Express Corporation........ 4
Ratio of Earnings to Fixed Charges. 4
Use of Proceeds.................... 4
Outline of Leveraged
Lease Transactions.............. 4
Description of the Certificates.... 5
ERISA Considerations............... 15
Plan of Distribution............... 15
Legal Matters...................... 16
Experts............................ 16 July ___, 1996
====================================== ======================================
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 5, 1996
PROSPECTUS
- ----------
[COMPANY LOGO]
PASS THROUGH TRUSTS
PASS THROUGH CERTIFICATES
_______________________________
Up to $1,000,000,000 aggregate amount of Pass Through Certificates (the
"Pass Through Certificates") may be offered for sale from time to time
pursuant to this Prospectus and one or more Prospectus Supplements. The Pass
Through Certificates may be offered in one or more Series in amounts, at
prices and on terms to be determined at the time of sale. For each Series of
Pass Through Certificates offered pursuant to this Prospectus and a Prospectus
Supplement, a separate Pass Through Trust will be formed pursuant to the Pass
Through Trust Agreement dated as of June 1, 1996 (the "Pass Through
Agreement") between Federal Express Corporation (the "Corporation") and State
Street Bank and Trust Company, and the supplements thereto relating to such
Pass Through Trust (a "Series Supplement") between the Corporation and the
trustee named in such Series Supplements, not in its individual capacity but
solely as the Pass Through Trustee with respect to such Pass Through Trust.
Each Pass Through Certificate in a Series will evidence a fractional undivided
interest in the related Pass Through Trust and will have no rights, benefits
or interest in respect of any other Pass Through Trust or the Trust Property
(as defined below) held in any other such Pass Through Trust.
The Trust Property of each Pass Through Trust will consist of (a) equipment
purchase certificates issued with recourse to the Corporation (the "Owned
Aircraft Certificates") or (b) equipment trust certificates issued as
nonrecourse obligations by certain Owner Trustees, each acting not in its
individual capacity but solely as the Owner Trustee of a separate Owner Trust,
in connection with separate leveraged lease transactions (the "Leased Aircraft
Certificates" and, together with the Owned Aircraft Certificates, the
"Equipment Certificates"). The Owned Aircraft Certificates will be issued to
finance or refinance all or a portion of the purchase price of each of one or
more aircraft that have been or will be purchased and owned by the Corporation
(the "Owned Aircraft"). The Leased Aircraft Certificates will be issued to
finance or refinance a portion of the payment by each such Owner Trustee of
the purchase price for a specified aircraft which has been or will be leased
to the Corporation (the "Leased Aircraft" and, together with the Owned
Aircraft, the "Aircraft"). The Prospectus Supplement relating to each
offering will describe certain terms of the Pass Through Certificates offered
thereby, the respective Pass Through Trusts, the Equipment Certificates to be
purchased by such Pass Through Trusts, the leveraged lease transactions, if
any, relating thereto and the Aircraft relating to such Equipment Certificates.
For each Aircraft, the related Owner Trustee or the Corporation, as the
case may be, may issue one or more Equipment Certificates, each of which may
have a different interest rate and final maturity date. For each Series of
Pass Through Certificates, the Pass Through Trustee will purchase one or more
Equipment Certificates issued with respect to each of one or more Aircraft
such that all of the Equipment Certificates held in the related Pass Through
Trust will have identical interest rates, in each case equal to the rate
applicable to the Pass Through Certificates issued by such Pass Through Trust,
and such that the latest maturity date for such Equipment Certificates will
occur on or before the final distribution date for such Pass Through
Certificates.
(Continued on following page)
_______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
___________________________
The date of this Prospectus is July __, 1996.
(continued from previous page)
The Owned Aircraft Certificates issued with respect to each Owned Aircraft
will be secured by a security interest in such Owned Aircraft and will be
direct obligations of the Corporation. The Leased Aircraft Certificates
issued with respect to each Leased Aircraft, except during the Pre-Funding
Period, if any, will be secured by a security interest in such Leased Aircraft
and by the Lease relating thereto, including the right to receive rent payable
by the Corporation under such Lease. Although none of the Leased Aircraft
Certificates held in the respective Pass Through Trusts will be obligations
of, or guaranteed by, the Corporation, the amounts payable by the Corporation
under the Lease of each Leased Aircraft will be sufficient to pay in full when
due all principal of and interest on the Leased Aircraft Certificates relating
to such Leased Aircraft, except as described under "Description of the
Equipment Certificates -- General" relating to any Pre-Funding Period with
respect to such Leased Aircraft.
During any Pre-Funding Period, the related Leased Aircraft Certificates
will be secured by a collateral account funded by the net proceeds of the sale
of such Leased Aircraft Certificates to the Pass Through Trustee and, if
specified in the applicable Prospectus Supplement, by other security (which
may include a letter of credit). Funds in such collateral account, together
with any such other security will be available to pay any principal due and
interest accrued on such Leased Aircraft Certificates during such Pre-Funding
Period, as well as to fund any mandatory prepayment of such Leased Aircraft
Certificates during such Pre-Funding Period.
Interest paid on the Equipment Certificates held in each Pass Through Trust
will be passed through to the registered holders of the Pass Through
Certificates for such Pass Through Trust (for each Pass Through Trust, the
"Certificateholders") on the dates and at the rate per annum set forth in the
Prospectus Supplement relating to such Pass Through Certificates until the
final distribution date for such Pass Through Trust. Principal paid on the
Equipment Certificates held in each Pass Through Trust will be passed through
to the Certificateholders in scheduled amounts on the dates set forth in the
Prospectus Supplement relating to such Pass Through Certificates until the
final distribution date for such Pass Through Trust.
The Pass Through Certificates will be issued in registered form only and,
unless otherwise specified in the applicable Prospectus Supplement, will be
issued in accordance with a book-entry system.
The Pass Through Certificates represent interests in the related Pass
Through Trust only and all payments and distributions will be made only from
the property of such Pass Through Trust. The Pass Through Certificates do not
represent an interest in, or obligation of, the Corporation.
The Pass Through Certificates may be sold to or through underwriters or
directly to other purchasers or through agents. The Prospectus Supplement
relating to each offering will set forth the names of any underwriters, dealers
or agents involved in the sale of the Pass Through Certificates in connection
with which this Prospectus is being delivered, the amounts, if any, to be
purchased by underwriters and the compensation, if any, of such underwriters
or agents.
Prior to their issuance, there will have been no market for the Pass
Through Certificates of any Series and there can be no assurance that one will
develop. Unless otherwise indicated in the applicable Prospectus Supplement,
the Corporation does not intend to apply for the listing of any Series of Pass
Through Certificates on a national securities exchange. See "Plan of
Distribution."
This Prospectus may not be used to consummate sales of any Pass Through
Certificates unless accompanied by the Prospectus Supplement applicable to the
Pass Through Certificates being sold.
____________________________
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
AVAILABLE INFORMATION
Federal Express Corporation (the "Corporation") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy and information statements and other information filed by the
Corporation with the Commission can be inspected, and copies may be obtained
at prescribed rates, at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
Regional Offices of the Commission: Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and New York Regional Office,
7 World Trade Center, New York, New York 10048. Such material can also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. and inspected and copied at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, herein referred to as the
"Registration Statement") filed by the Corporation under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus does not contain all
of the information included in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to the
Corporation and the securities offered hereby.
REPORTS TO PASS THROUGH CERTIFICATEHOLDERS
The Pass Through Trustee under each Pass Through Trust will provide the
Certificateholders of each Pass Through Trust with certain periodic statements
concerning the distributions made from such Pass Through Trust. See
"Description of the Pass Through Certificates -- Statements to
Certificateholders."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission in accordance with the
provisions of the Exchange Act are incorporated herein by reference and made a
part hereof.
1. The Corporation's Annual Report on Form 10-K for the fiscal
year ended May 31, 1995 filed August 4, 1995.
2. The Corporation's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1995, November 30, 1995 and February 29,
1996, respectively, filed October 13, 1995, January 12, 1996 and
April 12, 1996, respectively.
3. The Corporation's Current Reports on Form 8-K dated August 14,
1995, August 16, 1995, September 14, 1995, October 17, 1995, October
25, 1995, October 26, 1995, January 12, 1996, March 14, 1996, April
30, 1996, June 5, 1996 and June 7, 1996, respectively, filed August
15, 1995, August 18, 1995, September 19, 1995, October 18, 1995,
October 27, 1995, October 30, 1995, January 16, 1996, March 26, 1996,
June 5, 1996, June 10, 1996 and June 21, 1996, respectively.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Corporation will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all documents incorporated by
reference in this Prospectus, without exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to: Thomas L. Holland, Managing
Director -- Investor Relations, Federal Express Corporation, by mail at Box
727, Memphis, Tennessee 38194-1854 or by telephone at (901) 395-3478.
FEDERAL EXPRESS CORPORATION
The Corporation offers a wide range of express services for the
time-definite transportation of documents, packages and freight throughout the
world using an extensive fleet of aircraft and vehicles and leading-edge
information technologies. Corporate headquarters are located at 2005
Corporate Avenue, Memphis, Tennessee 38132, telephone (901) 369-3600.
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
Nine Months Ended
Year Ended May 31 February 28 February 29
---------------------------- -----------------------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges (a) 1.0x (b) 1.4x 1.7x 2.0x 2.0x 1.8x
- -------------------
(a) Earnings included in the calculation of the ratio of earnings to
fixed charges represent income before income taxes plus fixed charges
(other than capitalized interest). Fixed charges include interest
expense, capitalized interest, amortization of debt issuance costs and a
portion of rent expense representative of interest.
(b) Earnings were inadequate to cover fixed charges by $173.4 million for
the year ended May 31, 1992.
OUTLINE OF PASS THROUGH TRUST STRUCTURE
For each Series of Pass Through Certificates (as such terms are defined
below) offered pursuant to this Prospectus and a related Prospectus
Supplement, a separate pass through trust (a "Pass Through Trust") will be
formed pursuant to a supplemental agreement (a "Series Supplement") between
the Corporation and the trustee named in such Series Supplement, not in its
individual capacity but solely as pass through trustee (the "Pass Through
Trustee"), in accordance with the Pass Through Trust Agreement, dated as of
June 1, 1996 (the "Pass Through Agreement") between the Corporation and the
Pass Through Trustee, for the benefit of the registered holders (the
"Certificateholders") of the series (a "Series") of certificates (the "Pass
Through Certificates") evidencing fractional undivided interests in such Pass
Through Trust. The property held in each Pass Through Trust (the "Trust
Property") will consist of (a) equipment purchase certificates issued in
connection with the purchase by the Corporation of one or more aircraft (the
"Owned Aircraft Certificates") or (b) equipment trust certificates issued in
connection with one or more leveraged lease transactions (the "Leased Aircraft
Certificates" and, together with the Owned Aircraft Certificates, the
"Equipment Certificates"), as specified in the applicable Prospectus
Supplement.
As more fully described below under "Use of Proceeds," in connection with
each purchase or leveraged lease transaction, one or more Equipment
Certificates may be issued, each of which may have different interest rates and
final maturity dates. Concurrently with the execution and delivery of each
Series Supplement, the Pass Through Trustee, on behalf of the related Pass
Through Trust, will enter into one or more participation agreements (each, a
"Participation Agreement") pursuant to which it will, among other things,
purchase one or more Owned Aircraft Certificates or Leased Aircraft
Certificates, such that the Equipment Certificates that constitute the
property of such Pass Through Trust will have identical interest rates, in
each case equal to the rate applicable to the Pass Through Certificates issued
by such Pass Through Trust, and such that the latest maturity date for such
Equipment Certificates will occur on or before the final distribution date
applicable to such Pass Through Certificates.
For each Pass Through Trust, the aggregate amount of the related Series of
Pass Through Certificates will equal the aggregate principal amount of the
Equipment Certificates constituting the Trust Property of such Pass Through
Trust. The Pass Through Trustee will distribute the amount of payments of
principal, premium, if any, and interest, received by it as holder of the
Equipment Certificates to the Certificateholders of the Pass Through Trust in
which such Equipment Certificates are held. See "Description of the Pass
Through Certificates" and "Description of the Equipment Certificates."
USE OF PROCEEDS
Each Series of Pass Through Certificates offered pursuant to this
Prospectus and a related Prospectus Supplement will be issued to facilitate
(a) the financing of the aggregate principal amount of debt to be issued, or
the refinancing of the aggregate principal amount of the debt previously
issued, by the Corporation with respect to each of the aircraft that have been
or will be purchased and owned by the Corporation (the "Owned Aircraft"), as
specified in the applicable Prospectus Supplement, or (b) the financing or
refinancing of the debt portion and, in certain cases, refinancing some of the
equity portion of one or more separate leveraged lease transactions entered
into or to be entered into by the Corporation, as lessee, with respect to each
of the aircraft that have been or will be leased by the Corporation (the
"Leased Aircraft" and, together with the Owned Aircraft, the "Aircraft"), as
specified in the applicable Prospectus Supplement. Each Prospectus Supplement
will specify the type and model of each Aircraft relating to the Pass Through
Certificates offered thereby, the engines with which such Aircraft is equipped
and whether such Aircraft was or will be delivered new by the manufacturer to
the Corporation or the Owner Trustee, as the case may be, or whether such
Aircraft is already in use in the Corporation's fleet.
The proceeds from the sale of such Pass Through Certificates will be used
by the Pass Through Trustee on behalf of the related Pass Through Trust (a) to
purchase Owned Aircraft Certificates or (b) to purchase Leased Aircraft
Certificates. The Owned Aircraft Certificates will be issued with recourse to
the Corporation to finance or refinance all or a portion of the purchase price
(as specified in the applicable Prospectus Supplement) for one or more Owned
Aircraft which have been or will be purchased and owned by the Corporation.
The Leased Aircraft Certificates will be issued as nonrecourse obligations by
First Security Bank, National Association, not in its individual capacity but
solely as the owner trustee (the "Owner Trustee") of separate owner trusts
(each, an "Owner Trust" created pursuant to a separate "Trust Agreement") for
the benefit of the owner participant named therein (each, an "Owner
Participant"), in connection with one or more leveraged lease transactions, in
each case to finance or refinance not more than, unless otherwise specified in
such Prospectus Supplement, 80% of the purchase price paid or to be paid by
the Owner Trustee for a Leased Aircraft which has been or will be leased by
the related Owner Trustee to the Corporation.
To the extent that any proceeds from the sale of the Pass Through
Certificates for any Pass Through Trust have not been applied by the Pass
Through Trustee by the date specified in the applicable Prospectus Supplement
to the purchase of the Equipment Certificates that were contemplated to be
held in such Pass Through Trust, such proceeds will be distributed on the date
specified in such Prospectus Supplement to the related Certificateholders on a
pro rata basis, together with interest accrued thereon, but without premium.
See "Description of the Pass Through Certificates -- Special Payment Upon
Unavailability of Trust Property."
If, for any Leased Aircraft, under the circumstances discussed below in
"Description of Equipment Certificates -- Delayed Lease Commencement" the
proceeds from the sale of the related Leased Aircraft Certificates to the
applicable Pass Through Trusts are not applied by the Owner Trustee to pay the
purchase price for such Leased Aircraft on the date of the purchase of such
Leased Aircraft Certificates by such Pass Through Trusts, such proceeds, after
deducting certain expenses of the Pass Through Certificate offering, will be
deposited by the Owner Trustee into a Collateral Account (as defined below).
Such Collateral Account, together with the other security, if any, pledged
under the related Indenture (see "Description of the Equipment Certificates --
Security" below), will secure such Leased Aircraft Certificates during the
related Pre-Funding Period (as defined below) and will be available to make
scheduled payments of principal, if any, and interest accrued on such Leased
Aircraft Certificates during the Pre-Funding Period. If the Lease related to
such Leased Aircraft does not commence by the Cut-off Date specified in the
applicable Prospectus Supplement or an event of loss occurs with respect to
such Leased Aircraft during the Pre-Funding Period, funds in such Collateral
Account, together with such other security will be available to prepay such
Leased Aircraft Certificates as described in such Prospectus Supplement or
will be applied to finance the aggregate principal amount of the debt to be
issued by the Corporation in connection with the acquisition of such Aircraft
by the Corporation so that such Aircraft becomes an Owned Aircraft. See
"Description of the Equipment Certificates -- Delayed Lease Commencement" and
"--Mandatory Prepayment During the Pre-Funding Period."
For each Leased Aircraft, the related Leased Aircraft Certificates have
been or will be issued by the Owner Trustee and authenticated by the trustee
named in such trust indenture and security agreement, as indenture trustee
(the "Indenture Trustee") under a separate trust indenture and security
agreement (each, a "Leased Aircraft Indenture") between the Owner Trustee and
the Indenture Trustee. Each Owner Participant will have provided or will
provide, from sources other than the related Leased Aircraft Certificates, at
least, unless otherwise specified in the applicable Prospectus Supplement, 20%
of the purchase price for the related Leased Aircraft. No Owner Participant,
however, will be personally liable for any amount payable under the related
Leased Aircraft Indenture or the Leased Aircraft Certificates issued
thereunder. For each Owned Aircraft, the related Owned Aircraft Certificates
have been or will be issued under a separate trust indenture and security
agreement (each, an "Owned Aircraft Indenture," and together with any Leased
Aircraft Indentures, the "Indentures") between the Indenture Trustee and the
Corporation. The Owned Aircraft Certificates will be direct obligations of
the Corporation.
DIAGRAM OF PAYMENTS
The following diagram illustrates certain aspects of the payment flows
in the Pass Through Trust structure (1) for a possible transaction for
Leased Aircraft among the Corporation, the Owner Trustee, the related Owner
Participant, the Indenture Trustee, the Pass Through Trustee and the
Certificateholders, assuming each Leased Aircraft is leased by the leased
by the Corporation upon issuance of the Pass Through Certificates, and (2)
for a possible transaction for Owned Aircraft among the Corporation, the
Indenture Trustee, the Pass Through Trustee and the Certificateholders.
For each Aircraft included in a particular Pass Through Certificate
offering, one or more Equipment Certificates will be issued, each of which
may have a different interest rate and final maturity date and will be held
in a separate Pass Through Trust. Each Pass Through Trust may hold
Equipment Certificates relating to more than one Aircraft. The number of
Aircraft included in each offering and the interest rates and final
maturity dates of the Equipment Certificates held by each Pass Through
Trust will be described in the applicable Prospectus Supplement.
In a Leased Aircraft transaction, the Corporation will lease each Leased
Aircraft from the Owner Trustee under a separate Lease. The Corporation will
make scheduled rental payments for each Leased Aircraft under the related
Lease. As a result of the assignment under the related Leased Aircraft
Indenture of certain rights of the Owner Trustee under such Lease, the
Corporation will make these payments directly to the Indenture Trustee. From
these rental payments the Indenture Trustee will pay to the Pass Through
Trustee for each Pass Through Trust the interest or interest and principal due
from the Owner Trustee on the Leased Aircraft Certificates issued under the
related Leased Aircraft Indenture and held in such Pass Through Trust. After
such payments have been made, the Indenture Trustee will pay the remaining
balance to the Owner Trustee for the benefit of the related Owner Participant.
The Pass Through Trustee for each Pass Through Trust will distribute to the
related Certificateholders payments received on the Leased Aircraft
Certificates held in such Pass Through Trust. See "Description of the Pass
Through Certificates -- Payments and Distributions" and "Description of the
Equipment Certificates -- Delayed Lease Commencement" for a discussion of
payments during any Pre-Funding Period.
In an Owned Aircraft transaction, the Corporation will make scheduled
payments on the Owned Aircraft Certificates relating to each Owned Aircraft to
the Indenture Trustee. From these payments the Indenture Trustee will pay to
the Pass Through Trustee for each Pass Through Trust the interest or interest
and principal due on the Owned Aircraft Certificates issued under the related
Owned Aircraft Indenture and held in such Pass Through Trust. The Pass
Through Trustee for each Pass Through Trust will distribute to the related
Certificateholders payments received on the Owned Aircraft Certificates held
in such Pass Through Trust.
[GRAPHIC - A diagram is included here which contains boxes representing
the parties identified in the first paragraph of "Diagram of Payments"
which are connected by arrows demonstrating the cash flows described in
each of the second and third paragraphs.]
DESCRIPTION OF THE PASS THROUGH CERTIFICATES
In connection with each offering of Pass Through Certificates, one or more
separate Pass Through Trusts will be formed, and one or more corresponding
Series of Pass Through Certificates will be issued, pursuant to the Pass
Through Agreement and one or more separate Series Supplements to be entered
into between the Corporation and the Pass Through Trustee. The following
summary relates to the Pass Through Agreement and each of the Series
Supplements, the Pass Through Trusts to be formed thereby and the Pass Through
Certificates to be issued by each Pass Through Trust, except as otherwise
described in the applicable Prospectus Supplement.
The discussion that follows is a summary and does not purport to be
complete. The summary includes descriptions of the material terms of the Pass
Through Agreement which has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Series Supplement relating
to each Series of Pass Through Certificates and the forms of the related
Indentures and Participation Agreements and, if the Pass Through Certificates
relate to Leased Aircraft, the related Leases, Trust Agreements and Collateral
Agreements, if any, will be filed as exhibits to a post-effective amendment to
this Registration Statement, a Current Report on Form 8-K, a Quarterly Report
on Form 10-Q or an Annual Report on Form 10-K, as applicable, to be filed with
the Commission in connection with the issuance of each such Series of Pass
Through Certificates. This summary makes use of terms defined in and is
qualified in its entirety by reference to the Pass Through Agreement.
Each Prospectus Supplement will include a glossary of certain defined terms
used in connection with the Pass Through Certificates offered thereby and the
related Equipment Certificates. To the extent that any provision in any
Prospectus Supplement is inconsistent with any provision of this summary, the
provision of such Prospectus Supplement will control.
General
The Pass Through Certificates will be issued in fully registered form only
and, unless otherwise specified in the applicable Series Supplement, be
registered in the name of Cede & Co. ("Cede") as the nominee of The Depository
Trust Company ("DTC"). If the Pass Through Certificates are so registered, no
Certificateholder will be entitled to receive a certificated Pass Through
Certificate representing such person's interest in the related Pass Through
Trust unless such certificates are issued as described below. Unless
certificated Pass Through Certificates are issued, all references to actions
by Certificateholders shall refer to actions taken by DTC upon instructions
from DTC Participants (as defined below), and all references herein to
distributions, notices, reports and statements to Certificateholders shall
refer, as the case may be, to distributions, notices, reports and statements
to DTC or Cede, as the registered holder of the Pass Through Certificates, or
to DTC Participants for distribution to Certificateholders in accordance with
DTC procedures. See "Description of the Pass Through Certificates --
Book-Entry Procedures." (Pass Through Agreement, Section 2.12)
Each Pass Through Certificate will represent a fractional undivided
interest in the separate Pass Through Trust formed by the Pass Through
Agreement and the related Series Supplement pursuant to which such Pass Through
Certificate is issued. The property of each Pass Through Trust will include
the Equipment Certificates held in such Pass Through Trust, all monies at any
time paid thereon, all monies due and to become due thereunder and funds from
time to time deposited with the Pass Through Trustee in accounts relating to
such Pass Through Trust. Each Pass Through Certificate will represent a pro
rata share of the outstanding principal amount of the Equipment Certificates
and other property held in the related Pass Through Trust and will be issued,
unless otherwise specified in the applicable Prospectus Supplement, in minimum
denominations of $1,000 or any integral multiple of $1,000. (Pass Through
Agreement, Article II)
The applicable Prospectus Supplement will describe the specific Series of
Pass Through Certificates offered thereby, including:
(1) the specific designation and title of such Pass Through
Certificates;
(2) the Pass Through Trustee for such series of Pass Through
Certificates;
(3) the Regular Distribution Dates (as herein defined) and Special
Distribution Dates (as herein defined) applicable to such Pass
Through Certificates and the applicable Cut-Off Date (as herein
defined), if any;
(4) the specific form of such Pass Through Certificates;
(5) a description of the Equipment Certificates to be purchased by
such Pass Through Trust, including the period or periods within
which, the price or prices at which, and the terms and conditions
upon which such Certificates may or must be repaid in whole
or in part, by the Corporation or, with respect to Leased Aircraft
Certificates, the related Owner Trustee;
(6) a description of the related Aircraft, including whether
the Aircraft is a Leased Aircraft or an Owned Aircraft;
(7) a description of the related Participation Agreement and
Indenture, including a description of the events of default under
the related Indentures, the remedies exercisable upon the occurrence
of such events of default and any limitations on the exercise of such
remedies with respect to such Equipment Certificates;
(8) if such Pass Through Certificates relate to Leased Aircraft, a
a description of the related Lease, Trust Agreement and Collateral
Agreement, if any, including (a) the names of the related Owner
Trustee, (b) a description of the events of default under the related
Lease, remedies exercisable upon the occurrence of such events of
default and any limitations on the exercise of such remedies with
respect to such Leased Aircraft Certificates, and (c) the rights,
if any, related Owner Trustee or Owner Participant to cure failures
of the Corporation to pay rent under the related Lease;
(9) the extent, if any, to which the provisions of the operative
documents applicable to such Equipment Certificates may be amended
by the parties thereto without the consent of the Holders, or upon
the consent of the Holders of a specified percentage of aggregate
principal amount of, such Equipment Certificates; and
(10)any other special terms pertaining to such Pass Through
Certificates. (Pass Through Agreement, Article II)
Interest will be passed through to Certificateholders of each Pass Through
Trust at the rate per annum payable on the Equipment Certificates held in such
Pass Through Trust, as set forth for such Pass Through Trust on the cover page
of the applicable Prospectus Supplement.
The Pass Through Certificates represent interests in the related Pass
Through Trust only and all payments and distributions shall be made only from
the Trust Property of such Pass Through Trust. The Pass Through Certificates
do not represent an interest in or obligation of the Corporation, the Pass
Through Trustee, any related Owner Participant, the Owner Trustee in its
individual capacity or any affiliate of any of the foregoing. Each
Certificateholder by its acceptance of a Pass Through Certificate agrees to
look solely to the income and proceeds from the Trust Property of the related
Pass Through Trust as provided in the Pass Through Agreement and the
applicable Series Supplement. (Pass Through Agreement, Section 3.06)
The Pass Through Agreement does not, and the Indentures will not, contain
any debt covenants or provisions that would afford Certificateholders
protection in the event of a highly leveraged transaction involving the
Corporation. However, the Certificateholders of each Series will have the
benefit of a lien on the specific Aircraft securing the related Equipment
Certificates held in the related Pass Through Trust. See "Description of the
Equipment Certificates - Security" below for a discussion of security for
Leased Aircraft Certificates during any Pre-Funding Period.
Book-Entry Procedures
Unless otherwise specified in the applicable Prospectus Supplement, the
Pass Through Certificates will be subject to the provisions described below.
Upon issuance, each Series of Pass Through Certificates will be represented by
one or more fully registered global certificates. Each global certificate
will be deposited with, or on behalf of, DTC, and registered in its name or in
the name of Cede, its nominee. No Certificateholder will be entitled to
receive a certificated Pass Through Certificate, except as set forth below.
DTC has advised the Corporation that DTC is a limited purpose trust company
organized under the laws of the State of New York, 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 Section
17A of the Securities Exchange Act of 1934, as amended. DTC was created to
hold securities for its participants ("DTC Participants") and to facilitate
the clearance and settlement of securities transactions between DTC
Participants through electronic book-entries, thereby eliminating the need for
physical movement of certificates. DTC Participants include securities
brokers and dealers, banks, trust companies and clearing corporations. Access
to DTC's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Certificateholders that are not DTC Participants but desire to purchase,
sell or otherwise transfer ownership of, or other interests, in Pass Through
Certificates may do so only through DTC Participants. In addition,
Certificateholders will receive all distributions of principal and interest
from the Pass Through Trustee through the DTC Participants. Under the rules,
regulations and procedures creating and affecting DTC and its operation, DTC
is required to make book-entry transfers of Pass Through Certificates among
DTC Participants on whose behalf it acts and to receive and transmit
distributions of principal of, and interest on, the Pass Through Certificates.
Under the book-entry system, Certificateholders may experience some delay in
receipt of payments, since such payments will be forwarded by the Pass Through
Trustee to Cede, as nominee for DTC, and DTC in turn will forward the payments
to the appropriate DTC Participants.
Distributions by DTC Participants to Certificateholders will be the
responsibility of such DTC Participants and will be made in accordance with
customary industry practices. Accordingly, although Certificateholders will
not have possession of the Pass Through Certificates, the rules of DTC provide
a mechanism by which participants will receive payments and will be able to
transfer their interests. Although the DTC Participants are expected to convey
the rights represented by their interests in any global security to the
related Certificateholders, because DTC can only act on behalf of DTC
Participants, the ability of Certificateholders to pledge Pass Through
Certificates to persons or entities that are not DTC Participants or to
otherwise act with respect to such Pass Through Certificates, may be limited
due to the lack of physical certificates for such Pass Through Certificates.
None of the Corporation, the Pass Through Trustee or any other agent of the
Corporation or the Pass Through Trustee will have any responsibility or
liability for any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in the Pass Through Certificates or
for supervising or reviewing any records relating to such beneficial ownership
interests. Since the only "Certificateholder" will be Cede, as nominee of
DTC, Certificateholders will not be recognized by the Pass Through Trustee as
Certificateholders, as such term is used in the Pass Through Agreement, and
Certificateholders will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and DTC Participants. DTC has
advised the Corporation that it will take any action permitted to be taken by
a Certificateholder under the Pass Through Agreement and any Prospectus
Supplement only at the direction of one or more DTC Participants to whose
accounts with DTC the related Pass Through Certificates are credited.
Additionally, DTC has advised the Corporation that it will take such actions
with respect to any percentage of the beneficial interest of
Certificateholders held in each Pass Through Trust only at the direction of
and on behalf of DTC Participants whose holders include undivided interests
that satisfy any such percentage. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are taken
on behalf of DTC Participants whose holders include such undivided interests.
Same-Day Settlement and Payment. All payments made by the Corporation to
the Indenture Trustee under each Lease will be in immediately available funds
and will be passed through to DTC in immediately available funds.
The Pass Through Certificates will trade in DTC's Same-Day Funds Settlement
System until maturity, and secondary market trading activity in the Pass
Through Certificates will be required by DTC to settle in immediately
available funds. No assurance can be given as to the effect, if any, of
settlement in immediately available funds on trading activity in the Pass
Through Certificates.
Certificated Form. The Pass Through Certificates will be issued in fully
registered, certificated form to Certificateholders, or their nominees, rather
than to DTC or its nominee, only if DTC advises the Pass Through Trustee in
writing that it is no longer willing or able to discharge properly its
responsibilities as depository with respect to the Pass Through Certificates
and the Corporation is unable to locate a qualified successor or if the
Corporation, at its option, elects to terminate the book-entry system through
DTC. In such event, the Pass Through Trustee will notify all
Certificateholders through DTC Participants of the availability of such
certificated Pass Through Certificates. Upon surrender by DTC of the
definitive global certificate representing the series of Pass Through
Certificates and receipt of instructions for reregistration, the Pass Through
Trustee will reissue the Pass Through Certificates in certificated form to
Certificateholders or their nominees. (Pass Through Agreement, Section 2.12)
Certificates in certificated form will be freely transferable and
exchangeable at the office of the Pass Through Trustee upon compliance with
the requirements set forth in the Pass Through Agreement and the applicable
Series Supplements. No service charge will be imposed for any registration of
transfer or exchange, but payment of a sum sufficient to cover any tax or
other governmental charge may be required.
Payments and Distributions
The Corporation will make scheduled payments of principal of, and interest
on the unpaid amount of, the Owned Aircraft Certificates to the Indenture
Trustee under the related Owned Aircraft Indenture, and the Indenture Trustee
will distribute such principal and interest payments to the Pass Through
Trustee for each of the Pass Through Trusts that hold such Owned Aircraft
Certificates. Upon commencement of the Lease for any Leased Aircraft, the
Corporation will make scheduled rental payments for each Leased Aircraft under
the related Lease. After any Pre-Funding Period for a Leased Aircraft, these
scheduled rental payments will be assigned under the applicable Leased
Aircraft Indenture by the related Owner Trustee to the Indenture Trustee to
provide the funds necessary to make the corresponding payments of principal
and interest due from the Owner Trustee on the Leased Aircraft Certificates
issued under such Leased Aircraft Indenture.
Until the Corporation has entered into a Lease in connection with a Leased
Aircraft, the Corporation will not be obligated to make any scheduled rental
payments and during any Pre-Funding Period for such Leased Aircraft the
related Leased Aircraft Certificates will not be secured by such Leased
Aircraft or the related Lease, including any rental payments under such Lease.
During the Pre-Funding Period, if any, for such Leased Aircraft, however, the
related Collateral Account, together with any other security pledged under the
related Indenture or otherwise provided to the Indenture Trustee will be
available to provide funds necessary to make the corresponding scheduled
payments of principal, if any, and interest accrued on the related Leased
Aircraft Certificates during such Pre-Funding Period, and to pay the portion,
if any, of principal and interest due on the first payment date after the
Pre-Funding Period to the extent exceeding the amount of rent payable by the
Corporation on such payment date. See "Description of the Equipment
Certificates -- Delayed Lease Commencement."
Following any Pre-Funding Period, after the Indenture Trustee has made such
principal and interest payments to the Pass Through Trustee for each of the
Pass Through Trusts on the Leased Aircraft Certificates held in such Pass
Through Trust, the Indenture Trustee will, except under certain circumstances,
pay the remaining balance, if any, to the Owner Trustee for the benefit of the
related Owner Participant. The Pass Through Trustee for each such Pass
Through Trust will distribute to the Certificateholders of such Pass Through
Trust payments received on the Equipment Certificates held in such Pass
Through Trust as described below. During any Pre-Funding Period for a Leased
Aircraft, the Indenture Trustee will not make any payments to the Owner
Trustee for the benefit of the related Owner Participant.
Payments of principal of, and interest on the unpaid amount of, the
Equipment Certificates held in each Pass Through Trust will be scheduled to be
received by the Pass Through Trustee on the dates specified in the applicable
Prospectus Supplement (such scheduled payments of principal of, and interest
on, the Equipment Certificates are referred to herein as "Scheduled Payments,"
and the dates specified for distributions of Scheduled Payments to the Pass
Through Trustee in the applicable Prospectus Supplement are referred to herein
as "Regular Distribution Dates"). For each Pass Through Trust, the Pass
Through Trustee will distribute on each Regular Distribution Date to the
related Certificateholders any Scheduled Payment received by the Pass Through
Trustee on such Regular Distribution Date. (Pass Through Agreement, Section
5.02)
If a Scheduled Payment is not received by the Pass Through Trustee on or
before a Regular Distribution Date but is received within seven Business Days
thereafter, it will be distributed on the date received to the
Certificateholders. Each such distribution of a Scheduled Payment will be made
by the Pass Through Trustee to the Certificateholders of record of such Pass
Through Trust on the fifteenth day prior to such Regular Distribution Date,
subject to certain exceptions. Each such Certificateholder will be entitled
to receive a pro rata share of any such distribution. (Pass Through
Agreement, Article I; Sections 5.01 and 5.02) If a Scheduled Payment is
received more than seven Business Days after the applicable Regular
Distribution Date, it will be treated as a Special Payment and will be
distributed as described below.
After any prepayment of principal, any redemption or any default in respect
of some or all of the Equipment Certificates held in any Pass Through Trust,
any Certificateholder of such Pass Through Trust should refer to the Pool
Balance and the Pool Factor (as such terms are defined below) for such Pass
Through Trust reported periodically by the Pass Through Trustee, in order to
calculate such Certificateholder's pro rata share of such Pass Through Trust.
See "Pool Factors" and "Statements to Certificateholders" below.
For any Pass Through Trust, any payments of principal, premium, if any, or
interest, other than Scheduled Payments, received by the Pass Through Trustee
on any of the Equipment Certificates held in such Pass Through Trust,
including payments received (i) for the prepayment of such Equipment
Certificates in connection with certain events specified in the applicable
Prospectus Supplement (including payments upon unavailability of Trust Property
and prepayments during any Pre-Funding Period as described below), (ii) upon
the prepayment by the related Owner Trustee of such Equipment Certificates
following a default in respect of such Equipment Certificates, and (iii) on
account of the sale of such Equipment Certificates by the Pass Through Trustee
(such payments are referred to herein as "Special Payments"), will be
distributed on the dates determined as set forth in the applicable Prospectus
Supplement (each, a "Special Distribution Date" and, together with the Regular
Distribution Dates, the "Distribution Dates"). See "Description of the
Equipment Certificates -- Mandatory Prepayment During the Pre-Funding Period"
for a discussion of the funding of such prepayments during any Pre-Funding
Period.
Prior to any Special Payment for any Pass Through Trust, the Pass Through
Trustee will notify the Certificateholders of record of such Pass Through
Trust of such Special Payment and the anticipated Special Distribution Date
therefor in accordance with the Pass Through Agreement. Each distribution of
a Special Payment, other than the final distribution, for any Pass Through
Trust will be made by the Pass Through Trustee to the Certificateholders of
record of such Pass Through Trust on the fifteenth day prior to such Special
Distribution Date, unless otherwise specified in the applicable Prospectus
Supplement. Each such Certificateholder will be entitled to receive a pro
rata share of any such distribution. (Pass Through Agreement, Section 5.02)
See "Description of the Equipment Certificates -- Prepayment" and "Description
of the Pass Through Certificates -- Events of Default and Certain Rights Upon
an Event of Default."
The Pass Through Agreement requires that the Pass Through Trustee establish
and maintain, for each Pass Through Trust and for the benefit of the related
Certificateholders, one or more non-interest bearing accounts (a "Certificate
Account") for the deposit of Scheduled Payments on the Equipment Certificates
held in such Pass Through Trust and one or more accounts which will, except in
connection with Permitted Investments as defined below, be non-interest
bearing (a "Special Payments Account") for the deposit of Special Payments on
such Equipment Certificates. The Pass Through Trustee is required to deposit
any Scheduled Payments relating to a Pass Through Trust received by it in the
related Certificate Account and to deposit any Special Payments so received by
it in the related Special Payments Account pending distribution thereof. (Pass
Through Agreement, Section 5.01) Special Payments that are not promptly
distributed by the Pass Through Trustee will, to the extent practicable, be
invested by the Pass Through Trustee in Permitted Investments pending the
distribution of such funds on a Special Distribution Date, and the income and
earnings on such investment will be distributed with such Special Payment.
"Permitted Investments" are (a) direct obligations of the United States of
America or obligations fully guaranteed by the United States of America; (b)
commercial paper rated A-1/P-1 by Standard & Poor's Ratings Group and Moody's
Investors Service, Inc., respectively or, if such ratings are unavailable,
rated by any nationally recognized rating organization in the United States
equal to the highest rating assigned by such rating organization; (c)
overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers; and (d) overnight repurchase
agreements with respect to the securities described in clause (a) above entered
into with an office of a bank or trust company which is located in the United
States of America of any bank or trust company which is organized under the
laws of the United States or any state thereof and has capital, surplus and
undivided profits aggregating at least $500 million. (Pass Through Agreement,
Article I and Section 5.04)
If at any time, the Pass Through Certificates of any Pass Through Trust are
issued in the form of certificated Pass Through Certificates and not to Cede,
as nominee for DTC, distributions by the Pass Through Trustee from a
Certificate Account or a Special Payments Account of any Pass Through Trust on
any Distribution Date will be paid to each Certificateholder of record of such
Pass Through Trust on the applicable record date at its address appearing on
the register maintained for such Pass Through Trust. (Pass Through Agreement,
Section 5.02) The final distribution for each Pass Through Trust, however,
will be made only upon presentation and surrender of the Pass Through
Certificates for such Pass Through Trust at the office or agency of the Pass
Through Trustee specified in the notice given by the Pass Through Trustee of
such final distribution. The Pass Through Trustee will mail such notice of
the final distribution to the Certificateholders of such Pass Through Trust,
specifying the date set for such final distribution and the amount of such
distribution. (Pass Through Agreement, Section 12.01) See "Termination of
Pass Through Trusts" below.
If any Distribution Date is not a Business Day, distributions scheduled to
be made on such Distribution Date may be made on the next succeeding Business
Day without additional interest. (Pass Through Agreement, Section 13.15)
Pool Factors
Except as provided below, the Pool Factor (as defined below) for any Pass
Through Trust will decline in proportion to the scheduled repayments of
principal on the Equipment Certificates held in such Pass Through Trust as
described in the applicable Prospectus Supplement. Where any Equipment
Certificates held in a Pass Through Trust have been prepaid, a scheduled
repayment of principal thereon has not been made or certain actions have been
taken following a default thereon, as discussed in the applicable Prospectus
Supplement or below in "Events of Default and Certain Rights Upon an Event of
Default," the Pool Factor and the Pool Balance (as defined below) of such Pass
Through Trust will be recomputed after giving effect thereto and notice
thereof will be mailed to the Certificateholders of such Pass Through Trust.
Each Pass Through Trust will have a separate Pool Factor.
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Balance" for each Pass Through Trust indicates, as of any date, the
aggregate unpaid principal amount of the Equipment Certificates held in such
Pass Through Trust on such date plus any amounts in respect of principal on
such Equipment Certificates held by the Pass Through Trustee and not yet
distributed plus any amounts transferred to the Corporation and deposited in
a deposit trust account in connection with a delayed purchase of the Equipment
Certificates. The Pool Balance for each Pass Through Trust as of any
Distribution Date will be computed after giving effect to the payment of
principal, if any, on the Equipment Certificates held in such Pass Through
Trust and the distribution thereof being made on that date. (Pass Through
Agreement, Article I)
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Factor" for each Pass Through Trust as of any Distribution Date is the
quotient (rounded to the seventh decimal place) computed by dividing (i) the
Pool Balance, by (ii) the aggregate original principal amount of the Equipment
Certificates held in such Pass Through Trust. The Pool Factor for each Pass
Through Trust as of any Distribution Date shall be computed after giving
effect to the payment of principal, if any, on the Equipment Certificates held
in such Pass Through Trust and the distribution thereof being made on that
date. The Pool Factor for each Pass Through Trust will initially be 1.0000000;
thereafter, the Pool Factor for each Pass Through Trust will decline as
described above to reflect reductions in the Pool Balance of such Pass Through
Trust. For any Pass Through Trust, the amount of any Certificateholder's pro
rata share of the Pool Balance of such Pass Through Trust can be determined by
multiplying the original denomination of such Certificateholder's Pass Through
Certificate by the Pool Factor for such Pass Through Trust as of the
applicable Distribution Date. (Pass Through Agreement, Article I)
Statements to Certificateholders
On each Distribution Date, the Pass Through Trustee will include with each
distribution of a Scheduled Payment or Special Payment to Certificateholders
of record of the related Pass Through Trust a statement, giving effect to such
distribution being made on such Distribution Date, setting forth the following
information (per $1,000 in aggregate amount of Pass Through Certificates for
such Pass Through Trust, as to (i) and (ii) below):
(i) the amount of such distribution allocable to principal and
allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
(iii)the Pool Balance and the Pool Factor for such Pass Through
Trust. (Pass Through Agreement, Section 5.03)
So long as the Pass Through Certificates of any related Pass Through Trust
are registered in the name of Cede, as nominee for DTC, on the record date
prior to each Distribution Date, the Pass Through Trustee will request from
DTC a securities position listing setting forth the names of all DTC
Participants reflected on DTC's books as holding interests in the Pass Through
Certificates of such related Pass Through Trust on such record date. On each
Distribution Date, the Pass Through Trustee will mail to each such DTC
Participant the statement described above, and will make available additional
copies as requested by such DTC Participant, to be available for forwarding to
Certificateholders.
In addition, after the end of each calendar year, the Pass Through Trustee
will prepare and deliver to each Certificateholder of each Pass Through Trust
at any time during the preceding calendar year a report containing the sum of
the amounts determined pursuant to clauses (i) and (ii) above with respect to
each such Pass Through Trust for such calendar year or, in the event such
person was a Certificateholder during a portion of such calendar year, for the
applicable portion of such calendar year. Such report and such other items
will be prepared on the basis of information supplied to the Pass Through
Trustee by the DTC Participants, and shall be delivered by the Pass Through
Trustee to such DTC Participants to be available for forwarding by such DTC
Participants to Certificateholders in the manner described above. (Pass
Through Agreement, Section 5.03)
At such time, if any, as the Pass Through Certificates of a related Pass
Through Trust are issued in certificated form, the related Pass Through
Trustee will prepare and deliver the information described above to each
Certificateholder of record of such Trust as the name and period of record
ownership of such Certificateholder appears on the records on the registrar
for such Pass Through Trust.
Voting of Equipment Certificates
The Pass Through Trustee, as holder of the Equipment Certificates held in
each Pass Through Trust, has the right to vote and give consents and waivers
in respect of such Equipment Certificates under the related Indentures. The
Pass Through Agreement sets forth the circumstances in which the Pass Through
Trustee shall direct any action or cast any vote as the holder of the
Equipment Certificates held in the applicable Pass Through Trust at its own
discretion and the circumstances in which the Pass Through Trustee shall seek
instructions from the Certificateholders of such Pass Through Trust. Prior to
an Event of Default (as defined below) with respect to any Pass Through Trust,
the principal amount of the Equipment Certificates held in such Pass Through
Trust directing any action or being voted for or against any proposal will be
in proportion to the principal amount of Pass Through Certificates held by the
Certificateholders of such Pass Through Trust taking the corresponding
position. (Pass Through Agreement, Section 7.01)
Events of Default and Certain Rights Upon an Event of Default
The Pass Through Agreement defines an event of default for any Pass Through
Trust (an "Event of Default") as the occurrence and continuance of an event of
default under one or more of the related Indentures (an "Indenture Event of
Default"). The Indenture Events of Default under the Indentures will be
described in the applicable Prospectus Supplement and, for the Leased
Aircraft, will include events of default under the related Leases ("Lease
Events of Default"). Since the Equipment Certificates outstanding under an
Indenture may be held in more than one Pass Through Trust, a continuing
Indenture Event of Default under such Indenture would result in an Event of
Default with respect to each such Pass Through Trust. All of the Equipment
Certificates issued under the same Indenture, however, will relate to a
specific Aircraft and there will be no cross-collateralization or cross-default
provisions in the Indentures. Consequently, events resulting in an Indenture
Event of Default under any particular Indenture will not necessarily result in
an Indenture Event of Default occurring under any other Indenture. If an
Indenture Event of Default occurs in fewer than all of the Indentures related
to a Pass Through Trust, the Equipment Certificates issued pursuant to the
related Indentures with respect to which an Indenture Event of Default has not
occurred will continue to be held in such Pass Through Trust and payments of
principal of, premium, if any, and interest on such Equipment Certificates
will continue to be distributed to the Certificateholders of such Pass Through
Trust as originally scheduled.
The Equipment Certificates in any Pass Through Trust, and therefore the
related Pass Through Certificates, will not have the benefit of any debt
covenants or provisions in the Indentures relating to such Equipment
Certificates or Pass Through Certificates that would afford the holders
thereof protection in the event of a highly leveraged transaction involving
the Corporation.
Under each Leased Aircraft Indenture the related Owner Trustee and the
Owner Participant will have the right under certain circumstances to cure an
Indenture Event of Default that results from the occurrence of a Lease Event
of Default under the related Lease. If the Owner Trustee or the Owner
Participant chooses to exercise such cure right, the Indenture Event of
Default and consequently the Event of Default under any Pass Through Trust
holding the related Leased Aircraft Certificates will be deemed to be cured.
The applicable Prospectus Supplement will contain a more detailed discussion
of certain provisions described in this paragraph.
The Pass Through Agreement provides that if an Indenture Event of Default
under an Indenture relating to Equipment Certificates held in a Pass Through
Trust shall have occurred and be continuing, the Pass Through Trustee may vote
all of the Equipment Certificates issued under such Indenture that are held in
such Pass Through Trust, and upon the direction of the Certificateholders
evidencing fractional undivided interests aggregating not less than a majority
in interest of such Pass Through Trust, shall vote a corresponding majority of
such Equipment Certificates, in each case in favor of directing the Indenture
Trustee to declare the unpaid principal amount of all Equipment Certificates
issued under such Indenture and any accrued and unpaid interest thereon to be
due and payable. The Pass Through Agreement also provides that if an
Indenture Event of Default under an Indenture relating to Equipment
Certificates held in a Pass Through Trust shall have occurred and be
continuing, the Pass Through Trustee may, and upon the direction of the
Certificateholders evidencing fractional undivided interests aggregating not
less than a majority in interest of such Pass Through Trust shall, vote all of
the Equipment Certificates issued under such Indenture that are held in such
Pass Through Trust in favor of directing the Indenture Trustee as to the time,
method and place of conducting any proceeding for any remedy available to such
Indenture Trustee or of exercising any trust or power conferred on such
Indenture Trustee under such Indenture. (Pass Through Agreement, Sections
7.01 and 7.09)
The ability of the Certificateholders of any one Pass Through Trust to
cause the Indenture Trustee for any Equipment Certificates held in such Pass
Through Trust to accelerate the payment on such Equipment Certificates under
the related Indenture or to direct the exercise of remedies by such Indenture
Trustee under the related Indenture will depend, in part, upon the proportion
of the aggregate principal amount of the Equipment Certificates outstanding
under such Indenture and held in such Pass Through Trust to the aggregate
principal amount of all Equipment Certificates outstanding under such
Indenture. Each Pass Through Trust will hold Equipment Certificates
outstanding under such Indenture. Each Pass Through Trust will hold Equipment
Certificates with different terms from those of the Equipment Certificates
held in any other Pass Through Trust and, therefore, the Certificateholders
of a Pass Through Trust may have divergent or conflicting interests from those
of the Certificateholders of the other Pass Through Trusts holding Equipment
Certificates relating to the same Indenture. In addition, so long as the same
institution or an affiliate of such institution acts as Pass Through Trustee
of one or more Pass Through Trusts holding Equipment Certificates issued under
such Indenture, in the absence of instructions from the Certificateholders of
any such Pass Through Trust, the Pass Through Trustee for such Pass Through
Trust could for the same reason be faced with a potential conflict of interest
upon an Indenture Event of Default. In such event, the initial Pass Through
Trustee has indicated that it would resign as Pass Through Trustee of one or
all of such Pass Through Trusts, and a successor pass through trustee would be
appointed in accordance with the terms of the Pass Through Agreement and the
applicable Series Supplement. See "The Pass Through Trustee; the Indenture
Trustee" below for a discussion of resignation procedures.
As an additional remedy, if an Indenture Event of Default under an
Indenture has occurred and is continuing, the Pass Through Agreement provides
that the Pass Through Trustee of a Pass Through Trust holding Equipment
Certificates issued under such Indenture may, and upon the direction of the
Certificateholders evidencing fractional undivided interests aggregating not
less than a majority in interest of such Pass Through Trust will, sell all or
part of such Equipment Certificates for cash to any person at a price or
prices that it may reasonably deem advisable. Any proceeds received by the
Pass Through Trustee upon any such sale will be deposited in the Special
Payments Account for such Pass Through Trust and will be distributed to the
Certificateholders of such Pass Through Trust on a Special Distribution Date.
(Pass Through Agreement, Sections 7.01 and 7.02)
The market for Equipment Certificates in default may be very limited and
there can be no assurance that they could be sold for a reasonable price.
Furthermore, so long as the same institution or an affiliate of such
institution acts as Pass Through Trustee of one or more Pass Through Trusts
holding Equipment Certificates issued under such Indenture, it may be faced
with a conflict in deciding from which Pass Through Trust to sell Equipment
Certificates to available buyers. If the Pass Through Trustee sells any such
Equipment Certificates with respect to which an Indenture Event of Default
exists for less than the outstanding principal amount thereof, the
Certificateholders of such Pass Through Trust will receive a smaller amount of
principal distributions than anticipated and will not have any claim for the
shortfall against the Pass Through Trustee, or the Corporation or, in the case
of Leased Aircraft Certificates, the Owner Trustee or any related Owner
Participant, as the case may be. Furthermore, neither the Pass Through
Trustee nor the Certificateholders of such Pass Through Trust could take any
action with respect to any remaining Equipment Certificates held in such Pass
Through Trust so long as no Indenture Event of Default existed with respect
thereto.
For any Pass Through Trust, any amount distributed to the Pass Through
Trustee by the Indenture Trustee under any Indenture on account of the
Equipment Certificates held in such Pass Through Trust following an Indenture
Event of Default under such Indenture will be deposited in the Special
Payments Account for such Pass Through Trust and will be distributed to the
Certificateholders of such Pass Through Trust on a Special Distribution Date.
In addition, if, following an Indenture Event of Default under any Leased
Aircraft Indenture, the related Owner Trustee or Owner Participant, as the
case may be, exercises its option, if any, to prepay or purchase the
outstanding Leased Aircraft Certificates issued under such Indenture as
described in the related Prospectus Supplement, the price paid by such Owner
Trustee or the Owner Participant to the Pass Through Trustee for such Leased
Aircraft Certificates held in such Pass Through Trust will be deposited in the
related Special Payments Account and will be distributed to the
Certificateholders of such Pass Through Trust on a Special Distribution Date.
(Pass Through Agreement, Sections 5.01 and 5.02)
Any funds representing payments received with respect to any Equipment
Certificates held in a Pass Through Trust in default, or the proceeds from the
sale by the Pass Through Trustee of any such Equipment Certificates, held by
the Pass Through Trustee in the Special Payments Account for such Pass Through
Trust will, to the extent practicable, be invested by the Pass Through Trustee
in Permitted Investments pending the distribution of such funds on a Special
Distribution Date. (Pass Through Agreement, Article I and Section 5.04)
The Pass Through Agreement provides that the Pass Through Trustee will,
within 90 days after the occurrence of a default (as defined below) under any
Pass Through Trust, notify the Certificateholders of such Pass Through Trust
by mail of all uncured or unwaived defaults with respect to such Pass Through
Trust known to it. Under no circumstances, however, may the Pass Through
Trustee give such notice until the expiration of a period of 60 days from the
occurrence of such default. The Pass Through Trustee will be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interests of such Certificateholders, except in the case
of default in the payment of principal of, premium, if any, or interest on any
of the Equipment Certificates held in such Pass Through Trust. The term
"default" means the occurrence of any Event of Default with respect to a Pass
Through Trust as described above, except that in determining whether any such
Event of Default has occurred any grace period or notice in connection
therewith shall be disregarded. (Pass Through Agreement, Section 7.11)
The Pass Through Agreement provides that for each Pass Through Trust,
subject to the duty of the Pass Through Trustee during a default to act with
the required standard of care, the Pass Through Trustee is entitled to be
indemnified by the Certificateholders of such Pass Through Trust before
proceeding to exercise any right or power under such Pass Through Trust at the
request of such Certificateholders. (Pass Through Agreement, Section 8.03)
In certain cases, the Certificateholders of a Pass Through Trust evidencing
fractional undivided interests aggregating not less than a majority in
interest of such Pass Through Trust may on behalf of all the
Certificateholders of such Pass Through Trust waive any past default or Event
of Default with respect to such Pass Through Trust and thereby annul any
direction given by such Certificateholders to the Pass Through Trustee or the
Indenture Trustee with respect thereto, except (i) a default in payment of the
principal of, premium, if any, or interest on any of the Equipment
Certificates held in such Pass Through Trust and (ii) a default in respect of
any covenant or provision of the Pass Through Agreement or the related Series
Supplement that cannot be modified or amended without the consent of each
Certificateholder of such Pass Through Trust affected thereby. Any such
waiver, however, will be effective to waive any such past default or Event of
Default if, but only if, the correlative Indenture Event of Default has been
waived under the related Indenture by the requisite holders of the Equipment
Certificates outstanding thereunder. (Pass Through Agreement, Section 7.10)
Each Indenture will provide that, with certain exceptions, the holders of a
majority in aggregate unpaid principal amount of the Equipment Certificates
issued thereunder may on behalf of all such holders waive any past default or
Indenture Event of Default thereunder. If, as described above, the
Certificateholders of a Pass Through Trust elect to waive a past default or
Event of Default with respect to such Pass Through Trust, the principal amount
of the Equipment Certificates issued under the related Indenture and held in
such Pass Through Trust will be counted in favor of the waiver of the
corresponding past default or Indenture Event of Default under the related
Indenture when the Indenture Trustee determines whether such past default or
Indenture Event of Default has been waived by the requisite majority in
aggregate unpaid principal amount of Equipment Certificates under such
Indenture. If, for example, the Equipment Certificates issued under an
Indenture held in a Pass Through Trust constitute only 45% in aggregate unpaid
principal amount of the Equipment Certificates issued and unpaid under such
Indenture, even if all the Certificateholders of such Pass Through Trust were
to instruct the Pass Through Trustee not to waive a past default or Event of
Default with respect to such Pass Through Trust and, consequently, to vote
such Equipment Certificates against the waiver of the corresponding past
default or Indenture Event of Default under such Indenture, the Equipment
Certificates so voted by the Pass Through Trustee on behalf of such Pass
Through Trust would not alone be sufficient under the terms of such Indenture
to compel the Indenture Trustee to refrain from giving such waiver. Moreover,
there would be no assurance that the Certificateholders of any other Pass
Through Trust holding Equipment Certificates issued under such Indenture would
at such time vote such Equipment Certificates against such waiver. Therefore,
if the Certificateholders of a Pass Through Trust or Trusts waive a past
default or Event of Default such that the principal amount of the Equipment
Certificates held either individually in such Pass Through Trust or in the
aggregate in such Pass Through Trusts constitutes the required majority in
aggregate unpaid principal amount under the applicable Indenture, such past
default or Indenture Event of Default under such Indenture will be waived
whether or not the Certificateholders of any other Pass Through Trust holding
Equipment Certificates issued under such Indenture waive such past default or
Event of Default with respect to such other Pass Through Trust.
Modifications of the Pass Through Agreement
The Pass Through Agreement contains provisions permitting the Corporation
and the Pass Through Trustee to enter into an agreement supplemental to any
Pass Through Trust, without the consent of the Certificateholders of such Pass
Through Trust, to:
(i) provide for the formation of any Pass Through Trust and
the issuance of the related Pass Through Certificates;
(ii) evidence the succession of another corporation to the
Corporation and the assumption by such corporation of the
Corporation's obligations under the Pass Through Agreement and
the applicable Series Supplement;
(iii) add to the covenants of the Corporation for the
protection of the related Certificateholders;
(iv) surrender any right or power conferred upon the
Corporation in the Pass Through Agreement or any Series
Supplement;
(v) cure any ambiguity or correct or supplement any defective
or inconsistent provision of such Pass Through Agreement or the
applicable Series Supplement, or make any other provisions
in regard to matters or questions arising thereunder
that will not adversely affect the interests of the related
Certificateholders;
(vi) correct or amplify the description of property that
constitutes Trust Property or the conveyance of such property
to the Pass Through Trustee;
(vii) evidence and provide for a successor Pass Through Trustee
for some or all of the Pass Through Trusts;
(viii) modify, eliminate or add to the provisions of the Pass
Through Agreement or any Series Supplement to the extent
necessary to continue to qualify such Pass Through Agreement
or such Series Supplement under the Trust Indenture Act or any
similar Federal statute enacted thereafter;
(ix) make any other amendments or modifications which shall only
apply to any Pass Through Trust established thereafter; and
(x) add, eliminate or change any provision under the Pass
Through Agreement that will not adversely affect the interests
of the Certificateholders,
provided that in each case such modification does not cause the Pass Through
Trust to become taxable as an "association" within the meaning of Treasury
Regulation Section 301.7701-4. (Pass Through Agreement, Section 11.01)
The Pass Through Agreement also provides that the Corporation and the Pass
Through Trustee, with the consent of the Certificateholders evidencing
fractional undivided interests aggregating not less than a majority in
interest of the affected Pass Through Trust, may execute supplemental
agreements adding any provisions to or changing or eliminating any of the
provisions of the Pass Through Agreement, to the extent relating to such Pass
Through Trust, and the applicable Series Supplement, or modifying the rights
of such Certificateholders. No such supplemental agreement may, however,
without the consent of each Certificateholder so affected:
(a) reduce the amount of, or delay the timing of, any receipt by
the Pass Through Trustee of payments on the Equipment
Certificates held in such Pass Through Trust, or distributions
in respect of any Pass Through Certificate of such Pass Through
Trust, or make distributions payable in a currency other than
that provided for in such Pass Through Certificates, or impair
that right of any such Certificateholder to institute suit for
the enforcement of any payment when due;
(b) reduce, modify or amend any indemnities in favor of any
Certificateholder (unless consented to by each such holder
adversely affected thereby);
(c) create or permit the creation of any lien on the Trust
Property or deprive any holder of any such Equipment Certificate
of the benefit of the related Pass Through Trust with respect to
the Trust Property whether by disposition or otherwise, except
as provided in the Pass Through Agreement or the applicable
Series Supplement;
(d) reduce the percentage of the aggregate fractional undivided
interests of the Pass Through Trust that is required to
approve any supplemental agreement or any waiver provided
for in the Pass Through Agreement or such Series Supplement; or
(e) cause the Pass Through Trust to become taxable as an
"association" within the meaning of Treasury Regulation
Section 301.7701-4. (Pass Through Agreement, Section 11.02)
Modification, Consents and Waivers under the Indenture and Related Agreements
If the Pass Through Trustee, as the holder of any Equipment Certificates
held in a Pass Through Trust, receives a request for its consent to any
amendment, modification or waiver under the Indenture, or other document
relating to such Equipment Certificates (including any Lease with respect to
Leased Aircraft Certificates), the Pass Through Trustee will mail a notice of
such proposed amendment, modification or waiver to each Certificateholder of
such Pass Through Trust as of the date of such notice. The Pass Through
Trustee will request instructions from such Certificateholders as to whether
or not to consent to such amendment, modification or waiver. The Pass Through
Trustee will vote or consent with respect to such Equipment Certificates in
the same proportion as the Pass Through Certificates of such Pass Through
Trust are actually voted by such Certificateholders by a certain date. If an
Event of Default relating to such Indenture has occurred and is continuing
under such Pass Through Trust, the Pass Through Trustee may, in the absence of
instructions from Certificateholders holding a majority in interest of such
Pass Through Trust, in its own discretion consent to such amendment,
modification or waiver, and may so notify the Indenture Trustee. (Pass
Through Agreement, Section 11.08)
Termination of Pass Through Trusts
The obligations of the Corporation and the Pass Through Trustee with
respect to a Pass Through Trust will terminate upon the distribution to the
Certificateholders of such Pass Through Trust of all amounts required to be
distributed to them pursuant to the Pass Through Agreement and the applicable
Series Supplement and the disposition of all property held in such Pass
Through Trust. The Pass Through Trustee will notify each Certificateholder of
record of such Pass Through Trust by mail of, among other things, the
termination of such Pass Through Trust, the amount of the proposed final
payment and the proposed date for the distribution of such final payment for
such Pass Through Trust. The final distribution for each Certificateholder of
such Pass Through Trust will be made only upon surrender of such
Certificateholder's Pass Through Certificates at the office or agency of the
Pass Through Trustee specified in such termination notice. (Pass Through
Agreement, Section 12.01)
Delayed Purchase
If, on the date of issuance of any Pass Through Certificates, all of the
proceeds from the sale of such Pass Through Certificates are not used to
purchase the Equipment Certificates contemplated to be held in the related Pass
Through Trust, such Equipment Certificates may be purchased by the Pass
Through Trustee at any time on or prior to the date specified in the
applicable Prospectus Supplement. In such event, the Pass Through Trustee
will transfer the proceeds from the sale of such Pass Through Certificates not
used to purchase Equipment Certificates on such date of issuance to the
Corporation which will deposit such amount into a deposit trust account
pending the purchase of the Equipment Certificates not so purchased. Such
proceeds will be invested in specified investments at the direction and risk
of, and for the benefit of, the Corporation until applied to such purchase.
Earnings on specified investments in such deposit trust account will be paid
to the Corporation periodically, and the Corporation will be responsible for
any losses. (Pass Through Agreement, Article I and Section 2.02)
Subject to a Special Payment upon unavailability of the Trust Property as
described below, in return for its interest in the funds transferred to the
deposit trust account, if the Equipment Certificates that were not so purchased
become available for purchase on or prior to the date specified in the
applicable Prospectus Supplement, then the Corporation will cause an amount
equal to the purchase price of such Equipment Certificates to be transferred
from the deposit trust account to the Pass Through Trustee on the date for
such delayed purchase. On the initial Regular Distribution Date, the
Corporation will pay to the Pass Through Trustee an amount equal to the
interest that would have accrued on any Equipment Certificates purchased after
the date of the issuance of such Pass Through Certificates from the date of
the issuance of such Pass Through Certificates to, but excluding, the date of
the purchase of such Equipment Certificates by the Pass Through Trustee. (Pass
Through Agreement, Section 2.02)
Special Payment Upon Unavailability of Trust Property
For any Pass Through Trust, to the extent that any of the proceeds from the
sale of the related Pass Through Certificates are not applied on or prior to
the date specified in the applicable Prospectus Supplement to purchase the
Equipment Certificates that were contemplated to be held in such Pass Through
Trust, the Corporation will cause an amount equal to such unapplied proceeds
to be paid from the deposit trust account to the Pass Through Trustee. The
Pass Through Trustee will distribute such proceeds to the Certificateholders
of such Pass Through Trust on a pro rata basis upon not less than 20 days'
prior notice to them as a Special Payment on the date specified in the
applicable Prospectus Supplement, together with interest thereon at a rate
equal to the rate applicable to such Pass Through Certificates, but without
premium. The Corporation will also pay to the Pass Through Trustee on such
date an amount equal to such interest. The Corporation will be responsible
for any losses in the deposit trust account. (Pass Through Agreement, Section
2.02)
The Pass Through Trustee; the Indenture Trustee
The Pass Through Trustee for each of the Pass Through Trusts will be named
in the Prospectus Supplement. The Pass Through Trustee and any of its
affiliates may hold Pass Through Certificates in their own names. (Pass
Through Agreement, Section 8.05)
Unless otherwise specified in the related Prospectus Supplement, State
Street Bank and Trust Company will be the Indenture Trustee under the
Indentures under which the Equipment Certificates have been or will be issued.
State Street Bank and Trust Company acts as trustee under other indentures
with respect to other indebtedness by the Corporation, and the Corporation
from time to time borrows from, and maintains deposit accounts with, State
Street Bank and Trust Company and its affiliates.
The Pass Through Trustee may resign as trustee under any or all of the Pass
Through Trusts at any time. If the Pass Through Trustee ceases to be eligible
to continue as Pass Through Trustee with respect to a Pass Through Trust or
becomes incapable of acting as Pass Through Trustee or becomes insolvent, the
Corporation may remove such Pass Through Trustee, or any Certificateholder of
such Pass Through Trust holding Pass Through Certificates for at least six
months may, on behalf of such Certificateholder and all others similarly
situated, petition any court of competent jurisdiction for the removal of such
Pass Through Trustee and the appointment of a successor trustee. In addition,
the Pass Through Trustee of any Pass Through Trust may be removed without
cause by the Certificateholders holding more than 50% in aggregate amount of
the related Pass Through Certificates. (Pass Through Agreement, Section 10.01)
In the case of the resignation or removal of the Pass Through Trustee, the
Corporation or the Certificateholders holding more than 50% in aggregate
amount of the related Pass Through Certificates may appoint a successor Pass
Through Trustee. The resignation or removal of the Pass Through Trustee for
any Pass Through Trust and the appointment of the successor trustee for such
Pass Through Trust does not become effective until acceptance of the
appointment by the successor trustee. (Pass Through Agreement, Article X)
Pursuant to such resignation and successor trustee provisions, it is possible
that a different trustee could be appointed to act as the successor trustee
with respect to each Pass Through Trust. All references in this Prospectus to
the Pass Through Trustee are to the trustee acting in such capacity under each
of the Pass Through Trusts and should be read to take into account the
possibility that each of the Pass Through Trusts could have a different
successor trustee in the event of such a resignation or removal.
The Pass Through Agreement provides that the Corporation will pay the Pass
Through Trustee's fees and expenses and that the Pass Through Trustee will
have a priority claim on the related Trust Property to the extent such fees
and expenses are not paid. The Pass Through Agreement further provides that
the Pass Through Trustee in its individual capacity will be entitled to
indemnification by the Corporation for, and will be held harmless against, any
loss, liability or expenses (other than income or similar taxes) incurred by
the Pass Through Trustee in its individual capacity in connection with the
administration of any Pass Through Trust, except to the extent incurred
through its own willful misconduct, bad faith or negligence or by reason of a
breach of any of its representations or warranties set forth in the Pass
Through Agreement or the applicable Series Supplement or any related
documents. In certain circumstances, the Pass Through Trustee will be entitled
to be reimbursed from the applicable Pass Through Trust for any tax (other
than income or similar taxes) incurred in its trust capacity in connection
with the administration of any Pass Through Trust. (Pass Through Agreement,
Articles VIII and IX).
DESCRIPTION OF THE EQUIPMENT CERTIFICATES
The discussion that follows is a summary that does not purport to be
complete and is qualified in its entirety by the detailed information
appearing in the applicable Prospectus Supplement. The following summary
includes descriptions of the material terms of the Equipment Certificates and
the Indentures. Except as otherwise indicated below or as described in the
applicable Prospectus Supplement, the following summary will apply to the
Equipment Certificates, the Indenture and the Participation Agreement relating
to each Aircraft and, for Leased Aircraft, the Lease and the Collateral
Agreement, if any, relating thereto. Where no distinction is made between the
Leased Aircraft Certificates and the Owned Aircraft Certificates or between
their respective Indentures, the summary applies to any Equipment Certificate
and any Indenture. Additional provisions with respect to the Equipment
Certificates, the Indentures and the Participation Agreements and, for Leased
Aircraft, the Leases and the Collateral Agreements, if any, relating to any
particular offering of Pass Through Certificates will be described in the
applicable Prospectus Supplement. To the extent that any provision in any
Prospectus Supplement is inconsistent with any provision of this summary, the
provision of such Prospectus Supplement will control.
General
For each Owned Aircraft, the related Owned Aircraft Certificates will be
issued as direct obligations by the Corporation and will be authenticated
under an Owned Aircraft Indenture by the Indenture Trustee. All of the Owned
Aircraft Certificates issued under the same Owned Aircraft Indenture will
relate to a specific Owned Aircraft and will not be secured by any other
Aircraft. The Owned Aircraft relating to each Owned Aircraft Indenture and
the related Owned Aircraft Certificates will be specified in the applicable
Prospectus Supplement. The Corporation will be directly obligated under each
Owned Aircraft Indenture to make payments of principal of, premium, if any,
and interest on the related Owned Aircraft Certificates.
For each Leased Aircraft, the related Leased Aircraft Certificates will be
issued as nonrecourse obligations by the Owner Trustee, in each case acting
for a separate Owner Trust for the benefit of an Owner Participant, and will
be authenticated under a Leased Aircraft Indenture by the Indenture Trustee.
All of the Leased Aircraft Certificates issued under the same Leased Aircraft
Indenture will relate to and, after any related Pre-Funding Period, as
discussed below under "Delayed Lease Commencement," will be secured by a
specific Leased Aircraft and will not be secured by any other Aircraft. In
each case, the Owner Trustee will lease the related Leased Aircraft to the
Corporation pursuant to a separate Lease between such Owner Trustee and the
Corporation. See "Delayed Lease Commencement" below for a discussion of the
circumstances under which the Lease for an Aircraft may commence after the
date of issuance of the related Leased Aircraft Certificates.
The Leased Aircraft subject to each Lease and the Leased Aircraft
Certificates issued under the related Leased Aircraft Indenture will be
specified in the applicable Prospectus Supplement. Upon the commencement of
the Lease for any Leased Aircraft, the Corporation will be obligated to make
rental payments under such Lease that will be sufficient to pay the principal
of and accrued interest on the related Leased Aircraft Certificates when and
as due and payable except that, with respect to a Delayed Lease Aircraft (as
defined below), on the first scheduled payment date after the related
Pre-Funding Period, any difference between the rental payment due on such date
by the Corporation and the scheduled payment of principal, if any, and
interest then due on such Leased Aircraft Certificates will be payable from
the related Collateral Account and any other security pledged under the related
Indenture or otherwise available to the Indenture Trustee. See "Delayed Lease
Commencement" below. The Leased Aircraft Certificates will not, however, be
obligations of, or guaranteed by, the Corporation. The Corporation's
obligations to pay rent and to cause other payments to be made under each
Lease will be general obligations of the Corporation.
In certain circumstances described in the applicable Prospectus Supplement,
the Corporation will have the right to purchase an Owner Trustee's right,
title and interest in and to the related Aircraft and to assume the related
Leased Aircraft Certificates on a full recourse basis, which would reflect a
financing contemplated by an Owned Aircraft Indenture.
For any Owned Aircraft, if specified in the applicable Prospectus
Supplement, the Corporation may arrange for an Owner Trustee, acting for an
Owner Trust for the benefit of an Owner Participant, to purchase such Owned
Aircraft from the Corporation and lease such Aircraft back to the Corporation
under a "net lease," subsequent to the sale of the related Owned Aircraft
Certificates to the Pass Through Trustee for each applicable Pass Through
Trust and the offering and sale of the related Pass Through Certificates
pursuant to such Prospectus Supplement. In such event, such Owner Trustee
will assume, on a nonrecourse basis, the obligations of the Corporation to make
payments of principal and interest on the related Equipment Certificates.
However, the related Equipment Certificates will no longer be direct
obligations of, and will not be guaranteed by, the Corporation, although the
Corporation will be obligated under the related Lease to make rental payments
that will be sufficient to pay the principal of and accrued interest on the
related Equipment Certificates when and as due and payable, and such Equipment
Certificates will continue to be secured by a security interest in the related
Aircraft, in addition to being secured by an assignment by such Owner Trustee
to the Indenture Trustee of such Owner Trustee's rights under such Lease and
the agreements relating to the purchase of such Aircraft. See "Security,"
"Payments and Limitation of Liability" below and "Federal Income Tax
Consequences." The terms and conditions under which any such sale and
leaseback transaction may be consummated will be described in the applicable
Prospectus Supplement.
Until the Corporation has entered into a Lease in connection with a Leased
Aircraft, the Corporation will not be obligated to make any scheduled rental
payments and during any Pre-Funding Period for such Leased Aircraft the
related Leased Aircraft Certificates will not be secured by such Leased
Aircraft or the related Lease, including any rental payments under such Lease.
During any Pre-Funding Period for such Leased Aircraft, however, the related
Collateral Account, together with any other security pledged under the related
Indenture or otherwise available to the Indenture Trustee will be available to
provide funds necessary to make the corresponding scheduled payments of
principal, if any, and interest accrued on the related Leased Aircraft
Certificates during such Pre-Funding Period, including the portion, if any, of
principal and interest due on the first payment date after the Pre-Funding
Period to the extent exceeding the amount of rent payable by the Corporation
pursuant to the related Lease. See "Delayed Lease Commencement" below.
Principal and Interest Payments
Interest received by the Pass Through Trustee on the Equipment Certificates
constituting Trust Property of each Pass Through Trust will be passed through
to the Certificateholders of such Pass Through Trust on a pro rata basis on
the dates and at the rate per annum set forth in the applicable Prospectus
Supplement. Interest on the Equipment Certificates will be calculated on the
basis of a 360-day year consisting of twelve 30-day months.
Each Pass Through Trust will hold Equipment Certificates on which principal
is payable in scheduled amounts and on specified dates as set forth in the
applicable Prospectus Supplement. Principal received by the Pass Through
Trustee on such Equipment Certificates will be passed through to the
Certificateholders of such Pass Through Trust on a pro rata basis as set forth
in the Prospectus Supplement.
Prepayment
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the related Equipment
Certificates may or must be prepaid prior to the stated maturity date thereof,
in whole or in part, the premium, if any, applicable upon certain prepayments
and other terms applying to the prepayment of such Equipment Certificates.
See "Mandatory Prepayment During the Pre-Funding Period" below for a
discussion of certain events which would require prepayment of Leased Aircraft
Certificates related to a Leased Aircraft during any related Pre-Funding
Period.
Security
Except during any related Pre-Funding Period, the Leased Aircraft
Certificates issued under each Leased Aircraft Indenture will be secured by:
(i) an assignment by the related Owner Trustee to the Indenture
Trustee of such Owner Trustee's rights (except for certain
limited rights described below) under the applicable Lease,
including the right to receive rent and other payments
thereunder;
(ii) a security interest granted to the Indenture Trustee in the
related Leased Aircraft, subject to the rights of the
Corporation under such Lease and to certain other liens and
encumbrances; and
(iii) an assignment to such Indenture Trustee of such Owner
Trustee's rights relating to such Leased Aircraft and the
related engines under the agreements for the purchase
thereof between the Corporation and the respective
manufacturers of such Leased Aircraft and of such engines.
See "Registration of the Aircraft" below.
The assignment by such Owner Trustee to the Indenture Trustee of its rights
under each Lease will exclude rights of such Owner Trustee and the related
Owner Participant relating to:
(i) indemnification by the Corporation for certain matters;
(ii) proceeds of public liability insurance payable to such
Owner Trustee in its individual capacity and to such Owner
Participant under insurance maintained by the Corporation under
such Lease; and
(iii) proceeds of any insurance policies separately maintained
by such Owner Trustee in its individual capacity or by
such Owner Participant.
The right of the Indenture Trustee, however, to exercise any of the rights of
the Owner Trustee under the related Lease, except the right to receive
payments of rent due thereunder, will be subject to certain limitations as
described in the applicable Prospectus Supplement.
The Owned Aircraft Certificates issued under each Owned Aircraft Indenture
will be secured by (i) a security interest granted to the Indenture Trustee in
all of the Corporation's right, title and interest in and to the related Owned
Aircraft and (ii) an assignment to such Indenture Trustee of certain of the
Corporation's rights relating to such Owned Aircraft and the related engines
under the agreements for the purchase thereof between the Corporation and the
respective manufacturers of such Owned Aircraft and of such engines. See
"Registration of the Aircraft" below.
There will be no cross-collateralization provisions in the Indentures and
consequently the Equipment Certificates issued in respect of one of the
Aircraft will not be secured by any other Aircraft or, in the case of Leased
Aircraft Certificates, the Leases related thereto. There will be no
cross-default provisions in the Indentures and consequently events resulting
in an Indenture Event of Default under any particular Indenture may not result
in an Indenture Event of Default occurring under any other Indenture.
Section 1110 of the United States Bankruptcy Code (the "Bankruptcy Code")
provides that the right of lessors, conditional vendors and holders of
security interests with respect to aircraft capable of carrying ten (10) or
more individuals or 6,000 pounds or more of cargo used by air carriers
operating under certificates issued by the Secretary of Transportation under
Chapter 447 of the Transportation Code to take possession of such aircraft in
compliance with the provisions of the lease, conditional sale contract or
security agreement, as the case may be, is not affected by:
(a) the automatic stay provision of the Bankruptcy Code, which
provision enjoins the taking of any action against a debtor by a
creditor;
(b) the provision of the Bankruptcy Code allowing the trustee in
reorganization or the debtor-in-possession to use, sell or
lease property of the debtor;
(c) the confirmation of a plan by the bankruptcy court; and
(d) any power of the bankruptcy court to enjoin a repossession.
Section 1110 provides, however, that the right of a lessor, conditional vendor
or holder of a security interest to take possession of an aircraft in the
event of a default may not be exercised for 60 days following the date of
commencement of the reorganization proceedings (unless specifically permitted
by the bankruptcy court) and may not be exercised at all if, within such
60-day period, the trustee in reorganization or the debtor-in-possession agrees
to perform the debtor's obligations that become due on or after such date and
cures all existing defaults (other than defaults resulting solely from the
financial condition, bankruptcy, insolvency or reorganization of the debtor).
The Prospectus Supplement for each offering will discuss the availability of
the benefits of Section 1110 of the Bankruptcy Code with respect to the
related Aircraft.
If the applicable Prospectus Supplement provides that a Pre-Funding Period
will apply to a Leased Aircraft, then during such Pre-Funding Period the
related Leased Aircraft Certificates will not be secured by such Leased
Aircraft or a related Lease. During such Pre-Funding Period, however, such
Leased Aircraft Certificates will be secured by the related Collateral Account
and, if the Prospectus Supplement so provides, certain additional security
which may include, unless otherwise specified in the applicable Prospectus
Supplement, a letter of credit issued by a bank (within the meaning of Section
3(a)(2) of the Securities Act) whose obligations at the time of the relevant
Pass Through Certificate offering carry a credit rating at least as high as
the Corporation's ("Additional Collateral"). See "Delayed Lease Commencement"
below.
Registration of the Aircraft
The Corporation will be required, except under certain circumstances, to
register and keep each Aircraft registered under Title 49 of the United States
Code (the "Transportation Code"), in the name of the Corporation, in the case
of an Owned Aircraft, or in the name of the Owner Trustee, after commencement
of a Lease in the case of a Leased Aircraft, and to record and maintain the
recordation of the Indenture and the Lease, if any, relating to each such
Aircraft under the Transportation Code. Such recordation of the Indenture and
the Lease, if any, relating to each Aircraft will give the Indenture Trustee a
security interest in each such Aircraft perfected under the Transportation
Code, which perfected security interest will, with certain limited exceptions,
be recognized in those jurisdictions that have ratified to the Convention on
the International Recognition of Rights in Aircraft (the "Convention").
The Corporation will be able, in certain circumstances, to re-register any
Aircraft in certain countries other than the United States. Unless otherwise
specified in the applicable Prospectus Supplement, prior to any such change in
the jurisdiction of registry, the Indenture Trustee and, for Leased Aircraft,
the related Owner Participant must receive certain assurances, including that
such other country would provide substantially equivalent protection for the
rights of owner participants, lessors and lenders in similar transactions as
is provided under United States law, except that, for the purpose of such
determination, rights and remedies similar to those available under Section
1110 of the Bankruptcy Code will not be required in the absence of
restrictions of rights and remedies of lessors and secured parties that are
similar to those imposed by Sections 362, 363 and 1129 of the Bankruptcy Code.
While such assurances are intended to provide that the Corporation's (in the
case of an Owned Aircraft) or the Owner Trustee's (in the case of a Leased
Aircraft) title to the Aircraft and the Indenture Trustee's lien thereon will
be recognized in such jurisdiction and that the Indenture Trustee may exercise
the rights granted to it in the Indentures, there is no guarantee that, even
if such jurisdiction is a party to the Convention, as a practical matter, the
Indenture Trustee would be able to realize upon its security interest in the
case of an Indenture Event of Default.
Also, each Aircraft may be operated by the Corporation, or placed under
lease, sublease or interchange arrangements with carriers domiciled outside of
the United States. The ability of the Indenture Trustee in the case of an
Indenture Event of Default, to realize upon its security interest in the
Aircraft could be adversely affected as a legal or practical matter if the
Aircraft were located outside the United States.
Merger, Consolidation and Transfer of Assets
With respect to each Aircraft, the Corporation will be prohibited from
consolidating with or merging into any other corporation under circumstances
in which the Corporation is not the surviving corporation, or from
transferring all or substantially all of its assets as an entirety to any
other corporation, unless, among other things:
(i) the successor or transferee corporation is a U.S. Citizen,
an "air carrier" within the meaning of and operating under
the Transporation Code and a corporation organized and
existing under the laws of the United States or a political
subdivision thereof, and such corporation expressly
assumes all the obligations of the Corporation contained in
the related Indenture, the Participation Agreement, the Lease,
the Purchase Agreement and the Purchase Agreement Assignment;
(ii) immediately after giving effect to such consolidation, merger
or transfer, the successor or transferee is in compliance
with all of the terms and conditions of such documents; and
(iii) such consolidation, merger or transfer does not (or would
not, if prior to commencement of the related Lease) give rise
to a Lease Event of Default under the related Lease or, in
the case of an Owned Aircraft, an Indenture Event of Default
under the related Owner Aircraft Indenture.
Delayed Lease Commencement
If the applicable Prospectus Supplement provides that a Pre-Funding Period
will apply to a Leased Aircraft, then until commencement of a Lease with
respect to such Leased Aircraft and the Indenture Trustee's release of funds
from the related Collateral Account, which is expected to occur at the same
time as the commencement of such Lease, such Leased Aircraft is referred to as
a "Delayed Lease Aircraft" and the period prior to the Indenture Trustee's
release of such funds is referred to as the "Pre-Funding Period."
In the case of Leased Aircraft Certificates relating to a Delayed Lease
Aircraft, the proceeds from sale of such Leased Aircraft Certificates to the
applicable Pass Through Trusts, after deducting certain expenses of the
offering of the related Pass Through Certificates, will be deposited by the
Owner Trustee, on the date of such sale, in a collateral account (a
"Collateral Account") established pursuant to the Indenture or a collateral
agreement between the Owner Trustee and the Indenture Trustee (a "Collateral
Agreement"). Such Collateral Account will secure payment of the related
Leased Aircraft Certificates. In addition, if the Prospectus Supplement so
provides, the Corporation will be required to provide to the Indenture Trustee
Additional Collateral for such Leased Aircraft Certificates during the related
Pre-Funding Period. See "Security" above.
Funds in the Collateral Account will be invested at the risk of the Owner
Trustee pursuant to the related Collateral Agreement or Indenture in U.S.
government obligations or such other obligations as further described in the
applicable Prospectus Supplement. Earnings on such investments will be
retained in the Collateral Account pending distribution as contemplated below.
Unless otherwise specified in an applicable Prospectus Supplement, the
Leased Aircraft Certificates relating to a Delayed Lease Aircraft will be
issued in an amount such that the net proceeds thereof, together with expected
earnings on the investments in the Collateral Account, will be sufficient (i)
to make scheduled payments of principal, if any, and interest accrued on such
Leased Aircraft Certificates during the related scheduled Pre-Funding Period
specified in such Prospectus Supplement and (ii) to finance a portion of the
purchase price of such Delayed Lease Aircraft, as specified in such Prospectus
Supplement.
Subject to any mandatory prepayment contemplated below, under the
Collateral Agreement relating to a Delayed Lease Aircraft, on each date during
the scheduled Pre-Funding Period for the scheduled payments of principal, if
any, and interest on the related Leased Aircraft Certificates, the Indenture
Trustee shall withdraw from the Collateral Account the amount necessary to
make the scheduled payment then due. If the Indenture Trustee shall not have
released the funds in the Collateral Account on the date scheduled for the
commencement of the Lease relating to such Delayed Lease Aircraft, then on
each scheduled payment date during the Pre-Funding Period that occurs after
such scheduled commencement date, the Indenture Trustee shall withdraw from
the Collateral Account the excess of the amount therein over the amount
specified to be retained in such Collateral Account to be applied to the
purchase price of the Delayed Lease Aircraft. If the amount withdrawn is less
than the scheduled payment then due, the Indenture Trustee shall draw the
deficiency from any available Additional Collateral and will apply such amount
to satisfy the corresponding payment obligation. On the first scheduled
payment date after any Pre-Funding Period with respect to a Delayed Lease
Aircraft, the Indenture Trustee will withdraw from the Collateral Account or
otherwise realize from any Additional Collateral the difference between the
scheduled payment then due and the rental payment due on such payment from the
Corporation.
Mandatory Prepayment During the Pre-Funding Period
To the extent that the Lease related to a Delayed Lease Aircraft has not
commenced on or prior to the cut-off date specified in the applicable
Prospectus Supplement as the last date of the related permitted Pre-Funding
Period either (i) a "Deemed Event of Loss" will occur and the Collateral
Account and, to the extent necessary, any Additional Collateral will be drawn
upon and the related Leased Aircraft Certificates will be prepaid at a
prepayment price equal to the aggregate principal amount of such Leased
Aircraft Certificates, together with accrued but unpaid interest thereon to
the date designated for such prepayment specified in such Prospectus
Supplement or (ii) the Corporation will assume the Leased Aircraft
Certificates on a full recourse basis.
With respect to any Delayed Lease Aircraft, the applicable Prospectus
Supplement also will set forth (i) any mandatory prepayment of the related
Leased Aircraft Certificates, and the prepayment price therefor, upon the
occurrence of any event of loss with respect to such Delayed Lease Aircraft
during such Pre-Funding Period and (ii) any option the Corporation may have to
convert the leveraged lease financing for a Delayed Lease Aircraft into the
type of financing available for Owned Aircraft.
Owned Aircraft Indenture Covenants
Maintenance. The Corporation will be obligated to pay all costs of
operating the Owned Aircraft and, at its expense, to maintain, inspect,
service, repair and overhaul the Owned Aircraft so as to keep the Owned
Aircraft in good condition, ordinary wear and tear excepted, and to enable the
airworthiness certification thereof to be maintained in good standing at all
times under the Transportation Code or, under certain circumstances, under the
applicable requirements of the aeronautical authority of another country of
registry. If, however, the Owned Aircraft loses its airworthiness
certification and such loss is curable, and the Corporation, using its
reasonable best efforts, undertakes such cure promptly, diligently and
continuously, then the Corporation will not be in default with respect to such
obligation.
Generally, the Corporation will be obligated to replace or cause to be
replaced all parts that may from time to time be incorporated or installed in
or attached to any Owned Aircraft (including in or on any engine) and that may
become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use. The Corporation will have the
right to make other alterations, modifications and additions to an Owned
Aircraft so long as such alterations, modifications or additions do not
materially decrease the value or utility of such Owned Aircraft or impair its
condition or airworthiness below its value, utility, condition and
airworthiness immediately prior to such alteration, modification or addition,
assuming that such Owned Aircraft was then in the condition and airworthiness
required by the related Indenture. Also, in certain circumstances, the
Corporation will be permitted to remove parts (without replacement) from an
Owned Aircraft or any engine (and therefore from the Lien of the applicable
Indenture) if the Corporation deems such parts to be obsolete or no longer
suitable or appropriate for use thereon so long as such removals do not
decrease the utility, condition or airworthiness of such Owned Aircraft or any
such engine, although the value of such Owned Aircraft or any such engine may
be reduced by such removal. The applicable Prospectus Supplement will contain
a description of certain limitations, if any, applicable to provisions
described in this paragraph.
Insurance. Unless otherwise indicated in the applicable Prospectus
Supplement, the Corporation will be obligated to carry insurance with insurers
of recognized responsibility with respect to each Owned Aircraft, at its own
cost and expense, in such amounts, against such risks, with such deductibles
or retentions (i) in the case of hull insurance, as the Corporation
customarily maintains with respect to other aircraft in the Corporation's
fleet of the same type and model and operating on the same routes as the
respective Owned Aircraft and (ii) in the case of liability insurance, as is
usually carried by similar corporations engaged in the same or similar
business and similarly situated as the Corporation, owning or operating
aircraft similar to the Aircraft. The Corporation will be permitted to
maintain coverage below certain stipulated values and may be permitted to
self-insure (including by way of deductibles and retentions) in certain
circumstances, subject to certain limits. Therefore, there is no assurance that
any insurance will be carried in the future, or, if it is carried, as to the
amount of such insurance.
The Corporation and any permitted lessee of an Owned Aircraft will be named
as insured parties under all insurance policies required by the related
Indenture. The Indenture Trustee will be named as an additional insured,
which will afford such Indenture Trustee the rights but not the obligations of
an additional insured. Unless otherwise specified in the applicable
Prospectus Supplement, liability insurance proceeds will be distributed to the
respective parties as their interests may appear and hull insurance proceeds
will be distributed to the Indenture Trustee if the amount of such proceeds
exceeds certain specified amounts. The applicable Prospectus Supplement will
contain a description of certain limitations, if any, applicable to provisions
described in this paragraph.
Payments and Limitation of Liability
All payments of principal of, premium, if any, and interest on any Leased
Aircraft Certificates will be made only from the assets subject to the Lien of
the related Leased Aircraft Indenture. The income and proceeds received by
the Indenture Trustee therefrom or from certain payments received by the
Indenture Trustee to be applied pursuant to such Leased Aircraft Indenture,
including, during any Pre-Funding Period relating to a Leased Aircraft, the
Collateral Account and any Additional Collateral provided in connection with
such Pre-Funding Period and, on and after the commencement of the related
Lease and, in the case of a Delayed Lease Aircraft, after the related
Pre-Funding Period, rent payable by the Corporation under the related Lease.
The Leased Aircraft Certificates will not be direct obligations of, or
guaranteed by the Corporation. The Corporation's obligations to pay rent and
to cause other payments to be made under each Lease will be general
obligations of the Corporation.
Neither the Owner Trustee or the Indenture Trustee (in their individual
capacities) will be liable to any Certificateholder or, in the case of the
Owner Trustee, in its individual capacity, to the Corporation or the Indenture
Trustee for any amounts payable or for any liability under the Equipment
Certificates or the Indentures, except as provided in the Indentures and the
Participation Agreements and except for the gross negligence or willful
misconduct of the Owner Trustee.
The Corporation's obligations under each Owned Aircraft Indenture and under
the related Owned Aircraft Certificates will be general obligations of the
Corporation.
Indenture Events of Default and Remedies
For any Pass Through Trust, the applicable Prospectus Supplement will
describe the Indenture Events of Default under the Indentures related to the
Equipment Certificates to be held by such Pass Through Trust, the remedies that
the Indenture Trustee may exercise with respect to the related Aircraft,
either at its own initiative or upon instruction from holders of the related
Equipment Certificates, and other provisions relating to the occurrence of an
Indenture Event of Default and the exercise of remedies. There will be no
cross-default provisions in the Indentures and events resulting in an
Indenture Event of Default under any particular Indenture will not necessarily
result in an Indenture Event of Default under any other Indenture.
The Leases
Upon the commencement of any Lease, the following terms will be applicable:
Terms and Rentals. Each Leased Aircraft will be leased separately by the
related Owner Trustee to the Corporation for a term commencing on the date of
the delivery of the related Leased Aircraft to such Owner Trustee and expiring
on a date not earlier than the latest maturity date of the Leased Aircraft
Certificates issued with respect to such Leased Aircraft, unless previously
terminated or extended, as permitted by the related Lease. The scheduled
rental payments by the Corporation under each Lease will be payable on the
dates specified in the applicable Prospectus Supplement. The respective
payments will be assigned under the related Leased Aircraft Indenture by the
Owner Trustee to the Indenture Trustee to provide the funds necessary to make
payments of principal and interest due from such Owner Trustee on the Leased
Aircraft Certificates issued under such Leased Aircraft Indenture. Although
in certain cases the scheduled rental payments under the Leases may be
adjusted, under no circumstances will such payments that the Corporation will
be unconditionally obligated to make or cause to be made under any Lease be
less than the scheduled payments of principal and interest on the Leased
Aircraft Certificates issued under the Leased Aircraft Indenture relating to
such Lease. See "Payments and Limitations of Liability" above.
For any Delayed Lease Aircraft, upon the commencement of the Lease for such
Aircraft and after the related Pre-Funding Period, the Corporation will be
obligated to make scheduled rental payments under the related Lease that will
be sufficient to pay in full when due all principal of and interest on, to
the extent accrued from and after the related Pre-Funding Period, the related
Leased Aircraft Certificates, except that on the first scheduled payment date
after the related Pre-Funding Period, the difference between the rental
payment due on such date by the Corporation and the scheduled payment of
principal, if any, and interest then due on such Leased Aircraft Certificates
will be payable from the related Collateral Account and any related Additional
Collateral. See "Payments and Limitations of Liability" above. Scheduled
payments of principal and interest on the Leased Aircraft Certificates will be
made on the dates specified in the applicable Prospectus Supplement.
Net Lease. The Corporation's obligations under each Lease in respect of
the related Leased Aircraft will be those of a lessee under a "net lease."
Accordingly, the Corporation will be obligated to pay all costs of operating
the Leased Aircraft and, at its expense, to maintain, service, repair and
overhaul the Leased Aircraft so as to keep the Leased Aircraft in good
condition, ordinary wear and tear excepted, and to enable the airworthiness
certification thereof to be maintained in good standing at all times under the
Transportation Code or, under certain circumstances, under the applicable
requirements of the aeronautical authority of another country of registry. If,
however, the Leased Aircraft loses its airworthiness certification and such
loss is curable, and the Corporation, using its reasonable best efforts,
undertakes such cure promptly, diligently and continuously, then the
Corporation will not be in default with respect to such obligation.
Generally, the Corporation will be obligated to replace or cause to be
replaced all parts that may from time to time be incorporated or installed in
or attached to any Leased Aircraft (including in or on any engine) and that may
become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use. The Corporation will have the
right to make other alterations, modifications and additions to a Leased
Aircraft so long as such alterations, modifications or additions do not
materially decrease the value or utility of such Leased Aircraft or impair its
condition or airworthiness below its value, utility, condition and
airworthiness immediately prior to such alteration, modification or addition,
assuming that such Leased Aircraft was then in the condition and airworthiness
required by the related Lease. Also, in certain circumstances, the
Corporation will be permitted to remove parts (without replacement) from a
Leased Aircraft or any engine (and therefore from the Lien of the applicable
Indenture) if the Corporation deems such parts to be obsolete or no longer
suitable or appropriate for use on such Leased Aircraft so long as such
removals do not decrease the utility, condition or airworthiness of such
Leased Aircraft or any such engine, although the value of such Leased Aircraft
or any such engine may be reduced by such removal. The applicable Prospectus
Supplement will contain a description of certain limitations, if any,
applicable to provisions described above.
Insurance. Unless otherwise indicated in the applicable Prospectus
Supplement, the Corporation will be obligated to carry insurance with insurers
of recognized responsibility with respect to each Leased Aircraft, at its own
cost and expense, in such amounts, against such risks, with such deductibles
or retentions (i) in the case of hull insurance, as the Corporation
customarily maintains with respect to other aircraft in the Corporation's
fleet of the same type and model and operating on the same routes as the
respective Leased Aircraft and (ii) in the case of liability insurance, as is
usually carried by similar corporations engaged in the same or similar
business and similarly situated as the Corporation, owning or operating
aircraft similar to the Aircraft. The Corporation will be permitted to
maintain coverage below certain stipulated values and may be permitted to
self-insure (including by way of deductibles and retentions) in certain
circumstances, subject to certain limits. Therefore, there is no assurance that
any insurance will be carried in the future, or, if it is carried, as to the
amount of such insurance.
The Corporation and any permitted sublessee of a Leased Aircraft will be
named as insured parties under all insurance policies required by the related
Lease. The Indenture Trustee, Owner Trustee and related Owner Participant
will be named additional insureds, which will afford each of them the rights
but not the obligations of an additional insured. Unless otherwise specified
in the applicable Prospectus Supplement, liability insurance proceeds will be
distributed to the respective parties as their interests may appear and hull
insurance proceeds will be distributed to the Indenture Trustee if the amount
of such proceeds exceeds certain specified amounts. The applicable Prospectus
Supplement will contain a description of certain limitations, if any,
applicable to provisions described in this paragraph.
Lease Events of Default; Remedies. The applicable Prospectus Supplement
will describe the Lease Events of Default under the related Leases, the
remedies that the Owner Trustee may exercise with respect to the related
Leased Aircraft, and other provisions relating to the occurrence of a Lease
Event of Default and the exercise of remedies.
The Participation Agreements
The Corporation will be required to indemnify each Indenture Trustee and,
in the case of Leased Aircraft Certificates, each Owner Participant and each
Owner Trustee, and certain parties affiliated with the foregoing (but not
including holders of the Equipment Certificates or the Certificateholders),
for certain liabilities, losses, fees and expenses and for certain other
matters arising out of the transactions described herein or relating to the
applicable Aircraft or the use thereof. In addition, under certain
circumstances the Corporation will be required to indemnify such persons
against certain taxes, levies, duties, withholdings and for certain other
matters relating to such transactions or the applicable Aircraft. Subject to
certain restrictions, each Owner Participant may convey all of its right,
title and interest relating to any Leased Aircraft. Moreover, if so provided
in the applicable Prospectus Supplement, in certain limited instances the
Corporation may assume an Owner Trust's obligations under the related Leased
Aircraft Certificates on a full recourse basis.
FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Davis Polk & Wardwell, tax counsel to the Corporation,
the following discussion accurately describes the principal United States
federal income tax consequences of ownership and disposition of the Pass
Through Certificates to the initial purchasers thereof at the "issue price"
who hold such Pass Through Certificates as a capital asset, and should be read
in conjunction with any additional discussion of federal income tax
consequences included in the applicable Prospectus Supplement. This opinion
is based on laws, regulations, rulings and decisions in effect as of the date
hereof. Changes to existing law, which could have retroactive effect, may
alter the consequences described below. This opinion does not purport to
address federal income tax consequences applicable to particular categories of
investors, some of which (for example, insurance companies, financial
institutions, dealers in securities and foreign investors) may be subject to
special rules. Persons considering purchasing interests in Pass Through
Certificates should consult their own tax advisors with regard to the
application of the United States federal income tax laws to their particular
situations as well as any tax consequences arising under the laws of any
state, local or foreign jurisdiction. The Pass Through Trusts are not
indemnified for any federal income taxes that may be imposed upon them, and
the imposition of any such taxes on a Pass Through Trust could result in a
reduction in the amounts available for distribution to the Certificateholders
of such Pass Through Trust.
General
The Pass Through Trusts will not be classified as associations taxable as
corporations, but, rather, will be classified as grantor trusts under subpart
E, Part I of Subchapter J of the Internal Revenue Code of 1986, as amended
(the "Code"), and each Certificateholder will be treated as the owner of a pro
rata undivided interest in each of the Equipment Certificates and any other
property held in the related Pass Through Trust. Each Certificateholder will
be required to report on its federal income tax return its pro rata share of
the entire income from each of the Equipment Certificates and any other
property held in the related Pass Through Trust, in accordance with such
Certificateholder's method of accounting.
A purchaser of an interest in a Pass Through Certificate will be treated as
purchasing an interest in each Equipment Certificate and any other property in
the related Pass Through Trust at a price determined by allocating the
purchase price paid for the Pass Through Certificate among such Equipment
Certificates and other property in proportion to their fair market values at
the time of purchase of the Pass Through Certificate. Unless otherwise
indicated in a Prospectus Supplement, the Corporation anticipates that when
all the Equipment Certificates have been acquired by the related Pass Through
Trust the purchase price paid for a Pass Through Certificate of such Pass
Through Trust by an original purchaser of such Pass Through Certificate should
be allocated among the Equipment Certificates held in such Pass Through Trust
in proportion to their respective principal amounts.
If an Equipment Certificate held by a Pass Through Trust is prepaid for an
amount that differs from a Certificateholder's aggregate adjusted basis in the
Equipment Certificate, the Certificateholder will be considered to have sold
his pro rata share of that Equipment Certificate, and will recognize any gain
or loss equal to the difference between the Certificateholder's adjusted basis
and the amount realized from such prepayment (except to the extent
attributable to accrued interest, which would be taxable as interest income if
not previously included in income). Any such gain or loss will be long-term
capital gain or loss if the Equipment Certificate is considered to have been
held for more than one year. Net capital gains of individuals are, under
certain circumstances, taxed at lower rates than items of ordinary income.
With respect to the Leased Aircraft Certificates, although the matter is not
entirely free from doubt, an Owner Participant's conveyance of its interest in
an Owner Trust will not constitute a taxable event to the holders of interests
in the related Leased Aircraft Certificates. However, if the Corporation were
to assume an Owner Trust's obligations under the related Leased Aircraft
Certificates upon a purchase of the related Aircraft by the Corporation, or an
Owner Trust were to assume the Company's obligations under Owned Aircraft
Certificates upon a conversion of an Owned Aircraft to a Leased Aircraft, such
assumption would be treated for federal income tax purposes as a taxable
exchange of the respective Equipment Certificates resulting in the recognition
of taxable gain or loss under the rules discussed above. For this purpose the
amount realized, as determined under current Treasury regulations on original
issue discount, will be equal to the fair market value of the
Certificateholder's pro rata share of the respective Equipment Certificates at
such time.
Sales or Exchanges of Pass Through Certificates
A Certificateholder that sells or exchanges a Pass Through Certificate will
be considered to have sold his pro rata portion of the property held by the
Pass Through Trust, and will recognize gain or loss on the basis discussed in
the preceding paragraph.
Backup Withholding
Payments made on the Pass Through Certificates, and proceeds from the sale
or exchange of the Pass Through Certificates to or through certain brokers,
may be subject to a "backup" withholding tax of 31% unless the
Certificateholder complies with certain reporting procedures or is an exempt
recipient under the Code. Any such withheld amounts will be allowed as a
credit against the Certificateholder's federal income tax and may entitle such
Certificateholder to a refund, provided that the required information is
furnished to the Internal Revenue Service.
CERTAIN MASSACHUSETTS TAXES
The summary set forth below is based upon applicable tax statutes,
regulations and rules promulgated thereunder, government agency rulings and
court decisions published to date, each of which is subject to change.
The Pass Through Trustee is a Massachusetts trust company with its
principal corporate trust office in Boston, Massachusetts. Bingham, Dana &
Gould, counsel to the Pass Through Trustee, has advised the Corporation that,
in its opinion, under currently applicable Massachusetts laws and assuming
that the Pass Through Trustee will not hold any legal or equitable title to,
or lease, any real or tangible personal property located in the Commonwealth
of Massachusetts and that each Pass Through Trust will not be taxable as a
corporation but rather will be classified as a grantor trust under subpart E,
Part I of Subchapter J of the Code: (i) the Pass Through Trusts will not be
subject to any tax (including, without limitation, net or gross income
tangible or intangible property, net worth, capital, franchise or doing
business tax), governmental fee or similar charge imposed by the Commonwealth
of Massachusetts or any political subdivision thereof as a result of the
transactions contemplated by the Pass Through Agreement; and (ii)
Certificateholders who are not residents of, or otherwise subject to tax in or
by, the Commonwealth of Massachusetts will not be subject to any tax
(including, without limitation, net or gross income, tangible or intangible
property, net worth, capital, franchise or doing business tax), governmental
fee or similar charge imposed by the Commonwealth of Massachusetts or any
political subdivision thereof as a result of purchasing, holding (including
receiving payments with respect to) or selling a Pass Through Certificate.
Neither the Pass Through Trusts nor the Certificateholders will be
indemnified for any state or local taxes imposed on them, and the imposition
of any such taxes on a Pass Through Trust could result in a reduction in the
amounts available for distribution to the Certificateholders of such Pass
Through Trust. In general, should a Certificateholder or any Pass Through
Trust be subject to any state or local tax which would not be imposed if such
Pass Through Trust were administered in a different jurisdiction in the United
Sates or if the Pass Through Trustee were located in a different jurisdiction
in the United States, the Pass Through Trustee will either relocate the
administration of such Pass Through Trust to such other jurisdiction or resign
and, in the event of the Pass Through Trustee's resignation, a new Pass
Through Trustee in such other jurisdiction will be appointed.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement, Pass
Through Certificates may not be purchased by, or with the assets of, any
employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or individual retirement account
or plan subject to Section 4975 of the Code. Certain governmental plans and
non-electing church plans, however, are not subject to Title I of ERISA or
Section 4975 of the Code and, therefore, may purchase the Pass Through
Certificates.
PLAN OF DISTRIBUTION
The Pass Through Certificates may be sold to or through underwriters,
directly to other purchasers or through agents.
The distribution of the Pass Through Certificates may be effected from time
to time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
In connection with the sale of Pass Through Certificates, underwriters or
agents may receive compensation from the Corporation or from purchasers of
Pass Through Certificates for whom they may act as agents in the form of
discounts, concessions or commissions. Underwriters may sell Pass Through
Certificates to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters or
commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the distribution of Pass
Through Certificates may be deemed to be underwriters, and any discounts or
commissions received by them from the Corporation and any profit on the resale
of Pass Through Certificates by them may be deemed to be underwriting
discounts and commissions, under the Securities Act. Any such underwriter or
agent will be identified, and any such compensation received from the
Corporation will be described, in the applicable Prospectus Supplement.
Offers to purchase Pass Through Certificates may be solicited directly and
the sale thereof may be made directly to institutional investors or others,
who may be deemed to be underwriters within the meaning of the Securities Act
with respect to any resale thereof. The terms of any such sales will be
described in the Prospectus Supplement relating thereto.
Under agreements which may be entered into by the Corporation, underwriters
and agents who participate in the distribution of Pass Through Certificates
may be entitled to indemnification by the Corporation against certain
liabilities, including liabilities under the Securities Act.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation does not intend to apply for the listing of any Series of Pass
Through Certificates on a national securities exchange. If the Pass Through
Certificates of any Series are sold to or through underwriters, the
underwriters may make a market in such Pass Through Certificates, as permitted
by applicable laws and regulations. No underwriter would be obligated, however,
to make a market in such Pass Through Certificates, and any such market-making
could be discontinued at any time at the sole discretion of the underwriters.
Accordingly, no assurance can be given as to the liquidity of, or trading
markets for, the Pass Through Certificates of any Series.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for, the Corporation in
the ordinary course of business.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
legality of the Pass Through Certificates offered hereby will be passed upon
for the Corporation by Davis Polk & Wardwell, 450 Lexington Avenue, New York,
New York 10017, and by counsel for any agents, dealers or underwriters
("Underwriters' Counsel"). Unless otherwise indicated in the applicable
Prospectus Supplement, both Davis Polk & Wardwell and Underwriters' Counsel
may rely on the opinion of counsel for the Pass Through Trustee, as to matters
relating to the authorization, execution and delivery of the Pass Through
Agreement and of each Series of Pass Through Certificates by the Pass Through
Trustee, and of George W. Hearn, Vice President - Law of the Corporation, as
to the Corporation's authorization, execution and delivery of the Pass Through
Agreement. At July 3, 1996, Mr. Hearn owned zero shares of the Corporation's
common stock and had been granted options to purchase 20,800 shares of the
Corporation's common stock. Of the options granted, 3,750 were vested at such
date.
EXPERTS
The consolidated financial statements and schedules of the Corporation
included or incorporated by reference in the Corporation's Annual Report on
Form 10-K for the year ended May 31, 1995 and incorporated by reference
herein, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm
as experts in giving said reports.
With respect to the unaudited interim financial information for the
quarters ended August 31, 1995, November 30, 1995 and February 29, 1996,
included in the Corporation's Quarterly Reports on Form 10-Q for such periods,
which are incorporated by reference in this Prospectus, Arthur Andersen LLP
has applied limited procedures in accordance with professional standards for a
review of such information. However, their separate reports thereon state that
they did not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on their reports on
that information should be restricted in light of the limited nature of the
review procedures applied. In addition, the accountants are not subject to the
liability provisions of Section 11 of the Securities Act for their reports on
the unaudited interim financial information because those reports are not
"reports" or a "part" of the Registration Statement, of which this Prospectus
is a part, prepared or certified by the accountants within the meaning of
Sections 7 and 11 of the Securities Act.
======================================== ====================================
No dealer, salesperson or other
individual has been authorized to
give any information or to make any
representation not contained in this $1,000,000,000
Prospectus in connection with the
offering covered by this Prospectus.
If given or made, such information
or representation must not be relied [COMPANY LOGO]
upon as having been authorized by the
Corporation or the Underwriters. This
Prospectus does not constitute an
offer to sell, or the solicitation $1,000,000,000
of an offer to buy, the Pass Through
Certificates in any jurisdiction
where, or to any person to whom, it
is unlawful to make such offer or
solicitation. Neither the delivery Pass Through Certificates
of this Prospectus nor any sale
made hereunder shall, under any
circumstances, create an
implication that there has not been
any change in the facts set forth in --------------------
this Prospectus or in the affairs of P R O S P E C T U S
the Corporation since the date hereof. --------------------
TABLE OF CONTENTS
Prospectus
Page
----
Available Information.............. 3
Reports to Pass Through
Certificateholders............... 3
Incorporation of Certain
Documents by Reference........... 3
Federal Express Corporation........ 4
Ratio of Earnings to Fixed Charges. 4
Outline of Pass Through Trust
Structure........................ 4
Use of Proceeds.................... 5
Diagram of Payments................ 6
Description of the Pass Through
Certificates.................... 8
Description of the Equipment
Certificates.................... 21
Federal Income Tax Consequences.... 30 July ___, 1996
Certain Massachusetts Taxes........ 31
ERISA Considerations............... 32
Plan of Distribution............... 32
Legal Matters...................... 33
Experts............................ 33
======================================== ====================================
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 5, 1996
PROSPECTUS
[COMPANY LOGO]
DEBT SECURITIES
_____________________________
Up to $1,000,000,000 aggregate principal amount of Federal Express
Corporation (the "Corporation") unsecured debt securities (the "Debt
Securities") (or the equivalent thereof in foreign currency) may be offered for
sale from time to time pursuant to this Prospectus and one or more Prospectus
Supplements. The Debt Securities may be offered in one or more series in
amounts, at prices and on terms to be determined at the time of sale. The
Debt Securities will be unsecured obligations of the Corporation and will rank
on a parity with all other unsecured and unsubordinated indebtedness of the
Corporation.
When a particular series or issue of Debt Securities is offered (the
"Offered Debt Securities"), a supplement to this Prospectus (the "Prospectus
Supplement") will be delivered with this Prospectus setting forth with respect
to the offered securities: (i) the terms of any Offered Debt Securities
including the specific designation, aggregate principal amount, denominations,
purchase price, currency, maturity, rate (which may be fixed or variable) and
time of payment of interest (if any), redemption terms and the other terms in
connection with the offering and sale of the Offered Debt Securities; and (ii)
any initial public offering price, the net proceeds to the Corporation and the
other specific terms of the Offered Debt Securities.
Interest will be payable on the Debt Securities of each series on the dates
and at the rates per annum set forth for such Debt Securities in the
applicable Prospectus Supplement. Principal will be payable on the Debt
Securities of each series in scheduled amounts and on specified dates as set
forth in the applicable Prospectus Supplement. The Debt Securities will be
issued in registered form only and, unless otherwise specified in the
applicable Prospectus Supplement, in accordance with a book-entry system.
The Debt Securities may be sold on a negotiated or competitive bid basis to
or through underwriters or dealers or directly to other purchasers or through
agents. See "Plan of Distribution." The Prospectus Supplement relating to
each offering will set forth the names of any underwriters, dealers or agents
involved in the sale of the Debt Securities in connection with which this
Prospectus is being delivered, the amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters, dealers or
agents.
Prior to their issuance there will have been no market for the Debt
Securities of any series and there can be no assurance that one will develop.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation does not intend to apply for the listing of any series of Debt
Securities on a national securities exchange.
This Prospectus may not be used to consummate sales of any Debt Securities
unless accompanied by the Prospectus Supplement applicable to the Debt
Securities being sold.
____________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
___________________________
The date of this Prospectus is July __, 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
AVAILABLE INFORMATION
Federal Express Corporation (the "Corporation") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy and information statements and other information filed by the
Corporation with the Commission can be inspected, and copies may be obtained
at prescribed rates, at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
Regional Offices of the Commission: Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and New York Regional Office,
7 World Trade Center, New York, New York 10048. Such material can also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. and inspected and copied at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, herein referred to as the
"Registration Statement") filed by the Corporation under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus does not contain all
of the information included in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to the
Corporation and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission in accordance with the
provisions of the Exchange Act are incorporated herein by reference and made a
part hereof.
1. The Corporation's Annual Report on Form 10-K for the fiscal
year ended May 31, 1995 filed August 4, 1995.
2. The Corporation's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1995, November 30, 1995 and February 29,
1996, respectively, filed October 13, 1995, January 12, 1996 and
April 12, 1996, respectively.
3. The Corporation's Current Reports on Form 8-K dated August 14,
1995, August 16, 1995, September 14, 1995, October 17, 1995, October
25, 1995, October 26, 1995, January 12, 1996, March 14, 1996, April
30, 1996, June 5, 1996 and June 7, 1996, respectively, filed August
15, 1995, August 18, 1995, September 19, 1995, October 18, 1995,
October 27, 1995, October 30, 1995, January 16, 1996, March 26, 1996,
June 5, 1996, June 10, 1996 and June 21, 1996, respectively.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Corporation will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all documents incorporated by
reference in this Prospectus, without exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to: Thomas L. Holland, Managing
Director -- Investor Relations, Federal Express Corporation, by mail at Box
727, Memphis, Tennessee 38194-1854 or by telephone at (901) 395-3478.
FEDERAL EXPRESS CORPORATION
The Corporation offers a wide range of express services for the
time-definite transportation of documents, packages and freight throughout the
world using an extensive fleet of aircraft and vehicles and leading-edge
information technologies. Corporate headquarters are located at 2005
Corporate Avenue, Memphis, Tennessee 38132, telephone (901) 369-3600.
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
Nine Months Ended
Year Ended May 31 February 28 February 29
---------------------------- ----------------------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges (a) 1.0x (b) 1.4x 1.7x 2.0x 2.0x 1.8x
- ---------------
(a) Earnings included in the calculation of the ratio of earnings to
fixed charges represent income before income taxes plus fixed charges
(other than capitalized interest). Fixed charges include interest
expense, capitalized interest, amortization of debt issuance costs and a
portion of rent expense representative of interest.
(b) Earnings were inadequate to cover fixed charges by $173.4 million for
the year ended May 31, 1992.
As a result of an offering of Debt Securities, the Corporation may be
more highly leveraged than currently reflected in this table.
USE OF PROCEEDS
Unless otherwise set forth in a Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be added to the general
funds of the Corporation and used for general corporate purposes.
DESCRIPTION OF DEBT SECURITIES
The discussion that follows is a summary and does not purport to be
complete. The summary includes descriptions of the material terms of the
Indenture (defined herein) and the Debt Securities, the form of which has been
filed as an exhibit to the Registration Statement of which this Prospectus is
a part. For the Debt Securities offered pursuant to this Prospectus and any
Prospectus Supplement, this summary will be qualified in its entirety by the
detailed information appearing in such Prospectus Supplement, as well as by
the form of the Debt Securities of each series offered thereby and the
Indenture. This summary makes use of terms defined in and is qualified in its
entirety by reference to the Indenture.
Except as otherwise indicated below or as described in the applicable
Prospectus Supplement, the following summary will apply to the Debt Securities
and the Indenture. Additional provisions with respect to the Indenture and
the Debt Securities relating to any particular offering of Debt Securities
will be described in the applicable Prospectus Supplement. To the extent that
any provision in any Prospectus Supplement is inconsistent with any provision
of this summary, the provision of such Prospectus Supplement will control.
General
The Debt Securities are to be issued under an Indenture, dated as of
July 1, 1996 (the "Indenture"), between the Corporation and The First National
Bank of Chicago as trustee (the "Trustee"). The Indenture does not limit the
aggregate amount of Debt Securities which may be issued thereunder and
provides that Debt Securities may be issued thereunder in one or more series.
The Debt Securities will be unsecured obligations of the Corporation and
will rank on a parity with all other unsecured and unsubordinated indebtedness
of the Corporation.
The Indenture does not contain any debt covenants or provisions which
would afford the holders of the Debt Securities protection in the event of a
highly leveraged transaction. Other indebtedness of the Corporation ranking
pari passu with the Debt Securities have covenants that would afford those
holders privileges in the event of a change in control of the Corporation.
Reference is made to the Prospectus Supplement relating to the
particular series of Debt Securities for the following terms of such Debt
Securities:
(1) the title of such Debt Securities and the series in which such
Debt Securities will be included;
(2) the authorized denominations and aggregate principal amount of
such Debt Securities;
(3) whether the Debt Securities are to be issuable in global or
certificated form;
(4) the date or dates on which such Debt Securities will mature;
(5) the rate or rates (which may be fixed or variable) per annum
at which such Debt Securities will bear interest, if any, and if
such rate is variable, the manner of calculation thereof and the
date from which interest will accrue;
(6) the place or places where the principal of (and premium, if
any) and interest, if any, on such Debt Securities shall be payable;
(7) the dates on which such interest will be payable and the
corresponding record dates;
(8) any mandatory or optional sinking fund or purchase fund or
analogous provisions;
(9) the terms and conditions upon which such Debt Securities may
be redeemed, if any, and any redemption price;
(10)if other than the principal amount thereof, the portion of the
principal amount of such Debt Securities which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502 of the Indenture;
(11)provisions, if any, for the defeasance of such Debt Securities;
(12)the currency in which payments of principal of (and premium,
if any) and interest, if any, on such Debt Securities will be;
payable;
(13)whether Additional Amounts are payable with respect to any
Debt Securities;
(14)any additional Events of Default or covenants applicable to
such series; and
(15)any other terms of such series (which terms shall not be
inconsistent with the Indenture). (Indenture, Section 301)
If a Prospectus Supplement specifies that a series of Debt Securities is
denominated in a currency or currency unit other than United States dollars,
such Prospectus Supplement shall also specify the denomination in which such
Debt Securities will be issued and the currency in which the principal,
premium, if any, and interest, if any, on such Debt Securities will be
payable, which may be United States dollars based upon the exchange rate for
such other currency unit existing on or about the time a payment is due.
(Indenture, Section 301)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
all outstanding Debt Securities will be exchangeable and transfers thereof
will be registrable, and principal of, premium, if any, and interest, if any,
on all Debt Securities will be payable, at the corporate trust office of the
Trustee at One First National Plaza, Chicago, Illinois; provided that payment
of interest may, at the option of the Corporation, be made by check mailed to
the address of the person entitled thereto as it appears in the Security
Register or by transfer to an account maintained by the payee with a bank
located in the United States. (Indenture, Sections 301, 307 and 1002)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
all Debt Securities will be issued only in fully registered form without
coupons in denominations of $1,000 and any integral multiples thereof. No
service charge will be made for any registration of transfer or exchange of
any Debt Securities, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Indenture, Section 305) The Indenture provides that the Debt
Securities may be issuable in permanent global form. (Indenture, Section 203)
See "Permanent Global Securities."
The Corporation's right and the rights of its creditors, including the
Holders of any Debt Securities, to participate in the assets of any subsidiary
upon its liquidation or recapitalization would be subject to the prior claims
of such subsidiary's creditors, except to the extent that the Corporation may
itself be a creditor with recognized claims against such subsidiary. The
Indenture does not limit the amount of secured or unsecured indebtedness which
may be incurred by the Corporation or its subsidiaries.
Some of the Debt Securities may be issued as discounted Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount.
Certain federal income tax consequences and special considerations
applicable to any such securities will be described in the applicable
Prospectus Supplement.
Book-Entry Procedures
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities will be subject to the provisions described below. Upon
issuance, each Series of Debt Securities will be represented by one or more
fully registered global certificates. Each global note will be deposited
with, or on behalf of, the Depository Trust Company (the "DTC"), and
registered in its name or in the name of CEDE & Co. ("Cede"), its nominee. No
Holder will be entitled to receive a note in certificated form, except as set
forth below.
DTC has advised the Corporation that DTC is a limited purpose trust company
organized under the laws of the State of New York, 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 Section
17A of the Securities Exchange Act of 1934, as amended. DTC was created to
hold securities for its participants ("DTC Participants") and to facilitate
the clearance and settlement of securities transactions between DTC
Participants through electronic book-entries, thereby eliminating the need for
physical movement of certificates. DTC Participants include securities
brokers and dealers, banks, trust companies and clearing corporations. Access
to DTC's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Holders that are not DTC Participants but desire to purchase, sell or
otherwise transfer ownership of, or other interests, in Debt Securities may do
so only through DTC Participants. In addition, Holders will receive all
distributions of principal and interest from the Trustee through the DTC
Participants. Under the rules, regulations and procedures creating and
affecting DTC and its operation, DTC is required to make book-entry transfers
of Debt Securities among DTC Participants on whose behalf it acts and to
receive and transmit distributions of principal of, and interest on, the Debt
Securities. Under the book-entry system, Holders may experience some delay in
receipt of payments, since such payments will be forwarded by the Trustee to
Cede, as nominee for DTC, and DTC in turn will forward the payments to the
appropriate DTC Participants.
Distributions by DTC Participants to Holders will be the responsibility of
such DTC Participants and will be made in accordance with customary industry
practices. Accordingly, although Holders will not have possession of the Debt
Securities, the rules of DTC provide a mechanism by which participants will
receive payments and will be able to transfer their interests. Although the
DTC Participants are expected to convey the rights represented by their
interests in any global security to the related Holders, because DTC can only
act on behalf of DTC Participants, the ability of Holders to pledge Debt
Securities to persons or entities that are not DTC Participants or to
otherwise act with respect to such Debt Securities, may be limited due to the
lack of physical certificates for such Debt Securities.
None of the Corporation, the Trustee or any other agent of the Corporation
or the Trustee will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the Debt Securities or for supervising or reviewing any records
relating to such beneficial ownership interests. Since the only "Holder" will
be Cede, as nominee of DTC, Holders will not be recognized by the Trustee as
Holders, as such term is used in the Indenture, and Holders will be permitted
to exercise the rights of Holders only indirectly through DTC and DTC
Participants. DTC has advised the Corporation that it will take any action
permitted to be taken by a Holder under the Indenture and any Prospectus
Supplement only at the direction of one or more DTC Participants to whose
accounts with DTC the related Debt Securities are credited.
Same-Day Settlement and Payment. All payments made by the Corporation to
the Trustee under each Lease will be in immediately available funds and will
be passed through to DTC in immediately available funds.
The Debt Securities will trade in DTC's Same-Day Funds Settlement System
until maturity, and secondary market trading activity in the Debt Securities
will be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Debt Securities.
Certificated Form. The Debt Securities will be issued in fully registered,
certificated form to Holders, or their nominees, rather than to DTC or its
nominee, only if DTC advises the Trustee in writing that it is no longer
willing, able or eligible to discharge properly its responsibilities as
depository with respect to the Debt Securities and the Corporation is unable
to locate a qualified successor or if the Corporation, at its option, elects
to terminate the book-entry system through DTC. In such event, the Trustee
will notify all Holders through DTC Participants of the availability of such
certificated Debt Securities. Upon surrender by DTC of the definitive global
note representing the series of Debt Securities and receipt of instructions
for reregistration, the Trustee will reissue the Debt Securities in
certificated form to Holders or their nominees. (Indenture, Section 305)
Debt Securities in certificated form will be freely transferable and
exchangeable at the office of the Trustee upon compliance with the
requirements set forth in the Indenture. No service charge will be imposed
for any registration of transfer or exchange, but payment of a sum sufficient
to cover any tax or other governmental charge may be required. (Indenture,
Section 305)
Merger and Consolidation
The Indenture does not prevent any consolidation or merger of the
Corporation with or into any other Person, or successive consolidations or
mergers in which the Corporation or its successor or successors may be a
party, or any conveyance, transfer or lease of the property of the Corporation
as an entirety or substantially as an entirety, to any Person, unless:
(i) in case the Corporation shall consolidate with or merge into
another Corporation or convey, transfer or lease its
properties and assets as, or substantially as, an entirety
to any Person, the Corporation formed by such consolidation
or into which the Corporation is merged or the Person which
acquires by conveyance, transfer, or lease the properties
and assets of the Corporation, as, or substantially as, an
entirety shall be a Corporation organized and existing under
the laws of the United States of America, any state thereof
or the District of Columbia and shall expressly assume, by
an indenture supplemental hereto executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of (and premium, if
any), interest on and any Additional Amounts with respect to
all the Securities and the performance of every covenant of
this Indenture on the part of the Corporation to be
performed or observed;
(ii) immediately after giving effect to such transaction, no
Event of Default, or event which after notice or lapse of
time, or both, would become an Event of Default, shall have
occurred and be continuing; and
(iii)the Corporation shall have delivered to the Trustee an
Officers' Certificate or an Opinion of Counsel, each
stating that such consolidation, merger, conveyance,
transfer or lease and such supplemental indenture comply
with the Indenture and that all conditions precedent
therein provided for relating to such transaction have been
complied with. (Indenture, Section 801)
Upon compliance with such provisions by a successor corporation or Person, the
Corporation (except in the case of a lease) would be relieved of its
obligations and covenants under the Indenture and the Debt Securities.
(Indenture, Section 802)
Modification, Amendment and Waiver
Modifications and amendments of the Indenture may be made by the
Corporation and the Trustee with the consent of the Holders of a majority
in principal amount of each series of Debt Securities to be affected if
less than all series are to be affected by such modification; provided,
however, that no such modification or amendment may, without the consent of
the Holder of each debt security affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any such debt security;
(b) reduce the principal amount of, rate of interest on, or
premium payable upon the redemption of, any such debt
security;
(c) change any place of payment where, or the currency in
which, any debt security or the interest or any premium
thereon is payable;
(d) impair the right to institute suit for the enforcement of
any payment on or with respect to any such debt security on
or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date); or
(e) reduce the percentage in principal amount of outstanding
Debt Securities the consent of whose Holders is required
for modification or amendment of the Indenture, for waiver
of compliance with certain provisions of the Indenture or
for waiver of certain defaults. (Indenture Section 902)
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series may on behalf of the Holders of all Debt Securities
of such series waive any past default under the Indenture and its
consequences, except a default in the payment of the principal, premium, if
any, or interest on any Debt Securities or in respect of a covenant or
provision which under the Indenture cannot be modified or amended without the
consent of the Holder of each outstanding debt security affected. (Indenture,
Section 513)
Events of Default
The following are "Events of Default" under the Indenture with respect to
each series of Debt Securities:
(a) default for more than 30 days in the payment of any interest
on any debt security of such series;
(b) default in the payment of principal of, or premium, if any,
on, any debt security of such series at its Maturity;
(c) default in the performance, or breach, of any other
covenant of the Corporation in the Indenture for more than
60 days after written notice as provided in the Indenture;
(d) default in the deposit of any sinking fund payment when and as
due by the terms of a Debt Security of such series; and
(e) certain events in bankruptcy, insolvency or reorganization in
respect of the Corporation. (Indenture, Section 501)
If an Event of Default with respect to all Debt Securities of any series
occurs and is continuing, then and in every such case the Trustee or the
Holders of not less than 50% in aggregate principal amount of the outstanding
Debt Securities of such series may, by a notice in writing to the Corporation
(and to the Trustee if given by Holders), declare to be due and payable
immediately the principal amount of all Debt Securities of such series.
However, at any time after such a declaration of acceleration with respect to
the Debt Securities of such series has been made, but before the Stated
Maturity thereof, the Holders of a majority in principal amount of the
outstanding Debt Securities of such series may, subject to certain conditions,
rescind and annul such acceleration if all Events of Default with respect to
the Debt Securities of such series, other than the nonpayment of accelerated
principal, have been cured or waived as provided in the Indenture.
(Indenture, Section 502) For information as to waiver of defaults, see
"Modification and Waiver."
Subject to the duties of the Trustee, if an Event of Default with respect
to the Debt Securities of any series occurs and is continuing, the Indenture
provides that the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request or direction of any of the
Holders of the Debt Securities of such series, unless such Holders offer to
the Trustee reasonable indemnity. (Indenture, Sections 601 and 603) Subject
to such provision for indemnity, certain conditions and certain other rights
of the Trustee, the Holders of a majority in principal amount of the
outstanding Debt Securities of such series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Debt Securities of such series. (Indenture, Section 512)
No Holder of any debt security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder unless such Holder has previously given to the Trustee written
notice of a continuing Event of Default, and unless the Holders of at least
50% in principal amount of the outstanding Debt Securities of such series has
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee not has received from
the Holders of a majority in principal amount of the outstanding Debt
Securities of such series a direction inconsistent with such request and the
Trustee has failed to institute such proceeding within 60 days. (Indenture,
Section 507) However, the Holder of any debt security of such series will
have an absolute right to receive payment of the principal of (and premium, if
any, on) and interest on such debt security on or after the respective Stated
Maturities expressed in such debt security (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment. (Indenture, Section 508)
The Indenture requires the Corporation to furnish to the Trustee annually a
statement as to the absence of certain defaults under the Indenture.
(Indenture, Section 1005) The Indenture provides that the Trustee may
withhold notice to the Holders of Debt Securities of any default (except as
to payment of principal or interest with respect to such Debt Securities)
if it considers such withholding to be in the interest of the Holders of
such Debt Securities. (Indenture, Section 602)
Defeasance and Covenant Defeasance
The Indenture provides, if such provision is made applicable to the Debt
Securities of any series, that the Corporation may elect either (A) to defease
and be discharged from any and all obligations with respect to such Debt
Securities (except for the obligations to register the transfer or exchange of
such Debt Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of the Debt
Securities and to hold moneys for payment in trust) ("defeasance") or (B)(i)
to be released from its obligations with respect to such Debt Securities under
Sections 801 (consolidation, merger and sale of assets) and 1005
(certificates of compliance) and (ii) that Section 501(3) (as to Sections
801 and 1005), 501(5), 501(6) and 501(7) (if Section 501(7) is specified
in the Prospectus Supplement), as described in the last three clauses of
the first sentence under "Events of Default" above, shall not be deemed to
be events of default under the Indenture with respect to such series
("covenant defeasance"), upon the deposit with the Trustee (or other
qualifying trustee), in trust for such purpose, of money, or Government
Obligations which through the payment of principal and interest in
accordance with their terms will provide money, in an amount sufficient to
pay the principal of (and premium, if any) and interest on such Debt
Securities, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor.
In the case of defeasance, the holders of such Debt Securities are entitled
to receive payments in respect of such Debt Securities solely from such trust.
Such a trust may only be established if, among other things, the Corporation
has delivered to the Trustee an Opinion of Counsel (as specified in the
Indenture) to the effect that the holders of such Debt Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance or covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same time as would have
been the case if such defeasance or covenant defeasance had not occurred.
Such Opinion of Counsel, in the case of defeasance under clause (A) above,
must refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable federal income tax law occurring after the date of the
Indenture. (Indenture, Article Thirteen)
Concerning the Trustee
The Trustee acts as trustee under other indentures with respect to other
indebtedness of the Corporation which ranks pari passu with the Debt
Securities. The Corporation leases facilities financed with the proceeds of
such indebtedness and the Corporation's obligations under such leases secure
payment of such indebtedness. The Corporation also from time to time borrows
from, and maintains deposit accounts with, the Trustee.
PLAN OF DISTRIBUTION
The Debt Securities may be sold in any of the following ways: (1) through
underwriters or dealers; (2) through agents; or (3) directly to one or more
purchasers (through a specific bidding or auction process or otherwise).
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed,
or at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters or agents may
receive compensation from the Corporation or from purchasers of Debt
Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters may sell Debt Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions
from the purchasers for whom they may act as agents. If a dealer is utilized
to sell the Debt Securities, the Corporation will sell such Debt Securities to
the dealer as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at any time of
resale.
Underwriters, dealers and agents that participate in the distribution of
Debt Securities may be deemed to be underwriters, and any discounts or
commissions received by them from the Corporation and any profit on the resale
of Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter, dealer or agent
will be identified, and any such compensation received from the Corporation
will be described, in the applicable Prospectus Supplement.
Offers to purchase Debt Securities may be solicited directly and the sale
thereof may be made directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with
respect to any resale thereof. The terms of any such sales will be described
in the Prospectus Supplement relating thereto, including the terms of any
bidding or auction process.
If so indicated in the Prospectus Supplement, the Corporation will
authorize underwriters, dealers or agents to solicit offers by certain
specified institutions to purchase Debt Securities from the Corporation at the
public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject only to those conditions
set forth in the Prospectus Supplement and the Prospectus Supplement will set
forth the commission payable for the solicitation of such contracts.
Under agreements which may be entered into by the Corporation,
underwriters, dealers and agents who participate in the distribution of Debt
Securities may be entitled to indemnification by the Corporation against
certain liabilities, including liabilities under the Securities Act or to
contribution with respect to payments which the agents, underwriters or
dealers may be required to make in respect thereof.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation does not intend to apply for the listing of any Series of Debt
Securities on a national securities exchange. If the Debt Securities of any
Series are sold to or through underwriters, the underwriters may make a market
in such Debt Securities, as permitted by applicable laws and regulations. No
underwriter would be obligated, however, to make a market in such Debt
Securities, and any such market-making could be discontinued at any time at
the sole discretion of the underwriters. Accordingly, no assurance can be
given as to the liquidity of, or trading markets for, the Debt Securities of
any Series.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with, and perform services for, the
Corporation in the ordinary course of business.
LEGAL MATTERS
Unless otherwise indicated in the Prospectus Supplement relating to the
Offered Securities, the legality of the Debt Securities will be passed upon
for the Corporation by George W. Hearn, Vice President - Law of the
Corporation, and by counsel for any underwriters, dealers and agent. At July
3, 1996, Mr. Hearn owned zero shares of the Corporation's common stock and had
been granted options to purchase 20,800 shares of the Corporation's common
stock. Of the options granted, 3,750 were vested at such date.
EXPERTS
The consolidated financial statements and schedules of the Corporation
included or incorporated by reference in the Corporation's Annual Report on
Form 10-K for the year ended May 31, 1995 and incorporated by reference
herein, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm
as experts in giving said reports.
With respect to the unaudited interim financial information for the
quarters ended August 31, 1995, November 30, 1995 and February 29, 1996,
included in the Corporation's Quarterly Reports on Form 10-Q for such periods,
which are incorporated by reference in this Prospectus, Arthur Andersen LLP
has applied limited procedures in accordance with professional standards for a
review of such information. However, their separate reports thereon state that
they did not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on their reports on
that information should be restricted in light of the limited nature of the
review procedures applied. In addition, the accountants are not subject to the
liability provisions of Section 11 of the Securities Act for their reports on
the unaudited interim financial information because those reports are not
"reports" or a "part" of the Registration Statement, of which this Prospectus
is a part, prepared or certified by the accountants within the meaning of
Sections 7 and 11 of the Securities Act.
======================================== ====================================
No dealer, salesperson or other
individual has been authorized to
give any information or to make any
representation not contained in this $1,000,000,000
Prospectus in connection with the
offering covered by this Prospectus.
If given or made, such information
or representation must not be relied [COMPANY LOGO]
upon as having been authorized by the
Corporation or the Underwriters. This
Prospectus does not constitute an
offer to sell, or the solicitation $1,000,000,000
of an offer to buy, the Securities
in any jurisdiction where, or to any
person to whom, it is unlawful to
make such offer or solicitation.
Neither the delivery of this Prospectus Debt Securities
nor any sale made hereunder shall,
under any circumstances, create an
implication that there has not been
any change in the facts set forth in --------------------
this Prospectus or in the affairs of P R O S P E C T U S
the Corporation since the date hereof. --------------------
TABLE OF CONTENTS
Prospectus
Page
----
Available Information.............. 3
Incorporation of Certain
Documents by Reference........... 3
Federal Express Corporation........ 4
Ratio of Earnings to Fixed Charges. 4
Use of Proceeds.................... 4
Description of Debt Securities..... 4
Plan of Distribution............... 10
Legal Matters...................... 11
Experts............................ 11 July ___, 1996
======================================== ====================================
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 5, 1996
PROSPECTUS
- ----------
[COMPANY LOGO]
COMMON STOCK
PREFERRED STOCK
_______________________________
Pursuant to this Prospectus and one or more Prospectus Supplements, Federal
Express Corporation (the "Corporation") may offer and sell from time to time
up to $1,000,000,000 aggregate amount, together or separately, of (i) shares
of preferred stock of the Corporation (the "Preferred Stock") or (ii) shares
of Common Stock, par value $.10 per share of the Corporation (the "Common
Stock") on terms to be determined at the time of sale. The Preferred Stock
and Common Stock are sometimes collectively called the "Securities" herein.
When a particular issue of Securities is offered (the "Offered
Securities"), a supplement to this Prospectus (the "Prospectus Supplement")
will be delivered with this Prospectus setting forth with respect to the
Offered Securities: (i) the terms of any Preferred Stock offered (the
"Offered Preferred Stock") including the specific designations and stated
value, dividend rights and any liquidation, redemption, conversion, voting and
other rights not described in this Prospectus; (ii) the description of any
Common Stock offered (the "Offered Common Stock"); and (iii) any initial
public offering price, the net proceeds to the Corporation and the other
specific terms of the Offered Securities.
The Securities will be sold directly by the Corporation, through agents
designated from time to time or through underwriters or dealers. If any
agents of the Corporation or any underwriters are involved in the sale of the
Securities, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in the Prospectus Supplement.
____________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
___________________________
The date of this Prospectus is July __, 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
AVAILABLE INFORMATION
Federal Express Corporation (the "Corporation") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy and information statements and other information filed by the
Corporation with the Commission can be inspected, and copies may be obtained
at prescribed rates, at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
Regional Offices of the Commission: Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and New York Regional Office,
7 World Trade Center, New York, New York 10048. Such material can also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. and inspected and copied at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, herein referred to as the
"Registration Statement") filed by the Corporation under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus does not contain all
of the information included in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to the
Corporation and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission in accordance with the
provisions of the Exchange Act are incorporated herein by reference and made a
part hereof.
1. The Corporation's Annual Report on Form 10-K for the fiscal
year ended May 31, 1995 filed August 4, 1995.
2. The Corporation's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1995, November 30, 1995 and February 29,
1996, respectively, filed October 13, 1995, January 12, 1996 and
April 12, 1996, respectively.
3. The Corporation's Current Reports on Form 8-K dated August 14,
1995, August 16, 1995, September 14, 1995, October 17, 1995, October
25, 1995, October 26, 1995, January 12, 1996, March 14, 1996, April
30, 1996, June 5, 1996 and June 7, 1996, respectively, filed August
15, 1995, August 18, 1995, September 19, 1995, October 18, 1995,
October 27, 1995, October 30, 1995, January 16, 1996, March 26, 1996,
June 5, 1996, June 10, 1996 and June 21, 1996, respectively.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Corporation will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all documents incorporated by
reference in this Prospectus, without exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to: Thomas L. Holland, Managing
Director -- Investor Relations, Federal Express Corporation, by mail at Box
727, Memphis, Tennessee 38194-1854 or by telephone at (901) 395-3478.
FEDERAL EXPRESS CORPORATION
The Corporation offers a wide range of express services for the
time-definite transportation of documents, packages and freight throughout the
world using an extensive fleet of aircraft and vehicles and leading-edge
information technologies. Corporate headquarters are located at 2005
Corporate Avenue, Memphis, Tennessee 38132, telephone (901) 369-3600.
The U.S. domestic express market is highly competitive and sensitive to
both price and service. Competitors in this market include passenger airlines
offering package express services, regional express delivery concerns,
airfreight forwarders and other express package concerns, principally United
Parcel Service and Airborne Express.
The international express package and freight markets are also highly
competitive. Ability to compete effectively internationally depends
principally upon price, frequency and capacity of scheduled service, extent of
geographic coverage and reliability. Many of the Corporation's competitors in
the international market are government owned, controlled, or subsidized
carriers which may have greater resources, lower costs, less profit
sensitivity and more favorable operating conditions than the Corporation. The
Corporation's principal competitors in the international market are foreign
national air carriers, United States passenger airlines and all-cargo airlines
and other express package companies including United Parcel Service and DHL.
The Corporation operates in a heavily regulated environment. The
Department of Transportation exercises regulatory authority over the economic
aspects of air transportation while the Federal Aviation Administration
regulates safety aspects. The Environmental Protection Agency is authorized
to establish standards governing aircraft noise and engine emissions, and the
Corporation's communication facilities are subject to the Federal
Communication Commission Act. In addition to U. S. regulation, the
Corporation's international operations are also governed by bilateral treaties
between the United States and the countries served. For a complete discussion
of the Corporation's competitive and regulatory environments as well as its
services, operations and properties, see Item 1 of the Corporation's Annual
Report on Form 10-K for the fiscal year ended May 31, 1995.
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
Nine Months Ended
Year Ended May 31 February 28 February 29
---------------------------- ----------------------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges (a) 1.0x (b) 1.4x 1.7x 2.0x 2.0x 1.8x
- ---------------
* The Corporation had zero shares of Preferred Stock outstanding for the
periods covered in this table; therefore, no Preferred Stock dividends
were paid during these periods.
(a) Earnings included in the calculation of the ratio of earnings to
fixed charges represent income before income taxes plus fixed charges
(other than capitalized interest). Fixed charges include interest
expense, capitalized interest, amortization of debt issuance costs
and a portion of rent expense representative of interest.
(b) Earnings were inadequate to cover fixed charges by $173.4 million for
the year ended May 31, 1992.
USE OF PROCEEDS
Unless otherwise set forth in a Prospectus Supplement, the net proceeds
from the sale of the Securities will be added to the general funds of the
Corporation and used for general corporate purposes.
DESCRIPTION OF PREFERRED STOCK
Under its Restated Certificate of Incorporation (the "Certificate of
Incorporation"), the Corporation is authorized to adopt resolutions providing
for the issuance, in one or more series, of up to 4,000,000 shares of its
Preferred Stock, no par value, with such powers, preferences and relative
rights and qualifications, limitations or restrictions thereof as shall be
adopted by the Board of Directors and permitted by Delaware law and the
Corporation's Certificate of Incorporation. On July 5, 1996, there were zero
shares of Preferred Stock outstanding.
The description below sets forth certain general terms and provisions of
the Preferred Stock covered by this Prospectus. The specific terms of the
Offered Preferred Stock will be described in the Prospectus Supplement
relating to such Offered Preferred Stock. The following summaries of certain
provisions of the Preferred Stock do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, the
Certificate of Incorporation and the resolution of the Board of Directors
authorizing a particular series of Preferred Stock (the "Series Resolution").
If so indicated in the Prospectus Supplement, the terms of the Offered
Preferred Stock may differ from the terms set forth below, except those terms
required by the Certificate of Incorporation.
General
Under the Certificate of Incorporation, each series of Preferred Stock of
the Corporation ranks prior to the Common Stock of the Corporation with
respect to both dividends and distribution of assets on liquidation,
dissolution or winding up. The Preferred Stock will, when issued, be fully
paid and non-assessable and the holders thereof will have no preemptive rights.
Reference is made to the Prospectus Supplement relating to the Offered
Preferred Stock for specific terms including:
(i) The designation of the series of Preferred Stock, which may
be by distinguishing number, letter or title;
(ii) The number of shares of such Preferred Stock offered,
the liquidation preference per share and the offering
price of such Preferred Stock;
(iii) The dividend rate or rates of such shares, the date at
which dividends, if declared, will be payable, and
whether or not such dividends are to be cumulative and,
if cumulative, the date or dates from which dividends
shall be cumulative;
(iv) The amounts payable on shares of such Preferred Stock in
the event of voluntary or involuntary liquidation,
dissolution or winding up;
(v) The redemption rights and price or prices, if any, for the
shares of such Preferred Stock;
(vi) The terms and amount of any sinking fund or analogous
fund providing for the purchase or redemption of the
shares of such Preferred Stock, if any;
(vii) The voting rights, if any, granted to the holders of
the shares of such Preferred Stock in addition to those
required by Delaware law or the Certificate of
Incorporation;
(viii)Whether the shares of Preferred Stock shall be
convertible into shares of the Corporation's Common
Stock or any other class of the Corporation's capital
stock, and if convertible, the conversion price or
prices, any adjustment thereof and any other terms and
conditions upon which such conversion shall be made;
(ix) Any other rights, preferences, restrictions, limitations
or conditions relative to the shares of Preferred Stock
as may be permitted by Delaware law or the Certificate
of Incorporation;
(x) Any listing of such Preferred Stock on any securities
exchange; and
(xi) A discussion of federal income tax considerations
applicable to such Preferred Stock.
Subject to the Certificate of Incorporation and to any limitations
contained in any outstanding Preferred Stock, the Corporation may issue
additional series of Preferred Stock, at any time or from time to time, with
such powers, preferences, rights and qualifications, limitations or
restrictions thereof, as the Board of Directors shall determine, all without
further action of the stockholders, including holders of then outstanding
Preferred Stock of the Corporation, if any.
Restrictions
So long as any Preferred Stock is outstanding, the Corporation cannot (1)
declare or pay a dividend upon, or make a distribution upon, the Corporation's
Common Stock (other than a dividend or distribution payable in shares of such
Common Stock) ; (2) purchase or redeem shares of Common Stock without consent
of a certain number of holders of the outstanding Preferred Stock established
by the Board of Directors when authorizing the issuance of such outstanding
Preferred Stock; or (3) pay any money into, or make any money available for, a
sinking fund for the purchase or redemption of any Common Stock, unless in
each instance all dividends on all outstanding shares of Preferred Stock for
all past dividend periods shall have been paid, all dividends for the current
dividend period shall have been declared or paid and sufficient funds for the
payment thereof set apart and any arrears in the mandatory redemption of the
Preferred Stock shall have been made good.
Voting Rights
Holders of the Preferred Stock will have no right to vote for the election
of directors of the Corporation or on any other matter unless a vote of such
class is required by Delaware law, the Certificate of Incorporation or the
Series Resolution.
DESCRIPTION OF COMMON STOCK
Under the Certificate of Incorporation, the Corporation is authorized to
issue up to 200,000,000 shares of its Common Stock $.10 par value per share.
On July 2, 1996, there were outstanding (a) 56,893,591 shares of Common
Stock and (b) employee stock options to purchase an aggregate of 3,697,564
shares of Common Stock (of which options to purchase an aggregate of
1,241,263 shares of Common Stock were currently exercisable).
The following description is a summary of certain provisions of the Common
Stock and does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, the Corporation's bylaws and Certificate of
Incorporation. The Prospectus Supplement relating to an offering of the
Offered Common Stock will describe terms relevant thereto, including the
number of shares offered, the initial offering price, market price and
dividend information.
General
Each holder of Common Stock is entitled to one vote for each share held on
all matters voted upon by the stockholders of the Corporation, including the
election of directors. The Common Stock does not have cumulative voting
rights. The election of each class of the Board of Directors is decided by
the holders of a plurality of the shares entitled to vote in person or by
proxy at a meeting for the election of directors. See "Description of
Preferred Stock-Voting Rights" for a discussion of the voting rights of any
Preferred Stock that may be issued in the future.
In the event of any liquidation, dissolution or winding up of the
Corporation, after the payment or provision for payment of the debts and other
liabilities of the Corporation and the preferential amounts to which holders
of the Corporation's Preferred Stock are entitled (if any shares of Preferred
Stock are then outstanding), the holders of Common Stock are entitled to share
equally in the remaining assets of the Corporation.
The outstanding shares of Common Stock are, and any shares of Common Stock
offered hereby upon issuance and payment therefor will be, fully paid and
non-assessable. The Common Stock has no preemptive or conversion rights and
there are no redemption or sinking fund provisions applicable thereto.
The Common Stock of the Corporation is listed on the New York Stock
Exchange (symbol "FDX") .
Dividends
The Corporation's current policy is to not pay dividends on its Common
Stock, but to reinvest earnings in its business. However, if the Corporation
changes its current policy and decides to pay dividends on its Common Stock,
holders of Common Stock are entitled to receive dividends when, as and if
declared by the Board of Directors out of funds legally available therefor
subject to the rights of the holders of any outstanding shares of Preferred
Stock. The holders of the Common Stock will share equally, share for share,
in such dividends.
Anti-takeover Provisions
Classification of Board of Directors. The Board of Directors of the
Corporation is divided into three classes, having staggered terms of office of
three years each. The effect of a classified board of directors may be to make
it more difficult to acquire control of the Corporation.
Change in Control. The Corporation's Certificate of Incorporation includes
provisions designed to prevent the use of certain tactics in connection with a
potential takeover of the Corporation. Article Five of the Certificate of
Incorporation requires the affirmative vote of 80% of the outstanding shares
of capital stock of the Corporation entitled to vote generally in the election
of directors to approve certain business combinations (including certain
mergers, consolidations, security issuances, reclassifications,
recapitalizations, liquidations, dissolutions, sales, leases, exchanges,
mortgages, pledges, transfers of a substantial portion of assets) involving
the Corporation or any subsidiary and the beneficial owner of more than 10% of
the voting power of the outstanding shares of capital stock (a "Related
Person") , unless either (i) such business combination is approved by a
majority of the directors who are not affiliated with the Related Person and
who were directors before the Related Person became a Related Person or (ii)
the stockholders receive a "fair price" for their holdings and other
procedural requirements are met. The Certificate of Incorporation also
requires all stockholder action be taken at a duly called meeting of such
stockholders and prohibits taking action by written consent of stockholders.
Supermajority Voting. The classified board, fair price and stockholder
consent provisions, as well as certain other provisions of the Certificate of
Incorporation, may be altered, amended or repealed only by the affirmative
vote of 80% or more of the outstanding capital stock of the Corporation
entitled to vote on such action.
Transfer Agent and Registrar
The transfer agent and registrar for the Common Stock is First Chicago
Trust Company of New York, Shareholder Services, P.O. Box 2500, Jersey City,
NJ 07303-2500.
PLAN OF DISTRIBUTION
The Securities may be sold in any of the following ways: (1) through
underwriters or dealers; (2) through agents; or (3) directly to one or more
purchasers (through a specific bidding or auction process or otherwise).
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Corporation or from purchasers of Securities for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters or commissions from the purchasers for whom
they may act as agents. If a dealer is utilized to sell the Securities, the
Corporation will sell such Securities to the dealer as principal. The dealer
may then resell such Securities to the public at varying prices to be
determined by such dealer at any time of resale.
Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
received by them from the Corporation and any profit on the resale of
Securities by them may be deemed to be underwriting discounts and commissions,
under the Securities Act. Any such underwriter, dealer or agent will be
identified, and any such compensation received from the Corporation will be
described, in the applicable Prospectus Supplement.
Offers to purchase Securities may be solicited directly and the sale
thereof may be made directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with respect
to any resale thereof. The terms of any such sales will be described in the
Prospectus Supplement relating thereto, including the terms of any bidding or
auction process.
If so indicated in the Prospectus Supplement, the Corporation will
authorize underwriters, dealers or agents to solicit offers by certain
specified institutions to purchase Securities from the Corporation at the
public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject only to those conditions
set forth in the Prospectus Supplement and the Prospectus Supplement will set
forth the commission payable for the solicitation of such contracts.
Under agreements which may be entered into by the Corporation,
underwriters, dealers and agents who participate in the distribution of
Securities may be entitled to indemnification by the Corporation against
certain liabilities, including liabilities under the Securities Act or to
contribution with respect to payments which the agents, underwriters or
dealers may be required to make in respect thereof.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation does not intend to apply for the listing of any Series of
Preferred Stock on a national securities exchange. If the Preferred Stock is
sold to or through underwriters, the underwriters may make a market in such
stock, as permitted by applicable laws and regulations. No underwriter would
be obligated, however, to make a market in such stock, and any such
market-making could be discontinued at any time at the sole discretion of the
underwriters. Accordingly, no assurance can be given as to the liquidity of,
or trading markets for, the Preferred Stock.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with, and perform services for, the
Corporation in the ordinary course of business.
LEGAL MATTERS
Unless otherwise indicated in the Prospectus Supplement relating to the
Offered Securities, the legality of the Securities will be passed upon
for the Corporation by George W. Hearn, Vice President - Law of the
Corporation, and by counsel for any underwriters, dealers and agent. At July
3, 1996, Mr. Hearn owned zero shares of the Corporation's common stock and had
been granted options to purchase 20,800 shares of the Corporation's common
stock. Of the options granted, 3,750 were vested at such date.
EXPERTS
The consolidated financial statements and schedules of the Corporation
included or incorporated by reference in the Corporation's Annual Report on
Form 10-K for the year ended May 31, 1995 and incorporated by reference
herein, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm
as experts in giving said reports.
With respect to the unaudited interim financial information for the
quarters ended August 31, 1995, November 30, 1995 and February 29, 1996,
included in the Corporation's Quarterly Reports on Form 10-Q for such periods,
which are incorporated by reference in this Prospectus, Arthur Andersen LLP
has applied limited procedures in accordance with professional standards for a
review of such information. However, their separate reports thereon state that
they did not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on their reports on
that information should be restricted in light of the limited nature of the
review procedures applied. In addition, the accountants are not subject to the
liability provisions of Section 11 of the Securities Act for their reports on
the unaudited interim financial information because those reports are not
"reports" or a "part" of the Registration Statement, of which this Prospectus
is a part, prepared or certified by the accountants within the meaning of
Sections 7 and 11 of the Securities Act.
======================================== ====================================
No dealer, salesperson or other
individual has been authorized to
give any information or to make any
representation not contained in this $1,000,000,000
Prospectus in connection with the
offering covered by this Prospectus.
If given or made, such information
or representation must not be relied [COMPANY LOGO]
upon as having been authorized by the
Corporation or the Underwriters. This
Prospectus does not constitute an
offer to sell, or the solicitation $1,000,000,000
of an offer to buy, the Securities
in any jurisdiction where, or to any
person to whom, it is unlawful to
make such offer or solicitation.
Neither the delivery of this Prospectus Preferred Stock
nor any sale made hereunder shall, Common Stock
under any circumstances, create an
implication that there has not been
any change in the facts set forth in --------------------
this Prospectus or in the affairs of P R O S P E C T U S
the Corporation since the date hereof. --------------------
TABLE OF CONTENTS
Prospectus
Page
----
Available Information.............. 3
Incorporation of Certain
Documents by Reference........... 3
Federal Express Corporation........ 4
Ratio of Earnings to Fixed
Charges.......................... 4
Use of Proceeds.................... 5
Description of Preferred Stock..... 5
Description of Common Stock........ 6
Plan of Distribution............... 8
Legal Matters...................... 9
Experts............................ 9 July ___, 1996
======================================== ====================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following are the estimated expenses of the issuance and
distribution of the securities (other than underwriting discounts and
commissions) being registered, all of which will be paid by the Registrant:
SEC Registration Fee.......................................... $ 307,774
Printing and Engraving........................................ 25,000
Fees of Transfer Agent and Registrar.......................... 10,000
Attorneys' Fees and Expenses.................................. 600,000
Trustees' Fees................................................ 20,000
Accounting Fees and Expenses.................................. 20,000
Blue Sky Fees and Expenses.................................... 5,000
Rating Agency Fees............................................ 125,000
New York Stock Exchange Listing Fee........................... 25,000
Miscellaneous................................................. 5,000
----------
Total $1,142,774
==========
All of the above amounts, other than the SEC Registration Fee, are estimated.
Item 15. Indemnification of Directors and Officers
(a) Reference is made to Section 145 of the Delaware General
Corporation Law ("DGCL") as to indemnification by the Registrant of
officers and directors.
(b) Section 13 of Article III of the by-laws of the Registrant
provides for indemnification of directors as follows:
Section 13. The corporation shall indemnify to the full extent
authorized or permitted by the General Corporation Law of the State of
Delaware any person made, or threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding (whether
civil, criminal, administrative or investigative) by reason of the
fact that he, his testator or intestate is or was a director of the
corporation or serves or served as a director, officer, employee or
agent of any other enterprise at the request of the corporation.
Section 18 of Article V of the by-laws of the Registrant provides for
indemnification of officers as follows:
Section 18. The corporation shall indemnify to the full extent
authorized or permitted by the General Corporation Law of the State of
Delaware any person made, or threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding (whether
civil, criminal, administrative or investigative) by reason of the
fact that he, his testator or intestate is or was an officer or
Managing Director of the corporation or serves or served as a
director, officer, employee or agent of any other enterprise at the
request of the corporation.
(c) The Registrant has also entered into an indemnification agreement
with each of its directors based on the sections of the DGCL that recognize
the validity of additional indemnity rights granted by agreement. The
indemnification agreement alters or clarifies the statutory indemnity with
respect to the Registrant's directors in the following respects: (i)
indemnity is explicitly provided for settlements, fines and judgments in
derivative actions to the maximum extent permitted by Delaware law, (ii)
prompt payment of expenses is provided in advance of indemnification,
provided the director undertakes to repay such amount if it is finally
determined the director is not entitled to be indemnified and (iii)
indemnification for all matters involving a director as a party by reason
of the person being a director unless the person violates the law or the
person's conduct is finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct. Therefore, a director who
has entered into the indemnification agreement will be entitled to
indemnification automatically according to its terms without prior
independent review of such director's conduct and approval of the
indemnification payment by either disinterested directors, independent
counsel or the stockholders.
Certain of the provisions of the indemnification agreement have not been
tested in court and remain subject to public policy considerations with
respect to their enforceability. The Registrant has been advised that
indemnification of a judgment or amounts paid in settlement in a derivative
suit may be contrary to public policy in the State of Delaware. Because
substantial uncertainty exists as to the validity of such payments, the
Registrant will not make an indemnification payment for fines, judgments or
amounts paid in settlement in a derivative suit without first obtaining an
opinion of independent counsel that such payment is permitted under Delaware
law.
(d) The Underwriting Agreements filed as Exhibits 1(a), 1(b), 1(c),
1(d) and 1(e) to this Registration Statement provide, under certain
circumstances, for indemnification for the Registrant and certain other
persons against certain liabilities.
(e) The Registrant has purchased insurance designed to protect the
Registrant and its directors and officers against losses arising from
certain claims, including claims under the Securities Act of 1933, as
amended.
Item 16. Exhibits
Exhibit
Number Description of Exhibits
- ------- -----------------------
1(a) Form of Underwriting Agreement relating to Equipment Trust
Certificates (Filed as Exhibit 1(a) to Registrant's
Registration Statement on Form S-3, Commission File No.
33-52142, and incorporated herein by reference, except that
reference in such Exhibit to such File Number shall be left
blank.)
1(b) Form of Underwriting Agreement relating to Pass Through
Certificates
1(c) Form of Underwriting Agreement relating to Debt Securities
1(d) Form of Underwriting Agreement relating to Preferred Stock
1(e) Form of Underwriting Agreement relating to Common Stock
4(a)(1) Pass Through Trust Agreement, dated as of June 1, 1996 between
Federal Express Corporation and the Pass Through Trustee for an
offering of Pass Through Certificates
4(a)(2) Form of Pass Through Certificate (included in Exhibit 4(a)(1))
4(b)(1) Form of Trust Indenture and Security Agreement among the Owner
Trustee, the Indenture Trustee and Federal Express Corporation,
as Lessee, for an offering of Equipment Trust Certificates
(Filed as Exhibit 4(b)(1) to Registrant's Registration
Statement on Form S-3, Commission File No. 33-52142, and
incorporated herein by reference.) (*)
4(b)(2) Form of Equipment Trust Certificate (included in Exhibit
4(b)(1))
4(c)(1) Form of Trust Indenture and Security Agreement (Leased Aircraft
Indenture) between the Owner Trustee and the Indenture Trustee,
relating to Equipment Certificates (Leased Aircraft
Certificates) in connection with an offering of Pass Through
Certificates (Filed as Exhibit 4(c) to Registrant's
Registration Statement on Form S-3, Commission File No.
33-52142, and incorporated herein by reference.) (*)
4(c)(2) Form of Trust Indenture and Security Agreement (Leased Aircraft
Indenture - Prefunding) between the Owner Trustee and the
Indenture Trustee, relating to Equipment Certificates (Leased
Aircraft Certificates) in connection with an offering of Pass
Through Certificates (*)
4(d) Form of Trust Indenture, Mortgage and Security Agreement (Owned
Aircraft Indenture) between Federal Express Corporation and the
Indenture Trustee, relating to Equipment Certificates (Owned
Aircraft Certificates) in connection with an offering of Pass
Through Certificates (Filed as Exhibit 4(d)(1) to Registrant's
Registration Statement on Form S-3, Commission File No.
33-56569, and incorporated herein by reference.) (*)
4(e)(1) Form of Participation Agreement among Federal Express
Corporation, as Lessee, the Owner Participant, the Owner
Trustee, the Original Loan Participants, if any, the Indenture
Trustee and, when in connection with an offering of Pass
Through Certificates, the Pass Through Trustee, relating to
Equipment Trust Certificates or, when in connection with an
offering of Pass Through Certificates, Equipment Certificates
(Leased Aircraft Certificates) (Filed as Exhibit 4(e)(1) to
Registrant's Registration Statement on Form S-3, Commission
File No. 33-52142, and incorporated herein by reference.)
(*)
4(e)(2) Form of Participation Agreement among Federal Express
Corporation, as Lessee, the Owner Participant, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee,
relating to Equipment Certificates in connection with an
offering of Pass Through Certificates (Leased Aircraft
Certificates - Prefunding) (*)
4(e)(3) Form of Participation Agreement among Federal Express
Corporation, the Pass Through Trustee and the Indenture Trustee
for Equipment Certificates (Owned Aircraft Certificates) in
connection with an offering of Pass Through Certificates (Filed
as Exhibit 4(e)(2) to Registrant's Registration Statement on
Form S-3, Commission File No. 33-56569, and incorporated herein
by reference.) (*)
4(f)(1) Form of Trust Agreement between the Owner Participant and the
Owner Trustee relating to Equipment Certificates (Leased
Aircraft Certificates) in connection with an offering of
Equipment Trust Certificates or Pass Through Certificates
(Filed as Exhibit 4(f) to Registrant's Registration Statement
on Form S-3, Commission File No. 33-52142, and incorporated
herein by reference.) (*)
4(f)(2) Form of Trust Agreement between the Owner Participant and the
Owner Trustee relating to Equipment Certificates (Leased
Aircraft Certificates - Prefunding) in connection with an
offering of Pass Through Certificates (*)
4(g)(1) Form of Lease Agreement between the Owner Trustee, as the
Lessor, and Federal Express Corporation, as Lessee, relating to
Equipment Certificates (Leased Aircraft Certificates in
connection with an offering of Equipment Trust Certificates or
Pass Through Certificates (Filed as Exhibit 4(g) to
Registrant's Registration Statement on Form S-3, Commission
File No. 33-52142, and incorporated herein by reference.) (*)
4(g)(2) Form of Lease Agreement between the Owner Trustee, as the
Lessor, and Federal Express Corporation, as Lessee, relating to
Equipment Certificates (Leased Aircraft Certificates-
Prefunding) in connection with an offering of Pass Through
Certificates (*)
4(h) Form of Collateral Agreement between the Owner Trustee and the
Indenture Trustee (Filed as Exhibit 4.g to Registrant's
Registration Statement No. 33-51623, and incorporated herein
by reference.)
4(i) Form of Indenture dated as of July 1, 1996 between the
Registrant and The First National Bank of Chicago, as Trustee
4(j) Form of Debt Security (included in Exhibit 4(i))
4(k) The description of the securities contained in the Registrant's
Registration Statement on Form 8-A filed with the Commission on
December 15, 1978 under Section 12 of the Exchange Act, as
amended, including any amendment or report filed for the
purpose of updating such description.
4(l) Certain provisions of Registrant's Articles of Incorporation
relating to the Common Stock and defining the rights of
security holders (Filed as Exhibit 3.1 to Registrant's 1993
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
5(a)(1) Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation, relating to Equipment Trust Certificates
5(a)(2) Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation, relating to Pass Through Certificates
5(b) Opinion of Bingham, Dana & Gould, counsel for the Pass Through
Trustee
5(c) Opinion of Ray, Quinney & Nebeker, counsel for the Owner Trustee
5(d)(1) Opinion of George W. Hearn, Vice President - Law of Federal
Express Corporation, relating to Equipment Trust Certificates
and Pass Through Certificates
5(d)(2) Opinion of George W. Hearn, Vice President - Law of Federal
Express Corporation, relating to Debt Securities, Common Stock
and Preferred Stock
8(a) Tax Opinion of Davis Polk & Wardwell, counsel for Federal
Express Corporation (included under the caption "Federal Income
Tax Consequences" in the Prospectus relating to Pass Through
Certificates)
8(b) Tax Opinion of Bingham, Dana & Gould, special counsel for the
Pass Through Trustee (included under the caption "Certain
Massachusetts Taxes" in the Prospectus relating to Pass Through
Certificates) (included in Exhibit 5(b))
12 Computation of Ratio of Earnings to Fixed Charges (Filed as
Exhibit 12.1 to Registrant's FY96 Third Quarterly Report on
Form 10-Q, Commission File No. 1-7806, and incorporated herein
by reference.)
15(a) Letters of Arthur Andersen LLP, independent public accountants
(Filed as Exhibits 15.1 to Registrant's FY96 First, Second and
Third Quarterly Reports on Form 10-Q, Commission File No.
1-7806, and incorporated herein by reference.)
23(a) Consent of Davis Polk & Wardwell, counsel for Federal Express
Corporation (included in Exhibits 5(a)(1) and 5(a)(2))
23(b) Consent of Bingham, Dana & Gould, counsel for the Pass Through
Trustee (included in Exhibit 5(b))
23(c) Consent of Ray, Quinney & Nebeker, counsel for the Owner
Trustee (included in Exhibit 5(c))
23(d) Consent of George W. Hearn (included in Exhibits 5(d)(1) and
5(d)(2))
23(e) Consent of Arthur Andersen LLP, independent public accountants
24 Powers of Attorney
25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of State Street Bank and Trust Company, as
Indenture Trustee and as Pass Through Trustee
25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee
_________________________
* Separate Indentures, Participation Agreements, Trust Agreements and
Lease Agreements will be entered into with respect to each Leased Aircraft in
connection with any particular offering of Equipment Trust Certificates or
Pass Through Certificates. Separate Indentures and Participation Agreements
will be entered into with respect to each Owned Aircraft in connection with an
offering of Pass Through Certificates. The Prospectus Supplement for each
offering of Equipment Trust Certificates or Pass Through Certificates will set
forth any material details in which such Indentures, Participation Agreements,
Trust Agreements or Lease Agreements, as the case may be, differ from the
corresponding Exhibit for the form of such documents.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities
Act of 1933 if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions referred
to in Item 15 of this Registration Statement, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(d) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of section 310 of
the Trust Indenture Act of 1939 in accordance with the rules and
regulations prescribed by the Commission under section 305(b)(c) of the
Trust Indenture Act of 1939.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Memphis, State of Tennessee, on this 3rd day of July
1996
FEDERAL EXPRESS CORPORATION
(Registrant)
By: /s/ JAMES S. HUDSON
---------------------------
James S. Hudson
Vice President and Controller
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ Frederick W. Smith* Chairman of the Board,
- -------------------------------- President and Chief
Frederick W. Smith Executive Officer (Principal
Executive Officer) and
Director
/s/ Alan B. Graf, Jr* Executive Vice President and
- -------------------------------- Chief Financial Officer
Alan B. Graf, Jr. (Principal Financial Officer)
/s/ James S. Hudson Vice President and Controller July 3, 1996
- -------------------------------- (Principal Accounting Officer)
James S. Hudson
/s/ Robert H. Allen* Director
- --------------------------------
Robert H. Allen
/s/ Howard H. Baker, Jr.* Director
- --------------------------------
Howard H. Baker, Jr.
/s/ Anthony J. A. Bryan* Director
- --------------------------------
Anthony J. A. Bryan
/s/ Robert L. Cox* Director
- --------------------------------
Robert L. Cox
/s/ RALPH D. DENUNZIO* Director
- --------------------------------
Ralph D. DeNunzio
Director
- --------------------------------
Judith L. Estrin
/s/ PHILIP GREER* Director
- --------------------------------
Philip Greer
/s/ J. R. HYDE, III* Director
- --------------------------------
J. R. Hyde, III
Director
- --------------------------------
Charles T. Manatt
/s/ GEORGE J. MITCHELL* Director
- --------------------------------
George J. Mitchell
/s/ JACKSON W. SMART, JR.* Director
- --------------------------------
Jackson W. Smart, Jr.
/s/ JOSHUA I. SMITH* Director
- --------------------------------
Joshua I. Smith
/s/ PETER S. WILLMOTT* Director
- --------------------------------
Peter S. Willmott
*By: /s/ JAMES S. HUDSON July 3, 1996
--------------------------
James S. Hudson
Attorney-in-Fact
EXHIBIT INDEX
Exhibits Exhibit Description
- -------- -------------------
1(a) Form of Underwriting Agreement relating to Equipment Trust
Certificates (Filed as Exhibit 1(a) to Registrant's
Registration Statement on Form S-3, Commission File No.
33-52142, and incorporated herein by reference, except that
reference in such Exhibit to such File Number shall be left
blank.)
1(b) Form of Underwriting Agreement relating to Pass Through
Certificates
1(c) Form of Underwriting Agreement relating to Debt Securities
1(d) Form of Underwriting Agreement relating to Preferred Stock
1(e) Form of Underwriting Agreement relating to Common Stock
4(a)(1) Pass Through Trust Agreement, dated as of June 1, 1996 between
Federal Express Corporation and the Pass Through Trustee for an
offering of Pass Through Certificates
4(a)(2) Form of Pass Through Certificate (included in Exhibit 4(a)(1))
4(b)(1) Form of Trust Indenture and Security Agreement among the Owner
Trustee, the Indenture Trustee and Federal Express Corporation,
as Lessee, for an offering of Equipment Trust Certificates
(Filed as Exhibit 4(b)(1) to Registrant's Registration
Statement on Form S-3, Commission File No. 33-52142, and
incorporated herein by reference.) (*)
4(b)(2) Form of Equipment Trust Certificate (included in Exhibit
4(b)(1))
4(c)(1) Form of Trust Indenture and Security Agreement (Leased Aircraft
Indenture) between the Owner Trustee and the Indenture Trustee,
relating to Equipment Certificates (Leased Aircraft
Certificates) in connection with an offering of Pass Through
Certificates (Filed as Exhibit 4(c) to Registrant's
Registration Statement on Form S-3, Commission File No.
33-52142, and incorporated herein by reference.) (*)
4(c)(2) Form of Trust Indenture and Security Agreement (Leased Aircraft
Indenture - Prefunding) between the Owner Trustee and the
Indenture Trustee, relating to Equipment Certificates (Leased
Aircraft Certificates) in connection with an offering of Pass
Through Certificates (*)
4(d) Form of Trust Indenture, Mortgage and Security Agreement (Owned
Aircraft Indenture) between Federal Express Corporation and the
Indenture Trustee, relating to Equipment Certificates (Owned
Aircraft Certificates) in connection with an offering of Pass
Through Certificates (Filed as Exhibit 4(d)(1) to Registrant's
Registration Statement on Form S-3, Commission File No.
33-56569, and incorporated herein by reference.) (*)
4(e)(1) Form of Participation Agreement among Federal Express
Corporation, as Lessee, the Owner Participant, the Owner
Trustee, the Original Loan Participants, if any, the Indenture
Trustee and, when in connection with an offering of Pass
Through Certificates, the Pass Through Trustee, relating to
Equipment Trust Certificates or, when in connection with an
offering of Pass Through Certificates, Equipment Certificates
(Leased Aircraft Certificates) (Filed as Exhibit 4(e)(1) to
Registrant's Registration Statement on Form S-3, Commission
File No. 33-52142, and incorporated herein by reference.)
(*)
4(e)(2) Form of Participation Agreement among Federal Express
Corporation, as Lessee, the Owner Participant, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee,
relating to Equipment Certificates in connection with an
offering of Pass Through Certificates (Leased Aircraft
Certificates - Prefunding) (*)
4(e)(3) Form of Participation Agreement among Federal Express
Corporation, the Pass Through Trustee and the Indenture Trustee
for Equipment Certificates (Owned Aircraft Certificates) in
connection with an offering of Pass Through Certificates (Filed
as Exhibit 4(e)(2) to Registrant's Registration Statement on
Form S-3, Commission File No. 33-56569, and incorporated herein
by reference.) (*)
4(f)(1) Form of Trust Agreement between the Owner Participant and the
Owner Trustee relating to Equipment Certificates (Leased
Aircraft Certificates) in connection with an offering of
Equipment Trust Certificates or Pass Through Certificates
(Filed as Exhibit 4(f) to Registrant's Registration Statement
on Form S-3, Commission File No. 33-52142, and incorporated
herein by reference.) (*)
4(f)(2) Form of Trust Agreement between the Owner Participant and the
Owner Trustee relating to Equipment Certificates (Leased
Aircraft Certificates - Prefunding) in connection with an
offering of Pass Through Certificates (*)
4(g)(1) Form of Lease Agreement between the Owner Trustee, as the
Lessor, and Federal Express Corporation, as Lessee, relating to
Equipment Certificates (Leased Aircraft Certificates in
connection with an offering of Equipment Trust Certificates or
Pass Through Certificates (Filed as Exhibit 4(g) to
Registrant's Registration Statement on Form S-3, Commission
File No. 33-52142, and incorporated herein by reference.) (*)
4(g)(2) Form of Lease Agreement between the Owner Trustee, as the
Lessor, and Federal Express Corporation, as Lessee, relating to
Equipment Certificates (Leased Aircraft Certificates-
Prefunding) in connection with an offering of Pass Through
Certificates (*)
4(h) Form of Collateral Agreement between the Owner Trustee and the
Indenture Trustee (Filed as Exhibit 4.g to Registrant's
Registration Statement No. 33-51623, and incorporated herein
by reference.)
4(i) Form of Indenture dated as of July 1, 1996 between the
Registrant and The First National Bank of Chicago, as Trustee
4(j) Form of Debt Security (included in Exhibit 4(i))
4(k) The description of the securities contained in the Registrant's
Registration Statement on Form 8-A filed with the Commission on
December 15, 1978 under Section 12 of the Exchange Act, as
amended, including any amendment or report filed for the
purpose of updating such description.
4(l) Certain provisions of Registrant's Articles of Incorporation
relating to the Common Stock and defining the rights of
security holders (Filed as Exhibit 3.1 to Registrant's 1993
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
5(a)(1) Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation, relating to Equipment Trust Certificates
5(a)(2) Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation, relating to Pass Through Certificates
5(b) Opinion of Bingham, Dana & Gould, counsel for the Pass Through
Trustee
5(c) Opinion of Ray, Quinney & Nebeker, counsel for the Owner Trustee
5(d)(1) Opinion of George W. Hearn, Vice President - Law of Federal
Express Corporation, relating to Equipment Trust Certificates
and Pass Through Certificates
5(d)(2) Opinion of George W. Hearn, Vice President - Law of Federal
Express Corporation, relating to Debt Securities, Common Stock
and Preferred Stock
8(a) Tax Opinion of Davis Polk & Wardwell, counsel for Federal
Express Corporation (included under the caption "Federal Income
Tax Consequences" in the Prospectus relating to Pass Through
Certificates)
8(b) Tax Opinion of Bingham, Dana & Gould, special counsel for the
Pass Through Trustee (included under the caption "Certain
Massachusetts Taxes" in the Prospectus relating to Pass Through
Certificates) (included in Exhibit 5(b))
12 Computation of Ratio of Earnings to Fixed Charges (Filed as
Exhibit 12.1 to Registrant's FY96 Third Quarterly Report on
Form 10-Q, Commission File No. 1-7806, and incorporated herein
by reference.)
15(a) Letters of Arthur Andersen LLP, independent public accountants
(Filed as Exhibits 15.1 to Registrant's FY96 First, Second and
Third Quarterly Reports on Form 10-Q, Commission File No.
1-7806, and incorporated herein by reference.)
23(a) Consent of Davis Polk & Wardwell, counsel for Federal Express
Corporation (included in Exhibits 5(a)(1) and 5(a)(2))
23(b) Consent of Bingham, Dana & Gould, counsel for the Pass Through
Trustee (included in Exhibit 5(b))
23(c) Consent of Ray, Quinney & Nebeker, counsel for the Owner
Trustee (included in Exhibit 5(c))
23(d) Consent of George W. Hearn (included in Exhibits 5(d)(1) and
5(d)(2))
23(e) Consent of Arthur Andersen LLP, independent public accountants
24 Powers of Attorney
25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of State Street Bank and Trust Company, as
Indenture Trustee and as Pass Through Trustee
25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee
_________________________
* Separate Indentures, Participation Agreements, Trust Agreements and
Lease Agreements will be entered into with respect to each Leased Aircraft in
connection with any particular offering of Equipment Trust Certificates or
Pass Through Certificates. Separate Indentures and Participation Agreements
will be entered into with respect to each Owned Aircraft in connection with an
offering of Pass Through Certificates. The Prospectus Supplement for each
offering of Equipment Trust Certificates or Pass Through Certificates will set
forth any material details in which such Indentures, Participation Agreements,
Trust Agreements or Lease Agreements, as the case may be, differ from the
corresponding Exhibit for the form of such documents.
Exhibit 1(b)
Underwriting Agreement
Dated as of
______________, 199__
between
FEDERAL EXPRESS CORPORATION
and
[UNDERWRITERS]
Pass Through Certificates
TABLE OF CONTENTS
Page
----
SECTION 1. Representations & Warranties of the Company................ 3
SECTION 2. Purchase and Sale.......................................... 7
SECTION 3. Covenants of the Company................................... 8
SECTION 4. Payment of Expenses........................................ 10
SECTION 5. Conditions of Underwriters' Obligations.................... 11
SECTION 6. Indemnification............................................ 14
SECTION 7. Contribution............................................... 16
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery...................................... 16
SECTION 9. Termination of Agreement................................... 17
SECTION 10. Default by One of the Underwriters......................... 17
SECTION 11. Notices.................................................... 18
SECTION 12. Parties.................................................... 18
SECTION 13. Governing Law.............................................. 19
Exhibit A Pricing Information
Exhibit B Opinion of Davis Polk & Wardwell
Exhibit C-1 Opinion of Davis Polk & Wardwell pursuant to
Participation Agreement - Refinancing
Exhibit C-2 Opinion of Davis Polk & Wardwell pursuant to
Participation Agreement - Prefunding
Exhibit D Opinion of the Company
Schedule I Underwriters' Commitments
Schedule II Terms and Conditions
FEDERAL EXPRESS CORPORATION
199__ Pass Through Certificates, Series __
UNDERWRITING AGREEMENT
____________, 199__
[UNDERWRITERS]
[ADDRESS]
Ladies and Gentlemen:
Federal Express Corporation, a Delaware corporation (the "Company"),
proposes that State Street Bank and Trust Company, acting not in its
individual capacity but solely as pass through trustee (the "Trustee") under
the Pass Through Trust Agreement dated as of June 1, 1996 (the "Basic
Agreement"), as supplemented for each series of pass through certificates
(the "Pass Through Certificates") to be purchased hereunder (each, a
"Series") by a Series Supplement (each, a "Series Supplement"), in each case
between the Company and the Trustee (for each Series, the Basic Agreement,
as supplemented by the related Series Supplement, being referred to herein
as the "Pass Through Agreement"), issue and sell to the underwriters named
in Schedule I hereto its Pass Through Certificates in the aggregate amounts
and with the applicable interest rates and final distribution dates set
forth on Exhibit A hereto (the "Offered Certificates") on the terms and
conditions stated herein and in Schedule II.
Each Series of Pass Through Certificates will represent interests in a
separate trust (each, a "Pass Through Trust") established pursuant to the
related Pass Through Agreement to fund the purchase of equipment
certificates (the "Equipment Certificates") which are to be issued by the
Company or as nonrecourse obligations by certain owner trustees, each acting
not in its individual capacity but solely as owner trustee (each, an "Owner
Trustee"), in connection with separate leveraged lease transactions relating
to _____ aircraft (each, an "Aircraft" and, collectively, the "Aircraft").
The proceeds from the sale of the Equipment Certificates will be used to (i)
finance a portion of the purchase price to be paid by the Company or by the
Owner Trustee on behalf of the related Owner Trust, and (ii) refinance the
aggregate outstanding principal amount of the Original Loan Certificates of
the Company or the related Owner Trust issued in connection with
transactions relating to ___ Aircraft bearing U.S. Registration Marks
N____FE and [N____FE], respectively. Each series of Equipment Certificates
will be issued under a separate Trust Indenture and Security Agreement
between State Street Bank and Trust Company, acting not in its individual
capacity, but solely as Indenture Trustee (the "Indenture Trustee"), and the
related Owner Trustee (each, an "Indenture" and, collectively, the
"Indentures").
As used herein, unless the context otherwise requires, the term
"Underwriters" shall mean the firm or firms named as Underwriter or
Underwriters in Schedule I and the term "you" shall mean the Underwriter or
Underwriters, if no underwriting syndicate is purchasing the Offered
Certificates, or the representative or representatives of the Underwriters,
if an underwriting syndicate is purchasing the Offered Certificates, as
indicated in Schedule I.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-________) for the
registration of certain equipment trust certificates, pass through
certificates and other securities, including the Offered Certificates, under
the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"). Such registration statement has been declared effective by
the Commission and the Basic Agreement has been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act").
The Company has, pursuant to Rule 424 under the 1933 Act, filed with, or
transmitted for filing to, or shall within the required period of time
hereafter file with or transmit for filing to, the Commission a prospectus
supplement (the "Prospectus Supplement") specifically relating to the
Offered Certificates, together with a revised and restated prospectus
relating to pass through certificates covered by the above-referenced
registration statement.
The term "Registration Statement" refers to such registration statement in
the form in which it became effective, including the exhibits thereto and the
documents incorporated by reference therein, as amended to the date hereof.
The term "Basic Prospectus" means the above-referenced revised and restated
prospectus relating to pass through certificates. The term "Prospectus" means
the Basic Prospectus supplemented by the Prospectus Supplement. The term
"Preliminary Prospectus" means a preliminary prospectus supplement
specifically relating to the Offered Certificates together with the Basic
Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus" and
"Preliminary Prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement" and "amendment"
or "amend" as used herein shall include all documents deemed to be
incorporated by reference in the Prospectus that have been filed subsequent
to the date of the Basic Prospectus by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "1934
Act").
If the Company has filed an abbreviated registration statement to
register additional shares of Equipment Trust Certificates or Pass Through
Certificates pursuant to Rule 462(b) under the 1933 Act, then any reference
herein to the term "Registration Statement" shall include such Rule 462(b)
registration statement.
Capitalized terms used but not otherwise defined in this Agreement shall
have the meanings specified in or pursuant to the Pass Through Agreement or
the Indenture relating to each related series of Equipment Certificates.
SECTION 1. Representations and Warranties of the Company.
(a) The Company represents and warrants to you and to each
Underwriter named in Schedule I, as of the date hereof, as follows:
(i) Due Incorporation and Qualification. The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware, is a "citizen of the United States"
within the meaning of Title 49 of the United States Code, as amended (the
"Transportation Code"), holding an air operating certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of the Transportation
Code for aircraft capable of carrying 10 or more individuals or 6,000 or
more pounds of cargo, has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus; and is duly qualified to do business and is in good standing in
each jurisdiction in which such qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(ii) Subsidiaries. Each subsidiary of the Company which is a significant
subsidiary as defined in Rule 405 of Regulation C of the 1933 Act Regulations
(each a "Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify would not
have a material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, except
for directors' qualifying shares (except as otherwise stated in the
Registration Statement), is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(iii) Registration Statement and Prospectus. At the time the
Registration Statement became effective, the Registration Statement
complied, and as of the date hereof does comply, in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
1939 Act and the rules and regulations of the Commission promulgated
thereunder.
The Registration Statement, at the time it became effective, did not,
and at each time thereafter at which any amendment to the Registration
Statement becomes effective, will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
The Prospectus, as of the date hereof, does not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by an
Underwriter expressly for use in the Registration Statement or Prospectus or
to those parts of the Registration Statement which constitute Statements of
Eligibility and Qualification of Trustees (Form T-1) under the 1939 Act.
No stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the Commission.
(iv) Incorporated Documents. The documents incorporated by reference
in the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations promulgated
thereunder (the "1934 Act Regulations") , and, when read together and with
the other information in the Prospectus, did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were or are made,
not misleading.
(v) Accountants. The accountants who certified the financial
statements included or incorporated by reference in the Prospectus are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(vi) Financial Statements. The financial statements of the Company
included or incorporated by reference in the Prospectus and the
Registration Statement present fairly the financial position of the Company
as of the dates thereof and the results of operations, changes in common
stockholders' investment and cash flows of the Company, for the respective
periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire
period involved; and the financial schedules included or incorporated by
reference in the Registration Statement meet the requirements of the 1933
Act Regulations or the 1934 Act Regulations, as applicable.
(vii) Material Changes or Material Transactions. Except as stated in
the Prospectus, subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, the Company has
not incurred any liabilities or obligations, direct or contingent, or
entered into any transactions which are material to the Company, and there
has not been any material adverse change in the capital stock or short-term
debt, or any material increase in long-term debt of the Company, or any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or other), business,
prospects, net worth or results of operations of the Company.
(viii) No Defaults; Regulatory Approvals. Neither the Company nor
any of its subsidiaries is in violation of its charter or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which it or any of them or their properties may be bound.
The execution and delivery of this Agreement, each Pass Through
Agreement and the other Operative Agreements to which the Company is or is
to be a party and the consummation of the transactions contemplated herein
and therein have been duly authorized by all necessary corporate action and
executed by the Company and will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of any lien
(other than as permitted under the Leases), charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any such subsidiary is a party or by
which it or any of them may be bound or to which any of the property or
assets of the Company or any such subsidiary is subject, which conflict,
breach or default would have, individually or in the aggregate with any
other such instances, a material adverse effect on the condition (financial
or other), business, prospects, net worth or results of operations of the
Company and its subsidiaries considered as one entity, nor will such action
result in any violation of the provisions of the charter or by-laws of the
Company or any law, administrative regulation or administrative or court
order or decree currently in effect or in effect at the time of execution
and delivery of this Agreement, each Pass Through Agreement and the other
Operative Agreements and applicable to the Company or any of its
subsidiaries.
No consent, approval, authorization, order or decree of any court or
governmental agency or body is required for the consummation by the Company of
the transactions contemplated by this Agreement, any Pass Through Agreement or
any other Operative Agreement to which the Company is or is to be a party,
except such as may be required under the 1933 Act, the 1939 Act, the 1933
Act Regulations or state securities or Blue Sky laws, the Transportation
Code, and the Uniform Commercial Code as in effect in Delaware and Tennessee.
(ix) Legal Proceedings; Contracts. Except for matters described in
the Prospectus (as to which the Company can express no opinion at this time
concerning the Company's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of the Company), there is no pending, or to the best knowledge
of any financial officer of the Company, threatened action or proceeding
before any court or administrative agency which individually (or in the
aggregate in the case of any group of related lawsuits) is expected to have
a material adverse effect on the financial condition of the Company or the
ability of the Company to perform its obligations under the Pass Through
Agreements and the other Operative Agreements to which the Company is a
party.
(x) Compliance with Laws. The Company's business and operations
comply in all material respects with all laws and regulations applicable
thereto and there are no known, proposed or threatened changes in any laws
or regulations which would have a material adverse effect on the Company or
the manner in which it conducts its business. The Company possesses all
valid and effective certificates, licenses and permits required to conduct
its business as now conducted, except for instances which individually or
in the aggregate do not, or will not, have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company.
(xi) Enforceability of Operative Agreements. Each of the Pass
Through Agreements and the other Operative Agreements to which the Company
is or is to be a party have been duly authorized by the Company, will each
be substantially in the form heretofore supplied to you and, when duly
executed and delivered by the Company and the other parties thereto, will
each constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. The Basic Agreement as
executed is substantially in the form filed as an exhibit to the
Registration Statement and has been duly qualified under the 1939 Act.
(xii) Validity of the Offered Certificates. When executed, issued,
authenticated and delivered pursuant to the provisions of the applicable
Pass Through Agreement and sold and paid for as provided in this Agreement,
each Series of Offered Certificates will constitute valid and legally
binding obligations of the Trustee enforceable in accordance with their
terms; and the Certificateholders of such Offered Certificates will be
entitled to the benefits provided by such Pass Through Agreement.
(xiii) Equipment Certificates. The Equipment Certificates to be
issued under each applicable Indenture, when duly executed and delivered by
the related Owner Trustee and duly authenticated by the Indenture Trustee
in accordance with the terms of such Indenture, will be duly issued under
such Indenture and will constitute the valid and binding obligations of
such Owner Trustee, and the Holders thereof will be entitled to the
benefits of such Indenture.
The representations and warranties made by the Company as to the
enforceability of the Pass Through Agreements, the Indentures, the Offered
Certificates, the Equipment Certificates and the other Operative Agreements
set forth in subparagraphs (xi), (xii) and (xiii) above are limited by
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting enforcement of creditors' rights or
by general equity principles, and the enforceability of any Pass Through
Agreement, Lease and Indenture is also limited by applicable laws which may
affect the remedies provided therein but which do not affect the validity
of such Pass Through Agreement, Lease or Indenture or make such remedies
inadequate for the practical realization of the benefits intended to be
provided thereby.
(b) Additional Certifications. Any certificate signed by any officer
of the Company and delivered to you or your counsel in connection with an
offering of the Offered Certificates shall be deemed a representation and
warranty by the Company to each Underwriter participating in such offering as
to the matters covered thereby on the date of such certificate unless
subsequently amended or supplemented subsequent thereto.
SECTION 2. Purchase and Sale.
(a) Subject to the terms and conditions set forth herein and in
Schedule II, if any, the Company agrees to cause the Trustee to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Trustee, at the purchase price specified in Exhibit A
hereto, the respective amounts of each Series of Offered Certificates set
forth opposite the name of such Underwriter in Schedule I. It is understood
that you propose to offer the Offered Certificates for sale to the public as
set forth in the Prospectus.
(b) Payment of the purchase price for any Offered Certificates to be
purchased by the Underwriters shall be made at either the Company's offices in
Memphis, Tennessee or the office of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York 10017, or at such other place as shall be agreed
upon by you and the Company, at 9:00 A.M., New York City time, on the fourth
business day (unless postponed in accordance with the provisions of Section
10) following the date hereof or at such other date, time or location
specified in Schedule II, or as otherwise shall be agreed upon by you and the
Company (such time and date being referred to as a "Closing Time").
Delivery of the Offered Certificates shall be made for your account as
specified in Schedule II against payment by you of the purchase price thereof
to, or upon the order of, the Trustee (or such other person as the Company may
direct) by wire transfer of immediately available funds. Unless otherwise
indicated on Schedule II, such Offered Certificates shall be registered in the
name of Cede & Co., as nominee for The Depository Trust Company, and in such
denominations, as you may request in writing at least two business days prior
to the Closing Time. Such Offered Certificates, which may be in temporary
form, will be made available for examination and packaging by you in New York,
New York, on or before the first business day prior to the Closing Time or at
such other time and place specified in Schedule II.
(c) As compensation to you for your commitments and obligations
hereunder in respect of the Offered Certificates, including your undertakings
to distribute Offered Certificates, the Company will pay (or cause to be paid)
to you an amount equal to that percentage of the aggregate amount of each
series of Offered Certificates purchased by you as set forth in Exhibit A as
the underwriting discounts and commissions. Such payment shall be made
simultaneously with the payment by you to the Trustee of the purchase price of
the Offered Certificates as specified in Section 2(b) hereof. Payment of such
compensation shall be made by wire transfer of immediately available funds.
SECTION 3. Covenants of the Company.
The Company covenants with each of you, and with each Underwriter
participating in the offering as follows:
(a) Prospectus Supplement. The Company has prepared a Preliminary
Prospectus, and immediately following the execution of this Agreement, the
Company will prepare a Prospectus Supplement in connection with the offering
of the Offered Certificates. The Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424 of the
1933 Act Regulations.
(b) Notice of Certain Events. The Company will notify you promptly
(i) of the effectiveness of any amendment to the Registration Statement, (ii)
of the transmittal to the Commission for filing of any supplement to the
Prospectus or any document to be filed pursuant to the 1934 Act which will be
incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement, the
Prospectus or the Prospectus Supplement relating in any way to the offer and
sale of the Offered Certificates, (iv) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose.
(c) Notice of Certain Proposed Filings. The Company will give you
notice of its intention to file or prepare any amendment to the Registration
Statement or any amendment or supplement to the Prospectus, whether by the
filing of documents pursuant to the 1934 Act, the 1933 Act or otherwise, and
will furnish you with copies of any such amendment or supplement or other
documents proposed to be filed or prepared a reasonable time in advance of such
proposed filing or preparation, as the case may be.
(d) Copies of the Registration Statement and the Prospectus. The
Company will deliver to you as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as you may reasonably
request. The Company will furnish to you as many copies of the Prospectus (as
amended or supplemented) as you shall reasonably request so long as you are
required to deliver a Prospectus in connection with sales or solicitations of
offers to purchase the Offered Certificates.
(e) Revisions of Prospectus -- Material Changes. If at any time when
the Prospectus is required by the 1933 Act to be delivered in connection with
sales of the Offered Certificates any event shall occur or condition exist as
a result of which it is necessary, in the reasonable opinion of counsel for
the Company, to further amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of such counsel, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations the Company will
promptly prepare and file with the Commission such amendment or supplement,
whether by filing documents pursuant to the 1934 Act, the 1933 Act or
otherwise, as may be necessary to correct such untrue statement or omission or
to make the Registration Statement and Prospectus comply with such
requirements.
(f) Earnings Statements. The Company will make generally available to
its security holders as soon as practicable after the close of the period
covered thereby, an earnings statement (in form complying with the provisions
of Rule 158 under the 1933 Act) covering each twelve-month period beginning,
in each case, not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in such Rule 158) of the
Registration Statement with respect to each sale of Offered Certificates.
(g) Blue Sky Qualifications. The Company will endeavor, in
cooperation with you, to qualify the Offered Certificates for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Underwriters may designate, and will
maintain such qualifications in effect for so long as may be required for the
distribution of the Offered Certificates; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or to subject itself to taxation as doing
business in any jurisdiction in which it is not otherwise required to be so
qualified. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Offered Certificates
have been qualified as provided above.
(h) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act.
(i) Stand-Off Agreement. The Company will not, between the date of
this Agreement and the Closing Time, offer or sell, or enter into any
agreement to sell, any equipment notes, pass through certificates, equipment
trust certificates or equipment purchase certificates secured by aircraft
owned or leased by the Company (or rights relating thereto) unless the Company
has provided the Underwriters at least two business days' notice thereof.
SECTION 4. Payment of Expenses.
The Company will pay (or cause to be paid) all expenses incident to the
performance of its obligations under this Agreement, including:
(i) the preparation and filing of the Registration Statement and all
amendments thereto, the Preliminary Prospectus, if any, and the Prospectus and
any amendments or supplements thereto;
(ii) the filing of this Agreement;
(iii) the preparation, issuance and delivery of the Offered Certificates;
(iv) the reasonable fees and disbursements of the Company's accountants
and counsel, of the Trustee, the Owner Trustees and the Indenture Trustees and
their respective counsel, and of any registrar, paying agent and
authenticating agent;
(v) the qualification of the Offered Certificates under securities
laws in accordance with the provisions of Section 3(g), including filing fees
and the reasonable fees and disbursements of counsel to the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Survey and any Legal Investment Survey;
(vi) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Prospectus and any amendments or supplements thereto, and
the delivery by the Underwriters of the Prospectus and any amendments or
supplements thereto in connection with solicitations or confirmations of sales
of the Offered Certificates;
(vii) the preparation and delivery to the Underwriters of copies of the
Pass Through Agreements and the other Operative Agreements, including all
expenses incident to the performance of the Company's obligations under the
Pass Through Agreements, Participation Agreements, Indentures, Leases and each
of the other agreements and instruments referred to in the Indentures and
Participation Agreements; and
(viii)any fees charged by rating agencies for the rating of the Offered
Certificates.
If this Agreement is terminated by you in accordance with the provisions
of Section 5 or clause (i) of Section 9 hereof, the Company shall reimburse
upon demand the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the
Underwriters that shall have been incurred by you in connection with the
proposed purchase and sale of the Offered Certificates.
SECTION 5. Conditions of Underwriters' Obligations.
The several obligations of the Underwriters to purchase the Offered
Certificates pursuant to this Agreement will be subject at all times to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in
any certificate furnished pursuant to the provisions hereof, to the
performance and observance by the Company of all covenants and agreements
contained herein, or in Schedule II hereto, on its part to be performed and
observed and to the following additional conditions precedent:
(a) Stop Order; Ratings Change; etc. At the Closing Time, (i) no stop
order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission, (ii) the rating assigned as of the date of this Agreement
by any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g) under the 1933 Act Regulations, to any
debt securities of the Company (including for purposes of this Section
5(a)(ii) any rating indicated by the Company as of the date of this Agreement
as the rating orally confirmed to the Company by any such rating organization
as the rating to be assigned to the Offered Certificates) shall not have been
lowered since the execution of this Agreement nor shall any such rating
organization have publicly announced that it has placed any debt securities of
the Company on what is commonly termed a "watch list" for possible
downgrading, and (iii) there shall not have come to your attention any facts
that would cause you to believe that the Prospectus, including the Prospectus
Supplement, at the time it was required to be delivered to a purchaser of the
Offered Certificates, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not misleading.
(b) Legal Opinions. At the Closing Time, you shall have received the
following documents:
(1) Opinion of Special Counsel to the Company. The opinion of Davis
Polk & Wardwell, special counsel to the Company, dated as of such date, in
form and substance satisfactory to you, to the effect set forth in Exhibit B
and the opinions of such counsel required to be delivered pursuant to each
Participation Agreement, dated as of such date, in form and substance
satisfactory to you, to the effect set forth in Exhibits C-1 and C-2.
(2) Opinion of Company Counsel. The opinion of the Executive Vice
President, General Counsel and Secretary of the Company or any Vice President
in the Legal and Regulatory Division of the Company, dated as of such date, in
form and substance reasonably satisfactory to you, to the effect as set forth
in Exhibit D.
(3) Opinion of Counsel to the Underwriters. The opinion of
__________________________________, counsel to the Underwriters, with respect
to such matters as you may reasonably request.
(c) Officer Certificate. At the Closing Time, there shall not have
been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition (financial or otherwise) of the Company, or in the earnings or
business affairs of the Company; and you shall have received a certificate of
any Vice President of the Company, dated as of the Closing Time, to the effect
(i) that there has been no such material adverse change, (ii) that the other
representations and warranties of the Company contained in Section 1 are true
and correct with the same force and effect as though expressly made at and as
of the date of such certificate, except to the extent that such
representations and warranties expressly relate to an earlier date or later
date (in which case such representations and warranties are true and correct
on and as of such earlier date or will be true and correct on and as of such
later date, as the case may be), (iii) that the Company has made or caused to
be made any required filing of the Prospectus pursuant to Rule 424(b) in the
manner and within the time period required by Rule 424(b), and (iv) that the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the date of such certificate.
The officer signing and delivering this certificate may rely upon the best of
his or her knowledge as to proceedings threatened.
(d) Comfort Letter. At the time of the execution of this Agreement
and at the Closing Time, you shall have received a letter from Arthur Andersen
LLP or their successors as the Company's independent accountants (the
"Independent Accountants"), dated as of the date hereof and of the Closing
Time, as the case may be, in form and substance satisfactory to you to the
effect that:
(i) they are independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations;
(ii) in their opinion the Company's financial statements and schedules
included or incorporated by reference in the Registration Statement and
Prospectus and covered by their reports included or incorporated therein
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act and
the 1934 Act Regulations, as the case may be;
(iii) they have conducted reviews of the unaudited interim consolidated
financial information of the Company included in the Company's Quarterly
Reports on Form 10-Q incorporated in the Registration Statement and Prospectus
in compliance with the standards for such reviews promulgated by the American
Institute of Certified Public Accountants;
(iv) on the basis of a reading of the financial statements and
schedules of the Company included or incorporated in the Prospectus and the
Registration Statement, and the latest available unaudited interim financial
statements of the Company, inquiries of officials of the Company responsible
for financial and accounting matters, and other specified procedures and
inquiries, nothing has come to their attention that caused them to believe
that:
(A) the unaudited financial statements of the Company included or
incorporated in the Prospectus and the Registration Statement do not comply as
to form in all material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations or the 1934 Act and the 1934 Act
Regulations thereunder, as the case may be, or that such unaudited financial
statements are not presented fairly in conformity with generally accepted
accounting principles;
(B) with respect to the period subsequent to the date of the most
recent financial statements incorporated in the Registration Statement and the
Prospectus, as of a specified date not more than five business days prior to
the date of delivery of such letter, there has been any change in the common
or preferred stock or long-term debt of the Company or, as of such date, there
has been any decrease in assets or common stockholders' investment, in each
case as compared with amounts shown in the most recent consolidated balance
sheet of the Company included or incorporated in the Registration Statement
and the Prospectus, except in each case for changes or decreases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; or
(C) for the period from the date of the most recent financial
statements incorporated in the Registration Statement and the Prospectus to
such specified date, there was any decrease in operating revenues, operating
income, income before taxes or net income of the Company in each case as
compared with the comparable period of the preceding year, except in each case
for decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(v) in addition to their audit referred to in their reports included
or incorporated by reference in the Registration Statement and the Prospectus
and the reviews, inquiries and procedures referred to in clauses (iii) and
(iv) above, such letter shall state that Arthur Andersen LLP has performed
other specified procedures, with respect to certain numerical data and
information included or incorporated in the Registration Statement and the
Prospectus, as are requested by an Underwriter and specified in such letter
and have found such data and information to be in agreement with the
accounting records of or analyses prepared by the Company.
(e) Satisfaction of Conditions Precedent in Participation Agreements.
At the Closing Time, all conditions precedent specified in each Participation
Agreement with respect to the refunding or funding of the related Equipment
Certificates, as the case may be, shall have been satisfied; the
representations and warranties of the Company, the Owner Trustee, the Pass
Through Trustee and the Indenture Trustee contained in each of the
Participation Agreements shall be accurate as of the Closing Time (except to
the extent that they relate solely to an earlier date in which case they shall
be accurate as of such earlier date) and you shall have received certificates
of the Company and appropriate officers of the respective Owner Trustees, Pass
Through Trustees and Indenture Trustees, dated as of the Closing Time, to such
effect; and you shall have received a copy of each opinion required to be
delivered under each of the Participation Agreements dated as of the Closing
Time, and addressed to you, and of such other documents furnished in
connection with the fulfillment of such conditions as you may reasonably
request.
(f) Other Documents. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as
such counsel may reasonably require for the purpose of enabling such counsel
to pass upon the issuance and sale of Offered Certificates as herein
contemplated and related proceedings, or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the fulfillment
of any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of Offered Certificates as
herein contemplated shall be satisfactory in form and substance to you.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, arising out of any untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), or the omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of or based upon any
untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever arising out of or based
upon any such untrue statement or omission, if such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever arising out of or based upon any such untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto), or made in reliance upon the Statements
of Eligibility and Qualification of Trustees (Form T-1) under the 1939 Act
filed as exhibits to the Registration Statement; and provided, further, that
the foregoing indemnity agreement, with respect to any Preliminary Prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased Offered
Certificates, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Offered Certificates to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions made in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriters through you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it
may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 6 is for any reason
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company and the Underwriters of each offering
of Offered Certificates shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and one or more of the Underwriters in
respect of such offering, as incurred, in such proportions that the
Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of the Prospectus
in respect of such offering bears to the initial public offering price
appearing thereon and the Company is responsible for the balance; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive each
delivery of and payment for any of the Offered Certificates.
SECTION 9. Termination of Agreement.
You may terminate this Agreement, immediately upon notice to the
Company, at any time prior to the Closing Time (i) if there has been, since
the date hereof or since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Company,
or (ii) if there shall have occurred any material adverse change in the
financial markets in the United States or any outbreak or escalation of
hostilities or other national or international calamity or crisis, the effect
of which shall be such as to make it, in your judgment, impracticable to
market the Offered Certificates or enforce contracts for the sale of the
Offered Certificates, or (iii) if trading in any securities of the Company
shall have been suspended by the Commission or a national securities exchange,
or if trading generally on either the American Stock Exchange or the New York
Stock Exchange shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium
shall have been declared by either federal or New York authorities.
In the event of any termination of this Agreement, the covenant set
forth in Section 3(f) hereof, the provisions of Section 4 hereof, the
indemnity and contribution agreements set forth in Sections 6 and 7 hereof,
and the provisions of Sections 8 and 13 hereof shall remain in effect.
SECTION 10. Default by One of the Underwriters.
If any Underwriter shall fail at the Closing Time to purchase the
Offered Certificates which it is obligated to purchase hereunder (the
"Defaulted Certificates"), and the aggregate amount of Defaulted Certificates
is not more than one-tenth of the aggregate amount of the Offered Certificates
to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the amount of the Offered Certificates set
forth opposite their respective names in Schedule I hereto bears to the
aggregate amount of Offered Certificates set forth opposite the names of all
such non-defaulting underwriters to purchase the Defaulted Certificates;
provided that in no event shall the amount of Defaulted Certificates that any
Underwriter has agreed to purchase pursuant to this Agreement be increased by
an amount in excess of one-ninth of such amount of Offered Certificates
without the written consent of such Underwriter. If the aggregate amount of
Defaulted Certificates is more than one-tenth of the aggregate amount of the
Offered Certificates to be purchased on the Closing Date, and arrangements
satisfactory to the Underwriters and the Company for the purchase of such
Defaulted Certificates are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriters or the Company.
No action taken pursuant to this Section shall relieve a defaulting
Underwriter from liability in respect of its default under this Agreement.
In the event of any such default which does not result in a termination
of this Agreement, either the non-defaulting Underwriters or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed, delivered by Federal
Express service or transmitted by any facsimile communication. Notices to the
Underwriters shall be directed to _______________________________________,
with copies thereof directed to _________________________________________
_________________________________________________. Notices to the Company
shall be directed to it at 2007 Corporate Avenue, Memphis, Tennessee 38132 (if
by Federal Express service) or P.O. Box 727, Memphis, Tennessee 38194 (if by
mail), Attention: Vice President and Treasurer, with copies thereof directed
to the Legal Department of the Company at 1980 Nonconnah Drive, Memphis,
Tennessee 38132 (if by Federal Express Service) or P.O. Box 727, Memphis,
Tennessee 38194 (if by mail), Attention: Managing Director - Securities and
Corporate Law.
SECTION 12. Parties
This Agreement shall inure to the benefit of and be binding upon you and
the Company and any Underwriter who becomes a party hereto and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto their respective successors
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Offered Certificates from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law.
This Agreement and the rights and obligations of the parties created
hereby and thereby shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be
performed in such state. Any suit, action or proceeding brought by the
Company against an Underwriter in connection with or arising under this
Agreement shall be brought solely in the state or federal court of appropriate
jurisdiction located in the Borough of Manhattan, The City of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between you and the Company in accordance with its terms.
Very truly yours,
FEDERAL EXPRESS CORPORATION
By: _________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
[UNDERWRITERS]
By:
By: ___________________________________
Name:
Title:
Acting on behalf of themselves and the
other named Underwriters
Exhibit A
FEDERAL EXPRESS CORPORATION
199__ Pass Through Certificates, Series __
1996 _ Pass Underwriting
Through Final Discounts
Certificates Purchase Interest Distribution Aggregate and
Designation Price Rate Date Amounts Commissions
- ------------ -------- -------- ------------ --------- ------------
Series __ $ % $ %
TOTAL
Exhibit B
Opinion of Davis Polk & Wardwell,
Special Counsel for the Company
The opinion of Davis Polk & Wardwell, special counsel for the Company,
to be delivered pursuant to Section 5(b)(1) of the Underwriting Agreement
shall be to the effect that:
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
2. The Registration Statement has become effective under the 1933 Act
and the Basic Agreement has been duly qualified under the 1939 Act.
3. Although we are not aware of any judicial authority, none of the
Pass Through Trusts is required to be registered under the Investment Company
Act of 1940, as amended.
4. The Pass Through Trusts will not be classified as associations
taxable as corporations, but, rather, will be classified as grantor trusts
under subpart E, Part I of Subchapter J of the Internal Revenue Code of 1986,
as amended, and each person having a beneficial interest in a Pass Through
Certificate will be treated as the owner of a pro rata undivided interest in
each of the Equipment Certificates and any other property held in the related
Pass Through Trust. With respect to all other matters addressed in the Basic
Prospectus under the caption "Federal Income Tax Consequences," we are also of
the opinions ascribed to us therein.
We have considered the matters required to be included in the
Registration Statement and the Prospectus and the information contained
therein. In our opinion (i) the statements in the Basic Prospectus under the
captions "Description of the Pass Through Certificates" and "Description of
the Equipment Certificates" and in the Prospectus Supplement under the captions
"Description of the Pass Through Certificates" and "Description of the
Equipment Trust Certificates," insofar as such statements constitute a summary
of the Pass Through Agreement, the Leases, the Participation Agreements and
the Indentures, fairly present the information called for by the 1933 Act and
the 1933 Act Regulations with respect thereto and fairly summarize the
material provisions thereof and (ii) the statements in the Basic Prospectus in
the fourth paragraph under the caption "Description of the Equipment
Certificates - Security" and in the Prospectus Supplement in the ninth
paragraph under the caption "Description of the Equipment Certificates -
Remedies," insofar as such statements constitute a description of Section 1110
of the Bankruptcy Code as such Section would be applicable to the Equipment
Certificates, fairly summarize the material provisions of such Section as such
Section would be applicable to the Equipment Certificates. The Offered
Certificates conform in all material respects to the summary descriptions
thereof contained in the Prospectus.
We have not ourselves checked the accuracy or completeness of, or
otherwise verified, the information furnished with respect to other matters in
the Registration Statement or the Prospectus. We have generally reviewed and
discussed with certain officers and employees of the Company, its independent
public accountants and your representatives and counsel the information
furnished, whether or not subject to our check and verification. On the basis
of such consideration, review and discussion, but without independent check or
verification, except as stated, (i) we are of the opinion that the
Registration Statement and the Prospectus (except for the financial statements
and other financial information set forth or incorporated by reference
therein, as to which we are not called upon to express any opinion) comply as
to form in all material respects with the 1933 Act and the applicable 1933 Act
Regulations and (ii) we have no reason to believe that the Registration
Statement and the prospectus included therein (except for the financial
statements and other financial information set forth or incorporated by
reference therein and the Statement of Eligibility and Qualification (Form
T-1) under the 1939 Act of State Street Bank and Trust Company, as to all of
which we are not called upon to express a belief) at the time the Registration
Statement became effective contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that, as of the Closing
Time, either the Registration Statement or the Prospectus (except for the
financial statements and other financial information set forth or incorporated
by reference therein, as to which we are not called upon to express a belief),
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading.
The foregoing opinions are subject to the following qualifications:
(a) We are members of the Bar of the State of New York and the
foregoing opinions are limited to the laws of the State of New York, the
federal laws of the United States of America and the General Corporation Law
of the State of Delaware.
(b) We express no opinion as to the scope, effect or other matters
arising under the Transportation Code, or the rules and regulations thereunder
or as to matters involving filing and recording with the Federal Aviation
Administration.
(c) This opinion is issued solely to you in connection with the above
matter and may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
Exhibit C-1
[Letterhead of Davis Polk & Wardwell]
_____________, 199__
To each of the Parties
named on the Schedule hereto
Ladies and Gentlemen:
We have acted as special counsel for Federal Express Corporation, a
Delaware corporation ("Federal Express"), in connection with the transaction
contemplated by the Participation Agreement (Federal Express Corporation Trust
No. [N_______FE], dated as of [_________________, 199__] , as amended and
restated as of ___________________, 199__ (the "Participation Agreement")
among Federal Express, as Lessee, [________________________] as Owner
Participant, the entities listed on Schedule I to the Original Participation
Agreement as Original Loan Participants, ________________________________, as
Owner Trustee, State Street Bank and Trust Company, as Indenture Trustee and
State Street Bank and Trust Company, as Pass Through Trustee. Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Participation Agreement. This opinion is being
delivered pursuant to Section 4.01(l)(viii) of the Participation Agreement.
Capitalized terms not otherwise defined herein have the meanings assigned
thereto in the Participation Agreement.
Pursuant to the Original Participation Agreement, the Owner Participant
and the Original Loan Participants participated in the payment of the Purchase
Price of [Aircraft] which was purchased by the Owner Trustee pursuant to [the
Bills of Sale] [FAA Bill of Sale and the Warranty Bill of Sale], subjected to
the Lien of the Original Indenture and leased to Federal Express under the
Original Lease. The Participation Agreement provides, among other things, for
the refinancing of the Original Loan Certificates using the proceeds from the
public offering of Pass Through Certificates. _______ Series of Pass Through
Certificates will be issued by separate Pass Through Trusts, each formed to
acquire, among other securities, the Certificates bearing a particular
interest rate and having a particular Maturity that will be issued under the
Indenture.
In connection with the opinions expressed below, we have examined
executed counterparts of the Operative Agreements, the Pass Through
Certificates, the Pass Through Agreement and each Series Supplement (the
"Transaction Agreements"). We have also examined originals, or copies
certified to our satisfaction, of such other agreements, documents,
certificates and statements of governmental officials and corporate officers
as we have deemed necessary or advisable as a basis for such opinions. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies.
As to any facts material to our opinions expressed below, we have, with
your consent, relied on the representations and warranties made in or pursuant
to the Participation Agreement and the other documents referred to therein,
the accuracy of which we have not independently verified. In addition, we
have, when relevant facts were not independently established by us, relied, to
the extent we deemed such reliance proper, upon certificates of public
officials and certificates, telegrams and other written or oral statements of
officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. With respect to that portion, if any, of the Aircraft and the
other property included in the Lessor's Estate as may not be covered by the
recording system established by the FAA pursuant to Section 44107 of the
Transportation Code, no filing or recording of any document or other action
was or is necessary in order to establish the Owner Trustee's title thereto and
interest therein as against Federal Express and any third parties.
2. The Lease creates a valid leasehold interest in the Aircraft, the
entitlement thereof to the benefits of recordation under the Transportation
Code being subject to the due and timely filing and, where appropriate,
recording of (A) the Lease (with the Indenture attached as an exhibit), (B)
the Indenture and (C) the Trust Agreement.
3. The execution, delivery and performance of the Participation
Agreement, the Trust Agreement, the Indenture and the Lease by the Owner
Trustee in its individual or trust capacity, as the case may be, and the
issuance, execution, delivery and performance of the Certificates by the Owner
Trustee in its trust capacity do not violate, and fully comply with, any laws
and governmental rules and regulations of the State of New York that may be
applicable to the Owner Trustee in its individual or trust capacity, as the
case may be. The opinion set forth in this paragraph 3 is rendered without
regard to the effect, if any, on such issuance (in the case of the
Certificates), execution, delivery or performance of the taking of any other
action, the conduct of any other business or the exercise of any other powers
by _______, in its individual or in a trust capacity, in the State of New York
not related to the transactions contemplated by the Transaction Agreements.
We have assumed that _______ has made the filings necessary to comply with
Section 131.3 of the Banking Law of the State of New York. However, we express
no opinion as to whether _______ is required to comply with said Section 131.3.
4. (a) Each of the Transaction Agreements to which Federal Express
is a party has been duly authorized, executed and delivered by Federal Express.
(b) The execution, delivery and performance by Federal Express
of each of the Transaction Agreements to which Federal Express is a party do
not violate, or did not on the date of execution thereof, and fully comply, or
did fully comply on the date of execution thereof, with any laws and
governmental rules and regulations of the State of New York that may be
applicable to Federal Express. The opinion set forth in this paragraph 4(b)
is rendered without regard to the taking of any other action or the conduct of
any other business by Federal Express in the State of New York other than the
transactions contemplated by the Transaction Agreements.
5. Assuming (i) the due authorization, execution and delivery of the
Transaction Agreements by each of the parties to each such document (other
than Federal Express), (ii) each such party has full power and legal right to
enter into and perform its respective obligations under the Transaction
Agreements, (iii) that the execution, delivery and performance by each of the
Transaction Agreements by each of the parties thereto will not violate the
respective parties' constituent documents, (iv) the due authorization,
execution, issuance and delivery by the Owner Trustee, and the due
authentication by the Indenture Trustee, of the Certificates to be issued
under the Indenture in accordance with the terms of the Indenture, (v) that
the Original Loan Certificates are delivered by the Original Loan Participants
to the Indenture Trustee for cancellation and are canceled, (vi) the due
authorization, execution, issuance, delivery and authentication by the Pass
Through Trustee of the Pass Through Certificates to be issued under the Pass
Through Agreement and the Series Supplement relating to such Pass Through
Certificates, in each case in accordance with the terms of the Pass Through
Agreement and such Series Supplement, and (vii) that the form of each
Transaction Agreement is in compliance with all applicable laws and
governmental rules and regulations (other than the laws of the United States
and the laws of the State of New York), then:
(A) to the extent governed by New York law, each Transaction Agreement
in form constitutes a legal, valid and binding agreement of each party thereto
enforceable against each such party in accordance with its terms;
(B) the Original Indenture created, and the Indenture creates, for the
benefit of the Holders the security interest in the Trust Indenture Estate
that they purport to create;
(C) the Certificates, when issued to and acquired by the Pass Through
Trustee, will be legal, valid and binding obligations of the Owner Trustee
enforceable against the Owner Trustee in accordance with their terms and the
terms of the Indenture and will be entitled to the benefits of the Indenture,
including the benefit of the security interest created thereby;
(D) the Pass Through Certificates, when issued to and acquired by the
Underwriters in accordance with the Underwriting Agreement, will be legal,
valid and binding obligations of the Pass Through Trustee enforceable against
the Pass Through Trustee in accordance with their terms and will be entitled
to the benefits of the Pass Through Agreement and the Series Supplement
relating thereto; and
(E) the beneficial interest of the Owner Participant under the Trust
Agreement in and to the properties which are part of the Trust Indenture
Estate is subject, to the extent provided in the Indenture, to the Lien of the
Indenture in favor of the Holders.
The opinions set forth in this paragraph 5 are subject to the due filing and,
where appropriate, recording with the FAA of the documents referred to in
paragraph 2 above.
6. All the properties which are part of the Trust Indenture Estate
(including all right, title and interest of the Owner Trustee pledged and
mortgaged by it pursuant to the Indenture in and to the Aircraft and the
Lease) have been pledged and mortgaged with the Indenture Trustee as part of
the Trust Indenture Estate (subject to the due filing and, where appropriate,
recording of those documents referred to in paragraph 2 above and the
financing statements referred to in Section 4.01(f) of the Participation
Agreement), and the beneficial interest of the Owner Participant under the
Trust Agreement in and to such properties are subject, to the extent provided
in the Indenture, to the Lien of the Indenture in favor of the Holders of the
Certificates issued and to be issued under the Indenture.
7. The Indenture creates, as security for all of the Certificates
duly issued and to be issued under the Indenture, the first priority security
interest in the Aircraft it purports to create, the perfection and rank
thereof being subject to the registration with the FAA of the Aircraft in the
name of the Owner Trustee and the due filing and, where appropriate, recording
in accordance with the Transportation Code of the documents referred to in
paragraph 2 above. We express no opinion with respect to the status of any
security interest in any portion of the Aircraft which does not constitute an
"aircraft" or "aircraft engine", as defined in paragraphs (6) and (7) of
Section 40102(a) of the Transportation Code.
8. Federal Express' participation in the transactions contemplated by
the Transaction Agreements does not and will not constitute a violation of
Section 7 of the Securities Exchange Act of 1934.
9. Except for the fillings and recordings referred to in paragraph 2
above, neither the execution and delivery by Federal Express of the
Participation Agreement or any other Transaction Agreement to which it is a
party, nor the consummation of any of the transactions by Federal Express
contemplated thereby, requires the consent or approval of, the giving of
notice to, or the registration with, or the taking of any other action in
respect of, the Department of Transportation, the FAA, the Securities and
Exchange Commission or any other Federal or New York State governmental
authority.
10. It is not necessary, in connection with the creation of the
beneficial interest of the Owner Participant of the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
11. The provisions of Section 1110 of the United States Bankruptcy
Code will apply to the Aircraft for the benefit of the Lessor, as lessor under
and by reason of the Lease. The Lease, including the rights under Section
1110 of the United States Bankruptcy Code, has been assigned to the Indenture
Trustee pursuant to the Indenture as part of the collateral for the
Certificates and, as assignee, the Indenture Trustee has the benefit of
Section 1110.
The foregoing opinions are subject to the following qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, upon the opinions of Daugherty, Fowler &
Peregrin and _______________, Vice President ____________ of Federal Express
to be delivered to you and dated the date hereof, for purposes of the matters
covered thereby.
(b) We are qualified to practice law in the State of New York, and we
do not purport to be experts on, or to express any opinion herein concerning,
any laws other than the laws of the State of New York, the laws of the United
States and the General Corporation Law of the State of Delaware. We express
no opinion as to any matters involving aviation law.
(c) The opinion contained in paragraph 5 above as to enforceability is
subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity which may affect the remedies provided in
the agreements referred to in said opinions, which laws and principles,
however, do not in our opinion make the remedies provided in said agreements
inadequate for the practical realization of the benefits of the security
intended to be provided thereby.
(d) This opinion is rendered solely to you at Federal Express' request
in connection with the above matter. This opinion may not be relied upon by
you for any other purpose or relied upon by or furnished to any other Person
without our prior written consent.
(e) We rendered an opinion dated [________________, 199__] (the
"Delivery Opinion"), a copy of which is attached hereto, in connection with
the financing and acquisition of the Aircraft on such date. We hereby consent
and agree that the addressees hereto who were not addressees to the Delivery
Opinion may rely on the Delivery Opinion as fully and with the same force and
effect as if such addressees were originally named therein on the date of the
Delivery Opinion.
Very truly yours,
SCHEDULE
--------
Owner Trustee
- -------------
Indenture Trustee
- -----------------
State Street Bank and Trust Company
Owner Participant
- -----------------
Original Loan Participants
- --------------------------
The Entities listed on Schedule I to the Participation Agreement as
Original Loan Participants
Lessee
- ------
Federal Express Corporation
Pass Through Trustee
- --------------------
State Street Bank and Trust Company
Underwriters
- ------------
Exhibit C-2
[Letterhead of Davis Polk & Wardwell]
________, 199__
To each of the parties
named on the Schedule hereto
Ladies and Gentlemen:
We have acted as special counsel for Federal Express Corporation, a
Delaware corporation ("Federal Express"), in connection with the transaction
contemplated by the Participation Agreement (Federal Express Corporation Trust
No. N_____FE), dated as of _____________, 199__ (the "Participation
Agreement") among Federal Express, as Lessee, ______________________, as Owner
Participant, ___________________________________, as Owner Trustee, State
Street Bank and Trust Company, as Indenture Trustee and State Street Bank and
Trust Company, as Pass Through Trustee. This opinion is being delivered
pursuant to Section 4.01(k)(v) of the Participation Agreement. Capitalized
terms not otherwise defined herein have the meanings assigned thereto in the
Participation Agreement.
The Participation Agreement provides, among other things, for the
financing on the Delivery Date of a portion of the Owner Trustee's payment of
the Purchase Price of [Aircraft] using the proceeds from the public offering
of the Pass Through Certificates. On the Certificate Closing Date, _____
Series of Pass Through Certificates will be issued by separate Pass Through
Trusts, each formed to acquire, among other securities, the Certificates
bearing a particular interest rate and having a particular Maturity that will
be issued under the Indenture.
In connection with the opinions expressed below, we have examined
executed counterparts of the Operative Agreements to be delivered on the
Certificate Closing Date the Pass Through Certificates, the Pass Through
Agreement, each Series Supplement (the "Certificate Closing Date Documents")
and the forms of the Operative Agreements to be delivered on the Delivery
Date. We have also examined originals, or copies certified to our
satisfaction, of such other agreements, documents, certificates and statements
of governmental officials and corporate officers as we have deemed necessary
or advisable as a basis for such opinions. In such examination, we have
assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with the originals
of all documents submitted to us as copies.
As to any facts material to our opinions expressed below, we have, with
your consent, relied on the representations and warranties made in or pursuant
to the Participation Agreement and the other documents referred to therein,
the accuracy of which we have not independently verified. In addition, we
have, when relevant facts were not independently established by us, relied, to
the extent we deemed such reliance proper, upon certificates of public
officials and certificates, telegrams and other written or oral statements of
officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. The execution, delivery and performance by the Owner Trustee in
its individual or trust capacity, as the case may be, of the Certificate
Closing Date Documents (other than the Certificates) to which it is a party,
and the issuance, execution, delivery and performance of the Certificates by
the Owner Trustee in its trust capacity do not violate, and fully comply with,
any laws and governmental rules and regulations of the State of New York that
may be applicable to the Owner Trustee in its individual or trust capacity, as
the case may be. The opinion set forth in this paragraph 1 is rendered
without regard to the effect, if any, on such issuance (in the case of the
Certificates), execution, delivery or performance of the taking of any other
action, the conduct of any other business or the exercise of any other powers
by _______, in its individual or in a trust capacity, in the State of New York
not related to the transactions contemplated by the Certificate Closing Date
Documents. We have assumed that _______ has made the filings necessary to
comply with Section 131.3 of the Banking Law of the State of New York.
However, we express no opinion as to whether _______ is required to comply
with said Section 131.3.
2. (a) Each of the Certificate Closing Date Documents to which
Federal Express is a party has been duly authorized, executed and delivered by
Federal Express. Each of the Operative Agreements to which Federal Express is
to be a party and which are to be delivered on the Delivery Date has been
authorized by Federal Express.
(b) The execution, delivery and performance by Federal Express
of each of the Certificate Closing Date Documents to which Federal Express is
a party do not, or did not on the date of execution thereof, violate, and
fully comply, or did fully comply on the date of execution thereof, with, any
laws and governmental rules and regulations of the State of New York that may
be applicable to Federal Express. The opinion set forth in this paragraph 2(b)
is rendered without regard to the taking of any other action or the conduct of
any other business by Federal Express in the State of New York not related to
the transactions contemplated by the Certificate Closing Date Documents.
3. Assuming (i) the due authorization, execution and delivery of the
Certificate Closing Date Documents by each of the parties to each such
document (other than Federal Express), (ii) each such party has full power and
legal right to enter into and perform its respective obligations under the
Certificate Closing Date Documents, (iii) that the execution, delivery,
performance by each of the Certificate Closing Date Documents by each of the
parties thereto will not violate the respective parties' constituent
documents, (iv) the due authorization, execution, issue and delivery by the
Owner Trustee, and the due authentication by the Indenture Trustee, of the
Certificates to be issued under the Indenture in accordance with the terms of
the Indenture, (v) the due authorization, execution, issuance, delivery and
authentication by the Pass Through Trustee of the Pass Through Certificates to
be issued under the Pass Through Agreement and the Series Supplement relating
to such Pass Through Certificates, in each case in accordance with the terms
of the Pass Through Agreement and such Series Supplement, and (vi) that the
form of each such Certificate Closing Date Documents is in compliance with all
applicable laws and governmental rules and regulations (other than the laws of
the United States and the laws of the State of New York), then:
(A) to the extent governed by New York law, each such Certificate Closing Date
Documents in form constitutes a legal, valid and binding agreement of each
party thereto enforceable against each such party in accordance with its terms;
(B) the Indenture creates, for the benefit of the Holders the security
interest in the Trust Indenture Estate that they purport to create;
(C) the Certificates, when issued to and acquired by the Pass Through
Trustee, will be legal, valid and binding obligations of the Owner Trustee
enforceable against the Owner Trustee in accordance with their terms and the
terms of the Indenture and will be entitled to the benefits of the Indenture,
including the benefit of the security interest created thereby except that no
opinion is given with respect to perfection of such security interest on the
date hereof;
(D) the Pass Through Certificates, when issued to and acquired by the
Underwriters in accordance with the Underwriting Agreement, will be legal,
valid and binding obligations of the Pass Through Trustee enforceable against
the Pass Through Trustee in accordance with their terms and will be entitled
to the benefits of the Pass Through Agreement and the Series Supplement
relating thereto; and
(E) the beneficial interest of the Owner Participant under the Trust
Agreement in and to the properties which are part of the Trust Indenture
Estate is subject, to the extent provided in the Indenture, to the Lien of the
Indenture in favor of the Holders.
4. Federal Express' participation in the transactions contemplated by
the Operative Agreements does not and will not constitute a violation of
Section 7 of the Securities Exchange Act of 1934.
5. It is not necessary, in connection with the creation of the
beneficial interest of the Owner Participant of the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
The foregoing opinions are subject to the following qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, on the opinion dated the date hereof of
________________, Vice President _______ of Federal Express.
(b) We are qualified to practice law in the State of New York, and we
do not purport to be experts on, or to express any opinion herein concerning,
any laws other than the laws of the State of New York, the laws of the United
States and the General Corporation Law of the State of Delaware.
(c) The opinion contained in paragraph 3 above as to enforceability is
subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity which may affect the remedies provided in
the agreements referred to in said opinions, which laws and principles,
however, do not in our opinion make the remedies provided in said agreements
inadequate for the practical realization of the benefits of the security
intended to be provided thereby.
(d) This opinion is rendered solely to you at Federal Express' request
in connection with the above matter. This opinion may not be relied upon by
you for any other purpose or relied upon by or furnished to any other Person
without our prior written consent.
Very truly yours,
SCHEDULE
--------
Owner Trustee
- -------------
Indenture Trustee
- -----------------
State Street Bank and Trust Company
Owner Participant
- -----------------
Lessee
- ------
Federal Express Corporation
Pass Through Trustee
- --------------------
State Street Bank and Trust Company
Underwriters
- ------------
Exhibit D
Form of Opinion of Company Counsel
____________, 199__
[UNDERWRITERS]
Re: Federal Express Corporation
199_ Pass Through Certificates, Series __ (the "Offered Certificates")
Ladies and Gentlemen:
This opinion is directed to the Underwriters pursuant to Section 5(b)(2)
of the Underwriting Agreement dated ________________, 199__ (the "Underwriting
Agreement"), among the Company and you, with respect to the offer and sale of
the Offered Certificates. All terms defined or used in the Underwriting
Agreement have the same meaning when used herein, unless otherwise noted.
I am Vice President ________ of the Company and have acted as such in
connection with the Offered Certificates and the Underwriting Agreement. I or
attorneys under my supervision have made such examination and investigation as
we have deemed necessary in order to give the following opinion.
Based on the foregoing, it is my opinion that:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority under such laws to own its properties and to
conduct its business as described in the Prospectus; the Company is a "citizen
of the United States" within the meaning of Section 40102(a)(15) of Title 49
of the United States Code, as amended, holding an air operating certificate
issued by the Secretary of Transportation pursuant to Chapter 447 of Title 49
of the United States Code, as amended, for aircraft capable of carrying 10 or
more individuals or 6,000 or more pounds of cargo; the Company is duly
qualified to do business and is in good standing in each jurisdiction in which
it owns or leases real property or in which the conduct of its business
requires such qualification, except for such instances which in the aggregate
will not have a material adverse effect on the Company;
(ii) Each subsidiary of the Company which is a significant subsidiary
as defined in Rule 405 of Regulation C of the 1933 Act Regulations (each a
"Significant Subsidiary") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement, and, to the best of my knowledge, is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, except where the failure to so
qualify would not have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; all of the issued
and outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued and is fully paid and non-assessable, and all of
such capital stock, except for directors' qualifying shares, is owned by the
Company, directly or through subsidiaries, free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity;
(iii) Except for matters described in the Prospectus (as to which I can
express no opinion at this time concerning the Company's liability (if any) or
the effect of any adverse determination upon the business, condition
(financial or otherwise) or operations of the Company), there is no pending,
or to my knowledge, threatened action or proceeding before any court or
administrative agency which individually (or in the aggregate in the case of
any group of related lawsuits) is expected to have a material adverse effect
on the financial condition of the Company or the ability of the Company to
perform its obligations under the Pass Through Agreements and the other
Operative Agreements to which the Company is a party;
(iv) The Pass Through Agreements and the other Operative Agreements to
which the Company is a party have been duly and validly authorized, executed
and delivered by the Company;
(v) The Equipment Certificates are in due and proper form and have
been duly and validly authorized by all necessary corporate action;
(vi) The Company possesses all permits, approvals, franchises and other
rights from federal aviation, aeronautical, communications, transportation and
shipping authorities which are requisite for the conduct of its business as
described in the Prospectus or for the actions contemplated by the
Underwriting Agreement and the offering contemplated by the Prospectus; and
the actions contemplated by the Underwriting Agreement, the Pass Through
Agreements, the Participation Agreements and the other Operative Agreements,
and the offering contemplated by the Prospectus, are not in violation of any
federal statute or regulation relating to aviation, aeronautics,
communications, transportation or shipping;
(vii) The Basic Agreement is qualified under the 1939 Act; I have
reviewed or caused to be reviewed by attorneys under my supervision the
Registration Statement, the Prospectus and each amendment and supplement
thereto (including the documents incorporated by reference) and have no reason
to believe that, as of their respective effective or issue dates, or as of the
Closing Time, either the Registration Statement or the Prospectus or any such
amendment or supplement (or any such documents incorporated by reference)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(viii)I do not know of any statute or regulation or legal or
governmental proceeding required to be described in the Prospectus which is
not described as required, nor of any contract or document of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which is not described and
filed as required; and the descriptions in the Registration Statement and the
Prospectus of the contracts and other documents therein described are accurate
and fairly present the information required to be shown;
(ix) The execution and delivery by the Company of the Underwriting
Agreement, the Pass Through Agreements and the Operative Agreements to which
the Company is a party, the consummation by the Company of the transactions
herein and therein contemplated and compliance with the terms of the
Underwriting Agreement, the Pass Through Agreements and such Operative
Agreements do not and will not conflict with or result in a breach of any of
the terms of the Certificate of Incorporation or By-laws of the Company, and
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan, credit or note agreement, lease or other agreement or instrument
material to the Company to which the Company is a party or by which it or any
or its properties are bound, or any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality or
court, having jurisdiction over the Company or any of its properties;
(x) No authorization, approval, consent or license of any regulatory
body or authority (other than under the 1933 Act, the 1939 Act and the
securities or Blue Sky laws of the various states) is required for the valid
authorization, issuance, sale and delivery of the Offered Certificates as
herein contemplated or the valid authorization, execution, delivery and
performance by the Company of the Underwriting Agreement, the Pass Through
Agreements and the other Operative Agreements to which the Company is a party
or the consummation by the Company of the transactions contemplated herein or
therein, or, if so required, all such authorizations, approvals, consents and
licenses, specifying the sale, have been obtained and are in full force and
effect;
(xi) The Registration Statement has become effective under the 1933 Act
and, to the best of my knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the 1933
Act; the Registration Statement and the Prospectus, and each amendment or
supplement thereto (except for the financial statements and schedules included
therein, as to which I express no opinion), comply as to form in all material
respects to the requirements of the 1933 Act and the 1933 Act Regulations and,
as to documents incorporated therein, to the requirements of the 1934 Act and
the 1934 Act Regulations in effect at the time such documents were filed with
the Commission; and
(xii) The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms, except as
enforcement thereof is limited by bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting enforcement of
creditors' rights or by general equity principles and subject to any
principles of public policy limiting the right to enforce the indemnification
and contribution provisions contained in Sections 6 and 7 of the Underwriting
Agreement.
In rendering the foregoing opinion, we have assumed that (i) all
signatures on all documents examined by us are genuine and that where any such
signature (other than a signature purporting to have been made on behalf of
the Company) purports to have been made in a corporate, governmental,
fiduciary or other capacity, the person who affixed such signature had the due
authority to do so, (ii) certain factual matters contained in certificates of
public officials are accurate, true and correct, and (iii) photostatic copies
of such documents, records and certificates conform to the originals.
This opinion is intended solely for the benefit of the Underwriters and
is not to be relied on by, and no copies of it are to be delivered to, any
other person without my prior written consent, except that Underwriters'
counsel may rely upon this opinion as to all matters of Tennessee law or
Delaware corporate law in rendering its opinion of even date herewith. I am
not assuming any professional responsibility to any other person by rendering
this opinion. It is understood that this opinion speaks as of the date given,
notwithstanding any delivery as contemplated above on any other date.
Very truly yours,
Schedule I
to
Underwriting
Agreement
Dated: ________, 199__
FEDERAL EXPRESS CORPORATION
199__ Pass Through Certificates, Series __
Aggregate Amount Aggregate Amount Total Aggregate
of Series ___ Pass of Series ___ Pass Amount to be
Underwriters Through Certificates Through Certificates Purchased
- ------------ -------------------- -------------------- ---------------
$ $ $
Schedule II
to
Underwriting Agreement
Dated: ________, 199__
FEDERAL EXPRESS CORPORATION
199__ Pass Through Certificates, Series __
To: Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Re: Underwriting Agreement dated ______________, 199__
Title of Offered Certificates:199__ Pass Through Certificates, Series __
Current ratings:
Interest rate: Series __ ____%
Interest payable: each ___________ and __________ commencing on _________,
199__
Public offering price: 100%, plus accrued interest from ___________, 199__
Closing date, time and
location: ___________, 199__, 9:00 A.M., New York City time
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Location for checking Offered
Certificates: New York, New York
Listing requirement: None
Other terms and conditions:
The Offered Certificates will be issued in fully registered, book-entry only
form through the facilities of The Depository Trust Company, and each Series
of the Offered Certificates shall be represented by a separate global
certificate.
Exceptions, if any, to Section 3(i) of the
Underwriting Agreement: None
[UNDERWRITERS]
By:
By: ___________________________
Name:
Title:
Acting on behalf of themselves and the
other named Underwriters
Accepted:
FEDERAL EXPRESS CORPORATION
By: _______________________________
Name:
Title:
Exhibit 1(c)
Underwriting Agreement
Dated as of
______________, 199__
between
FEDERAL EXPRESS CORPORATION
and
[UNDERWRITERS]
DEBT SECURITIES
TABLE OF CONTENTS
Page
----
SECTION 1. Representations & Warranties of the Company............2
SECTION 2. Purchase and Sale..................................... 6
SECTION 3. Covenants of the Compan................................8
SECTION 4. Payment of Expenses...................................10
SECTION 5. Conditions of Underwriters' Obligations...............11
SECTION 6. Indemnification.......................................14
SECTION 7. Contribution..........................................15
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery .................................16
SECTION 9. Termination of Agreement..............................16
SECTION 10. Default by One Underwriter............................16
SECTION 11. Notices...............................................17
SECTION 12. Parties...............................................17
SECTION 13. Governing Law.........................................18
Exhibit A Pricing Information
Exhibit B Opinion of the Company
Schedule I Underwriters' Commitments
Schedule II Terms and Conditions
FEDERAL EXPRESS CORPORATION
Debt Securities
UNDERWRITING AGREEMENT
____________, 199__
[UNDERWRITERS]
[ADDRESS]
Ladies and Gentlemen:
Federal Express Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule I hereto up
to $1 billion aggregate principal amount of its debt securities (the "Debt
Securities") in one or more offerings on the terms and conditions stated
herein and in Schedule II hereto (the "Offered Securities").
The Debt Securities will be issued under an indenture dated as of June
1, 1996 (the "Indenture") between the Company and The First National Bank of
Chicago, acting not in its individual capacity, but solely as trustee (the
"Trustee"). Each issue of Debt Securities may vary as to aggregate principal
amount, maturity date, currency, interest rate or formula and timing of
payments thereof, any redemption or sinking fund requirements and any other
variable terms as the Indenture contemplates and as may be set forth in the
Debt Securities issued from time to time.
As used herein, unless the context otherwise requires, the term
"Underwriters" shall mean the firm or firms named as Underwriter or
Underwriters in Schedule I and the term "you" shall mean the Underwriter or
Underwriters, if no underwriting syndicate is purchasing the Offered
Securities, or the representative or representatives of the Underwriters,
if an underwriting syndicate is purchasing the Offered Securities, as
indicated in Schedule I.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-________) for the
registration of certain debt securities and other securities, including the
Offered Securities, under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with Rule 415
of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement has been declared effective by
the Commission and the Indenture has been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act").
The Company has, pursuant to Rule 424 under the 1933 Act, filed with, or
transmitted for filing to, or shall within the required period of time
hereafter file with or transmit for filing to, the Commission a prospectus
supplement (the "Prospectus Supplement") specifically relating to the Offered
Securities, together with a revised and restated prospectus relating to debt
securities covered by the above-referenced registration statement.
The term "Registration Statement" refers to such registration statement
in the form in which it became effective, including the exhibits thereto and
the documents incorporated by reference therein, as amended to the date
hereof. The term "Basic Prospectus" means the above-referenced revised and
restated prospectus relating to debt securities. The term "Prospectus" means
the Basic Prospectus supplemented by the Prospectus Supplement. The term
"Preliminary Prospectus" means a preliminary prospectus supplement
specifically relating to the Offered Securities together with the Basic
Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus" and
"Preliminary Prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement" and "amendment" or
"amend" as used herein shall include all documents deemed to be incorporated
by reference in the Prospectus that have been filed subsequent to the date of
the Basic Prospectus by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act").
If the Company has filed an abbreviated registration statement to
register additional shares of Debt Securities pursuant to Rule 462(b) under
the 1933 Act, then any reference herein to the term "Registration Statement"
shall include such Rule 462(b) registration statement.
Capitalized terms used but not otherwise defined in this Agreement shall
have the meanings specified in or pursuant to the Indenture.
SECTION 1. Representations and Warranties of the Company.
(a) The Company represents and warrants to you and to each Underwriter
named in Schedule I, as of the date hereof, as follows:
(i) Due Incorporation and Qualification. The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware, has the corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus; and is duly qualified to do business and is in good
standing in each jurisdiction in which such qualification is required, except
where the failure to so qualify would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(ii) Subsidiaries. Each subsidiary of the Company which is a
significant subsidiary as defined in Rule 405 of Regulation C of the 1933
Act Regulations (each a "Significant Subsidiary") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise; and all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, except for directors' qualifying shares
(except as otherwise stated in the Registration Statement), is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iii) Registration Statement and Prospectus. At the time the
Registration Statement became effective, the Registration Statement complied,
and as of the date hereof does comply, in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and
the rules and regulations of the Commission promulgated thereunder.
The Registration Statement, at the time it became effective, did not,
and at each time thereafter at which any amendment to the Registration
Statement becomes effective, will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
The Prospectus, as of the date hereof, does not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus made
in reliance upon and in conformity with information furnished to the Company
in writing by an Underwriter expressly for use in the Registration Statement
or Prospectus or to those parts of the Registration Statement which constitute
Statements of Eligibility and Qualification of Trustees (Form T-1) under the
1939 Act.
No stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the Commission.
(iv) Incorporated Documents. The documents incorporated by reference
in the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations promulgated
thereunder (the "1934 Act Regulations"), and, when read together and with the
other information in the Prospectus, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were or are made, not misleading.
(v) Accountants. The accountants who certified the financial
statements included or incorporated by reference in the Prospectus are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(vi) Financial Statements. The financial statements of the Company
included or incorporated by reference in the Prospectus and the Registration
Statement present fairly the financial position of the Company as of the dates
thereof and the results of operations, changes in common stockholders'
investment and cash flows of the Company, for the respective periods covered
thereby, all in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved; and the
financial schedules included or incorporated by reference in the Registration
Statement meet the requirements of the 1933 Act Regulations or the 1934 Act
Regulations, as applicable.
(vii) Material Changes or Material Transactions. Except as stated in
the Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company has not
incurred any liabilities or obligations, direct or contingent, or entered into
any transactions which are material to the Company, and there has not been any
material adverse change in the capital stock or short-term debt, or any
material increase in long-term debt of the Company, or any material adverse
change, or any development involving a prospective material adverse change, in
the condition (financial or other), business, prospects, net worth or results
of operations of the Company.
(viii) No Defaults; Regulatory Approvals. Neither the Company nor
any of its subsidiaries is in violation of its charter or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which it or any of them or their properties may be bound.
The execution and delivery of this Agreement and the Indenture and the
consummation of the transactions contemplated herein and therein have been
duly authorized by all necessary corporate action and executed by the Company
and will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any such subsidiary is a party or by which
it or any of them may be bound or to which any of the property or assets of
the Company or any such subsidiary is subject, which conflict, breach or
default would have, individually or in the aggregate with any other such
instances, a material adverse effect on the condition (financial or other),
business, prospects, net worth or results of operations of the Company and its
subsidiaries considered as one entity, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
law, administrative regulation or administrative or court order or decree
currently in effect or in effect at the time of execution and delivery of this
Agreement and the Indenture and applicable to the Company or any of its
subsidiaries.
No consent, approval, authorization, order or decree of any court or
governmental agency or body is required for the consummation by the Company of
the transactions contemplated by this Agreement or the Indenture, except such
as may be required under the 1933 Act, the 1939 Act, the 1933 Act Regulations
or state securities or Blue Sky laws, and the Uniform Commercial Code as in
effect in Delaware and Tennessee.
(ix) Legal Proceedings; Contracts. Except for matters described in
the Prospectus (as to which the Company can express no opinion at this time
concerning the Company's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of the Company), there is no pending, or to the best knowledge
of any financial officer of the Company, threatened action or proceeding
before any court or administrative agency which individually (or in the
aggregate in the case of any group of related lawsuits) is expected to have
a material adverse effect on the financial condition of the Company or the
ability of the Company to perform its obligations under the Indenture.
(x) Compliance with Laws. The Company's business and operations
comply in all material respects with all laws and regulations applicable
thereto and there are no known, proposed or threatened changes in any laws or
regulations which would have a material adverse effect on the Company or the
manner in which it conducts its business. The Company possesses all valid and
effective certificates, licenses and permits required to conduct its business
as now conducted, except for instances which individually or in the aggregate
do not, or will not, have a material adverse effect on the condition
(financial or other), business, prospects or results of operations of the
Company.
(xi) Enforceability. The Indenture has been duly authorized by the
Company, will be substantially in the form heretofore supplied to you and,
when duly executed and delivered by the Company and the other parties thereto,
will constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
(xii) Validity of the Offered Securities. When executed, issued,
authenticated and delivered pursuant to the provisions of the Indenture and
sold and paid for as provided in this Agreement, each thereof Offered
Securities will constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms; and the Holders of such
Offered Securities will be entitled to the benefits provided by such
Indenture.
The representations and warranties made by the Company as to the
enforceability of the Indenture and the Offered Securities, set forth in
subparagraphs (xi) and (xii) above are limited by bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting enforcement of creditors' rights or by general equity principles,
and the enforceability of the Indenture is also limited by applicable laws
which may affect the remedies provided therein but which do not affect the
validity of such Indenture or make such remedies inadequate for the practical
realization of the benefits intended to be provided thereby.
(b) Additional Certifications. Any certificate signed by any officer
of the Company and delivered to you or your counsel in connection with an
offering of the Offered Securities shall be deemed a representation and
warranty by the Company to each Underwriter participating in such offering as
to the matters covered thereby on the date of such certificate unless
subsequently amended or supplemented subsequent thereto.
SECTION 2. Purchase and Sale.
(a) Subject to the terms and conditions set forth herein and in
Schedule II, if any, the Company agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company,
at the purchase price specified in Exhibit A hereto, the amount of Offered
Securities set forth opposite the name of such Underwriter in Schedule I. It
is understood that you propose to offer the Offered Securities for sale to the
public as set forth in the Prospectus.
(b) Subject to the terms and conditions herein set forth, the Company
may grant, if so provided in Schedule II hereto, an option to the
Underwriters, severally and not jointly, to purchase additional Debt
Securities to cover over-allotments, if any (the "Option Securities"). If
Schedule II so provides, the Underwriters may purchase up to the amount of
Option Securities set forth therein at the same price per share as is
applicable to the Offered Securities. As used herein, the term "Offered
Securities" shall include Option Securities. Such option, if granted, will
expire 30 days after the date of this Agreement, and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Offered Securities upon notice by you to the Company setting forth the number
of Option Securities as to which the several Underwriters are then exercising
the option and the time and date of payment and delivery for such Option
Securities.
Any such time and date of delivery shall be determined by you, but shall
not be later than four business days and not be earlier that two business days
after the exercise of said option, nor in any event prior to Closing Time,
unless otherwise agreed upon by you and the Company.
If the option is exercised as to all or any portion of the Option
Securities, each Underwriter, acting severally and not jointly, will purchase
that proportion of the total number of Option Securities then being purchased
which the number of Offered Securities each such Underwriter has agreed to
purchase as set forth in Schedule II bears to the total number of Offered
Securities, subject to such adjustments as you shall make to eliminate any
sales or purchases of fractional Debt Securities.
(c) Payment of the purchase price for any Offered Securities to be
purchased by the Underwriters shall be made to the Company at either the
Company's offices in Memphis, Tennessee or the office of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017, or at such other
place as shall be agreed upon by you and the Company, at 9:00 A.M., New York
City time, on the third business day (unless postponed in accordance with the
provisions of Section 10) following the date hereof or at such other date,
time or location specified in Schedule II, or as otherwise shall be agreed
upon by you and the Company (such time and date being referred to as a
"Closing Time").
Delivery of the Offered Securities shall be made for your account as
specified in Schedule II against payment by you of the purchase price thereof
to the Company (or such other person as the Company may direct) by wire
transfer of immediately available funds. Unless otherwise indicated on
Schedule II, such Offered Securities shall be registered in the name of Cede &
Co., as nominee for The Depository Trust Company, and in such denominations,
as you may request in writing at least two business days prior to the Closing
Time. Such Offered Securities will be made available for examination and
packaging by you in New York, New York, on or before the first business day
prior to the Closing Time or at such other time and place specified in
Schedule II.
(d) As compensation to you for your commitments and obligations
hereunder in respect of the Offered Securities, including your undertakings to
distribute Offered Securities, the Company will pay to you an amount equal to
that percentage of the aggregate principal amount of Offered Securities
purchased by you as set forth in Exhibit A as the underwriting discounts and
commissions. Such payment shall be made simultaneously with the payment by
you of the purchase price of the Offered Securities as specified in Section
2(b) hereof. Payment of such compensation shall be made by wire transfer of
immediately available funds.
SECTION 3. Covenants of the Company.
The Company covenants with each of you, and with each Underwriter
participating in the offering as follows:
(a) Prospectus Supplement. The Company has prepared a Preliminary
Prospectus, and immediately following the execution of this Agreement, the
Company will prepare a Prospectus Supplement in connection with the offering
of the Offered Securities. The Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424 of the
1933 Act Regulations.
(b) Notice of Certain Events. The Company will notify you promptly
(i) of the effectiveness of any amendment to the Registration Statement, (ii)
of the transmittal to the Commission for filing of any supplement to the
Prospectus or any document to be filed pursuant to the 1934 Act which will be
incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement, the
Prospectus or the Prospectus Supplement relating in any way to the offer and
sale of the Offered Securities, (iv) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose.
(c) Notice of Certain Proposed Filings. The Company will give you
notice of its intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the Prospectus,
whether by the filing of documents pursuant to the 1934 Act, the 1933 Act
or otherwise, and will furnish you with copies of any such amendment or
supplement or other documents proposed to be filed or prepared a reasonable
time in advance of such proposed filing or preparation, as the case may be.
(d) Copies of the Registration Statement and the Prospectus. The
Company will deliver to you as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as you may reasonably
request. The Company will furnish to you as many copies of the Prospectus (as
amended or supplemented) as you shall reasonably request so long as you are
required to deliver a Prospectus in connection with sales or solicitations of
offers to purchase the Offered Securities.
(e) Revisions of Prospectus -- Material Changes. If at any time when
the Prospectus is required by the 1933 Act to be delivered in connection with
sales of the Offered Securities any event shall occur or condition exist as a
result of which it is necessary, in the reasonable opinion of counsel for the
Company, to further amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of such counsel, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations the Company will
promptly prepare and file with the Commission such amendment or supplement,
whether by filing documents pursuant to the 1934 Act, the 1933 Act or
otherwise, as may be necessary to correct such untrue statement or omission or
to make the Registration Statement and Prospectus comply with such
requirements.
(f) Earnings Statements. The Company will make generally available to
its security holders as soon as practicable after the close of the period
covered thereby, an earnings statement (in form complying with the provisions
of Rule 158 under the 1933 Act) covering each twelve-month period beginning,
in each case, not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in such Rule 158) of the
Registration Statement with respect to each sale of Offered Securities.
(g) Blue Sky Qualifications. The Company will endeavor, in
cooperation with you, to qualify the Offered Securities for offering and sale
under the applicable securities laws of such states and other jurisdictions of
the United States as the Underwriters may designate, and will maintain such
qualifications in effect for so long as may be required for the distribution
of the Offered Securities; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or to subject itself to taxation as doing business in any
jurisdiction in which it is not otherwise required to be so qualified. The
Company will file such statements and reports as may be required by the laws
of each jurisdiction in which the Offered Securities have been qualified as
provided above.
(h) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act.
(i) Stand-Off Agreement. The Company will not, between the date of
this Agreement and the Closing Time, without your consent, offer or sell, or
enter into any agreement to sell, any debt securities of the Company pursuant
to a public offering of securities registered under the 1933 Act (other than
the Offered Securities which are to be sold pursuant hereto and commercial
paper in the ordinary course of business).
SECTION 4. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) the preparation and filing of the Registration Statement and all
amendments thereto, the Preliminary Prospectus, if any, and the Prospectus and
any amendments or supplements thereto;
(ii) the filing of this Agreement;
(iii) the preparation, issuance and delivery of the Offered Securities;
(iv) the reasonable fees and disbursements of the Company's
accountants and counsel, of the Trustee and its counsel, and of any
registrar, paying agent and authenticating agent;
(v) the qualification of the Offered Securities under securities laws
in accordance with the provisions of Section 3(g), including filing fees and
the reasonable fees and disbursements of counsel to the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Survey and any Legal Investment Survey;
(vi) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Prospectus and any amendments or supplements thereto, and
the delivery by the Underwriters of the Prospectus and any amendments or
supplements thereto in connection with solicitations or confirmations of sales
of the Offered Securities;
(vii) the preparation and delivery to the Underwriters of copies of the
Indenture; and
(viii) any fees charged by rating agencies for the rating of the Offered
Securities.
If this Agreement is terminated by you in accordance with the provisions
of Section 5 or clause (i) of Section 9 hereof, the Company shall reimburse
upon demand the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the
Underwriters that shall have been incurred by you in connection with the
proposed purchase and sale of the Offered Securities.
SECTION 5. Conditions of Underwriters' Obligations.
The several obligations of the Underwriters to purchase the Offered
Securities pursuant to this Agreement will be subject at all times to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in
any certificate furnished pursuant to the provisions hereof, to the
performance and observance by the Company of all covenants and agreements
contained herein, or in Schedule II hereto, on its part to be performed and
observed and to the following additional conditions precedent:
(a) Stop Order; Ratings Change; etc. At the Closing Time, (i) no stop
order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission, (ii) the rating assigned as of the date of this Agreement
by any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g) under the 1933 Act Regulations, to any
debt securities of the Company (including for purposes of this Section
5(a)(ii) any rating indicated by the Company as of the date of this Agreement
as the rating orally confirmed to the Company by any such rating organization
as the rating to be assigned to the Offered Securities) shall not have been
lowered since the execution of this Agreement nor shall any such rating
organization have publicly announced that it has placed any debt securities of
the Company on what is commonly termed a "watch list" for possible
downgrading, and (iii) there shall not have come to your attention any facts
that would cause you to believe that the Prospectus, including the Prospectus
Supplement, at the time it was required to be delivered to a purchaser of the
Offered Securities, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not misleading.
(b) Legal Opinions. At the Closing Time, you shall have received the
following documents:
(1) Opinion of Company Counsel. The opinion of the Executive Vice
President, General Counsel and Secretary of the Company or any Vice President
in the Legal and Regulatory Division of the Company, dated as of such date, in
form and substance reasonably satisfactory to you, to the effect as set forth
in Exhibit B.
(2) Opinion of Counsel to the Underwriters. The opinion of
__________________________________, counsel to the Underwriters, with respect
to such matters as you may reasonably request.
(c) Officer Certificate. At the Closing Time, there shall not have
been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition (financial or otherwise) of the Company, or in the earnings or
business affairs of the Company; and you shall have received a certificate of
any Vice President of the Company, dated as of the Closing Time, to the effect
(i) that there has been no such material adverse change, (ii) that the other
representations and warranties of the Company contained in Section 1 are true
and correct with the same force and effect as though expressly made at and as
of the date of such certificate, except to the extent that such
representations and warranties expressly relate to an earlier date or later
date (in which case such representations and warranties are true and correct
on and as of such earlier date or will be true and correct on and as of such
later date, as the case may be), (iii) that the Company has made or caused to
be made any required filing of the Prospectus pursuant to Rule 424(b) in the
manner and within the time period required by Rule 424(b), and (iv) that the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the date of such certificate.
The officer signing and delivering this certificate may rely upon the best of
his or her knowledge as to proceedings threatened.
(d) Comfort Letter. At the time of the execution of this Agreement
and at the Closing Time, you shall have received a letter from Arthur Andersen
LLP or their successors as the Company's independent accountants (the
"Independent Accountants"), dated as of the date hereof and of the Closing
Time, as the case may be, in form and substance satisfactory to you to the
effect that:
(i) they are independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations;
(ii) in their opinion the Company's financial statements and schedules
included or incorporated by reference in the Registration Statement and
Prospectus and covered by their reports included or incorporated therein
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act and
the 1934 Act Regulations, as the case may be;
(iii) they have conducted reviews of the unaudited interim consolidated
financial information of the Company included in the Company's Quarterly
Reports on Form 10-Q incorporated in the Registration Statement and Prospectus
in compliance with the standards for such reviews promulgated by the American
Institute of Certified Public Accountants;
(iv) on the basis of a reading of the financial statements and
schedules of the Company included or incorporated in the Prospectus and the
Registration Statement, and the latest available unaudited interim financial
statements of the Company, inquiries of officials of the Company responsible
for financial and accounting matters, and other specified procedures and
inquiries, nothing has come to their attention that caused them to believe
that:
(A) the unaudited financial statements of the Company included or
incorporated in the Prospectus and the Registration Statement do not comply as
to form in all material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations or the 1934 Act and the 1934 Act
Regulations thereunder, as the case may be, or that such unaudited financial
statements are not presented fairly in conformity with generally accepted
accounting principles;
(B) with respect to the period subsequent to the date of the most
recent financial statements incorporated in the Registration Statement and the
Prospectus, as of a specified date not more than five business days prior to
the date of delivery of such letter, there has been any change in the common
or preferred stock or long-term debt of the Company or, as of such date, there
has been any decrease in assets or common stockholders' investment, in each
case as compared with amounts shown in the most recent consolidated balance
sheet of the Company included or incorporated in the Registration Statement
and the Prospectus, except in each case for changes or decreases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; or
(C) for the period from the date of the most recent financial
statements incorporated in the Registration Statement and the Prospectus to
such specified date, there was any decrease in operating revenues, operating
income, income before taxes or net income of the Company in each case as
compared with the comparable period of the preceding year, except in each case
for decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(v) in addition to their audit referred to in their reports included
or incorporated by reference in the Registration Statement and the Prospectus
and the reviews, inquiries and procedures referred to in clauses (iii) and
(iv) above, such letter shall state that Arthur Andersen LLP has performed
other specified procedures, with respect to certain numerical data and
information included or incorporated in the Registration Statement and the
Prospectus, as are requested by an Underwriter and specified in such letter
and have found such data and information to be in agreement with the
accounting records of or analyses prepared by the Company.
(e) Other Documents. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as
such counsel may reasonably require for the purpose of enabling such counsel
to pass upon the issuance and sale of Offered Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the fulfillment
of any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of Offered Securities as
herein contemplated shall be satisfactory in form and substance to you.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, arising out of any untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), or the omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of or based upon any
untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever arising out of or based
upon any such untrue statement or omission, if such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever arising out of or based upon any such untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto), or made in reliance upon the Statements
of Eligibility and Qualification of Trustees (Form T-1) under the 1939 Act
filed as exhibits to the Registration Statement; and provided, further, that
the foregoing indemnity agreement, with respect to any Preliminary Prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased Offered
Securities, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Offered Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions made in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriters through you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it
may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 6 is for any reason
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company and the Underwriters of each offering
of Offered Securities shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and one or more of the Underwriters in
respect of such offering, as incurred, in such proportions that the
Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of the Prospectus
in respect of such offering bears to the initial public offering price
appearing thereon and the Company is responsible for the balance; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive each
delivery of and payment for any of the Offered Securities.
SECTION 9. Termination of Agreement.
You may terminate this Agreement, immediately upon notice to the
Company, at any time prior to the Closing Time if: (i) there has been, since
the date hereof or since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Company,
(ii) there shall have occurred any material adverse change in the financial
markets in the United States or any outbreak or escalation of hostilities or
other national or international calamity or crisis, the effect of which shall
be such as to make it, in your judgment, impracticable to market the Offered
Securities or enforce contracts for the sale of the Offered Securities, or
(iii) trading in any securities of the Company shall have been suspended by
the Commission or a national securities exchange, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange shall have
been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, by
either of said exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium shall have been declared by
either federal or New York authorities.
In the event of any termination of this Agreement, the covenant set
forth in Section 3(f) hereof, the provisions of Section 4 hereof, the
indemnity and contribution agreements set forth in Sections 6 and 7 hereof,
and the provisions of Sections 8 and 13 hereof shall remain in effect.
SECTION 10. Default by One Underwriter.
If any Underwriter shall fail at the Closing Time to purchase the
Offered Securities which it is obligated to purchase hereunder (the "Defaulted
Securities"), and the aggregate amount of Defaulted Securities is not more
than one-tenth of the aggregate amount of the Offered Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the amount of the Offered Securities set forth opposite
their respective names in Schedule I hereto bears to the aggregate amount of
Offered Securities set forth opposite the names of all such non-defaulting
underwriters to purchase the Defaulted Securities; provided that in no event
shall the amount of Defaulted Securities that any Underwriter has agreed to
purchase pursuant to this Agreement be increased by an amount in excess of
one-ninth of such amount of Offered Securities without the written consent of
such Underwriter. If the aggregate amount of Defaulted Securities is more
than one-tenth of the aggregate amount of the Offered Securities to be
purchased on the Closing Date, and arrangements satisfactory to the
Underwriters and the Company for the purchase of such Defaulted Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriters or the
Company.
No action taken pursuant to this Section shall relieve a defaulting
Underwriter from liability in respect of its default under this Agreement.
In the event of any such default which does not result in a termination
of this Agreement, either the non-defaulting Underwriters or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed, delivered by Federal
Express service or transmitted by any facsimile communication. Notices to the
Underwriters shall be directed to _______________________________________,
with copies thereof directed to _________________________________________
________________________________________________. Notices to the Company
shall be directed to it at 2007 Corporate Avenue, Memphis, Tennessee 38132 (if
by Federal Express service) or P.O. Box 727, Memphis, Tennessee 38194 (if by
mail), Attention: Vice President and Treasurer, with copies thereof directed
to the Legal Department of the Company at 1980 Nonconnah Drive, Memphis,
Tennessee 38132 (if by Federal Express Service) or P.O. Box 727, Memphis,
Tennessee 38194 (if by mail), Attention: Managing Director - Securities and
Corporate Law.
SECTION 12. Parties
This Agreement shall inure to the benefit of and be binding upon you and
the Company and any Underwriter who becomes a party hereto and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto their respective successors
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Offered Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law.
This Agreement and the rights and obligations of the parties created
hereby and thereby shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be
performed in such state. Any suit, action or proceeding brought by the
Company against an Underwriter in connection with or arising under this
Agreement shall be brought solely in the state or federal court of appropriate
jurisdiction located in the Borough of Manhattan, The City of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between you and the Company in accordance with its terms.
Very truly yours,
FEDERAL EXPRESS CORPORATION
By: _________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
[UNDERWRITERS]
By:
By: ___________________________________
Name:
Title:
Acting on behalf of themselves and the
other named Underwriters
Exhibit A
FEDERAL EXPRESS CORPORATION
Debt Securities
Underwriting
Final Aggregate Discount
Purchase Interest Distribution Principal and
Designation Price Rate Date Amount Commissions
- ----------- -------- -------- ------------ --------- -----------
$ % $ %
Exhibit B
Form of Opinion of Company Counsel
____________, ______
[UNDERWRITERS]
Re: Federal Express Corporation
Debt Securities (the "Offered Securities")
Ladies and Gentlemen:
This opinion is directed to the Underwriters pursuant to Section 5(b)(1)
of the Underwriting Agreement dated ________________, ______ (the
"Underwriting Agreement"), among the Company and you, with respect to the
offer and sale of the Offered Securities. All terms defined or used in the
Underwriting Agreement have the same meaning when used herein, unless
otherwise noted.
I am Vice President ________ of the Company and have acted as such in
connection with the Offered Securities and the Underwriting Agreement. I or
attorneys under my supervision have made such examination and investigation as
we have deemed necessary in order to give the following opinion.
Based on the foregoing, it is my opinion that:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority under such laws to own its properties and to
conduct its business as described in the Prospectus; the Company is duly
qualified to do business and is in good standing in each jurisdiction in which
it owns or leases real property or in which the conduct of its business
requires such qualification, except for such instances which in the aggregate
will not have a material adverse effect on the Company;
(ii) Each subsidiary of the Company which is a significant subsidiary
as defined in Rule 405 of Regulation C of the 1933 Act Regulations (each a
"Significant Subsidiary") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement, and, to the best of my knowledge, is duly qualified to do business
and is in good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; all of the issued and outstanding capital stock
of each Significant Subsidiary has been duly authorized and validly issued and
is fully paid and non-assessable, and all of such capital stock, except for
directors' qualifying shares, is owned by the Company, directly or through
subsidiaries, free and clear of any mortgage, pledge, lien, encumbrance, claim
or equity;
(iii) Except for matters described in the Prospectus (as to which I can
express no opinion at this time concerning the Company's liability (if any) or
the effect of any adverse determination upon the business, condition
(financial or otherwise) or operations of the Company), there is no pending,
or to my knowledge, threatened action or proceeding before any court or
administrative agency which individually (or in the aggregate in the case of
any group of related lawsuits) is expected to have a material adverse effect
on the financial condition of the Company or the ability of the Company to
perform its obligations under the Indenture;
(iv) The Indenture has been duly qualified under the 1939 Act and duly
and validly authorized, executed and delivered by the Company and (assuming
the Indenture has been duly authorized, executed and delivered by the Trustee)
constitutes a valid and binding agreement of the Company, enforceable in
accordance with its terms;
(v) The Offered Securities are in due and proper form and have been
duly and validly authorized by all necessary corporate action and, when
executed and authenticated as specified in the Indenture and delivered against
payment of the consideration therefor determined in accordance with the
Underwriting Agreement, will be valid and binding obligations of the Company,
enforceable in accordance with their terms, and each holder of the Offered
Securities will be entitled to the benefits of the Indenture;
(vi) The Company possesses all permits, approvals, franchises and
other rights from federal aviation, aeronautical, communications,
transportation and shipping authorities which are requisite for the conduct
of its business as described in the Prospectus or for the actions
contemplated by the Underwriting Agreement and the offering contemplated by
the Prospectus; and the actions contemplated by the Underwriting Agreement,
the Indenture and the offering contemplated by the Prospectus, are not in
violation of any federal statute or regulation relating to aviation,
aeronautics, communications, transportation or shipping;
(vii) I have reviewed or caused to be reviewed by attorneys under my
supervision the Registration Statement, the Prospectus and each amendment and
supplement thereto (including the documents incorporated by reference) and
have no reason to believe that, as of their respective effective or issue
dates, or as of the Closing Time, either the Registration Statement or the
Prospectus or any such amendment or supplement (or any such documents
incorporated by reference) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading;
(viii) I do not know of any statute or regulation or legal or
governmental proceeding required to be described in the Prospectus which is
not described as required, nor of any contract or document of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which is not described and
filed as required; and the descriptions in the Registration Statement and the
Prospectus of the contracts and other documents therein described are accurate
and fairly present the information required to be shown;
(ix) The execution and delivery by the Company of the Underwriting
Agreement and the consummation by the Company of the transactions herein and
therein contemplated and compliance with the terms of the Underwriting
Agreement do not and will not conflict with or result in a breach of any of
the terms of the Certificate of Incorporation or By-laws of the Company, and
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan, credit or note agreement, lease or other agreement or instrument
material to the Company to which the Company is a party or by which it or any
or its properties are bound, or any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality or
court, having jurisdiction over the Company or any of its properties;
(x) No authorization, approval, consent or license of any regulatory
body or authority (other than under the 1933 Act, the 1939 Act and the
securities or Blue Sky laws of the various states) is required for the valid
authorization, issuance, sale and delivery of the Offered Securities as herein
contemplated or the valid authorization, execution, delivery and performance
by the Company of the Underwriting Agreement and the Indenture or the
consummation by the Company of the transactions contemplated herein or
therein, or, if so required, all such authorizations, approvals, consents and
licenses, specifying the sale, have been obtained and are in full force and
effect;
(xi) The Registration Statement has become effective under the 1933
Act and, to the best of my knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the 1933 Act; the Registration Statement and the
Prospectus, and each amendment or supplement thereto (except for the
financial statements and schedules included therein, as to which I express
no opinion), comply as to form in all material respects to the requirements
of the 1933 Act and the 1933 Act Regulations and, as to documents
incorporated therein, to the requirements of the 1934 Act and the 1934 Act
Regulations in effect at the time such documents were filed with the
Commission; and
(xii) The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms.
My opinions as to the enforceability of the Indenture, the Offered
Securities and Underwriting Agreement set forth in subparagraphs (iv), (v) and
(xii) above, are limited by bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting enforcement of
creditors' rights or by general equity principles and subject to any
principles of public policy limiting the right to enforce the indemnification
and contribution provisions contained in Sections 6 and 7 of the Underwriting
Agreement.
In rendering the foregoing opinion, we have assumed that (i) all
signatures on all documents examined by us are genuine and that where any such
signature (other than a signature purporting to have been made on behalf of
the Company) purports to have been made in a corporate, governmental,
fiduciary or other capacity, the person who affixed such signature had the due
authority to do so, (ii) certain factual matters contained in certificates of
public officials are accurate, true and correct, and (iii) photostat copies of
such documents, records and certificates conform to the originals.
This opinion is intended solely for the benefit of the Underwriters and
is not to be relied on by, and no copies of it are to be delivered to, any
other person without my prior written consent, except that Underwriters'
counsel may rely upon this opinion as to all matters of Tennessee law or
Delaware corporate law in rendering its opinion of even date herewith. I am
not assuming any professional responsibility to any other person by rendering
this opinion. It is understood that this opinion speaks as of the date given,
notwithstanding any delivery as contemplated above on any other date.
Very truly yours,
Schedule I
to
Underwriting
Agreement
Dated: ________, ______
FEDERAL EXPRESS CORPORATION
Debt Securities
Total
Aggregate
Principal
Amount
to be
Underwriters Purchased
------------ ---------
$
Schedule II
to
Underwriting Agreement
Dated: ________, ______
FEDERAL EXPRESS CORPORATION
[Title of Debt Securities]
To: Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Re: Underwriting Agreement dated ______________, _______
Title of Offered Securities:__ % Debt Securities due ____________, ______
Current ratings:
Interest rate: %
Interest payable: ____________ and ____________ commencing ___________, _____
Public offering price: 100%, plus accrued interest from ___________, ______
Closing date, time and
location: ____________, ______, 9:00 A.M., New York City time
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Location for checking
Offered Securities: New York, New York
Listing requirement: None
Redemption or repayment provisions:
Sinking fund requirements:
Number of Option Securities, if any, that may be
purchased by the Underwriters:
Other terms and conditions:
The Offered Securities will be issued in fully registered,
book-entry only form through the facilities of The Depository
Trust Company, and each issue of the Offered Securities shall
be represented by a separate global note.
Exceptions, if any, to Section 3(i) of the
Underwriting Agreement: None
[UNDERWRITERS]
By:
By:
______________________________
Name:
Title:
Acting on behalf of
themselves and the
other named Underwriters
Accepted:
FEDERAL EXPRESS CORPORATION
By: _______________________________
Name:
Title:
Exhibit 1(d)
Underwriting Agreement
Dated as of
______________, 199__
between
FEDERAL EXPRESS CORPORATION
and
[UNDERWRITERS]
PREFERRED STOCK
TABLE OF CONTENTS
Page
----
SECTION 1. Representations & Warranties of the Company.............. 2
SECTION 2. Purchase and Sale........................................ 6
SECTION 3. Covenants of the Company................................. 7
SECTION 4. Payment of Expenses...................................... 9
SECTION 5. Conditions of Underwriters' Obligations.................. 10
SECTION 6. Indemnification.......................................... 13
SECTION 7. Contribution............................................. 14
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery.................................... 15
SECTION 9. Termination of Agreement................................. 15
SECTION 10. Default by One Underwriter............................... 16
SECTION 11. Notices.................................................. 16
SECTION 12. Parties.................................................. 17
SECTION 13. Governing Law............................................ 17
Exhibit A Pricing Information
Exhibit B Opinion of the Company
Schedule I Underwriters' Commitments
Schedule II Terms and Conditions
FEDERAL EXPRESS CORPORATION
Preferred Stock
UNDERWRITING AGREEMENT
____________, 199__
[UNDERWRITERS]
[ADDRESS]
Ladies and Gentlemen:
Federal Express Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule I hereto
____________________ shares of its Preferred Stock (the "Preferred Stock") in
one or more offerings on the terms and conditions stated herein and in
Schedule II hereto (the "Offered Preferred Stock").
As used herein, unless the context otherwise requires, the term
"Underwriters" shall mean the firm or firms named as Underwriter or
Underwriters in Schedule I and the term "you" shall mean the Underwriter or
Underwriters, if no underwriting syndicate is purchasing the Offered
Preferred Stock, or the representative or representatives of the
Underwriters, if an underwriting syndicate is purchasing the Offered
Preferred Stock, as indicated in Schedule I.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-________) for the
registration of certain preferred stock and other securities, including the
Offered Preferred Stock, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations"). Such registration statement has been declared
effective by the Commission.
The Company has, pursuant to Rule 424 under the 1933 Act, filed with, or
transmitted for filing to, or shall within the required period of time
hereafter file with or transmit for filing to, the Commission a prospectus
supplement (the "Prospectus Supplement") specifically relating to the
Offered Preferred Stock, together with a revised and restated prospectus
relating to preferred stock covered by the above-referenced registration
statement.
The term "Registration Statement" refers to such registration statement in
the form in which it became effective, including the exhibits thereto and the
documents incorporated by reference therein, as amended to the date hereof.
The term "Basic Prospectus" means the above-referenced revised and restated
prospectus relating to Preferred Stock. The term "Prospectus" means the Basic
Prospectus supplemented by the Prospectus Supplement. The term "Preliminary
Prospectus" means a preliminary prospectus supplement specifically relating to
the Offered Preferred Stock together with the Basic Prospectus. As used
herein, the terms "Basic Prospectus," "Prospectus" and "Preliminary
Prospectus" shall include in each case the documents, if any, incorporated
by reference therein. The terms "supplement" and "amendment" or "amend" as
used herein shall include all documents deemed to be incorporated by
reference in the Prospectus that have been filed subsequent to the date of
the Basic Prospectus by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act").
If the Company has filed an abbreviated statement to register additional
shares of Preferred Stock pursuant to Rule 462(b) under the 1933 Act, then any
reference herein to the term "Registration Statement" shall include such Rule
462(b) registration statement.
SECTION 1. Representations and Warranties of the Company.
(a) The Company represents and warrants to you and to each Underwriter
named in Schedule I, as of the date hereof, as follows:
(i) Due Incorporation and Qualification. The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware, has the corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; and is duly qualified to do business and is in
good standing in each jurisdiction in which such qualification is required,
except where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries considered
as one enterprise.
(ii) Subsidiaries. Each subsidiary of the Company which is a significant
subsidiary as defined in Rule 405 of Regulation C of the 1933 Act Regulations
(each a "Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify would not
have a material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, except
for directors' qualifying shares (except as otherwise stated in the
Registration Statement) , is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(iii) Registration Statement and Prospectus. At the time the Registration
Statement became effective, the Registration Statement complied, and as of
the date hereof does comply, in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and the rules and regulations
of the Commission promulgated thereunder.
The Registration Statement, at the time it became effective, did not,
and at each time thereafter at which any amendment to the Registration
Statement becomes effective, will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
The Prospectus, as of the date hereof, does not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by an
Underwriter expressly for use in the Registration Statement or Prospectus or
to those parts of the Registration Statement which constitute Statements of
Eligibility and Qualification of Trustees (Form T-1) under the 1939 Act.
No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(iv) Incorporated Documents. The documents incorporated by reference in the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations promulgated
thereunder (the "1934 Act Regulations") , and, when read together and with the
other information in the Prospectus, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were or are made, not misleading.
(v) Accountants. The accountants who certified the financial statements
included or incorporated by reference in the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The financial statements of the Company included
or incorporated by reference in the Prospectus and the Registration
Statement present fairly the financial position of the Company as of the dates
thereof and the results of operations, changes in common stockholders'
investment and cash flows of the Company, for the respective periods covered
thereby, all in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved; and the
financial schedules included or incorporated by reference in the
Registration Statement meet the requirements of the 1933 Act Regulations or
the 1934 Act Regulations, as applicable.
(vii) Material Changes or Material Transactions. Except as stated in the
Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company has not
incurred any liabilities or obligations, direct or contingent, or entered
into any transactions which are material to the Company, and there has not
been any material adverse change in the capital stock or short-term debt, or
any material increase in long- term debt of the Company, or any material
adverse change, or any development involving a prospective material adverse
change, in the condition (financial or other) , business, prospects, net
worth or results of operations of the Company.
(viii) No Defaults; Regulatory Approvals. Neither the Company nor
any of its subsidiaries is in violation of its charter or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which it or any of them or their properties may be bound.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein and in the resolution of the Company's Board
of Directors setting forth the terms of the Offered Preferred Stock (the
"Series Resolution") have been duly authorized by all necessary corporate
action and executed by the Company and will not conflict with or constitute
a breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or any
such subsidiary is a party or by which it or any of them may be bound or to
which any of the property or assets of the Company or any such subsidiary is
subject, which conflict, breach or default would have, individually or in
the aggregate with any other such instances, a material adverse effect on
the condition (financial or other) , business, prospects, net worth or
results of operations of the Company and its subsidiaries considered as one
entity, nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any law, administrative regulation or
administrative or court order or decree currently in effect or in effect at
the time of execution and delivery of this Agreement and applicable to the
Company or any of its subsidiaries.
No consent, approval, authorization, order or decree of any court or
governmental agency or body is required for the consummation by the Company
of the transactions contemplated by this Agreement, except such as may be
required under the 1933 Act, the 1933 Act Regulations or state securities or
Blue Sky laws and the filing of the Series Resolution in Delaware.
(ix) Legal Proceedings; Contracts. Except for matters described in the
Prospectus (as to which the Company can express no opinion at this time
concerning the Company's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of the Company) , there is no pending, or to the best knowledge of
any financial officer of the Company, threatened action or proceeding before
any court or administrative agency which individually (or in the aggregate
in the case of any group of related lawsuits) is expected to have a material
adverse effect on the financial condition of the Company.
(x) Compliance with Laws. The Company's business and operations comply in
all material respects with all laws and regulations applicable thereto and
there are no known, proposed or threatened changes in any laws or regulations
which would have a material adverse effect on the Company or the manner in
which it conducts its business. The Company possesses all valid and effective
certificates, licenses and permits required to conduct its business as now
conducted, except for instances which individually or in the aggregate do not,
or will not, have a material adverse effect on the condition (financial or
other) , business, prospects or results of operations of the Company.
(xi) Capital Stock. The authorized capital stock of the Company and the
provisions of the Series Resolution conform as to legal matters to the
descriptions thereof contained in the Prospectus.
(xii) Validity of the Offered Preferred Stock. The Offered Preferred Stock
has been duly authorized and, when issued and delivered in accordance with
the terms of this Agreement, will be validly issued, fully paid and non-
assessable, and the issuance of such shares will not be subject to any
preemptive or similar rights.
(xiii) Registration Rights. There are no contracts or agreements
between the Company and any person granting such person the right to
require the Company to file a registration statement under the 1933 Act
with respect to any equity securities of the Company or to require the
Company to include such securities with the Preferred Stock registered
pursuant to the Registration Statement.
(b) Additional Certifications. Any certificate signed by any officer
of the Company and delivered to you or your counsel in connection with an
offering of the Offered Preferred Stock shall be deemed a representation and
warranty by the Company to each Underwriter participating in such offering as
to the matters covered thereby on the date of such certificate unless
subsequently amended or supplemented subsequent thereto.
SECTION 2. Purchase and Sale.
(a) Subject to the terms and conditions set forth herein and in
Schedule II, if any, the Company agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company,
at the purchase price specified in Exhibit A hereto, the respective numbers of
shares of Offered Preferred Stock set forth opposite the name of such
Underwriter in Schedule I. It is understood that you propose to offer the
Offered Preferred Stock for sale to the public as set forth in the Prospectus.
(b) Subject to the terms and conditions herein set forth, the Company
may grant, if so provided in Schedule II hereto, an option to the
Underwriters, severally and not jointly, to purchase additional shares of
Preferred Stock to cover over-allotments, if any (the "Option Shares"). If
Schedule II so provides, the Underwriters may purchase up to the amount of
Option Shares set forth therein at the same price per share as is applicable
to the Offered Preferred Stock. As used herein, the term "Offered Preferred
Stock" shall include Option Shares. Such option, if granted, will expire 30
days after the date of this Agreement, and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering of the Offered Preferred Stock
upon notice by you to the Company setting forth the number of Option Shares as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Shares.
Any such time and date of delivery shall be determined by you, but shall
not be later than four business days and not be earlier that two business days
after the exercise of said option, nor in any event prior to Closing Time,
unless otherwise agreed upon by you and the Company.
If the option is exercised as to all or any portion of the Option
Shares, each Underwriter, acting severally and not jointly, will purchase that
proportion of the total number of Option Shares then being purchased which the
number of shares of Offered Preferred Stock each such Underwriter has agreed
to purchase as set forth in Schedule II bears to the total number of shares of
Offered Preferred Stock, subject to such adjustments as you shall make to
eliminate any sales or purchases of fractional shares of Preferred Stock.
(c) Payment of the purchase price for any Offered Preferred Stock to
be purchased by the Underwriters shall be made to the Company at either the
Company's offices in Memphis, Tennessee or the office of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017, or at such other
place as shall be agreed upon by you and the Company, at 9:00 A.M., New York
City time, on the third business day (unless postponed in accordance with the
provisions of Section 10) following the date hereof or at such other date,
time or location specified in Schedule II, or as otherwise shall be agreed
upon by you and the Company (such time and date being referred to as a
"Closing Time").
Certificates for the Offered Preferred Stock shall be in definitive form
and registered in such names and in such denominations as you shall request in
writing at least two business days prior to the Closing Time. Delivery of
the Offered Preferred Stock shall be made to you as specified in Schedule II
against payment by you of the purchase price thereof to the Company (or such
other person as the Company may direct) by wire transfer of immediately
available funds. Such Offered Preferred Stock will be made available for
examination and packaging by you in New York, New York, on or before the first
business day prior to the Closing Time or at such other time and place
specified in Schedule II.
(d) As compensation to you for your commitments and obligations
hereunder in respect of the Offered Preferred Stock, including your
undertakings to distribute Offered Preferred Stock, the Company will pay to
you the amount set forth in Exhibit A as the underwriting discounts and
commissions. Such payment shall be made simultaneously with the payment by
you of the purchase price of the Offered Preferred Stock as specified in
Section 2(b) hereof. Payment of such compensation shall be made by wire
transfer of immediately available funds.
SECTION 3. Covenants of the Company.
The Company covenants with each of you, and with each Underwriter
participating in the offering as follows:
(a) Prospectus Supplement. The Company has prepared a Preliminary
Prospectus, and immediately following the execution of this Agreement, the
Company will prepare a Prospectus Supplement in connection with the offering
of the Offered Preferred Stock. The Company will promptly transmit copies of
the Prospectus Supplement to the Commission for filing pursuant to Rule 424 of
the 1933 Act Regulations.
(b) Notice of Certain Events. The Company will notify you promptly
(i) of the effectiveness of any amendment to the Registration Statement, (ii)
of the transmittal to the Commission for filing of any supplement to the
Prospectus or any document to be filed pursuant to the 1934 Act which will be
incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement, the
Prospectus or the Prospectus Supplement relating in any way to the offer and
sale of the Offered Preferred Stock, (iv) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose.
(c) Notice of Certain Proposed Filings. The Company will give you
notice of its intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the Prospectus,
whether by the filing of documents pursuant to the 1934 Act, the 1933 Act
or otherwise, and will furnish you with copies of any such amendment or
supplement or other documents proposed to be filed or prepared a reasonable
time in advance of such proposed filing or preparation, as the case may be.
(d) Copies of the Registration Statement and the Prospectus. The
Company will deliver to you as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as you may reasonably
request. The Company will furnish to you as many copies of the Prospectus (as
amended or supplemented) as you shall reasonably request so long as you are
required to deliver a Prospectus in connection with sales or solicitations of
offers to purchase the Offered Preferred Stock.
(e) Revisions of Prospectus -- Material Changes. If at any time when
the Prospectus is required by the 1933 Act to be delivered in connection with
sales of the Offered Preferred Stock any event shall occur or condition exist
as a result of which it is necessary, in the reasonable opinion of counsel for
the Company, to further amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of such counsel, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations the Company will
promptly prepare and file with the Commission such amendment or supplement,
whether by filing documents pursuant to the 1934 Act, the 1933 Act or
otherwise, as may be necessary to correct such untrue statement or omission or
to make the Registration Statement and Prospectus comply with such
requirements.
(f) Earnings Statements. The Company will make generally available to
its security holders as soon as practicable after the close of the period
covered thereby, an earnings statement (in form complying with the provisions
of Rule 158 under the 1933 Act) covering each twelve-month period beginning,
in each case, not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in such Rule 158) of the
Registration Statement with respect to each sale of Offered Preferred Stock.
(g) Blue Sky Qualifications. The Company will endeavor, in
cooperation with you, to qualify the Offered Preferred Stock for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Underwriters may designate, and will
maintain such qualifications in effect for so long as may be required for the
distribution of the Offered Preferred Stock; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or to subject itself to
taxation as doing business in any jurisdiction in which it is not otherwise
required to be so qualified. The Company will file such statements and
reports as may be required by the laws of each jurisdiction in which the
shares of Offered Preferred Stock have been qualified as provided above.
(h) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act.
SECTION 4. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) the preparation and filing of the Registration Statement and all
amendments thereto, the Preliminary Prospectus, if any, and the Prospectus and
any amendments or supplements thereto;
(ii) the filing of this Agreement;
(iii) the preparation, issuance, printing and delivery of the Offered
Preferred Stock;
(iv) the reasonable fees and disbursements of the Company's accountants
and counsel, and of the transfer agent;
(v) the qualification of the Offered Preferred Stock under securities
laws in accordance with the provisions of Section 3(g), including filing fees
and the reasonable fees and disbursements of counsel to the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Survey and any Legal Investment Survey; and
(vi) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Prospectus and any amendments or supplements thereto.
If this Agreement is terminated by you in accordance with the provisions
of Section 5 or clause (i) of Section 9 hereof, the Company shall reimburse
upon demand the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the
Underwriters that shall have been incurred by you in connection with the
proposed purchase and sale of the Offered Preferred Stock.
SECTION 5. Conditions of Underwriters' Obligations.
The several obligations of the Underwriters to purchase the Offered
Preferred Stock pursuant to this Agreement will be subject at all times to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in
any certificate furnished pursuant to the provisions hereof, to the
performance and observance by the Company of all covenants and agreements
contained herein, or in Schedule II hereto, on its part to be performed and
observed and to the following additional conditions precedent:
(a) Stop Order; Ratings Change; etc. At the Closing Time, (i) no stop
order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission, (ii) the rating assigned as of the date of this Agreement
by any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g) under the 1933 Act Regulations, to any
debt securities of the Company shall not have been lowered since the execution
of this Agreement nor shall any such rating organization have publicly
announced that it has placed any debt securities of the Company on what is
commonly termed a "watch list" for possible downgrading, and (iii) there shall
not have come to your attention any facts that would cause you to believe that
the Prospectus, including the Prospectus Supplement, at the time it was
required to be delivered to a purchaser of the Offered Preferred Stock,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of
the circumstances existing at such time, not misleading.
(b) Legal Opinions. At the Closing Time, you shall have received the
following documents:
(1) Opinion of Company Counsel. The opinion of the Executive Vice
President, General Counsel and Secretary of the Company or any Vice President
in the Legal and Regulatory Division of the Company, dated as of such date, in
form and substance reasonably satisfactory to you, to the effect as set forth
in Exhibit B.
(2) Opinion of Counsel to the Underwriters. The opinion of
__________________________________, counsel to the Underwriters, with respect
to such matters as you may reasonably request.
(c) Officer Certificate. At the Closing Time, there shall not have
been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition (financial or otherwise) of the Company, or in the earnings or
business affairs of the Company; and you shall have received a certificate of
any Vice President of the Company, dated as of the Closing Time, to the effect
(i) that there has been no such material adverse change, (ii) that the other
representations and warranties of the Company contained in Section 1 are true
and correct with the same force and effect as though expressly made at and as
of the date of such certificate, except to the extent that such
representations and warranties expressly relate to an earlier date or later
date (in which case such representations and warranties are true and correct
on and as of such earlier date or will be true and correct on and as of such
later date, as the case may be), (iii) that the Company has made or caused to
be made any required filing of the Prospectus pursuant to Rule 424(b) in the
manner and within the time period required by Rule 424(b), and (iv) that the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the date of such certificate.
The officer signing and delivering this certificate may rely upon the best of
his or her knowledge as to proceedings threatened.
(d) Comfort Letter. At the time of the execution of this Agreement
and at the Closing Time, you shall have received a letter from Arthur Andersen
LLP or their successors as the Company's independent accountants (the
"Independent Accountants"), dated as of the date hereof and of the Closing
Time, as the case may be, in form and substance satisfactory to you to the
effect that:
(i) they are independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations;
(ii) in their opinion the Company's financial statements and schedules
included or incorporated by reference in the Registration Statement and
Prospectus and covered by their reports included or incorporated therein
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act and
the 1934 Act Regulations, as the case may be;
(iii) they have conducted reviews of the unaudited interim consolidated
financial information of the Company included in the Company's Quarterly
Reports on Form 10-Q incorporated in the Registration Statement and Prospectus
in compliance with the standards for such reviews promulgated by the American
Institute of Certified Public Accountants;
(iv) on the basis of a reading of the financial statements and
schedules of the Company included or incorporated in the Prospectus and the
Registration Statement, and the latest available unaudited interim financial
statements of the Company, inquiries of officials of the Company responsible
for financial and accounting matters, and other specified procedures and
inquiries, nothing has come to their attention that caused them to believe
that:
(A) the unaudited financial statements of the Company included or
incorporated in the Prospectus and the Registration Statement do not comply as
to form in all material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations or the 1934 Act and the 1934 Act
Regulations thereunder, as the case may be, or that such unaudited financial
statements are not presented fairly in conformity with generally accepted
accounting principles;
(B) with respect to the period subsequent to the date of the most
recent financial statements incorporated in the Registration Statement and the
Prospectus, as of a specified date not more than five business days prior to
the date of delivery of such letter, there has been any change in the common
or preferred stock or long-term debt of the Company or, as of such date, there
has been any decrease in assets or common stockholders' investment, in each
case as compared with amounts shown in the most recent consolidated balance
sheet of the Company included or incorporated in the Registration Statement
and the Prospectus, except in each case for changes or decreases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; or
(C) for the period from the date of the most recent financial
statements incorporated in the Registration Statement and the Prospectus to
such specified date, there was any decrease in operating revenues, operating
income, income before taxes or net income of the Company in each case as
compared with the comparable period of the preceding year, except in each case
for decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(v) in addition to their audit referred to in their reports included
or incorporated by reference in the Registration Statement and the Prospectus
and the reviews, inquiries and procedures referred to in clauses (iii) and
(iv) above, such letter shall state that Arthur Andersen LLP has performed
other specified procedures, with respect to certain numerical data and
information included or incorporated in the Registration Statement and the
Prospectus, as are requested by an Underwriter and specified in such letter
and have found such data and information to be in agreement with the
accounting records of or analyses prepared by the Company.
(e) Other Documents. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as
such counsel may reasonably require for the purpose of enabling such counsel
to pass upon the issuance and sale of Offered Preferred Stock as herein
contemplated and related proceedings, or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the fulfillment
of any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of Offered Preferred Stock as
herein contemplated shall be satisfactory in form and substance to you.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, arising out of any untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), or the omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of or based upon any
untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever arising out of or based
upon any such untrue statement or omission, if such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever arising out of or based upon any such untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto), or made in reliance upon the Statements
of Eligibility and Qualification of Trustees (Form T-1) under the 1939 Act
filed as exhibits to the Registration Statement; and provided, further, that
the foregoing indemnity agreement, with respect to any Preliminary Prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased Offered
Preferred Stock, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Offered Preferred Stock to such person, and if the Prospectus (as so amended
or supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions made in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriters through you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it
may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 6 is for any reason
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company and the Underwriters of each offering
of Offered Preferred Stock shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and one or more of the
Underwriters in respect of such offering, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus in respect of such offering bears to the initial public offering
price appearing thereon and the Company is responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive each
delivery of and payment for any of the Offered Preferred Stock.
SECTION 9. Termination of Agreement.
You may terminate this Agreement, immediately upon notice to the
Company, at any time prior to the Closing Time if: (i) there has been, since
the date hereof or since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Company,
(ii) there shall have occurred any material adverse change in the financial
markets in the United States or any outbreak or escalation of hostilities or
other national or international calamity or crisis, the effect of which shall
be such as to make it, in your judgment, impracticable to market the Offered
Preferred Stock or enforce contracts for the sale of the Offered Preferred
Stock, or (iii) trading in any securities of the Company shall have been
suspended by the Commission or a national securities exchange, or if trading
generally on either the American Stock Exchange or the New York Stock Exchange
shall have been suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, by either of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium shall have been
declared by either federal or New York authorities.
In the event of any termination of this Agreement, the covenant set
forth in Section 3(f) hereof, the provisions of Section 4 hereof, the
indemnity and contribution agreements set forth in Sections 6 and 7 hereof,
and the provisions of Sections 8 and 13 hereof shall remain in effect.
SECTION 10. Default by One Underwriter.
If any Underwriter shall fail at the Closing Time to purchase the
Offered Preferred Stock which it is obligated to purchase hereunder (the
"Defaulted Securities"), and the aggregate amount of Defaulted Securities is
not more than one-tenth of the aggregate amount of the Offered Preferred Stock
to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the amount of the Offered Preferred Stock
set forth opposite their respective names in Schedule I hereto bears to the
aggregate amount of Offered Preferred Stock set forth opposite the names of
all such non-defaulting underwriters to purchase the Defaulted Securities;
provided that in no event shall the amount of Defaulted Securities that any
Underwriter has agreed to purchase pursuant to this Agreement be increased by
an amount in excess of one-ninth of such amount of Offered Preferred Stock
without the written consent of such Underwriter. If the aggregate amount of
Defaulted Securities is more than one-tenth of the aggregate amount of the
Offered Preferred Stock to be purchased on the Closing Date, and arrangements
satisfactory to the Underwriters and the Company for the purchase of such
Defaulted Securities are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriters or the Company.
No action taken pursuant to this Section shall relieve a defaulting
Underwriter from liability in respect of its default under this Agreement.
In the event of any such default which does not result in a termination
of this Agreement, either the non-defaulting Underwriters or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed, delivered by Federal
Express service or transmitted by any facsimile communication. Notices to the
Underwriters shall be directed to _______________________________________,
with copies thereof directed to _________________________________________
________________________________________________. Notices to the Company
shall be directed to it at 2007 Corporate Avenue, Memphis, Tennessee 38132 (if
by Federal Express service) or P.O. Box 727, Memphis, Tennessee 38194 (if by
mail), Attention: Vice President and Treasurer, with copies thereof directed
to the Legal Department of the Company at 1980 Nonconnah Drive, Memphis,
Tennessee 38132 (if by Federal Express Service) or P.O. Box 727, Memphis,
Tennessee 38194 (if by mail), Attention: Managing Director - Securities and
Corporate Law.
SECTION 12. Parties
This Agreement shall inure to the benefit of and be binding upon you and
the Company and any Underwriter who becomes a party hereto and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto their respective successors
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Offered Preferred Stock from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law.
This Agreement and the rights and obligations of the parties created
hereby and thereby shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be
performed in such state. Any suit, action or proceeding brought by the
Company against an Underwriter in connection with or arising under this
Agreement shall be brought solely in the state or federal court of appropriate
jurisdiction located in the Borough of Manhattan, The City of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between you and the Company in accordance with its terms.
Very truly yours,
FEDERAL EXPRESS CORPORATION
By: _________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
[UNDERWRITERS]
By:
By: ___________________________________
Name:
Title:
Acting on behalf of themselves and the
other named Underwriters
Exhibit A
FEDERAL EXPRESS CORPORATION
Preferred Stock
Underwriting
Purchase Number of Shares to Discounts and
Designation Price be Purchased Commissions
- -------------- ---------- --------------------- ---------------
$ $ %
Exhibit B
Form of Opinion of Company Counsel
____________, ______
[UNDERWRITERS]
Re: Federal Express Corporation
Preferred Stock (the "Offered Preferred Stock")
Ladies and Gentlemen:
This opinion is directed to the Underwriters pursuant to Section 5(b)(1)
of the Underwriting Agreement dated ________________, ______ (the
"Underwriting Agreement"), among the Company and you, with respect to the
offer and sale of the Offered Preferred Stock. All terms defined or used in
the Underwriting Agreement have the same meaning when used herein, unless
otherwise noted.
I am Vice President ________ of the Company and have acted as such in
connection with the Offered Preferred Stock and the Underwriting Agreement. I
or attorneys under my supervision have made such examination and investigation
as we have deemed necessary in order to give the following opinion.
Based on the foregoing, it is my opinion that:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority under such laws to own its properties and to
conduct its business as described in the Prospectus; the Company is duly
qualified to do business and is in good standing in each jurisdiction in which
it owns or leases real property or in which the conduct of its business
requires such qualification, except for such instances which in the aggregate
will not have a material adverse effect on the Company;
(ii) Each subsidiary of the Company which is a significant subsidiary
as defined in Rule 405 of Regulation C of the 1933 Act Regulations (each a
"Significant Subsidiary") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement, and, to the best of my knowledge, is duly qualified to do business
and is in good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; all of the issued and outstanding capital stock
of each Significant Subsidiary has been duly authorized and validly issued and
is fully paid and non-assessable, and all of such capital stock, except for
directors' qualifying shares, is owned by the Company, directly or through
subsidiaries, free and clear of any mortgage, pledge, lien, encumbrance, claim
or equity;
(iii) Except for matters described in the Prospectus (as to which I can
express no opinion at this time concerning the Company's liability (if any) or
the effect of any adverse determination upon the business, condition
(financial or otherwise) or operations of the Company), there is no pending,
or to my knowledge, threatened action or proceeding before any court or
administrative agency which individually (or in the aggregate in the case of
any group of related lawsuits) is expected to have a material adverse effect
on the financial condition of the Company;
(iv) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(v) The Offered Preferred Stock has been duly authorized and, when
issued and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such shares
will not be subject to any preemptive or similar rights.
(vi) The Company possesses all permits, approvals, franchises and other
rights from federal aviation, aeronautical, communications, transportation and
shipping authorities which are requisite for the conduct of its business as
described in the Prospectus or for the actions contemplated by the
Underwriting Agreement and the offering contemplated by the Prospectus; and
the actions contemplated by the Underwriting Agreement and the offering
contemplated by the Prospectus, are not in violation of any federal statute or
regulation relating to aviation, aeronautics, communications, transportation
or shipping;
(vii) I have reviewed or caused to be reviewed by attorneys under my
supervision the Registration Statement, the Prospectus and each amendment and
supplement thereto (including the documents incorporated by reference) and
have no reason to believe that, as of their respective effective or issue
dates, or as of the Closing Time, either the Registration Statement or the
Prospectus or any such amendment or supplement (or any such documents
incorporated by reference) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading;
(viii)I do not know of any statute or regulation or legal or
governmental proceeding required to be described in the Prospectus which is
not described as required, nor of any contract or document of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which is not described and
filed as required; and the descriptions in the Registration Statement and the
Prospectus of the contracts and other documents therein described are accurate
and fairly present the information required to be shown;
(ix) The execution and delivery by the Company of the Underwriting
Agreement and the consummation by the Company of the transactions herein and
therein contemplated and compliance with the terms of the Underwriting
Agreement do not and will not conflict with or result in a breach of any of
the terms of the Certificate of Incorporation or By-laws of the Company, and
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan, credit or note agreement, lease or other agreement or instrument
material to the Company to which the Company is a party or by which it or any
or its properties are bound, or any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality or
court, having jurisdiction over the Company or any of its properties;
(x) No authorization, approval, consent or license of any regulatory
body or authority (other than under the 1933 Act and the securities or Blue
Sky laws of the various states) is required for the valid authorization,
issuance, sale and delivery of the Offered Preferred Stock as herein
contemplated or the valid authorization, execution, delivery and performance
by the Company of the Underwriting Agreement or the consummation by the
Company of the transactions contemplated herein or therein, or, if so
required, all such authorizations, approvals, consents and licenses,
specifying the sale, have been obtained and are in full force and effect;
(xi) The Registration Statement has become effective under the 1933 Act
and, to the best of my knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the 1933
Act; the Registration Statement and the Prospectus, and each amendment or
supplement thereto (except for the financial statements and schedules included
therein, as to which I express no opinion), comply as to form in all material
respects to the requirements of the 1933 Act and the 1933 Act Regulations and,
as to documents incorporated therein, to the requirements of the 1934 Act and
the 1934 Act Regulations in effect at the time such documents were filed with
the Commission; and
(xii) The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting enforcement of creditors' rights or by
general equity principles and subject to any principles of public policy
limiting the right to enforce the indemnification and contribution provisions
contained in Sections 6 and 7 of the Underwriting Agreement.
In rendering the foregoing opinion, we have assumed that (i) all
signatures on all documents examined by us are genuine and that where any such
signature (other than a signature purporting to have been made on behalf of
the Company) purports to have been made in a corporate, governmental,
fiduciary or other capacity, the person who affixed such signature had the due
authority to do so, (ii) certain factual matters contained in certificates of
public officials are accurate, true and correct, and (iii) photostat copies of
such documents, records and certificates conform to the originals.
This opinion is intended solely for the benefit of the Underwriters and
is not to be relied on by, and no copies of it are to be delivered to, any
other person without my prior written consent, except that Underwriters'
counsel may rely upon this opinion as to all matters of Tennessee law or
Delaware corporate law in rendering its opinion of even date herewith. I am
not assuming any professional responsibility to any other person by rendering
this opinion. It is understood that this opinion speaks as of the date given,
notwithstanding any delivery as contemplated above on any other date.
Very truly yours,
Schedule I
of
Underwriting
Agreement
Dated: ________, ______
FEDERAL EXPRESS CORPORATION
Preferred Stock
Underwriters Number of Shares to be Purchased
- --------------------------- ----------------------------------
$
Schedule II
to
Underwriting Agreement
Dated: ________, ______
FEDERAL EXPRESS CORPORATION
[Title of Preferred Stock]
To: Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Re: Underwriting Agreement dated ______________, _______
Title of Offered Preferred Stock:
Current ratings:
Public offering price:
Closing date, time and
location: ____________, ______, 9:00 A.M., New York City time
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Location for checking
Offered Preferred Stock: New York, New York
Redemption provisions:
Liquidation Preference:
Listing requirement: None
Number of Option Shares, if any, that may be
purchased by the Underwriters:
Other terms and conditions:
[UNDERWRITERS]
By:
By: ______________________________
Name:
Title:
Acting on behalf of themselves
and the other named
Underwriters
Accepted:
FEDERAL EXPRESS CORPORATION
By: _______________________________
Name:
Title:
Exhibit 1(e)
Underwriting Agreement
Dated as of
______________, 199__
between
FEDERAL EXPRESS CORPORATION
and
[UNDERWRITERS]
COMMON STOCK, par value $.10 per share
TABLE OF CONTENTS
Page
----
SECTION 1. Representations & Warranties of the Company............. 2
SECTION 2. Purchase and Sale....................................... 6
SECTION 3. Covenants of the Company................................ 8
SECTION 4. Payment of Expenses..................................... 10
SECTION 5. Conditions of Underwriters' Obligations................. 10
SECTION 6. Indemnification......................................... 14
SECTION 7. Contribution............................................ 15
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery................................... 16
SECTION 9. Termination of Agreement................................ 16
SECTION 10. Default by One Underwriter.............................. 16
SECTION 11. Notices................................................. 17
SECTION 12. Parties................................................. 17
SECTION 13. Governing Law........................................... 18
Exhibit A Pricing Information
Exhibit B Opinion of the Company
Exhibit C Form of Lock-up Letter
Schedule I Underwriters' Commitments
Schedule II Terms and Conditions
FEDERAL EXPRESS CORPORATION
Common Stock, par value $.10 per share
UNDERWRITING AGREEMENT
____________, 199__
[UNDERWRITERS]
[ADDRESS]
Ladies and Gentlemen:
Federal Express Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule I hereto
____________________ shares of its Common Stock, par value $.10 per share (the
"Common Stock") in one or more offerings on the terms and conditions stated
herein and in Schedule II hereto (the "Offered Common Stock").
As used herein, unless the context otherwise requires, the term
"Underwriters" shall mean the firm or firms named as Underwriter or
Underwriters in Schedule I and the term "you" shall mean the Underwriter or
Underwriters, if no underwriting syndicate is purchasing the Offered Common
Stock, or the representative or representatives of the Underwriters, if an
underwriting syndicate is purchasing the Offered Common Stock, as indicated
in Schedule I.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-________) for the
registration of certain common stock and other securities, including the
Offered Common Stock, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations"). Such registration statement has been declared
effective by the Commission.
The Company has, pursuant to Rule 424 under the 1933 Act, filed with, or
transmitted for filing to, or shall within the required period of time
hereafter file with or transmit for filing to, the Commission a prospectus
supplement (the "Prospectus Supplement") specifically relating to the
Offered Common Stock, together with a revised and restated prospectus
relating to common stock covered by the above-referenced registration
statement.
The term "Registration Statement" refers to such registration statement in
the form in which it became effective, including the exhibits thereto and the
documents incorporated by reference therein, as amended to the date hereof.
The term "Basic Prospectus" means the above-referenced revised and restated
prospectus relating to Common Stock. The term "Prospectus" means the Basic
Prospectus supplemented by the Prospectus Supplement. The term "Preliminary
Prospectus" means a preliminary prospectus supplement specifically relating to
the Offered Common Stock together with the Basic Prospectus. As used herein,
the terms "Basic Prospectus," "Prospectus" and "Preliminary Prospectus" shall
include in each case the documents, if any, incorporated by reference therein.
The terms "supplement" and "amendment" or "amend" as used herein shall
include all documents deemed to be incorporated by reference in the Prospectus
that have been filed subsequent to the date of the Basic Prospectus by the
Company with the Commission pursuant to the Securities Exchange Act of 1934,
as amended (the "1934 Act").
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the 1933 Act,
then any reference herein to the term "Registration Statement" shall include
such Rule 462(b) registration statement.
SECTION 1. Representations and Warranties of the Company.
(a) The Company represents and warrants to you and to each
Underwriter named in Schedule I, as of the date hereof, as follows:
(i) Due Incorporation and Qualification. The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware, has the corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; and is duly qualified to do business and is in
good standing in each jurisdiction in which such qualification is required,
except where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries considered
as one enterprise.
(ii) Subsidiaries. Each subsidiary of the Company which is a significant
subsidiary as defined in Rule 405 of Regulation C of the 1933 Act Regulations
(each a "Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify would not
have a material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, except
for directors' qualifying shares (except as otherwise stated in the
Registration Statement), is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(iii) Registration Statement and Prospectus. At the time the Registration
Statement became effective, the Registration Statement complied, and as of
the date hereof does comply, in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and the rules and regulations
of the Commission promulgated thereunder.
The Registration Statement, at the time it became effective, did not,
and at each time thereafter at which any amendment to the Registration
Statement becomes effective, will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
The Prospectus, as of the date hereof, does not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by an Underwriter expressly for use in the Registration
Statement or Prospectus or to those parts of the Registration Statement
which constitute Statements of Eligibility and Qualification of Trustees
(Form T-1) under the 1939 Act.
No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(iv) Incorporated Documents. The documents incorporated by reference
in the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations promulgated
thereunder (the "1934 Act Regulations") , and, when read together and with
the other information in the Prospectus, did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were or are made,
not misleading.
(v) Accountants. The accountants who certified the financial statements
included or incorporated by reference in the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The financial statements of the Company
included or incorporated by reference in the Prospectus and the
Registration Statement present fairly the financial position of the Company
as of the dates thereof and the results of operations, changes in common
stockholders' investment and cash flows of the Company, for the respective
periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire
period involved; and the financial schedules included or incorporated by
reference in the Registration Statement meet the requirements of the 1933
Act Regulations or the 1934 Act Regulations, as applicable.
(vii) Material Changes or Material Transactions. Except as stated in the
Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company has not
incurred any liabilities or obligations, direct or contingent, or entered
into any transactions which are material to the Company, and there has not
been any material adverse change in the capital stock or short-term debt, or
any material increase in long- term debt of the Company, or any material
adverse change, or any development involving a prospective material adverse
change, in the condition (financial or other) , business, prospects, net
worth or results of operations of the Company.
(viii) No Defaults; Regulatory Approvals. Neither the Company nor
any of its subsidiaries is in violation of its charter or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which it or any of them or their properties may be bound.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by all necessary
corporate action and executed by the Company and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company or any such subsidiary is a party or by which it or any of them may
be bound or to which any of the property or assets of the Company or any
such subsidiary is subject, which conflict, breach or default would have,
individually or in the aggregate with any other such instances, a material
adverse effect on the condition (financial or other) , business, prospects,
net worth or results of operations of the Company and its subsidiaries
considered as one entity, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any law,
administrative regulation or administrative or court order or decree currently
in effect or in effect at the time of execution and delivery of this
Agreement and applicable to the Company or any of its subsidiaries.
No consent, approval, authorization, order or decree of any court or
governmental agency or body is required for the consummation by the Company
of the transactions contemplated by this Agreement, except such as may be
required under the 1933 Act, the 1933 Act Regulations or state securities or
Blue Sky laws.
(ix) Legal Proceedings; Contracts. Except for matters described in the
Prospectus (as to which the Company can express no opinion at this time
concerning the Company's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of the Company) , there is no pending, or to the best knowledge of
any financial officer of the Company, threatened action or proceeding before
any court or administrative agency which individually (or in the aggregate
in the case of any group of related lawsuits) is expected to have a material
adverse effect on the financial condition of the Company.
(x) Compliance with Laws. The Company's business and operations comply in
all material respects with all laws and regulations applicable thereto and
there are no known, proposed or threatened changes in any laws or regulations
which would have a material adverse effect on the Company or the manner in
which it conducts its business. The Company possesses all valid and effective
certificates, licenses and permits required to conduct its business as now
conducted, except for instances which individually or in the aggregate do not,
or will not, have a material adverse effect on the condition (financial or
other) , business, prospects or results of operations of the Company.
(xi) Capital Stock. The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus.
(xii) Validity of the Offered Common Stock. The Offered Common Stock has
been duly authorized and, when issued and delivered in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such shares will not be subject to any
preemptive or similar rights.
(xiii) Registration Rights. There are no contracts or agreements
between the Company and any person granting such person the right to
require the Company to file a registration statement under the 1933 Act
with respect to any equity securities of the Company or to require the
Company to include such securities with the Common Stock registered
pursuant to the Registration Statement.
(b) Additional Certifications. Any certificate signed by any officer
of the Company and delivered to you or your counsel in connection with an
offering of the Offered Common Stock shall be deemed a representation and
warranty by the Company to each Underwriter participating in such offering as
to the matters covered thereby on the date of such certificate unless
subsequently amended or supplemented subsequent thereto.
SECTION 2. Purchase and Sale.
(a) Subject to the terms and conditions set forth herein and in
Schedule II, if any, the Company agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company,
at the purchase price specified in Exhibit A hereto, the respective numbers of
shares of Offered Common Stock set forth opposite the name of such Underwriter
in Schedule I. It is understood that you propose to offer the Offered Common
Stock for sale to the public as set forth in the Prospectus.
(b) Subject to the terms and conditions herein set forth, the Company
may grant, if so provided in Schedule II hereto, an option to the Underwriters,
severally and not jointly, to purchase additional shares of Common Stock to
cover over-allotments, if any (the "Option Shares"). If Schedule II so
provides, the Underwriters may purchase up to the amount of Option Shares set
forth therein at the same price per share as is applicable to the Offered
Common Stock. As used herein, the term "Offered Common Stock" shall include
Option Shares. Such option, if granted, will expire 30 days after the date of
this Agreement, and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in
connection with the offering of the Offered Common Stock upon notice by you
to the Company setting forth the number of Option Shares as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Shares.
Any such time and date of delivery shall be determined by you, but shall
not be later than four business days and not be earlier that two business days
after the exercise of said option, nor in any event prior to Closing Time,
unless otherwise agreed upon by you and the Company.
If the option is exercised as to all or any portion of the Option
Shares, each Underwriter, acting severally and not jointly, will purchase
that proportion of the total number of Option Shares then being purchased
which the number of shares of Offered Common Stock each such Underwriter has
agreed to purchase as set forth in Schedule II bears to the total number of
shares of Offered Common Stock, subject to such adjustments as you shall make
to eliminate any sales or purchases of fractional shares of Common Stock.
(c) Payment of the purchase price for any Offered Common Stock to be
purchased by the Underwriters shall be made to the Company at either the
Company's offices in Memphis, Tennessee or the office of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017, or at such other
place as shall be agreed upon by you and the Company, at 9:00 A.M., New York
City time, on the third business day (unless postponed in accordance with the
provisions of Section 10) following the date hereof or at such other date,
time or location specified in Schedule II, or as otherwise shall be agreed
upon by you and the Company (such time and date being referred to as a
"Closing Time").
Certificates for the Offered Common Stock shall be in definitive form and
registered in such names and in such denominations as you shall request in
writing at least two business days prior to the Closing Time. Delivery of
the Offered Common Stock shall be made to you as specified in Schedule II
against payment by you of the purchase price thereof to the Company (or such
other person as the Company may direct) by wire transfer of immediately
available funds. Such Offered Common Stock will be made available for
examination and packaging by you in New York, New York, on or before the first
business day prior to the Closing Time or at such other time and place
specified in Schedule II.
(d) As compensation to you for your commitments and obligations
hereunder in respect of the Offered Common Stock, including your undertakings
to distribute Offered Common Stock, the Company will pay to you the amount set
forth in Exhibit A as the underwriting discounts and commissions. Such payment
shall be made simultaneously with the payment by you of the purchase price of
the Offered Common Stock as specified in Section 2(b) hereof. Payment of such
compensation shall be made by wire transfer of immediately available funds.
(e) The Company hereby agrees that, without the prior consent of the
Underwriters, it will not, during the period ending 30 days after the date of
the Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exerciseable or exchangeable for Common Stock, or (ii)
enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (i) above or this (ii) is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise.
The foregoing sentence shall not apply to (A) the Offered Common Stock
to be sold hereunder, or (B) the issuance by the Company of shares of Common
Stock, (i) upon the exercise of an employee stock option outstanding on the
date hereof under any of the Company's stock incentive plans or (ii) in
connection with any of the Company's employee benefit plans.
SECTION 3. Covenants of the Company.
The Company covenants with each of you, and with each Underwriter
participating in the offering as follows:
(a) Prospectus Supplement. The Company has prepared a Preliminary
Prospectus, and immediately following the execution of this Agreement, the
Company will prepare a Prospectus Supplement in connection with the offering of
the Offered Common Stock. The Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424 of the
1933 Act Regulations.
(b) Notice of Certain Events. The Company will notify you promptly
(i) of the effectiveness of any amendment to the Registration Statement, (ii)
of the transmittal to the Commission for filing of any supplement to the
Prospectus or any document to be filed pursuant to the 1934 Act which will be
incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement, the
Prospectus or the Prospectus Supplement relating in any way to the offer and
sale of the Offered Common Stock, (iv) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose.
(c) Notice of Certain Proposed Filings. The Company will give you
notice of its intention to file or prepare any amendment to the Registration
Statement or any amendment or supplement to the Prospectus, whether by the
filing of documents pursuant to the 1934 Act, the 1933 Act or otherwise, and
will furnish you with copies of any such amendment or supplement or other
documents proposed to be filed or prepared a reasonable time in advance of
such proposed filing or preparation, as the case may be.
(d) Copies of the Registration Statement and the Prospectus. The
Company will deliver to you as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as you may reasonably
request. The Company will furnish to you as many copies of the Prospectus (as
amended or supplemented) as you shall reasonably request so long as you are
required to deliver a Prospectus in connection with sales or solicitations of
offers to purchase the Offered Common Stock.
(e) Revisions of Prospectus -- Material Changes. If at any time when
the Prospectus is required by the 1933 Act to be delivered in connection with
sales of the Offered Common Stock any event shall occur or condition exist as
a result of which it is necessary, in the reasonable opinion of counsel for
the Company, to further amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of such counsel, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations the Company will
promptly prepare and file with the Commission such amendment or supplement,
whether by filing documents pursuant to the 1934 Act, the 1933 Act or
otherwise, as may be necessary to correct such untrue statement or omission or
to make the Registration Statement and Prospectus comply with such
requirements.
(f) Earnings Statements. The Company will make generally available to
its security holders as soon as practicable after the close of the period
covered thereby, an earnings statement (in form complying with the provisions
of Rule 158 under the 1933 Act) covering each twelve-month period beginning,
in each case, not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in such Rule 158) of the
Registration Statement with respect to each sale of Offered Common Stock.
(g) Blue Sky Qualifications. The Company will endeavor, in cooperation
with you, to qualify the Offered Common Stock for offering and sale under the
applicable securities laws of such states and other jurisdictions of the
United States as the Underwriters may designate, and will maintain such
qualifications in effect for so long as may be required for the distribution
of the Offered Common Stock; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or to subject itself to taxation as doing business in any
jurisdiction in which it is not otherwise required to be so qualified. The
Company will file such statements and reports as may be required by the laws
of each jurisdiction in which the shares of Offered Common Stock have been
qualified as provided above.
(h) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act.
SECTION 4. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) the preparation and filing of the Registration Statement and all
amendments thereto, the Preliminary Prospectus, if any, and the Prospectus and
any amendments or supplements thereto;
(ii) the filing of this Agreement;
(iii) the preparation, issuance, printing and delivery of the Offered
Common Stock;
(iv) the reasonable fees and disbursements of the Company's accountants
and counsel, and of the transfer agent;
(v) the qualification of the Offered Common Stock under securities laws
in accordance with the provisions of Section 3(g), including filing fees and
the reasonable fees and disbursements of counsel to the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Survey and any Legal Investment Survey;
(vi) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Prospectus and any amendments or supplements thereto;
(vii) costs and expenses related to the issuance and delivery of the
Offered Common Stock to the Underwriters; and
(viii) fees and expenses incident to listing of the Offered Common Stock
on the New York Stock Exchange.
If this Agreement is terminated by you in accordance with the provisions
of Section 5 or clause (i) of Section 9 hereof, the Company shall reimburse
upon demand the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the
Underwriters that shall have been incurred by you in connection with the
proposed purchase and sale of the Offered Common Stock.
SECTION 5. Conditions of Underwriters' Obligations.
The several obligations of the Underwriters to purchase the Offered
Common Stock pursuant to this Agreement will be subject at all times to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in
any certificate furnished pursuant to the provisions hereof, to the
performance and observance by the Company of all covenants and agreements
contained herein, or in Schedule II hereto, on its part to be performed and
observed and to the following additional conditions precedent:
(a) Stop Order; Ratings Change; etc. At the Closing Time, (i) no stop
order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission, (ii) the rating assigned as of the date of this Agreement
by any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g) under the 1933 Act Regulations, to any
debt securities of the Company shall not have been lowered since the
execution of this Agreement nor shall any such rating organization have
publicly announced that it has placed any debt securities of the Company on
what is commonly termed a "watch list" for possible downgrading, and (iii)
there shall not have come to your attention any facts that would cause you to
believe that the Prospectus, including the Prospectus Supplement, at the time
it was required to be delivered to a purchaser of the Offered Common Stock,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of
the circumstances existing at such time, not misleading.
(b) Legal Opinions. At the Closing Time, you shall have received the
following documents:
(1) Opinion of Company Counsel. The opinion of the Executive Vice
President, General Counsel and Secretary of the Company or any Vice President
in the Legal and Regulatory Division of the Company, dated as of such date,
in form and substance reasonably satisfactory to you, to the effect as set
forth in Exhibit B.
(2) Opinion of Counsel to the Underwriters. The opinion of
__________________________________, counsel to the Underwriters, with respect
to such matters as you may reasonably request.
(c) Officer Certificate. At the Closing Time, there shall not have
been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition (financial or otherwise) of the Company, or in the earnings or
business affairs of the Company; and you shall have received a certificate of
any Vice President of the Company, dated as of the Closing Time, to the effect
(i) that there has been no such material adverse change, (ii) that the other
representations and warranties of the Company contained in Section 1 are true
and correct with the same force and effect as though expressly made at and as
of the date of such certificate, except to the extent that such
representations and warranties expressly relate to an earlier date or later
date (in which case such representations and warranties are true and correct
on and as of such earlier date or will be true and correct on and as of such
later date, as the case may be), (iii) that the Company has made or caused to
be made any required filing of the Prospectus pursuant to Rule 424(b) in the
manner and within the time period required by Rule 424(b), and (iv) that the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the date of such certificate.
The officer signing and delivering this certificate may rely upon the best of
his or her knowledge as to proceedings threatened.
(d) Comfort Letter. At the time of the execution of this Agreement
and at the Closing Time, you shall have received a letter from Arthur Andersen
LLP or their successors as the Company's independent accountants (the
"Independent Accountants"), dated as of the date hereof and of the Closing
Time, as the case may be, in form and substance satisfactory to you to the
effect that:
(i) they are independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations;
(ii) in their opinion the Company's financial statements and schedules
included or incorporated by reference in the Registration Statement and
Prospectus and covered by their reports included or incorporated therein
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act and
the 1934 Act Regulations, as the case may be;
(iii) they have conducted reviews of the unaudited interim consolidated
financial information of the Company included in the Company's Quarterly
Reports on Form 10-Q incorporated in the Registration Statement and
Prospectus in compliance with the standards for such reviews promulgated by
the American Institute of Certified Public Accountants;
(iv) on the basis of a reading of the financial statements and
schedules of the Company included or incorporated in the Prospectus and the
Registration Statement, and the latest available unaudited interim financial
statements of the Company, inquiries of officials of the Company responsible
for financial and accounting matters, and other specified procedures and
inquiries, nothing has come to their attention that caused them to believe
that:
(A) the unaudited financial statements of the Company included or
incorporated in the Prospectus and the Registration Statement do not comply as
to form in all material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations or the 1934 Act and the 1934 Act
Regulations thereunder, as the case may be, or that such unaudited financial
statements are not presented fairly in conformity with generally accepted
accounting principles;
(B) with respect to the period subsequent to the date of the most
recent financial statements incorporated in the Registration Statement and the
Prospectus, as of a specified date not more than five business days prior to
the date of delivery of such letter, there has been any change in the common
or preferred stock or long-term debt of the Company or, as of such date, there
has been any decrease in assets or common stockholders' investment, in each
case as compared with amounts shown in the most recent consolidated balance
sheet of the Company included or incorporated in the Registration Statement
and the Prospectus, except in each case for changes or decreases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; or
(C) for the period from the date of the most recent financial
statements incorporated in the Registration Statement and the Prospectus to
such specified date, there was any decrease in operating revenues, operating
income, income before taxes or net income of the Company in each case as
compared with the comparable period of the preceding year, except in each case
for decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(v) in addition to their audit referred to in their reports included or
incorporated by reference in the Registration Statement and the Prospectus and
the reviews, inquiries and procedures referred to in clauses (iii) and (iv)
above, such letter shall state that Arthur Andersen LLP has performed other
specified procedures, with respect to certain numerical data and information
included or incorporated in the Registration Statement and the Prospectus, as
are requested by an Underwriter and specified in such letter and have found
such data and information to be in agreement with the accounting records of or
analyses prepared by the Company.
(e) Other Documents. At the Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as such counsel may
reasonably require for the purpose of enabling such counsel to pass upon the
issuance and sale of Offered Common Stock as herein contemplated and related
proceedings, or in order to evidence the accuracy and completeness of any of
the representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of Offered Common Stock as herein
contemplated shall be satisfactory in form and substance to you.
(f) "Lock-up". The "lock-up" agreements, each substantially in the
form of Exhibit C hereto, between you and certain stockholders, officers and
directors of the Company relating to sales and certain other dispositions of
shares of Common Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing Date.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, arising out of any untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), or the omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of or based upon any
untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever arising out of or based
upon any such untrue statement or omission, if such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever arising out of or based upon any such untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto), or made in reliance upon the Statements
of Eligibility and Qualification of Trustees (Form T-1) under the 1939 Act
filed as exhibits to the Registration Statement; and provided, further, that
the foregoing indemnity agreement, with respect to any Preliminary Prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased Offered
Common Stock, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Offered Common Stock to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions made in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriters through you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it
may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 6 is for any reason
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company and the Underwriters of each offering
of Offered Common Stock shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and one or more of the Underwriters in
respect of such offering, as incurred, in such proportions that the
Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of the Prospectus
in respect of such offering bears to the initial public offering price
appearing thereon and the Company is responsible for the balance; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive each
delivery of and payment for any of the Offered Common Stock.
SECTION 9. Termination of Agreement.
You may terminate this Agreement, immediately upon notice to the
Company, at any time prior to the Closing Time if: (i) there has been, since
the date hereof or since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Company,
(ii) there shall have occurred any material adverse change in the financial
markets in the United States or any outbreak or escalation of hostilities or
other national or international calamity or crisis, the effect of which shall
be such as to make it, in your judgment, impracticable to market the Offered
Common Stock or enforce contracts for the sale of the Offered Common Stock, or
(iii) trading in any securities of the Company shall have been suspended by
the Commission or a national securities exchange, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange shall have
been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required,
by either of said exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium shall have been declared by
either federal or New York authorities.
In the event of any termination of this Agreement, the covenant set
forth in Section 3(f) hereof, the provisions of Section 4 hereof, the
indemnity and contribution agreements set forth in Sections 6 and 7 hereof,
and the provisions of Sections 8 and 13 hereof shall remain in effect.
SECTION 10. Default by One Underwriter.
If any Underwriter shall fail at the Closing Time to purchase the Offered
Common Stock which it is obligated to purchase hereunder (the "Defaulted
Securities"), and the aggregate amount of Defaulted Securities is not more than
one-tenth of the aggregate amount of the Offered Common Stock to be purchased
on such date, the other Underwriters shall be obligated severally in the
proportions that the amount of the Offered Common Stock set forth opposite
their respective names in Schedule I hereto bears to the aggregate amount of
Offered Common Stock set forth opposite the names of all such non-defaulting
underwriters to purchase the Defaulted Securities; provided that in no event
shall the amount of Defaulted Securities that any Underwriter has agreed to
purchase pursuant to this Agreement be increased by an amount in excess of
one-ninth of such amount of Offered Common Stock without the written consent
of such Underwriter. If the aggregate amount of Defaulted Securities is more
than one-tenth of the aggregate amount of the Offered Common Stock to be
purchased on the Closing Date, and arrangements satisfactory to the
Underwriters and the Company for the purchase of such Defaulted Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriters or the
Company.
No action taken pursuant to this Section shall relieve a defaulting
Underwriter from liability in respect of its default under this Agreement.
In the event of any such default which does not result in a termination
of this Agreement, either the non-defaulting Underwriters or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed, delivered by Federal
Express service or transmitted by any facsimile communication. Notices to
the Underwriters shall be directed to _______________________________________,
with copies thereof directed to ___________________________________________
________________________________________________. Notices to the Company
shall be directed to it at 2007 Corporate Avenue, Memphis, Tennessee 38132 (if
by Federal Express service) or P.O. Box 727, Memphis, Tennessee 38194 (if by
mail), Attention: Vice President and Treasurer, with copies thereof directed
to the Legal Department of the Company at 1980 Nonconnah Drive, Memphis,
Tennessee 38132 (if by Federal Express Service) or P.O. Box 727, Memphis,
Tennessee 38194 (if by mail), Attention: Managing Director - Securities and
Corporate Law.
SECTION 12. Parties
This Agreement shall inure to the benefit of and be binding upon you and
the Company and any Underwriter who becomes a party hereto and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto their respective successors
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Offered Common Stock from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law.
This Agreement and the rights and obligations of the parties created
hereby and thereby shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be
performed in such state. Any suit, action or proceeding brought by the
Company against an Underwriter in connection with or arising under this
Agreement shall be brought solely in the state or federal court of appropriate
jurisdiction located in the Borough of Manhattan, The City of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between you and the Company in accordance with its terms.
Very truly yours,
FEDERAL EXPRESS CORPORATION
By: _________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
[UNDERWRITERS]
By:
By: ___________________________________
Name:
Title:
Acting on behalf of themselves and the
other named Underwriters
Exhibit A
FEDERAL EXPRESS CORPORATION
Common Stock, par value $.10 per share
Number of Underwriting
Shares Discounts
Purchase to be and
Designation Price Purchased Commissions
- ----------- ----- --------- -----------
$ $ %
Exhibit B
Form of Opinion of Company Counsel
____________, ______
[UNDERWRITERS]
Re: Federal Express Corporation
Common Stock (the "Offered Common Stock")
Ladies and Gentlemen:
This opinion is directed to the Underwriters pursuant to Section 5(b)(1)
of the Underwriting Agreement dated ________________, ______ (the "Underwriting
Agreement"), among the Company and you, with respect to the offer and sale of
the Offered Common Stock. All terms defined or used in the Underwriting
Agreement have the same meaning when used herein, unless otherwise noted.
I am Vice President ________ of the Company and have acted as such in
connection with the Offered Common Stock and the Underwriting Agreement. I or
attorneys under my supervision have made such examination and investigation as
we have deemed necessary in order to give the following opinion.
Based on the foregoing, it is my opinion that:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority under such laws to own its properties and to
conduct its business as described in the Prospectus; the Company is duly
qualified to do business and is in good standing in each jurisdiction in which
it owns or leases real property or in which the conduct of its business
requires such qualification, except for such instances which in the aggregate
will not have a material adverse effect on the Company;
(ii) Each subsidiary of the Company which is a significant subsidiary as
defined in Rule 405 of Regulation C of the 1933 Act Regulations (each a
"Significant Subsidiary") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement, and, to the best of my knowledge, is duly qualified to do business
and is in good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; all of the issued and outstanding capital
stock of each Significant Subsidiary has been duly authorized and validly
issued and is fully paid and non-assessable, and all of such capital stock,
except for directors' qualifying shares, is owned by the Company, directly or
through subsidiaries, free and clear of any mortgage, pledge, lien,
encumbrance, claim or equity;
(iii) Except for matters described in the Prospectus (as to which I can
express no opinion at this time concerning the Company's liability (if any) or
the effect of any adverse determination upon the business, condition
(financial or otherwise) or operations of the Company), there is no pending,
or to my knowledge, threatened action or proceeding before any court or
administrative agency which individually (or in the aggregate in the case of
any group of related lawsuits) is expected to have a material adverse effect
on the financial condition of the Company;
(iv) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(v) The Offered Common Stock has been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such shares will
not be subject to any preemptive or similar rights.
(vi) The Company possesses all permits, approvals, franchises and other
rights from federal aviation, aeronautical, communications, transportation and
shipping authorities which are requisite for the conduct of its business as
described in the Prospectus or for the actions contemplated by the
Underwriting Agreement and the offering contemplated by the Prospectus; and
the actions contemplated by the Underwriting Agreement and the offering
contemplated by the Prospectus, are not in violation of any federal statute or
regulation relating to aviation, aeronautics, communications, transportation
or shipping;
(vii) I have reviewed or caused to be reviewed by attorneys under my
supervision the Registration Statement, the Prospectus and each amendment and
supplement thereto (including the documents incorporated by reference) and
have no reason to believe that, as of their respective effective or issue
dates, or as of the Closing Time, either the Registration Statement or the
Prospectus or any such amendment or supplement (or any such documents
incorporated by reference) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading;
(viii)I do not know of any statute or regulation or legal or governmental
proceeding required to be described in the Prospectus which is not described as
required, nor of any contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which is not described and filed as
required; and the descriptions in the Registration Statement and the
Prospectus of the contracts and other documents therein described are
accurate and fairly present the information required to be shown;
(ix) The execution and delivery by the Company of the Underwriting
Agreement and the consummation by the Company of the transactions herein and
therein contemplated and compliance with the terms of the Underwriting
Agreement do not and will not conflict with or result in a breach of any of the
terms of the Certificate of Incorporation or By-laws of the Company, and will
not conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust, loan,
credit or note agreement, lease or other agreement or instrument material to
the Company to which the Company is a party or by which it or any or its
properties are bound, or any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality or
court, having jurisdiction over the Company or any of its properties;
(x) No authorization, approval, consent or license of any regulatory
body or authority (other than under the 1933 Act and the securities or Blue
Sky laws of the various states) is required for the valid authorization,
issuance, sale and delivery of the Offered Common Stock as herein contemplated
or the valid authorization, execution, delivery and performance by the Company
of the Underwriting Agreement or the consummation by the Company of the
transactions contemplated herein or therein, or, if so required, all such
authorizations, approvals, consents and licenses, specifying the sale, have
been obtained and are in full force and effect;
(xi) The Registration Statement has become effective under the 1933 Act
and, to the best of my knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the 1933 Act; the
Registration Statement and the Prospectus, and each amendment or supplement
thereto (except for the financial statements and schedules included therein,
as to which I express no opinion), comply as to form in all material respects
to the requirements of the 1933 Act and the 1933 Act Regulations and, as to
documents incorporated therein, to the requirements of the 1934 Act and the
1934 Act Regulations in effect at the time such documents were filed with the
Commission; and
(xii) The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting enforcement of creditors' rights or by
general equity principles and subject to any principles of public policy
limiting the right to enforce the indemnification and contribution provisions
contained in Sections 6 and 7 of the Underwriting Agreement.
In rendering the foregoing opinion, we have assumed that (i) all
signatures on all documents examined by us are genuine and that where any such
signature (other than a signature purporting to have been made on behalf of
the Company) purports to have been made in a corporate, governmental,
fiduciary or other capacity, the person who affixed such signature had the due
authority to do so, (ii) certain factual matters contained in certificates of
public officials are accurate, true and correct, and (iii) photostat copies of
such documents, records and certificates conform to the originals.
This opinion is intended solely for the benefit of the Underwriters and
is not to be relied on by, and no copies of it are to be delivered to, any
other person without my prior written consent, except that Underwriters'
counsel may rely upon this opinion as to all matters of Tennessee law or
Delaware corporate law in rendering its opinion of even date herewith. I am
not assuming any professional responsibility to any other person by rendering
this opinion. It is understood that this opinion speaks as of the date given,
notwithstanding any delivery as contemplated above on any other date.
Very truly yours,
Exhibit C
[Form of Lock-up Letter]
_____________, 199__
[UNDERWRITERS]
[ADDRESS]
Ladies and Gentlemen:
The undersigned understands that the Underwriters propose to enter into
an underwriting agreement (the "Underwriting Agreement") with Federal Express
Corporation, a Delaware corporation (the "Company"), providing for the public
offering (the "Public Offering") by the several Underwriters, (the
"Underwriters"), of ______ shares (the "Shares") of the Common Stock par value
$.10 per share of the company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior consent of the Underwriters, it will not,
during the period commencing on the date hereof and ending 30 days after the
date of the Prospectus relating to the Public Offering (the "Prospectus"), (1)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock (whether such shares or any such
securities are now owned by the undersigned or are hereafter acquired), or (2)
enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1) above or in this (2) is
to be settled by delivery of Common Stock or such other securities, in cash or
otherwise.
The foregoing sentence shall not apply to: (i) the sale of any Shares
to the Underwriters pursuant to the Underwriting Agreement, (ii) gifts, (iii)
stock grants in connection with the Company's benefit plans or (iv) the
exercise of a stock option under any of the Company's stock incentive plans.
In addition, the undersigned agrees that, without the prior consent of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 30 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
__________________________________
(Name)
__________________________________
(Address)
Schedule I
to
Underwriting
Agreement
Dated: ________, ______
FEDERAL EXPRESS CORPORATION
Common Stock, par value $.10 per share
Underwriters Number of Shares to be Purchased
- --------------------------- ----------------------------------
$
Schedule II
to
Underwriting Agreement
Dated: ________, ______
FEDERAL EXPRESS CORPORATION
Common Stock, par value $.10 per share
To: Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Re: Underwriting Agreement dated ______________, _______
Title of Offered Common Stock:
Current ratings:
Public offering price:
Closing date, time and
location: ____________, ______, 9:00 A.M., New York City time
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Location for checking
Offered Common Stock: New York, New York
Listing requirement: None
Redemption provisions:
Liquidation preference:
Number of Option Shares, if any, that may be
purchased by the Underwriters:
Other terms and conditions:
[UNDERWRITERS]
By:
By: ______________________________
Name:
Title:
Acting on behalf of themselves
and the other named
Underwriters
Accepted:
FEDERAL EXPRESS CORPORATION
By: _______________________________
Name:
Title:
Exhibit 4(a)(1)
PASS THROUGH TRUST AGREEMENT
Dated as of
June 1, 1996
between
STATE STREET BANK AND TRUST COMPANY,
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
CROSS REFERENCE SHEET
Between
Provisions of the Trust Indenture Act of 1939, as amended,
and the Pass Through Trust Agreement:
Section of
Section of the Act the Agreement
- ------------------ -------------
310(a)(1) and (2)..................................................10.02
310(a)(3)..........................................................10.05
310(a)(4).......................................................Art. VII
310(a)(5)..........................................................10.02
310(b)(i)-(iii).............................................10.01, 10.03
310(b)(remainder)......................................................*
310(c)......................................................Inapplicable
311(a).................................................................*
311(b).............................................................10.06
311(c)......................................................Inapplicable
312(a)..................... ..................................2.12, 4.01
312(b).................................................................*
312(c)..............................................................4.02
313(a)..............................................................4.04
313(b)(1)..............................................................*
313(b)(2)..............................................................*
313(c)..............................................................4.04
313(d).................................................................*
314(a)..............................................................4.03
314(b)......................................................Inapplicable
314(c)(1) and (2)..................................................13.07
314(c)(3)...................................................Inapplicable
314(d)(1)..............................................................*
314(d)(2)..............................................................*
314(d)(3)..............................................................*
314(e).............................................................13.07
314(f)......................................................Inapplicable
315(a), (c) and (d)....................................................*
315(b)..............................................................7.11
315(e).................................................................*
316(a)(1).....................................................7.09, 7.10
316(a)(2)..........................................................11.01
316(a)(last sentence)...............................................6.04
316(b)..............................................................7.08
316(c)...........................................................6.01(b)
317(a)........................................................7.03, 7.05
317(b)..............................................................3.04
318(a).............................................................13.08
_____________
*Intentionally deleted.
TABLE OF CONTENTS
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE I
DEFINITIONS
ARTICLE II
ISSUANCE OF PASS THROUGH CERTIFICATES;
ACQUISITION OF EQUIPMENT CERTIFICATES
SECTION 2.01 Amount Unlimited; Issuable in Series; Series
Supplements. ..................................... 11
SECTION 2.02. Acquisition of Equipment Certificates. ........... 13
SECTION 2.03. Initial Certificateholders as Grantors............ 15
SECTION 2.04. Limitation of Powers. ............................ 16
SECTION 2.05. Execution of Pass Through Certificates. .......... 16
SECTION 2.06. Certificate of Authentication. ................... 16
SECTION 2.07. Form and Denomination of Pass Through
Certificates...................................... 17
SECTION 2.08. Registration, Transfer and Exchange............... 17
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen
Pass Through Certificates......................... 18
SECTION 2.10. Cancellation of Pass Through Certificates;
Destruction Thereof. ............................. 19
SECTION 2.11. Temporary Pass Through Certificates. ............. 20
SECTION 2.12. Pass Through Certificates Issuable in the Form of
a Registered Global Certificate. ................. 20
ARTICLE III
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01. Covenants of the Company. ........................ 22
SECTION 3.02. Offices for Payments; Registrar................... 23
SECTION 3.03. Representations and Warranties of the Pass Through
Trustee. ......................................... 24
SECTION 3.04. Paying Agents..................................... 25
SECTION 3.05. No Representations or Warranties as to Documents.. 26
SECTION 3.06. Payments from Trust Property Only. ............... 26
SECTION 3.07. Limitation of the Company's Liability. ........... 26
ARTICLE IV
CERTIFICATEHOLDER LISTS AND REPORTS BY THE
COMPANY AND THE PASS THROUGH TRUSTEE
SECTION 4.01. Certificateholder Lists; Ownership of Pass Through
Certificates...................................... 27
SECTION 4.02. Disclosure of Certificateholder Lists. ........... 27
SECTION 4.03. Reports by the Company. .......................... 27
SECTION 4.04. Reports by the Pass Through Trustee. ............. 28
ARTICLE V
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY
SECTION 5.01. Certificate Account and Special Payments Account.. 28
SECTION 5.02. Distributions from Certificate Account and Special
Payments Account. ................................ 29
SECTION 5.03. Statements to Certificateholders. ................ 31
SECTION 5.04. Investment of Special Payment Moneys. ............ 31
SECTION 5.05. Withholding Taxes. ............................... 31
ARTICLE VI
CONCERNING THE CERTIFICATEHOLDERS
SECTION 6.01. Evidence of Action Taken by Certificateholders. .. 32
SECTION 6.02. Proof of Execution of Instruments and of Holding
of Certificates. ................................. 33
SECTION 6.03. Certificateholders to Be Treated as Owners. ...... 33
SECTION 6.04. Pass Through Certificates Owned by the Company and
Related Owner Trustees Deemed Not Outstanding. ... 33
SECTION 6.05. Right of Revocation of Action Taken. ............. 34
SECTION 6.06. ERISA. ........................................... 35
ARTICLE VII
REMEDIES OF PASS THROUGH TRUSTEE
AND CERTIFICATEHOLDERS
SECTION 7.01. Events of Default. ............................... 35
SECTION 7.02. Incidents of Sale of Equipment Certificates. ..... 36
SECTION 7.03. Pass Through Trustee May Prove Debt. ............. 37
SECTION 7.04. Remedies Cumulative. ............................. 38
SECTION 7.05. Suits for Enforcement. ........................... 38
SECTION 7.06. Discontinuance of Proceedings. ................... 38
SECTION 7.07. Limitations on Suits by Certificateholders. ...... 39
SECTION 7.08. Unconditional Right of Certificateholders to Receive
Principal, Interest and Premium, and to Institute
Certain Suits. ................................... 39
SECTION 7.09. Control by Certificateholders. ................... 40
SECTION 7.10. Waiver of Past Events of Default. ................ 40
SECTION 7.11. Notice of Pass Through Defaults. ................ 41
ARTICLE VIII
CONCERNING THE PASS THROUGH TRUSTEE
SECTION 8.01. Acceptance by Pass Through Trustee. .............. 41
SECTION 8.02. Pass Through Trustee's Liens. .................... 42
SECTION 8.03. Certain Rights of the Pass Through Trustee. ..... 42
SECTION 8.04. Pass Through Trustee Not Responsible for Recitals. 43
SECTION 8.05. Pass Through Trustee and Agents May Hold Pass
Through Certificates; Collections. ............... 43
SECTION 8.06. Moneys Held by Pass Through Trustee. ............. 44
SECTION 8.07. Right of Pass Through Trustee to Rely on Officer's
Certificate....................................... 44
SECTION 8.08. Compensation. .................................... 44
ARTICLE IX
INDEMNIFICATION OF
PASS THROUGH TRUSTEE BY THE COMPANY
ARTICLE X
SUCCESSOR TRUSTEES
SECTION 10.01. Resignation and Removal of Pass Through Trustee;
Appointment of Successor. ........................ 46
SECTION 10.02. Persons Eligible for Appointment as Pass Through
Trustee. ......................................... 47
SECTION 10.03. Acceptance of Appointment by Successor Trustee. .. 48
SECTION 10.04. Merger, Conversion, Consolidation or Succession to
Business of Pass Through Trustee. ................ 49
SECTION 10.05. Appointment of Separate Pass Through Trustees. ... 50
SECTION 10.06 Preferential Claim. .............................. 52
ARTICLE XI
SUPPLEMENTS AND AMENDMENTS TO THIS
PASS THROUGH AGREEMENT AND OTHER DOCUMENTS
SECTION 11.01. Supplemental Agreements Without Consent of
Certificateholders. .............................. 53
SECTION 11.02. Supplemental Agreements With Consent of
Certificate-holders............................... 54
SECTION 11.03 Effect of Supplemental Agreements. ............... 56
SECTION 11.04. Documents to Be Given to Trustee. ................ 56
SECTION 11.05. Notation on Pass Through Certificates in Respect
of Supplemental Agreements. ...................... 56
SECTION 11.06. Trust Indenture Act. ............................. 56
SECTION 11.07. Revocation and Effect of Consents. ............... 57
SECTION 11.08. Amendments, Waivers, etc., of Related Indenture
Documents......................................... 57
ARTICLE XII
TERMINATION OF PASS THROUGH TRUSTS;
UNCLAIMED MONEYS
SECTION 12.01. Termination of Pass Through Trusts. .............. 57
SECTION 12.02. Application by Pass Through Trustee of Funds
Deposited for Payment of Pass Through
Certificates...................................... 58
SECTION 12.03. Repayment of Moneys Held by Paying Agent. ........ 58
SECTION 12.04. Transfer of Moneys Held by Pass Through Trustee
and Paying Agent Unclaimed for Two Years and
Eleven Months. ................................... 58
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Capacity in Which Acting.......................... 59
SECTION 13.02. No Legal Title to Trust Property in
Certificateholders................................ 59
SECTION 13.03. Certificates Nonassessable and Fully Paid. ....... 59
SECTION 13.04. Pass Through Agreement for the Benefit of the
Company, the Pass Through Trustee and the
Certificateholders. .............................. 60
SECTION 13.05. Limitation on Rights of Certificateholders. ...... 60
SECTION 13.06. Notices. ......................................... 60
SECTION 13.07. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. .............. 61
SECTION 13.08. Conflict of Any Provision of Pass Through
Agreement with the Trust Indenture Act. .......... 62
SECTION 13.09. Severability. .................................... 62
SECTION 13.10. No Oral Modifications or Continuing Waivers. ..... 62
SECTION 13.11. Successors and Assigns. .......................... 63
SECTION 13.12. Headings. ........................................ 63
SECTION 13.13. Normal Commercial Relations. ..................... 63
SECTION 13.14. Governing Law; Counterpart Form. ................. 63
SECTION 13.15. Distributions Due on Days Other than Business Days 63
EXHIBIT A Form of Pass Through Certificate
EXHIBIT B Form of Series Supplement
PASS THROUGH TRUST AGREEMENT
PASS THROUGH TRUST AGREEMENT dated as of June 1, 1996, between
FEDERAL EXPRESS CORPORATION, a Delaware corporation (the "Company"), and State
Street Bank and Trust Company, a Massachusetts trust company, as Pass Through
Trustee (together with any successor hereunder or under any Pass Through Trust
as herein provided, the "Pass Through Trustee").
RECITALS
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, from time to time the Company will enter into a Series
Supplement with the Pass Through Trustee named therein in accordance with this
Pass Through Agreement pursuant to which the Pass Through Trustee will declare
the creation of a separate Pass Through Trust for the benefit of the
Certificateholders of the Series of Pass Through Certificates to be issued
pursuant to such Pass Through Trust, and the initial Certificateholders of
such Series, as the grantors of such Pass Through Trust, by their respective
acceptances of such Pass Through Certificates, will join in the creation of
such Pass Through Trust;
WHEREAS, the Pass Through Certificates of each Series will evidence
fractional undivided interests in the Pass Through Trust pursuant to which
they will be issued, and will have no rights, benefits or interest in respect
of any other separate Pass Through Trust or the Trust Property held in any
such other Pass Through Trust;
WHEREAS, for each Pass Through Trust, the Pass Through Trustee will
purchase one or more issues of Equipment Certificates of the same interest
rate as, and final maturity dates not later than the final scheduled Regular
Distribution Date of, the Series of Pass Through Certificates to be issued in
respect of such Pass Through Trust and will hold such Equipment Certificates
in trust as Trust Property for the benefit of the Certificateholders of such
Series;
WHEREAS, to facilitate the sale of Equipment Certificates to, and the
purchase of Equipment Certificates by, the Pass Through Trustee on behalf of
each such Pass Through Trust, the Company has duly authorized the execution
and delivery of this Pass Through Agreement and each Series Supplement as the
"issuer," as such term is defined in and solely for purposes of the Securities
Act, of the Pass Through Certificates to be issued in respect of each Pass
Through Trust and as the "obligor," as such term is defined in and solely for
purposes of the Trust Indenture Act, with respect to all such Pass Through
Certificates and is undertaking to perform certain administrative duties
hereunder and to pay the fees and expenses of the Pass Through Trustee;
WHEREAS, this Pass Through Agreement, as amended or supplemented from
time to time, is subject to the provisions of the Trust Indenture Act and
shall, to the extent applicable, be governed by such provisions;
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto
as follows:
ARTICLE I
DEFINITIONS
The following terms (except as otherwise expressly provided or unless
the context otherwise clearly requires) for all purposes of this Pass Through
Agreement have the respective meanings specified in this Section, as amended
or supplemented by the provisions of the Series Supplement for a particular
Series. All other terms used in this Pass Through Agreement that are defined
in the Trust Indenture Act or the definitions of which in the Securities Act
are referred to in the Trust Indenture Act (except as herein otherwise
expressly provided or unless the context otherwise clearly requires), have the
meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act.
All accounting terms used and not expressly defined herein have the
meanings given to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" means the
accounting principles that are generally accepted at the date or time of any
computation or otherwise at the date hereof.
The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Pass Through Agreement as a whole and not to any
particular Article, Section or other subdivision. References to designated
"Articles," "Sections," "subsections" and other subdivisions of this Pass
Through Agreement are to the designated Articles, Sections, subsections and
other subdivisions of this Pass Through Agreement. The terms defined in this
Article include the plural as well as the singular.
"Affiliate," has for any Person, the meaning specified in Rule 0-2
under the Trust Indenture Act.
"Business Day" means, for any Series, any day other than Saturday,
Sunday or other day on which banking institutions in the States of
Massachusetts, New York or Tennessee, or any other state in which the Pass
Through Trustee or any Related Indenture Trustee or Related Owner Trustee for
the Pass Through Trust for such Series maintains an office for the receipt or
disbursement of funds for the transactions contemplated herein or in any
Indenture Documents for the Equipment Certificates that constitute Trust
Property of such Pass Through Trust, are authorized or required by law to
close.
"Certificate Account" means, for any Pass Through Trust, the account
or accounts created and maintained for such Pass Through Trust pursuant to
Section 5.01(a) hereof and the related Series Supplement.
"Certificateholder" means, for any Series, the Person who is the
registered holder of any Pass Through Certificate as evidenced on the Register
for such Series.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission of the
United States, or if at any time after the execution and delivery of this Pass
Through Agreement such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body performing
such duties on such date.
"Company" means Federal Express Corporation, a Delaware corporation,
and its permitted successors and assigns hereunder.
"Corporate Trust Office" means the corporate trust office of the Pass
Through Trustee in the city in which the Pass Through Trustee's corporate trust
business shall be administered and which the Pass Through Trustee shall have
specified by notice in writing to the Company and the Certificateholders of
each Series.
"Cut-off Date for Pass Through Trust" means, for any Pass Through
Trust, the date specified as such in the related Series Supplement, provided
that in no event shall such Cut-off Date for Pass Through Trust be later than
90 days after the creation of such Pass Through Trust.
"Delivery Date" means, for any Pass Through Trust, the date specified
in the related Series Supplement for the purchase of the related Equipment
Certificates, which date may be delayed for any such Equipment Certificates as
provided in Section 2.02 hereof.
"Delayed Delivery Notice" means, for any Pass Through Trust, a
certificate signed by a Responsible Officer of the Company (i) requesting that
the Pass Through Trustee temporarily delay purchase of any related Equipment
Certificates to a date later than the applicable Issuance Date, (ii) stating
the amount of the purchase price of each such Equipment Certificate and the
aggregate purchase price of all such Equipment Certificates, (iii) stating the
reasons for such delay and (iv) with respect to any Participation Agreement
for such delayed Equipment Certificates, either (1) setting or resetting the
Delivery Date (which shall be on or prior to the applicable Cut-off Date for
Pass Through Trust), or (2) indicating that such Delivery Date will be set by
subsequent written notice not less than one Business Day prior to such new
Delivery Date (which shall be on or prior to the applicable Cut-off Date for
Pass Through Trust).
"Delayed ECs" means, for any Pass Through Trust, any Equipment
Certificates that are the subject of a Delayed Delivery Notice.
"Deposit Trust" means a separate trust created pursuant to a Deposit
Trust Agreement.
"Deposit Trust Account" means, for any Deposit Trust, the deposit
account established and maintained for such Deposit Trust pursuant to the
related Deposit Trust Agreement.
"Deposit Trust Agreement" means an agreement in form and substance
reasonably satisfactory to the Company and the Pass Through Trustee for the
purposes described in Section 2.02 hereof, between the Company, as depositor,
the Pass Through Trustee and the Deposit Trustee.
"Deposit Trust Funds" means, for any Delayed ECs, an amount equal to
the purchase price of such Delayed ECs.
"Deposit Trustee" means, for any Deposit Trust, the Person,
acceptable to the Pass Through Trustee, defined as such in the related Deposit
Trust Agreement.
"Depositary" means, for any Series, the depository of the Registered
Global Certificate, if any, representing the Pass Through Certificates of such
Series and any successor to such depository appointed by the Company pursuant
hereto. Such depository initially shall be The Depository Trust Company, a
New York corporation, or any successor thereto registered under the Exchange
Act or other applicable statute or regulation.
"Distribution Date" means, for any Series, any Regular Distribution
Date or Special Distribution Date or both for such Series.
"Dollars" and "$" mean lawful currency of the United States of
America.
"Equipment Certificate" means, for any Pass Through Trust, any of the
Equipment Trust Certificates or Equipment Purchase Certificates, issued
pursuant to an Indenture and described in, or on a schedule attached to, the
Series Supplement for such Pass Through Trust.
"Equipment Purchase Certificate" means, for any Pass Through Trust,
any "Equipment Purchase Certificate," as such term is defined in the related
Indenture, issued by the Company pursuant to an Indenture and described in, or
on a schedule attached to, the Series Supplement for such Pass Through Trust,
which is to be held by the Pass Through Trustee as part of the Trust Property
of such Pass Through Trust.
"Equipment Trust Certificate" means, for any Pass Through Trust,
any "Equipment Trust Certificate," as such term is defined in the related
Indenture, issued by an Owner Trustee pursuant to such Indenture and
described in, or on a schedule attached to, the Series Supplement
for such Pass Through Trust, which is to be held by the Pass Through
Trustee as part of the Trust Property of such Pass Through Trust.
"Event of Default" has the meaning specified in Section 7.01 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fractional Undivided Interest" means, for any Pass Through
Certificate, the fractional undivided interest in the related Pass Through
Trust that is evidenced thereby.
"Government Obligations" means direct obligations of the United
States of America which are not callable, redeemable or payable prior to
maturity, in whole or in part, directly or indirectly, by any Person.
"Indenture" means (i) for any Equipment Trust Certificate, the trust
indenture and security agreement among the Indenture Trustee, the Owner
Trustee and, if applicable, the Company pursuant to which such Equipment Trust
Certificate is issued and (ii) for any Equipment Purchase Certificate, the
trust indenture and security agreement between the Indenture Trustee and the
Company pursuant to which such Equipment Purchase Certificate is issued, in
each case as such agreement may be modified, supplemented or amended from time
to time in accordance with the related Indenture Documents.
"Indenture Default" means, for any Indenture, any event or condition
defined as a "Default" under such Indenture.
"Indenture Documents" means (i) for any Equipment Trust Certificate,
the related Indenture, the related Trust Agreement and the related Lease, in
each case as defined in such Indenture, and the related Participation
Agreement and (ii) for any Equipment Purchase Certificate, the related
Indenture, the related Indenture Addendum, as defined in such Indenture, and
the related Participation Agreement.
"Indenture Event of Default" means, for any Indenture, any event or
condition defined as an "Indenture Event of Default" in such Indenture.
"Indenture Trustee" means, for any Equipment Certificate, the Person
defined as such in the related Indenture.
"Initial Regular Distribution Date" means, for any Pass Through
Trust, the first Regular Distribution Date on which a Scheduled Payment is to
be made following the Issuance Date for such Pass Through Trust.
"Issuance Date" means, for any Pass Through Trust, the date of the
issuance of the related Pass Through Certificates.
"Lease" means, for any Equipment Trust Certificate, the agreement
between the Company, as lessee, and an Owner Trustee, as lessor, that is
defined as the "Lease" in the related Indenture.
"Letter of Representations" means, for any Series, a letter from the
Company and the Pass Through Trustee to, and accepted by, the Depository in
form and substance satisfactory to the Company and the Pass Through Trustee
for the purposes of the related Series Supplement, as such letter may be
modified or supplemented, or any successor letter thereto.
"Lien" means any mortgage, pledge, lien, charge, disposition of title,
encumbrance, lease or security interest.
"Majority in Interest of Certificateholders" means, for any Series at
any time, Pass Through Certificates of such Series then Outstanding (or the
proxy therefor) representing in the aggregate not less than a majority of the
aggregate Fractional Undivided Interests of the Pass Through Certificates then
Outstanding under the related Pass Through Trust.
"Officer's Certificate" means a certificate signed by a Responsible
Officer of the Company, any Indenture Trustee or any Owner Trustee, as the
case may be, delivered to the Pass Through Trustee. Each such certificate
shall include the statements provided for in Section 13.07 hereof.
"Opinion of Counsel" means a written opinion of legal counsel, who in
the case of counsel (a) for the Company may be (i) an attorney employed by the
Company who is generally empowered to deliver such written opinions, or (ii)
other counsel designated by the Company and reasonably satisfactory to the
Pass Through Trustee and (b) for any Owner Trustee or Indenture Trustee, an
attorney selected by such Person and reasonably satisfactory to the Pass
Through Trustee.
"Outstanding" means, when used with respect to Pass Through
Certificates of any Series, as of the date of determination and subject to the
provisions of Section 6.04 hereof, all Pass Through Certificates theretofore
authenticated and delivered for such Series, with the exception of the
following:
(i) Pass Through Certificates theretofore cancelled by the
Pass Through Trustee or delivered to the Pass Through Trustee for
cancellation pursuant to Section 2.10 hereof;
(ii) All Pass Through Certificates of such Series if money in
the amount required to make the final distribution thereon in
accordance with Section 12.01 hereof has been theretofore deposited
with the Pass Through Trustee in trust for the Certificateholders of
such Series pending such final distribution; and
(iii) Pass Through Certificates in exchange for or in lieu of
which other Pass Through Certificates have been authenticated and
delivered pursuant to Article II hereof.
"Overdue Scheduled Payment" means, for any Pass Through Trust, any
Scheduled Payment that is not received within seven Business Days after the
Regular Distribution Date applicable to such Scheduled Payment.
"Owner Participant" means, for any Equipment Trust Certificate, the
Person defined as such in the related Indenture.
"Owner Trustee" means, for any Equipment Trust Certificate, the Person
defined as such in the related Indenture.
"Participation Agreement" means (i) for any Equipment Trust
Certificate, the agreement among the Company, the Owner Participant, the Owner
Trustee, the Indenture Trustee, the Pass Through Trustee and, if applicable,
each Original Loan Participant (as defined in such Participation Agreement),
that is defined as the "Participation Agreement" in the related Indenture and
pursuant to which the Pass Through Trustee agrees to purchase such Equipment
Trust Certificate upon the issuance thereof by such Owner Trustee and (ii) for
any Equipment Purchase Certificate, the agreement among the Company, the
Indenture Trustee and the Pass Through Trustee that is defined as the
"Transfer Agreement" in the related Indenture and pursuant to which the Pass
Through Trustee agrees to purchase such Equipment Purchase Certificate from
the Banks (as defined in such Participation Agreement).
"Pass Through Agreement," "this Pass Through Agreement" and other like
words mean this Pass Through Trust Agreement as the same may be modified,
supplemented or amended from time to time in accordance with the provisions
hereof, but does not include, unless otherwise specified, any Series
Supplement.
"Pass Through Certificate" means, for any Series, any of the
certificates executed, authenticated and delivered for such Series by the Pass
Through Trustee, in accordance with this Pass Through Agreement and pursuant
to the related Series Supplement.
"Pass Through Default" means, for any Pass Through Trust, an Event of
Default or an event or condition that, with the giving of notice or the lapse
of time or both, would become an Event of Default.
"Pass Through Trust" means a separate trust created in accordance
with this Pass Through Agreement by a Series Supplement incorporating the
provisions hereof, as such provisions may be amended or supplemented thereby,
the estate of which consists of the related Trust Property.
"Pass Through Trustee" means the institution executing this Pass
Through Agreement as Pass Through Trustee, or its successor in interest, and
any successor or other trustee appointed as provided herein; provided that if
the same institution is not acting as the Pass Through Trustee in respect of
all Series, the phrase "the Pass Through Trustee" shall, unless the context
otherwise requires, mean, as to any Series, the institution named in the
applicable Series Supplement as Pass Through Trustee in respect of such
Series, or its successor in interest and any successor or other trustee
appointed as provided herein.
"Paying Agent" has the meaning set forth in Section 3.04 hereof.
"Permitted Investments" means (a) direct obligations of the United
States of America or obligations fully guaranteed by the United States of
America; (b) commercial paper rated A-1/P-1 by Standard & Poor's Ratings Group
and Moody's Investors Service, Inc., respectively or, if such ratings are
unavailable, rated by any nationally recognized rating organization in the
United States equal to the highest rating assigned by such rating
organization; (c) overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers; and (d) overnight
repurchase agreements with respect to the securities described in clause (a)
above entered into with an office of a bank or trust company which is located
in the United States of America of any bank or trust company which is
organized under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500 million.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, nonincorporated organization
or government or any agency or political subdivision thereof.
"Pool Balance" means, for any Pass Through Trust, as of any date of
determination the aggregate unpaid principal amount of the Equipment
Certificates that constitute Trust Property of such Pass Through Trust on such
date plus the amount of the principal payments on such Equipment Certificates
held by the Pass Through Trustee and not yet distributed plus the amount of
any moneys transferred to the Company and deposited in the related Deposit
Trust Account (other than earnings thereon and without giving effect to any
losses on investments thereof). The Pool Balance as of any Regular
Distribution Date or Special Distribution Date shall be computed after giving
effect to the payment of principal, if any, on such Equipment Certificates and
the distribution thereof being made on that date.
"Pool Factor" means, for any Pass Through Trust, as of any date of
determination the quotient (rounded to the seventh decimal place) computed by
dividing (i) the Pool Balance by (ii) the aggregate original amount of the
Pass Through Certificates of the related Series. The Pool Factor as of any
Regular Distribution Date or Special Distribution Date shall be computed after
giving effect to the payment of principal, if any, on such Equipment
Certificates and the distribution thereof being made on that date.
"Record Date," for any Series, means, (i) for any Regular
Distribution Date, the date specified in the related Series Supplement as the
Record Date for such Regular Distribution Date and (ii) for any Special
Distribution Date, the 15th day preceding such Special Distribution Date, in
any event, whether or not such date is a Business Day.
"Register" has the meaning set forth in Section 3.02 hereof.
"Registered Global Certificate" means, for any Series, each Pass
Through Certificate, if any, issued to the Depository in accordance with
Article II hereof and bearing the legend prescribed in Section 2.12(a) hereof.
"Registrar" has the meaning set forth in Section 3.02 hereof.
"Regular Distribution Date" means, for any Pass Through Trust, any
date specified in the related Series Supplement for the distribution of any
Scheduled Payment from such Pass Through Trust to the related
Certificateholders.
"Related Indenture Trustee" means, for any Pass Through Trust, any
Indenture Trustee under an Indenture relating to any Equipment Certificate that
constitutes Trust Property thereof, and "Related Indenture Trustees" means all
such Indenture Trustees for all such Equipment Certificates constituting Trust
Property thereof.
"Related Owner Participant" means, for any Pass Through Trust, any
Owner Participant under a Trust Agreement relating to any Equipment Trust
Certificate that constitutes Trust Property, and "Related Owner Participants"
means all such Owner Participants for all such Equipment Trust Certificates
constituting Trust Property thereof.
"Related Owner Trustee" means, for any Pass Through Trust, any Owner
Trustee under a Trust Agreement relating to any Equipment Trust Certificate
that constitutes Trust Property, and "Related Owner Trustees" means all such
Owner Trustees for all such Equipment Trust Certificates constituting Trust
Property thereof.
"Responsible Officer" means the president or any vice president; or,
in the case of the Pass Through Trustee, an officer in its Corporate Trust
Office.
"Scheduled Payment" means, for any Pass Through Trust, any scheduled
payment of principal of (whether by installment or redemption or otherwise) and
interest on any Equipment Certificate that constitutes Trust Property thereof
to be made in the amounts and on the date set forth for such payment in such
Equipment Certificate, but does not include any Overdue Scheduled Payment.
"Securities Act" means the Securities Act of 1933, as amended.
"Series" means a separate series of Pass Through Certificates issued
pursuant to this Pass Through Agreement and a Series Supplement.
"Series Supplement" means an agreement executed and delivered by the
Company and the Pass Through Trustee in accordance with this Pass Through
Agreement, incorporating the provisions hereof, as amended or supplemented
thereby, and creating a separate Pass Through Trust for the benefit of the
Certificateholders of the Series of Pass Through Certificates to be issued
under such Pass Through Trust.
"Special Distribution Date" means, for any Pass Through Trust, any
date specified in the related Series Supplement for the distribution of any
Special Payment from such Pass Through Trust to the related
Certificateholders.
"Special Payment" means, for any Pass Through Trust, any payment
(including any Overdue Scheduled Payment) other than a Scheduled Payment on any
Equipment Certificate that constitutes Trust Property thereof, any proceeds
from the sale of such Equipment Certificate pursuant to Article VII hereof or
any payment by the Company pursuant to the last two paragraphs of Section
2.02(b) hereof.
"Special Payments Account" means, for any Pass Through Trust, the
account or accounts created and maintained for such Pass Through Trust
pursuant to Section 5.01(b) hereof and the related Series Supplement.
"Specified Investments" has, for any Deposit Trust, the meaning set
forth for such term in the related Deposit Trust Agreement.
"Trust Agreement" means, for any Equipment Trust Certificate, the
agreement between an Owner Trustee and an Owner Participant that is defined as
the "Trust Agreement" in the related Indenture.
"Trust Indenture Act" means (except as otherwise provided in Section
11.06) the Trust Indenture Act of 1939, as amended, as in force at the date as
of which this Pass Through Agreement was first qualified under such Act.
"Trust Property" means, for any Pass Through Trust, all money,
instruments, including the related Equipment Certificates, and other property
held as the property of such Pass Through Trust, including all distributions
thereon and proceeds thereof.
ARTICLE II
ISSUANCE OF PASS THROUGH CERTIFICATES;
ACQUISITION OF EQUIPMENT CERTIFICATES
SECTION 2.01. Amount Unlimited; Issuable in Series; Series
Supplements. (a) The aggregate amount of Pass Through Certificates that may
be authenticated and delivered in accordance with this Pass Through Agreement
is unlimited.
The Pass Through Certificates may be issued from time to time in one
or more Series, each Series relating to a separate Pass Through Trust, and
shall be designated generally as the "Pass Through Certificates," with further
designations added or incorporated in the title for the Pass Through
Certificates of any Series as specified in the related Series Supplement.
Each Pass Through Certificate shall bear upon its face the designation so
selected for the Series to which it belongs. All Pass Through Certificates of
the same Series shall be substantially identical except as to denomination and
as may otherwise be provided in the related Series Supplement.
The Pass Through Certificates of each Series will evidence fractional
undivided interests in the separate Pass Through Trust formed by the related
Series Supplement, and will have no rights, benefits or interest in respect of
any other separate Pass Through Trust or the Trust Property held in such other
Pass Through Trust. All Pass Through Certificates of the same Series shall be
in all respects equally and ratably entitled to the benefits of the related
Pass Through Trust without preference, priority, or distinction on account of
the actual time or times of authentication and delivery, all in accordance
with the terms and provisions of this Pass Through Agreement and the related
Series Supplement.
(b) The following matters shall be established for the Pass Through
Certificates of each Series in a Series Supplement executed and delivered by
the Company and the Pass Through Trustee:
(1) the formation of the Pass Through Trust in which the Pass
Through Certificates of such Series evidence fractional undivided
interests and its designation (which designation shall distinguish
such Pass Through Trust from each other Pass Through Trust);
(2) the specific title of the Pass Through Certificates of
such Series (which title shall distinguish the Pass Through
Certificates of the Series from each other Series);
(3) subject to Section 2.02(a) hereof, any limit upon the
aggregate amount of the Pass Through Certificates of such Series that
may be authenticated and delivered under this Pass Through Agreement;
(4) the related Cut-off Date for Pass Through Trust;
(5) the related Regular Distribution Dates;
(6) the related Special Distribution Dates;
(7) if other than as provided in Section 3.02 hereof, the
Registrar or the Paying Agent for such Series, including any
Co-Registrar or additional Paying Agent;
(8) if other than as provided in Section 2.07 hereof, the
denominations in which the Pass Through Certificates of such Series
are issuable;
(9) the specific form of the Pass Through Certificates of such
Series and whether or not the Pass Through Certificates of such
Series are to be issued as one or more Registered Global Certificates
and if the Pass Through Certificates are to be issued as one or more
Registered Global Certificates, the Depository for the Registered
Global Certificates and the Letter of Representations;
(10) a description of the Equipment Certificates to be
acquired by and held in the related Pass Through Trust and of the
related Indenture Documents;
(11) provisions with respect to the terms for which the
definitions set forth in Article I hereof permit or require further
specification in the related Series Supplement;
(12) whether the Pass Through Certificates are eligible for
purchase by ERISA Plans (as defined in Section 6.06 hereof) and, if
applicable, any restrictions on purchases of Pass Through
Certificates by ERISA Plans;
(13) the acceptance of appointment by the institution named to
act as Pass Through Trustee with respect to such Series if different
from the institution executing this Pass Through Agreement or its
successor; and
(14) any other terms of the Pass Through Certificates of such
Series (which terms shall not be inconsistent with the provisions of
the Trust Indenture Act as in effect at the time of the execution and
delivery of such Series Supplement or adversely affect the interest
of the Certificateholders of any Series outstanding at the time),
including any terms that may be required or advisable under United
States laws or regulations or advisable in connection with the
marketing of the Series.
(c) At any time and from time to time after the execution and
delivery of this Pass Through Agreement, the Company and the Pass Through
Trustee may execute and deliver one or more Series Supplements, each forming a
separate Pass Through Trust and establishing the terms of the Pass Through
Certificates of the related Series, and pursuant to which the Pass Through
Certificates of such Series shall be executed, authenticated and delivered by
the Pass Through Trustee to the Person specified by the Company upon request
of the Company and upon satisfaction of any conditions precedent set forth in
the related Series Supplement on the Issuance Date for such Series.
SECTION 2.02. Acquisition of Equipment Certificates. (a) Pass
Through Certificates of a Series executed, authenticated and delivered by the
Pass Through Trustee upon request of the Company in accordance with Section
2.01(c) hereof shall equal the aggregate principal amount of the Equipment
Certificates to be purchased by the Pass Through Trustee pursuant to the
related Participation Agreements, and evidence the entire ownership of the
related Pass Through Trust. The Pass Through Trustee shall issue and sell
such Pass Through Certificates, in authorized denominations and in such
Fractional Undivided Interests, so as to result in the receipt of
consideration in an amount equal to the aggregate principal amount of such
Equipment Certificates and, concurrently therewith, the Pass Through Trustee
shall purchase, pursuant to the terms and conditions of the Participation
Agreements, the Equipment Certificates (except Delayed ECs, if any) at a
purchase price equal to the amount of such consideration so received. Except
as provided in Sections 2.08 and 2.09 hereof, the Pass Through Trustee shall
not execute, authenticate or deliver Pass Through Certificates of such Series
in excess of the aggregate amount determined in accordance with this
subsection (a). The provisions of this subsection (a) are subject to the
provisions of subsection (b) below.
(b) If, on or prior to an Issuance Date, the Company delivers to the
Pass Through Trustee a Delayed Delivery Notice relating to one or more Delayed
ECs, then (i) the Pass Through Trustee shall postpone the purchase of the
specified Delayed ECs, (ii) the Company, the Pass Through Trustee and the
Deposit Trustee shall form a Deposit Trust, (iii) the Pass Through Trustee
shall transfer to the Company the Deposit Trust Funds relating to such Delayed
ECs and (iv) the Company shall deposit such Deposit Trust Funds into the
Deposit Trust Account for such Deposit Trust. The Deposit Trust Funds so
deposited shall be invested pursuant to the related Deposit Trust Agreement by
the Deposit Trustee at the direction and risk of, and for the benefit of, the
Company in Specified Investments. The Company agrees that withdrawals shall
be made from any Deposit Trust Account only as provided in the related Deposit
Trust Agreement.
Upon notice from the Company on one or more occasions that any Delayed
ECs are available for purchase and upon the satisfaction of the closing
conditions specified in the applicable Participation Agreements and the
related Series Supplement on or prior to the related Cut-off Date for Pass
Through Trust, the Company shall cause the related Deposit Trust Funds to be
withdrawn from the related Deposit Trust Account and paid to the Pass Through
Trustee, free and clear of any Lien under the Deposit Trust Agreement, and the
Pass Through Trustee shall purchase the applicable Delayed ECs with such
Deposit Trust Funds. The purchase price for such Delayed ECs shall equal the
principal amount of such Delayed ECs.
On the Initial Regular Distribution Date for any Pass Through Trust
for which Delayed ECs are purchased pursuant to this subsection, the Company
shall pay, in immediately available funds, to the Pass Through Trustee an
amount equal to the interest that would have accrued on any Delayed ECs
purchased after the related Issuance Date as if such Delayed ECs had been
purchased on such Issuance Date, from such Issuance Date to, but not
including, the date of the purchase of such Delayed ECs for such Pass Through
Trust.
If the Company notifies the Pass Through Trustee prior to any Cut-off
Date for Pass Through Trust that any related Delayed ECs will not be issued on
or prior to such Cut-off Date for Pass Through Trust for any reason, on the
next Special Distribution Date for such Pass Through Trust occurring more than
20 days following the date of such notice (i) the Company shall (A) pay to the
Pass Through Trustee for deposit in the related Special Payments Account, in
immediately available funds, an amount equal to the interest that would have
accrued on the Delayed ECs designated in such notice at a rate equal to the
interest rate applicable to the related Series from the related Issuance Date
to, but not including, such Special Distribution Date and (B) cause an amount
equal to the amount of Deposit Trust Funds that would have been used to
purchase such Delayed ECs to be withdrawn from the related Deposit Trust
Account and paid to the Pass Through Trustee, free and clear of any Lien under
the Deposit Trust Agreement, and (ii) the Pass Through Trustee shall deposit
in the related Special Payments Account, upon receipt from the Deposit Trustee
pursuant to the related Deposit Trust Agreement, the amount received pursuant
to clause (i)(B) above, and the amount paid by the Company pursuant to clause
(i)(A) above, and such amounts shall be distributed as a Special Payment in
accordance with the provisions hereof.
If, on the Cut-off Date for Pass Through Trust for any Pass Through
Trust, an amount equal to less than all of the Deposit Trust Funds (other than
Deposit Trust Funds referred to in the immediately preceding paragraph) has
been used to purchase related Delayed ECs, on the next Special Distribution
Date for such Pass Through Trust occurring more than 20 days following such
Cut-off Date for Pass Through Trust (i) the Company shall (A) pay to the Pass
Through Trustee for deposit in the related Special Payments Account, in
immediately available funds, an amount equal to the interest that would have
accrued on such Delayed ECs contemplated to be purchased with such unused
Deposit Trust Funds (other than any Deposit Trust Funds referred to in the
immediately preceding paragraph) but not so purchased at a rate equal to the
interest rate applicable to the related Series from the related Issuance Date
to, but not including, such Special Distribution Date and (B) cause such
unused Deposit Trust Funds to be withdrawn from the related Deposit Trust
Account and paid to the Pass Through Trustee, free and clear of any Lien under
the Deposit Trust Agreement, and (ii) the Pass Through Trustee shall deposit
in such Special Payments Account, upon receipt from the Deposit Trustee
pursuant to the related Deposit Trust Agreement, such unused Deposit Trust
Funds received pursuant to clause (i)(B) above, and the amount paid by the
Company pursuant to clause (i)(A) above, and such amounts shall be distributed
as a Special Payment in accordance with the provisions hereof.
SECTION 2.03. Initial Certificateholders as Grantors. By its
acceptance of any Pass Through Certificate of any Series issued to it under
the related Pass Through Trust, each initial Certificateholder of such Series
as grantor of such Pass Through Trust shall join in the creation and
declaration of such Pass Through Trust.
SECTION 2.04. Limitation of Powers. Each Pass Through Trust shall be
constituted solely for the purpose of making the investment in the Equipment
Certificates provided for in the related Series Supplement and, except as set
forth herein or in such Series Supplement, the Pass Through Trustee shall not
be authorized or empowered to acquire any other investments or engage in any
other activities and, in particular, the Pass Through Trustee shall not be
authorized or empowered to do anything that would cause such Pass Through
Trust to fail to qualify as a "grantor trust" for federal income tax purposes
(including as subject to this restriction, acquiring any Aircraft (as defined
in the respective related Indentures) by bidding such Equipment Certificates
or otherwise, or taking any action with respect to any such Aircraft once
acquired).
SECTION 2.05. Execution of Pass Through Certificates. The Pass
Through Certificates of each Series shall be signed on behalf of the Pass
Through Trustee by an authorized officer of the Pass Through Trustee. Such
signatures may be the manual or facsimile signatures of such officer and minor
errors or defects in any reproduction of any such signature shall not affect
the validity or enforceability of any Pass Through Certificate which has been
duly authenticated and delivered by the Pass Through Trustee.
If any officer of the Pass Through Trustee who signs any of the Pass
Through Certificates subsequently ceases to be such officer before the Pass
Through Certificate so signed is authenticated and delivered or disposed of by
the Pass Through Trustee, such Pass Through Certificate nevertheless may be
authenticated and delivered or disposed of as though the person who signed
such Pass Through Certificate had not ceased to be such officer of the Pass
Through Trustee; and any Pass Through Certificate may be signed on behalf of
the Pass Through Trustee by such person or persons as, at the actual date of
the execution of such Pass Through Certificate, are the proper officers of the
Pass Through Trustee, although at the date of the execution and delivery of
the related Series Supplement any such person was not such officer.
SECTION 2.06. Certificate of Authentication. The Pass Through
Trustee shall duly authenticate and deliver Pass Through Certificates for each
Series in authorized denominations equaling the aggregate principal amount of
the Equipment Certificates to be purchased for the related Pass Through Trust
by the Pass Through Trustee pursuant to the related Participation Agreements,
and evidencing the entire ownership of the related Pass Through Trust. Only
such Pass Through Certificates of such Series as shall bear thereon a
certificate of authentication substantially in the form set forth in Exhibit
A, executed by the Pass Through Trustee by manual or facsimile signature of
one of its authorized officers, shall be entitled to the benefits of the
related Pass Through Trust or be valid or obligatory for any purpose. Such
certificate by the Pass Through Trustee upon any Pass Through Certificate for
such Series executed by the Pass Through Trustee shall be conclusive evidence
that the Pass Through Certificate so authenticated has been duly authenticated
and delivered hereunder and that the Certificateholder, as evidenced on the
Register for such Series, is entitled to the benefits of the related Pass
Through Trust.
SECTION 2.07. Form and Denomination of Pass Through Certificates.
The Pass Through Certificates of each Series shall be substantially in the
form set forth in Exhibit A hereto. The Pass Through Certificates shall be
issuable as registered securities without coupons and shall be numbered,
lettered, or otherwise distinguished in such manner or in accordance with such
plans as set forth in the related Series Supplement. The Pass Through
Certificates of each Series shall be issued in minimum denominations of $1,000
and integral multiples thereof and shall be dated the date of their
authentication.
The Pass Through Certificates of any Series may be issued with
appropriate insertions, omissions, substitutions and variations, and may have
imprinted or otherwise reproduced thereon such legend, not inconsistent with
the provisions of this Pass Through Agreement or the related Series
Supplement, as may be required to comply with any law or with any rules or
regulations pursuant thereto, or with the rules of the Depository or any
securities market in which such Pass Through Certificates are admitted to
trading, or to conform to general usage.
SECTION 2.08. Registration, Transfer and Exchange. The Pass Through
Trustee will keep at each office or agency to be maintained for any Series for
the purpose as provided in Section 3.02 hereof a Register in which, subject to
such reasonable regulations as it may prescribe, it will register, and will
register the transfer of, Pass Through Certificates of the related Series as
provided in this Article II. Such Register shall be in written form in the
English language.
Upon due presentation for registration of transfer of any Pass Through
Certificate of the related Series at any such office or agency, the Pass
Through Trustee shall execute, authenticate and deliver in the name of the
transferee or transferees a new Pass Through Certificate of such Series in
authorized denominations and for a like aggregate Fractional Undivided
Interest.
Subject to the provisions of Section 2.12 hereof, any Pass Through
Certificate or Pass Through Certificates may be exchanged for a Pass Through
Certificate or Pass Through Certificates of the same Series in other authorized
denominations and for a like aggregate Fractional Undivided Interest. Pass
Through Certificates to be exchanged shall be surrendered at any office or
agency to be maintained by the Pass Through Trustee for the related Series for
the purpose as provided in Section 3.02 hereof, and the Pass Through Trustee
shall execute, authenticate and deliver in exchange therefor the Pass Through
Certificate or Pass Through Certificates which the Certificateholder making
the exchange shall be entitled to receive, bearing numbers not
contemporaneously or previously outstanding.
All Pass Through Certificates presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Pass Through
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Pass Through Trustee duly
executed by, the Certificateholder or such Person's attorney duly authorized
in writing.
The Pass Through Trustee may require payment from the
Certificateholder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any exchange or registration of
transfer of Pass Through Certificates. No service charge to the
Certificateholder shall be made for any such transaction.
All Pass Through Certificates issued upon any transfer or exchange of
Pass Through Certificates shall evidence ownership in the same Pass Through
Trust and be entitled to the same benefits under this Pass Through Agreement
and the applicable Series Supplement, as the Pass Through Certificates
surrendered upon such transfer or exchange.
Resales or other transfers of Pass Through Certificates represented
by a Registered Global Certificate will be conducted in accordance with the
provisions of this Pass Through Agreement, including without limitation
Section 6.06 hereof, and the rules and procedures of the Depository applicable
to U.S. corporate pass through certificates and without notice to, or action
by, the Pass Through Trustee.
Neither the Company nor the Pass Through Trustee will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests of a Registered
Global Certificate or for maintaining, supervising or reviewing any records
relating to such beneficial interests.
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Pass
Through Certificates. If any Pass Through Certificate becomes mutilated,
defaced or is apparently destroyed, lost or stolen, the Pass Through Trustee
in its discretion may execute, authenticate and deliver a new Pass Through
Certificate of like Fractional Undivided Interest in the related Pass Through
Trust, bearing a number not contemporaneously or previously outstanding, in
exchange and substitution for the mutilated or defaced Pass Through
Certificate, or in lieu of and in substitution for the Pass Through
Certificate so apparently destroyed, lost or stolen. In every case the
applicant for a substitute Pass Through Certificate shall furnish to the Pass
Through Trustee and any agent of the Pass Through Trustee such security or
indemnity as may be required by them to indemnify and defend and to save each
of them harmless from any such substitution and, in every case of destruction,
loss or theft, evidence to their satisfaction of the apparent destruction,
loss or theft of such Pass Through Certificate and of the ownership thereof.
Upon the issuance of any substitute Pass Through Certificate, the Pass
Through Trustee may require payment from the Certificateholder of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the
reasonable fees and expenses of the Pass Through Trustee) connected therewith.
If any Pass Through Certificate of a Pass Through Trust for which a notice of
termination has been or is about to be given pursuant to Section 12.01 hereof
becomes mutilated or defaced or is apparently destroyed, lost or stolen, the
Pass Through Trustee may, instead of issuing a substitute Pass Through
Certificate, pay or authorize the payment of the same (without surrender
thereof except in the case of a mutilated or defaced Pass Through
Certificate), if the applicant for such payment furnishes to the Pass Through
Trustee and any agent of the Pass Through Trustee such security or indemnity
as any of them may require to save each of them harmless from all risks,
however remote, resulting from such payment and, in every case of apparent
destruction, loss or theft, the applicant shall also furnish to the Pass
Through Trustee and any agent of the Pass Through Trustee evidence to their
satisfaction of the apparent destruction, loss or theft of such Pass Through
Certificate and of the ownership thereof.
Every substitute Pass Through Certificate issued pursuant to the
provisions of this Section 2.09 by virtue of the fact that any Pass Through
Certificate is apparently destroyed, lost or stolen will constitute conclusive
evidence of the Fractional Undivided Interest in the applicable Pass Through
Trust evidenced by the Pass Through Certificate that it replaces, whether or
not the apparently destroyed, lost or stolen Pass Through Certificate may be
enforceable at any time by anyone and will be entitled to all the benefits of
(but will be subject to all the limitations of rights set forth in) the
applicable Pass Through Trust equally and proportionately with any and all
other Pass Through Certificates duly authenticated and delivered therefor.
All Pass Through Certificates will be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced, or
apparently destroyed, lost or stolen Pass Through Certificates and will
preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.10. Cancellation of Pass Through Certificates; Destruction
Thereof. All Pass Through Certificates surrendered for payment, redemption,
registration of transfer or exchange, if surrendered to any agent of the Pass
Through Trustee, shall be delivered to the Pass Through Trustee for
cancellation or, if surrendered to the Pass Through Trustee, shall be
cancelled by it; and no Pass Through Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Pass
Through Agreement or the applicable Series Supplement. The Pass Through
Trustee shall destroy cancelled Pass Through Certificates held by it.
SECTION 2.11. Temporary Pass Through Certificates. Pending the
preparation of definitive Pass Through Certificates of any Series, the Pass
Through Trustee may execute, authenticate and deliver temporary Pass Through
Certificates for such Series (produced in a form satisfactory to the executing
officer of the Pass Through Trustee, as evidenced by such officer's execution
thereof). Such temporary Pass Through Certificates shall be issuable as
registered Pass Through Certificates without coupons, of any authorized
denomination, and substantially in the form of the definitive Pass Through
Certificates of such Series but with such omissions, insertions and variations
as may be appropriate for temporary Pass Through Certificates, all as may be
determined by the executing officer of the Pass Through Trustee, as evidenced
by such officer's execution thereof.
Temporary Pass Through Certificates may contain such reference to any
provisions of this Pass Through Agreement or the applicable Series Supplement
as may be appropriate. Every such temporary Pass Through Certificate shall be
executed and authenticated by the Pass Through Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the
definitive Pass Through Certificates of such Series. Without unreasonable
delay the Company shall furnish definitive Pass Through Certificates for such
Series and thereupon temporary Pass Through Certificates shall be surrendered
in exchange therefor without charge at any office or agency to be maintained
by the Pass Through Trustee for the purpose pursuant to Section 3.02 hereof,
and the Pass Through Trustee shall execute, authenticate and deliver in
exchange for such temporary Pass Through Certificates such definitive Pass
Through Certificates evidencing a like aggregate Fractional Undivided Interest
in the applicable Pass Through Trust in authorized denominations. Until so
exchanged, temporary Pass Through Certificates shall be entitled to the same
benefits under the applicable Pass Through Trust and this Pass Through
Agreement as definitive Pass Through Certificates of the applicable Series.
SECTION 2.12. Pass Through Certificates Issuable in the Form of a
Registered Global Certificate. For any Series, at the sole option of the
Company as set forth in the related Series Supplement, this Section 2.12 shall
apply to such Series or may be amended with respect to any Series. To the
extent that the provisions of this Section 2.12 conflict with any other
provisions of this Pass Through Agreement, the provisions of this Section 2.12
shall control.
(a) If the Company shall establish pursuant to Section 2.01(b)(9)
hereof that the Pass Through Certificates of a particular Series are to be
issued in whole in the form of a Registered Global Certificate, then the Pass
Through Trustee shall, in accordance with this Article II, execute,
authenticate and deliver, one or more Registered Global Certificates which (i)
shall represent, and shall be denominated in an amount equal to, the aggregate
Fractional Undivided Interests of all of the Pass Through Certificates in the
related Pass Through Trust, (ii) shall be registered in the name of the
Depository or its nominee, (iii) shall be delivered by the Pass Through
Trustee to the Depository or pursuant to the Depository's instruction, and
(iv) shall bear a legend substantially to the following effect: "Unless this
Registered Global Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Pass
Through Trustee or its agent for registration of transfer, exchange or
payment, and any Registered Global Certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein."
No Person acquiring a beneficial interest in a Pass Through
Certificate will be entitled to receive a definitive Pass Through Certificate
representing such Person's interest in the Pass Through Trust, except as
provided in subsection (d) below.
(b) Notwithstanding any other provision of this Section 2.12 or of
Section 2.08 hereof, the Registered Global Certificate for any Series may be
transferred, in whole but not in part and in the manner provided in Section
2.08 hereof, by the Depository to a nominee of such Depository or by a nominee
of such Depository to such Depository or another nominee of such Depository or
by such Depository or any such nominee to a successor Depository selected or
approved by the Company upon notice to the Pass Through Trustee or to a
nominee of such successor Depository.
(c) The Depository shall be an organization registered as a clearing
agency under the Exchange Act and any other applicable statute or regulation.
(d) If at any time the Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Series or if at any
time the Depository for such Series shall no longer be eligible under
subsection (c) above, and a successor Depository is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, this Section 2.12 shall no longer be
applicable to the Pass Through Certificates of such Series and the Pass
Through Trustee will execute, authenticate and deliver Pass Through
Certificates of such Series in definitive registered form without coupons, in
authorized denominations, and in an aggregate Fractional Undivided Interest in
the related Pass Through Trust equal to the Fractional Undivided Interest in
the related Pass Through Trust of the Registered Global Certificate then
outstanding in exchange for such Registered Global Certificate.
The Company may at any time and in its sole discretion determine that
the Pass Through Certificates of any Series shall no longer be represented by
a Registered Global Certificate and that the provisions of this Section 2.12
shall no longer apply to such Pass Through Certificates. In such event the
Pass Through Trustee, upon receipt of an Officer's Certificate evidencing such
determination by the Company, will notify the Depository of the availability
of such Pass Through Certificates in definitive form and will execute,
authenticate and deliver, Pass Through Certificates of such Series in
definitive registered form without coupons, in authorized denominations and in
an aggregate Fractional Undivided Interest in the related Pass Through Trust
equal to the Fractional Undivided Interest in the related Pass Through Trust
of the Registered Global Certificate then outstanding in exchange for such
Registered Global Certificate. Upon the exchange of the Registered Global
Certificate for such Pass Through Certificates in definitive registered form,
such Registered Global Certificate shall be cancelled by the Pass Through
Trustee. Such Pass Through Certificates in definitive registered form issued
in exchange for the Registered Global Certificate pursuant to this subsection
(d) shall be registered in such names and in such authorized denominations as
the Depository shall instruct the Pass Through Trustee. The Pass Through
Trustee shall deliver such Pass Through Certificates to the Persons in whose
names such Pass Through Certificates are so registered. Upon the issuance of
Pass Through Certificates in definitive registered form without coupons, the
Pass Through Trustee shall recognize the Person in whose name such definitive
Pass Through Certificates are registered in the Register from time to time as
Certificateholders hereunder.
(e) As long as the Pass Through Certificates of a Series are
represented by a Registered Global Certificate, all distributions for such
Series shall be made to the holder of such Registered Global Certificate as
the Certificateholder of such Series, or to such Persons as such holder may
designate, by wire transfer of immediately available funds on the date such
distributions are due, and the Company shall or shall cause the Pass Through
Trustee to provide to the Depository any notices referred to in the related
Letter of Representations in accordance with such Letter of Representations.
ARTICLE III
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01. Covenants of the Company. (a) The Company will
preserve and maintain all of its rights, privileges and franchises necessary
in the normal conduct of its business; provided that the Company shall not be
required to preserve any right, privilege or franchise if the Company shall
reasonably determine that the loss thereof will not materially adversely
affect the Company's ability to perform its obligations hereunder or under any
Series Supplement.
(b) The Company shall not (i) consolidate with or merge into any
other corporation under circumstances in which the Company is not the surviving
corporation or (ii) convey, transfer or lease all or substantially all of its
assets as an entirety to any Person, unless the corporation formed by such
consolidation or into which the Company is merged or the Person which acquired
by conveyance, transfer or lease substantially all of the assets of the
Company as an entirety shall be a corporation organized and existing under the
laws of the United States of America or any State or the District of Columbia,
and shall execute and deliver to the Pass Through Trustee an agreement
reasonably satisfactory in form and substance to the Pass Through Trustee
containing an effective assumption by such successor corporation of the due
and punctual performance and observance of each covenant and condition to be
performed or observed by the Company hereunder and under each Series
Supplement.
(c) Upon any consolidation or merger, or any conveyance, transfer or
lease of substantially all the assets of the Company as an entirety in
accordance with this Section 3.01, the successor corporation formed by such
consolidation or the Person into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company hereunder and
under each Series Supplement with the same effect as if such successor
corporation or such Person, as the case may be, had been named as the Company
herein and therein. No such conveyance, transfer or lease of substantially
all of the assets of the Company as an entirety shall have the effect of
releasing the Company or any successor corporation which shall theretofore have
become such in the manner prescribed in this Section 3.01 from its liability
hereunder or under any Series Supplement.
(d) The Pass Through Trustee shall receive an Opinion of Counsel of
the Company as conclusive evidence that any consolidation, merger, sale, lease
or conveyance, and any assumption complies with the provisions of this Section
3.01 and the Pass Through Trustee shall be entitled to rely upon the same for
all purposes hereof.
SECTION 3.02. Offices for Payments; Registrar. So long as any Pass
Through Certificates of a Series remain outstanding, the Pass Through Trustee
will maintain the following for such Series: (a) an office or agency where
such Pass Through Certificates may be presented for payment and (b) a facility
or agency in New York, New York where such Pass Through Certificates may be
presented or surrendered for registration of transfer and for exchange and for
redemption as provided in this Pass Through Agreement (the "Registrar").
Written notice of the location of each such other office or agency and of any
change of location thereof shall be given by the Pass Through Trustee to the
Company, any Owner Trustees, the Indenture Trustees and the Certificateholders
of such Series. In the event that no such office or agency shall be
maintained or no such notice of location or of change of location shall be
given, presentations and demands may be made and notices may be served at the
Corporate Trust Office of the Pass Through Trustee. The Registrar shall keep
a Register with respect to the Pass Through Certificates of each Series and
their transfer and exchange. The Pass Through Trustee may appoint one or more
co-registrars ("Co-Registrars") for any Series and may terminate any such
appointment at any time upon written notice. The term "Registrar" includes
any Co-Registrar.
Any Registrar shall be a bank or trust company organized and doing
business under the laws of the United States or any state, with a combined
capital and surplus of at least $100,000,000, or a direct or indirect
subsidiary of such an entity, or a member of a bank holding company group,
having a combined capital and surplus of at least $100,000,000 and such
subsidiary or member itself having a capital and surplus of at least
$10,000,000.
The Pass Through Trustee shall initially act as Registrar and shall
initially serve as an office where Pass Through Certificates can be presented
for payment.
SECTION 3.03. Representations and Warranties of the Pass Through
Trustee. (a) The Pass Through Trustee, in its individual capacity (except
with respect to clause (iv) below), represents, warrants and agrees that:
(i) it is a validly existing national banking association or
a bank or trust company organized or chartered under the laws of a
State of the United States of America and duly organized under the
laws of the United States of America or such State, as the case may
be, holding a valid certificate to do business as a national banking
association or a bank or trust company under the State of the United
States of America where it is organized or chartered, as the case may
be, with banking and trust powers and has the corporate power and
authority to enter into and perform its obligations under this Pass
Through Agreement;
(ii) this Pass Through Agreement has been duly authorized by
all necessary corporate action on its part, and neither the execution
and delivery hereof nor its performance of any of the terms and
provisions hereof will violate any federal law or the law of the
State of the United States of America where it is located or
regulation relating to its banking or trust powers or any judgment or
order applicable to or binding on the Pass Through Trustee and will
not contravene or result in any breach of, or constitute any default
under its charter or by-laws or the provisions of any indenture,
mortgage, contract or other agreement to which it is a party or by
which it or its properties may be bound or affected;
(iii) the execution, delivery and performance by the Pass
Through Trustee of this Pass Through Agreement will not require the
authorization, consent, or approval of, the giving of notice to, the
filing or registration with, or the taking of any other action in
respect of, any governmental authority or agency of the United States
of America or the State of the United States of America where it is
located regulating the banking and corporate trust activities of the
Pass Through Trustee other than (i) the registration of the Pass
Through Certificates under the Securities Act and under the securities
laws of any state in which the Pass Through Certificates may be
offered for sale if the laws of such state require such action and
(ii) the qualification of the Pass Through Agreement under the Trust
Indenture Act pursuant to an order of the Securities and Exchange
Commission;
(iv) this Pass Through Agreement has been duly executed and
delivered by it and, assuming that this Pass Through Agreement is the
legal, valid and binding obligation of the Company, is the legal,
valid and binding obligation of the Pass Through Trustee, enforceable
against the Pass Through Trustee in accordance with its terms except
as may be limited by bankruptcy, insolvency, moratorium,
reorganization, receivership, fraudulent conveyance or similar laws
or equitable principles of general application to or affecting the
enforcement of creditors' rights and remedies generally from time to
time in effect, regardless of whether such enforceability is
considered in a proceeding in equity or at law; and
(v) each Series Supplement executed by such Pass Through
Trustee will be, upon the date of execution and delivery of such
Series Supplement, executed and delivered by one of its officers duly
authorized to execute and deliver such Series Supplement on its
behalf.
(b) The representations and warranties set forth in subsection (a)
above shall be deemed to be made by the applicable Pass Through Trustee on
each Issuance Date, except as otherwise provided in the applicable Series
Supplement.
SECTION 3.04. Paying Agents. Whenever the Pass Through Trustee in
its sole discretion shall appoint a paying agent (the "Paying Agent") for any
Pass Through Trust, it will cause the Paying Agent to execute and deliver an
instrument in which the Paying Agent shall agree with the Pass Through
Trustee, subject to the provisions of this Section 3.04,
(a) that it will hold all sums received by it as such agent for
distribution to the Certificateholders of the related Series (whether
such sums have been paid to it by the Pass Through Trustee or the
Related Owner Trustee or Indenture Trustee) in trust for the benefit
of the Certificateholders of the related Series or of the Pass
Through Trustee, and
(b) that it will notify the Pass Through Trustee if the
principal of or interest or premium on the Equipment Certificates
that constitute Trust Property of such Pass Through Trust is not paid
when the same is due and payable.
Anything in this Section 3.04 to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section 3.04 are subject
to the provisions of Sections 12.03 and 12.04 hereof.
SECTION 3.05. No Representations or Warranties as to Documents. The
Pass Through Trustee neither makes nor shall be deemed to have made any
representation or warranty as to the validity, legality or enforceability of
any Series Supplement, any related Pass Through Certificates or any related
Indenture Documents or as to the correctness of any statement contained in any
thereof, except for the representations and warranties of the Pass Through
Trustee made in its individual capacity under this Pass Through Agreement, in
any Series Supplement or in any related Participation Agreement.
SECTION 3.06. Payments from Trust Property Only. For any Pass
Through Trust, all payments or distributions to be made to Certificateholders
of any Series under the related Series Supplement by the Pass Through Trustee
under such Pass Through Trust shall be made only from the income and the
proceeds from the related Trust Property and only to the extent that the Pass
Through Trustee shall have sufficient income or proceeds from such Trust
Property to enable the Pass Through Trustee to make distributions of the
amounts due in respect of the Pass Through Certificates thereunder.
Each Certificateholder of such Series by its acceptance of a related
Pass Through Certificate agrees that it will look solely to the income and
proceeds from the related Trust Property to the extent available for
distribution to it as provided herein and in the related Series Supplement and
that the Pass Through Trustee is not personally liable to such
Certificateholder for any amounts payable under such Pass Through Trust except
as expressly provided herein.
SECTION 3.07. Limitation of the Company's Liability. The Company is
a party to this Pass Through Agreement solely for purposes of meeting the
requirements of the Trust Indenture Act, and therefore shall not be liable
hereunder, except as otherwise expressly provided herein, or under the terms
of any Series Supplement or any Pass Through Certificates, except as otherwise
expressly provided therein.
ARTICLE IV
CERTIFICATEHOLDER LISTS AND REPORTS BY THE
COMPANY AND THE PASS THROUGH TRUSTEE
SECTION 4.01. Certificateholder Lists; Ownership of Pass Through
Certificates. (a) For each Series, the Pass Through Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of the Certificateholders of such
Series. If the Pass Through Trustee is not the Registrar for such Series, the
Company shall cause the Registrar to furnish to the Pass Through Trustee
semi-annually not more than 15 days after each Record Date, as of such Record
Date, or at such other times as the Pass Through Trustee may request in
writing, a list, in such form and as of such date as the Pass Through Trustee
may reasonably require, containing all the information in the possession or
control of the Registrar as to the names and addresses of the
Certificateholders of such Series and the amounts of the Pass Through
Certificates held by such Certificateholders.
(b) For each Series, ownership of the Pass Through Certificates
shall be proved by the Register for such Series kept by the Registrar.
SECTION 4.02. Disclosure of Certificateholder Lists. Each and every
Certificateholder, by receiving and holding such Pass Through Certificate,
agrees with the Company and the Pass Through Trustee that neither the Company,
the Pass Through Trustee, the Pass Through Trustee in its individual capacity
nor any agent of any of the foregoing shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of any
Certificateholders in accordance with the provisions of Section 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, and that the Pass Through Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 312(b)
of the Trust Indenture Act.
SECTION 4.03. Reports by the Company. The Company covenants:
(a) to file with the Pass Through Trustee, within 30 days after the
Company is required to file the same with the Commission, copies of the
reports and documents, which the Company is required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(b) to file with the Pass Through Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such additional information, documents, and reports with respect to
compliance by the Company with the conditions and covenants provided for in
this Pass Through Agreement as may be required from time to time by such rules
and regulations;
(c) to transmit to the Certificateholders of each Series in the
manner and to the extent required by Section 313(c) of the Trust Indenture
Act, within 30 days after the filing thereof with the Pass Through Trustee,
such summaries of any information, documents and reports required to be filed
by the Company pursuant to subsections (a) and (b) of this Section 4.03 as may
be required by rules and regulations prescribed from time to time by the
Commission; and
(d) furnish to the Pass Through Trustee, on or before each March 15,
a brief certificate from the principal executive officer, principal financial
officer or principal accounting officer of the Company as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Pass Through Agreement and each Series Supplement. For purposes of this
subsection (d), such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Pass Through
Agreement or any Series Supplement.
SECTION 4.04. Reports by the Pass Through Trustee. For each Series,
on or before each May 15, the Pass Through Trustee in respect of such Series
shall transmit, in the manner and to the extent required by Section 313(c) of
the Trust Indenture Act, any report required by Section 313(b) of the Trust
Indenture Act to be transmitted by the Pass Through Trustee to the related
Certificateholders.
ARTICLE V
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY
SECTION 5.01. Certificate Account and Special Payments Account. (a)
The Pass Through Trustee shall establish and maintain for each Pass Through
Trust, on behalf of the related Certificateholders of each Series, a
Certificate Account as one or more non-interest bearing accounts. In each
case, the Pass Through Trustee shall hold such Certificate Account in trust
for the benefit of such Certificateholders, respectively, and shall make or
permit withdrawals therefrom only as provided in this Pass Through Agreement
or the related Series Supplement. Upon receipt of any Scheduled Payment, the
Pass Through Trustee shall immediately deposit such Scheduled Payment in the
applicable Certificate Account.
(b) The Pass Through Trustee shall establish and maintain, as and
when required, for each Pass Through Trust, on behalf of the related
Certificateholders of each Series, a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section
5.04 hereof. In each case, the Pass Through Trustee shall hold such Special
Payments Account in trust for the benefit of such Certificateholders,
respectively, and shall make or permit withdrawals therefrom only as provided
in this Pass Through Agreement or the related Series Supplement. Upon receipt
of any Special Payment, the Pass Through Trustee shall immediately deposit
such Special Payment in the applicable Special Payments Account.
(c) The Pass Through Trustee shall present any Equipment Certificate
to the applicable Related Indenture Trustee on the date of its stated final
maturity, or on such earlier date as such Equipment Certificate is to be
redeemed or purchased in whole pursuant to the relevant Indenture.
SECTION 5.02. Distributions from Certificate Account and Special
Payments Account. (a) For each Pass Through Trust, on each related Regular
Distribution Date, or as soon thereafter as the Pass Through Trustee has
confirmed receipt of any Scheduled Payment due on the related Equipment
Certificates on such Regular Distribution Date, the Pass Through Trustee shall
distribute out of the applicable Certificate Account the entire amount
deposited therein pursuant to Section 5.01(a) hereof by paying to each
Certificateholder of the related Series of record at the close of business on
the Record Date for such Regular Distribution Date (except as provided in
Section 12.01 hereof concerning the final distribution), at the address for
such Certificateholder appearing in the related Register, such
Certificateholder's pro rata share (based on the aggregate Fractional
Undivided Interest in the related Pass Through Trust held by such
Certificateholder) of the aggregate amount in the applicable Certificate
Account.
(b) For each Pass Through Trust, on each related Special
Distribution Date, or as soon thereafter as the Pass Through Trustee has
confirmed receipt of any Special Payment due on the related Equipment
Certificates or realized upon the sale of any such Equipment Certificates, the
Pass Through Trustee shall distribute out of the applicable Special Payments
Account the entire amount of such Special Payment deposited therein pursuant
to Section 5.01(b) hereof by paying to each Certificateholder of the related
Series of record at the close of business on the Record Date for such Special
Distribution Date (except as provided in Section 12.01 hereof concerning the
final distribution), at the address for such Certificateholder appearing in
the related Register, such Certificateholder's pro rata share (based on the
aggregate Fractional Undivided Interest in the related Pass Through Trust held
by such Certificateholder) of the aggregate amount in the applicable Special
Payments Account on account of such Special Payment.
(c) For each Pass Through Trust, the Pass Through Trustee shall at
the expense of the Company notify each Certificateholder of the related Series
by mail at its address as it appears in the related Register of each related
Special Payment for such Series. If the related Equipment Certificates are to
be redeemed or purchased in whole prior to their respective maturities, or if
a Special Payment is to be made pursuant to either of the last two paragraphs
of Section 2.02(b) hereof, such notice shall be mailed not less than 20 days
prior to the date any such Special Payment is scheduled to be distributed.
For any other Special Payment, such notice shall be mailed as soon as
practicable after the Pass Through Trustee has received funds for such Special
Payment. Such notices of Special Payments shall set forth:
(i) the Special Distribution Date and the Record Date therefor
(except as otherwise provided in Section 12.01 hereof);
(ii) the amount of the Special Payment for each $1,000 face
amount Pass Through Certificate and the amount thereof constituting
principal, premium, if any, and interest on the related Equipment
Certificates;
(iii) the reason for the Special Payment; and
(iv) if the Special Distribution Date is the same date as a
Regular Distribution Date for such Series, the total amount to be
received on such date for each $1,000 face amount Pass Through
Certificate.
If the amount of premium, if any, payable upon the redemption or purchase in
whole of an Equipment Certificate has not been calculated at the time that the
Pass Through Trustee mails the notice of the related Special Payment, it shall
be sufficient if the notice sets forth the other amounts to be distributed and
states that any premium received will also be distributed.
If, for any Pass Through Trust, any cancelable redemption of the
related Equipment Certificates is cancelled, the Pass Through Trustee, as soon
as possible after learning thereof, shall notify by mail each
Certificateholder of the related Series at its address as it appears on the
related Register.
(d) For each Pass Through Trust, any Scheduled Payment or Special
Payment to be distributed pursuant to this Article V shall be payable at the
Corporate Trust Office of the Pass Through Trustee or at any office or agency
maintained for such purpose for the related Series pursuant to Section 3.02
hereof, provided that any Scheduled Payment or Special Payment may be payable
at the option of the Pass Through Trustee or its Paying Agent for the related
Series by mailing checks for such Scheduled Payment or Special Payment payable
to or upon the written order of the related Certificateholders entitled
thereto as they appear on the related Register.
SECTION 5.03. Statements to Certificateholders. (a) On each Regular
Distribution Date and Special Distribution Date, the Pass Through Trustee
shall mail to Certificateholders of the related Series a statement, giving
effect to such distribution to be made on such Regular Distribution Date or
Special Distribution Date, as the case may be, setting forth the following
information (as to (i) and (ii) below, for each $1,000 face amount Pass
Through Certificate):
(i) the amount of such distribution allocable to principal
and the amount allocable to premium, if any, on the related Equipment
Certificates;
(ii) the amount of such distribution allocable to interest on
the related Equipment Certificates; and
(iii) the Pool Balance and the Pool Factor of the related Pass
Through Trust.
(b) For each Series, within a reasonable period of time after the
end of each calendar year but not later than the latest date permitted by law,
the Pass Through Trustee shall furnish to each Person who at any time during
such calendar year was a Certificateholder of such Series a statement
containing the sum of the amounts determined pursuant to clauses (a)(i) and
(a)(ii) of this Section 5.03 for the related Pass Through Trust for such
calendar year or, in the event such Person was a Certificateholder of such
Series during a portion of such calendar year, for the applicable portion of
such year.
SECTION 5.04. Investment of Special Payment Moneys. Any money
received by the Pass Through Trustee pursuant to Section 5.01(b) hereof
representing a Special Payment that is not to be promptly distributed shall,
to the extent practicable, be invested by the Pass Through Trustee in
Permitted Investments selected by the Company pending distribution of such
Special Payment pursuant to Section 5.02 hereof. Any investment made pursuant
to this Section 5.04 shall be in such Permitted Investments having maturities
not later than the date that such moneys are required to be used to make the
payment required under Section 5.02 hereof on the applicable Special
Distribution Date and the Pass Through Trustee shall hold any such Permitted
Investments until maturity. The proceeds upon maturity of any Permitted
Investment shall not be reinvested pending distribution. The Pass Through
Trustee shall have no liability with respect to any investment made pursuant
to this Section 5.04, other than by reason of the willful misconduct or
negligence of the Pass Through Trustee. All income and earnings from such
investments shall be distributed on such Special Distribution Date as part of
such Special Payment.
SECTION 5.05. Withholding Taxes. The Pass Through Trustee shall
withhold any taxes required to be withheld on payments to any
Certificateholder of any Series, except to the extent that such
Certificateholder has furnished evidence reasonably satisfactory to the Pass
Through Trustee of any exemption from withholding claimed by such
Certificateholder, and under no circumstances shall the failure of any such
Certificateholder to receive any amounts so withheld constitute an Event of
Default. The Pass Through Trustee agrees to act as such withholding agent
and, in connection therewith, whenever any taxes or similar charges are
required to be withheld with respect to any amounts payable in respect of the
Pass Through Certificates of such Series, to withhold such amounts and timely
pay the same to the appropriate authority in the name of and on behalf of the
Certificateholders of such Series, that it will file any necessary withholding
tax returns or statements when due, and that, as promptly as possible after
the payment thereof, it will deliver to each such Certificateholder
appropriate documentation showing the payment thereof, together with such
additional documentary evidence as any such Certificateholder of such Series
may reasonably request from time to time. The Pass Through Trustee agrees to
file any other information reports as it may be required to file under law.
Notwithstanding any provision to the contrary herein, if the Company
is required to pay any withholding tax or any interest or penalty thereon, or
to indemnify an Owner Participant or Owner Trustee pursuant to Section 8.01(c)
of any related Participation Agreement with respect to the Pass Through
Trustee's failure to withhold with respect to any Certificateholder, the Pass
Through Trustee shall be entitled to retain any payments otherwise
distributable to such Certificateholder that was subject to such withholding
until such amounts shall have been recovered in full by the Pass Through
Trustee.
ARTICLE VI
CONCERNING THE CERTIFICATEHOLDERS
SECTION 6.01. Evidence of Action Taken by Certificateholders. (a)
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Pass Through Agreement to be given or taken by
Certificateholders of any Series may be embodied in and evidenced by one or
more substantially similar instruments signed by such Certificateholders in
person or by an agent duly appointed in writing, and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to the Pass Through Trustee. Proof of
execution of any instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Pass Through Agreement and (subject to
Sections 8.02 and 8.03 hereof) conclusive in favor of the Pass Through
Trustee, if made in the manner provided in this Article VI.
(b) For the purpose of determining the Certificateholders of any
Series entitled to vote or consent to any direction, waiver or other action of
such Certificateholders under Section 7.10 or 7.11 hereof, the Company may set
a record date for such vote or consent by specifying such record date in an
Officer's Certificate delivered to the Pass Through Trustee. Notwithstanding
Section 316(c) of the Trust Indenture Act, such record date shall be a date
not more than 15 days prior to the first solicitation of such vote or consent.
SECTION 6.02. Proof of Execution of Instruments and of Holding of
Certificates. Subject to Sections 8.02 and 8.03 hereof, the execution of any
instrument by a Certificateholder or his or her agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed by
the Pass Through Trustee. The holding of Pass Through Certificates shall be
proved by the Register or by a certificate of the Registrar.
SECTION 6.03. Certificateholders to Be Treated as Owners. Prior to
due presentment for registration of transfer of any Pass Through Certificate,
each related Indenture Trustee, the Pass Through Trustee, any agent of any
such related Indenture Trustee or the Pass Through Trustee, the Paying Agent,
if any, the Registrar and the Company may deem and treat the Person in whose
name such Pass Through Certificate shall be registered upon the Register as
the absolute owner of such Pass Through Certificate (whether or not such Pass
Through Certificate shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment on
account of the principal payable with respect to and, subject to the
provisions of this Pass Through Agreement, interest payable with respect to
such Pass Through Certificate and for all other purposes; and neither any such
related Indenture Trustee nor the Pass Through Trustee (nor any agent of any
such related Indenture Trustee or the Pass Through Trustee) nor the Paying
Agent, if any, nor the Registrar nor the Company shall be affected by any
notice to the contrary. All such payments so made to any such Person, or upon
such Person's order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any such Pass Through Certificate.
SECTION 6.04. Pass Through Certificates Owned by the Company and
Related Owner Trustees Deemed Not Outstanding. In determining whether the
Certificateholders of the requisite aggregate Fractional Undivided Interest of
Pass Through Certificates of any Series have concurred in any direction,
consent or waiver under this Pass Through Agreement, Pass Through Certificates
of such Series that are owned by the Company, any Related Owner Trustee or
Related Owner Participant or any obligor on such Pass Through Certificates or
by any Affiliate of the Company, any such Related Owner Trustee or Related
Owner Participant or any obligor on such Pass Through Certificates shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination; provided that for the purpose of determining whether the Pass
Through Trustee shall be protected in relying on any such direction, consent
or waiver, only if a Responsible Officer of the Pass Through Trustee has actual
knowledge that certain Pass Through Certificates are so owned shall such Pass
Through Certificates be so disregarded; and provided further that if all Pass
Through Certificates of such Series that would be deemed Outstanding in the
absence of the foregoing provision are owned by the Company, any Related Owner
Trustee or Related Owner Participant or any obligor on such Pass Through
Certificates or by any Affiliate of the Company, any such Related Owner
Trustee or Related Owner Participant or any obligor on such Pass Through
Certificates, then such Pass Through Certificates shall be deemed Outstanding
for the purpose of any such determination. Pass Through Certificates so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Pass Through Trustee the
pledgee's right so to act with respect to such Pass Through Certificates and
that the pledgee is not the Company, any Related Owner Trustee or Related Owner
Participant or any obligor upon the Pass Through Certificates or any Affiliate
of the Company, any Related Owner Trustee or Related Owner Participant or any
obligor on such Pass Through Certificates. In case of a dispute as to such
right, the advice of counsel shall be full protection in respect of any
decision made by the Pass Through Trustee in accordance with such advice.
For any Series, upon request of the Pass Through Trustee, the
Company, the Related Owner Trustees and the Related Owner Participants
promptly shall furnish to the Pass Through Trustee an Officer's Certificate
listing and identifying all Pass Through Certificates of such Series, if any,
known by the Company or any such Related Owner Trustee or Related Owner
Participant to be owned or held by or for the account of any of the
above-described persons; and the Pass Through Trustee shall be entitled to
accept such Officer's Certificate as conclusive evidence of the facts set
forth therein and of the fact that all Pass Through Certificates of such
Series not listed therein are Outstanding for the purpose of any such
determination. For the purpose of determining whether Pass Through
Certificates of a Series are Outstanding as described in this Section 6.04, an
"obligor" on such Pass Through Certificates shall include any obligor or any
Affiliate of any such obligor on any Equipment Certificates that constitute
Trust Property of the related Pass Through Trust.
SECTION 6.05. Right of Revocation of Action Taken. For any Series,
at any time prior to (but not after) the evidencing to the Pass Through
Trustee, as provided in Section 6.01 hereof, of any action taken by the
related Certificateholders of the percentage in aggregate of Fractional
Undivided Interests in the related Pass Through Trust specified in this Pass
Through Agreement in connection with such action, any Certificateholder of a
Pass Through Certificate of such Series, the serial number of which is shown
by the evidence to be included among the outstanding serial numbers of the
Pass Through Certificates of such Series, the Certificateholders of which have
consented to such action, may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Article VI, revoke such
action so far as concerns such Pass Through Certificate. Except as aforesaid,
any such action taken shall be conclusive and binding upon such
Certificateholder for such Pass Through Certificate and upon all future
Certificateholders and owners of such Pass Through Certificate and of any Pass
Through Certificates issued in exchange or substitution therefor, irrespective
of whether or not any notation in regard thereto is made upon any such Pass
Through Certificate or otherwise. Any action taken by such Certificateholders
of the percentage in aggregate of Fractional Undivided Interests in the
related Pass Through Trust specified in this Pass Through Agreement in
connection with such action shall be conclusively binding upon the Pass
Through Trustee and all the Certificateholders of such Series.
SECTION 6.06. ERISA. Unless otherwise specified in the applicable
Series Supplement, no employee benefit plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or individual
retirement account or plan subject to Section 4975 of the Code (hereinafter
collectively referred to as an "ERISA Plan"), may acquire or hold any of the
Pass Through Certificates. If the Pass Through Certificates are not described
in the applicable Series Supplement as being eligible for purchase by ERISA
Plans, the purchase by any person of any Pass Through Certificate constitutes
a representation by such person to the Company, the Related Owner
Participants, the Related Owner Trustees, the Related Indenture Trustees and
the Pass Through Trustee that such person is not an ERISA Plan and that such
person is not acquiring, and has not acquired, such Pass Through Certificate
with assets of an ERISA Plan.
ARTICLE VII
REMEDIES OF PASS THROUGH TRUSTEE
AND CERTIFICATEHOLDERS
SECTION 7.01. Events of Default. If, for any Pass Through Trust, an
Indenture Event of Default under an Indenture relating to any Equipment
Certificate that constitutes Trust Property of such Pass Through Trust (an
"Event of Default") shall occur and be continuing, then, and in each and every
case, the Pass Through Trustee may vote all of the Equipment Certificates
under such Indenture held by such Pass Through Trust, and upon the direction
of the Majority In Interest of Certificateholders of the related Series, the
Pass Through Trustee shall vote a corresponding majority of such Equipment
Certificates in favor of directing the applicable Related Indenture Trustee to
declare the unpaid principal of such Equipment Certificates then outstanding,
together with interest accrued but unpaid thereon and all other amounts due
under such Equipment Certificates and the related Indenture, to be due and
payable under, and in accordance with the provisions of, such Indenture. In
addition, if such Event of Default shall have occurred and be continuing, the
Pass Through Trustee may in accordance with such related Indenture vote such
Equipment Certificates to direct the applicable Related Indenture Trustee
regarding the exercise of remedies provided in such Indenture.
If, for any Pass Through Trust, an Event of Default shall have
occurred and be continuing, the Pass Through Trustee may, and upon the
direction of the Majority In Interest of Certificateholders of the related
Series shall, by such officer or agent as it may appoint, sell, convey,
transfer and deliver any Equipment Certificates held in such Pass Through
Trust that are subject to the corresponding Indenture Event of Default,
without recourse to or warranty by the Pass Through Trustee or any
Certificateholder of such Series, to any Person. In any such case, the Pass
Through Trustee shall sell, assign, contract to sell or otherwise dispose of
and deliver any such Equipment Certificates in one or more parcels at public
or private sale or sales, at any location or locations at the option of the
Pass Through Trustee, all upon such terms and conditions as it may reasonably
deem advisable and at such prices as it may reasonably deem advisable, for
cash.
If the Pass Through Trustee so decides or is required to sell or
otherwise dispose of any Equipment Certificates pursuant to this Section 7.01,
the Pass Through Trustee shall take such of the actions described above as it
may reasonably deem most effective to complete the sale or other disposition
of such Equipment Certificates, so as to provide for the payment in full of
all amounts due on such Equipment Certificates with respect to the related
Series. Notwithstanding the foregoing, any action taken by the Pass Through
Trustee under this Section 7.01 shall not, in the reasonable judgment of the
Pass Through Trustee, be adverse to the best interests of the
Certificateholders of such Series.
SECTION 7.02. Incidents of Sale of Equipment Certificates. Upon any
sale of all or any part of the Equipment Certificates held in any Pass Through
Trust made either under the power of sale given under this Pass Through
Agreement or the related Series Supplement or otherwise for the enforcement of
this Pass Through Agreement and the related Series Supplement, the following
shall be applicable:
(1) Any Certificateholder of the related Series, the Pass
Through Trustee in its individual or any other capacity or any other
Person may bid for and purchase any of such Equipment Certificates,
and upon compliance with the terms of sale, may hold, retain, possess
and dispose of such Equipment Certificates in its or their own
absolute right without further accountability.
(2) The receipt of the Pass Through Trustee or of the officer
making such sale shall be a sufficient discharge to any purchaser for
his or her purchase money, and, after paying such purchase money and
receiving such receipt, such purchaser or its personal representative
or assigns shall not be obliged to see to the application of such
purchase money, or be in any way answerable for any loss,
misapplication or non-application thereof.
(3) Any moneys collected by the Pass Through Trustee upon any
sale made either under the power of sale given by this Pass Through
Agreement or the related Series Supplement or otherwise for the
enforcement of the related Pass Through Trust, shall be deposited and
distributed as a Special Payment as provided in Article V hereof.
SECTION 7.03. Pass Through Trustee May Prove Debt. If any amount
payable under any Equipment Certificate held by any Pass Through Trust is not
paid when due and payable, the Pass Through Trustee, in its own name and as
trustee of an express trust, as holder of such Equipment Certificate shall be,
to the extent permitted by and in accordance with the terms of the related
Indenture Documents, entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceedings to judgment or final
decree, and may enforce any such judgment or final decree against the
applicable Owner Trustee, in the case of an Equipment Trust Certificate, or
the Company, in the case of an Equipment Purchase Certificate, or other
obligor upon such Equipment Certificate and collect in the manner provided by
law out of the property of such Owner Trustee, or the Company or such other
obligor upon such Equipment Certificate, as the case may be, wherever
situated, the moneys adjudged or decreed to be payable.
All rights of action and of asserting claims under this Pass Through
Agreement, or under any of the Pass Through Certificates, may be prosecuted and
enforced by the Pass Through Trustee without the possession of any of such Pass
Through Certificates or the production thereof in any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Pass Through Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Pass Through Trustee, each
predecessor Pass Through Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Certificateholders of the related
Series.
In any proceedings brought by the Pass Through Trustee (and also any
proceedings involving the interpretation of any provision of this Pass Through
Agreement or any Series Supplement to which the Pass Through Trustee shall be a
party) the Pass Through Trustee shall be held to represent all the
Certificateholders of the related Series, and it shall not be necessary to
make any such Certificateholders parties to any such proceedings.
SECTION 7.04. Remedies Cumulative. Each and every right, power and
remedy given to the Pass Through Trustee or to any of the Certificateholders
of any Series specifically or otherwise under any Pass Through Trust shall be
cumulative and shall be in addition to every other right, power and remedy
specifically given thereunder or now or hereafter existing at law, in equity
or by statute, and each and every right, power and remedy whether specifically
given thereunder or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Pass Through
Trustee or the Certificateholders of the related Series, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or thereafter any other
right, power or remedy. No delay or omission by the Pass Through Trustee or
of any such Certificateholder in the exercise of any right, remedy or power or
in the pursuance of any remedy shall impair any such right, power or remedy or
be construed to be a waiver of any default on the part of the applicable Owner
Trustee, if any, or the Company, as the case may be, or to be an acquiescence
therein.
SECTION 7.05. Suits for Enforcement. If an Indenture Event of
Default has occurred, has not been waived and is continuing, the Pass Through
Trustee may in its discretion and subject to its rights of appropriate
indemnification under Sections 7.07 and 8.03 and Article IX hereof, to the
extent permitted by and in accordance with the Indenture Documents, proceed to
protect and enforce its rights and rights of the Certificateholders of the
related Series by such appropriate judicial proceedings as the Pass Through
Trustee shall deem most effectual to protect and enforce any of such rights,
either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement under the related Pass
Through Trust or in aid of the exercise of any power granted thereunder or to
enforce any other legal or equitable right vested in the Pass Through Trustee
or the Certificateholders under such Pass Through Trust or by law; provided
that any sale of any portion of the related Trust Property shall be done in
accordance with Section 7.02 hereof.
SECTION 7.06. Discontinuance of Proceedings. If the Pass Through
Trustee or any Certificateholder of any Series institutes any proceeding to
enforce any right, power or remedy under the related Pass Through Trust, and
such proceeding is discontinued or abandoned for any reason or is determined
adversely to the Pass Through Trustee or such Certificateholder, then and in
every such case the applicable Owner Trustee, if any, and the applicable
Indenture Trustee, the Pass Through Trustee, the Certificateholders of such
Series and the Company shall, subject to any determination in such proceeding,
be restored to their former positions and rights under such Pass Through Trust
with respect to the Trust Property and all rights, remedies and powers of the
Pass Through Trustee and such Certificateholders shall continue as if no such
proceeding had been instituted.
SECTION 7.07. Limitations on Suits by Certificateholders. No
Certificateholder of any Series shall have any right by virtue or by availing
of any provision of the related Pass Through Trust to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to such Pass Through Trust, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other
remedy thereunder, unless such Certificateholder previously has notified the
Pass Through Trustee in writing of an Event of Default under such Pass Through
Trust and of the continuance thereof, as provided herein, and the
Certificateholders of the related Pass Through Certificates then Outstanding
(or the proxy therefor) representing in the aggregate not less than 50% of the
Fractional Undivided Interests of Pass Through Certificates then Outstanding
under such Pass Through Trust have requested in writing that the Pass Through
Trustee institute such action or proceedings in its own name as trustee under
such Pass Through Trust and have offered to the Pass Through Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Pass Through Trustee
for 60 days after its receipt of such notice, request and offer of indemnity
has failed to institute any such action or proceedings and no direction
inconsistent with such written request has been given to the Pass Through
Trustee pursuant to Section 7.10 hereof; it being understood and intended, and
being expressly covenanted by such Certificateholder with every other
Certificateholder of such Series and the Pass Through Trustee, that no one or
more Certificateholders of such Series shall have any right in any manner
whatever to affect, disturb or prejudice the rights of any other
Certificateholder of such Series or to obtain or seek to obtain priority over
or preference to any other Certificateholder of such Series or to enforce any
right under the related Pass Through Trust, except in the manner provided
therein and for the equal, ratable and common benefit of all
Certificateholders of such Series. For the protection and enforcement of the
provisions of this Section 7.07, each and every Certificateholder of the
related Series and the Pass Through Trustee shall be entitled to such relief
as can be given either at law or in equity.
SECTION 7.08. Unconditional Right of Certificateholders to Receive
Principal, Interest and Premium, and to Institute Certain Suits.
Notwithstanding any other provision in this Pass Through Agreement, any Series
Supplement or any Pass Through Certificate issued pursuant to such Series
Supplement, the right of any Certificateholder of the related Series to
receive distributions on such Pass Through Certificate of Scheduled Payments
or Special Payments pursuant to Article V hereof on or after the respective
due dates set forth in such Series Supplement, or, subject to Section 7.07
hereof, to institute suit for the enforcement of any such distribution on or
after such respective dates as provided herein or therein, shall not be
impaired or affected without the consent of such Certificateholder. The
purchase by any Certificateholder of any Pass Through Certificate constitutes
the consent of such Certificateholder to the retention by the Pass Through
Trustee of certain amounts otherwise distributable to such Certificateholder
in accordance with Section 5.05 hereof.
SECTION 7.09. Control by Certificateholders. A Majority In Interest
of Certificateholders of any Series has the right with respect to the related
Pass Through Trust to direct the Pass Through Trustee as to the time, method,
and place of conducting any proceeding for any remedy available to the Pass
Through Trustee, or exercising any trust or power conferred on the Pass
Through Trustee under such Pass Through Trust; provided that such direction is
not otherwise than in accordance with law and the provisions of such Pass
Through Trust and the Pass Through Trustee has received, to the extent
provided in Sections 7.07 and 8.03 and Article IX hereof, such reasonable
indemnification as it may require against the costs, expenses and liabilities
to be incurred by the Pass Through Trustee; and provided further that the Pass
Through Trustee has the right to decline to follow any such direction if the
Pass Through Trustee, being advised by counsel, determines that the action or
proceeding so directed may not lawfully be taken or if the Pass Through
Trustee in good faith by its board of directors, the executive committee, or a
trust committee of directors or Responsible Officers of the Pass Through
Trustee determines that the action or proceedings so directed would involve
the Pass Through Trustee in personal liability or if the Pass Through Trustee
in good faith so determines that the actions or forebearances specified in or
pursuant to such direction would be unduly prejudicial to the interests of the
Certificateholders of such Series not joining in the giving of said direction,
it being understood that the Pass Through Trustee shall have no duty to
ascertain whether or not such actions or forebearances are unduly prejudicial
to such Certificateholders.
Nothing in this Pass Through Agreement or any Series Supplement shall
impair the right of the Pass Through Trustee in its discretion to take any
action deemed proper by the Pass Through Trustee with respect to the related
Pass Through Trust and which is not inconsistent with such direction by
Certificateholders of the related Series.
SECTION 7.10. Waiver of Past Events of Default. Upon written
instructions from a Majority in Interest of Certificateholders of any Series,
the Pass Through Trustee shall waive any past Event of Default under the
related Pass Through Trust or the related Series Supplement and its
consequences and upon such waiver such Event of Default will cease to exist
and any Event of Default arising therefrom will be deemed to have been cured
for every purpose of such Pass Through Trust, but no such waiver will extend
to any subsequent or other Event of Default thereunder or impair any right
consequent thereon; provided that any such waiver will be effective to waive
any such past Event of Default and its consequences as described above if, but
only if, the correlative Indenture Event of Default has been waived under the
related Indenture by the requisite holders of the Equipment Certificates
outstanding thereunder; and provided further that in the absence of written
instructions from all Certificateholders of any Series (or the proxy
therefor), the Pass Through Trustee shall not waive any Event of Default (i)
consisting of the failure to pay any principal of, or premium (if any), or
interest on, or other amounts due under, any Equipment Certificate held by the
related Pass Through Trust and the consequent failure to distribute any related
Scheduled Payment or Special Payment pursuant to Article V hereof on or after
the respective due date therefor set forth in the related Series Supplement or
(ii) in respect of a covenant or provision under any Pass Through Trust that,
under Article XI hereof or the related Series Supplement, cannot be modified
or amended without the consent of each Certificateholder of the related Series
(or the proxy therefor).
SECTION 7.11. Notice of Pass Through Defaults. The Pass Through
Trustee shall, in the manner and to the extent required by Section 313(c) of
the Trust Indenture Act, notify the Certificateholders of any Series of all
Pass Through Defaults under the related Pass Through Trust known to the Pass
Through Trustee, unless such Pass Through Defaults have been cured before the
giving of such notice; provided that under no circumstances shall the Pass
Through Trustee give such notice until the earlier of the time at which such
Pass Through Default becomes an Event of Default or the expiration of a period
of 60 days from the occurrence of such Pass Through Default; and provided
further that, except in the case of the failure to pay any principal of or
interest on or any other amount due under any of the Equipment Certificates
held by any Pass Through Trust and the consequent failure to distribute any
related Scheduled Payment or Special Payment pursuant to Article V hereof on
or after the respective due date therefor set forth in the related Series
Supplement, the Pass Through Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors or trustees or Responsible Officers of the Pass
Through Trustee in good faith determines that the withholding of such notice
is in the interests of the Certificateholders of the related Series.
ARTICLE VIII
CONCERNING THE PASS THROUGH TRUSTEE
SECTION 8.01. Acceptance by Pass Through Trustee. The Pass Through
Trustee, upon the execution and delivery of a Series Supplement creating a Pass
Through Trust and providing for the issuance of a Series of Pass Through
Certificates, shall acknowledge its acceptance of all right, title and
interest in and to the Equipment Certificates to be acquired as Trust Property
of such Pass Through Trust pursuant to the applicable Participation Agreements
and Section 2.02 hereof, and shall declare that the Pass Through Trustee holds
and will hold such right, title, and interest, together with all other
property constituting the Trust Property of such Pass Through Trust, for the
benefit of all then present and future Certificateholders of such Series, upon
the trusts set forth in such Pass Through Trust.
SECTION 8.02. Pass Through Trustee's Liens. The Pass Through Trustee
agrees that it will, in its individual capacity and at its own cost and
expense (without any right of indemnity in respect of any such cost or expense
under Article IX hereof) promptly take such action as may be necessary to duly
discharge all Liens on any part of the Trust Property of any Pass Through
Trust that result from claims (i) against it in its individual capacity not
related to the administration of such Trust Property or any other transaction
pursuant to this Pass Through Agreement or the related Series Supplement, or
(ii) against it as Pass Through Trustee hereunder or in its individual
capacity which arise out of the negligence or willful misconduct of the Pass
Through Trustee as such negligence or willful misconduct shall be determined
by a final decision of a court of competent jurisdiction.
SECTION 8.03. Certain Rights of the Pass Through Trustee. Subject
to the Trust Indenture Act:
(a) the Pass Through Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, note,
coupon, security or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request of any Related Indenture Trustee or Related
Owner Trustee in connection with any Pass Through Trust shall be
sufficiently evidenced by an Officer's Certificate (unless other
evidence in respect thereof is specifically prescribed herein) upon
which the Pass Through Trustee may rely to prove or establish a
matter set forth therein;
(c) the Pass Through Trustee may consult with counsel and any
advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(d) the Pass Through Trustee shall not be obligated to
exercise any of the trusts or powers vested in it under any Pass
Through Trust at the request, order or direction of the
Certificateholders of the related Series in accordance with the
provisions thereof, unless such Certificateholders have offered to
the Pass Through Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Pass Through Trustee shall not be liable for any
action taken or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon
it under any Pass Through Trust;
(f) prior to the occurrence of an Event of Default under any
Pass Through Trust and after the curing or waiving of all Events of
Default thereunder, the Pass Through Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond,
debenture, note, security, or other paper or document unless
requested in writing to do so by the Majority in Interest of
Certificateholders of the related Series; provided that if the
payment within a reasonable time to the Pass Through Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Pass Through
Trustee, not reasonably assured to the Pass Through Trustee by the
security afforded to it by the terms of such Pass Through Trust, the
Pass Through Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Pass Through
Trustee or any predecessor trustee, and shall be repaid by the
Company upon demand;
(g) the Pass Through Trustee may execute any of the trusts or
powers under any Pass Through Trust or perform any duties hereunder or
thereunder either directly or by or through agents or attorneys not
regularly in its employ and the Pass Through Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent or attorney appointed by it with due care; and
(h) the Pass Through Trustee shall not be required to expend
or risk its own funds or otherwise incur personal financial liability
in the performance of any of its duties or in the exercise of any of
its rights or powers under any Pass Through Trust, if the Pass
Through Trustee has determined in good faith that the repayment of
such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 8.04. Pass Through Trustee Not Responsible for Recitals. The
Pass Through Trustee assumes no responsibility for the correctness of the
recitals contained herein or in any Pass Through Certificates, except for the
execution and authentication of such Pass Through Certificates by the Pass
Through Trustee in accordance with Sections 2.05 and 2.06 hereof,
respectively.
SECTION 8.05. Pass Through Trustee and Agents May Hold Pass Through
Certificates; Collections. The Pass Through Trustee and any agent of the Pass
Through Trustee, in its individual or any other capacity, may become the owner
or pledgee of Pass Through Certificates with the same rights it would have if
it were not the Pass Through Trustee or such agent and, subject to the
applicable provisions of the Trust Indenture Act, may otherwise deal with the
Company, any Related Indenture Trustee or Related Owner Trustee and receive,
collect, hold and retain collections therefrom with the same rights it would
have if it were not the Pass Through Trustee or such agent.
SECTION 8.06. Moneys Held by Pass Through Trustee. Subject to
Sections 5.04 and 12.04 hereof, all moneys received by the Pass Through
Trustee shall, until used or applied as provided herein, be held in trust for
the purposes for which they were received, but need not be segregated from
other funds except to the extent required by mandatory provisions of law.
Subject to Section 5.04 hereof, neither the Pass Through Trustee nor any agent
thereof shall be under any liability for interest on any moneys received by it
hereunder.
SECTION 8.07. Right of Pass Through Trustee to Rely on Officer's
Certificate. Subject to Section 8.03 hereof, whenever in the administration
of any Pass Through Trust the Pass Through Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or suffering
or omitting any action thereunder, such matter (unless other evidence in
respect thereof is specifically prescribed herein) may, in the absence of bad
faith on the part of the Pass Through Trustee, be deemed to be conclusively
proved and established by an Officer's Certificate delivered to the Pass
Through Trustee by the Company, any Related Indenture Trustee or any Related
Owner Trustee, as the case may be, and such certificate, in the absence of bad
faith on the part of the Pass Through Trustee, shall be full warrant to the
Pass Through Trustee for any action taken, suffered or omitted by it under the
provisions of this Pass Through Agreement upon the faith thereof.
SECTION 8.08. Compensation. The Company agrees to pay, and the Pass
Through Trustee shall be entitled to receive, reasonable compensation and
payment or reimbursement for its reasonable advances, expenses and
disbursements (including the reasonable compensation and expenses and
disbursements of its counsel, agents and other persons not regularly in its
employ) incurred in connection with its services rendered hereunder or in any
way relating to or arising out of the administration of any Pass Through Trust
or the related Trust Property, except any such advance, expense or
disbursement attributable to the Pass Through Trustee's negligence, willful
misconduct or bad faith or incurred as a result of the breach of its
representation, warranty or covenant set forth in Sections 3.03(iv) and 8.02
hereof, and shall have a priority claim on such Trust Property for the payment
of such compensation, advances, expenses and disbursements to the extent that
such compensation, advances, expenses and disbursements shall not be paid by
the Company.
In addition, the Pass Through Trustee shall be entitled to
reimbursement from, and shall have a priority claim on, all property and funds
held or collected by the Pass Through Trustee with respect to any Series or
the related Pass Through Trust in its capacity as Pass Through Trustee for any
tax incurred without negligence, bad faith or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of such
Pass Through Trust (other than any tax attributable to the Pass Through
Trustee's compensation for serving as such), including any costs and expenses
incurred in contesting the imposition of any such tax. If the Pass Through
Trustee reimburses itself from the Trust Property of such Pass Through Trust
for any such tax it shall within 20 days mail a brief report setting forth the
circumstances thereof to all Certificateholders of the related Series as their
names and addresses appear in the related Register.
ARTICLE IX
INDEMNIFICATION OF
PASS THROUGH TRUSTEE BY THE COMPANY
The Company hereby agrees to assume liability for, and does hereby
indemnify, save and keep harmless the Pass Through Trustee, in its individual
capacity, and its successors, assigns, agents and servants, with respect to
the claims of the Pass Through Trustee for payment or reimbursement under
Section 8.08 hereof and from and against any and all liabilities, losses,
damages, penalties, taxes (excluding any taxes payable by the Pass Through
Trustee on or measured by any compensation received by the Pass Through
Trustee for its services under this Pass Through Agreement), claims, actions,
suits, costs, expenses or disbursements (including legal fees and expenses) of
any kind and nature whatsoever which may be imposed on, or incurred by, the
Pass Through Trustee in its individual capacity in any way relating to or
arising out of this Pass Through Agreement, or any Series Supplement or the
enforcement of any of the terms of any thereof, or in any way relating to or
arising out of the administration of any Pass Through Trust or the related
Trust Property or the action or inaction of the Pass Through Trustee
hereunder, except only (i) in the case of negligence, willful misconduct or
bad faith of the Pass Through Trustee in the performance of its duties
hereunder or under any Series Supplement, (ii) as may result from the
inaccuracy of any representation or warranty of the Pass Through Trustee
herein or in any Participation Agreement or (iii) as otherwise provided in
Section 8.02 hereof.
The Pass Through Trustee in its individual capacity shall be entitled
to indemnification, from the related Trust Property, for any liability, loss,
damage, penalty, claim, action, suit, cost, expense or disbursement
indemnified against pursuant to this Article IX to the extent not reimbursed
by the Company or others, but without releasing any of them from their
respective agreements of reimbursement; and to secure the same the Pass
Through Trustee shall have a prior Lien on such Trust Property. The
indemnities contained in this Article IX shall survive the termination of this
Pass Through Agreement or any Pass Through Trust and the resignation or
removal of the Pass Through Trustee hereunder or thereunder.
ARTICLE X
SUCCESSOR TRUSTEES
SECTION 10.01. Resignation and Removal of Pass Through Trustee;
Appointment of Successor. (a) The Pass Through Trustee may resign at any
time as trustee of any Pass Through Trust without cause by giving at least 45
days prior written notice to the Company, the Related Indenture Trustees and
the Related Owner Trustees, if any, such resignation to be effective upon the
acceptance of the trusteeship by a successor Pass Through Trustee. In
addition, a Majority in Interest of Certificateholders of any Series or the
Company may at any time remove the related Pass Through Trustee without cause
by an instrument in writing delivered to the Company (in the case of removal
by a Majority in Interest of Certificateholders of any Series), the Related
Owner Trustees, if any, the Related Indenture Trustees and the Pass Through
Trustee, and the Pass Through Trustee shall promptly notify each
Certificateholder of such Series of such removal in writing, such removal to be
effective upon the acceptance of the trusteeship by a successor Pass Through
Trustee.
In the case of the resignation or removal of the Pass Through
Trustee, the Company or a Majority in Interest of Certificateholders of the
related Series may appoint a successor Pass Through Trustee by an instrument
signed by the Company or such Certificateholders, as the case may be.
If a successor Pass Through Trustee shall not have been appointed
within 90 days after such notice of resignation or removal, the Pass Through
Trustee, the Company or any Certificateholder of the related Series may apply
to any court of competent jurisdiction to appoint a successor Pass Through
Trustee to act until such time, if any, as a successor shall have been
appointed as provided above. The successor Pass Through Trustee so appointed
by such court shall immediately and without further act be superseded by any
successor Pass Through Trustee appointed by the Company or a Majority in
Interest of Certificateholders as provided above within one year from the date
of the appointment by such court.
(b) If at any time any of the following occurs with respect to any
Pass Through Trust:
(i) the Pass Through Trustee fails to comply with the
requirements of Section 310(G) of the Trust Indenture Act after
written request for such compliance by any Certificateholder of the
related Series who has been a bona fide Certificateholder of such
Series for at least six months;
(ii) the Pass Through Trustee ceases to be eligible in
accordance with the provisions of Section 10.02 hereof to act as
trustee for such Pass Through Trust and fails to resign after written
request for such resignation by the Company or by any such bona fide
Certificateholder; or
(iii) the Pass Through Trustee becomes incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver or
liquidator of the Pass Through Trustee or of its property shall be
appointed, or any public officer takes charge or control of the Pass
Through Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then the Company may remove the Pass Through Trustee and appoint a successor
trustee by written instrument, one copy of which instrument shall be delivered
to the Pass Through Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 315(e) of the Trust Indenture Act,
any Certificateholder of the related Series who has been a bona fide
Certificateholder of such Series for at least six months may, on behalf of
itself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Pass Through Trustee and the appointment
of a successor trustee. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, remove the Pass Through Trustee and
appoint a successor trustee, which removal and appointment shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 10.03 hereof. The successor Pass Through Trustee so appointed by
such court shall immediately and without further act be superseded by any
successor Pass Through Trustee appointed by the Company or the
Certificateholders of the related Series as provided in subsection (a) above
within one year from the date of appointment by such court.
SECTION 10.02. Persons Eligible for Appointment as Pass Through
Trustee. Each Pass Through Trust shall at all times have a Pass Through
Trustee which shall be a Person eligible to act as trustee under Section
310(a) of the Trust Indenture Act and shall be a corporation organized and
doing business under the laws of the United States of America or of any State
or the District of Columbia having a combined capital and surplus of at least
$100,000,000, or a direct or indirect subsidiary of such a corporation, or a
member of a bank holding company group, having a combined capital and surplus
of at least $100,000,000 and such subsidiary or member itself having a capital
and surplus of at least $10,000,000, which corporate trustee shall be a citizen
of the United States of America as defined under Title 49 of the United States
Code, as amended, and which is authorized under such laws to exercise
corporate trust powers and is subject to supervision of examination by
federal, State or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 10.02, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
If at any time the Pass Through Trustee ceases to be eligible in
accordance with the provisions of this Section 10.02 to act as trustee for any
Pass Through Trust, the Pass Through Trustee shall resign immediately as Pass
Through Trustee for such Pass Through Trust in the manner and with the effect
specified in Section 10.01 hereof.
SECTION 10.03. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 10.01 hereof for any Pass
Through Trust shall execute and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment with respect to such Pass
Through Trust, and thereupon the resignation or removal of the predecessor
trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become vested with all rights, powers, duties
and obligations of its predecessor with respect to such Pass Through Trust, as
if such successor trustee was originally named as trustee of such Pass Through
Trust.
Notwithstanding the foregoing, on the written request of the Company
or the successor trustee, the trustee ceasing to act shall, upon payment of
its charges then unpaid and subject to Section 12.04 hereof, pay over to the
successor trustee all moneys at the time held by it with respect to such Pass
Through Trust and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon
request of any such successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights and powers. Any trustee ceasing to
act shall, nevertheless, retain a prior claim upon all property or funds held
or collected by such trustee with respect to such Pass Through Trust to secure
any amounts then due it pursuant to the provisions of Article IX hereof.
If a successor trustee is appointed with respect to one or more (but
not all) of the Pass Through Trusts created pursuant to this Pass Through
Agreement, the predecessor trustee and each successor trustee with respect to
such Pass Through Trusts shall execute and deliver a supplemental agreement
hereto which shall be sufficient with respect to each such Pass Through Trust
to effect the removal of any predecessor trustee retiring and to vest the
successor trustee with all rights, powers, duties and obligations of its
predecessor under each such Pass Through Trust as to which the predecessor
Pass Through Trustee is retiring, as if such successor trustee was originally
named as Pass Through Trustee hereunder or under the applicable Series
Supplement, and shall add to or change any of the provisions of this Pass
Through Agreement and the applicable Series Supplement as shall be necessary
to provide for or facilitate the administration of such Pass Through Trust
hereunder by more than one Pass Through Trustee.
An institution satisfying the criteria specified in Section 10.02
hereof may be appointed, including pursuant to the relevant Series Supplement,
as the Pass Through Trustee in respect of any Series issued or proposed to be
issued if such institution shall execute and deliver to the Company with
respect to the relevant Pass Through Trust an instrument (which may be the
relevant Series Supplement) accepting such appointment and shall thereupon
become vested with all the rights, powers, trusts and duties of the Pass
Through Trustee in respect of such Pass Through Trust.
It is understood that except as provided in Section 10.05 hereof
nothing herein or in any supplemental agreement or Series Supplement shall
constitute any Pass Through Trustee a co-trustee of any Pass Through Trustee
and that each Pass Through Trustee may be the Pass Through Trustee of one or
more separate Pass Through Trusts.
No institution shall accept appointment as a Pass Through Trustee as
provided in this Section 10.03 unless at the time of such acceptance such
institution shall be eligible under the provisions of Article X hereof to act
as trustee of the relevant Pass Through Trust.
Upon acceptance of appointment by a successor trustee as provided in
this Section 10.03, the successor trustee shall notify the Certificateholders
of the related Series of such appointment by first-class mail at their last
addresses as they shall appear in the Register, and shall mail a copy of such
notice to the Company, the Related Indenture Trustees and the Related Owner
Trustees, if any. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 10.01
hereof.
SECTION 10.04. Merger, Conversion, Consolidation or Succession to
Business of Pass Through Trustee. Any corporation into which the Pass Through
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Pass Through Trustee is a party, or any corporation succeeding to the
corporate trust business of the Pass Through Trustee, shall be the successor
to the Pass Through Trustee hereunder, provided that, anything herein to the
contrary notwithstanding, such corporation shall be eligible under the
provisions of Section 10.02 hereof to act as trustee hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
If, with respect to any Pass Through Trusts at the time of such
succession to the Pass Through Trustee, any of the Pass Through Certificates
of the related Series have been authenticated but not delivered, such
successor may adopt the certificate of authentication of any such predecessor
Pass Through Trustee and deliver such Pass Through Certificates so
authenticated; and, if at that time any of such Pass Through Certificates have
not been authenticated, such successor may authenticate such Pass Through
Certificates either in the name of any of its predecessor or in its own name as
the successor Pass Through Trustee; and in all such cases such certificate of
authentication shall have the full force of the certificate of authentication
of the Pass Through Trustee set forth in Section 2.01 hereof; provided that
the right to adopt the certificate of authentication of any predecessor Pass
Through Trustee or to authenticate Pass Through Certificates in the name of
any predecessor Pass Through Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
SECTION 10.05. Appointment of Separate Pass Through Trustees. (a)
At any time or times, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Property of any Pass Through Trust
may at the time be located or in which any action of the Pass Through Trustee
may be required to be performed or taken, the Pass Through Trustee, by an
instrument in writing signed by it, may appoint one or more individuals or
corporations to act as separate trustee or separate trustees or co-trustee,
acting jointly with the Pass Through Trustee, of all or any part of such Trust
Property, to the full extent that local law makes it necessary for such
separate trustee or separate trustees or co-trustee, acting jointly with the
Pass Through Trustee, to act.
(b) The Pass Through Trustee and, at the request of the Pass Through
Trustee, the Company, shall execute, acknowledge and deliver all such
instruments as may be required by the legal requirements of any jurisdiction
or by any such separate trustee or separate trustees or co-trustee for the
purpose of more fully confirming such title, rights or duties to such separate
trustee or separate trustees or co-trustee. Upon the acceptance in writing of
such appointment by any such separate trustee or separate trustees or
co-trustee, it, he, she or they shall be vested with such title to such Trust
Property or any part thereof, and with such rights, powers, duties and
obligations, as shall be specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be conferred or imposed upon and
exercised or performed by the Pass Through Trustee, or the Pass Through
Trustee and such separate trustee or separate trustees or co-trustee jointly
with the Pass Through Trustee subject to all the terms of this Pass Through
Agreement, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed the Pass Through Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations shall be exercised and
performed by such separate trustee or separate trustees or co-trustee, as the
case may be.
Any separate trustee or separate trustees or co-trustee may, at any
time by an instrument in writing, constitute the Pass Through Trustee its, her
or his attorney-in-fact and agent with full power and authority to do all acts
and things and to exercise all discretion on its, her or his behalf and in
its, her or his name. In case any such separate trustee or co-trustee shall
die, become incapable of acting, resign or be removed, the title to any Trust
Property and all assets, property, rights, powers, duties and obligations and
duties of such separate trustee or co-trustee shall, so far as permitted by
law, vest in and be exercised by the Pass Through Trustee, without the
appointment of a successor to such separate trustee or co-trustee unless and
until a successor is appointed.
(c) All provisions of this Pass Through Agreement which are for the
benefit of the Pass Through Trustee (including without limitation Article IX
hereof) shall extend to and apply to each separate trustee or co-trustee
appointed pursuant to the foregoing provisions of this Section 10.06.
(d) For any Pass Through Trust, every additional trustee and separate
trustee hereunder shall, to the extent permitted by law, be appointed and act
and the Pass Through Trustee shall act, subject to the following provisions
and conditions:
(i) all powers, duties, obligations and rights conferred upon
the Pass Through Trustee in respect of the receipt, custody,
investment and payment of moneys shall be exercised solely by the
Pass Through Trustee;
(ii) all other rights, powers, duties and obligations
conferred or imposed upon the Pass Through Trustee shall be conferred
or imposed and exercised or performed by the Pass Through Trustee and
such additional trustee or trustees and separate trustee or trustees
jointly except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed, the Pass
Through Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Property in
any such jurisdiction) shall be exercised and performed by such
additional trustee or trustees or separate trustee or trustees;
(iii) no power hereby given to, or exercisable by, any such
additional trustee or separate trustee shall be exercised hereunder
by such additional trustee or separate trustee except jointly with,
or with the consent of, the Pass Through Trustee; and
(iv) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder.
If at any time the Pass Through Trustee shall deem it no longer necessary or
prudent in order to conform to any such law, the Pass Through Trustee shall
execute and deliver all instruments and agreements necessary or proper to
remove any additional trustee or separate trustee.
(e) Any request, approval or consent in writing by the Pass Through
Trustee to any additional trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate trustee, as the case may be, to
take such action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 10.06, the
powers of any additional trustee or separate trustee shall not exceed those of
the Pass Through Trustee hereunder.
SECTION 10.06. Preferential Claims. Reference is made to Section
311 of the Trust Indenture Act. For purposes of Section 311(b)(4) and (6) of
such Act:
(a) "cash transaction" means any transaction in which full payment
for goods or securities sold is made within seven days after delivery of
the goods or securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by
the Company for the purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or proceeds
arising from the sale of the goods, wares or merchandise previously
constituting the security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the
Company arising from the making, drawing, negotiating or incurring of the
draft, bill of exchange, acceptance or obligation.
ARTICLE XI
SUPPLEMENTS AND AMENDMENTS TO THIS
PASS THROUGH AGREEMENT AND OTHER DOCUMENTS
SECTION 11.01. Supplemental Agreements Without Consent of
Certificateholders. The Company and the Pass Through Trustee may enter into an
agreement or agreements supplemental hereto for one or more of the following
purposes:
(a) to provide for the formation of any Pass Through Trust, the
issuance of the related Series and the other matters contemplated by
Section 2.01(b) hereof;
(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Company herein and in each Series Supplement;
(c) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions as the Pass Through
Trustee shall consider to be for the protection of the
Certificateholders of any Series;
(d) to surrender any right or power conferred upon the Company
herein or in any Series Supplement;
(e) to cure any ambiguity or to correct or supplement any
provision contained herein or in any Series Supplement that may be
defective or inconsistent with any other provision contained herein
or in such Series Supplement; or to modify any other provision in
regard to matters or questions arising under this Pass Through
Agreement or under any Series Supplement as the Company may deem
necessary or desirable and that will not adversely affect the
interests of the related Certificateholders;
(f) to correct or amplify the description of any property at
any time that constitutes Trust Property or better to assure, convey
and confirm unto the Pass Through Trustee any such property to be
included in any such Trust Property;
(g) to evidence and provide for the acceptance and appointment
under this Pass Through Agreement by the Pass Through Trustee or a
successor trustee with respect to one or more Pass Through Trusts and
to add to or change any of the provisions hereof as may be necessary
to provide for or facilitate the administration of one or more Pass
Through Trusts by more than one trustee, pursuant to the requirements
of Section 10.03 hereof;
(h) to modify, eliminate or add to the provisions of this Pass
Through Agreement or any Series Supplement to the extent necessary to
continue the qualification of this Pass Through Agreement or such
Series Supplement (including any supplemental agreement) under the
Trust Indenture Act, or under any similar federal statute enacted
after the date hereof, and to add to this Pass Through Agreement or
any Series Supplement such other provisions as may be expressly
permitted by the Trust Indenture Act, excluding, however, the
provisions referred to in Section 316(a)(2) of the Trust Indenture
Act as in effect on the date hereof or any corresponding provision in
any similar federal statute enacted after the date hereof;
(i) to make any other amendments or modifications to this Pass
Through Agreement, provided such amendments or modifications shall
only apply to one or more Series to be issued after the date of such
amendment or modification; or
(j) to add, eliminate or change any provision hereunder so
long as such action shall not adversely affect the interests of the
Certificateholders of any Series;
provided that no such supplemental agreement shall cause any Pass Through
Trust to become taxable as an association within the meaning of Treasury
Regulation Section 301.7701-4.
The Pass Through Trustee is hereby authorized to join in the
execution of any such supplemental agreement, to make any further appropriate
agreements and stipulations that may be contained therein and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Pass Through Trustee shall not be obligated to enter into
any such supplemental agreement that adversely affects the Pass Through
Trustee's own rights, duties or immunities under this Pass Through Agreement,
any Series Supplement or otherwise, whether in its official or individual
capacity.
Any supplemental agreement contemplated by this Section 11.01 may be
executed without the consent of the Certificateholders of the Outstanding Pass
Through Certificates of any Series, notwithstanding any of the provisions of
Section 11.02 hereof.
SECTION 11.02. Supplemental Agreements With Consent of
Certificate-holders. With the consent (evidenced as provided in Article VI)
of the Majority in Interest of Certificateholders of any Series, the Company
and the Pass Through Trustee may, from time to time and at any time, enter
into an agreement or agreements supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Pass Through Agreement or of the related Series Supplement
or of modifying in any manner the rights of the related Certificateholders;
provided, that no such supplemental agreement shall cause any Pass Through
Trust to become taxable as an association within the meaning of Treasury
Regulation Section 301.7701-4; and provided further that, without the consent
of each Certificateholder of such Series (or the proxy therefor), no such
amendment of or supplement to this Pass Through Agreement or such related
Series Supplement, or modification of the terms of, or consent under, any
thereof, shall:
(a) modify any of the provisions of Section 7.10 or this
Section 11.02,
(b) reduce the amount or extend the time of payment of any
amount owing or payable on the related Equipment Certificates or
distributions to be made on any related Pass Through Certificate
pursuant to Article V, or alter the currency in which any amount
payable under any such Pass Through Certificate is to be paid, or
impair the right of any related Pass Through Certificateholder to
commence legal proceedings to enforce a right to receive payment
hereunder,
(c) reduce, modify or amend any indemnities in favor of any
Certificateholder (except as consented to by each such
Certificateholder adversely affected thereby (or the proxy
therefor)), or
(d) create or permit the creation of any Lien on the related
Trust Property or any part thereof, or deprive any related
Certificateholder of the benefit of the related Pass Through Trust
with respect to the related Trust Property, whether by disposition of
such Trust Property or otherwise, except as provided in Section 7.02
or in connection with the exercise of remedies under Article VII.
Upon the request of the Company and upon the filing with the Pass
Through Trustee of evidence of the consent of the applicable
Certificateholders required under this Section 11.02 and other documents, if
any, required by Section 6.01, the Pass Through Trustee shall join with the
Company in the execution of such supplemental agreement unless such
supplemental agreement affects the Pass Through Trustee's own rights, duties
or immunities under this Pass Through Agreement or the related Series
Supplement or otherwise, in which case the Pass Through Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
agreement.
It shall not be necessary for the consent of the Certificateholders
of any Series under this Section 11.02 to approve the particular form of any
proposed supplemental agreement, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Pass Through
Trustee of any supplemental agreement relating to any Pass Through Trust
pursuant to the provisions of this Section 11.02, the Pass Through Trustee
shall mail a notice thereof by first-class mail to the related
Certificateholders at their addresses as they shall appear on the related
Register, setting forth in general terms the substance of such supplemental
agreement. Any failure of the Pass Through Trustee to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental agreement.
SECTION 11.03. Effect of Supplemental Agreements. Upon the execution
of any supplemental agreement pursuant to the provisions hereof and of any
applicable Series Supplement, this Pass Through Agreement and such Series
Supplement shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities hereunder and under the related Pass Through Trust of
the Pass Through Trustee, the Company and the related Certificateholders shall
thereafter be determined, exercised and enforced hereunder and thereunder
subject in all respects to such modifications and amendments, and all the
terms and conditions of any such supplemental agreement shall be and be deemed
to be part of the terms and conditions of this Pass Through Agreement and such
Pass Through Trust for any and all purposes.
SECTION 11.04. Documents to Be Given to Trustee. The Pass Through
Trustee, subject to the provisions of Sections 8.02 and 8.03 hereof, may
receive an Opinion of Counsel as conclusive evidence that any such
supplemental agreement complies with the applicable provisions of this Pass
Through Agreement and any applicable Series Supplement.
SECTION 11.05. Notation on Pass Through Certificates in Respect of
Supplemental Agreements. Pass Through Certificates of any Series
authenticated and delivered after the execution of any supplemental agreement
relating to such Series pursuant to the provisions of this Article XI may bear
a notation in form approved by the Pass Through Trustee as to any matter
provided for by such supplemental agreement. If the Company or the Pass
Through Trustee shall so determine, new Pass Through Certificates for such
Series so modified as to conform, in the opinion of the Company and the Pass
Through Trustee, to any modification of this Pass Through Agreement contained
in any such supplemental agreement may be provided by the Company, executed
and authenticated by the Pass Through Trustee and delivered in exchange for
the Outstanding Pass Through Certificates of such Series.
SECTION 11.06. Trust Indenture Act. Any supplemental agreement
executed pursuant to the terms of this Article XI shall on the date of the
execution thereof conform to the provisions of the Trust Indenture Act as in
force on such date.
SECTION 11.07. Revocation and Effect of Consents. Until an amendment
or waiver becomes effective, a consent to it by a Certificateholder is a
continuing consent by such Certificateholder and every subsequent
Certificateholder of the related Pass Through Certificate, even if notation of
the consent is not made on such Pass Through Certificate. However, any such
Certificateholder or subsequent Certificateholder may revoke the consent as to
his or her Pass Through Certificate if the Pass Through Trustee receives the
notice of revocation before the date the amendment or waiver becomes
effective. After an amendment or waiver becomes effective, it shall bind
every Certificateholder affected by such amendment or waiver.
SECTION 11.08. Amendments, Waivers, etc., of Related Indenture
Documents. If the Pass Through Trustee, as holder of any Equipment
Certificate in trust for the benefit of the Certificateholders of any Series,
receives a request for a consent to any modification, amendment or supplement
to any related Indenture or other related Indenture Document or to give any
consent, waiver, authorization or approval under such related Indenture or
such other related Indenture Documents, the Pass Through Trustee shall
forthwith notify each Certificateholder of such Series, as shown on the
related Register as of such date, of such request. Such notice shall request
instructions from such Certificateholders with respect to such request.
Subject to Section 7.10 hereof, the Pass Through Trustee shall, as the holder
of such Equipment Certificate, consent or vote with respect thereto in the
same proportion as so instructed by the respective Certificateholders of the
related Pass Through Certificates. Notwithstanding the foregoing, but subject
to Section 7.09 hereof, if an Event of Default shall have occurred and be
continuing, the Pass Through Trustee may, in its own discretion and at its own
direction, consent and notify the Related Indenture Trustee of such consent to
any modification, amendment, supplement or waiver under any related Indenture
Document.
ARTICLE XII
TERMINATION OF PASS THROUGH TRUSTS;
UNCLAIMED MONEYS
SECTION 12.01. Termination of Pass Through Trusts. For any Pass
Through Trust created by this Pass Through Agreement as supplemented by a
related Series Supplement, such Pass Through Trust and the respective
obligations and responsibilities of the Company and the Pass Through Trustee
under such Pass Through Trust shall terminate upon the distribution to all
Certificateholders of the related Series and the Pass Through Trustee of all
amounts required to be distributed to them pursuant to this Pass Through
Agreement and the related Series Supplement and the disposition of all
property held as part of the Trust Property of such Pass Through Trust;
provided that in no event shall such Pass Through Trust continue beyond the
final expiration date determined as provided in such Series Supplement.
Notice of termination of any Pass Through Trust, specifying the
applicable Distribution Date upon which the Certificateholders of the related
Series may surrender their Pass Through Certificates to the Pass Through
Trustee for payment of the final distribution and cancellation thereof, shall
be mailed promptly by the Pass Through Trustee to such Certificateholders not
earlier than the 60th day and not later than the 20th day next preceding such
final distribution specifying (i) the Distribution Date upon which such final
distribution will be made and that such distribution will be made only upon
presentation and surrender of the related Pass Through Certificates at the
office or agency of the Pass Through Trustee specified therein, (ii) the
amount of any such final distribution, and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable. The Pass
Through Trustee shall notify the related Registrar at the time such
Certificateholders are notified of such final distribution. Upon presentation
and surrender of the Pass Through Certificates of such Series, the Pass
Through Trustee shall distribute all amounts distributable on such Pass Through
Certificates on such Distribution Date pursuant to Section 5.02 hereof.
SECTION 12.02. Application by Pass Through Trustee of Funds Deposited
for Payment of Pass Through Certificates. Subject to Section 12.04 hereof, all
moneys deposited with the Pass Through Trustee for payment pursuant to Section
12.01 hereof shall be held in trust and applied by it to the prompt payment,
either directly or through any Paying Agent, to the Certificateholders of the
particular Pass Through Certificates for the payment or redemption of which
such moneys have been deposited with the Pass Through Trustee, of all sums due
and to become due thereon; but such money need not be segregated from other
funds except to the extent required by law.
In the event that all of the Certificateholders of such Series shall
not surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Pass Through Trustee
shall give a second written notice to the remaining Certificateholders of such
Series to surrender their Certificates for cancellation and to receive the
final distribution with respect thereto.
SECTION 12.03. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of any Pass Through Trust, all
moneys then held by any Paying Agent for such Pass Through Trust shall, upon
demand of the Pass Through Trustee, be repaid to it and thereupon such Paying
Agent shall be released from all further liability with respect to such
moneys.
SECTION 12.04. Transfer of Moneys Held by Pass Through Trustee and
Paying Agent Unclaimed for Two Years and Eleven Months. Any moneys deposited
with or paid to the Pass Through Trustee or any Paying Agent to be distributed
on any Pass Through Certificate and not applied but remaining unclaimed for
two years and eleven months after the date upon which such amount has become
due and payable, shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be paid to the
applicable Related Indenture Trustees by the Pass Through Trustee or such
Paying Agent and the applicable Certificateholder shall, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to such Related Indenture
Trustees for any payment which such Certificateholder may be entitled to
collect, and all liability of the Pass Through Trustee, or any Paying Agent
with respect to such moneys shall thereupon cease.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Capacity in Which Acting. The Pass Through Trustee
acts hereunder and under any Pass Through Trust not in its individual capacity
but solely as trustee except as expressly provided herein or in the related
Series Supplement.
SECTION 13.02. No Legal Title to Trust Property in
Certificateholders. No Certificateholder of any Series shall have legal title
to any part of the Trust Property of the related Pass Through Trust. No
transfer, by operation of law or otherwise, of any Pass Through Certificate or
other right, title and interest of any Certificateholder in and to such Trust
Property or under the related Pass Through Trust shall operate to terminate
such Pass Through Trust or entitle such Certificateholder or any successor or
transferee of such Certificateholder to an accounting or to the transfer to it
of legal title to any part of such Trust Property.
SECTION 13.03. Certificates Nonassessable and Fully Paid. No
Certificateholder of any Series shall be personally liable for obligations of
the related Pass Through Trust, the Fractional Undivided Interests represented
by the Pass Through Certificates of such Series shall be nonassessable for any
losses or expenses of such Pass Through Trust or for any reason whatsoever,
and upon authentication of such Pass Through Certificates by the Pass Through
Trustee pursuant to Section 3.02 hereof, such Pass Through Certificates will
be and shall be deemed fully paid. No Certificateholder of such Series shall
have any right (except as expressly provided herein) to vote or in any manner
otherwise control the operation and management of the related Trust Property,
the related Pass Through Trust, or the obligations of the parties hereto, nor
shall anything set forth herein, in the related Series Supplement or in the
related Pass Through Certificates be construed so as to constitute the
Certificateholders of such Series from time to time as partners or members of
an association.
SECTION 13.04. Pass Through Agreement for the Benefit of the Company,
the Pass Through Trustee and the Certificateholders. Nothing in this Pass
Through Agreement, in any Series Supplement or in any Pass Through
Certificate, whether express or implied, shall be construed to give to any
person other than the Company, the Pass Through Trustee, as trustee and in its
individual capacity, and the Certificateholders of the respective related
Series any legal or equitable right, remedy or claim under or in respect of
this Pass Through Agreement, any Pass Through Trust or any such Pass Through
Certificate.
SECTION 13.05. Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder of any Series shall not operate
to terminate this Pass Through Agreement or the related Pass Through Trust,
nor entitle such Certificateholder's legal representatives or heirs to claim
an accounting or to take any action or commence any proceeding in any court
for a partition or winding up of such Pass Through Trust, nor otherwise affect
the rights, obligations, and liabilities of the parties hereto or any of them.
No Certificateholder of any Series shall be entitled to revoke the related
Pass Through Trust.
SECTION 13.06. Notices. Unless otherwise expressly specified or
permitted by the terms hereof or the applicable Series Supplement with respect
to any Pass Through Trust, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this Pass
Through Agreement or such Series Supplement to be made, given, furnished or
filed with respect to such Pass Through Trust shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed facsimile, and (i) if to
State Street Bank and Trust Company, as Pass Through Trustee, at its office at
Two International Place, 4th Floor, Boston, MA 02110, (fax (617) 664-5371),
Attention: Corporate Services Division or (ii) if to the Company, addressed
to it at its office at 2007 Corporate Avenue, Memphis, Tennessee 38132 (fax
(901) 395-4758), Attention: Vice President and Treasurer, with a copy to
Executive Vice President and General Counsel at 1980 Nonconnah Drive, Memphis,
Tennessee 38132 (fax (901) 395-4758), and as to any Series, as otherwise
specified in the Series Supplement related thereto. The Company or the Pass
Through Trustee as to any Series, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.
Any party hereto may change the address to which notices to such party will be
sent by giving notice of such change to the other party to this Pass Through
Agreement.
Where this Pass Through Agreement or any Series Supplement provides
for notice to Certificateholders of any Series, such notice shall be
sufficiently given (unless otherwise expressly provided herein) if in writing
and mailed, first-class postage prepaid, to each such Certificateholder
entitled thereto, at his or her last address as it appears in the related
Register. In any case where notice to Certificateholders of any Series is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Certificateholder shall affect the
sufficiency of such notice with respect to other Certificateholders of such
Series. Where this Pass Through Agreement or any Series Supplement provides
for notice in any manner, such notice may be waived in writing by the person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by
Certificateholders shall be filed with the Pass Through Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to any
Certificateholders when such notice is required to be given pursuant to any
provision of this Pass Through Agreement or any related Series Supplement,
then any manner of giving such notice as shall be satisfactory to the Pass
Through Trustee shall be deemed to be a sufficient giving of such notice.
SECTION 13.07. Officer's Certificate and Opinion of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Company to the Pass Through Trustee to take any action, the Company shall
furnish to the Pass Through Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Pass Through Agreement
and the applicable Series Supplement relating to the proposed action have been
complied with and that the proposed action is in conformity with the
requirements of this Pass Through Agreement and such Series Supplement, or
(ii) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that in the
case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Pass Through
Agreement or such Series Supplement relating to such particular application or
demand, no additional certificate or opinion need be furnished.
Each certificate or opinion required by this Pass Through Agreement
or any Series Supplement and delivered to the Pass Through Trustee with
respect to compliance with a condition or covenant provided for in this Pass
Through Agreement or such Series Supplement, except for the certificate
required by Section 4.03(d) hereof shall include (a) a statement that the
person making such certificate or opinion has read such covenant or condition,
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of such
person, he or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with and (d) a statement as to whether
or not, in the opinion of such person, such condition or covenant has been
complied with.
Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters information with respect to which is
in the possession of the Company, upon the certificate, statement or opinion
of or representations by an officer or officers of the Company unless such
counsel knows that the certificate, statement or opinion or representations
with respect to the matters upon which his or her certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Company or
of counsel thereto may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm
of accountants employed by the Company unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which such certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Pass Through Trustee shall contain a statement that
such firm is independent.
SECTION 13.08. Conflict of Any Provision of Pass Through Agreement
with the Trust Indenture Act. If and to the extent that any provision of this
Pass Through Agreement limits, qualifies or conflicts with another provision
included in this Pass Through Agreement by operation of Sections 310 to 317,
inclusive, of the Trust Indenture Act (an "incorporated provision"), such
incorporated provision shall control.
SECTION 13.09. Severability. Any provision of this Pass Through
Agreement or any Series Supplement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
SECTION 13.10. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Pass Through Agreement, any Series Supplement, or
any Pass Through Certificates may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other
person against whom enforcement of the change, waiver, discharge or
termination is sought; and any waiver of the terms hereof or thereof shall be
effective only in the specific instance and for the specific purpose given.
SECTION 13.11. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and permitted assigns of each, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Certificateholder shall bind the successors and
assigns of such Certificateholder.
SECTION 13.12. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for the convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 13.13. Normal Commercial Relations. Anything contained in
this Pass Through Agreement to the contrary notwithstanding, the Pass Through
Trustee and any Certificateholder, or any bank or other affiliate of any such
party, may conduct any banking or other financial transactions, and have
banking or other commercial relationships, with the Company fully to the same
extent as if this Pass Through Agreement were not in effect, including without
limitation the making of loans or other extensions of credit to the Company
for any purpose whatsoever, whether related to any of the transactions
contemplated hereby or otherwise.
SECTION 13.14. Governing Law; Counterpart Form. THROUGH CERTIFICATE
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE. This Pass Through Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
SECTION 13.15. Distributions Due on Days Other than Business Days.
If, for any Pass Through Trust, any Distribution Date is not a Business Day,
then such distribution need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on the
applicable Distribution Date, and no interest shall accrue for the intervening
period.
IN WITNESS WHEREOF, the parties hereto have caused this Pass Through
Agreement to be duly executed this 25th day of June, 1996 by their respective
officers thereunto duly authorized, and acknowledge that this Pass Through
Agreement has been made and delivered in the City of New York, and this Pass
Through Agreement shall be effective only upon such execution and delivery.
STATE STREET BANK AND
TRUST COMPANY
not in its individual capacity,
except as otherwise expressly
provided herein, but solely
as Pass Through Trustee
By: /s/ J.E. MOGAVERO
------------------------------------
Name: J.E. Mogavero
Title: Assistant Vice President
FEDERAL EXPRESS CORPORATION
By: /s/ ROBERT D. HENNING
------------------------------------
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director -
Structured Finance
Exhibit A
to
Pass Through Agreement
FORM OF PASS THROUGH CERTIFICATE
[THIS IS A REGISTERED GLOBAL CERTIFICATE REFERRED TO IN
SECTION 2.12 OF THE PASS THROUGH TRUST AGREEMENT.
Unless this pass through certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Pass Through Trustee or its agent for registration or
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.](1)
- -------------------------
(1) This paragraph is required only if the Pass Through Certificates are to
be represented by the Registered Global Certificate.
Subject to and in accordance with the terms of the Pass Through
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 199__ - __
199_ Pass Through Certificate, Series ___
CUSIP ______
Final Regular Distribution Date: _______
evidencing a fractional undivided interest in a pass through
trust, the property of which includes certain Equipment
Certificates.
Certificate No. _______
Applicable interest rate on Equipment Certificates held in
Pass Through Trust, 199__ - _____: ____%.
$___________ Fractional Undivided Interest representing _______ of the Pass
Through Trust per $1,000 face amount.
THIS CERTIFIES THAT ______________, for value received, is the
registered owner of a $_________ (_____________ dollars) Fractional Undivided
Interest in the Federal Express Corporation Pass Through Trust, 199_-_ (the
"Pass Through Trust") created and declared by State Street Bank and Trust
company, as pass through trustee (the "Pass Through Trustee"), pursuant to the
Pass Through Trust Agreement dated as of June 1, 1996 (the "Pass Through
Agreement"), as supplemented by Series Supplement __ thereto dated
____________, 199_ (the "Series Supplement") between the Pass Through Trustee
and Federal Express Corporation, a Delaware corporation (the "Company"), a
summary of certain of the pertinent provisions of which is set forth below.
To the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Pass Through Agreement and the Series
Supplement.
This Pass Through Certificate is one of the duly authorized Pass
Through Certificates designated as "Federal Express Corporation 199_ Pass
Through Certificates, Series _______." This Pass Through Certificate is issued
under and is subject to the terms, provisions, and conditions of the Pass
Through Agreement and the Series Supplement, to which the Certificateholder of
this Pass Through Certificate by virtue of the acceptance hereof assents and
by which such Certificateholder is bound. The property of the Pass Through
Trust (the "Trust Property") includes certain Equipment Certificates (the
"Equipment Certificates"). Each series of Equipment Certificates is secured
by a security interest in (A) an aircraft leased to or owned by the Company
and, in the case of a leased aircraft, an assignment of the rights of the
Related Owner Trustee with respect to such aircraft, including the right to
receive rent and other amounts payable under the related Lease or Indenture
with respect to such aircraft or (B) a collateral account holding securities
purchased with the proceeds of the sale of such series of Equipment
Certificates. The Certificateholders have no rights, benefits or interests in
respect of any other separate trust established pursuant to the terms of the
Pass Through Agreement for any other series of Pass Through Certificates
issued pursuant thereto.
Subject to and in accordance with the terms of the Pass Through
Agreement and the Series Supplement, from funds then available to the Pass
Through Trustee, there will be distributed on each ______ and _____ (a
"Regular Distribution Date"), commencing on _______, __, to the Person in
whose name this Pass Through Certificate is registered at the close of
business on the 15th day preceding the applicable Regular Distribution Date,
an amount in respect of the Scheduled Payments on the Equipment Certificates
due on such Regular Distribution Date, equal to the product of the percentage
interest in the Pass Through Trust evidenced by this Pass Through Certificate
and an amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the Pass Through
Agreement and the Series Supplement, if Special Payments on the Equipment
Certificates are received by the Pass Through Trustee, from funds then
available to the Pass Through Trustee, there shall be distributed on the
applicable Special Distribution Date, to the Person in whose name this Pass
Through Certificate is registered at the close of business on the 15th day
preceding such Special Distribution Date, an amount in respect of such Special
Payments on the Equipment Certificates, equal to the product of the percentage
interest in the Pass Through Trust evidenced by this Pass Through Certificate
and an amount equal to the sum of such Special Payments so received.
If a Distribution Date is not a Business Day, distribution shall be
made on the immediately following Business Day with the same force and effect
as if made on such Distribution Date and no interest shall accrue during the
intervening period. The Special Distribution Date shall be the ______ day of
the month determined as provided in the Pass Through Agreement and the Series
Supplement, except in certain circumstances, in which case it will be the date
of receipt of proceeds by the Pass Through Trustee as provided in the Series
Supplement. The Pass Through Trustee shall mail notice of each Special
Payment and the Special Distribution Date therefor to the Certificateholder of
this Pass Through Certificate.
Distributions on this Pass Through Certificate will be made by the
Pass Through Trustee to the Person entitled thereto, without the presentation
or surrender of this Pass Through Certificate or the making of any notation
hereon. Except as otherwise provided in the Pass Through Agreement and
notwithstanding the above, the final distribution on this Pass Through
Certificate will be made after notice mailed by the Pass Through Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Pass Through Certificate at the office or agency of the Pass Through
Trustee specified in such notice.
[NO EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR INDIVIDUAL
RETIREMENT ACCOUNT OR PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (HEREINAFTER COLLECTIVELY REFERRED TO AS AN "ERISA"
PLAN), MAY ACQUIRE OR HOLD ANY OF THE PASS THROUGH CERTIFICATES. THE PURCHASE
BY ANY PERSON OF ANY PASS THROUGH CERTIFICATE CONSTITUTES A REPRESENTATION BY
SUCH PERSON TO FEDERAL EXPRESS CORPORATION, THE RELATED OWNER PARTICIPANTS, THE
RELATED OWNER TRUSTEES, THE RELATED INDENTURE TRUSTEES AND THE PASS THROUGH
TRUSTEE OR THEIR RESPECTIVE SUCCESSORS, AS THE CASE MAY BE, THAT SUCH PERSON
IS NOT AN ERISA PLAN AND THAT SUCH PERSON IS NOT ACQUIRING, AND HAS NOT
ACQUIRED, SUCH PASS THROUGH CERTIFICATE WITH ASSETS OF AN ERISA PLAN.](*)(*)
- -------------------------
(*)(*) Subject to revision as set forth in Section 6.06 hereof.
This Pass Through Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
Reference is hereby made to the further provisions of this Pass
Through Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Pass Through Trustee, by manual signature, this Pass Through Certificate
shall not be entitled to any benefit under the related Pass Through Trust or
be valid for any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee has caused this Pass
Through Certificate to be duly executed.
FEDERAL EXPRESS CORPORATION
PASS THROUGH TRUST, SERIES 199__-__
By: __________________________,
as Pass Through Trustee
By: _______________________
Authorized Signatory
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated:
This is one of the Pass Through Certificates referred to in the
within-mentioned Pass Through Agreement and related Series Supplement.
_________________________,
as Pass Through Trustee
By: ______________________
Authorized Signatory
[Reverse of Pass Through Certificate]
The Pass Through Certificates do not represent a direct obligation
of, or an obligation guaranteed by, or an interest in, the Company or the Pass
Through Trustee or any affiliate thereof. The Pass Through Certificates are
limited in right of payment, all as more specifically set forth on the face
hereof and in the Pass Through Agreement and the Series Supplement. All
payments or distributions made to Certificateholders under the Pass Through
Agreement shall be made only from the Trust Property and only to the extent
that the Pass Through Trustee shall have sufficient income or proceeds from
the Trust Property to make such payments in accordance with the terms of the
Pass Through Agreement and the Series Supplement.
Each Certificateholder of this Pass Through Certificate, by its
acceptance hereof, agrees that it will look solely to the income and proceeds
from the Trust Property to the extent available for distribution to such
Certificateholder as provided in the Pass Through Agreement and the Series
Supplement.
In connection with withholding taxes, under certain circumstances the
Pass Through Trustee may retain certain amounts otherwise distributable to a
Certificateholder. The purchase by any Certificateholder of any Pass Through
Certificate constitutes the consent of such Certificateholder to such
retention in accordance with the terms of the Pass Through Agreement.
This Pass Through Certificate does not purport to summarize the Pass
Through Agreement and the Series Supplement and reference is made to the Pass
Through Agreement and the Series Supplement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby. A copy of the Pass Through Agreement may be examined by any
Certificateholder upon request, during normal business hours at the principal
office of the Pass Through Trustee, and at such other places designated by the
Pass Through Trustee.
As of the date of issuance of this Pass Through Certificate, and
assuming that no prepayment or default in respect of the Equipment
Certificates shall occur, the aggregate scheduled repayments of principal on
the Equipment Certificates for the Pass Through Trust and the resulting Pool
Factors for the Pass Through Trust after taking into account each such
repayment are set forth below:
Pass Through Trust, 199__-___
Scheduled Principal
Regular Payments on
Distribution Date Equipment Certificates Pool Factor
- ----------------------- ------------------------ -------------
$ 0.0000000
The Pass Through Agreement and the Series Supplement permits, with
certain exceptions provided therein, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of
the Certificateholders under the Pass Through Trust at any time by the Company
and the Pass Through Trustee with the consent of the Majority In Interest of
Certificateholders in the Pass Through Trust. Any such consent by the
Certificateholder of this Pass Through Certificate shall be conclusive and
binding on such Certificateholder and upon all future Certificateholders of
this Pass Through Certificate and of any Pass Through Certificate issued upon
the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Pass Through Certificate. The Pass
Through Agreement and the Series Supplement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Pass Through Certificates.
As provided in the Pass Through Agreement and the the Series
Supplement and subject to certain limitations set forth therein, the transfer
of this Pass Through Certificate is registrable in the Register upon surrender
of this Pass Through Certificate for registration of transfer at the
facilities or agencies maintained by the Pass Through Trustee in its capacity
as Registrar, or by any successor Registrar, duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Pass Through
Trustee and the Registrar duly executed by the Certificateholder hereof or
such Certificateholder's attorney duly authorized in writing, and thereupon
one or more new Pass Through Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided Interest in the Pass
Through Trust will be issued to the designated transferee or transferees.
The Pass Through Certificates are issuable only as registered Pass
Through Certificates without coupons in minimum denominations of $1,000
fractional undivided interest and integral multiples thereof. As provided in
the Pass Through Agreement and the Series Supplement and subject to certain
limitations set forth therein, the Pass Through Certificates are exchangeable
for new Pass Through Certificates of authorized denominations evidencing the
same aggregate Fractional Undivided Interest in the Pass Through Trust, as
requested by the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Pass Through Trustee may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Pass Through Trustee, the Registrar, and any agent of the Pass
Through Trustee or the Registrar may treat the person in whose name this Pass
Through Certificate is registered as the owner hereof for all purposes, and
neither the Pass Through Trustee, the Registrar, nor any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Pass Through
Agreement and the Series Supplement and the Pass Through Trust created thereby
shall terminate upon the distribution to Certificateholders of all amounts
required to be distributed to them pursuant to the Pass Through Agreement and
the Series Supplement and the disposition of all property held as part of the
Trust Property.
Exhibit B
to
Pass Through Agreement
__________________________________________
SERIES SUPPLEMENT 199__-___
Dated __________, 199__
Between
___________________________________
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
to
PASS THROUGH TRUST AGREEMENT
Dated as of June 1, 1996
$__________________
Federal Express Corporation
Pass Through Trust, 199__-___
Federal Express Corporation
199__ Pass Through Certificates,
Series ___
__________________________________________
TABLE OF CONTENTS
Page
RECITALS.................................... ............................ 1
ARTICLE I
CERTAIN DEFINITIONS
ARTICLE II
DESIGNATIONS; TRUST FORMATION;
ISSUANCE OF PASS THROUGH CERTIFICATES
SECTION 2.01. Designations; Aggregate Amount............................ 4
SECTION 2.02. Declaration of Trust; Authorization....................... 4
SECTION 2.03. Issuance of Pass Through Certificates..................... 5
SECTION 2.04. Purchase of Equipment Certificates........................ 5
SECTION 2.05. Representations and Warranties of the Company............. 5
SECTION 2.06. Conditions Precedent...................................... 5
SECTION 2.07. Acceptance of Appointment of Pass Through Trustee......... 5
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS;
CONCERNING AUTHENTICATING AGENT, PAYING AGENT AND REGISTRAR AND
THE CERTIFICATEHOLDERS
SECTION 3.01. Distribution Dates........................................ 6
SECTION 3.02. Record Dates.............................................. 6
SECTION 3.03. Certificate Account and Special Payments Account.......... 6
SECTION 3.04. Form of Pass Through Certificates......................... 7
SECTION 3.05. Indenture Documents....................................... 7
SECTION 3.06. Appointment of Authenticating Agent;
Paying Agent and Registrar....................... 7
SECTION 3.07. Predelivery Funding....................................... 7
SECTION 3.08. ERISA..................................................... 8
SECTION 3.09. Registered Global Certificate............................. 9
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart Form........................... 9
SECTION 4.02. Reports by the Company.................................... 9
SECTION 4.03. Modification and Ratification of Pass Through Agreement... 9
SECTION 4.04. Termination............................................... 9
EXHIBIT A Form of Pass Through Certificate
SCHEDULE Equipment Certificates; Related Indenture Documents
SERIES SUPPLEMENT 199__-___
SERIES SUPPLEMENT 199__-___, dated _________, 199__ (this "Series
Supplement"), between FEDERAL EXPRESS CORPORATION, a Delaware corporation (the
"Company") and ______________________________________, a _____________________
company, as Pass Through Trustee (the "Pass Through Trustee"), to the Pass
Through Trust Agreement, dated as of June 1, 1996 (the "Pass Through
Agreement"), between the Company and State Street Bank and Trust Company, a
Massachusetts trust company.
RECITALS
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, Section 2.01 of the Pass Through Agreement provides, among other
things, that the Company and the Pass Through Trustee may execute and deliver
one or more series supplements, each for the purpose of forming a separate
pass through trust for the benefit of the certificateholders of the series of
pass through certificates to be issued pursuant to such pass through trust,
appointing an institution to act as Pass Through Trustee if different from the
institution executing the Pass Through Agreement, establishing certain terms
of such pass through certificates, and pursuant to which the pass through
certificates of such series shall be executed and authenticated by the Pass
Through Trustee and delivered as directed by the Company;
WHEREAS, pursuant to the Participation Agreements, the Company has
agreed to cause the Equipment Certificates to be issued and sold to the Pass
Through Trustee, and the Pass Through Trustee has agreed to purchase the
Equipment Certificates, which will be held in trust as Trust Property for the
benefit of the Certificateholders;
WHEREAS, in order to facilitate such sale, the Company has agreed,
pursuant to the Underwriting Agreement, to cause the Pass Through Trustee to
issue and sell the Pass Through Certificates to the Underwriters;
WHEREAS, pursuant to the Pass Through Agreement and the terms of this
Series Supplement, the Pass Through Trustee will execute, authenticate and
deliver the Pass Through Certificates to the Underwriters upon receipt by the
Pass Through Trustee of the purchase price therefor, which will be applied in
accordance with this Series Supplement to purchase the Equipment Certificates;
WHEREAS, the Pass Through Trustee hereby declares the creation of this
Pass Through Trust for the benefit of the Certificateholders, and the initial
Certificateholders of such Pass Through Certificates, as the grantors of such
Pass Through Trust, by their respective acceptances of such Pass Through
Certificates, join in the creation of such Pass Through Trust;
WHEREAS, to facilitate the sale of the Equipment Certificates to, and
the purchase of the Equipment Certificates by, the Pass Through Trustee on
behalf of this Pass Through Trust, the Company has duly authorized the
execution and delivery of this Series Supplement as the "issuer," as such term
is defined in and solely for purposes of the Securities Act, of the Pass
Through Certificates and as the "obligor," as such term is defined in and
solely for purposes of the Trust Indenture Act, with respect to all such Pass
Through Certificates; and
WHEREAS, this Series Supplement is subject to the provisions of the Trust
Indenture Act and shall, to the extent applicable, be governed by such
provisions;
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto as
follows:
ARTICLE I
CERTAIN DEFINITIONS
All terms used in this Series Supplement that are defined in the Pass
Through Agreement, either directly or by reference therein, have the meanings
assigned to them therein as supplemented by this Article I, if applicable,
except to the extent the context requires otherwise. Any such defined term
that is defined in the Pass Through Agreement as relating to a particular Pass
Through Trust or Series rather than to any Pass Through Trust or Series
generally shall, when used in this Series Supplement, relate solely to the
Federal Express Corporation Pass Through Trust, 199__-___, or the Federal
Express Corporation 199__ Pass Through Certificates, Series ___, as the case
may be, whether or not expressly so stated herein.
"Aircraft" means ___________________________ aircraft , including the
Engines (as such term is defined in the related Participation Agreement)
relating thereto, (i) leased or to be leased by the Owner Trustee to the
Company pursuant to a Lease or (ii) to be purchased by the Company as
provided, and under the circumstances specified, in Section 3.07 hereof) and,
collectively, means all of the foregoing.
"Authenticating Agent" has the meaning set forth in Section 3.06 hereof.
"Certificate Account" means the Certificate Account specified in Section
3.03 hereof.
"Certificateholders" means the Certificateholders of the Series of Pass
Through Certificates designated in Section 2.01 hereof.
"Collateral Account" means the Collateral Account established pursuant
to the Indenture for Federal Express Corporation Trust No. N_____FE into which
the proceeds of sale of the related Equipment Certificates will be deposited.
"Cut-off Date for Pass Through Trust" is inapplicable.
"Delivery Date" means, for any Equipment Certificates, the Refunding
Date (as such term is defined in the related Participation Agreement) for such
Equipment Certificates.
"Equipment Certificates" means those Equipment Certificates listed in
Schedule I hereto.
"Issuance Date" means the date defined as the Closing Time in the
Underwriting Agreement.
"Participation Agreements" means those Participation Agreements listed in
Schedule I hereto.
"Pass Through Certificates" means the Pass Through Certificates
designated in Section 2.01 hereof.
"Pass Through Trust," "this Pass Through Trust" and other like words
means the Pass Through Trust designated in Section 2.01 hereof.
"Paying Agent" means the Person specified as such in Section 3.06 hereof.
"Record Date" means any Record Date specified in Section 3.02 hereof.
"Registrar" means the Person specified as such in Section 3.06 hereof.
"Regular Distribution Date" means any Regular Distribution Date
specified in Section 3.01 hereof.
"Special Distribution Date" means, for any Special Payment, the Special
Distribution Date for such Special Payment specified in Section 3.01 hereof.
"Special Payments Account" means the Special Payments Account specified
in Section 3.03 hereof.
"Trust Property" means all money, instruments, including the Equipment
Certificates that have been issued by the related Owner Trustee and delivered
to and accepted by the Pass Through Trustee for the benefit of the
Certificateholders, and other property held as the property of this Pass
Through Trust, including all distributions thereon and proceeds thereof.
"Underwriters" means the several Underwriters named in the Underwriting
Agreement.
"Underwriting Agreement" means the Underwriting Agreement dated
_________, 199__ among the Company and ____________________________.
ARTICLE II
DESIGNATIONS; TRUST FORMATION;
ISSUANCE OF PASS THROUGH CERTIFICATES
SECTION 2.01. Designations; Aggregate Amount. The Pass Through Trust
created hereby shall be designated Federal Express Corporation Pass Through
Trust, 199__-___ (herein sometimes called this "Pass Through Trust"). The
Pass Through Certificates evidencing Fractional Undivided Interests in such
Pass Through Trust shall be designated as the Federal Express Corporation
199__ Pass Through Certificates, Series ___ (herein sometimes called the
"Series ___ Pass Through Certificates"). The Series ___ Pass Through
Certificates shall be the only instruments evidencing a fractional undivided
interest in such Pass Through Trust.
Except as provided in Sections 2.08, 2.09 and 2.11 of the Pass Through
Agreement, the aggregate amount of Series ___ Pass Through Certificates that
may be authenticated, delivered and outstanding under this Series Supplement
is limited to $_________________.
SECTION 2.02. Declaration of Trust; Authorization. Each initial
Certificateholder, by its acceptance of any Series ___ Pass Through
Certificate is hereby deemed (1) as grantor, to join in the creation and
declaration of this Pass Through Trust and (2) as beneficiary of such Pass
Through Trust, to authorize and direct the Pass Through Trustee to execute and
deliver all documents to which the Pass Through Trustee is a party that may be
necessary or desirable to consummate the transactions contemplated hereby and
to exercise its rights and perform its duties under the Participation
Agreements, the Indentures, the Pass Through Agreement and this Series
Supplement.
The Pass Through Trustee hereby acknowledges and accepts this grant of
trust and declares that it will hold the Trust Property as Pass Through
Trustee of this Pass Through Trust for the use and benefit of the
Certificateholders.
SECTION 2.03. Issuance of Pass Through Certificates. Subject to the
terms set forth herein, on the Issuance Date (i) the Company shall direct the
Underwriters to execute a wire transfer or intra-bank transfer to the Pass
Through Trustee in the amount of the total proceeds payable by such
Underwriters pursuant to the Underwriting Agreement with respect to the Series
___ Pass Through Certificates and (ii) the Pass Through Trustee shall deliver
the Series ___ Pass Through Certificates to the Underwriters as provided in
the Underwriting Agreement upon receipt by the Pass Through Trustee of such
proceeds.
SECTION 2.04. Purchase of Equipment Certificates. On the Issuance
Date, the Pass Through Trustee shall purchase, in accordance with Section 2.02
of the Pass Through Agreement, each of the Equipment Certificates upon the
satisfaction or waiver of the conditions for such purchase by the Pass Through
Trustee set forth in the related Participation Agreement.
SECTION 2.05. Representations and Warranties of the Company. All of the
representations and warranties of the Company set forth or incorporated by
reference in Section 1 of the Underwriting Agreement are incorporated by
reference in this Series Supplement as if set forth herein and the Company
represents and warrants that such representations and warranties are true and
correct on the date hereof, except to the extent that such representations and
warranties expressly relate solely to an earlier date or later date (in which
case such representations and warranties were correct on and as of such
earlier date or will be correct on and as of such later date, as the case may
be).
SECTION 2.06. Conditions Precedent. The obligations of the Pass Through
Trustee to participate in the transactions described in Sections 2.03 and 2.04
hereof are subject to (i) receipt by the Pass Through Trustee of a certificate
of the Company to the same effect as the certificate of the Company delivered
to the Underwriters pursuant to Section 5(c) of the Underwriting Agreement,
and (ii) satisfaction or waiver of the conditions for the purchase by the
Underwriters of the Pass Through Certificates set forth in Section 5 of the
Underwriting Agreement, which satisfaction or waiver for the purposes hereof
shall be conclusively demonstrated by the receipt by the Pass Through Trustee
of the total proceeds payable by such Underwriters pursuant to the
Underwriting Agreement with respect to the Series ___ Pass Through
Certificates.
SECTION 2.07. Acceptance of Appointment of Pass Through Trustee.
__________________________ represents and warrants that it is qualified to
serve as Pass Through Trustee and satisfies the criteria specified in Section
10.02 of the Pass Through Agreement for eligibility as a Pass Through Trustee.
_______________________________ hereby agrees to serve as Pass Through Trustee
for the Pass Through Certificates and acknowledges its appointment as Pass
Through Trustee in accordance with the provisions of, and subject to all of
the terms and conditions set forth in, the Pass Through Agreement and this
related Series Supplement upon the execution and delivery of this Series
Supplement.
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS;
CONCERNING AUTHENTICATING AGENT, PAYING AGENT AND REGISTRAR AND
THE CERTIFICATEHOLDERS
SECTION 3.01. Distribution Dates. The Regular Distribution Dates are
each _____________ and ____________, commencing on ____________, 199__. The
Special Distribution Date for any month in which a Special Payment is to be
distributed will be the __________ day of such month, except that the Special
Distribution Date for any Special Payment received by the Pass Through Trustee
in connection with a prepayment of any Equipment Certificate pursuant to
Section 6.02(a)(i), 6.02(a)(v) or, in the case of the Indenture in respect of
Federal Express Corporation Trust No. N_____FE, 6.02(a)(vi) of the related
Indenture will correspond to the date of the receipt of such Special Payment by
the Pass Through Trustee. Notice of such Special Payment shall be mailed as
soon as practicable after receipt by the Pass Through Trustee of the notice of
such prepayment.
SECTION 3.02. Record Dates. The Record Dates for the Regular
Distribution Dates are __________ and ___________, respectively, and the
Record Date for any Special Distribution Date is the fifteenth day preceding
such Special Distribution Date, in any event, whether or not such date is a
Business Day.
SECTION 3.03. Certificate Account and Special Payments Account. In
accordance with Section 5.01(a) of the Pass Through Agreement and upon receipt
of any Scheduled Payment, the Pass Through Trustee shall immediately deposit
such Scheduled Payment into the Certificate Account, a separate and
non-interest bearing account designated by the Pass Through Trustee to be used
for such purpose. In accordance with Section 5.01(b) of the Pass Through
Agreement and upon receipt of any Special Payment, the Pass Through Trustee
shall immediately deposit such Special Payment into the Special Payments
Account, a separate and, except as provided in Section 5.04 of the Pass
Through Agreement, non-interest bearing account designated by the Pass Through
Trustee to be used for such purpose.
SECTION 3.04. Form of Pass Through Certificates. Subject to Section
2.07 of the Pass Through Agreement, each of the Series ___ Pass Through
Certificates will be substantially in the form of Exhibit A hereto. The
Series ___ Pass Through Certificates will be issued pursuant to a book-entry
system in the form of one Registered Global Certificate and subject to the
conditions set forth in the Letter of Representations among the Company, the
Pass Through Trustee and The Depository Trust Company.
SECTION 3.05. Indenture Documents. The related Indenture Documents are
listed in Schedule I hereto.
SECTION 3.06. Appointment of Authenticating Agent; Paying Agent and
Registrar. (a) The Pass Through Trustee may appoint an authenticating agent
(the "Authenticating Agent") with respect to the Pass Through Certificates
which shall be authorized to act on behalf of the Pass Through Trustee to
authenticate the Pass Through Certificates issued upon original issue and upon
exchange or registration of transfer thereof or pursuant to Section 2.09 of
the Pass Through Agreement. Pass Through Certificates so authenticated shall
be entitled to the benefits of the Pass Through Agreement and this Series
Supplement and shall be valid and obligatory for all purposes as if
authenticated by the Pass Through Trustee. Whenever reference is made in the
Pass Through Agreement or this Series Supplement to the authentication and
delivery of Pass Through Certificates by the Pass Through Trustee or the Pass
Through Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Pass Through
Trustee by an Authenticating Agent and a certificate of authentication executed
on behalf of the Pass Through Trustee by an Authenticating Agent.
(b) The Paying Agent, Registrar and Authenticating Agent for the Series
___ Pass Through Certificates initially shall be _________________________.
________________________________________ hereby represents and warrants to the
Company that it is qualified to serve as Paying Agent, Registrar and
Authenticating Agent under the provisions of, and subject to all of the terms
and conditions set forth in, the Pass Through Agreement and this related
Series Supplement.
SECTION 3.07. Predelivery Funding. During the period between the date
of issuance of Equipment Certificates by the Owner Trustee in respect of
Federal Express Corporation Trust No. N_____FE and the delivery date of the
related Aircraft, such Equipment Certificates will not be secured by such
Aircraft or the related Lease, but will be secured by the Collateral Account.
Pursuant to the related Indenture, the Owner Trustee will deposit the proceeds
from the sale of the related Equipment Certificates into the Collateral
Account for the benefit of the related Indenture Trustee.
Sums deposited in the Collateral Account will be invested in: (a) direct
obligations of the United States of America or obligations fully guaranteed by
the United States of America; (b) commercial paper rated A-1/P-1 by Standard &
Poor's Ratings Group and Moody's Investors Service, Inc., respectively or, if
such ratings are unavailable, rated by any nationally recognized rating
organization in the United States equal to the highest rating assigned by such
rating organization; (c) overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers; and (d)
overnight repurchase agreements with respect to the securities described in
clause (a) above entered into with an office of a bank or trust company which
is located in the United States of America of any bank or trust company which
is organized under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500 million. The
Company will pay to the Indenture Trustee on demand any losses on such
investments. On the delivery date of such Aircraft, upon satisfaction or
waiver of the conditions to the Indenture Trustee's release of amounts in the
Collateral Account, the Indenture Trustee will release such amounts. Such
amounts will be applied by the Indenture Trustee in accordance with the
related Participation Agreement to pay a portion of the purchase price for
such Aircraft on the delivery date thereof.
The Company will pay to the Indenture Trustee on such delivery date the
excess, if any, of the portion of the purchase price for such Aircraft
required to be paid by the Indenture Trustee over the amounts released from
the Collateral Account net of investment earnings (which will be paid to the
Company). The Company is obligated to cause the proceeds of the Equipment
Certificates to be utilized to acquire such Aircraft in all circumstances
other than the failure of the manufacturer to deliver such Aircraft.
Accordingly, if the related Owner Participant does not make available its
portion of the purchase price on the delivery date of such Aircraft or the
Company does not enter into the related Lease on or prior to ______________,
199__ for any reason other than the failure of the manufacturer to deliver
such Aircraft, the Company will purchase such Aircraft and assume on a fully
recourse basis all of the obligations of the Owner Trustee under the related
Equipment Certificates pursuant to an indenture containing terms substantially
identical to those contained in the Leases and Indentures in respect of
Federal Express Corporation Trust No. N____FE. In such case, the Indenture
Trustee will release the amounts in the Collateral Account to the Company to
pay a portion of the purchase price for such Aircraft.
SECTION 3.08. ERISA. [Any Person who is, or who in acquiring a Pass
Through Certificate is or may be using the assets of, an employee benefit plan
subject to Title I of The Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or an individual retirement account or plan subject to
Section 4975 of the Code, or any trust established under any such plan or
account, may acquire or hold any of the Pass Through Certificates, if such
Person determines either that an administrative or a statutory exemption from
the prohibited transaction rules under Section 406 of ERISA and Section 4975
of the Code is applicable to its purchase and holding of a Pass Through
Certificate or that its purchase and holding of a Pass Through Certificate
will not result in a prohibited transaction under Section 406 of ERISA and
Section 4975 of the Code.]**
______________________
** Subject to revision as set forth in Section 6.06 of The Pass Through
Agreement.
SECTION 3.09. Registered Global Certificate. The Series ___ Pass
Through Certificates are to be issued in whole in the form of a Registered
Global Certificate, and Section 2.12 of the Pass Through Agreement shall,
accordingly, be applicable. The Depository for the Registered Global
Certificate and the Letter of Representations is The Depository Trust Company.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart Form. AS PROVIDED IN SECTION
13.14 OF THE PASS THROUGH AGREEMENT, THIS SERIES SUPPLEMENT AND EACH SERIES
___ PASS THROUGH CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
This Series Supplement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 4.02. Reports by the Company. In addition to the reports
required to be provided by the Company pursuant to Section 4.03 of the Pass
Through Agreement, the Company agrees to furnish to the Pass Through Trustee
from time to time, such other financial information as the Pass Through
Trustee may reasonably request.
SECTION 4.03. Modification and Ratification of Pass Through Agreement.
The Pass Through Agreement is incorporated herein by reference in its
entirety, and shall be deemed to be a part of this Series Supplement as if set
forth in full herein, and is in all respects ratified and confirmed, as
supplemented and modified by this Series Supplement.
SECTION 4.04. Termination. In no event shall this Pass Through Trust
continue beyond the expiration of 21 years after the death of the last
survivor of George Pataki, Governor of New York State, living on the date of
this Series Supplement.
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized, all on the day
and year first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________
Name: Robert D. Henning
Title:Assistant Treasurer and Managing
Director - Structured Finance
____________________________________________,
as Pass Through Trustee
By: _________________________________________
Name:
Title:
Exhibit A
to
Series Supplement
FORM OF PASS THROUGH CERTIFICATE
THIS IS A REGISTERED GLOBAL CERTIFICATE REFERRED TO IN
SECTION 2.12 OF THE PASS THROUGH TRUST AGREEMENT.
[Unless this pass through certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Pass Through Trustee or its agent for registration or
transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.]*
______________________
* This paragraph is required only if the Pass Through Certificates are to
be represented by the Registered Global Certificate.
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 199__-___
199__ Pass Through Certificate, Series ___
CUSIP _________________
Final Regular Distribution Date: __________, ______
evidencing a fractional undivided interest in a pass through trust,
the property of which includes certain Equipment Certificates.
Certificate No. _______
Applicable interest rate on Equipment Certificates held in
Pass Through Trust, 199__-___: _____%.
$___________ Fractional Undivided Interest representing _______ of the
Pass Through
Trust per $1,000 face amount.
THIS CERTIFIES THAT ____________________, for value received, is the
registered owner of a $_________ (_____________ dollars) Fractional Undivided
Interest in the Federal Express Corporation Pass Through Trust, 199__-___ (the
"Pass Through Trust") created and declared by ___________________________, as
pass through trustee (the "Pass Through Trustee"), pursuant to the Pass
Trust Agreement dated as of June 1, 1996 (the "Pass Through Agreement"), as
supplemented by Series Supplement 199__-___ thereto dated ________, 199__
(the "Series Supplement") between the Pass Through Trustee and Federal
Express Corporation, a Delaware corporation (the "Company"), a summary of
certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Pass Through Agreement and the Series
Supplement.
This Pass Through Certificate is one of the duly authorized Pass Through
Certificates designated as "Federal Express Corporation 199__ Pass Through
Certificates, Series ___." This Pass Through Certificate is issued under and
is subject to the terms, provisions, and conditions of the Pass Through
Agreement and the Series Supplement, to which the Certificateholder of this
Pass Through Certificate by virtue of the acceptance hereof assents and by
which such Certificateholder is bound. The property of the Pass Through Trust
(the "Trust Property") includes certain Equipment Certificates (the "Equipment
Certificates"). Each series of Equipment Certificates is secured by a security
interest in (A) an aircraft leased to or owned by the Company and, in the case
of a leased aircraft, an assignment of the rights of the Related Owner Trustee
with respect to such aircraft, including the right to receive rent and other
amounts payable under the related Lease or Indenture with respect to such
aircraft or (B) a collateral account holding securities purchased with the
proceeds of the sale of such series of Equipment Certificates. The
Certificateholders have no rights, benefits or interests in respect of any
other separate trust established pursuant to the terms of the Pass Through
Agreement for any other series of Pass Through Certificates issued pursuant
thereto.
Subject to and in accordance with the terms of the Pass Through
Agreement and the Series Supplement, from funds then available to the Pass
Through Trustee, there will be distributed on each ___________ and ___________
(a "Regular Distribution Date"), commencing on ___________, 199__, to the
Person in whose name this Pass Through Certificate is registered at the close
of business on the 15th day preceding the applicable Regular Distribution
Date, an amount in respect of the Scheduled Payments on the Equipment
Certificates due on such Regular Distribution Date, equal to the product of the
percentage interest in the Pass Through Trust evidenced by this Pass Through
Certificate and an amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the Pass Through
Agreement and the Series Supplement, if Special Payments on the Equipment
Certificates are received by the Pass Through Trustee, from funds then
available to the Pass Through Trustee, there shall be distributed on the
applicable Special Distribution Date, to the Person in whose name this Pass
Through Certificate is registered at the close of business on the 15th day
preceding such Special Distribution Date, an amount in respect of such Special
Payments on the Equipment Certificates, equal to the product of the percentage
interest in the Pass Through Trust evidenced by this Pass Through Certificate
and an amount equal to the sum of such Special Payments so received.
If a Distribution Date is not a Business Day, distribution shall be made
on the immediately following Business Day with the same force and effect as if
made on such Distribution Date and no interest shall accrue during the
intervening period. The Special Distribution Date shall be the _______ day of
the month determined as provided in the Pass Through Agreement and the Series
Supplement, except in certain circumstances, in which case it will be the date
of receipt of proceeds by the Pass Through Trustee as provided in the Series
Supplement. The Pass Through Trustee shall mail notice of each Special
Payment and the Special Distribution Date therefor to the Certificateholder of
this Pass Through Certificate.
Distributions on this Pass Through Certificate will be made by the Pass
Through Trustee to the Person entitled thereto, without the presentation or
surrender of this Pass Through Certificate or the making of any notation
hereon. Except as otherwise provided in the Pass Through Agreement and
notwithstanding the above, the final distribution on this Pass Through
Certificate will be made after notice is mailed by the Pass Through Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Pass Through Certificate at the office or agency of the Pass Through
Trustee specified in such notice.
[Any Person who is, or who in acquiring this Pass Through Certificate is
or may be using the assets of, an employee benefit plan subject to Title I of
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
an individual retirement account or plan subject to Section 4975 of the Code,
or any trust established under any such plan or account, may acquire or hold
any of the Pass Through Certificates, if such Person determines either that an
administrative or a statutory exemption from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code is applicable to its
purchase and holding of this Pass Through Certificate or that its purchase and
holding of this Pass Through Certificate will not result in a prohibited
transaction under Section 406 of ERISA and Section 4975 of the Code.]**
______________________
** Subject to revision as set forth in Section 6.06 of The Pass Through
Agreement.
This Pass Through Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
Reference is hereby made to the further provisions of this Pass Through
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Pass Through Trustee, by manual signature, this Pass Through Certificate shall
not be entitled to any benefit under the Pass Through Trust or be valid for
any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee has caused this Pass Through
Certificate to be duly executed.
FEDERAL EXPRESS CORPORATION
PASS THROUGH TRUST, 199__-___
_______________________________________,
as Pass Through Trustee
By: ________________________________
Authorized Signatory
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated:
This is one of the Pass Through Certificates referred to in the
within-mentioned Pass Through Agreement and the Series Supplement.
_______________________________________,
as Pass Through Trustee
By: ________________________________
Authorized Signatory
Reverse of Pass Through Certificate]
The Pass Through Certificates do not represent a direct obligation of,
or an obligation guaranteed by, or an interest in, the Company or the Pass
Through Trustee or any affiliate thereof. The Pass Through Certificates are
limited in right of payment, all as more specifically set forth on the face
hereof and in the Pass Through Agreement and the Series Supplement. All
payments or distributions made to Certificateholders under the Pass Through
Agreement shall be made only from the Trust Property and only to the extent
that the Pass Through Trustee shall have sufficient income or proceeds from the
Trust Property to make such payments in accordance with the terms of the Pass
Through Agreement and the Series Supplement. Each Certificateholder of this
Pass Through Certificate, by its acceptance hereof, agrees that it will look
solely to the income and proceeds from the Trust Property to the extent
available for distribution to such Certificateholder as provided in the Pass
Through Agreement and the Series Supplement.
In connection with withholding taxes, under certain circumstances the
Pass Through Trustee may retain certain amounts otherwise distributable to a
Certificateholder. The purchase by any Certificateholder of any Pass Through
Certificate constitutes the consent of such Certificateholder to such
retention in accordance with the terms of the Pass Through Agreement.
This Pass Through Certificate does not purport to summarize the Pass
Through Agreement and the Series Supplement and reference is made to the Pass
Through Agreement and the Series Supplement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby. A copy of the Pass Through Agreement may be examined by any
Certificateholder upon request during normal business hours at the principal
office of the Pass Through Trustee, and at such other places designated by the
Pass Through Trustee.
As of the date of issuance of this Pass Through Certificate, and
assuming that no prepayment or default in respect of payment on the Equipment
Certificates shall occur, the aggregate scheduled repayments of principal on
the Equipment Certificates for the Pass Through Trust and the resulting Pool
Factors for the Pass Through Trust after taking into account each such
repayment are set forth below:
Pass Through Trust, 199__-___
Scheduled
Principal
Payments on
Regular Equipment
Distribution Dates Certificates Pool Factor
- ---------------------------- -------------- -------------
The Pass Through Agreement and the Series Supplement permit, with certain
exceptions provided therein, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the Certificateholders
under the Pass Through Trust at any time by the Company and the Pass Through
Trustee with the consent of the Majority In Interest of Certificateholders in
the Pass Through Trust. Any such consent by the Certificateholder of this Pass
Through Certificate shall be conclusive and binding on such Certificateholder
and upon all future Certificateholders of this Pass Through Certificate and of
any Pass Through Certificate issued upon the transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent is made upon
this Pass Through Certificate. The Pass Through Agreement and the Series
Supplement also permit the amendment thereof, in certain limited
circumstances, without the consent of the Certificateholders of any of the
Pass Through Certificates.
As provided in the Pass Through Agreement and the Series Supplement and
subject to certain limitations set forth therein, the transfer of this Pass
Through Certificate is registrable in the Register upon surrender of this Pass
Through Certificate for registration of transfer to the Pass Through Trustee
in its capacity as Registrar, or by any successor Registrar, duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Pass Through Trustee and the Registrar duly executed by the Certificateholder
hereof or such Certificateholder's attorney duly authorized in writing, and
thereupon one or more new Pass Through Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided Interest in the Pass
Through Trust will be issued to the designated transferee or transferees.
The Pass Through Certificates are issuable only as registered Pass
Through Certificates without coupons in minimum denominations of $1,000
fractional undivided interests and integral multiples thereof. As provided in
the Pass Through Agreement and the Series Supplement and subject to certain
limitations set forth therein, the Pass Through Certificates are exchangeable
for new Pass Through Certificates of authorized denominations evidencing the
same aggregate Fractional Undivided Interest in the Pass Through Trust, as
requested by the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Pass Through Trustee may require payment of a sum sufficient
to cover any tax or governmental charge payable in connection therewith.
The Pass Through Trustee, the Registrar, and any agent of the Pass
Through Trustee or the Registrar may treat the person in whose name this Pass
Through Certificate is registered as the owner hereof for all purposes, and
neither the Pass Through Trustee, the Registrar, nor any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Pass Through
Agreement and the Series Supplement and the Pass Through Trust created thereby
shall terminate upon the distribution to Certificateholders of all amounts
required to be distributed to them pursuant to the Pass Through Agreement and
the Series Supplement and the disposition of all property held as part of the
Trust Property.
Schedule I
to
Series Supplement
Federal Express Corporation
Pass Through Trust, 199__-___
Equipment Certificates;
Related Indenture Documents
Equipment Certificates (Federal Express Corporation Trust No. N FE):
Interest Rate: ________%
Maturity: _____________
Principal Amount: $____________
Related Indenture Documents:
Exhibit 4(c)(2)
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N_____)
Dated as of _______________, 199_
between
_________________________,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
_________________________,
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE [MANUFACTURER/MODEL] AIRCRAFT
SERIAL NO. _____, REGISTRATION NO. N_____
TABLE OF CONTENTS
Page
Initial Recitals......................................................... 1
Granting Clause.......................................................... 2
Habendum Clause.......................................................... 5
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.............................................. 5
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
SECTION 2.01. Authentication and Delivery of Certificates.............. 6
SECTION 2.02. Execution of Certificates................................ 6
SECTION 2.03. Certificate of Authentication............................ 6
SECTION 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest.......................... 7
SECTION 2.05. Payments from Trust Indenture Estate Only................ 8
SECTION 2.06. Registration, Transfer and Exchange...................... 9
SECTION 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates............................................. 10
SECTION 2.08. Cancellation of Certificates; Destruction Thereof........ 11
SECTION 2.09. Temporary Certificates................................... 11
SECTION 2.10. Termination of Interest in Trust Indenture Estate........ 12
SECTION 2.11. Certificates in Respect of Replacement Aircraft.......... 12
SECTION 2.12. Establishment of Collateral Account...................... 12
SECTION 2.13. Investment of Funds on Deposit in the Collateral Account. 13
SECTION 2.14. Release of Debt Portion on Delivery Date................. 14
SECTION 2.15. Cut-Off Date............................................. 14
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Make-Whole Premium and Interest.... 14
SECTION 3.02. Offices for Payments, etc................................ 15
SECTION 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee.................................................. 15
SECTION 3.04. Paying Agents............................................ 15
SECTION 3.05. Covenants of the Trust Company and the Owner Trustee..... 16
SECTION 3.06. Intentionally Left Blank................................. 17
SECTION 3.07. Disposal of Indenture Estate............................. 17
SECTION 3.08. No Representations or Warranties as to Aircraft or
Documents................................................ 17
SECTION 3.09. Further Assurances; Financing Statements................. 18
ARTICLE IV
HOLDER LISTS
SECTION 4.01. Holder Lists; Ownership of Certificates.................. 18
SECTION 4.02. Intentionally Left Blank................................. 18
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 5.01. Basic Rent Distribution.................................. 19
SECTION 5.02. Event of Loss and Replacement; Prepayment................ 19
SECTION 5.03. Payment After Indenture Event of Default, etc............ 20
SECTION 5.04. Certain Payments......................................... 21
SECTION 5.05. Other Payments........................................... 21
SECTION 5.06. Payments to Owner Trustee................................ 21
SECTION 5.07. Application of Payments.................................. 22
SECTION 5.08. Investment of Amounts Held by Indenture Trustee.......... 22
SECTION 5.09. Withholding Taxes........................................ 23
ARTICLE VI
PREPAYMENT OF CERTIFICATES
SECTION 6.01. No Prepayment Prior to Maturity.......................... 23
SECTION 6.02. Prepayment of Certificates............................... 23
SECTION 6.03. Notice of Prepayment to Holders.......................... 25
SECTION 6.04. Deposit of Prepayment Price.............................. 25
SECTION 6.05. Certificates Payable on Prepayment Date.................. 26
SECTION 6.06. Mandatory Sinking Fund Prepayments....................... 26
ARTICLE VII
REMEDIES OF INDENTURE TRUSTEE
AND HOLDERS
SECTION 7.01. Indenture Event of Default............................... 27
SECTION 7.02. Remedies................................................. 29
SECTION 7.03. Return of Aircraft, etc.................................. 31
SECTION 7.04. Indenture Trustee May Prove Debt......................... 34
SECTION 7.05. Remedies Cumulative...................................... 35
SECTION 7.06. Suits for Enforcement.................................... 36
SECTION 7.07. Discontinuance of Proceedings............................ 36
SECTION 7.08. Limitations on Suits by Holders.......................... 36
SECTION 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute
Certain Suits............................................ 37
SECTION 7.10. Control by Holders....................................... 37
SECTION 7.11. Waiver of Past Indenture Default......................... 38
SECTION 7.12. Notice of Indenture Default.............................. 38
SECTION 7.13. Waiver of Appraisement, etc.; Laws....................... 38
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
SECTION 8.01. Certain Rights of Owner Trustee and Owner Participant.... 40
SECTION 8.02. Owner Participant's Right to Elect to Prepay the
Certificates, and to Provide for Payment................. 41
SECTION 8.03. Certain Rights of Owner Participant...................... 42
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
SECTION 9.01. Acceptance of Trusts..................................... 43
SECTION 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an
Indenture Event of Default............................... 43
SECTION 9.03. Certain Rights of the Indenture Trustee.................. 46
SECTION 9.04. Indenture Trustee Not Responsible for Recitals,
Disposition of Certificates or Application of Proceeds
Thereof.................................................. 47
SECTION 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc......................................... 47
SECTION 9.06. Moneys Held by Indenture Trustee......................... 47
SECTION 9.07. Right of Indenture Trustee to Rely on Officers'
Certificate, etc......................................... 47
SECTION 9.08. Replacement Airframes and Replacement Engines............ 48
SECTION 9.09. Indenture Supplement for Replacements.................... 51
SECTION 9.10. Effect of Replacement.................................... 51
SECTION 9.11. Compensation............................................. 51
ARTICLE X
CONCERNING THE HOLDERS
SECTION 10.01. Evidence of Action Taken by Holders..................... 52
SECTION 10.02. Proof of Execution of Instruments and of Holding of
Certificates............................................ 52
SECTION 10.03. Holders to Be Treated as Owners......................... 52
SECTION 10.04. Certificates Owned by Owner Trustee and the Lessee
Deemed Not Outstanding.................................. 53
SECTION 10.05. Right of Revocation of Action Taken..................... 54
SECTION 10.06. ERISA Plan Prohibition.................................. 54
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
SECTION 12.01. Notice of Successor Owner Trustee....................... 56
SECTION 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor................................ 56
SECTION 12.03. Persons Eligible for Appointment as Indenture Trustee... 57
SECTION 12.04. Acceptance of Appointment by Successor Trustee.......... 57
SECTION 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee........................... 58
SECTION 12.06. Appointment of Separate Trustees........................ 59
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 13.01. Supplemental Indentures Without Consent of Holders...... 61
SECTION 13.02. Supplemental Indentures With Consent of Holders......... 62
SECTION 13.03. Effect of Supplemental Indenture........................ 64
SECTION 13.04. Documents to Be Given to Indenture Trustee.............. 64
SECTION 13.05. Notation on Certificates in Respect of Supplemental
Indentures.............................................. 64
SECTION 13.06. No Request Necessary for Lease Supplement or Indenture
Supplement.............................................. 64
SECTION 13.07. Amendments, Waivers, etc. of Other Indenture Documents.. 64
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture............................................... 66
SECTION 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates................................. 67
SECTION 14.03. Repayment of Moneys Held by Paying Agent................ 67
SECTION 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven Months....... 67
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Capacity in Which Acting................................ 68
SECTION 15.02. No Legal Title to Trust Indenture Estate in Holders..... 68
SECTION 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding................................................. 68
SECTION 15.04. Indenture for Benefit of Owner Trustee, Indenture
Trustee, Owner Participant and Holders.................. 68
SECTION 15.05. No Action Contrary to the Lessee's Rights Under the
Lease................................................... 69
SECTION 15.06. Notices................................................. 69
SECTION 15.07. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein...................... 70
SECTION 15.08. Severability............................................ 70
SECTION 15.09. No Oral Modifications or Continuing Waivers............. 71
SECTION 15.10. Successors and Assigns.................................. 71
SECTION 15.11. Headings................................................ 71
SECTION 15.12. Normal Commercial Relations............................. 71
SECTION 15.13. Governing Law; Counterpart Form......................... 71
EXHIBIT A -- Form of Indenture Supplement
EXHIBIT B -- Form of Certificate
Schedule I -- Intentionally Left Blank
Schedule II -- Definitions
TRUST INDENTURE AND SECURITY AGREEMENT
TRUST INDENTURE AND SECURITY AGREEMENT dated as of ___________,
199_, between ______________________, a ______________________, not in its
individual capacity, except as otherwise specifically set forth herein (when
acting in such individual capacity, the "Trust Company"), but solely as owner
trustee (the "Owner Trustee") under the Trust Agreement, as defined herein,
and ______________________, a ______________________, as Indenture Trustee
hereunder (the "Indenture Trustee").
W I T N E S S E T H :
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and the Trust Company have, immediately
prior to the execution and delivery of this Indenture, entered into the Trust
Agreement whereby, among other things, (i) the Owner Trustee has declared a
certain trust for the use and benefit of the Owner Participant, subject,
however, to the Lien of this Indenture, and (ii) the Owner Trustee is
authorized and directed to execute and deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture to provide, among
other things, (i) for the issuance by the Owner Trustee of the Certificates
which collectively evidence participation by the Holders in the payment of the
Purchase Price for the Aircraft, as provided in the Participation Agreement
and (ii) for the assignment, mortgage and pledge by the Owner Trustee to the
Indenture Trustee, as part of the Trust Indenture Estate hereunder, among
other things, of certain of the Owner Trustee's right, title and interest in
the Liquid Collateral and after the Delivery Date for the assignment, mortgage
and pledge by the Owner Trustee to the Indenture Trustee, as part of the Trust
Indenture Estate hereunder, among other things, of certain of the Owner
Trustee's right, title and interest in and to the Aircraft, the Lease and
payments and other amounts received hereunder or thereunder in accordance with
the terms hereof (other than Excepted Payments), as security for the Owner
Trustee's obligations to the Holders and for the ratable benefit and security
of such Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee, and authenticated, issued and delivered
hereunder, the valid obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of the Owner Trustee, enforceable in accordance
with its terms, have been done and performed and have happened;
NOW, THEREFORE, the parties agree as follows:
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual promises contained
herein and to secure (i) the prompt payment of the principal of and Make-Whole
Premium, if any, and interest on, and all other amounts due with respect to,
all the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of the Certificates, and the
prompt payment of any and all amounts from time to time owing under the
Participation Agreement by the Owner Trustee, the Owner Participant and the
Lessee to the Holders and for the uses and purposes and subject to the terms
and provisions of this Indenture, and in consideration of the premises and of
the covenants in this Indenture and in the Certificates and of the purchase of
the Certificates by their Holders, and of the sum of $1 paid to the Owner
Trustee by the Indenture Trustee at or before the delivery of this Indenture,
the receipt and sufficiency of which is hereby acknowledged, the Owner Trustee
has granted, bargained, sold, assigned, transferred, conveyed, mortgaged,
pledged, granted a security interest in and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and grant a security
interest in and confirm to the Indenture Trustee, its successors and assigns,
in trust for the equal and ratable security and benefit of the Holders from
time to time of the Certificates, a first priority security interest in and
first mortgage Lien on all estate, right, title and interest of the Owner
Trustee in, to and under the following described property, rights and
privileges other than Excepted Payments, which collectively, excluding
Excepted Payments but including all property specifically subjected to the
Lien of this Indenture by the terms hereof, by any Indenture Supplement or any
mortgage supplemental to this Indenture, are included within the Trust
Indenture Estate:
(1) The Airframe, as the same will be more particularly described in
the Indenture Supplement to be executed and delivered with respect to the
Airframe as provided in this Indenture and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture, and all
Parts in respect thereof;
(2) The Engines, as the same will be more particularly described in
the Indenture Supplement to be executed and delivered with respect to the
Aircraft as provided in this Indenture whether or not such Engines shall be
installed in or attached to the Airframe or any other airframe, and any
Replacement Engine therefor, and all Parts in respect thereof;
(3) The Lease and all Rent thereunder, including, without
limitation, all amounts of Basic Rent and Supplemental Rent, and payments of
any kind thereunder and including all rights of the Owner Trustee to execute
any election or option or to give any notice, consent, waiver or approval
under or in respect of the Lease or to accept any surrender of the Aircraft or
any part thereof as well as any rights, powers or remedies on the part of the
Owner Trustee, whether arising under the Lease or by statute or at law or in
equity or otherwise arising out of any Event of Default;
(4) The Purchase Agreement, the Purchase Agreement Assignment, the
Consent and Agreement, the Engine Consent and Agreement, the Bills of Sale and
the Manufacturer's warranty bill of sale referred to in Section __ of the
Purchase Agreement Assignment, including all rights of the Owner Trustee to
execute any election or option or to give any notice, consent, waiver or
approval under or in respect of any of the foregoing documents and
instruments;
(5) All the tolls, rents, issues, profits, products, revenues and
other income of the property subjected or required to be subjected to the Lien
of this Indenture, and all of the estate, right, title and interest of the
Owner Trustee in and to the same and every part of said property;
(6) The Collateral Account, the Liquid Collateral and all other
moneys and securities (including Permitted Investments) now or hereafter paid
or deposited or required to be paid or deposited to or with the Indenture
Trustee by or for the account of the Owner Trustee pursuant to any term of any
Operative Agreement, except the Tax Indemnity Agreement, and held or required
to be held by the Indenture Trustee hereunder; and
(7) All proceeds of the foregoing.
EXCLUDING, HOWEVER, from the foregoing grant from the Lien and
security interest of this Indenture and from the Trust Indenture Estate, all
Excepted Payments, including without limitation all right, title and interest
of the Owner Participant in, to and under the Tax Indemnity Agreement and any
moneys due or to become due under the Tax Indemnity Agreement and subject to
the rights granted to the Owner Trustee or the Owner Participant hereunder,
including without limitation, the rights of the Owner Participant and Owner
Trustee under Sections 2.05, 7.02, 8.01, 8.02, 8.03, 13.01 and 13.02 hereof.
HABENDUM CLAUSE
TO HAVE AND TO HOLD the aforesaid property unto the Indenture Trustee,
its successors and assigns, in trust for the equal and ratable benefit and
security of the Holders from time to time of the Certificates, without any
priority of any one Certificate over any other and for the uses and purposes
and subject to the terms and conditions set forth in this Indenture,
including, without limitation, the rights of the Owner Trustee and the Owner
Participant under Sections 2.05, 7.02, 8.01, 8.02, 8.03, 13.01 and 13.02
hereof;
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Documents to perform all of the obligations assumed by it under any
of those documents, all in accordance with and pursuant to the terms and
provisions of those documents, and the Indenture Trustee and the Holders of
the Certificates shall have no obligation or liability under the Indenture
Documents by reason of or arising out of the assignment under this Indenture,
nor shall the Indenture Trustee or the Holders of the Certificates be required
or obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Documents or, except as expressly
provided in this Indenture, to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or present or file
any claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
Until such time as this Indenture and the Lien hereby created shall
terminate and subject to the limitations contained in Sections 8.01, 13.01 and
13.02 hereof, the Owner Trustee hereby constitutes the Indenture Trustee the
true and lawful attorney of the Owner Trustee, irrevocably, with full power
(in the name of the Owner Trustee or otherwise) to (A) ask, require, demand,
receive, compound and give acquittance for any and all Basic Rent,
Supplemental Rent payable to the Owner Trustee, Stipulated Loss Value
payments, insurance proceeds and any and all moneys and claims for moneys due
and to become due under or arising out of the Indenture Documents (other than
Excepted Payments), and all other property which now or hereafter constitutes
part of the Trust Indenture Estate, to endorse any checks or other instruments
or orders in connection with the same and to file any claims, take any action
or institute any proceeding which the Indenture Trustee may deem to be
necessary or advisable in the premises and (B) subject to Section 8.01 hereof,
to sue for, compound and give acquittance for, to settle, adjust or compromise
any claim for any and all such Rents, income and other sums which are assigned
under the Granting Clause hereof as fully as the Owner Trustee could itself do.
Under the Lease the Lessee is directed to make all payments of Rent
(other than Excepted Payments) payable to the Owner Trustee and all other
amounts (other than Excepted Payments) which are required to be paid to or
deposited with the Owner Trustee pursuant to the Lease directly to the
Indenture Trustee at such address in the United States of America as the
Indenture Trustee shall specify for application as provided in this Indenture.
The Owner Trustee agrees that if, notwithstanding such provision, it shall
have received any such amounts, promptly on receipt of any such payment, it
will transfer to the Indenture Trustee any and all moneys from time to time
received by the Owner Trustee constituting part of the Trust Indenture Estate
for distribution by the Indenture Trustee pursuant to this Indenture, except
that the Owner Trustee shall accept for distribution pursuant to the Trust
Agreement (i) any amounts distributed to it by the Indenture Trustee under
this Indenture, and (ii) any Excepted Payments.
Concurrently with the delivery of this Indenture, the Owner Trustee
has delivered to the Indenture Trustee executed counterparts of the Trust
Agreement, the Participation Agreement, the chattel paper original counterpart
of the Lease and Lease Supplement, and the full warranty bill of sale referred
to in the definition of Bills of Sale. The Owner Trustee agrees that at any
time and from time to time, upon the written request of the Indenture Trustee,
the Owner Trustee will promptly and duly execute and deliver or cause to be
duly executed and delivered any and all such further instruments and documents
as the Indenture Trustee may reasonably deem desirable in obtaining the full
benefits of the assignment under this Indenture and of the rights and powers
granted in this Indenture.
It is hereby further covenanted and agreed by and between the parties
as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. Unless the context otherwise requires,
capitalized terms utilized herein shall have the meanings set forth in
Schedule II hereto for all purposes of this Indenture and shall be equally
applicable to both the singular and plural forms of the terms defined.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
SECTION 2.01. Authentication and Delivery of Certificates.
Forthwith upon the execution and delivery of this Indenture, and from time to
time thereafter, Certificates in an aggregate principal amount not in excess
of the amount specified in Section 2.04 (except as otherwise provided in
Sections 2.06 and 2.07) shall be executed by the Owner Trustee and delivered
to the Indenture Trustee for authentication, and the Indenture Trustee shall
thereupon authenticate and deliver said Certificates to or upon the oral or
written order of the Owner Trustee, signed, if written, by an authorized
officer of the Owner Trustee, without any further action by the Owner Trustee.
SECTION 2.02. Execution of Certificates. The Certificates shall be
signed on behalf of the Owner Trustee by an authorized officer of the Trust
Company. Such signatures may be the manual or facsimile signatures of such
officer and minor errors or defects in any reproduction of any such signature
shall not affect the validity or enforceability of any Certificate which has
been duly authenticated and delivered by the Indenture Trustee.
In case any officer of the Trust Company who shall have signed any of
the Certificates shall cease to be such officer before the Certificate so
signed shall be authenticated and delivered by the Indenture Trustee or
disposed of by the Trust Company, such Certificate nevertheless may be
authenticated and delivered or disposed of as though the person who signed
such Certificate had not ceased to be such officer of the Owner Trustee; and
any Certificate may be signed on behalf of the Owner Trustee by such person or
persons as, at the actual date of the execution of such Certificate, shall be
the proper officers of the Trust Company, although at the date of the
execution and delivery of this Indenture any such person was not such officer.
Certificates bearing the signatures of individuals who were authorized officers
of the Trust Company at the time such Certificates were issued shall bind the
Owner Trustee, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the respective dates of such
Certificates.
SECTION 2.03. Certificate of Authentication. Only such Certificates
as shall bear thereon a certificate of authentication substantially in the
form set forth in Exhibit B, executed by the Indenture Trustee by manual
signature of one of its authorized officers, shall be entitled to the security
and benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Indenture Trustee upon any Certificate executed by the
Owner Trustee shall be conclusive evidence that the Certificate so
authenticated has been duly authenticated and delivered hereunder and that the
Holder, as evidenced on the Register, is entitled to the security and benefits
of this Indenture.
SECTION 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest. The Certificates and the Indenture Trustee's
certificate of authentication shall be substantially in the form set forth in
Exhibit B hereto. Certificates may differ with respect to Maturity and as to
other terms. The Certificates shall be issuable as registered securities
without coupons and shall be numbered, lettered, or otherwise distinguished in
such manner or in accordance with such plans as the Owner Trustee executing
the same may determine with the approval of the Indenture Trustee.
The aggregate principal amount of Certificates that may be
authenticated and delivered under this Indenture is limited as provided in the
form of Certificate attached as Exhibit B hereto. The Certificates shall be
issued in registered form only and in denominations of $1,000 and any integral
multiple thereof, shall be dated the Delivery Date, and shall be issued in the
Maturities and principal amounts, and shall bear interest at the rates per
annum, specified in the form of Certificate set forth in Exhibit B.
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Certificates are admitted to trading, or to
conform to general usage.
Each Certificate shall bear interest from the date of issuance
thereof or from the most recent date to which interest has been paid and duly
provided for, as the case may be, which shall be payable on the dates
specified on the face of the form of Certificate set forth in Exhibit B hereto
until the principal thereof is paid. Interest shall be calculated on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding the preceding paragraph, each Certificate shall bear
interest at the Past Due Rate on any principal of any Certificate and on any
other amount payable hereunder or under the Certificates, which shall not be
paid in full when due (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise), for the period from and including the due
date thereof to but excluding the date the same is paid in full, payable from
time to time on demand of the Indenture Trustee.
The principal of, and Make-Whole Premium, if any, and interest on, the
Certificates shall be payable at the Corporate Trust Office of the Indenture
Trustee or at any office or agency maintained for such purpose pursuant to
Section 3.02 hereof; provided, however, that interest may be payable at the
option of the Indenture Trustee or its Paying Agent, as defined in Section
3.04, by mailing checks for such interest payable to or upon the written order
of the Holders entitled thereto as they shall appear on the Register.
The Holder at the close of business on any Record Date with respect
to any Interest Payment Date shall be entitled to receive the interest if any
payable on such Interest Payment Date notwithstanding any transfer or exchange
of such Certificate subsequent to the Record Date and prior to such Interest
Payment Date, except if and to the extent the Owner Trustee shall default in
the payment of the interest due on such Interest Payment Date, in which case
such defaulted interest shall be paid to the Holder at the close of business
on a subsequent Record Date (which shall be not less than five or more than
fifteen Business Days prior to the date of payment of such defaulted interest)
established by notice given by mail by or on behalf of the Owner Trustee to
the Holders not less than 15 days preceding such subsequent Record Date.
SECTION 2.05. Payments from Trust Indenture Estate Only. All
payments to be made by the Owner Trustee under this Indenture shall be made
only from the income and the proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate and only to the extent that the Owner
Trustee shall have sufficient income or proceeds from the Lessor's Estate to
the extent included in the Trust Indenture Estate to enable the Indenture
Trustee to make distributions of the amounts due in respect of the
Certificates in accordance with the terms hereof and thereof. Each Holder by
its acceptance of a Certificate agrees that it will look solely to the income
and proceeds from the Trust Indenture Estate to the extent available for
distribution to it as provided herein and that neither the Owner Participant,
the Owner Trustee, the Trust Company nor the Indenture Trustee is personally
liable to such Holder for any amounts payable under this Indenture or such
Certificate or for any amounts payable or liability under any Certificate or
this Indenture, except as expressly provided herein in the case of the Trust
Company, the Owner Trustee or the Indenture Trustee, or in the case of the
Owner Participant, except as expressly provided in the Participation
Agreement.
The Trust Company is not personally liable to any Holder, the Lessee,
the Owner Participant or the Indenture Trustee for any amounts payable under
this Indenture or for any liability under this Indenture or the Certificates,
except as a result of the Trust Company's gross negligence or willful
misconduct, or as otherwise expressly provided herein or in the Participation
Agreement.
If (1) all or any part of the Lessor's Estate becomes the property of
a debtor subject to the reorganization provisions of the Bankruptcy Code, (2)
pursuant to such reorganization provisions the Owner Participant is required,
by reason of the Owner Participant being held to have recourse liability to
the debtor or the trustee of the debtor directly or indirectly, to make
payment on account of any amount payable as principal of or interest,
Make-Whole Premium or other amounts payable on the Certificates, and (3) the
Indenture Trustee actually receives any Excess Amount, as defined below, which
reflects any payment by the Owner Participant on account of (2) above, then
the Indenture Trustee shall promptly refund to the Owner Participant such
Excess Amount. For purposes of this paragraph, "Excess Amount" means the
amount by which such payment exceeds the amount which would have been received
by the Indenture Trustee if the Owner Participant had not become subject to
the recourse liability referred to in (2) above. Nothing contained in this
paragraph shall prevent the Indenture Trustee from enforcing any personal
recourse obligation (and retaining the proceeds thereof) of the Owner
Participant under the Participation Agreement, this Indenture (other than
referred to in clause (2)) or the Trust Agreement (and any exhibits or annexes
thereto), or from retaining any amount paid by the Owner Participant under
Sections 5.01, 8.02 and 8.03 hereof. Nothing contained herein shall be
construed as requiring any Holder to refund any amount distributed to such
Holder pursuant to this Indenture.
SECTION 2.06. Registration, Transfer and Exchange. The Indenture
Trustee will keep, on behalf of the Owner Trustee, at each office or agency to
be maintained for the purpose as provided in Section 3.02 hereof a Register or
Registers on which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Certificates
as provided in this Article. Such Register shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable time.
Upon due presentation for registration of transfer of any Certificate
at any such office or agency, the Owner Trustee shall execute and the
Indenture Trustee shall authenticate and deliver in the name of the transferee
or transferees a new Certificate or Certificates of the same Maturity and
interest rate and in authorized denominations for an equal aggregate principal
amount.
Any Certificate or Certificates may be exchanged for a Certificate or
Certificates of the same Maturity and interest rate but in other authorized
denominations, in an equal aggregate principal amount. Certificates to be
exchanged shall be surrendered at any office or agency to be maintained by the
Indenture Trustee for the purpose as provided in Section 3.02 hereof, and the
Owner Trustee shall execute and the Indenture Trustee shall authenticate and
deliver in exchange therefor the Certificate or Certificates which the Holder
making the exchange shall be entitled to receive, bearing numbers not
contemporaneously or previously outstanding.
All Certificates presented for registration of transfer, exchange,
prepayment or payment shall (if so required by the Owner Trustee or the
Indenture Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Owner
Trustee and the Indenture Trustee duly executed by the Holder or its attorney
duly authorized in writing and (except in the case of transfers pursuant to
Section 14 of the Participation Agreement) the Indenture Trustee may require
evidence satisfactory to it as to the compliance of any such transfer with the
Securities Act.
The Indenture Trustee may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of Certificates. No
service charge shall be levied for any such transaction.
The Indenture Trustee shall not be required to exchange or register a
transfer of any Certificates (a) for a period of 15 days immediately preceding
the first mailing of notice of prepayment of such Certificates or (b) with
respect to which notice of prepayment has been given pursuant to Section 6.03
and such notice has not been revoked.
All Certificates issued upon any transfer or exchange of Certificates
shall be valid obligations of the Owner Trustee, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the
Certificates surrendered upon such transfer or exchange.
SECTION 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates. In case any temporary or definitive Certificate shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Owner
Trustee in its discretion may execute, and upon the oral or written request of
any officer of the Trust Company, the Indenture Trustee shall authenticate and
deliver, a new Certificate of like Maturity, bearing a number not
contemporaneously or previously outstanding, in exchange and substitution for
the mutilated or defaced Certificate, or in lieu of and substitution for the
Certificate so apparently destroyed, lost or stolen. In case of any
Certificate so apparently destroyed, lost or stolen, the applicant for a
substitute Certificate shall furnish to the Owner Trustee and to the Indenture
Trustee such security or indemnity as may be required by them to indemnify and
defend and to save each of them harmless and evidence to their satisfaction of
the apparent destruction, loss or theft of such Certificate and of the
ownership thereof.
Upon the issuance of any substitute Certificate, the Owner Trustee or
the Indenture Trustee may require payment from the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses connected therewith. In case any
Certificate which has matured or is about to mature, or has been called for
prepayment in full, shall become mutilated or defaced or be apparently
destroyed, lost or stolen, the Owner Trustee may, instead of issuing a
substitute Certificate, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated or defaced Certificate),
if the applicant of any Certificate so apparently destroyed, lost or stolen,
for such payment shall furnish to the Owner Trustee and to the Indenture
Trustee such security or indemnity as any of them may require to save each of
them harmless and the applicant shall also furnish to the Owner Trustee and
the Indenture Trustee evidence to their satisfaction of the apparent
destruction, loss or theft of such Certificate and of the ownership thereof.
Every substitute Certificate issued pursuant to the provisions of
this Section by virtue of the fact that any Certificate is apparently
destroyed, lost or stolen shall constitute an original additional contractual
obligation of the Owner Trustee, whether or not the apparently destroyed, lost
or stolen Certificate shall be enforceable at any time by anyone and shall be
entitled to all the security and benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and proportionately
with any and all other Certificates duly authenticated and delivered
hereunder. All Certificates shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced, or
apparently destroyed, lost or stolen Certificates and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
SECTION 2.08. Cancellation of Certificates; Destruction Thereof. All
Certificates surrendered for payment, prepayment, registration of transfer or
exchange, if surrendered to the Owner Trustee or any agent of the Owner
Trustee or the Indenture Trustee, shall be delivered to the Indenture Trustee
for cancellation or, if surrendered to the Indenture Trustee, shall be
cancelled by it; and no Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Indenture
Trustee shall destroy cancelled Certificates held by it and deliver a
certificate of destruction to the Owner Trustee. If the Owner Trustee shall
acquire any of the Certificates, such acquisition shall not operate as a
prepayment or satisfaction of the indebtedness represented by such
Certificates unless and until the same are delivered to the Indenture Trustee
for cancellation.
SECTION 2.09. Temporary Certificates. Pending the preparation of
definitive Certificates, the Owner Trustee may execute and, upon the oral or
written request of an officer of the Owner Trustee, the Indenture Trustee
shall authenticate and deliver temporary Certificates (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory to the
Indenture Trustee). Temporary Certificates shall be issuable as registered
Certificates without coupons, of any authorized denomination, and
substantially in the form of the definitive Certificates but with such
omissions, insertions and variations as may be appropriate for temporary
Certificates, all as may be determined by the Owner Trustee with the
concurrence of the Indenture Trustee. Temporary Certificates may contain such
reference to any provisions of this Indenture as may be appropriate. Every
temporary Certificate shall be executed by the Owner Trustee and, upon the
oral or written request of an authorized officer of the Owner Trustee, be
authenticated by the Indenture Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Certificates. Without unreasonable delay the Owner Trustee shall execute and
shall furnish definitive Certificates and thereupon temporary Certificates
shall be surrendered in exchange therefor without charge at any office or
agency to be maintained by the Indenture Trustee for the purpose pursuant to
Section 3.02, and, upon the oral or written request of an authorized officer
of the Owner Trustee, the Indenture Trustee shall authenticate and deliver in
exchange for such temporary Certificates an equal aggregate principal amount
of definitive Certificates of the same Maturities and interest rates and in
authorized denominations. Until so exchanged, temporary Certificates shall be
entitled to the same security and benefits under this Indenture as definitive
Certificates.
SECTION 2.10. Termination of Interest in Trust Indenture Estate. A
Holder shall not, as such, have any further interest in, or other right with
respect to, the Trust Indenture Estate when and if the principal amount of and
Make-Whole Premium, if any, and interest on and other amounts due under all
Certificates held by such Holder and all other sums payable to such Holder
hereunder shall have been paid in full.
SECTION 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture Supplement covering a replacement
airframe and/or Replacement Engine, as provided in Section 9.09 hereof, each
Certificate shall be deemed to have been issued in connection with such
replacement airframe and/or Replacement Engine and each Certificate issued
thereafter upon a transfer or exchange of, or as a replacement for, a
Certificate, shall be designated as having been issued in connection with such
replacement airframe and/or Replacement Engine, but without any other change
therein except as provided for in this Article II.
SECTION 2.12. Establishment of Collateral Account. (a) The
Indenture Trustee shall establish, or cause to be established, with ________,
who represents and warrants that it is a financial intermediary (as defined in
Section 8-313(4) of the _____________ Uniform Commercial Code), in its name as
secured party hereunder an Eligible Deposit Account entitled
"___________________________________, as secured party under the Trust
Indenture and Security Agreement (Federal Express Corporation Trust No.
N_____) dated as of _______________, 199_, with the Owner Trustee referred to
therein".
(b) If at any time the Collateral Account ceases to be an Eligible
Deposit Account, the Indenture Trustee shall within two (2) Business Days,
establish a new Collateral Account meeting the conditions specified in the
definition of Eligible Deposit Account, and shall transfer any cash or any
investments in the Collateral Account to such new Collateral Account.
(c) The Indenture Trustee shall have exclusive dominion and control
of the Collateral Account and all funds therein, and shall make withdrawals
from the Collateral Account only in accordance with this Indenture.
(d) ________, agrees to send confirmation to the Indenture Trustee
that it has credited the Specified Investments to the Collateral Account and
to make appropriate entries on its books identifying the Specified Investments
as pledged to the Indenture Trustee.
SECTION 2.13. Investment of Funds on Deposit in the Collateral
Account. (a) Funds deposited in the Collateral Account shall be invested and
reinvested by the Indenture Trustee, subject to Section 15.02 of the
Participation Agreement, at the risk of the Owner Trustee, in Specified
Investments selected by the Lessee for the account of the Owner Trustee in
accordance with Section 2.13(b) below; provided, however, that if Specified
Investments meeting the requirements of Section 2.13(b) are not available on
any day on which funds are to be invested as contemplated by the preceding
provisions of this Section 2.13(a), the Indenture Trustee may leave such funds
in the Collateral Account uninvested until the earliest of (i) the date on
which an appropriate Specified Investment becomes available, (ii) the Delivery
Date and (iii) the Cut-Off Date. The Indenture Trustee shall maintain
possession of the negotiable instruments or securities, if any, evidencing
such Specified Investments and, in the case of any Specified Investments in
book-entry form, such Specified Investments shall be credited to an account of
the Indenture Trustee or a financial intermediary with the applicable Federal
Reserve Bank; provided, however, if the account is credited to the financial
intermediary, the financial intermediary shall make written confirmation
thereof to the Indenture Trustee and make an appropriate entry on its books
identifying the Specified Investments as pledged to the Indenture Trustee.
All proceeds of and any income, interest and other payments and distributions
on or with respect to any Specified Investments shall be deposited in or
credited to the Collateral Account and thereafter shall be held, invested and
applied by the Indenture Trustee in accordance with this Indenture. The
Indenture Trustee shall promptly notify the Owner Trustee and the Lessee of
any Losses.
(b) On the Certificate Closing Date, the Indenture Trustee shall
invest the amount deposited in the Collateral Account pursuant to Section
2.01(c) of the Participation Agreement in Specified Investments selected by
the Lessee for the account of the Owner Trustee which mature prior to
_______________, 199_. If the Delivery Date is postponed pursuant to Section
3.02(c) or Section 3.05 of the Participation Agreement, the proceeds of the
Specified Investments maturing prior to such postponed Delivery Date shall be
invested in Specified Investments and any such Specified Investments shall
mature within two weeks of the rescheduled Delivery Date or if no notice of a
rescheduled Delivery Date has been given, within two weeks of the Cut-Off Date.
(c) If for any reason the Indenture Trustee shall be required to
make any distributions of the Liquid Collateral prior to the maturity date of
any Specified Investment, the Indenture Trustee shall cause the same to be
sold in accordance with standard commercial practices, and the Lessee, for the
account of the Owner Trustee, shall forthwith compensate the Indenture Trustee
for any Losses as provided in Section 15.02(a) of the Participation Agreement.
SECTION 2.14. Release of Debt Portion on Delivery Date. Subject to
the satisfaction or waiver of the conditions precedent to the Indenture
Trustee's obligations set forth in Section 4.02 of the Participation
Agreement, on the Delivery Date the Indenture Trustee shall release from the
Collateral Account an amount of Liquid Collateral equal to the lesser of (A)
the Debt Portion and (B) the amount actually in the Collateral Account on the
Delivery Date. Such amount so released, together with the amount of any
Losses received from the Lessee pursuant to Section 15.02(a) of the
Participation Agreement, shall be used to finance a portion of the Purchase
Price payable by (x) the Owner Trustee as contemplated by Section 3.02(a) of
the Participation Agreement or (y) if the fifth sentence of Section 3.05(a) of
the Participation Agreement shall be applicable, by the Lessee as contemplated
by such sentence. Any amount remaining in the Collateral Account after such
release (net of any uncompensated Losses) shall be remitted by the Indenture
Trustee on behalf of the Owner Trustee to the Lessee pursuant to Section
3.02(a)(C) of the Participation Agreement.
SECTION 2.15. Cut-Off Date. In the case of a prepayment under
Section 6.02(a)(vi) hereof, the Indenture Trustee shall release from the
Collateral Account all amounts held in the Collateral Account on such date.
Such amount so released, together with the amount of any Losses received from
the Lessee pursuant to Sections 15.02(a) and 15.02(c) of the Participation
Agreement, shall be applied to pay amounts due under Section 6.02(b)(1) hereof
on the Cut-Off Date, and any amount (net of any uncompensated Losses)
remaining after such release and application shall be remitted by the
Indenture Trustee, on behalf of the Owner Trustee, to the Lessee.
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Make-Whole Premium and Interest.
The Owner Trustee covenants and agrees that it will duly and punctually pay or
cause to be paid the principal of, and interest and Make-Whole Premium, if
any, and all other amounts due on, each of the Certificates and under this
Indenture at the place or places, at the respective times and in the manner
provided in this Indenture and in the Certificates.
Principal and interest and other amounts due hereunder or under the
Certificates shall be payable in Dollars on the due date thereof, to the
Indenture Trustee at the Corporate Trust Office (or such other account at such
other financial institution as the Indenture Trustee may designate for the
purpose). If any amount payable under the Certificates or under this
Indenture falls due on a day which is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
SECTION 3.02. Offices for Payments, etc. So long as any of the
Certificates remain outstanding, the Indenture Trustee will maintain the
following: (a) an office or agency in ___________ where the Certificates may
be presented for payment and (b) a facility or agency in New York, New York
where the Certificates may be presented for registration of transfer and for
exchange and for prepayment as provided in this Indenture (the "Registrar").
The Registrar shall keep a register (the "Register") with respect to the
Certificates and their transfer and exchange. The Indenture Trustee may
appoint one or more co-registrars ("Co-Registrars") for the Certificates and
may terminate any such appointment at any time upon written notice. The term
"Registrar" includes any Co-Registrar.
The Indenture Trustee shall initially act as Registrar.
SECTION 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee. The Owner Trustee, whenever necessary to avoid or fill a vacancy in
the office of Indenture Trustee, will, with the consent of the Lessee,
appoint, in the manner provided in Section 12.02, an Indenture Trustee, so
that there shall at all times be an Indenture Trustee hereunder.
SECTION 3.04. Paying Agents. Whenever the Indenture Trustee in its
sole discretion shall appoint a paying agent (the "Paying Agent"), it will
cause the Paying Agent to execute and deliver an instrument in which the
Paying Agent shall agree with the Indenture Trustee, subject to the provisions
of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of, and interest and Make-Whole Premium, if any,
on the Certificates (whether such sums have been paid to it by the
Indenture Trustee or the Owner Trustee) in trust for the benefit of the
Holders or of the Indenture Trustee, and
(b) that it will give the Indenture Trustee notice of any failure
by the Owner Trustee to make any payment of the principal of or interest or
Make-Whole Premium, if any, on the Certificates when the same shall be due
and payable.
Anything in this Section to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section are subject to
the provisions of Sections 14.03 and 14.04 hereof.
SECTION 3.05. Covenants of the Trust Company and the Owner Trustee.
(a) The Trust Company hereby covenants and agrees as follows:
(i) the Trust Company will perform its covenants set forth in
Sections 6.04(b) and 6.04(c) of the Participation Agreement; and
(ii) the Trust Company will not directly or indirectly create,
incur, assume or suffer to exist any Lessor's Liens against, on or with
respect to the Aircraft or the Lessor's Estate or the Trust Indenture
Estate.
(b) The Owner Trustee hereby covenants and agrees as follows:
(i) the Owner Trustee will perform its obligations under the Lease;
(ii) the Owner Trustee will perform its covenant set forth in Section
6.04(b) of the Participation Agreement;
(iii) in the event a Responsible Officer of the Owner Trustee shall
have actual knowledge of an Indenture Event of Default or an Event of Loss,
the Owner Trustee will give prompt written notice of such Indenture Event
of Default or Event of Loss to the Indenture Trustee, the Lessee and the
Owner Participant;
(iv) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to the Owner Trustee under the Lease, including,
without limitation, a copy of each report or notice received pursuant to
Section 11 of the Lease, to the extent that the same shall not have been
furnished to the Indenture Trustee;
(v) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to the Lessee and the carrying out of the transactions
contemplated hereby and by the Lease, the Participation Agreement,
the Trust Agreement and the other Indenture Documents;
(vi) the Owner Trustee will not directly or indirectly create,
incur, assume or suffer to exist any Lessor's Liens in or with respect to
the Trust Indenture Estate or any of the properties or assets of the Trust
Indenture Estate resulting from the acts or omissions of or claims against
the Owner Trustee (including, without limitation, the nonpayment of any
taxes based on or measured by the revenues or income of the Owner Trustee);
(vii) the Owner Trustee will not (except as permitted herein) assign
or pledge, so long as this Indenture shall remain in effect and shall not
have been terminated pursuant to Section 14.01, any of its right, title or
interest hereby assigned to anyone other than the Indenture Trustee, and,
with respect to such right, title and interest hereby assigned, will not,
except as expressly provided in this Indenture, (i) accept any payment from
the Lessee or any Permitted Sublessee, enter into any agreement amending or
supplementing any of the Indenture Documents, execute any waiver or
modification of, or consent under, the terms of any of the Indenture
Documents, (ii) settle or compromise any claim arising under any of the
Indenture Documents, (iii) submit or consent to the submission of any
dispute, difference or other matter arising under or in respect of any of
the Indenture Documents to arbitration thereunder or (iv) incur, or suffer
to exist, any Indebtedness; and
(viii)the Owner Trustee agrees to indemnify the Indenture Trustee upon
demand for any and all indemnity amounts which are payable by the Lessee to
such Indenture Trustee pursuant to Articles 7 and 8 of the Participation
Agreement.
SECTION 3.06. Intentionally Left Blank.
SECTION 3.07. Disposal of Indenture Estate. (a) At any time and
from time to time any part of the Trust Indenture Estate may be sold or
disposed of in accordance with the provisions of this Indenture and the Lease.
The Indenture Trustee shall, from time to time, release any part of the Trust
Indenture Estate so sold or disposed of or as to which an Event of Loss has
occurred or as to which the Lease has been terminated from the Lien of this
Indenture. In addition, to the extent that such property constitutes an
Airframe or Engine, the further requirements of Section 9.08 hereof shall be
complied with.
SECTION 3.08. No Representations or Warranties as to Aircraft or
Documents. NEITHER THE INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR THE TRUST
COMPANY NOR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN,
QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OR PURPOSE
OF THE AIRCRAFT OR ANY ENGINE, OR ANY OTHER REPRESENTATION OR WARRANTY WITH
RESPECT TO THE AIRCRAFT OR ANY ENGINE WHATSOEVER, except that the Trust
Company warrants that on the Delivery Date (a) the Owner Trustee shall have
received whatever title was conveyed to it by the Lessee, and (b) the Aircraft
shall be free and clear of Lessor's Liens attributable to the Trust Company.
Neither the Trust Company, the Indenture Trustee nor the Owner Participant
makes or shall be deemed to have made any representation or warranty as to the
validity, legality or enforceability of this Indenture, the Trust Agreement,
the Certificates or any Indenture Document or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Trust Company, the Indenture Trustee and the Owner
Participant made under this Indenture or in the Participation Agreement.
SECTION 3.09. Further Assurances; Financing Statements. At any time
and from time to time, upon the request of the Indenture Trustee or the
Lessee, the Owner Trustee shall promptly and duly execute and deliver any and
all such further instruments and documents as may be specified in such request
and as are necessary or desirable to perfect, preserve or protect the Liens
and assignments created or intended to be created hereby, or to obtain for the
Indenture Trustee the full benefit of the specific rights and powers granted
herein, including, without limitation, the execution and delivery of Uniform
Commercial Code financing statements and continuation statements with respect
thereto, or similar instruments relating to the perfection of the Liens or
assignments created or intended to be created hereby.
ARTICLE IV
HOLDER LISTS
SECTION 4.01. Holder Lists; Ownership of Certificates. (a) The
Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Indenture Trustee is not the Registrar, the Registrar
shall furnish to the Indenture Trustee semi-annually not more than 15 days
after each Record Date, as of such Record Date, or at such other times as the
Indenture Trustee may request in writing, a list, in such form and as of such
date as the Indenture Trustee may reasonably require, containing all the
information in the possession or control of the Registrar as to the names and
addresses of the Holders and the amounts and Maturities of the Certificates
held by such Holders.
(b) Ownership of the Certificates shall be proved by the Register
kept by the Registrar.
SECTION 4.02. Intentionally Left Blank.
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 5.01. Basic Rent Distribution. Except as otherwise provided
in Section 5.03 hereof, each installment of Basic Rent, Rent paid by the Owner
Participant under Section 3.01 of Lease, any payment of interest on overdue
installments of Basic Rent, any payment received by the Indenture Trustee
pursuant to Section 8.03 hereof and any payment received by the Indenture
Trustee pursuant to Section 15.02(b) or 15.02(c) of the Participation
Agreement shall be promptly distributed in the following order of priority:
first, so much of such installment or payment as shall be required to pay in
full the aggregate amount of the payment or payments of principal and interest
and other amounts (as well as any interest on overdue principal and, to the
extent permitted by law, on Make-Whole Premium, if any, interest and other
amounts) then due under all Certificates shall be distributed to the Holders
ratably, without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each such Certificate bears
to the aggregate amount of the payments then due under all such Certificates,
and, second, the balance if any of such installment or payment remaining
thereafter shall be distributed to the Owner Trustee, or as the Owner Trustee
may request, for distribution pursuant to the Trust Agreement; provided,
however, that if an Indenture Event of Default shall have occurred and be
continuing, then such balance shall not be distributed as provided in this
clause "second" but shall be held by the Indenture Trustee as part of the
Trust Indenture Estate until whichever of the following shall first occur:
(a) all Indenture Events of Default shall have been cured, in which event such
balance shall be distributed as provided in this clause "second", (b) such
Indenture Event of Default shall have continued for a period of 180 days, in
which event such balance shall be distributed as provided in this clause
"second", or (c) Section 5.03 hereof shall be applicable in which event such
balance shall be distributed in accordance with the provisions thereof.
SECTION 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft or as the result of, or in connection with any event under the Lease
giving rise to a prepayment pursuant to Section 6.02 hereof, shall be promptly
distributed by the Indenture Trustee in the following order of priority:
first, to reimburse the Indenture Trustee for any costs or expenses reasonably
incurred in connection with such prepayment, as the case may be, second, as
provided in clause "second" of Section 5.03 hereof, and third, as provided in
clause "third" of Section 5.03 hereof; provided that if a replacement airframe
shall be substituted for an Airframe subject to an Event of Loss as provided in
Section 11.03 of the Lease and Section 9.08 hereof, any proceeds which result
from such Event of Loss and are paid to the Indenture Trustee shall be held by
the Indenture Trustee as part of the Trust Indenture Estate and, unless
otherwise applied pursuant to Section 5.01 or 5.03 hereof, such proceeds shall
be released to the Lessee upon the release of such damaged Airframe and the
replacement thereof as herein provided.
(b) Any amounts received directly or indirectly from any governmental
authority, insurer or other party pursuant to any provision of Section 10 or
11 of the Lease as the result of loss or damage not constituting an Event of
Loss with respect to the Aircraft, or as a result of such loss or damage
constituting an Event of Loss if and to the extent that such amounts would at
the time be required to be paid to the Lessee pursuant to said Section 10 or
11 but for the fact that an Event of Default shall have occurred and be
continuing, shall be held by the Indenture Trustee as security for the
obligations of the Lessee under the Lease and the Participation Agreement and
shall be invested in accordance with the terms of Section 5.08 hereof and at
such time as the conditions for payment to the Lessee specified in said
Section 10 or 11, as the case may be, shall be fulfilled and there shall not
be continuing any Event of Default, such amount, and the proceeds of any
investment thereof, shall, to the extent not theretofore applied, be paid to
the Lessee to the extent provided in the Lease.
SECTION 5.03. Payment After Indenture Event of Default, etc. Except
as otherwise provided in Sections 5.02(b), 5.04(b), 5.04(c) and 5.05(b)
hereof, all payments received and all amounts held or realized by the
Indenture Trustee (a) after an Indenture Event of Default shall have occurred
and so long as such an Indenture Event of Default shall be continuing, and
after the Indenture Trustee has received a request in accordance with Section
7.10 hereof, or (b) after the Certificates shall have become due and payable
as provided in Section 7.02(b) or (c) hereof, shall be promptly distributed by
the Indenture Trustee in the following order of priority:
first, so much of such payments or amounts as shall be required to
reimburse the Indenture Trustee for any tax, expense, charge or other loss
(including, without limitation, all amounts to be expended at the expense
of, or charged upon the tolls, rents, revenues, issues, products and
profits of, the property included in the Trust Indenture Estate pursuant to
Section 7.03(b) hereof) incurred by the Indenture Trustee (to the extent
not previously reimbursed) (including, without limitation, the expenses of
any sale, taking or other proceeding, attorneys' fees and expenses, court
costs, and any other expenditures incurred or expenditures or advances made
by the Indenture Trustee in the protection, exercise or enforcement of any
right, power or remedy or any damages sustained by the Indenture Trustee,
liquidated or otherwise, upon such Indenture Event of Default) shall be
applied by the Indenture Trustee in reimbursement of such expenses;
second, so much of such payments or amounts as shall be required to
pay in full the aggregate unpaid principal amount of all Outstanding
Certificates, all accrued but unpaid interest thereon to the date of
distribution and all other amounts due hereunder and thereunder, shall be
distributed to the Holders, and if the aggregate amount so to be
distributed shall be insufficient to pay all such amounts in full as
aforesaid, then such amount shall be distributed ratably, without priority
of one over the other, in the proportion that the aggregate unpaid
principal amount of all Certificates held by each such Holder, the accrued
but unpaid interest thereon to the date of distribution and all other
amounts due hereunder and thereunder, bears to the aggregate unpaid
principal amount of all Outstanding Certificates, plus accrued but unpaid
interest thereon to the date of distribution and all other amounts due
hereunder and thereunder (it being understood that amounts payable hereunder
shall not include Make-Whole Premium); and
third, the balance, if any of such payments or amounts remaining
thereafter shall be distributed to the Owner Trustee for distribution
pursuant to the Trust Agreement.
SECTION 5.04. Certain Payments. (a) Except as otherwise provided
in this Indenture, any payments received by the Indenture Trustee which are to
be applied according to any provision in any other Indenture Document shall be
applied thereunder in accordance therewith.
(b) The Indenture Trustee will distribute, promptly upon receipt, any
indemnity or other payment received by it from the Owner Trustee or the Lessee
pursuant to Article 8 of the Participation Agreement or as Supplemental Rent,
directly to the Person (which may include the Indenture Trustee) entitled
thereto.
(c) Notwithstanding anything to the contrary contained herein, any
sums received by the Indenture Trustee which constitute Excepted Payments
shall be distributed promptly upon receipt by the Indenture Trustee directly
to the Person or Persons entitled thereto.
SECTION 5.05. Other Payments. Any payments received by the Indenture
Trustee for which no provision as to the application thereof is made elsewhere
in this Indenture or in any other Indenture Document (including without
limitation Section 9 of the Lease) shall be distributed by the Indenture
Trustee (a) to the extent received or realized at any time prior to the
payment in full of all obligations to the Holders, in the order of priority
specified in Section 5.01 hereof, and (b) to the extent received or realized
at any time after payment in full of all obligations to the Holders, in the
following order of priority: first, in the manner provided in clause "first"
of Section 5.03 hereof and second, in the manner provided in clause "third" of
Section 5.03 hereof.
SECTION 5.06. Payments to Owner Trustee. Any amounts distributed
hereunder by the Indenture Trustee to the Owner Trustee shall be paid to the
Owner Trustee by wire transfer of immediately available funds of the type
received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be designated by notice from the
Owner Trustee to the Indenture Trustee from time to time. The Owner Trustee
hereby notifies the Indenture Trustee that unless and until the Indenture
Trustee receives notice to the contrary from the Owner Trustee, all amounts to
be distributed to the Owner Trustee hereunder for distribution in accordance
with the Trust Agreement shall be distributed by wire transfer of immediately
available funds of the type received by the Indenture Trustee to such account
of the Owner Participant as may be specified pursuant to Section 2.06 of the
Trust Agreement.
SECTION 5.07. Application of Payments. Each payment of principal of
and interest or other amounts due on each Certificate shall, except as
otherwise provided herein, be applied, first, to the payment of interest on
such Certificate due and payable to the date of such payment, as provided in
such Certificate, as well as any interest on overdue principal and Make-Whole
Premium, if any, and, to the extent permitted by law, interest and other
amounts due thereunder, second, to the payment of any other amount (other than
the principal of such Certificate) due hereunder to the Holder of such
Certificate or under such Certificate, third, to the payment of the principal
of such Certificate if then due hereunder or under such Certificate and
fourth, the balance, if any remaining thereafter, to the payment of the
principal of such Certificate remaining unpaid (provided that such Certificate
shall not be subject to prepayment without the consent of the affected Holder
except as permitted by Sections 6.02, 6.06 and 8.02 hereof).
SECTION 5.08. Investment of Amounts Held by Indenture Trustee.
Amounts held by the Indenture Trustee pursuant to the proviso to Section 5.01
hereof, pursuant to Section 5.02(b) hereof or pursuant to any provision of any
Indenture Document providing for investment of sums pursuant to this Section
5.08 shall be invested by the Indenture Trustee from time to time in
securities selected by (i) so long as no Event of Default shall have occurred
and be continuing, the Lessee or (ii) so long as an Event of Default shall
have occurred and be continuing, the Indenture Trustee and of the type listed
in clauses (i) through (iv) of Section 23.01 of the Lease. Unless otherwise
expressly provided in this Indenture, any income realized as a result of any
such investment, net of the Indenture Trustee's reasonable fees and expenses in
making such investment, shall be held and applied by the Indenture Trustee in
the same manner as the principal amount of such investment is to be applied
and any losses, net of earnings and such reasonable fees and expenses, shall
be charged against the principal amount invested. The Lessee shall be
responsible for and will promptly pay to the Indenture Trustee or the Lessor,
as the case may be, on demand, the amount of any loss realized as the result
of any such investment (together with any fees, commissions and other costs
and expenses, if any, incurred by the Indenture Trustee or the Lessor in
connection with such investment), such amount to be disposed of in accordance
with the terms hereof or the Lease, as the case may be. The Indenture Trustee
shall not be liable for any loss resulting from any investment made by it
under this Indenture in accordance with instructions from the Lessee other
than by reason of its willful misconduct or gross negligence, and any such
investment may be sold (without regard to its maturity) by the Indenture
Trustee without instructions whenever the Indenture Trustee reasonably
believes such sale is necessary to make a distribution required by this
Indenture.
Unless otherwise confirmed in writing, an account statement delivered
by the Indenture Trustee to the Owner Trustee (with a copy to the Lessee)
shall be deemed written confirmation by the Owner Trustee that the investment
transactions identified therein accurately reflect the investment directions
given to the Indenture Trustee by or on behalf of the Owner Trustee, unless
the Owner Trustee (or the Lessee on its behalf) notifies the Indenture Trustee
in writing to the contrary within 30 days of the date of receipt of such
statement.
SECTION 5.09. Withholding Taxes. The Indenture Trustee shall
withhold any Taxes required to be withheld on payments to any Holder who is
not a "United States person", within the meaning of the Code, except to the
extent that such Holder has furnished evidence satisfactory to the Indenture
Trustee of any exemption from withholding claimed by such Holder and under no
circumstances shall the failure of any such Holder to receive any amounts so
withheld constitute an Indenture Event of Default. Notwithstanding any
provision to the contrary in Sections 5.01 through 5.05 hereof and subject to
Article 7 of the Participation Agreement, if the Lessee is required to pay any
such Tax, or any interest or penalty thereon, or to indemnify the Owner
Participant or the Owner Trustee with respect thereto pursuant to Article 7 of
the Participation Agreement, the Lessee shall be entitled to receive any
payments otherwise distributable to the Holder of any Certificate who was
subject to such Tax pursuant to Sections 5.01 to 5.05 hereof until the
foregoing amounts shall have been recovered in full by the Lessee.
ARTICLE VI
PREPAYMENT OF CERTIFICATES
SECTION 6.01. No Prepayment Prior to Maturity. Except as provided in
Sections 6.02, 6.06 and 8.02 hereof, the Certificates may not be prepaid prior
to their respective Maturities.
SECTION 6.02. Prepayment of Certificates. (a) The Outstanding
Certificates shall be prepaid in full (and not in part):
(i) If an Event of Loss occurs with respect to the Aircraft (unless
pursuant to Section 11.03 of the Lease and Section 9.08 hereof a Replacement
Aircraft is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft.
(iii) If the Owner Participant, gives notice of prepayment to the
Indenture Trustee pursuant to Section 8.02 hereof.
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus.
(v) Pursuant to Section 14.01 of the Participation Agreement in
connection with a refinancing of the Certificates.
(vi) As contemplated by Section 2.15 hereof and Section 3.05(b) of
the Participation Agreement if the Delivery Date has not occurred on or
prior to the Cut-Off Date.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Lessee, in accordance with and
subject to the terms (including timing of notice) of Section 4.02(a) or
Section 10.01 of the Lease or Section 14 of the Participation Agreement, as
the case may be, shall give irrevocable written notice to the Owner Trustee
and the Indenture Trustee and to the Holders of all of the Certificates
specifying the Business Day on which the Owner Trustee is directed to prepay
the Certificates in full but not in part. In the case of a prepayment of the
Certificates pursuant to Section 6.02(a)(i) above, the Certificates shall be
prepaid in full but not in part on the Loss Payment Date as defined in Section
11.02 of the Lease. In the case of a prepayment of the Certificates pursuant
to Sections 6.02(a)(ii) and (iii) above, the Certificates shall be prepaid in
full but not in part on the date so designated in the notice referred to in
such Section. In the case of a prepayment of the Certificates pursuant to
Section 6.02(a)(iv) above, the Certificates shall be prepaid in full but not
in part on the Rent Payment Date next succeeding the Termination Date. In the
case of a prepayment of the Certificates pursuant to Section 6.02(a)(vi) above,
the Certificates shall be prepaid on the 15th day following the Cut-Off Date.
The day on which the Certificates are to be prepaid pursuant to this Section
6.01(b) is herein referred to as the "Prepayment Date".
On or prior to the Prepayment Date, immediately available funds shall
be deposited with the Indenture Trustee in an amount in respect of the
Certificates equal to the sum of, in the event of a prepayment of the
Certificates (1) pursuant to Sections 6.02(a)(i) and 6.02(a)(iii) above, (A)
the aggregate principal amount of such Certificates then outstanding, (B)
accrued interest on the Certificates to the Prepayment Date and (C) all other
aggregate sums due any Holder or the Indenture Trustee hereunder or under the
Participation Agreement or the Lease and (2) pursuant to Sections 6.02(a)(ii),
6.02(a)(iv), 6.02(a)(v) and 6.02(a)(vi), the sums specified in the clauses
(A), (B) and (C) of clause (1) above plus (D) a Make-Whole Premium, (the
aggregate amount required to be paid pursuant to this sentence in the case of
clauses (i), (ii), (iii), (iv) and (v) of the preceding paragraph (a) being
herein referred to as the "Prepayment Price").
Any Certificate issued pursuant to Section 14.01(c) of the
Participation Agreement may bear interest at a rate other than the Debt Rate.
The parties hereto agree to enter into any amendments to this Indenture
necessary to effect such Refinancing.
(c) If, in accordance with and subject to the satisfaction of the
conditions set forth in Section 6.11 of the Participation Agreement, the
Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall (except for prior acts) be released
and discharged from any further obligations hereunder and under the
Certificates and all other Operative Agreements.
(d) Unless otherwise provided herein, in the Lease or in the
Participation Agreement, notice of prepayment pursuant to this Section 6.02
shall be given no fewer than 30 days prior to the Prepayment Date and shall be
irrevocable, if not previously revoked, from and after 30 days prior to the
Prepayment Date. If, pursuant to the last section of Section 10.01(f) of the
Lease, no Termination Date shall occur, the Lessee shall give notice thereof
to the Indenture Trustee, and the prepayment to be effected in respect of the
Prepayment Date associated with such Prepayment Date shall not occur.
SECTION 6.03. Notice of Prepayment to Holders. In order to effect
any prepayment set forth in Section 6.02(a) hereof, the Indenture Trustee
shall give prompt notice by first class mail of prepayment to each Holder of
an Outstanding Certificate. Such notice may be revoked by the Owner Trustee
at any time on or before the Prepayment Date by prompt notice to the Holders
except as otherwise provided in the Lease or the Participation Agreement.
All notices of prepayment shall state:
(1) the Prepayment Date,
(2) the applicable basis for determining the Prepayment Price,
(3) that on the Prepayment Date, subject to the provisions hereof,
the Prepayment Price will become due and payable, and that interest on the
Certificates shall cease to accrue on and after such Prepayment Date, and
(4) the place or places where such Certificates are to be
surrendered for payment.
SECTION 6.04. Deposit of Prepayment Price. On the Prepayment Date or
the [Sinking Fund Prepayment] Date (as defined in Section 6.06 hereof), the
Owner Trustee shall, to the extent an amount equal to the Prepayment Price or
the [Sinking Fund Prepayment] Price (as defined in Section 6.06 hereof), as
the case may be, shall not then be held in cash or Permitted Investments
(marked-to-market net of all costs and expenses of liquidation thereof) by the
Indenture Trustee in immediately available funds, pay to the Indenture Trustee
an amount equal to the difference between (a) the amount then so held and (b)
the Prepayment Price or the [Sinking Fund Prepayment] Price, as the case may
be. If there shall so be on deposit and/or deposited the applicable
Prepayment Price or [Sinking Fund Prepayment] Price on or prior to a
Prepayment Date or [Sinking Fund Prepayment] Date, interest shall cease to
accrue in respect of all or, in the case of a mandatory sinking fund
prepayment, the relevant portion being prepaid of, the Outstanding
Certificates on and after such Prepayment Date or such [Sinking Fund
Prepayment] Date.
SECTION 6.05. Certificates Payable on Prepayment Date. On the
Prepayment Date, the Outstanding Certificates shall (except (A) if the Owner
Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise provided
in the Lease) become due and payable and from and after such Prepayment Date
(unless there shall be a default in the payment of the Prepayment Price) such
Certificates shall cease to bear interest. Upon surrender of any such
Certificate for prepayment in accordance with said notice, the Holder of such
Certificate shall be paid its pro rata portion of the Prepayment Price.
If any Certificate called for prepayment shall not be so paid upon
surrender thereof for prepayment, the principal shall, until paid, continue to
bear interest from the Prepayment Date at the interest rate applicable to such
Certificate.
SECTION 6.06. Mandatory Sinking Fund Prepayments. The Certificates
shall also be subject to partial prepayment, on a pro rata basis on each date
specified in this Section (a "[Sinking Fund Prepayment] Date"). The Owner
Trustee shall deposit funds sufficient to pay the [Sinking Fund Prepayment]
Price with the Indenture Trustee as provided in Section 6.04 hereof. The
Indenture Trustee shall pay from the amounts so deposited on each applicable
[Sinking Fund Prepayment] Date to the Holders of each Certificate then
Outstanding on a pro rata basis the aggregate principal amount set forth
below, together with accrued interest to such [Sinking Fund Prepayment] Date,
but without Make-Whole Premium (the "[Sinking Fund Prepayment] Price"):
<TABLE>
<S> <C>
[Sinking Fund
Prepayment] Date Principal Amount
- ------------------------------------- ------------------
Total $
</TABLE>
In lieu of making all or any part of any payment of Basic Rent in
cash in respect of an amount up to the [Sinking Fund Prepayment] Price payable
on any [Sinking Fund Prepayment] Date, the Lessee may at its option deliver to
the Indenture Trustee Certificates theretofore purchased or otherwise acquired
by the Lessee and the Lessee shall receive as a credit against the Basic Rent
payment due on such date an amount equal to the aggregate [Sinking Fund
Prepayment] Price due on such date in respect of such delivered Certificates.
Certificates so delivered shall be received by the Indenture Trustee at the
[Sinking Fund Prepayment] Price. If the Lessee proposes to deliver
Certificates to the Indenture Trustee pursuant to this paragraph, the Lessee
shall give the Indenture Trustee irrevocable notice thereof at least 20 days
prior to such [Sinking Fund Prepayment] Date. The Lessee shall deposit such
Certificates with the Indenture Trustee at least 5 days prior to such [Sinking
Fund Prepayment] Date.
ARTICLE VII
REMEDIES OF INDENTURE TRUSTEE
AND HOLDERS
SECTION 7.01. Indenture Event of Default. (a) "Indenture Event of
Default" means any of the following events (whatever the reason for such
Indenture Event of Default and whether it shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) any Event of Default specified in Article 16 of the Lease (other
than an Event of Default arising solely as the result of the failure to
make an Excepted Payment);
(ii) any failure by the Owner Trustee to observe or perform any
covenant or obligation of the Owner Trustee in this Indenture (other than
any such failure arising by reason of an Event of Default) and the
continuance of such failure for a period of thirty (30) days after written
notice thereof identified as a "Notice of Indenture Event of Default" to
the Owner Trustee and the Owner Participant by the Indenture Trustee or by
Certificate Holders of no less than 25% in aggregate principal amount of
Outstanding Certificates specifying such failure to so observe or perform
and requiring it to be remedied (or if such default is curable the
continuance of such failure for up to 120 days after such notice if during
such 120-day period the Lessor or the Owner Participant, as the case may
be, shall be diligently attempting to cure such breach);
(iii) to the extent not resulting from an Event of Default, any
failure by the Owner Participant or the Owner Trustee (i) to pay principal,
interest or Make-Whole Premium, if any, with respect to any Certificate
when due, if such failure shall continue unremedied for a period of 5
Business Days or (ii) to pay any other amounts hereunder or under the
Certificates when due, if such failure shall continue for a period of
thirty (30) days;
(iv) (A) any representation or warranty made by the Trust Company, the
Owner Trustee or the Owner Participant in Article 6 of the Participation
Agreement, in Section 5.01 of the Lease or in any other Indenture Document
or in any certificate of the Trust Company, the Owner Trustee or the Owner
Participant furnished to the Indenture Trustee or any Holder in connection
herewith or therewith or pursuant hereto or thereto shall prove to have been
incorrect when made and was and remains in any respect material to the
rights and remedies of the Holders under this Indenture, the Certificates,
the Participation Agreement or the Lease and if such misrepresentation is
capable of being corrected as of a subsequent date and if such correction
is being sought diligently, such misrepresentation shall not have been
corrected within 30 days following notice thereof identified as a "Notice
of Indenture Event of Default" being given to the Trust Company, the Owner
Trustee and the Owner Participant by the Indenture Trustee or by
Certificate Holders of no less than 25% in aggregate principal amount of
Outstanding Certificates; or
(B) any covenant made by the Trust Company, the Owner Trustee, or
the Owner Participant in Article 6 of the Participation Agreement shall be
breached in any respect and was and remains material to the rights and
remedies of the Holders under this Indenture, the Certificates, the
Participation Agreement or the Lease and such breach shall remain
unremedied for a period of thirty (30) days after there has been given to
the Owner Trustee and the Owner Participant by the Indenture Trustee or by
Certificate Holders of no less than 25% in aggregate principal amount of
Outstanding Certificates a written notice identified as a "Notice of
Indenture Event of Default" specifying such breach and requiring it to be
remedied;
(v) the Owner Trustee, the Lessor's Estate or the Owner Participant
shall file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(vi) the Owner Trustee, the Lessor's Estate or the Owner Participant
shall file any answer admitting or not contesting the material allegations
of a petition filed against the Owner Trustee or the Lessor's Estate in any
proceeding referred to in clause (vii) below or seek or consent or
acquiesce in the appointment of any trustee, custodian, receiver or
liquidator of the Owner Trustee, the Lessor's Estate and the Owner
Participant or of all or any substantial part of its properties; or
(vii) without the consent or acquiescence of the Owner Trustee, the
Lessor's Estate and the Owner Participant, an order shall be entered
constituting an order for relief or approving a petition for relief or
reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or if any such petition shall be filed
against the Owner Trustee, the Lessor's Estate and the Owner Participant
and such petition shall not be dismissed within 60 days, or if, without the
consent or acquiescence of the Owner Trustee Lessor's Estate and Owner
Participant, an order shall be entered appointing a trustee, custodian,
receiver or liquidator of the Owner Trustee or of all or any substantial
part of the properties of the Owner Trustee and such order shall not be
dismissed within 60 days.
SECTION 7.02. Remedies. (a) If an Indenture Event of Default shall
have occurred and be continuing and so long as the same shall be continuing
unremedied, then and in every such case, the Indenture Trustee may, and when
required by the provisions of Article IX or Section 7.02(c) hereof, shall (i)
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article VII and (ii) in the event such Indenture
Event of Default is an Indenture Event of Default referred to in paragraph (a)
of Section 7.01 hereof, and after the expiration of ten days (the "Enforcement
Date") from the time the Indenture Trustee notifies the Owner Trustee and the
Owner Participant that it intends to exercise its remedies (including
acceleration of the Certificates) hereunder, exercise any and all of the
remedies pursuant to Article 17 of the Lease. The Indenture Trustee may take
possession of all or any part of the properties covered or intended to be
covered by the Lien and security interest created hereby or pursuant hereto
and may exclude the Owner Participant, the Owner Trustee, the Lessee and any
transferee of the Lessee and all persons claiming under any of them wholly or
partly therefrom. In addition, the Indenture Trustee may exercise any other
right or remedy in lieu of or in addition to the foregoing that may be
available to it under applicable law, or proceed by appropriate court action
to enforce the terms hereof, of the Lease, or both, or to rescind the Lease.
Without limiting any of the foregoing, it is understood and agreed that the
Indenture Trustee may exercise any right of sale of the Aircraft available to
it, even though it shall not have taken possession of the Aircraft and shall
not have possession thereof at the time of such sale. The Indenture Trustee
may only exercise remedies hereunder while an Indenture Event of Default is in
existence that is also an Event of Default if the Indenture Trustee
simultaneously exercises one or more remedies under the Lease with respect to
the Aircraft; provided that the requirement that the Indenture Trustee
exercise such remedies under the Lease shall not apply in circumstances where
the Indenture Trustee is involuntarily stayed or prohibited by applicable law
or court order from exercising such remedies under the Lease; and provided
further, that the foregoing proviso shall have no force and effect in any one
or more of the following circumstances: (A) for a period of 90 days after the
date of the order for relief in a Chapter 11 case of the Lessee under the
Bankruptcy Code unless the Lessee elects to return the Aircraft or to permit
the repossession of the Aircraft before the expiration of such 90-day period
and the Indenture Trustee actually repossesses the Aircraft; and (B) for so
long as the 60-day period specified in Section 1110 of the Bankruptcy Code is
extended pursuant to Section 1110(b) of the Bankruptcy Code with the consent of
the Indenture Trustee; it being understood that reference in this sentence to
particular Sections of the Bankruptcy Code as in effect on the date hereof
shall include any substantially similar successor provisions.
(b) Notwithstanding Section 7.02(c) hereof, if an Indenture Event of
Default referred to in clause (v), (vi) or (vii) of Section 7.01 hereof shall
have occurred, or an Event of Default referred to in clause (e), (f) or (g) of
Section 16.01 of the Lease shall have occurred, then and in every such case
the unpaid principal of all Outstanding Certificates, together with interest
accrued but unpaid thereon and all other amounts due thereunder and hereunder,
but without Make-Whole Premium, shall immediately and without further act
become due and payable, without presentment, demand, protest or notice, all of
which are hereby waived.
(c) If any Indenture Event of Default not described in the preceding
paragraph (b) shall have occurred and be continuing, then and in every such
case, the Indenture Trustee may on its own accord or at the direction of
Holders of not less than 25% in aggregate principal amount of Outstanding
Certificates, at any time, by written notice or notices to the Owner Trustee
and the Lessee, declare the principal of all the Certificates to be due and
payable, whereupon the unpaid principal of all Outstanding Certificates,
together with accrued but unpaid interest thereon and all other amounts due
thereunder, but without Make-Whole Premium (except to the extent a Make-Whole
Premium was theretofore payable by virtue of Section 6.02(a)(ii), 6.02(a)(iii),
6.02(a)(iv) or 6.02(a)(v) hereof), shall immediately become due and payable
without presentment, demand, protest or other notice, all of which are hereby
waived. At any time after such declaration and prior to the sale or
disposition of the Trust Indenture Estate, however, the Holders of not less
than 50% in aggregate principal amount of Outstanding Certificates, by notice
to the Indenture Trustee, the Owner Trustee and the Lessee, may rescind such
declaration, whether made by the Indenture Trustee on its own accord or as
directed, if (x) there has been paid or deposited with the Indenture Trustee a
sum sufficient to pay all overdue installments of interest on all Certificates
(together, to the extent permitted by law, with interest on such overdue
installments of interest), the principal on any Certificates that has become
due otherwise than by such declaration of acceleration, all sums paid or
advanced by the Indenture Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel, or (y) all Indenture Events of Default (other than the nonpayment of
principal that has become due solely because of such acceleration) have been
either cured or waived as provided in Section 7.11 hereof. No such rescission
shall affect any subsequent default or impair any right consequent thereon.
(d) Each Holder shall be entitled at any sale to a credit against
any purchase price bid at such sale by such Holder all or any part of the
unpaid obligations owing to such Holder secured by the Lien of this Indenture.
SECTION 7.03. Return of Aircraft, etc. Subject to Section 7.02
hereof: (a) If an Indenture Event of Default shall have occurred and be
continuing, at the request of the Indenture Trustee, the Owner Trustee shall
promptly execute and deliver to the Indenture Trustee such instruments of
title and other documents as the Indenture Trustee may deem necessary or
advisable to enable the Indenture Trustee or an agent or representative
designated by the Indenture Trustee, at such time or times and place or places
as the Indenture Trustee may specify, to obtain possession of all or any part
of the Trust Indenture Estate to which the Indenture Trustee shall at the time
be entitled hereunder. If the Owner Trustee shall for any reason fail to
execute and deliver such instruments and documents after such request by the
Indenture Trustee, the Indenture Trustee may (i) obtain a judgment conferring
on the Indenture Trustee the right to immediate possession and requiring the
Owner Trustee to execute and deliver such instruments and documents to the
Indenture Trustee, to the entry of which judgment the Owner Trustee hereby
specifically consents, and (ii) pursue all or part of the Trust Indenture
Estate wherever such Trust Indenture Estate may be found and may enter any of
the premises of the Lessee and search for and take possession of and remove
the Trust Indenture Estate. All expenses of obtaining such judgment or of
pursuing, searching for and taking such property shall, until paid, be secured
by the Lien of this Indenture.
(b) Upon every such taking of possession or title, the Indenture
Trustee may, from time to time, at the expense of the Trust Indenture Estate,
make all such expenditures for maintenance, insurance, repairs, replacements,
alterations, additions and improvements to and of the Trust Indenture Estate,
as it may deem proper. In each such case, the Indenture Trustee shall have
the right to maintain, use, operate, store, lease, control or manage the Trust
Indenture Estate and to carry on the business and, without limiting the
express provisions of Section 8.01 hereof, to exercise all rights and powers
of the Owner Participant and the Owner Trustee relating to the Trust Indenture
Estate, as the Indenture Trustee shall deem best, including the right to enter
into any and all such agreements with respect to the maintenance, insurance,
use, operation, storage, leasing, control, management or disposition of the
Trust Indenture Estate or any part thereof as the Indenture Trustee may
determine; and, except for Excepted Payments (other than Excepted Payments
payable to the Indenture Trustee), the Indenture Trustee shall be entitled to
collect and receive directly all rents (including Rent), revenues, issues,
income, products and profits of the Trust Indenture Estate and every part
thereof without prejudice to the right of the Indenture Trustee under any
provision hereof to collect and receive all cash held by, or required to be
deposited with, the Indenture Trustee hereunder. Such rents (including Rent),
revenues, issues, income, products and profits shall be applied to pay the
expenses of the use, operation, storage, leasing, control, management or
disposition of the Trust Indenture Estate and of conducting the business
thereof, and of all maintenance, repairs, replacements, alterations, additions
and improvements, and to make all payments which the Indenture Trustee may be
required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon the Trust Indenture Estate or any part thereof
(including the employment of engineers and accountants to examine, inspect and
make reports upon the properties and books and records of the Owner Trustee),
and all other payments which the Indenture Trustee may be required or
authorized to make under any provision of this Indenture, as well as just and
reasonable compensation for the services of the Indenture Trustee, and of all
persons properly engaged and employed by the Indenture Trustee.
(c) If an Indenture Event of Default shall have occurred and be
continuing and the Indenture Trustee shall be entitled to exercise remedies
hereunder, and subject to Article VIII hereof, the Indenture Trustee, either
with or without taking possession, and either before or after taking
possession, and without instituting any legal proceedings whatsoever, may
sell, assign, transfer and deliver the whole or, from time to time, to the
extent permitted by law, any part of the Trust Indenture Estate, or any part
thereof, or interest therein, at any private sale or public auction, with or
without demand, advertisement or notice, except as expressly provided for
below in this Section 7.03(c), for cash or credit or for other property, for
immediate or future delivery, and for such price or prices and on such terms
as the Indenture Trustee in its sole discretion may determine; provided, that
any such action shall be at the time lawful and that all mandatory legal
requirements shall be complied with. The Indenture Trustee shall, to the
extent permitted by law, give the Owner Trustee, the Owner Participant and the
Lessee at least 30 days' notice of any public or private sale. Such notice,
in the case of a public sale, shall state the time and place fixed for such
sale. Any such public sale shall be held at such time or times within
ordinary business hours as the Indenture Trustee shall fix in the notice of
such sale. At any such sale, the Trust Indenture Estate may be sold in one
lot as an entirety or in separate lots. The Indenture Trustee shall not be
obligated to make any sale pursuant to such notice. The Indenture Trustee
may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time
and place fixed for such sale, and any such sale may be made at any time or
place to which the same may be so adjourned without further notice or
publication. The Indenture Trustee may exercise such right of sale without
possession or production of the Certificates or proof of ownership thereof,
and as representative of the Holders may exercise such right without notice to
the Holders or without including the Holders as parties to any suit or
proceedings relating to the foreclosure of any part of the Trust Indenture
Estate. The Owner Trustee shall execute any and all such bills of sale,
assignments and other documents, and perform and do all other acts and things
requested by the Indenture Trustee in order to permit consummation of any sale
of the Trust Indenture Estate in accordance with this Section 7.03(c) and to
effectuate the transfer or conveyance referred to in the first sentence of
this Section 7.03(c). Notwithstanding any other provision of this Indenture,
the Indenture Trustee shall not sell the Trust Indenture Estate or any part
thereof unless the Certificates shall have been accelerated.
(d) To the extent permitted by applicable law, the Indenture Trustee
or any Holder may be a purchaser of the Trust Indenture Estate or any part
thereof or any interest therein at any sale thereof, whether pursuant to
foreclosure or power of sale or otherwise. The Indenture Trustee may apply
against the purchase price therefor the amount then due hereunder or under any
of the Certificates secured hereby and any Holder may apply against the
purchase price therefor the amount then due to it hereunder, under any other
Indenture Document or under the Certificates held by such Holder to the extent
that such portion of the purchase price as it would have received had it been
entitled to share any distribution thereof. The Indenture Trustee or any
Holder or nominee thereof shall, upon any such purchase, acquire good title to
the property so purchased, free of the Lien of this Indenture and, to the
extent permitted by applicable law, free of all rights of redemption in the
Owner Trustee or the Owner Participant in respect of the property so
purchased.
(e) Subject to Article VIII hereof, the Owner Trustee hereby
irrevocably appoints and constitutes the Indenture Trustee the true and lawful
attorney-in-fact of the Owner Trustee in its name and stead and on its behalf,
for the purpose of effectuating any sale, assignment, transfer or delivery for
the enforcement of the Lien of this Indenture, whether pursuant to foreclosure
or power of sale or otherwise, to execute and deliver all such bills of sale,
assignments and other instruments as the Indenture Trustee may consider
necessary or appropriate, with full power of substitution, and the Owner
Trustee hereby ratifies and confirms all that such attorney or any substitute
shall lawfully do by virtue hereof. Nevertheless, if so requested by the
Indenture Trustee or any purchaser, the Owner Trustee shall ratify and confirm
any such sale, assignment, transfer or delivery, by executing and delivering
to the Indenture Trustee or such purchaser all bills of sale, assignments,
releases and other proper instruments to effect such ratification and
confirmation as may be designated in any such request.
(f) The Indenture Trustee shall, as a matter of right, be entitled
to the appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee) for all or any part of the Trust Indenture Estate,
whether such receivership be incidental to a proposed sale of the Trust
Indenture Estate or the taking of possession thereof or otherwise, and the
Owner Trustee hereby consents to the appointment of such receiver and will not
oppose any such appointment. Any receiver appointed for all or any part of
the Trust Indenture Estate shall be entitled to exercise all of the rights and
powers of the Indenture Trustee with respect to the Trust Indenture Estate.
(g) Any sale of the Trust Indenture Estate or any part thereof or
any interest therein, whether pursuant to foreclosure or power of sale or
otherwise hereunder, shall be a perpetual bar against the Owner Trustee after
the expiration of the period, if any, during which the Owner Trustee shall
have the benefit of prepayment laws which may not be waived pursuant to
Section 7.13 hereof.
SECTION 7.04. Indenture Trustee May Prove Debt. If the Owner
Trustee shall fail to pay any amount payable hereunder or under the
Certificates, the Indenture Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceedings to judgment or final
decree, and may enforce any such judgment or final decree against the Owner
Trustee and collect in the manner provided by law out of the property of the
Owner Trustee wherever situated, the moneys adjudged or decreed to be payable;
provided, that any sale of any portion of the Trust Indenture Estate shall be
done in accordance with Section 7.03(c) hereof.
In case there shall be pending proceedings relative to the Owner
Trustee under the Bankruptcy Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Owner Trustee or its property, or in case of any other comparable judicial
proceedings relative to the Owner Trustee, or to the creditors or property of
the Owner Trustee, the Indenture Trustee, irrespective of whether the
principal of the Certificates shall then be due and payable as therein or
herein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal, interest and other amounts owing and unpaid in respect of the
Certificates or hereunder, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of the Holders allowed in any judicial
proceedings relative to the Owner Trustee or to the creditors or property of
the Owner Trustee,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Indenture Trustee on their
behalf;
and any trustee, receiver, or liquidator, custodian or other similar official
is hereby authorized by each of the Holders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to the Holders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or willful misconduct.
Nothing contained herein shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Certificates or the rights of any Holder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any Holder
in any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture, or
under any of the Certificates, may be prosecuted and enforced by the Indenture
Trustee without the possession of any of the Certificates or the production
thereof in any trial or other proceedings relative thereto, and any such
action or proceedings instituted by the Indenture Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment,
subject to the payment of the expenses, disbursements and compensation of the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Certificates, and it shall not be
necessary to make any Holders parties to any such proceedings.
SECTION 7.05. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee specifically or otherwise in this
Indenture shall be cumulative and shall be in addition to every other right,
power and remedy specifically given herein or now or hereafter existing at
law, in equity or by statute, and each and every right, power and remedy
whether specifically given herein or otherwise existing may be exercised from
time to time and as often and in such order as may be deemed expedient by the
Indenture Trustee or the Holders, and the exercise or the beginning of the
exercise of any power or remedy shall not constitute or be construed to be a
waiver of the right to exercise at the same time or thereafter any other
right, power or remedy. No delay or omission by the Indenture Trustee or of
any Holder in the exercise of any right, remedy or power or in the pursuance
of any remedy shall impair any such right, power or remedy or be construed to
be a waiver of any default on the part of the Owner Trustee or the Lessee or
to be an acquiescence therein.
SECTION 7.06. Suits for Enforcement. If an Indenture Event of
Default has occurred, has not been waived and is continuing, the Indenture
Trustee may in its discretion and subject to its rights of appropriate
indemnification under Sections 7.08 and 9.03 and Article XI hereof proceed to
protect and enforce its rights and rights of the Holders by such appropriate
judicial proceedings as the Indenture Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture or to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture or by
law; provided, that any sale of any portion of the Trust Indenture Estate
shall be done in accordance with Section 7.03(c) hereof.
SECTION 7.07. Discontinuance of Proceedings. In case the Indenture
Trustee or any Holder shall have instituted any proceeding to enforce any
right, power or remedy under this Indenture by foreclosure, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Indenture Trustee or
such Holder, then and in every such case the Owner Trustee, the Indenture
Trustee, the Holders and the Lessee shall, subject to any determination in
such proceeding, be restored to their former positions and rights hereunder
with respect to the Trust Indenture Estate, and all rights, remedies and
powers of the Indenture Trustee and the Holders shall continue as if no such
proceeding had been instituted.
SECTION 7.08. Limitations on Suits by Holders. No Holder of any
Certificate shall have any right by virtue or by availing of any provision of
this Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Indenture Trustee written notice of an
Indenture Event of Default and of the continuance thereof, as hereinbefore
provided, and the Holders of not less than 25% in aggregate principal amount
of Outstanding Certificates shall have made written request upon the Indenture
Trustee to institute such action or proceedings in its own name as trustee
hereunder and shall have offered to the Indenture Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby and the Indenture Trustee for 60 days after its
receipt of such notice, request and offer of indemnity shall have failed to
institute any such action or proceedings and no direction inconsistent with
such written request shall have been given to the Indenture Trustee pursuant
to Section 7.10 hereof; it being understood and intended, and being expressly
covenanted by the Holder of each Certificate with every other Holder of each
other Certificate and the Indenture Trustee, that no one or more Holders shall
have any right in any manner whatever to affect, disturb or prejudice the
rights of any other Holder or the Lien of this Indenture or any part of the
Trust Indenture Estate or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Indenture, except in the manner provided herein and for the equal, ratable and
common benefit of all Holders. For the protection and enforcement of the
provisions of this Section, each and every Holder and the Indenture Trustee
shall be entitled to such relief as can be given either at law or in equity.
SECTION 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute Certain Suits.
Notwithstanding any other provision in this Indenture and any provision of any
Certificate, the right of any Holder to receive payment of the principal of
and interest and Make-Whole Premium, if any, on such Certificate on or after
the respective due dates and in the manner expressed in such Certificate, or,
subject to Section 7.08 hereof, to institute suit for the enforcement of any
such payment on or after such respective dates as provided herein, shall not
be impaired or affected without the consent of such Holder.
SECTION 7.10. Control by Holders. The Majority in Interest of
Certificate Holders shall have the right to direct the Indenture Trustee as to
the time, method, and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power conferred
on the Indenture Trustee by this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture and the Indenture Trustee shall have received, to the extent
provided in Sections 7.08 and 9.03 and Article XI hereof, such reasonable
indemnification as it may require against the costs, expenses and liabilities
to be incurred by the Indenture Trustee; and provided further that (subject to
the provisions of Section 9.02 hereof) the Indenture Trustee shall have the
right to decline to follow any such direction if the Indenture Trustee, being
advised by counsel, shall determine that the action or proceeding so directed
may not lawfully be taken or if the Indenture Trustee in good faith by its
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers of the Indenture Trustee shall determine that the
action or proceedings so directed would involve the Indenture Trustee in
personal liability or if the Indenture Trustee in good faith shall so
determine that the actions or forebearances specified in or pursuant to such
direction shall be unduly prejudicial to the interests of Holders not joining
in the giving of said direction, it being understood that (subject to Section
9.02 hereof) the Indenture Trustee shall have no duty to ascertain whether or
not such actions or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Indenture
Trustee in its discretion to take any action deemed proper by the Indenture
Trustee and which is not inconsistent with the direction by the Majority in
Interest of Certificate Holders.
SECTION 7.11. Waiver of Past Indenture Default. Upon written
instructions from the Majority in Interest of Certificate Holders, the
Indenture Trustee shall waive any past Indenture Default and its consequences
and upon any such waiver such Indenture Default shall cease to exist and any
Indenture Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Indenture Default or impair any right consequent
thereon; provided, however, that in the absence of written instructions from
all Holders, the Indenture Trustee shall not waive any Indenture Default (a)
in the payment of the principal of, or Make-Whole Premium, if any, or interest
on, or other amounts due under, any Certificate then Outstanding, or (b) in
respect of a covenant or provision hereof which, under Article XIII hereof,
cannot be modified or amended without the consent of each Holder.
SECTION 7.12. Notice of Indenture Default. The Indenture Trustee
shall transmit to the Owner Trustee, the Holders and to the Owner Participant
notice of all Indenture Defaults actually known to a Responsible Officer of
the Indenture Trustee, such notice to be transmitted by mail to the Holders
within 90 days, and to the Owner Trustee and the Owner Participant promptly
after the occurrence thereof, unless such Indenture Default shall have been
cured before the giving of such notice; provided that under no circumstances
shall the Indenture Trustee give such notice to the Holders until the
expiration of a period of 60 days from the occurrence of such Indenture
Default; and provided further that, except in the case of default in the
payment of the principal of or interest on or any other amount due under any
of the Certificates, the Indenture Trustee shall be protected in withholding
such notice to the Holders if and so long as the board of directors, the
executive committee, or a trust committee of directors or trustees and/or
Responsible Officers of the Indenture Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders.
SECTION 7.13. Waiver of Appraisement, etc.; Laws. The Owner Trustee
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any appraisement, valuation, stay, extension or
prepayment law wherever enacted, now or at any time hereafter in force, in
order to prevent or hinder the enforcement of this Indenture or the execution
of any power granted herein to the Indenture Trustee, or the absolute sale of
the Trust Indenture Estate, or any part thereof, or the possession thereof by
any purchaser at any sale under this Article VII; and the Owner Trustee for
itself and all who may claim under it, so far as it or any of them now or
hereafter lawfully may, hereby waives the benefit of all such laws. The Owner
Trustee for itself and all who may claim under it waives, to the extent that
it lawfully may, all right to have the property in the Trust Indenture Estate
marshalled upon any foreclosure hereof, and agrees that any court having
jurisdiction to foreclose this Indenture may order the sale of the Trust
Indenture Estate as an entirety.
If any law referred to in this Section 7.13 and now in force, of
which the Owner Trustee or its successors might take advantage despite this
Section 7.13, shall hereafter be repealed or cease to be in force, such law
shall not thereafter be deemed to constitute any part of the contract herein
contained or to preclude the application of this Section 7.13.
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
SECTION 8.01. Certain Rights of Owner Trustee and Owner Participant.
Notwithstanding any other provision of this Indenture, including the Granting
Clause, the following rights shall be reserved to the Owner Trustee or the
Owner Participant, as the case may be (as separate and independent rights), to
the extent described herein:
(a) at all times the Owner Trustee shall have the right, together
with the Indenture Trustee, to receive from the Lessee all notices,
certificates, reports, filings, opinions of counsel and other documents and
all information which the Lessee is permitted or required to give or
furnish to the Owner Trustee or the Lessor pursuant to any Indenture
Document;
(b) so long as no Indenture Event of Default shall have occurred and
be continuing, the Owner Trustee shall have the right (i) to the exclusion
of the Indenture Trustee, but subject to the provisions of Sections
13.07(a) and 13.07(c) hereof, (A) except as specified in clause (ii) below,
to exercise the rights, elections and options of the Lessor to make any
decision or determination and to give any notice, consent, waiver or
approval as may be requested under the Lease, (B) to exercise all rights of
the Lessor under Articles 4 and 10 of the Lease with respect to the
retention or purchase by the Lessee or the Lessor of the Aircraft or the
exercise by the Lessee of the Lessee's renewal and purchase options and (C)
to approve as satisfactory any accountants, engineers or counsel to render
services for or issue opinions to the Owner Trustee pursuant to express
provisions of the Indenture Documents and (ii) together with the Indenture
Trustee (each acting independently), to exercise inspection rights pursuant
to Article 14 of the Lease and to require the Lessee to take any action and
execute and deliver such documents and assurances as the "Lessor" may from
time to time reasonably request pursuant to Article 19 of the Lease;
(c) at all times the Owner Trustee shall have the right, as the
Lessor, together with the Indenture Trustee (each acting independently) to
seek specific performance of the covenants of the Lessee under the Lease
relating to the protection, insurance and maintenance of the Aircraft and
to maintain separate insurance with respect to the Aircraft pursuant to
Article 13 of the Lease;
(d) at all times and whether or not an Indenture Event of Default has
occurred and is continuing, each of the Owner Trustee, the Trust Company
and the Owner Participant shall have the right, to the exclusion of the
Indenture Trustee, to demand, collect, sue for or otherwise receive and
enforce the payment of Excepted Payments due and payable to it; and
(e) at all times prior to the foreclosure of the Liens of this
Indenture the consent of the Owner Trustee (with the consent of the Owner
Participant) shall be required to amend, modify or supplement, directly or
indirectly, any Indenture Document.
SECTION 8.02. Owner Participant's Right to Elect to Prepay the
Certificates, and to Provide for Payment. (a) At any time after an Event of
Default has occurred and has continued for a period of at least 180 days, and
provided that (i) no Indenture Event of Default (that does not arise out of a
Event of Default) has occurred and is continuing and (ii) the Certificates
shall not have become due and payable as provided in Section 7.02(b) or
7.02(c) hereof, the Owner Participant may, but shall be under no obligation
to, direct the Owner Trustee to cause the prepayment of all but not less than
all of the Certificates then Outstanding by notifying the Indenture Trustee of
such election, which notice in order to be effective shall state that it is
irrevocable and shall designate a Prepayment Date not less than 30 days and
not more than 60 days after the date of such notice which the Owner Trustee
shall, in the manner provided for in Section 6.04 hereof, deposit the sum of
amounts contemplated by paragraph "first" under Section 5.03 and the aggregate
Prepayment Price of all such Certificates with the Indenture Trustee. The
Indenture Trustee shall notify each Holder of such prepayment in the manner
provided for in Section 6.03 hereof.
(b) At any time while the Certificates shall have become due and
payable as provided in Section 7.02(b) or 7.02(c) hereof, the Owner
Participant may, but shall be under no obligation to, direct the Owner Trustee
to pay to the Indenture Trustee for distribution to the Holders in the manner
provided for in Section 5.01 hereof an amount equal to the sum of (i) amounts
contemplated by paragraph "first" under Section 5.03, (ii) the aggregate
unpaid principal amount of all Outstanding Certificates, (iii) all accrued but
unpaid interest thereon to the Prepayment Date and (iv) all other amounts due
hereunder and thereunder, but without Make-Whole Premium (unless previously
payable). The Owner Trustee shall give written notice of such payment to the
Indenture Trustee, which notice, in order to be effective, shall state that it
is irrevocable and shall designate a date not less than 30 days and not more
than 60 days thereafter as the Prepayment Date. The Indenture Trustee shall
promptly notify each Holder of an Outstanding Certificate of such payment.
If such payment by the Owner Trustee to the Indenture Trustee is made, the
Certificates shall cease to accrue interest from and after the Prepayment
Date, and after distribution of such payment to the Holders, the Indenture
Trustee shall release the Trust Indenture Estate from the Lien of this
Indenture.
(c) From and after the deposit by the Owner Trustee of the
applicable Prepayment Price with the Indenture Trustee pursuant to Section
8.02(a) or the payment by the Owner Trustee of the amount specified in Section
8.02(b), the Owner Trustee shall be entitled to exercise all remedies of the
Indenture Trustee under Article VII hereof as well as of the Lessor under the
Lease.
SECTION 8.03. Certain Rights of Owner Participant. (a) If (A)
there shall occur an Event of Default under the Lease as a result of the
Lessee's failure to make any payment of an installment of Basic Rent, and (B)
the Owner Trustee shall have paid or caused to be paid on or prior to the
Enforcement Date (as defined in Section 7.02 hereof) all principal and
interest on the Certificates then due (as well as any interest on overdue
principal and (to the extent permitted by applicable law) interest, but not
including any principal or interest becoming due on account of such Event of
Default), then the failure of the Lessee to make the payment of such
installment of Basic Rent or of interest on account of such installment's
being overdue shall not constitute an Indenture Event of Default (including
any Indenture Event of Default under Section 7.01(a) resulting from such
failure) under this Indenture and any declaration based solely on the same
shall be deemed to be automatically rescinded. Nothing contained in the
preceding sentence shall be deemed to entitle the Owner Trustee to declare the
Lease to be in default or to exercise any rights and powers or pursue any
remedies pursuant to Article 17 of the Lease or otherwise, except that the
Owner Trustee or the Owner Participant may attempt to recover any amount paid
by it or them under this Indenture by demanding of the Lessee payment of such
amount, or by commencing an action at law against the Lessee for the payment
of such amount or taking appropriate action in a pending action at law against
the Lessee pursuant to Section 17.01(a)(v), but only said Section 17.01(a)(v),
of the Lease. Upon curing any such Event of Default pursuant to this Section
8.03, the Owner Trustee or the Owner Participant, as the case may be, shall,
so long as no Indenture Event of Default shall have occurred and be
continuing, be subrogated on an unsecured basis to all the rights of the
Indenture Trustee under the Lease in respect of the payment giving rise to
such Event of Default, and any right to any interest in respect of same, and
shall be entitled to any payment of Basic Rent (or interest thereon) actually
made by the Lessee in respect of such cured payment upon receipt by the
Indenture Trustee; provided that no such amount shall be paid to the Owner
Trustee or the Owner Participant until all amounts then due and payable to
each Certificate Holder hereunder and thereunder shall have been paid in full
and no Indenture Event of Default shall have occurred and be continuing.
Notwithstanding anything in this Indenture or the Lease to the contrary,
neither the Owner Participant nor the Owner Trustee collectively, shall be
entitled to cure more than three consecutive Events of Default in the payment
of Basic Rent or more than six such Events of Default in total.
(b) If (A) there shall occur an Event of Default under the Lease for
any reason other than the Lessee's failure to make any payment of an
installment of Basic Rent (B) such Event of Default is curable by the payment
of money and (C) the Owner Trustee shall have taken or caused to be taken such
action necessary to cure and shall have cured such Event of Default prior to
the date the Certificates shall have been accelerated or the date on which the
Indenture Trustee shall have commenced any remedy under this Indenture in any
material respect, then the failure of the Lessee to perform such covenant,
condition or agreement, the observance or performance of which was
accomplished by the Owner Trustee hereunder shall not constitute an Indenture
Event of Default (including any Indenture Event of Default under Section
7.01(iv)(B) resulting from such failure) under this Indenture and any
declaration based solely on the same shall be deemed to be automatically
rescinded. Nothing contained in the preceding sentence shall be deemed to
entitle the Owner Trustee or the Owner Participant to declare the Lease to be
in default or to exercise any rights and powers or pursue any remedies
pursuant to Article 17 of the Lease or otherwise, except that the Owner
Trustee or the Owner Participant may attempt to recover any amount paid by it
or them in effecting such cure by demanding of the Lessee payment of such
amount, or by commencing an action at law against the Lessee for the payment
of such amount or taking appropriate action in a pending action at law against
the Lessee pursuant to Section 17.01(a)(v), but only said Section 17.01(a)(v),
of the Lease. Upon curing any such Event of Default pursuant to this Section
8.03(b), the Owner Trustee or the Owner Participant, as the case may be, shall
be subrogated to all the rights of the Indenture Trustee under the Lease in
respect of the payment, agreement or covenant giving rise to such Event of
Default, and any right to any interest in respect of same, and shall be
entitled to any payment or other performance upon receipt by the Indenture
Trustee; provided that no such amount shall be paid to the Owner Trustee or
the Owner Participant until all amounts then due and payable to each
Certificate Holder hereunder and thereunder shall have been paid in full and
no Indenture Event of Default shall have occurred and be continuing.
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
SECTION 9.01. Acceptance of Trusts. The Indenture Trustee hereby
accepts the trusts imposed upon it by this Indenture, and covenants and agrees
to perform the same as expressed herein and agrees to receive and disburse all
moneys constituting part of the Trust Indenture Estate in accordance with the
terms hereof.
SECTION 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an Indenture Event of Default.
(a) The Indenture Trustee, prior to the occurrence of an Indenture Event of
Default and after the curing or waiving of all Indenture Events of Default
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Indenture
Event of Default has occurred (which has not been cured or waived) the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs. No provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Indenture Event of Default and
after the curing or waiving of all Indenture Events of Default which may
have occurred:
(x)the duties and obligations of the Indenture trustee shall be
determined solely by the express provisions of this Indenture, and the
Indenture Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read in
to this Indenture against the Indenture Trustee; and
(y)in the absence of bad faith on the part of the Indenture
Trustee, the Indenture Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions furnished to
the Indenture Trustee and conforming to the requirements of this
Indenture; but in the case of any such statements, certificate or
opinions which by any provision hereof are specifically required to
be furnished to the Indenture Trustee, the Indenture Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Indenture Trustee, unless it shall be proved that the
Indenture Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action taken or not taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in aggregate principal
amount of Outstanding Certificates relating to the time, method and place
of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred upon the Indenture
Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Indenture Trustee shall have determined
in good faith that the repayment of such funds or adequate indemnity against
such liability is not reasonably assured to it.
The Indenture Trustee will execute and the Owner Trustee will file or
cause to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the Trust
Indenture Estate as may be specified from time to time in written instructions
of the Holders of not less than 25% in aggregate principal amount of
Certificates (which instructions may, by their terms, be operative only at a
future date and which shall be accompanied by the execution form of such
continuation statement so to be filed); provided that, notwithstanding the
foregoing, the Indenture Trustee may execute and file or cause to be filed any
financing statement which it from time to time deems appropriate.
(b) If any Event of Default shall have occurred and be continuing
and, after the Enforcement Date, on request of the Holders of not less than
25% in aggregate principal amount of Outstanding Certificates and subject to
indemnification, to the extent provided in Sections 7.08 and 9.03 and Article
XI hereof, as it may require against the costs, expenses and liabilities to be
incurred, the Indenture Trustee shall exercise such remedies under Article 17
of the Lease as shall be specified in such request.
(c) The Indenture Trustee agrees that it will, in its individual
capacity and at its own cost and expense (but without any right of indemnity
in respect of any such cost or expense under Article XI hereof) promptly take
such action as may be necessary to duly discharge all Liens on any part of the
Trust Indenture Estate which result from claims against it in its individual
capacity not related to the administration of the Trust Indenture Estate or
any other transaction pursuant to this Indenture or any document included in
the Trust Indenture Estate.
(d) The Indenture Trustee will execute and deliver to the Lessee
for filing in accordance with Section 18 of the Lease any properly presented
document, instrument or financing or continuation statement specified in any
opinion delivered pursuant to Section 5.03(e) of the Participation Agreement.
The Indenture Trustee may rely on the act of presentation of any such
document, instrument, financing or continuation statement as evidencing the
fact that it is properly prepared and presented, provided that the Indenture
Trustee shall promptly correct any error in any such document, instrument,
financing or continuation statement of which a Responsible Officer of the
Indenture Trustee has actual knowledge.
(e) The Indenture Trustee will furnish to each Holder promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished to
the Indenture Trustee, to the extent that the same shall not have been
otherwise furnished to such Holder pursuant to this Indenture or to the extent
the Indenture Trustee does not reasonably believe that the same shall have
been furnished by the Lessee directly to such Holder.
SECTION 9.03. Certain Rights of the Indenture Trustee. Subject to
Section 9.02 hereof:
(a) the Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Owner Trustee
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed) upon which the Indenture Trustee may rely to prove
or establish a matter set forth therein;
(c) the Indenture Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Indenture Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Indenture Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Indenture Event of Default
hereunder and after the curing or waiving of all Indenture Events of
Default, the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or
document unless requested in writing to do so by the Majority in Interest
of Certificate Holders; provided that, if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Indenture Trustee, not reasonably assured to the Indenture Trustee
by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such examination shall be paid by the Owner Trustee or, if paid by the
Indenture Trustee or any predecessor trustee, shall be repaid by the Owner
Trustee upon demand; and
(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by it hereunder.
SECTION 9.04. Indenture Trustee Not Responsible for Recitals,
Disposition of Certificates or Application of Proceeds Thereof. The Indenture
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates, except the Indenture Trustee's
certificates of authentication. The Indenture Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Certificates. The Indenture Trustee shall not be accountable for the use or
application by the Owner Trustee of any of the Certificates or of the proceeds
thereof.
SECTION 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc. The Indenture Trustee or any agent of the Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Indenture
Trustee or such agent and may otherwise deal with the Owner Trustee and
receive, collect, hold and retain collections from the Owner Trustee with the
same rights it would have if it were not the Indenture Trustee or such agent.
SECTION 9.06. Moneys Held by Indenture Trustee. Subject to Sections
5.08 hereof and 14.04 hereof, all moneys received by the Indenture Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Neither
the Owner Trustee nor, subject to Section 5.08 hereof, the Indenture Trustee
nor any agent thereof shall be under any liability for interest on any moneys
received by it hereunder.
SECTION 9.07. Right of Indenture Trustee to Rely on Officers'
Certificate, etc. Subject to Sections 9.02 and 9.03 hereof, whenever in the
administration of the trusts of this Indenture the Indenture Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting any action hereunder, such matter (unless
other evidence in respect thereof be specifically prescribed herein) may, in
the absence of bad faith on the part of the Indenture Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to
the Indenture Trustee, and such certificate, in the absence of bad faith on
the part of the Indenture Trustee, shall be full warrant to the Indenture
Trustee for any action taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
SECTION 9.08. Replacement Airframes and Replacement Engines. At any
time and from time to time any Airframe or Engine which has been subject to an
Event of Loss and may, or is required to, be replaced under Section 10.03,
11.03 or 11.04 of the Lease by a replacement airframe or Replacement Engine,
as the case may be, shall be replaced in accordance with the provisions of
this Section 9.08 and the provisions of said Sections of the Lease, the Owner
Trustee shall, from time to time, direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing such Airframe and/or Engine as appropriate from the Lien
of this Indenture and the Indenture Trustee shall execute and deliver such
instrument as aforesaid without recourse or warranty, but only upon receipt by
or deposit with the Indenture Trustee of the following:
(1) A written request from the Owner Trustee requesting such release
and specifically describing the Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or other
applicable registration information) and manufacturer's serial number;
(ii)a description of the replacement airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii)that on the date of the Indenture Supplement relating to
the replacement airframe the Owner Trustee will be the legal owner of
and have good and marketable title to such replacement airframe free
and clear of all Liens except Liens permitted under Section 6.01 of
the Lease, that such replacement airframe will on such date be in at
least as good operating condition and repair as required by the terms
of the Lease, and that such replacement airframe has been or,
substantially concurrently with such replacement, will be duly
registered in the name of the Owner Trustee under the Aviation Act or
under the law then applicable to the registration of the Airframe and
that an airworthiness certificate has been duly issued under the
Aviation Act (or such other applicable law) with respect to such
replacement airframe and that such registration and certificate is,
or will be, in full force and effect, and that the Lessee will have
the full right and authority to use such replacement airframes;
(iv)that the insurance required by Article 13 of the Lease is
in full force and effect with respect to such replacement airframe
and all premiums then due thereon have been paid in full;
(v)that the replacement airframe is of the same or an improved
make or model as the Airframe requested to be released from this
Indenture;
(vi)that the value of the replacement airframe as of the date
of such certificate is not less than the value of the Airframe
requested to be released (assuming such Airframe was in the condition
and repair required to be maintained under the Lease);
(vii)that no Event of Default has occurred and is continuing or
would result from the making and granting of the request for release
and the addition of a replacement airframe;
(viii)that the release of the Airframe subject to the Event of
Loss will not impair the security of the Indenture in contravention
of any of the provisions of this Indenture;
(ix)that upon such replacement, the Lien of this Indenture will
apply to the replacement airframes and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x)that each of the conditions specified in Section 11.03 of
the Lease with respect to such replacement airframe has been
satisfied.
B. With respect to the replacement of any Engine:
(i) a description of the Engine subject to the Event of Loss
including the manufacturer's serial number;
(ii)a description of the Replacement Engine including the
manufacturer's name, the engine model and serial number;
(iii)that on the date of the Indenture Supplement relating to
the Replacement Engine the Owner Trustee will be the legal owner of
such Replacement Engine free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease, and that such Replacement
Engine will on such date be in at least as good operating condition
and repair as required by the terms of the Lease;
(iv)that the value of the Replacement Engine as of the date of
such certificate is not less than the value of the Engine to be
released (assuming such Engine was in the condition and repair
required to be maintained under the Lease);
(v)that the release of the Engine subject to the Event of Loss
will not impair the security of the Indenture in contravention of any
of the provisions of this Indenture;
(vi)that upon such replacement, the Lien of this Indenture will
apply to the Replacement Engine; and
(vii)that each of the conditions specified in Section 10.03,
11.03 or 11.04 of the Lease with respect to such Replacement Engine
has been satisfied.
(3) The appropriate instruments (i) transferring to the Owner
Trustee title to the replacement airframe or Replacement Engine to be received
as consideration for the Airframe or Engine to be released and (ii) assigning
to the Owner Trustee the benefit of all manufacturer's and vendor's
warranties, if any, generally available with respect to such replacement
airframe or Replacement Engine, and an Indenture Supplement subjecting such
replacement airframe or Replacement Engine to the Trust Agreement and to the
Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing satisfactory to the Indenture Trustee and the Owner Trustee
confirming the accuracy of the information set forth in clause (2)A.(vi) of
this Section 9.08.
(5) The opinion of Messrs. Davis Polk & Wardwell, special counsel
to the Lessee, or other counsel reasonably satisfactory to the Indenture
Trustee, stating that:
(i) the certificates, opinions and other instruments and/or
property which have been or are therewith delivered to and deposited
with the Indenture Trustee conform to the requirements of this
Indenture and the Lease and, upon the basis of such application, the
property so sold or disposed of may be properly released from the
Lien of this Indenture and all conditions precedent herein provided
for relating to such release have been complied with; and
(ii)the replacement airframe or Replacement Engine has been
validly subjected to the Lien of this Indenture and covered by the
Lease, the instruments subjecting such replacement airframe or
Replacement Engine to the Lease and to the Lien of this Indenture, as
the case may be, have been duly filed for recordation pursuant to the
Aviation Act or any other law then applicable to the registration of
the Aircraft, and no further action, filing or recording of any
document is necessary or advisable in order to establish and perfect
the title of the Owner Trustee to and the Lien of this Indenture on
such replacement airframe or Replacement Engine and the Indenture
Trustee should be entitled to the benefits of Section 1110 of the
Bankruptcy Code with respect to such replacement airframe or
Replacement Engine, provided, that such opinion need not be to the
effect specified in the foregoing clause to the extent that the
benefits of such Section 1110 would not have been, by reason of a
change in law or governmental interpretation thereof after the date
hereof, available to the Indenture Trustee with respect to the
Aircraft immediately prior to such substitution had such Event of
Loss not occurred.
SECTION 9.09. Indenture Supplement for Replacements. In the event of
the substitution of a replacement airframe or a Replacement Engine as
contemplated by Section 10.03 or Article 11 of the Lease, the Owner Trustee
and the Indenture Trustee agree for the benefit of the Holders and the Lessee,
subject to fulfillment of the conditions precedent and compliance by the
Lessee with its obligations set forth in Section 10.03 or Article 11 of the
Lease, to execute and deliver an Indenture Supplement as contemplated by
Section 9.08(3) hereof and, provided no Event of Default shall have occurred
and be continuing, execute and deliver to the Lessee an appropriate instrument
releasing the Airframe or Engine being replaced from the Lien of this
Indenture.
SECTION 9.10. Effect of Replacement. In the event of the
substitution of a replacement airframe or a Replacement Engine as contemplated
by Section 10.01 or Article 11 of the Lease and Section 9.08 hereof, all
provisions of this Indenture relating to the Airframe or Engine or Engines
being replaced shall be applicable to such replacement airframe or Replacement
Engine or Engines with the same force and effect as if such replacement
airframe or Replacement Engine or Engines were the same Airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine or
Engines being replaced.
SECTION 9.11. Compensation. The Owner Trustee covenants and agrees
to pay, and the Indenture Trustee shall be entitled to receive, reasonable
compensation and payment or reimbursement for its reasonable advances,
expenses and disbursements (including the reasonable compensation and expenses
and disbursements of its counsel, agents and other persons not regularly in
its employ) in connection with its services rendered hereunder or in any way
relating to or arising out of the administration of the Trust Indenture Estate
and shall have a priority claim on the Trust Indenture Estate for the payment
of such compensation, advances, expenses and disbursements to the extent that
such compensation, advances, expenses and disbursements shall not be paid by
the Lessee, and shall have the right to use or apply any moneys held by it
hereunder in the Trust Indenture Estate toward such payments; provided that,
so long as the Lease is in effect, the Indenture Trustee shall not make any
claim for payment under this Section 9.11 against the Owner Trustee without
first making demand on the Lessee for payment of such claim. The Indenture
Trustee agrees that it shall have no right against any Holder, the Trust
Company or the Owner Participant for any fee as compensation for its services
as trustee under this Indenture.
ARTICLE X
CONCERNING THE HOLDERS
SECTION 10.01. Evidence of Action Taken by Holders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing, and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee and, if expressly required herein, to the Owner Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
9.02 and 9.03 hereof) conclusive in favor of the Indenture Trustee and the
Owner Trustee, if made in the manner provided in this Article.
(b) For the purpose of determining the Holders entitled to vote or
consent to any direction, waiver or other action of such Holders under Section
7.10 or 7.11 hereof, the Lessee may set a record date for such vote or consent
by specifying such record date in an Officer's Certificate delivered to the
Indenture Trustee. Such record date shall be a date not more than 15 days
prior to the first solicitation of such vote or consent.
SECTION 10.02. Proof of Execution of Instruments and of Holding of
Certificates. Subject to Sections 9.02 and 9.03 hereof, the execution of any
instrument by a Holder or his agent or proxy may be proved in accordance with
such reasonable rules and regulations as may be prescribed by the Indenture
Trustee. The holding of Certificates shall be proved by the Register or by a
certificate of the Registrar.
SECTION 10.03. Holders to Be Treated as Owners. Prior to due
presentment for registration of transfer of any Certificate, the Owner
Trustee, the Indenture Trustee, any agent of the Owner Trustee or the
Indenture Trustee, the Paying Agent, if any, the Registrar and the Lessee may
deem and treat the Person in whose name such Certificate shall be registered
upon the Register as the absolute owner of such Certificate (whether or not
such Certificate shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of or
on account of the principal of and, subject to the provisions of this
Indenture, interest on such Certificate and for all other purposes; and
neither the Owner Trustee nor the Indenture Trustee (nor any agent of the
Owner Trustee or the Indenture Trustee) nor the Paying Agent, if any, nor the
Registrar nor the Lessee shall be affected by any notice to the contrary. All
such payments so made to any such person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Certificate.
SECTION 10.04. Certificates Owned by Owner Trustee and the Lessee
Deemed Not Outstanding. In determining whether the Holders of the requisite
aggregate principal amount of Certificates have concurred in any direction,
consent or waiver under this Indenture, Certificates which are owned by the
Owner Trustee, the Owner Participant, Trust Company, the Lessee or by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Owner Trustee, the Owner Participant, Trust
Company or the Lessee shall be disregarded and deemed not to be Outstanding
for the purpose of any such determination; provided that for the purpose of
determining whether the Indenture Trustee shall be protected in relying on any
such direction, consent or waiver, only if a Responsible Officer of the
Indenture Trustee has actual knowledge that certain Certificates are so owned
by any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Owner Trustee, the Owner
Participant, Trust Company shall such Certificates be so disregarded; and
provided further that if all Certificates which would be deemed Outstanding in
the absence of the foregoing provision are owned by the Owner Trustee, the
Owner Participant, Trust Company or the Lessee or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Owner Trustee, the Owner Participant, Trust Company or the
Lessee, then such Certificates shall be deemed Outstanding for the purpose of
any such determination. Certificates so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with
respect to such Certificates and that the pledgee is not the Owner Trustee,
the Owner Participant, Trust Company or the Lessee or any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Owner Trustee, the Owner Participant, Trust Company or the
Lessee. In case of a dispute as to such right, the advice of counsel shall be
full protection in respect of any decision made by the Indenture Trustee in
accordance with such advice, unless the Lessee, the Owner Trustee, the Trust
Company, or the Owner Participant are actually named in the Register. Upon
request of the Indenture Trustee, the Owner Trustee, the Owner Participant,
Trust Company and the Lessee shall furnish to the Indenture Trustee promptly
an Officers' Certificate listing and identifying all Certificates, if any,
known by the Owner Trustee, the Owner Participant, Trust Company or the Lessee
to be owned or held by or for the account of any of the above-described
persons; and, subject to Sections 9.02 and 9.03 hereof, the Indenture Trustee
shall be entitled to accept such Officers' Certificate as conclusive evidence
of the facts set forth therein and of the fact that all Certificates not
listed therein are outstanding for the purpose of any such determination.
SECTION 10.05. Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Indenture Trustee, as provided
in Section 10.01, of the taking of any action by the Holders of the percentage
in aggregate principal amount of the Certificates specified in this Indenture
in connection with such action, any Holder of a Certificate, the serial number
of which is shown by the evidence to be included among the serial numbers of
the Certificates the Holders of which have consented to such action, may, by
filing written notice at the Corporate Trust Office and upon proof of holding
as provided in this Article, revoke such action so far as concerns such
Certificate. Except as aforesaid, any such action taken by the Holder shall
be conclusive and binding upon such Holder and upon all future Holders and
owners of such Certificate and of any Certificates issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Certificate or otherwise. Any action taken by
the Holders of the percentage in aggregate principal amount of the
Certificates specified in this Indenture in connection with such action shall
be conclusively binding upon the Owner Trustee, the Indenture Trustee and the
Holders of all the Certificates.
SECTION 10.06. ERISA Plan Prohibition. No employee benefit plan
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or individual retirement account or employee benefit plan
subject to Section 4975 of the Internal Revenue Code of 1986, as amended, or
any trust established under any such plan or account (hereinafter collectively
referred to as an "ERISA Plan"), may acquire or hold any of the Certificates.
The purchase by any person of any Certificate constitutes a representation by
such person to the Lessee, the Owner Participant, the Owner Trustee and the
Indenture Trustee that such person is not an ERISA Plan and that such person
is not acquiring, and has not acquired, such Certificate with assets of an
ERISA Plan.
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
The Owner Trustee, not individually but solely in its capacity as
Owner Trustee under the Trust Agreement, hereby agrees, whether or not any of
the transactions contemplated hereby shall be consummated, to assume liability
for, and does hereby indemnify, protect, save and keep harmless the Indenture
Trustee, in its individual capacity, and its successors, assigns, agents and
servants solely from the Lessor's Estate, with respect to the claims of the
Indenture Trustee for payment or reimbursement under Section 9.11 hereof and
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on or
measured by any compensation received by the Indenture Trustee for its
services under this Indenture), claims, actions, suits, costs, expenses or
disbursements (including legal fees and expenses) of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Indenture Trustee (whether or not also agreed to be indemnified against by any
other person under any other document) in any way relating to or arising out
of this Indenture, or any other Indenture Documents or the enforcement of any
of the terms of any thereof, or in any way relating to or arising out of the
manufacture, purchase, acceptance, nonacceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft or any Engine (including, without limitation,
latent and other defects, whether or not discoverable, and any claim for
patent, trademark or copyright infringement), or in any way relating to or
arising out of the administration of the Trust Indenture Estate or the action
or inaction of the Indenture Trustee hereunder, except only (a) in the case of
willful misconduct or gross negligence of the Indenture Trustee in the
performance of its duties hereunder, (b) as may result from the inaccuracy of
any representation or warranty of the Indenture Trustee in the Participation
Agreement, (c) as otherwise provided in Section 9.02(c) hereof or (d) as
otherwise excluded by the terms of Article 7 or Article 8 of the Participation
Agreement from the Lessee's general indemnity to the Indenture Trustee under
said Section; provided that so long as the Lease is in effect, the Indenture
Trustee shall not make any claim under this Article XI for any claim or expense
indemnified by the Lessee under the Participation Agreement without first
making demand on the Lessee for payment of such claim or expense. The
Indenture Trustee shall be entitled to indemnification, from the Trust
Indenture Estate, for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Article XI to the extent not reimbursed by the Lessee or others, but
without releasing any of them from their respective agreements of
reimbursement; and to secure the same the Indenture Trustee shall have a prior
Lien on the Trust Indenture Estate. The indemnities contained in this Article
XI shall survive the termination of this Indenture and the resignation or
removal of the Indenture Trustee. Upon payment in full by the Owner Trustee
of any indemnity pursuant to this Article XI, the Owner Trustee shall, so long
as no Indenture Event of Default shall have occurred and be continuing, be
subrogated to the rights of the Indenture Trustee, if any, in respect of the
matter as to which the indemnity was paid.
ARTICLE XII
SUCCESSOR TRUSTEES
SECTION 12.01. Notice of Successor Owner Trustee. In the case of any
appointment of a successor to the Owner Trustee pursuant to the Trust
Agreement or any merger, conversion, consolidation or sale of substantially
all of the corporate trust business of the Owner Trustee pursuant to the Trust
Agreement, the successor Owner Trustee shall give prompt written notice
thereof to the Indenture Trustee.
SECTION 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor. (a) The Indenture Trustee or any successor thereto
may resign at any time without cause by giving at least 30 days' prior written
notice to the Owner Trustee, the Owner Participant, the Lessee and each
Holder, such resignation to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In addition, the Majority in
Interest of the Certificate Holders or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders may at any
time remove the Indenture Trustee without cause by an instrument in writing
delivered to the Lessee, the Owner Trustee, the Owner Participant, and the
Indenture Trustee, and the Indenture Trustee shall promptly notify each Holder
thereof in writing, such removal to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In the case of the resignation
or removal of the Indenture Trustee, the Majority in Interest of the
Certificate Holders, or the Owner Trustee, with the consent of the Lessee and
the Majority in Interest of the Certificate Holders, may appoint a successor
Indenture Trustee by an instrument signed by such Holders. If a successor
Indenture Trustee shall not have been appointed within 90 days after such
notice of resignation or removal, the Indenture Trustee, the Owner Trustee, the
Lessee, the Owner Participant, or any Holder may apply to any court of
competent jurisdiction to appoint a successor Indenture Trustee to act until
such time, if any, as a successor shall have been appointed as provided above.
The successor Indenture Trustee so appointed by such court shall immediately
and without further act be superseded by any successor Indenture Trustee
appointed as provided above.
(b) In case at any time any of the following shall occur:
(i) the Indenture Trustee shall cease to be eligible in accordance
with the provisions of Section 12.03 hereof and shall fail to resign after
written request therefor by the Owner Trustee or by any such Holder; or
(ii) the Indenture Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of
the Indenture Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then the Owner Trustee may remove the Indenture Trustee and, with the consent
of the Lessee, appoint a successor trustee by written instrument, in
duplicate, executed by a Responsible Officer of the Owner Trustee, one copy of
which instrument shall be delivered to the Indenture Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of Section
7.13 hereof, any Holder who has been a bona fide Holder for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Indenture Trustee
and the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Indenture
Trustee and appoint a successor trustee, which removal and appointment shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 12.04 hereof. The successor Indenture Trustee so
appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as provided above
within one year from the date of appointment by such court.
SECTION 12.03. Persons Eligible for Appointment as Indenture
Trustee. There shall at all times be an Indenture Trustee hereunder which
shall be a corporation organized and doing business under the laws of the
United States of America or of any State or the District of Columbia having a
combined capital and surplus of at least $100,000,000, or a direct or indirect
subsidiary of such a corporation, or a member of a bank holding company group,
having a combined capital and surplus of at least $100,000,000 and such
subsidiary or member itself having a capital and surplus, in the case of the
original Indenture Trustee or an affiliate of the original Indenture Trustee,
of at least $10,000,000 and in any other case of at least $75,000,000, if
there is such an institution willing, able and legally qualified to perform
the duties of the Indenture Trustee hereunder upon reasonable or customary
terms. Such corporate trustee shall be a citizen of the United States as
defined in Section 101(16) of the Aviation Act, and shall be authorized under
such laws to exercise corporate trust powers and shall be subject to
supervision of examination by Federal, State or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Indenture
Trustee shall resign immediately in the manner and with the effect specified
in Section 12.02 hereof.
SECTION 12.04. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 12.02 hereof shall execute
and deliver to the Owner Trustee, the Lessee, and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Owner Trustee or of
the successor trustee, upon payment of its charges then unpaid, the trustee
ceasing to act shall, subject to Section 14.04 hereof, pay over to the
successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any such
successor trustee, the Owner Trustee shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such
successor trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property or funds held or
collected by such trustee to secure any amounts then due it pursuant to the
provisions of Article XI hereof.
No successor trustee shall accept appointment as provided in this
Section 12.04 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 12.03 hereof.
Upon acceptance of appointment by a successor trustee as provided in
this Section 12.04, the successor trustee shall mail notice thereof by
first-class mail to the Holders at their last addresses as they shall appear
in the Register, and shall mail a copy of such notice to the Lessee and the
Owner Trustee. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 12.02
hereof.
SECTION 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation into which the Indenture
Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to
the corporate trust business of the Indenture Trustee, shall be the successor
to the Indenture Trustee hereunder, provided that, anything herein to the
contrary notwithstanding, such corporation shall be eligible under the
provisions of Section 12.03 hereof, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Indenture Trustee shall
succeed to the trusts created by this Indenture any of the Certificates shall
have been authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor
Indenture Trustee and deliver such Certificates so authenticated; and, in case
at that time any of the Certificates shall not have been authenticated, any
successor to the Indenture Trustee may authenticate such Certificates either
in the name of any predecessor hereunder or in the name of the successor
Indenture Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Certificates or in this Indenture provided
that the certificate of the Indenture Trustee shall have; provided, that the
right to adopt the certificate of authentication of any predecessor Indenture
Trustee or to authenticate Certificates in the name of any predecessor
Indenture Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 12.06. Appointment of Separate Trustees. (a) At any time or
times, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Indenture Estate may at the time be located or
in which any action of the Indenture Trustee may be required to be performed
or taken, the Indenture Trustee, by an instrument in writing signed by it, may
appoint one or more individuals or corporations to act as a separate trustee
or separate trustees or co-trustee, acting jointly with the Indenture Trustee,
of all or any part of the Trust Indenture Estate, to the full extent that
local law makes it necessary for such separate trustee or separate trustees or
co-trustee acting jointly with the Indenture Trustee to act.
(b) The Indenture Trustee and, at the request of the Indenture
Trustee, the Owner Trustee, shall execute, acknowledge and deliver all such
instruments as may be required by the legal requirements of any jurisdiction
or by any such separate trustee or separate trustees or co-trustee for the
purpose of more fully confirming such title, rights or duties to such separate
trustee or separate trustees or co-trustee. Upon the acceptance in writing of
such appointment by any such separate trustee or separate trustees or
co-trustee, it, he or they shall be vested with such title to the Trust
Indenture Estate or any part thereof, and with such rights, powers, duties and
obligations, as shall be specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee, or the Indenture Trustee and
such separate trustee or separate trustees or co-trustee jointly with the
Indenture Trustee subject to all the terms of this Indenture, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such separate
trustee or separate trustees or co-trustee, as the case may be. Any separate
trustee or separate trustees or co-trustee may, at any time by an instrument
in writing, constitute the Indenture Trustee its or his attorney-in-fact and
agent with full power and authority to do all acts and things and to exercise
all discretion on its or his behalf and in its or his name. In case any such
separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, the title to the Trust Indenture Estate and all assets,
property, rights, powers, duties and obligations and duties of such separate
trustee or co-trustee shall, so far as permitted by law, vest in and be
exercised by the Indenture Trustee, without the appointment of a successor to
such separate trustee or co-trustee unless and until a successor is appointed.
(c) All provisions of this Indenture which are for the benefit of
the Indenture Trustee (including without limitation Article XI hereof) shall
extend to and apply to each separate trustee or co-trustee appointed pursuant
to the foregoing provisions of this Section 12.06.
(d) Every additional trustee and separate trustee hereunder shall,
to the extent permitted by law, be appointed and act and the Indenture Trustee
shall act, subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Indenture Trustee in respect of the receipt, custody, investment and
payment of moneys shall be exercised solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed and
exercised or performed by the Indenture Trustee and such additional trustee
or trustees and separate trustee or trustees jointly except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
Indenture Estate in any such jurisdiction) shall be exercised and performed
by such additional trustee or trustees or separate trustee or trustees;
(iii) no power hereby given to, or exercisable by, any such additional
trustee or separate trustee shall be exercised hereunder by such additional
trustee or separate trustee except jointly with, or with the consent of,
the Indenture Trustee; and
(iv) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder.
If at any time the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to any such law, the Indenture Trustee shall
execute and deliver an indenture supplemental hereto and all other instruments
and agreements necessary or proper to remove any additional trustee or
separate trustee.
(e) Any request, approval or consent in writing by the Indenture
Trustee to any additional trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate trustee, as the case may be, to
take such action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 12.06, the
powers of any additional trustee or separate trustee shall not exceed those of
the Indenture Trustee hereunder.
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 13.01. Supplemental Indentures Without Consent of Holders.
The Owner Trustee (when authorized by the Owner Participant) and the Indenture
Trustee, without consent of the Holders, may enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge any property or
assets to the Indenture Trustee as security for the Certificates;
(b) to evidence the succession of another corporation to the Owner
Trustee or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Owner
Trustee herein and in the Certificates;
(c) to add to the covenants of the Owner Trustee such further
covenants, restrictions, conditions or provisions as it and the Indenture
Trustee shall consider to be for the protection of the Holders, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Indenture
Event of Default permitting the enforcement of all or any of the several
remedies provided herein; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture
may provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Indenture Event of
Default or may limit the remedies available to the Indenture Trustee upon
such an Indenture Event of Default or may limit the right of not less than
the Majority in Interest of Certificate Holders to waive such an Indenture
Event of Default;
(d) to surrender any rights or power conferred herein upon the Owner
Trustee or the Owner Participant;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Owner Trustee may deem necessary or desirable and which
shall not adversely affect the interests of the Holders;
(f) to correct or amplify the description of any property at any
time subject to the Lien of this Indenture or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the Lien of this Indenture or to subject replacement airframe or
Replacement Engines to the Lien of this Indenture in accordance with the
provisions hereof or with the Lease or to release from the Lien of this
Indenture property that has been substituted on or removed from the
Aircraft as contemplated in Section 3.07 hereof; provided that supplements
to this Indenture entered into for the purpose of subjecting replacement
airframe or Replacement Engines to the Lien of this Indenture need only be
executed by the Owner Trustee and the Indenture Trustee;
(g) to provide for the issuance under this Indenture of Certificates
in coupon form (including Certificates registrable as to principal only)
and to provide for exchangeability of such Certificates with Certificates
issued hereunder in fully registered form, and to make all appropriate
changes for such purpose;
(h) to effect the re-registration of the Aircraft pursuant to
Section 5.03(b) of the Participation Agreement; and
(i) to add, eliminate or change any provision hereunder so long as
such action shall not adversely affect the interests of the Holders.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be contained therein and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Indenture Trustee shall not be obligated to enter into any such supplemental
indenture which adversely affects the Indenture Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any supplemental indenture may be executed without the consent of the
Holders of Outstanding Certificates, notwithstanding any of the provisions of
Section 13.02.
SECTION 13.02. Supplemental Indentures With Consent of Holders. With
the consent (evidenced as provided in Article X) of the Majority in Interest of
Certificate Holders, the Owner Trustee (when authorized by the Owner
Participant) and the Indenture Trustee may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the Holders; provided, however, that, without the
consent of each Holder, no such amendment of or supplement to this Indenture
or any indenture supplemental hereto, or modification of the terms of, or
consent under, any thereof, shall (a) modify any of the provisions of Section
7.11 or this Section 13.02, (b) reduce the amount or extend the time of
payment of any amount owing or payable under any Certificate or reduce the
interest payable on any Certificate (except that only the consent of the
Holder shall be required for any decrease in any amounts of or the rate of
interest payable on such Certificate or any extension for the time of payment
of any amount payable under such Certificate), or alter or modify the
provisions of Article V hereof with respect to the order of priorities in
which distributions thereunder shall be made as between the Holder and the
Owner Trustee or the Owner Participant or with respect to the amount or time
of payment of any such distribution, or alter or modify the circumstances under
which a Make-Whole Premium shall be payable, or alter the currency in which any
amount payable under any Certificate is to be paid, or impair the right of any
Holder to commence legal proceedings to enforce a right to receive payment
hereunder, (c) reduce, modify or amend any indemnities in favor of any Holder
or in favor of or to be paid by the Owner Participant (except as consented to
by each Person adversely affected thereby), or (d) create or permit the
creation of any Lien on the Trust Indenture Estate or any part thereof prior
to or pari passu with the Lien of this Indenture, except as expressly
permitted herein, or deprive any Holder of the benefit of the Lien of this
Indenture on the Trust Indenture Estate, except as provided in Section 7.02
hereof or in connection with the exercise of remedies under Article VII. This
Section 13.02 shall not apply to any indenture or indentures supplemental
hereto permitted by, and complying with the terms of, Section 13.06 hereof.
Upon the request of the Owner Trustee (at the direction of the Owner
Participant) and upon the filing with the Indenture Trustee of evidence of the
consent of Holders and other documents, if any, required by Section 10.01, the
Indenture Trustee shall join with the Owner Trustee and the Lessee in the
execution of such supplemental indenture unless such supplemental indenture
affects the Indenture Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Indenture Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance
thereof.
Promptly after the execution by the Owner Trustee, the Indenture
Trustee and the Lessee of any supplemental indenture pursuant to the
provisions of this Section, the Indenture Trustee shall mail a notice thereof
by first-class mail to the Holders at their addresses as they shall appear on
the registry books of the Registrar, setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 13.03. Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Indenture Trustee, the Owner
Trustee, the Lessee and the Holders shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
SECTION 13.04. Documents to Be Given to Indenture Trustee. The
Indenture Trustee, subject to the provisions of Sections 9.02 and 9.03, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental indenture complies with the applicable
provisions of this Indenture.
SECTION 13.05. Notation on Certificates in Respect of Supplemental
Indentures. Certificates authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may bear
a notation in form approved by the Indenture Trustee as to any matter provided
for by such supplemental indenture. If the Owner Trustee or the Indenture
Trustee shall so determine, new Certificates so modified as to conform, in the
opinion of the Owner Trustee and the Indenture Trustee, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Owner Trustee, authenticated by the Indenture Trustee and delivered in
exchange for the Outstanding Certificates.
SECTION 13.06. No Request Necessary for Lease Supplement or Indenture
Supplement. Notwithstanding anything contained in Section 13.02 hereof, no
written request or consent of the Indenture Trustee, any Holder or the Owner
Participant pursuant to Section 13.02 hereof shall be required to enable the
Owner Trustee to enter into any supplement to the Lease with the Lessee
pursuant to the terms of the Lease to subject a replacement airframe or
Replacement Engine thereto or to execute and deliver an Indenture Supplement
pursuant to the terms hereof.
SECTION 13.07. Amendments, Waivers, etc. of Other Indenture
Documents. (a) Without the consent of the Majority in Interest of
Certificate Holders, the respective parties to the Participation Agreement,
the Lease and the Trust Agreement may not modify, amend or supplement any of
said agreements, or give any consent, waiver, authorization or approval
thereunder, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder; provided, however,
that the actions specified in subsection (b) of this Section 13.07 may be
taken without the consent of any Holder.
(b) The Participation Agreement, the Lease and the Trust Agreement
may, at any time and from time to time, be amended or supplemented without the
consent of any Holder:
(i) to effect any modification, amendment, addition or deletion
expressly provided for in the Lease, the Participation Agreement or the
Trust Agreement (including, without limitation, Article 3 of the Lease but
excluding any provisions describing the manner in which such Operative
Document may be amended or modified); or
(ii) to effect any modification or amendment of, addition to or
deletion from the Lease, the Participation Agreement or the Trust Agreement
if, as reflected in an Opinion of Counsel pursuant to Section 13.07(d)
hereof to the party requesting such action addressed to the other parties
to the applicable agreement, such modification, amendment, addition or
deletion shall not adversely affect the interests of Holders.
The Indenture Trustee may, without the consent of any Holder, give any
consent, waiver, authorization or approval under any Indenture Document,
whether or not provided for therein, if, as reflected in an Opinion of Counsel
referred to in Section 13.07(d), such consent, waiver, authorization or
approval does not adversely affect the interests of Holders.
The consent of the Indenture Trustee shall not be required for any
amendment or supplement to the Lease necessary to adjust the percentages for
Basic Rent, Stipulated Loss Value or Termination Value pursuant to Section
3.04 of the Lease.
(c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease, whether effected pursuant
to subsection (a) or pursuant to subsection (b) of this Section 13.07 and
anything in such subsections or elsewhere in this Indenture to the contrary
notwithstanding, shall, without the consent of the Holder of each Outstanding
Certificate directly or indirectly affected thereby, reduce the amount of, or
change the timing of payment of, any payment of Basic Rent, Supplemental Rent,
Stipulated Loss Value or Termination Value below the amount required to pay as
and when due (i) all principal, Make-Whole Premium, if any, and interest
payable on the Certificates and (ii) any other amounts required to be paid
pursuant thereto or hereto, at any time or from time to time.
(d) Upon receipt of an Officers' Certificate and an Opinion of
Counsel (which Opinion, in the case of the Lessee, shall be by counsel other
than an employee of the Lessee unless the related modification, amendment,
addition or deletion effects a change that relates solely to the period after
there are no longer any Certificates Outstanding) from the Lessee or the Owner
Trustee, the Indenture Trustee shall consent and evidence its consent to any
action permitted by this Section 13.07 and the Indenture Trustee shall be
fully protected in relying on such Officers' Certificate and Opinion of
Counsel.
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 14.01. Satisfaction and Discharge of Indenture; Termination
of Indenture. If at any time after (a) the Owner Trustee shall have paid or
caused to be paid the principal of and interest on all the Certificates
outstanding hereunder, as and when the same shall have become due and payable,
or (b) the Owner Trustee shall have delivered to the Indenture Trustee for
cancellation all Certificates theretofore authenticated (other than any
Certificates which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.07 hereof) or (c) (i) all
such Certificates not theretofore delivered to the Indenture Trustee for
cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for prepayment
within one year under arrangements satisfactory to the Indenture Trustee for
the giving of notice of prepayment by the Indenture Trustee in the name and at
the expense of the Owner Trustee, and (ii) the Owner Trustee shall have
irrevocably deposited or caused to be deposited with the Indenture Trustee as
trust funds the entire amount in cash (other than moneys repaid by the
Indenture Trustee or any paying agent to the Owner Trustee in accordance with
Section 14.04 hereof) or Government obligations maturing as to principal and
interest in such amounts and at such times as will insure the availability of
cash sufficient to pay at maturity all such Certificates not theretofore
delivered to the Indenture Trustee for cancellation, including principal and
interest due or to become due to such date of maturity as the case may be, and
if, in any such case, the Owner Trustee shall also pay or cause to be paid all
other sums then payable hereunder by the Owner Trustee, then this Indenture
shall cease to be of further effect (except as to (A) rights of registration
of transfer and exchange, and the Owner Trustee's right of optional prepayment
pursuant to Section 6.02(a)(ii), (B) substitution of mutilated, defaced,
destroyed, lost or stolen Certificates, (C) rights of Holders to receive
payments of principal thereof and interest thereon, upon the original stated
due dates therefor (but not upon acceleration), (D) the rights, obligations,
indemnities and immunities of the Indenture Trustee hereunder and (E) the
rights of the Holders as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them), and the
Indenture Trustee, on demand of the Owner Trustee accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the Owner
Trustee, shall execute proper instruments acknowledging such satisfaction of
and discharging this Indenture. The Owner Trustee agrees to reimburse and
indemnify the Indenture Trustee for any costs or expenses thereafter
reasonably and properly incurred and to compensate the Indenture Trustee for
any services thereafter reasonably and properly rendered by the Indenture
Trustee in connection with this Indenture or the Certificates.
Upon (or at any time after) payment in full to the Indenture Trustee,
as trust funds, of the principal of and interest on and Make-Whole Premium, if
any, and all other amounts due hereunder and under all Certificates and
provided that there shall then be no other amounts due to the Holders and the
Indenture Trustee hereunder or under the Participation Agreement or otherwise
secured hereby, the Owner Trustee shall direct the Indenture Trustee to
execute and deliver to or as directed in writing by the Owner Trustee an
appropriate instrument releasing the Aircraft from the Lien of this Indenture
and releasing the Indenture Documents from the assignment thereof hereunder,
and the Indenture Trustee shall execute and deliver such instrument as
aforesaid and, at the Owner Trustee's expense, will execute and deliver such
other instruments or documents as may be reasonably requested by the Owner
Trustee to give effect to such release; provided, however, that this Indenture
and the trusts created hereby shall terminate earlier and this Indenture shall
be of no further force or effect upon any sale or other final disposition by
the Indenture Trustee of all property forming a part of the Trust Indenture
Estate and the final distribution by the Indenture Trustee of all moneys or
other property or proceeds constituting part of the Trust Indenture Estate in
accordance with the terms hereof. Except as aforesaid otherwise provided,
this Indenture and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof.
SECTION 14.02. Application by Indenture Trustee of Funds Deposited
for Payment of Certificates. Subject to Section 14.04 hereof, all moneys
deposited with the Indenture Trustee pursuant to Section 14.01 hereof shall be
held in trust and applied by it to the prompt payment, either directly or
through any Paying Agent, to the Holders of the particular Certificates for
the payment or prepayment of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal,
interest and Make-Whole Premium, if any, but such money need not be segregated
from other funds except to the extent required by law.
SECTION 14.03. Repayment of Moneys Held by Paying Agent. Upon the
satisfaction and discharge of this Indenture all moneys then held by any
Paying Agent under the provisions of this Indenture shall, upon demand of the
Owner Trustee, be repaid to it or paid to the Indenture Trustee and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
SECTION 14.04. Transfer of Moneys Held by Indenture Trustee and
Paying Agent Unclaimed for Two Years and Eleven Months. Any moneys deposited
with or paid to the Indenture Trustee or any Paying Agent for the payment of
the principal of or interest or Make-Whole Premium on any Certificate and not
applied but remaining unclaimed for two years and eleven months after the date
upon which such principal, interest or Make-Whole Premium shall have become
due and payable, shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be paid to the
Owner Trustee by the Indenture Trustee or such Paying Agent and the Holder of
such Certificate, as a general unsecured creditor, shall, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Owner Trustee for any
payment which such Holder may be entitled to collect, and all liability of the
Indenture Trustee, or any Paying Agent with respect to such moneys shall
thereupon cease.
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Capacity in Which Acting. Each of Trust Company (or
its permitted successors or assigns) and the Indenture Trustee acts hereunder
not in its individual capacity but solely as trustee except as expressly
provided herein and in the other Operative Documents, and, in the case of
Trust Company (or its permitted successors or assigns), in the Trust
Agreement.
SECTION 15.02. No Legal Title to Trust Indenture Estate in Holders.
No Holder shall have legal title to any part of the Trust Indenture Estate.
No transfer, by operation of law or otherwise, of any Certificate or other
right, title and interest of any Holder in and to the Trust Indenture Estate
or hereunder shall operate to terminate this Indenture or entitle such Holder
or any successor or transferee of such Holder to an accounting or to the
transfer to it of legal title to any part of the Trust Indenture Estate.
SECTION 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding. Any sale or other conveyance of all or any part of the Trust
Indenture Estate by the Indenture Trustee made pursuant to the terms of this
Indenture or of the Lease shall bind the Lessee, the Owner Trustee, the
Holders and the Owner Participant and shall be effective to transfer or convey
all right, title and interest of the Indenture Trustee, the Owner Trustee, the
Owner Participant and such Holders therein and thereto. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance or as to the application
of any sale or other proceeds with respect thereto by the Indenture Trustee.
SECTION 15.04. Indenture for Benefit of Owner Trustee, Indenture
Trustee, Owner Participant and Holders. Nothing in this Indenture, whether
express or implied, shall be construed to give to any person other than the
Trust Company, the Owner Trustee, the Lessee, the Indenture Trustee, as
trustee and in its individual capacity, the Owner Participant, and the Holders
any legal or equitable right, remedy or claim under or in respect of this
Indenture.
SECTION 15.05. No Action Contrary to the Lessee's Rights Under the
Lease. Notwithstanding any of the provisions of this Indenture or the Trust
Agreement to the contrary, so long as no Event of Default shall have occurred
and be continuing, neither the Indenture Trustee nor the Owner Trustee will
take any affirmative acts that interfere with the peaceful and quiet
possession and enjoyment of the Aircraft by the Lessee.
SECTION 15.06. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Indenture to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telex or telecopy, and (a) if
to the Owner Trustee, addressed to it at its office at
______________________________, Attention: Corporate Trust Administration
(telecopier _________) (with a copy to the Owner Participant at the address
provided for notice pursuant to Section 13.01 of the Participation Agreement),
(b) if personally delivered to the Indenture Trustee, at
______________________________, (telecopier _________), Attention: Corporate
Trust Department or (c) if to the Owner Participant or the Lessee, addressed
to such party at such address as such party shall have furnished by notice to
the Owner Trustee and the Indenture Trustee, or, until an address is so
furnished, addressed to the address of such party if any, set forth on the
signature pages of the Participation Agreement. Any party hereto may change
the address to which notices to such party will be sent by giving notice of
such change to the other parties to this Indenture.
Where this Indenture provides for notice to Holders, such notice
shall be sufficiently given (unless otherwise expressly provided herein) if in
writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Register. In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of notice by Holders shall be filed with the Indenture Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Owner Trustee
and Holders when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient
giving of such notice.
SECTION 15.07. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Lessee or the Owner Trustee to the Indenture Trustee to take any action under
any of the provisions of this Indenture, the Lessee or the Owner Trustee, as
the case may be, shall furnish to the Indenture Trustee upon request (a) an
Officers' Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and
that the proposed action is in conformity with the requirements of this
Indenture, and (b) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or demand as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate
or opinion need be furnished.
Any certificate, statement or opinion of an officer of the Trust
Company may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous. Any certificate, statement or opinion of counsel
may be based, insofar as it relates to factual matters information with respect
to which is in the possession of the Lessee or the Trust Company, upon the
certificate, statement or opinion of or representations by an officer or
officers of the Lessee or the Trust Company, as the case may be, unless such
counsel knows that the certificate, statement or opinion or representations
with respect to the matters upon which his certificate, statement or opinion
may be based as aforesaid are erroneous, or in the exercise of reasonable care
should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Lessee or
the Trust Company or of counsel thereto may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of or representations by an
accountant or firm of accountants employed by the Lessee or the Owner Trustee,
as the case may be, unless such officer or counsel, as the case may be, knows
that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Indenture Trustee shall contain a statement that
such firm is independent.
SECTION 15.08. Severability. Any provision of this Indenture which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 15.09. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Indenture or the Certificates may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party or other person against whom enforcement of the change,
waiver, discharge or termination is sought; and any waiver of the terms hereof
or of any Certificate shall be effective only in the specific instance and for
the specific purpose given.
SECTION 15.10. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and permitted assigns of each, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of
such Holder. This Indenture and the Trust Indenture Estate shall not be
affected by any amendment or supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust Agreement, except that each
reference in this Indenture to the Trust Agreement shall mean the Trust
Agreement as amended and supplemented from time to time to the extent
permitted hereby and thereby.
SECTION 15.11. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for the convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 15.12. Normal Commercial Relations. Anything contained in
this Indenture to the contrary notwithstanding, the Owner Participant, the
Indenture Trustee and any Holder, or any bank or other affiliate of any such
party, may conduct any banking or other financial transactions, and have
banking or other commercial relationships, with the Lessee fully to the same
extent as if this Indenture were not in effect, including without limitation
the making of loans or other extensions of credit to the Lessee for any
purpose whatsoever, whether related to any of the transactions contemplated
hereby or otherwise.
SECTION 15.13. Governing Law; Counterpart Form. THIS INDENTURE AND
EACH CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. This Indenture may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed this __ day of ________ 199_ by their respective officers
thereunto duly authorized and acknowledge that this Indenture has been made
and delivered in the City of New York, and this Indenture shall be effective
only upon such execution and delivery.
______________________________,
not in its individual capacity, except
as otherwise expressly provided herein
but solely as Owner Trustee,
By_________________________________
Name:
Title:
______________________________,
not in its individual capacity, except
as otherwise expressly provided herein
but solely as Indenture Trustee,
By_________________________________
Name:
Title:
Exhibit A
to
Trust Indenture and
Security Agreement
INDENTURE SUPPLEMENT
INDENTURE SUPPLEMENT dated ______ __, ____, of
________________________, not in its individual capacity but solely as owner
trustee (herein called the "Owner Trustee") under the Trust Agreement dated as
of ______, 199_ (as at any time amended, herein called the "Trust Agreement")
between ________________________, and the Owner Participant named therein.
W I T N E S E T H :
WHEREAS, the Trust Agreement provides for the execution and delivery
of this Indenture Supplement which shall particularly describe the Aircraft
and any replacement airframe or Replacement Engine included in the property
covered by the Trust Agreement.
WHEREAS, the Trust Indenture and Security Agreement dated as of
______, 199_ (herein called the "Indenture") between the Owner Trustee and
__________________, as Indenture Trustee (herein called the "Indenture
Trustee"), provides for the execution and delivery of a supplement thereto
substantially in the form hereof which shall particularly describe the
Aircraft (such term and other defined terms in the Indenture being used herein
with the same meanings) and any replacement airframe or Replacement Engine
included in the Trust Indenture Estate, and shall specifically mortgage such
Aircraft, replacement airframe or Replacement Engine, as the case may be, to
the Indenture Trustee.
WHEREAS,(1) the Indenture relates to the Airframe and Engines
described below and a counterpart of the Indenture is attached hereto and made
a part hereof and this Indenture Supplement, together with such counterpart of
the Indenture, is being filed for recordation on the date hereof with the
Federal Aviation Administration as one document.
- ------------
(1) This recital is to be included only in the first Indenture Supplement.
WHEREAS,(2) the Indenture and an Indenture Supplement dated
__________, ___________ (the Indenture being attached to and made a part of
such Indenture Supplement and filed therewith) have been duly recorded
pursuant to the Federal Aviation Act of 1958, as amended, on __________, ____,
as one document and have been assigned Conveyance No. _________;
- ------------
(2) This recital is not to be included in the first Indenture Supplement.
NOW, THEREFORE, this Supplement witnesseth, that, to secure the prompt
payment of the principal of and Make-Whole Premium, if any, and interest on,
and all other amounts due with respect to, all Outstanding Certificates under
the Indenture and all other amounts due hereunder and the performance and
observance by the Owner Trustee of all the agreements, covenants and
provisions for the benefit of the Holders contained in the Indenture, in the
Lease, in the Participation Agreement and the Certificates, and the prompt
payment of any and all amounts from time to time owing under the Participation
Agreement by the Owner Trustee, the Owner Participant and the Lessee to the
Holders and for the uses and purposes and subject to the terms and provisions
of the Indenture and the Certificates, and in consideration of the premises
and of the covenants contained in the Indenture, and of the purchase of the
Certificates by the Holders, and of the sum of $1 paid to the Owner Trustee by
the Indenture Trustee at or before the delivery of the Indenture, the receipt
of which is hereby acknowledged, the Owner Trustee has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged, granted a security
interest in, and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge, grant a security interest in, and confirm,
unto the Indenture Trustee, its successors and assigns, in trust for the equal
and ratable security and benefit of the Holders, in the trust created by the
Indenture, a first priority security interest in and mortgage lien on all
estate, right, title and interest of the Owner Trustee in, to and under the
following described property:
Airframe
One (1) Airframe identified as follows:
FAA Manufacturer's
Registration Serial
Manufacturer Model Number Number
together with all appliances, equipment, instruments and accessories
(including, without limitation, radio and radar) from time to time belonging
thereto, owned by the Owner Trustee and installed in or appurtenant to said
aircraft.
AIRCRAFT ENGINES
[_______] aircraft engines, each such engine having 750 or more rated takeoff
horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Serial
Manufacturer Model Number
together with all equipment and accessories belonging thereto, by whomsoever
manufactured, owned by the Owner Trustee and installed in or appurtenant to
said aircraft engines.
Together with all substitutions, replacements and renewals of the
property described above, and all property which shall hereafter become
physically attached to or incorporated in the property described above,
whether the same are now owned by the Owner Trustee or shall hereafter be
acquired by it.
As further security for the obligations referred to above and secured
by the Indenture and hereby, the Owner Trustee has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors and assigns, for the
security and benefit of the Holders, in the trust created by the Indenture,
all of the estate, right, title and interest of the Owner Trustee in, to and
under the Lease Supplement (other than Excepted Payments, if any) covering the
property described above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, for the benefit and security of
the Holders for the uses and purposes and subject to the terms and provisions
set forth in the Indenture.
This Supplement shall be construed as supplemental to the Indenture
and shall form a part thereof, and the Indenture is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplement is being delivered in the State of New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft/Engines referred to in this Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee and covered by all the terms and conditions of
the Trust Agreement, subject to the Lien of the Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this Supplement to
be duly executed as of the date first written above by one of its officers
thereunto duly authorized.
______________________________,
not in its individual capacity
but solely as Owner Trustee
By_________________________________
Name:
Title:
Exhibit B
to
Trust Indenture and
Security Agreement
[Form of Face of Certificate]
No. ________ $________
EQUIPMENT TRUST CERTIFICATE
(FEDERAL EXPRESS 199 - [SERIES NAME])
_____________________________,
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
DATED AS OF ______, 199_
Interest Rate Maturity [CUSIP]
________________________, not in its individual capacity but solely
as Owner Trustee (herein in such capacity called the "Owner Trustee") under
that certain Trust Agreement dated as of ______, 199_, between the Owner
Participant named therein and __________ Trust Company (herein as such Trust
Agreement may be amended or supplemented from time to time called the "Trust
Agreement"), hereby promises to pay to _________________, or registered
assigns, the principal sum of _______________ Dollars, payable as set forth on
the reverse hereof for the Maturity specified above, in such coin or currency
of the United States of America as at the time of payment shall be legal
tender for the payment of public and private debts, and to pay interest on the
principal outstanding from time to time, semiannually on each ________ and
_______, on said principal sum in like coin or currency at the rate per annum
set forth above from the ________ or the _______, as the case may be, next
preceding the date of this Certificate to which interest on the Certificates
has been paid or duly provided for, unless the date hereof is a date to which
interest on the Certificates has been paid or duly provided for, in which case
from the date of this Certificate. Notwithstanding the foregoing, if the
date hereof is after any _________ or ________ and before the following
________ or _______, as the case may be, this Certificate shall bear interest
from such ________ and _______; provided that, if the Owner Trustee shall
default in the payment of interest due on such ________ or _______, then this
Certificate shall bear interest from the next preceding ________ or _______ to
which interest on the Certificate has been paid or duly provided for. The
interest so payable on any ________ or _______ will, except as otherwise
provided in the Indenture referred to on the reverse hereof, be paid to the
person in whose name this Certificate is registered at the close of business
on the __________ or ________ preceding such ________ or _______, whether or
not such day is a Business Day.
This Certificate shall bear interest at the Past Due Rate on any
principal hereof and on any other amount payable hereunder or under the
Indenture which shall not be paid in full when due (whether at stated
maturity, by acceleration, by mandatory prepayment or otherwise), for the
period from and including the date thereof to but excluding the date the same
is paid in full, payable from time to time on demand of the Indenture Trustee.
Principal and interest and other amounts due hereunder shall be
payable at the office or agency of ____________ (the "Indenture Trustee") for
such purpose; provided that, at the option of the Indenture Trustee, interest
may be paid by mailing a check therefor payable to the registered holder
entitled thereto at his last address as it appears on the Register. If any
amount payable under this Certificate, or under the Indenture, falls due on a
day that is not a Business Day, then such sum shall be payable on the next
succeeding Business Day, without (provided that payment is made on such next
succeeding Business Day) additional interest thereon for the period of such
extension.
No employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or individual retirement
account or employee benefit plan subject to Section 4975 of the Internal
Revenue Code of 1986, as amended, or any trust established under any such plan
or account (hereinafter collectively referred to as an "ERISA Plan"), may
acquire or hold any of the Certificates. The acquiring by any person of any
Certificate shall be deemed to constitute a representation by such person to
Federal Express Corporation as the Lessee, ________________ as the Owner
Participant, the Owner Trustee and the Indenture Trustee or their respective
successors, as the case may be, that such person is not an ERISA Plan and that
such person is not acquiring, and has not acquired, such Certificate with
assets of an ERISA Plan.
________________________ is not acting individually hereunder, but
solely as Owner Trustee.
Reference is made to the further provisions set forth on the reverse
hereof. Such provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Certificate shall not be secured by or be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose unless
authenticated by the Indenture Trustee as evidenced by the manual signature of
one of its authorized officers on the certificate below.
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Trust
Certificate, (Federal Express 199 - [SERIES NAME]) to be duly executed in its
corporate name by its officer thereunto duly authorized.
Dated: ___________________________,
not in its individual capacity
but solely as Owner Trustee
By ___________________________
Name:
Title:
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust Certificates referred to in the
within-mentioned Indenture.
Dated: ___________________________,
not in its individual capacity
but solely as Indenture Trustee
By __________________________
Authorized Signatory
[Form of Reverse of Certificate]
This Certificate is one of a duly authorized issue of Certificates
issued and to be issued under the Trust Indenture and Security Agreement dated
as of ______, 199_, (herein as amended, supplemented or modified from time to
time called the "Indenture") between the Owner Trustee and the Indenture
Trustee, designated as Equipment Trust Certificates (199 - [SERIES NAME])
limited in aggregate principal amount to $__________ consisting of the
following aggregate principal amounts of Certificates with the interest rates
per annum and maturities shown:
Principal
Maturity Amount Interest Rate
_______________ $__________ ____%
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its
principal corporate trust office) for a more complete statement of the terms
and provisions thereof, including a statement of the properties conveyed,
pledged and assigned thereby, the nature and extent of the security, the
respective rights of the Owner Trustee, the Lessee, the Indenture Trustee and
the Holders, and the terms upon which the Certificates are, and are to be,
executed and delivered, to all of which terms and conditions in the Indenture
each Holder hereof agrees by its acceptance of this Certificate.
Capitalized Terms not otherwise defined herein shall have the meanings
given to them in the Indenture.
The principal amount of the Certificate is payable as follows. The
Certificate is subject to prepayment in part, pro rata, commencing on
_________, ____, in each case through mandatory sinking fund prepayments
providing for the prepayment on the sinking fund prepayment dates of the
aggregate principal amounts set forth below, together with interest accrued
thereon to the applicable sinking fund prepayment date, but without Make-Whole
Premium.
<TABLE>
<S> <C>
Sinking Fund
Prepayment Date Principal Amount
- ------------------------------------- ------------------
Total $
</TABLE>
All payments of principal, Make-Whole Premium, if any, and interest
and other amounts to be made to the Holder hereof by or at the behest of the
Owner Trustee hereunder or under the Indenture shall be made only from the
income and proceeds from the Lessor's Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner Trustee shall
have sufficient income or proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate to enable the Indenture Trustee to make
such distributions in accordance with the terms of the Indenture; provided
that under the Lease, the Lessee is obligated to pay or cause to be paid, to
the extent such payments are not required to be made from the assets subject
to the Lien of this Indenture or the income and proceeds received by the
Indenture Trustee therefrom, any net loss arising from the investment of funds
held by the Indenture Trustee which but for an Event of Default would be
payable to Lessee, and each Holder hereof, by its acceptance of this
Certificate, agrees that it will look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for distribution to the
Holder hereof as provided above and that none of the Owner Participant,
__________ Trust Company or the Indenture Trustee is personally liable to the
Holder hereof for any amounts payable or any liability under this Certificate
or under the Indenture, except as expressly provided in the Indenture (in the
case of __________ Trust Company, the Owner Trustee and the Indenture Trustee)
or as expressly provided in the Participation Agreement (in the case of the
Owner Participant).
The Certificates are subject to prepayment in the following
circumstances at the price determined as set forth below.
(i) If an Event of Loss occurs with respect to the Aircraft (unless
pursuant to Section 11.03 of the Lease and Section 9.08 of the Indenture a
Replacement Aircraft is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft.
(iii) If the Owner Participant, gives notice of prepayment to the
Indenture Trustee pursuant to Section 8.02 hereof.
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus.
(v) Pursuant to Section 14.01 of the Participation Agreement in
connection with a refinancing of the Certificates.
(vi) As contemplated by Section 2.15 of the Indenture and Section
3.05(b) of the Participation Agreement if the Delivery Date has not
occurred on or prior to the Cut-Off Date.
In the event of a prepayment of the Certificates pursuant to Sections
6.02(a)(ii), (iv) and (v) of the Indenture, the Lessee, in accordance with and
subject to the terms (including timing of notice) of Section 4.02(a) or
Section 10.01 of the Lease or Section 14 of the Participation Agreement, as
the case may be, shall give irrevocable written notice to the Owner Trustee
and the Indenture Trustee and to the Holders of all of the Certificates
specifying the Business Day (the "Prepayment Date") on which the Owner Trustee
is directed to prepay the Certificates in full but not in part. In the case
of Section 6.02(a)(iv) of the Indenture, the Prepayment Date shall be the Rent
Payment Date next succeeding the Termination Date. In the case of Section
6.02(a)(i) of the Indenture, the Prepayment Date shall be the Loss Payment
Date as defined in Section 11.02 of the Lease. In the case of Section
6.02(a)(iii) of the Indenture, the Prepayment Date shall be the date
designated in the notice of prepayment required by Section 8.02(a) of the
Indenture. In the case of a prepayment of the Certificates pursuant to clause
(vi) above, the Certificates shall be prepaid on the 15th day following the
Cut-Off Date. On or prior to the Prepayment Date, immediately available funds
shall be deposited with the Indenture Trustee in an amount in respect of the
Certificates equal to the sum of (i) the aggregate principal amount of such
Certificates then outstanding, (ii) accrued interest on the Certificates to the
Prepayment Date, (iii) all other aggregate sums due any Certificate Holder or
the Indenture Trustee hereunder or under the Participation Agreement or the
Lease and (iv) a Make-Whole Premium, plus accrued interest, with respect to
such Certificates; in the event of a prepayment of the Certificates pursuant
to Section 6.02(a)(i) of the Indenture, the funds deposited with the Indenture
Trustee shall be in the amount specified in clauses (i) and (ii) above; in the
event of a prepayment of the Certificates pursuant to Section 6.02(a)(v) of
the Indenture the funds deposited with the Indenture Trustee shall be in the
amount specified in Section 14.01 of the Participation Agreement (the
aggregate amount required to be paid pursuant to this sentence in the case of
clause (i), (ii), (iii), (iv) and (v) of the preceding paragraph being herein
referred to as the "Prepayment Price").
Any Certificate issued pursuant to Section 14.01(c) of the
Participation Agreement may bear interest at a rate other than the Debt Rate.
The parties hereto agree to enter into any amendments to this Indenture
necessary to effect such Refinancing.
If, in accordance with and subject to the satisfaction of the
conditions set forth in Section 6.11 of the Participation Agreement, the
Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall (except for prior acts) be released
and discharged from any further obligations hereunder and under the
Certificates and all other Operative Agreements.
If an Indenture Event of Default under the Indenture shall occur and
be continuing, the principal of the Certificates may be declared due and
payable in the manner and with the effect provided in the Indenture. The
Indenture provides that in certain events such declaration and its
consequences may be waived the Majority in Interest of Certificate Holders.
Any such consent or waiver by the Holder of this Certificate shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Certificate and any Certificate that may be issued in exchange or
substitution therefor, whether or not any notation thereof is made upon this
Certificate or such other Certificates. Moreover, if, and only if, an Event of
Default shall occur, the Indenture Trustee may declare the Lease to be in
default, and may, to the exclusion of the Owner Trustee, exercise one or more
of the remedies of the Owner Trustee provided in the Lease.
The Owner Trustee or the Owner Participant may cure a default by the
Lessee under the Lease arising from the failure of the Lessee to make any
Basic Rent payments under the Lease if such failure of the Lessee to make such
payment of Basic Rent shall not constitute the third consecutive such failure
or sixth subsequent cumulative such failure. The Owner Trustee or the Owner
Participant may cure any other default by the Lessee in the performance of its
obligations under the Lease which can be cured by the payment of money by
making such payment on behalf of the Lessee.
At any time while the Certificates have become immediately due and
payable as provided in the Indenture, the Owner Participant may direct the
Owner Trustee to pay to the Indenture Trustee for distribution to the Holders
an amount equal to the aggregate unpaid principal amount of all Outstanding
Certificates plus all accrued but unpaid interest thereon to the date of
payment and all other amounts due hereunder, but without Make-Whole Premium.
Upon such payment, the Certificates shall cease to accrue interest thereafter.
The right of the Holder hereof to institute an action for any remedy
under the Indenture is subject to certain restrictions specified in the
Indenture, except that the right of the Holder of this Certificate to receive
payment of the principal of and interest and Make-Whole Premium, if any on
this Certificate on or after the respective due dates, or to institute suit
for the enforcement of any such payment, shall not be impaired or affected
without the consent of such Holder.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 and integral multiples thereof. So long as
any of the Certificates remain Outstanding, the Indenture Trustee will
maintain an office or agency where the Certificates may be presented for
payment and a facility or agency in New York, New York where the Certificates
may be presented for registration of transfer and for exchange as provided in
the Indenture. As provided in the Indenture and subject to certain
limitations therein, this Certificate is transferable, and upon surrender of
this Certificate for registration of transfer at the principal corporate trust
office of the Indenture Trustee, or at the office or agency maintained for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Indenture Trustee duly
executed by, the Holder or his attorney duly authorized in writing, one or
more new Certificates of the same Maturity and interest rate and of authorized
denominations and for the same aggregate principal amount will be issued to
the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein, the Certificates are exchangeable for an equal aggregate principal
amount of Certificates of the same Maturity and interest rate and of
authorized denominations, as requested by the Holder surrendering the same,
upon presentation thereof for such purpose at the principal corporate trust
office of the Indenture Trustee, or at an office or agency maintained for such
purpose.
No service charge shall be levied for any such registration of
transfer or exchange, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to the due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, any agent of the Owner
Trustee or the Indenture Trustee, the Paying Agent, if any, the Registrar and
the Lessee may deem and treat the person in whose name this Certificate is
registered as the absolute owner hereof for all purposes whether or not this
Certificate is overdue, and neither the Owner Trustee, the Indenture Trustee
(nor any agent of the Owner Trustee or the Indenture Trustee), nor the Paying
Agent, if any, the Registrar nor the Lessee shall be affected by notice to the
contrary.
As provided in the Indenture, the Indenture and the Certificates
shall be construed in accordance with and governed by the laws of the State of
New York.
SCHEDULE I
INTENTIONALLY LEFT BLANK
SCHEDULE II
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements referred to below, unless otherwise
defined in an Operative Agreement or the context thereof shall otherwise
require. In the case of any conflict between the provisions of this Schedule
and the provisions of any Operative Agreement, the provisions of such
Operative Agreement shall control the construction of such Operative Agreement.
[All other terms used in the Indenture that are defined in the Trust
Indenture Act (as defined below) or the Securities Act (as defined below) have
the meanings assigned to such terms in the Trust Indenture Act or the
Securities Act as in force on the date of the Indenture, except as otherwise
expressly provided or unless the context requires.](1)
- -----------------
(1) To be used for a qualified Indenture.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Act or Federal Aviation Act. The Federal Aviation Act of 1958, as
amended and in effect, on the date of the Lease or as subsequently amended, or
any successor or substituted legislation at the time in effect and applicable,
and the regulations promulgated pursuant thereto.
Aeronautics Authority. As appropriate, the Federal Aviation
Administration and/or the Administrator of the Federal Aviation
Administration, any successor to the former United States Civil Aeronautics
Board, or any person, governmental department, bureau, commission or agency
succeeding to the functions of any of the foregoing.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership or voting securities or by contract
or otherwise.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person shall be supplemented by a further payment to
such Person so that the sum of the two payments, after deduction of all Taxes
resulting from the receipt or accrual of such payments, shall be equal to the
payment received or deemed to have been received. In the case of amounts
payable to the Lessor, the Owner Participant, or any corporate affiliate of
the Owner Participant, it shall be presumed that such Person is at all times
subject to Federal income tax at the maximum marginal rate generally
applicable to corporations from time to time.
Air Carrier. Any air carrier which is a United States "domestic air
carrier" as defined in Part 121 of the Federal Aviation Regulations, and any
"foreign air carrier" (as defined in the Act) as to which there is in force a
permit granted under Section 402 of the Act.
Aircraft. The Airframe to be sold by the Lessee to the Owner Trustee
pursuant to the Participation Agreement and leased under the Lease (or any
permitted substitute Airframe) together with the _____ Engines (or any
Replacement Engine) whether or not any of such initial or Replacement Engines
may from time to time be installed on such Airframe or may be installed on any
other airframe or on any other aircraft, including any aircraft substituted
pursuant to Section 11.03 of the Lease. Prior to delivery of the initial
Lease Supplement, references in the Operative Agreements (including Section
3.05 of the Participation Agreement) to the Aircraft shall mean the
__________________ airframe bearing FAA Registration Number N_____ and
Manufacturer's serial number _____, together with
_________________________________ engines bearing Manufacturer's serial numbers
___________________.
Airframe. The ________________________ aircraft (excluding the
Engines or engines from time to time installed thereon) leased by Lessor to
Lessee pursuant to the Lease and the Lease Supplement and having the United
States FAA Registration Number and manufacturer's serial number specified in
the Lease Supplement, including (i) all Parts so long as the same shall be
incorporated or installed in or attached to such Airframe, or so long as title
to any such Parts shall remain vested in Lessor in accordance with the terms
of Section 8.01(b) of the Lease after removal from such Airframe, and (ii) any
replacement airframe which may be substituted pursuant to Section 11.03 of the
Lease.
Ancillary Agreements. Any written agreement of the Lessee entered
into on the Delivery Date or at any time thereafter in connection with the
transaction contemplated by the Operative Agreements or the Original
Agreements, in each case as amended from time to time.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant and Lessee on the Delivery Date pursuant to Section
4.02(j) of the Participation Agreement.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Commencement Date and ending at the end of the day on the day immediately
preceding the date _________ years from the Commencement Date, or such earlier
date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Bills of Sale. Collectively, the FAA Bills of Sale for the Aircraft,
an additional full warranty bill of sale covering the Aircraft (and
specifically referring to each Engine) executed by the Lessee as owner of the
Aircraft in favor of the Owner Trustee and dated the Delivery Date and an
additional full warranty bill of sale covering the Aircraft executed by the
Manufacturer in favor of Lessee.
Burdensome Indemnity Payment. A Loss, as defined in the Tax Indemnity
Agreement, which causes the aggregate net present value of all Losses paid or
payable by the Lessee as of the determination date discounted semi-annually at
the Debt Rate to the date of determination to exceed ___% of the Purchase
Price.
Business Day. Any day other than a Saturday, Sunday or other day on
which commercial banking institutions in __________, ________, ______________,
____, New York, New York, ________________________ or Memphis, Tennessee are
authorized or required by law to close.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
199_-[SERIES NAME]), issued by the Owner Trustee pursuant to the Indenture and
any certificate issued in exchange therefor or replacement thereof pursuant to
the Indenture.
Change in Tax Law. Any change to the Code or the Treasury regulations
promulgated thereunder or the publication of any revenue ruling, revenue
procedure or any informational release by the Internal Revenue Service or the
Department of Treasury, provided that the Owner Participant or the Lessee has
notified the other parties of such change in writing prior to the Delivery
Date.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Citizen of the United States. A citizen of the United States as
defined in Section 101(16) of the Act, or any analogous part of any successor
or substituted legislation or regulation at the time in effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.12 of the Indenture.
Commencement Date. ________________________.
Commission. The Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution and delivery of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement means the Consent
and Agreement dated as of ____________, executed by the Manufacturer, as the
same may be amended, modified or supplemented from time to time.
Cut-Off Date. ___________,19__.
Corporate Base Rate. The rate announced from time to time by
________ as its Corporate Base Rate.
Debt Portion. The amount specified as such on Schedule I to the
Participation Agreement.
Debt Rate. The average weighted rate of interest on the Certificates
issued pursuant to the Indenture.
Default. Any event or condition, which, with the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
Delayed Delivery Notice. A certificate signed by a Responsible
Officer of the Lessee (i) requesting that the Pass Through Trustee temporarily
delay purchase of the Certificates to a date later than the Pass Through
Closing Date, (ii) stating the amount of the purchase price of each such
Certificate and the aggregate purchase price of all such Certificates, (iii)
stating the reasons for such delay and (iv) either (1) setting or resetting
the Delivery Date (which shall be on or prior to the Cut-Off Date), or (2)
indicating that such Delivery Date will be set by subsequent written notice
not less than three Business Days prior to such new Delivery Date (which shall
be on or prior to the applicable Cut-off Date).
Delivery Date. The date on which the Aircraft is to be delivered and
sold by the Lessee to the Lessor and leased by the Lessor to the Lessee under
the Lease, which date is also the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
Depository. The depository of the Registered Global Certificate, if
any, representing the Equipment Trust Certificates issued under the Indenture
and any successor to such depository appointed by the Company pursuant hereto.
Such depository initially shall be Depository Trust Company, a New York
corporation.
Eligible Deposit Account. Either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution with corporate trust powers
organized under the laws of the United States or any state thereof, or the
District of Columbia, and whose deposits are insured by the Federal Deposit
Insurance Corporation, provided that such institution also must have a
combined capital and surplus of at least $100,000,000 and a rating of A or
better from the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the ______________________ engines listed by its
manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Sections 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts incorporated or installed in or attached to any such
Engine and all Parts removed from any such Engine so long as title to such
Parts shall remain vested in the Lessor in accordance with the terms of
Article 8 of the Lease after removal from such Engine. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, all Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent and Agreement. The Engine Consent and Agreement dated
as of ________, executed by the Engine Manufacturer, as the same may be amended
from time to time.
Engine Manufacturer. ________________________, a ________
corporation.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 180 days (or in any event if such loss is continuing
on the last day of the Term) due to theft or disappearance, or (B) for a
period in excess of 60 days (or in any event if such loss is continuing on the
last day of the Term) due to the destruction, damage beyond economic repair or
rendition of such property permanently unfit for normal use by the Lessee for
any reason whatsoever; (ii) any damage to such property which results in an
insurance settlement with respect to such property on the basis of a total
loss, or constructive or compromised total loss; (iii) (x) condemnation,
confiscation or seizure of, or requisition of title to such property, or (y)
requisition of use of such property (A) by a foreign government or
instrumentality or agency thereof, or any purported government or
instrumentality or agency thereof, for a period in excess of 180 days, or (B)
by the Government for a period extending beyond the Term, provided that no
Event of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of up to six months in the event that the Aircraft,
the Airframe or any Engine is requisitioned by the Government pursuant to an
activation as part of the Civil Reserve Air Fleet Program, as such term is
defined in Section 7.02(a)(iv) of the Lease; and (iv) as a result of any law,
rule, regulation, order or other action by the Aeronautics Authority or other
governmental body having jurisdiction, the use of the Aircraft or Airframe in
the normal course of air transportation of cargo shall have been prohibited by
virtue of a condition affecting all aircraft of the same type for a period of
eighteen (18) consecutive months, unless the Lessee, prior to the expiration
of such eighteen month period, shall be diligently carrying forward all steps
which are necessary or desirable to permit the normal use of the Aircraft or
Airframe or, in any event, if such use shall have been prohibited for a period
of two (2) consecutive years or for a period extending beyond the end of the
Term, unless the Lessee, prior to the expiration of such two (2) year period
shall have conformed at least one __________________ aircraft (but not
necessarily the Aircraft or the Airframe) to the requirements of any such law,
rule, regulation, order, or other action and shall have commenced regular
commercial use and shall be diligently carrying forward, on a
non-discriminatory basis, all steps necessary or desirable to permit the
normal use of the Aircraft by the Lessee; provided, that if there is a
conflict between the operation of clause (iv) above and Section 12.05 of the
Lease (by reference to Section 12.04(ix) thereof), such Section 12.05 of the
Lease shall control. The date of such Event of Loss shall be the date of (i)
loss of such property or its use for a period in excess of 180 days due to
theft or disappearance, or loss for a period in excess of 60 days due to
damage beyond economic repair or loss of use of the Airframe because of
requisition for use for a period in excess of 180 days (or shorter period due
to insurance settlement), (ii) an insurance settlement on the basis of total
loss with respect to such property, (iii) condemnation, confiscation, seizure
or requisition of title, or (iv) prohibition from usage for the periods
described in clause (iv) above. An Event of Loss with respect to the Aircraft
shall be deemed to have occurred if any Event of Loss occurs with respect to
the Airframe.
Excepted Payments. Collectively, (i) all right, title and interest
of the Owner Participant or the Owner Trustee in, to and under the Tax
Indemnity Agreement and any moneys due or to become due under the Tax
Indemnity Agreement and payments of Supplemental Rent or other payments by the
Lessee in either case in respect of the Tax Indemnity Agreement, (ii)
indemnity payments and interest thereon and other amounts payable by the
Lessee to the Owner Participant or to the Trust Company or any of their
respective Affiliates, successors, assigns, directors, officers, employees,
agents or servants pursuant to Article 7 or 8 of the Participation Agreement
or any corresponding payment of Supplemental Rent under the Lease; (iii)
proceeds of public liability insurance in respect of the Aircraft payable to
the Owner Participant or Trust Company, or any of their Affiliates, successors
or assigns, as a result of insurance claims made, or losses suffered, by, or
amounts in respect of such indemnities paid for the benefit of, the Owner
Participant or the Trust Company either pursuant to the Lease (which shall
include proceeds of any self-insurance by the Lessee) or maintained by the
Trust Company or the Owner Participant and not required to be maintained under
the Lease; (iv) proceeds of any insurance in respect of the Aircraft which is
separately acquired and paid for by the Owner Participant (directly or through
the Owner Trustee) or the Lessor in accordance with Section 13.05 of the
Lease; (v) indemnity payments payable by the Owner Participant to the Trust
Company pursuant to Section 6.01 of the Trust Agreement; (vi) Transaction
Costs or other expenses paid or payable by the Lessee to, or for the benefit
of, the Owner Trustee, Trust Company or the Owner Participant pursuant to
Section 9.01 of the Participation Agreement, Section 3.02(b) of the Lease and
Section 2.02 of the Participation Agreement; (vii) the right to enforce, and
the proceeds of any such enforcement of, any right to receive the proceeds of
any of the amounts referred to in clauses (i) through (vi) above and (viii)
any payments in respect of interest to the extent attributable to the payments
referred to in clauses (i) through (vii) above.
Expense and Expenses. Have the meaning specified in Section 8.01(a)
of the Participation Agreement.
FAA Bills of Sale. The bill of sale for the Airframe on AC Form
8050-2, or such other form as may be approved by the Aeronautics Authority
executed by the Lessee in favor of the Lessor and dated the Delivery Date and
the bill of sale for the Airframe on AC Form 8050-2, or such other form as may
be approved by the Aeronautics Authority executed by the manufacturer in favor
of the Lessee.
Fair Market Renewal Term. One or more terms of one or more years,
but not to exceed ____ years in the aggregate and which term(s) shall
immediately follow the end of the Basic Term or the Fixed Renewal Term with
respect to which the Lessee has exercised its option to renew the Lease
pursuant to Section 4.01(a)(B) thereof.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. In such determination, it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease. Fair Market Rental shall be determined in
accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell. In such determination it shall be assumed that the
Aircraft is in the condition required under the Lease in the case of return of
the Aircraft pursuant to Article 12 of the Lease. Fair Market Value shall be
determined in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration and FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rental. An amount equal to 50% of the average
semiannual payments of Basic Rent during the Basic Term as such payments may
be adjusted pursuant to Section 3.04 of the Lease.
Fixed Renewal Term. Up to ____ renewal terms, each term to be not
less than ____ year, but not more than _____ years in the aggregate.
Government. The United States of America or an agency or
instrumentality thereof.
Holder. As of any particular time, the person in whose name a
Certificate shall be registered.
Indebtedness of any Person means at any time, without duplication,
(i) all obligations of such Person for borrowed money or the deferred purchase
price of property, or evidenced by bonds, debentures, notes or other similar
instruments, or arising under leases that are properly capitalized under
generally accepted accounting principles applicable to such Person and (ii)
all guarantees by such Person of such obligations described in clause (i)
above of third parties.
Indemnitee. Each of the Owner Trustee, in its individual capacity
and as trustee, the Owner Participant, the Original Loan Participant, the
Indenture Trustee, in its individual capacity and as trustee, and any
successor (including any trustee which may succeed to the Lessor's interest
under the Lease), and any Affiliate, assign, officer, director, employee,
agent and servant of any of the foregoing, the Lessor's Estate and the Trust
Indenture Estate. Neither the Certificate Holder nor any holder of a Pass
Through Certificate shall be deemed to be an Indemnitee.
Indenture. The Trust Indenture and Security Agreement, dated as of
___________, 199_, as amended and restated as of _____________, 199_, between
the Lessor and the Indenture Trustee and the Indenture Supplement and any
amendment or supplement hereto or thereto from time to time entered into.
Indenture Default. Any event or condition, which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. The Participation Agreement, the Trust Agreement
(including any Trust Agreement Supplements), the Lease (including any Lease
Supplements), the Indenture (including any Indenture Supplements), the
Certificates, the Purchase Agreement Assignment, the FAA Bills of Sale, the
Consent and Agreement and the Engine Consent and Agreement.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Supplement. Any Indenture Supplement, substantially in the
form of Exhibit A to the Indenture, entered into between the Indenture Trustee
and the Owner Trustee, which Indenture Supplement shall incorporate by
reference the provisions of the Indenture including any amendments entered
into subsequent to the Delivery Date.
Indenture Trustee. _______________________, a national banking
association, not in its individual capacity but solely as Indenture Trustee
under the Indenture and each other Person which may from time to time be
acting as successor trustee under the Indenture.
Indenture Trustee's Liens. Any Lien on the Trust Indenture Estate
resulting from (i) claims against the Indenture Trustee not related to the
administration of the Trust Indenture Estate or any transactions pursuant to
the Indenture or any document included in the Trust Indenture Estate or (ii)
any act or omission of the Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements or is in violation of
any of the terms of the Operative Agreements.
Independent Appraisal. An appraisal conducted pursuant to Section
4.03 of the Lease.
Independent Investment Banker. An independent investment banking
institution of national standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests, or any material
indirect financial interest, in the Lessee or any Affiliate of the Lessee, and
is not connected with the lessee or any Affiliate of the Lessee, as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions; provided, that if the Indenture Trustee shall
not have received written notice of such an appointment at least 10 days prior
to the Prepayment Date or if an Event of Default shall have occurred and be
continuing, "Independent Investment Banker" shall mean such an institution
appointed by the Indenture Trustee.
Interest Payment Date means each _________ and ________ beginning with
__________, 199_; provided, that if any such day is not a Business Day, the
relevant Interest Payment Date shall be the next succeeding Business Day.
Interim Term. The period commencing on the Delivery Date and ending
at the end of the day immediately preceding the Commencement Date.
Invoice. The invoice for the Aircraft given by the Lessee to the
Lessor.
Lease. The Lease Agreement dated as of __________, 199_, entered
into by the Lessor and the Lessee and the Lease Supplement and any amendment or
supplement hereto or thereto from time to time entered into.
Lease Supplement. Any Lease Supplement, substantially in the form of
Exhibit A to the Lease, entered into between the Lessor and the Lessee for the
purpose of leasing the Aircraft pursuant to the terms of the Lease, which
Lease Supplement shall incorporate by reference the provisions of the Lease
including any amendments or supplements entered into subsequent to the
Delivery Date.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and assigns in its capacity as lessee.
Lessor. __________ Trust Company, a ________ banking corporation,
not in its individual capacity except as otherwise expressly stated, but
solely as Owner Trustee under the Trust Agreement, and its successors and
assigns.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Bills of Sale, any warranty with respect
to the Airframe and the Engines, all amounts of Basic Rent and Supplemental
Rent, including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee for its own
account or in its individual capacity, the Owner Participant or any Holder or
the Indenture Trustee) and requisition, indemnity or other payments of any
kind for or with respect to the Aircraft (except amounts owing to the Owner
Participant, to the Indenture Trustee, to the Owner Trustee in its individual
capacity or any Holder, or to any of their respective directors, officers,
employees and agents pursuant to Articles 7 and 8 of the Participation
Agreement). Notwithstanding the foregoing, "Lessor's Estate" shall not include
any Excepted Payment.
Lessor's Liens. Liens on the Lessor's Estate or the Trust Indenture
Estate arising as a result of (i) claims against the Lessor, in its individual
capacity or as Owner Trustee, or the Owner Participant, in each case not
related to the transactions contemplated by the Operative Agreements, (ii)
acts or omissions of the Lessor in its individual capacity or as Owner
Trustee, and, in the case of the Lessor in its individual capacity, arising
from its gross negligence or willful misconduct either not related to the
transactions contemplated by or expressly prohibited under the Operative
Agreements and any act or omission of the Owner Participant which is not
related to the transactions contemplated by the Operative Agreements or is in
violation of any of the terms of the Operative Agreements, (iii) Taxes or
Expenses imposed against the Lessor, in its individual capacity or as Owner
Trustee, Owner Participant, Lessor's Estate or the trust created by the Trust
Agreement which are not indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement or the Participation Agreement, or (iv) claims against the
Lessor or the Owner Participant arising from the voluntary transfer by the
Lessor or the Owner Participant of its interests in the Aircraft other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Articles 10 or 11 of
the Lease and other than a transfer pursuant to the exercise of the remedies
set forth in Article 17 of the Lease.
Letter of Representations. A letter from the Company and the Owner
Trustee to, and accepted by, the Depository, as such letter may be modified or
supplemented, or any successor letter thereto.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Losses. Has the meaning specified in Section 15.02(a) of the
Participation Agreement.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% in aggregate unpaid principal
amount of all Certificates outstanding as of such date excluding for purposes
of this definition any Certificates held by (i) the Owner Participant unless
all Certificates then outstanding shall be held by the Owner Participant, (ii)
by the Lessee, (iii) by the Indenture Trustee or (iv) by any Affiliate of
either.
Make-Whole Premium. With respect to each Certificate to be prepaid
pursuant to Sections 6.02(ii), 6.02(iv) and 6.02(v) of the Indenture an amount
determined as of the day before the applicable Prepayment Date which an
Independent Investment Banker determines to be equal to an excess of (i) the
present values of all remaining scheduled payments of such principal amount or
portion thereof and interest thereon (excluding interest accrued from the
immediately preceding Payment Date to such Prepayment Date) to the Maturity of
such Certificate in accordance with generally accepted financial practices
assuming a 360-day year consisting of twelve 30-day months at a discount rate
equal to Treasury Yield, all as determined by the Independent Investment
Banker over (ii) the unpaid principal amount of such Certificate.
Manufacturer. _____________________________, a ________ corporation.
Maturity. With respect to any Certificate, the date on which the
principal amount of such Certificate is due and payable.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Basic Rent set forth in Schedule II of the Lease, discounted
at a rate per semi-annual period equal to (a) the Debt Rate as of the date of
determination divided by (b) two.
Non-U.S. Person. Any Person other than (i) a citizen or resident of
the United States, as defined in Section 7701(a)(30) of the Code (for purposes
of this definition, the "United States"), (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
any political subdivision thereof or therein, or (iii) any estate or trust
that is subject to United States federal income taxation regardless of the
source of its income.
Obsolete Parts. Parts which the Lessee deems obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate means a certificate signed by a Responsible
Officer of the Owner Trustee or the Lessee, as the case may be, delivered to
the Indenture Trustee. Each such certificate shall include the statements
provided for in Section 15.07.
Operative Agreements. The Participation Agreement, the Trust
Agreement, the Bills of Sale, the Lease, the Lease Supplement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
Purchase Agreement Assignment, the Engine Consent and Agreement, the Pass
Through Agreement and the Tax Indemnity Agreement, each as amended from time
to time.
Opinion of Counsel means a written opinion of legal counsel, who in
the case of counsel (a) for the Lessee may be (i) an attorney employed by the
Lessee who is generally empowered to deliver such written opinions, (ii) Davis
Polk & Wardwell or a successor firm or (iii) other counsel designated by the
Lessee and reasonably satisfactory to the Indenture Trustee, (b) for the Owner
Trustee, may be (i) Potter Anderson & Corroon or (ii) other counsel designated
by the Owner Trustee and reasonably satisfactory to the Indenture Trustee and
(c) for the Indenture Trustee, may be (i) Powell, Goldstein, Frazer & Murphy
or (ii) other counsel designated by the Indenture Trustee.
Owner Participant. ____________________________, a __________
corporation, and any successor thereto, and any person to which Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Trustee. __________ Trust Company, a ________ banking
corporation, not in its individual capacity except as otherwise expressly
stated, but solely as Owner Trustee under the Trust Agreement, and its
successors and assigns.
Owner's Economic Return. The Owner Participant's anticipated
after-tax yield and aggregate after-tax cash flow during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Basic Rent, Stipulated
Loss Value and Termination Value percentages, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement, dated as of
___________, 199_ among the Lessee, the Owner Trustee not in its individual
capacity except as otherwise expressly stated therein, but solely as trustee,
the Owner Participant, the Pass Through Trustee, solely as pass through
trustee, and the Indenture Trustee in its individual capacity and as trustee
as amended, modified or supplemented, or the terms thereof waived.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine and, so long as title
thereto shall remain vested in the Lessor in accordance with the terms of
Article 8 of the Lease, after removal from the Airframe or Engines.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
___________, 199_ between the Lessee and the Pass Through Trustee, as such Pass
Through Agreement may be modified, supplemented or amended from time to time in
accordance with the provisions thereof.
Pass Through Certificates. Any of the 199_ Pass Through Certificates,
Series ___ or 199_ Pass Through Certificates, Series ___, in each case as
issued by the related Pass Through Trust; and "Pass Through Certificates"
means all of the Pass Through Certificates issued by each of the Pass Through
Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriter pursuant to the Underwriting
Agreements takes place.
Pass Through Trust. The Federal Express Pass Through Trust,
199_-____ or Federal Express Pass Through Trust 199_-_, in each case formed
pursuant to the related Series Supplement in accordance with the Pass Through
Agreement; and "Pass Through Trusts" means both of such Pass Through Trusts.
Pass Through Trustee. ________________, a national banking
association, in its capacity as Pass Through Trustee under the Pass Through
Agreement and each Pass Through Trust, and its successors and assigns as Pass
Through Trustee thereunder.
Past Due Rate. At any time a rate of interest per annum equal to __%
per annum plus the Debt Rate.
Paying Agent has the meaning set forth in Section 3.04 of the
Indenture.
Payment Date. Each _______ and ___________, commencing _____________,
199_, thereafter until all Certificates have been paid in full.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a ) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local, foreign
or any agency, instrumentality, division or body thereof).
Prepayment Date. The meaning specified in Section 6.02 of the
Indenture.
Prepayment Price. The meaning specified in Section 6.02(b) of the
Indenture.
Proposed Termination Date. The proposed date of termination of the
Lease as specified by the Lessee in its notice given pursuant to Section 10.01
thereof
Purchase Agreement. The Purchase Agreement, dated as of
_____________, between the Manufacturer and the Lessee relating to the
purchase by the Lessee of the Aircraft, as originally executed or as modified,
amended or supplemented in accordance with the terms thereof, but only insofar
as the foregoing relates to the Aircraft.
Purchase Agreement Assignment. The Purchase Agreement Assignment
dated as of _____, executed by the Lessee and the Owner Trustee.
Purchase Option Date. ______________________.
Purchase Option Price. The amount to be paid by Lessee to Lessor on
the Purchase Option Date pursuant to Section 4.02(a)(B) of the Lease, which
amount is set forth in the Appraisal.
Purchase Price. Has the meaning specified in Section 2.01(b) of the
Participation Agreement.
Record Date. As used with respect to any Interest Payment Date
(except a date for payment for defaulted interest), __________ for __________
Interest Payment Dates and _________ for ____________ Interest Payment Dates,
whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 14.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 14.01 of the Participation Agreement.
Register has the meaning set forth in Section 3.02 of the Indenture.
Registered Global Certificate. The Equipment Trust Certificate, if
any, issued to the Depository in accordance with Section 2.12 of the Indenture
and bearing the legend prescribed in Exhibit B to the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. Any of the Fixed Renewal Terms or Fair Market Renewal
Terms which immediately follow the end of the Basic Term with respect to which
the Lessee has exercised its option to renew the Lease pursuant to Section
4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each _________ and __________, commencing
___________, 199_, and continuing thereafter during the Term.
Replacement Engine. A ______________________ ______ engine (or an
engine of the same or another manufacturer of the same or of equal or greater
value, and utility), which shall have been substituted for an Engine pursuant
to Sections 7.02(a)(vii), 10.03, 11.03 11.04, or 12.02 of the Lease and leased
pursuant to the Lease, together with all Parts relating to such engine.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement) or the Indenture Trustee, any officer in its
Corporate Trust Administration Department designated by such person to perform
obligations under the Operative Agreements, and with respect to any other
party, any corporate officer or other employee of a party who, in the normal
performance of his operational responsibilities, with respect to the subject
matter of any covenant, agreement or obligation of such party pursuant to any
Operative Agreement, would have responsibility for and knowledge of such
matter and the requirements of any Operative Agreement with respect thereto.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
Securities Act. The Securities Act of 1933, as amended.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Series Supplement. The Series Supplement 199_-_ to be executed and
delivered by the Lessee and the Pass Through Trustee or the Series Supplement
199_-_ to be executed and delivered by the Lessee and the Pass Through
Trustee, in each case as such Series Supplement may be modified, supplemented
or amended from time to time in accordance with the provisions thereof and
"Series Supplements" means both of such Series Supplements.
Significant Expenditure. Has the meaning specified in Section
4.02(a)(D) of the Lease.
Sinking Fund Payment Date. __________________
Sinking Fund Payment Price. _________________
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Specified Investments. Shall mean (a) direct obligations of the
United States of America or obligations fully guaranteed by the United States
of America; (b) commercial paper rated A-1/P-1 by Standard & Poor's Ratings
Group and Moody's Investors Service, Inc., respectively or, if such ratings
are unavailable, rated by any nationally recognized rating organization in the
United States equal to the highest rating assigned by such rating
organization; (c) overnight federal funds transactions with members of the
Federal Reserve Systems arranged by federal funds brokers; and (d) overnight
repurchase agreements with respect to the securities described in clause (a)
above entered into with an office of a bank or trust company which is located
in the United States of America of any bank or trust company which is
organized under the laws of the United States or any state thereof and has
capital surplus and undivided profits aggregating at least $500 million.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Basic Term, the amount determined by multiplying the Purchase
Price by the percentage set forth in Schedule III of the Lease under the
heading "Stipulated Loss Value Factors" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with Basic Rent due and owing through the date of payment of
Stipulation Loss Value, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Factors."
Supplemental Rent. All amounts, liabilities and obligations which
the Lessee assumes or agrees to pay under the Lease or under the Participation
Agreement or Tax Indemnity Agreement or any other Ancillary Agreement to the
Lessor or others, including, without limitation, payments of Stipulated Loss
Value and amounts calculated by reference to Termination Value and any other
amounts due on the Certificates pursuant to the Indenture, and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement, but excluding Basic
Rent or the Fixed Renewal Rental.
Tax. Shall have the meaning set forth in Section 7.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement, dated as of
___________, 199_, between the Lessee and the Owner Participant, as from time
to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Interim Term and the Basic Term of the lease for the
Aircraft under the Lease and, if renewed pursuant to Section 4.01 of the
Lease, each Renewal Term for the Aircraft for which the Lease is renewed, or
such earlier date on which the Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during the Basic Term that is
on or after _________________.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factors" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with Basic Rent due and owing through the date of payment of any amount
calculated by reference to Termination Value, at least sufficient to pay in
full as of such date of payment of the aggregate unpaid principal amount of
and accrued interest on the Certificates outstanding on such date of payment.
Transaction Costs. All of the documented costs and expenses incurred
by the Lessee, the Owner Trustee, the Underwriters, the Indenture Trustee and
the Participants as contemplated by Section 9.01(a) of the Participation
Agreement.
"Treasury Yield". (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the Lessee) corresponding
in maturity to such Certificate (or, if there is no corresponding maturity,
an interpolation of maturities by the Independent Investment Banker), in each
case determined by the Independent Investment Banker selected to determine the
Make-Whole Premium based on the bid price as of 10:00 a.m. and 2:00 p.m. New
York time, on the second Business Day preceding the Prepayment Date.
Trust Agreement. The Trust Agreement, dated as of _________, 1992,
between the Owner Participant and the Owner Trustee in its individual
capacity, as from time to time modified, amended or supplemented pursuant to
its applicable provisions and in accordance with the Operative Agreements.
Trust Company. __________ Trust Company, a ________ banking
corporation, in its individual capacity and not as Owner Trustee, and its
successors under the Trust Agreement, in their respective individual
capacities and not as Owner Trustees.
[Trust Indenture Act. Except as otherwise provided in Section 4.04,
13.01 and 13.08 of the Indenture, the Trust Indenture Act of 1939, as amended,
as in force on the date that the Indenture was first qualified under such
Act.](2)
- -------------------
(2) To be added in the case of a qualified Indenture.
Trust Indenture Estate. The property, rights and privileges
described in the Granting Clause of the Indenture, other than (i) Excepted
Payments, including, without limitation all right, title and interest of the
Owner Participant in, to and under the Tax Indemnity Agreement and any moneys
due and to become due under the Tax Indemnity Agreement, all as provided in
the Indenture, and (ii) rights granted to the Owner Trustee or the Owner
Participant under the Indenture, including without limitation Sections 2.05,
7.02, 8.01, 8.02, 8.03, 13.01 and 13.02 thereof.
Underwriters. __________________.
Underwriting Agreement. The agreement among the Lessee and the
several Underwriters dated _______________, 199_, relating to the purchase by
such Underwriters of the Pass Through Certificates.
United States or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 401 or Section 418 of the
Federal Aviation Act, and as to which there is in force an air carrier
operating certificate issued pursuant to Part 121 of the regulations under
such Act, or which may operate as an air carrier by certification or otherwise
under any successor or substitute provision thereof or in absence thereof.
Exhibit 4(e)(2)
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N_____)
Dated as of _______________, 199_
among
FEDERAL EXPRESS CORPORATION,
Lessee
________________________,
Owner Participant
________________________,
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as Owner Trustee,
Owner Trustee
________________________,
Indenture Trustee
and
________________________,
Pass Through Trustee
______________________________
LEVERAGED LEASE OF ONE [MANUFACTURER/MODEL] AIRCRAFT
SERIAL NO. ______, REGISTRATION NO. ______
TABLE OF CONTENTS
Page
Initial Recitals........................................................... 1
ARTICLE 1
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds........................................ 3
Section 2.02. Certificates............................................. 4
Section 2.03. Owner Participant's Instructions to Owner Trustee........ 4
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent, Stipulated
Loss Values and Termination Values..................... 4
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date......................... 5
Section 3.02. Commitments to Participate in Purchase Price............. 5
Section 3.03. Owner Participant's Instructions to Owner Trustee........ 7
Section 3.04. Transaction Costs........................................ 8
Section 3.05. Postponement of Delivery Date............................ 8
Section 3.06. Closing.................................................. 10
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date).......... 10
Section 4.02. Conditions Precedent (Delivery Date)..................... 16
Section 4.03. Opinion of Special Aviation Counsel...................... 22
Section 4.04. Conditions Precedent to Lessee's Obligations............. 22
ARTICLE 5
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.01. Lessee's Representations and Warranties.................. 22
Section 5.02. Intentionally Left Blank................................. 27
Section 5.03. Certain Covenants of Lessee.. ........................... 27
Section 5.04. Survival of Representations and Warranties............... 32
ARTICLE 6
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Acquisitions and Offerings of Participations............. 32
Section 6.02. Citizenship.............................................. 32
Section 6.03. Representations, Warranties and Covenants of Owner
Participant............................................ 33
Section 6.04. Representations and Warranties of Owner Trustee.......... 36
Section 6.05. Representations and Warranties of the Indenture Trustee.. 38
Section 6.06. Intentionally Left Blank................................. 40
Section 6.07. Indenture Trustee's Notice of Default.................... 40
Section 6.08. Releases from Indenture.................................. 40
Section 6.09. Covenant of Quiet Enjoyment.............................. 40
Section 6.10. Survival of Representations, Warranties and Covenants.... 40
Section 6.11. Lessee's Assumption of the Certificates.................. 40
Section 6.12. Indebtedness of Owner Trustee............................ 42
Section 6.13. Pass Through Trustee Representations and Warranties...... 42
ARTICLE 7
TAXES
Section 7.01. Lessee's Obligation to Pay Taxes......................... 43
Section 7.02. After-Tax Basis.......................................... 46
Section 7.03. Time of Payment.......................................... 46
Section 7.04. Contests................................................. 47
Section 7.05. Refunds.................................................. 48
Section 7.06. Lessee's Reports......................................... 48
Section 7.07. Survival of Obligations.................................. 49
Section 7.08. Property Taxes........................................... 49
ARTICLE 8
GENERAL INDEMNITY
Section 8.01. Generally................................................ 49
Section 8.02. After-Tax Basis.......................................... 52
Section 8.03. Subrogation.............................................. 53
Section 8.04. Notice and Payment....................................... 53
Section 8.05. Refunds.................................................. 53
Section 8.06. Defense of Claims........................................ 54
Section 8.07. Survival of Obligations.................................. 54
ARTICLE 9
TRANSACTION COSTS
Section 9.01. Transaction Costs and Other Costs........................ 54
ARTICLE 10
SUCCESSOR OWNER TRUSTEE
Section 10.01. Appointment of Successor Owner Trustee.................. 56
ARTICLE 11
LIABILITIES AND INTERESTS OF THE
OWNER PARTICIPANT AND EACH CERTIFICATEHOLDER
Section 11.01. Liabilities of the Owner Participant.................... 58
Section 11.02. Interest of Holders of Certificates..................... 58
ARTICLE 12
OTHER DOCUMENTS
Section 12.01. Consent of Lessee to Other Documents.................... 58
Section 12.02. Further Assurances...................................... 59
ARTICLE 13
NOTICES
Section 13.01. Notices................................................. 59
ARTICLE 14
REFINANCING
Section 14.01. Refinancing............................................. 60
ARTICLE 15
MISCELLANEOUS
Section 15.01. Owner for Federal Tax Purposes.......................... 62
Section 15.02. Collateral Account...................................... 63
Section 15.03. Counterparts............................................ 63
Section 15.04. No Oral Modifications................................... 63
Section 15.05. Captions................................................ 64
Section 15.06. Successors and Assigns.................................. 64
Section 15.07. Concerning the Owner Trustee, Pass Through Trustee and
Indenture Trustee..................................... 64
Section 15.08. Severability............................................ 64
Section 15.09. Public Release of Information........................... 65
Section 15.10. Certain Limitations on Reorganization................... 65
Section 15.11. Governing Law........................................... 65
Section 15.12. Section 1110 Compliance................................. 65
Section 15.13. Authorization to Owner Trustee.......................... 65
ARTICLE 16
CONFIDENTIALITY
Section 16.01. Confidentiality......................................... 66
SCHEDULE I Debt Portion and Owner Participant Amount
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
SCHEDULE IV Pass Through Trust Information
EXHIBIT A(1)(a)(i) Opinion of Lessee's Counsel
(Certificate Closing Date)
EXHIBIT A(1)(a)(ii) Opinion of Lessee's Counsel
(Delivery Date)
EXHIBIT A(1)(b)(i) Opinion of Lessee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(1)(b)(ii) Opinion of Lessee's Special Counsel
(Delivery Date)
EXHIBIT A(2)(a) Opinion of Owner Participant's Special Counsel
EXHIBIT A(2)(b) Opinion of Owner Participant's Counsel
EXHIBIT A(3) Opinion of Indenture Trustee's Special Counsel
EXHIBIT A(4)(a) Opinion of Owner Trustee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(4)(b) Opinion of Owner Trustee's Special Counsel
(Delivery Date)
EXHIBIT A(5) Opinion of Pass Through Trustee's Special Counsel
EXHIBIT A(6) Opinion of Engine Manufacturer's Counsel
EXHIBIT A(7) Opinion of Manufacturer's Counsel
EXHIBIT A(8) Opinion of Special Aviation Counsel
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
EXHIBIT E Form of Purchase Agreement Assignment, Consent and
Agreement and Engine Consent and Agreement
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N_____)
This PARTICIPATION AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO.
N_____) is entered into as of _______________, 199_ (the "Participation
Agreement" or "Agreement"), by and among FEDERAL EXPRESS CORPORATION, a
Delaware corporation (herein, together with its successors and permitted
assigns, the "Lessee"), ________________________, a ________________________
(herein, together with its successors and permitted assigns, the "Owner
Participant"), ________________________, a ________________________, not in
its individual capacity, except as otherwise expressly stated herein, but
solely as owner trustee under the Trust Agreement referred to below (in such
capacity as trustee, together with its successors and permitted assigns, the
"Owner Trustee"), ________________________, a ________________________, not in
its individual capacity, except as otherwise expressly stated herein, but
solely as indenture trustee under the Indenture referred to below (in such
capacity as trustee, together with its successors and permitted assigns, the
"Indenture Trustee") and ________________________, a ________________________,
not in its individual capacity, except as otherwise expressly stated herein,
but solely as pass through trustee (in such capacity as trustee, together with
its successors and permitted assigns, the "Pass Through Trustee").
W I T N E S S E T H :
WHEREAS, capitalized terms used but not defined in the Recitals shall
have the respective meanings set forth or referred to below;
WHEREAS, the Owner Participant has entered into the Trust Agreement
with the Owner Trustee in its individual capacity, substantially in the form
of Exhibit D hereto, pursuant to which Trust Agreement the Owner Trustee
agrees, among other things, to hold the Lessor's Estate for the benefit of the
Owner Participant on the terms specified in the Trust Agreement, subject to
the Lien of the Indenture.
WHEREAS, on the Pass Through Closing Date, a closing will occur with
respect to the public offering of Pass Through Certificates issued by each Pass
Through Trust, an allocable amount of the proceeds of which offering will be
used by the Pass Through Trustee to purchase for each such Pass Through Trust
the Certificates of the interest rate and Maturity applicable thereto.
WHEREAS, concurrently with the execution and delivery hereof, the
Owner Trustee and the Indenture Trustee are entering into the Indenture for
the benefit of the Pass Through Trustee, pursuant to which the Owner Trustee
is issuing the Certificates to the Pass Through Trustee as evidence of the
loans made by the Pass Through Trustee to the Owner Trustee, the proceeds of
which loans will be deposited by the Owner Trustee in the Collateral Account.
WHEREAS, prior to the Delivery Date, the Certificates will be secured
by the Liquid Collateral.
WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Trustee will be authorized and directed by the Owner Participant:
(a) on the Delivery Date, to purchase the Aircraft from the Lessee;
(b) on the Certificate Closing Date, to execute and deliver the
Lease substantially in the form of Exhibit B hereto, pursuant to which,
subject to the terms and conditions set forth in said Lease, the Owner
Trustee agrees to lease to the Lessee, and the Lessee agrees to lease from
the Owner Trustee, the Aircraft on the Delivery Date, such lease to be
effected by the execution and delivery of a Lease Supplement, in the form
of Exhibit A to the Lease, covering the Aircraft and incorporating by
reference all of the terms of the Lease;
(c) on the Certificate Closing Date, to execute and deliver the
Indenture, substantially in the form of Exhibit C hereto, for the benefit
of the Holders from time to time of the Certificates, pursuant to which the
Owner Trustee agrees, among other things, (A) to deposit, mortgage and
pledge with the Indenture Trustee, as part of the Trust Indenture Estate,
all of the Lessor's Estate but not Excepted Payments, (B) on the
Certificate Closing Date, to issue Certificates substantially in the form
set forth in Exhibit B to the Indenture, the proceeds of the sale of which
will be held by the Owner Trustee in the Collateral Account until released
on the Delivery Date for use by the Owner Trustee (or, in certain
circumstances, the Lessee) towards payment of the Purchase Price for the
Aircraft, and (C) on the Delivery Date, to execute and deliver the
Indenture and Security Agreement Supplement, substantially in the form of
Exhibit A to the Indenture, covering the Aircraft and supplementing the
Indenture; and
(d) on the Certificate Closing Date, to execute and deliver the
Purchase Agreement Assignment, whereby the Lessee assigns to the Owner
Trustee certain of the Lessee's rights and interests under the Purchase
Agreement to the extent that the same relate to the Aircraft (except to the
extent reserved in said Purchase Agreement Assignment), which Purchase
Agreement Assignment is to include as an annex a Consent and Agreement
executed by the Manufacturer and an Engine Consent and Agreement executed
by the Engine Manufacturer, said Purchase Agreement Assignment, Consent and
Agreement and Engine Consent and Agreement to be substantially in the form
of Exhibit E hereto.
WHEREAS, on the Delivery Date pursuant to and subject to the terms and
conditions of this Agreement, the Purchase Agreement Assignment, the Consent
and Agreement, the Engine Consent and Agreement and the Bills of Sale, the
Owner Trustee will purchase, and receive title to, the Aircraft from the
Lessee and lease the Aircraft to the Lessee pursuant to the Lease (or, in
certain, circumstances, the Lessee will purchase the Aircraft).
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
Unless the context otherwise requires, the terms defined in Schedule
II hereto are incorporated herein for all purposes of this Agreement and shall
be equally applicable to both the singular and the plural forms of the terms
so defined.
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds.
(a) On or before the Pass Through Closing Date, the Pass Through
Trustee and the Lessee, in accordance with the Pass Through Agreement, shall
enter into the Series Supplements, and, subject to the terms and conditions
set forth therein, on the Pass Through Closing Date (i) the Lessee shall
direct the Underwriters to execute a wire transfer or intra-bank transfer to
the Pass Through Trustee in the amount of the total proceeds payable pursuant
to the Underwriting Agreement with respect to the Pass Through Certificates
and (ii) the Pass Through Trustee shall deliver the Pass Through Certificates
to the Underwriters upon receipt by the Pass Through Trustee of such proceeds.
(b) Subject to the satisfaction or waiver of the conditions set
forth herein, on the Certificate Closing Date, on behalf of each Pass Through
Trust, from an allocable amount of the proceeds of the sale of the related
Pass Through Certificates, the Pass Through Trustee shall purchase the
Certificates specified for such Pass Through Trust on Schedule IV hereto. For
each Pass Through Trust, the Pass Through Trustee shall pay an amount equal to
the principal amount of Certificates of the Maturity and having the interest
rate that relates to such Pass Through Trust, which amounts in the aggregate
shall equal the aggregate principal amount of the Certificates as specified in
Section 2.04 of the Indenture. The aggregate amount payable by the Pass
Through Trustee pursuant to this Section 2.01(b) shall be payable by wire
transfer or intra-bank transfer to the Indenture Trustee on behalf of the
Owner Trustee.
(c) On the Certificate Closing Date, the Indenture Trustee shall,
on behalf of the Owner Trustee, deposit, by wire transfer or intra-bank
transfer, the amounts received by it pursuant to Section 2.01(b) hereof in the
Collateral Account pursuant to the Indenture.
(d) On the Certificate Closing Date concurrently with the events
specified in Section 2.01(b) hereof, the parties hereto shall execute and
deliver, to the extent they are parties thereto, and consent to the execution
and delivery of (if they are not parties thereto), the Lease, the Indenture
and the Trust Agreement, and the other documents listed in Section 4.01(d)
hereof, and the Owner Trustee shall execute and deliver to the Indenture
Trustee for authentication, and the Indenture Trustee shall authenticate and
deliver to the Pass Through Trustee, upon the request of the Owner Trustee,
the Certificates as provided in Section 2.02 hereof.
(e) The Closings shall take place at the offices of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017.
Section 2.02. Certificates. Subject to the satisfaction or waiver
of the conditions set forth herein, on the Certificate Closing Date, the Owner
Participant will instruct the Owner Trustee to execute and deliver to the
Indenture Trustee, and the Indenture Trustee shall authenticate and deliver,
upon the request of the Owner Trustee, to the Pass Through Trustee for each
Pass Through Trust, the Certificates specified for such Pass Through Trust on
Schedule IV attached hereto, which (i) shall be issued in the principal amount
and in the Maturity set forth for such Certificate in Schedule IV hereto, (ii)
shall bear interest at the interest rate set forth for such Certificate in
Schedule IV hereto, (iii) shall be issued in such form and on such terms as
are specified in the Indenture, (iv) shall be dated and authenticated on the
Certificate Closing Date and shall bear interest from the Certificate Closing
Date and (v) shall be registered in the name of the Pass Through Trustee on
behalf of such Pass Through Trust.
Section 2.03. Owner Participant's Instructions to Owner Trustee. The
Owner Participant agrees that the issuance of Certificates in accordance with
the terms hereof shall constitute, without further act, authorization and
direction by the Owner Participant to the Owner Trustee to take the action
specified in Section 1.01 (other than clauses (a) and (c)) of the Trust
Agreement and confirmation that all conditions to closing in respect of the
Certificate Closing Date set forth in Section 4.01 (but not Section 4.02)
hereof were either met to the satisfaction of the Owner Participant or, if not
so met, were in any event waived by it.
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent,
Stipulated Loss Values and Termination Values. On or prior to the Delivery
Date, the percentages for Basic Rent referred to in Schedule II of the Lease
and the percentages for Stipulated Loss Value and Termination Value in
Schedule III and Schedule IV, respectively, of the Lease shall be adjusted
(upward or downward), subject to the procedures set forth in Section 3.04 of
the Lease and the minimum values established by Section 3.05 of the Lease and
the definitions of Stipulated Loss Value and Termination Value, to reflect
changes in the pricing assumptions with respect to (i) the Delivery Date being
other than _______________, ____, (ii) a different rate of interest or
amortization schedule assumed by the Owner Participant in calculating such
percentages from that assumed by the Owner Participant in originally
calculating such percentages, (iii) Transaction Costs being other than as
assumed in Section 10.01 hereof, (iv) any change in the length of the Interim
Term or the Basic Term and (v) a Change in Tax Law which occurs after the date
of the execution of this Agreement but on or prior to the Delivery Date.
Notwithstanding anything herein to the contrary, the Lessee shall have no
obligation to enter into the transaction contemplated by this Agreement other
than with respect to Transaction Costs as described in Section 2.03 below and
its obligation to purchase the Aircraft as provided in Section 3.05(a) hereof
if, as a result of a Change in Tax Law after the date of execution of this
Agreement but on or prior to the Delivery Date, the Net Present Value of Rents
is increased by 150 basis points or more.
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date. The Lessee agrees
to give the Owner Participant, the Indenture Trustee, the Owner Trustee and
the Pass Through Trustee at least three (3) Business Days' written or
facsimile notice prior to the Delivery Date (which notice shall be effective
only if received not later than 10:00 a.m. (New York City time) on the date
that is at least three (3) Business Days prior to the Delivery Date), which
Delivery Notice shall specify the amount of the Purchase Price, the amount of
the Owner Participant's Commitment, the Debt Portion, the Delivery Date for
the Aircraft, the serial number of the Airframe and each Engine, and the
Aeronautics Authority registration number for the Aircraft.
Section 3.02. Commitments to Participate in Purchase Price. (a)
Participation in Purchase Price. Subject to the terms and conditions of this
Agreement, on the Delivery Date, (i) the Indenture Trustee agrees to release
the Debt Portion or such lesser amount as may then be held in the Collateral
Account together with the Lessee Shortfall (as defined in clause (iii) below),
if any, to the Owner Trustee for application to the Purchase Price as provided
below, (ii) the Owner Participant agrees to participate in the Lessor's
payment of the Purchase Price by making an investment in the beneficial
ownership of the Lessor's Estate in an amount equal to the amount set forth in
Schedule I hereto, (iii) the Lessee agrees to pay to the Indenture Trustee the
excess, if any, of (I) the Debt Portion over (II) the amount as may then be
held in the Collateral Account (the "Lessee Shortfall") as provided in Section
15.02(a) hereof, and (iv) the Lessee shall sell the Aircraft to the Owner
Trustee and the Owner Trustee shall immediately thereafter lease the Aircraft
to the Lessee pursuant to the Lease. In consideration for the transfer of
ownership and title to the Owner Trustee, the following cash payments will be
made by wire transfer of immediately available funds on the Delivery Date:
(A) by the Owner Trustee to the Lessee, an amount equal to the Purchase Price
as set forth in Schedule I hereto, as evidenced by the Invoice and (B) by the
Indenture Trustee, on behalf of the Owner Trustee, to the Lessee the excess of
any amounts as may then be held in the Collateral Account over the Debt
Portion.
(b) Payment of Commitment. The Owner Participant agrees, subject to
the terms and conditions of this Agreement, to make the amount of its
Commitment available to the Owner Trustee on the Delivery Date specified in
the Delivery Notice pursuant to Section 3.03 hereof by wire transfer,
initiated by 9:00 a.m. (New York City time on such day) of such amount in
immediately available funds, to the Owner Trustee for deposit in its account
at __________________________________, ABA No. _________, Account Number
________, Attention: _________________, Reference _______________. The
amount of the Owner Participant's Commitment shall be held for the account of
the Owner Participant by the Owner Trustee until released by the Owner
Participant or its special counsel at closing or until returned to the Owner
Participant in accordance with Section 3.02(c) hereof.
(c) No Obligation to Increase Commitments; Delayed Delivery. (i) If
the Indenture Trustee shall default in its obligation to make the amount of
its Debt Portion available pursuant hereto, the Owner Participant shall have
no obligation to make any portion of such Debt Portion available or to
increase the amount of its respective Commitment, and the obligations of the
Owner Participant shall remain subject to the terms and conditions of this
Agreement.
(ii) Subject to the provisions of Section 3.05 hereof, if the closing
of the transactions contemplated by the Operative Agreements shall not have
been consummated by 2:00 p.m. (New York City time), or such earlier time as
directed by the Lessee, on the Scheduled Delivery Date, the Owner Trustee
shall, if instructed in writing by the Lessee, at the risk and expense of the
Lessee, use its reasonable best efforts to cause the Owner Participant's
Commitment to be invested and reinvested to the extent practicable at the
direction received by it from the Lessee (with a copy to the Owner
Participant), at the risk of the Lessee, in Permitted Investments consisting
of either commercial paper or time deposits; provided, however, that in the
absence of instructions by 2:00 p.m. (New York City time) the Owner Trustee
shall use its reasonable best efforts to cause such amount or the proceeds
thereof to be invested and reinvested to the extent practicable in overnight
Eurodollar time deposits. Earnings on any such investments shall be applied
to the Lessee's payment obligations, if any, to such Owner Participant
pursuant to the next succeeding paragraph, and the balance, if any, of such
earnings remaining after such application shall be paid in accordance with the
Lessee's written instructions.
If for any reason (i) the Operative Agreements shall not be executed
and delivered by the respective parties thereto and/or the Delayed Delivery
Date shall not occur (whether by reason of a failure to meet a condition
precedent thereto set forth in Article 4 hereof or otherwise) on or before the
third Business Day after the Scheduled Delivery Date (or earlier if requested
by the Owner Participant) or, if earlier, the Cut-Off Date, or (ii) the Lessee
has notified the Owner Trustee (with a copy to the Owner Participant) prior to
2:00 p.m. (New York City time) on any date after the Scheduled Delivery Date
that it does not intend to go forward to close the transactions contemplated
hereby for such Delivery Date, the Owner Participant may cancel any funding
arrangements made to fund its Commitment on the Scheduled Delivery Date but
the Owner Participant's Commitment hereunder with respect to the Aircraft shall
not be terminated thereby until the Cut-Off Date, whereupon the Owner
Participant's Commitment hereunder shall terminate. On such third Business
Day (or such earlier date) or the Cut-Off Date, as the case may be, or the
earliest practicable Business Day thereafter, the Owner Trustee shall return
the amounts held by it hereunder to the Owner Participant, provided that the
Owner Trustee shall have had a reasonable time to liquidate any Permitted
Investments it has been authorized to invest in pursuant to the preceding
paragraph and to obtain the proceeds therefrom in funds of the type originally
received, and the Lessee shall pay interest on such funds to the Owner
Participant at the Debt Rate, such interest to be payable for the period from
and including such Scheduled Delivery Date to but excluding the date such
funds are returned to the Owner Participant in accordance with the terms
hereof; provided that if any such funds are returned to the Owner Participant
after 2:00 p.m. (New York City time) on any such date, such funds shall be
deemed for purposes of this paragraph to have been returned on the next
succeeding Business Day.
The Lessee shall reimburse the Owner Trustee on demand for any loss
incurred by the Owner Trustee as a result of the investment of funds by the
Owner Trustee in accordance with the terms of this Section 3.02(c). Further,
the Lessee shall indemnify the Owner Trustee and hold it harmless from and
against any cost or expense the Owner Trustee may incur as a result of any
investment of funds or transfer of funds referred to herein in accordance with
the terms hereof. The Owner Trustee shall not be liable for failure to invest
such funds except as otherwise provided herein or for any losses incurred on
such investments except for any losses arising out of its own gross negligence
or willful misconduct.
Section 3.03. Owner Participant's Instructions to Owner Trustee. The
Owner Participant agrees that the release of its Commitment in accordance with
the terms hereof shall constitute, without further act, authorization and
direction by the Owner Participant to the Owner Trustee to take the actions
specified in Sections 1.01(a) and (c) of the Trust Agreement and confirmation
that all conditions to closing set forth in Section 4.02 hereof were either
met to the satisfaction of the Owner Participant or, if not so met, were in
any event waived by it.
Section 3.04. Transaction Costs. If the transactions contemplated
by this Article 3 are consummated, as and when any portion of Transaction
Costs becomes due and payable, the Owner Participant shall, as soon as
practicable upon receipt of bills or invoices for the amounts payable make
such payments or, if the Lessee shall have already made such payment, shall
reimburse the Lessee therefor or shall, as soon as practicable, furnish the
Owner Trustee funds sufficient to, and the Owner Trustee shall, as soon as
practicable, make payment of such portion to the Person or Persons entitled to
payment upon presentation to the Owner Trustee of bills or invoices for the
amount of such payment. If such transactions are not consummated, the Lessee
shall pay or cause to be paid all the Transaction Costs; provided, however
that if the failure of such transactions to be consummated is due to (i) a
failure of the Owner Participant to obtain investment approval to proceed with
the transaction contemplated hereby, (ii) a failure to negotiate the Operative
Agreements in good faith by the Owner Participant or (iii) a wrongful act by
the Owner Participant, the Lessee shall have no obligation to pay those costs
and expenses incurred directly by the Owner Participant in connection with the
transactions contemplated by this Agreement described in Sections 9.01(a)(i)
and (ix) hereof, but the Lessee shall be obligated to pay all other
Transaction Costs.
Section 3.05. Postponement of Delivery Date. (a) If the Owner
Participant shall for any reason fail or refuse to make the full amount of its
Commitment available on the Delivery Date in accordance with the terms of
Section 3.02 hereof, the Owner Trustee will promptly give each party confirmed
facsimile notice thereof and the Lessee shall postpone the Delivery Date for a
period of not more than five (5) Business Days, but in no event later than the
Cut-Off Date. If the Owner Participant shall for any reason fail or refuse to
make the full amount of its Commitment available in accordance with the terms
of Section 3.02 hereof on such postponed Delivery Date, (i) if the Owner
Participant fails to make available its Commitment in breach of its
obligations under this Agreement, the Lessee shall cause the Owner Participant
to assign to another equity investor identified by the Lessee its interest in
the Lessor's Estate pursuant to Section 6.03(d) hereof and (ii) if no such
equity investor is identified, or if such equity investor fails to close such
transactions, or if the Owner Participant fails to make available its
Commitment for any other reason than as specified in clause (i) above, the
Owner Participant's interest in the Lessor's Estate shall be automatically
conveyed to the Lessee without any further action, and the parties hereto
shall take such actions as may be advisable or necessary to give effect to
such conveyance. From and after any such conveyance, the Owner Participant's
obligations hereunder and under the other Operative Agreements shall cease.
The exception to the Lessee's indemnity set forth in clause (viii) of Section
8.01(b) hereof shall not be applicable to any such conveyance other than a
conveyance pursuant to clause (i) above. For the avoidance of doubt, it is
understood and agreed that if for any reason other than the failure of the
Manufacturer to deliver the Aircraft, the Lessee does not enter into the Lease
Supplement with the Owner Trustee on or prior to the Cut-Off Date, the
Indenture Trustee and the Pass Through Trustee agree that the Lessee shall
purchase the Aircraft and assume all of the obligations of the Owner Trustee
under the Certificates upon satisfaction of the requirements set forth in
Section 4.02 hereof, as the same may be modified by the provisions of Section
6.11 hereof and as otherwise necessary to reflect a full recourse secured
aircraft financing of the Lessee. If the Lessee has identified an equity
investor under the circumstances set forth in clause (i) above, the Owner
Participant agrees to assign its interest in the Lessor's Estate as provided
in said clause (i). In case of any such conveyance pursuant to said clause
(i) (but subject to the satisfaction of the conditions precedent specified
herein), the Indenture Trustee shall release the Debt Portion or such lesser
amount as may then be held in the Collateral Account for application to the
payments contemplated in the last sentence of Section 3.02(a) hereof.
(b) Release of Obligations. If the Delivery Date has not occurred
on or prior to the Cut-Off Date (i) in the case of the Indenture Trustee and
the Pass Through Trustee, as a result of a failure of the Manufacturer to
deliver the Aircraft, or (ii) in the case of the Owner Participant, for any
reason, then, in such event, the Owner Trustee shall not purchase the Aircraft
from the Manufacturer, and the parties to the Operative Agreements shall have
no further obligations or liabilities under any of said Operative Agreements
with respect to the Aircraft, including the obligation of the Owner
Participant to participate in the payment of the Purchase Price, and such
documents shall terminate and have no further force or effect with respect to
the Aircraft; provided, however, that the Lessee shall provide, no later than
the Cut-Off Date, notice of prepayment to the Indenture Trustee and the
Certificates shall be prepaid on the 15th day following the Cut-Off Date as
provided in Section 6.02(a)(vi) of the Indenture and Section 15.02(c) hereof
and provided further, that (i) the Lessee's obligation to pay any Transaction
Costs as provided in Section 3.04 hereof (to the extent such section is
applicable) and to indemnify such parties to the extent provided in such
documents, shall not be diminished or modified in any respect and (ii) the
obligations of the Owner Trustee, the Indenture Trustee and the Lessee to
return funds and pay interest, costs, expenses and other amounts thereon or in
respect thereof as provided in Section 3.02 hereof shall continue.
(c) Optional Postponement. Without limiting the provisions of
Section 3.02(c) hereof, the Scheduled Delivery Date may be postponed from time
to time (but in no event shall the Delivery Date be later than the Cut-Off
Date) for any reason, other than pursuant to Section 3.05(a) hereof, if the
Lessee gives the Owner Participant, the Indenture Trustee, the Owner Trustee
and the Pass Through Trustee confirmed facsimile notice (or telephone notice
followed by written confirmation) of such postponement and notice of the date
to which the Delivery Date has been postponed, such notice of postponement to
be received by each party no later than 11:00 a.m. (New York City time) on the
Business Day preceding the Scheduled Delivery Date.
Section 3.06. Closing. The closing with respect to the purchase and
lease of the Aircraft on the Delivery Date shall take place at the offices of
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017.
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date). The
parties agree that the obligation of each of the Owner Participant, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee to participate in
the transactions contemplated hereby on the Certificate Closing Date are
subject to the fulfillment to the satisfaction of the Owner Participant, the
Owner Trustee, the Indenture Trustee and the Pass Through Trustee (or waiver
by the Owner Participant, the Owner Trustee, the Indenture Trustee or the Pass
Through Trustee), prior to or on the Certificate Closing Date, of the
following conditions precedent:
(a) Certificates. On the Certificate Closing Date, there shall have
been duly issued and delivered by the Owner Trustee to the Pass Through
Trustee for each Pass Through Trust, against payment therefor the
Certificates, duly authenticated dated the Certificate Closing Date and
registered in the name of the Pass Through Trusts. The Pass Through
Certificates shall be registered under the Securities Act, any applicable
state securities laws shall have been complied with, and the Pass Through
Agreement shall have been qualified under the Trust Indenture Act.
The Pass Through Trustee shall, in accordance with Section 2.01 of
the Pass Through Agreement, execute, authenticate and deliver Pass Through
Certificates, dated the Certificate Closing Date and of the maturities, in
the principal amounts, bearing the interest rates and of the other economic
terms specified in the Series Supplements, and deliver such Pass Through
Certificates to the Underwriters as specified in such request against
payment by the Underwriters of an amount equal to the principal amount
thereof.
(b) Legal Investment. No change shall have occurred in applicable
laws or regulations, or interpretations of any such laws or regulations by
applicable regulatory authorities, which, in the opinion of the Owner
Participant, the Pass Through Trustee or the Indenture Trustee, would make
it illegal for the Owner Participant, the Pass Through Trustee or the
Indenture Trustee, and no change in circumstances outside the control of
the Owner Participant, the Pass Through Trustee or the Indenture Trustee
shall have occurred which would otherwise make it illegal or otherwise in
contravention of guidance issued by regulatory authorities for the Owner
Participant, the Pass Through Trustee or the Indenture Trustee, to
participate in the transaction to be consummated on the Certificate Closing
Date; and no action or proceeding shall have been instituted nor shall
governmental action before any court, governmental authority or agency be
threatened which in the opinion of counsel for the Owner Participant, the
Pass Through Trustee or the Indenture Trustee is not frivolous, nor shall
any order have been issued or proposed to be issued by any court, or
governmental authority or agency, as of the Certificate Closing Date, to
set aside, restrain, enjoin or prevent the consummation of any of the
transactions contemplated by this Agreement or by any of the other
Operative Agreements.
(c) Other Commitments; Approvals. The Underwriters shall have
transferred the funds specified in Section 2.01(a) and all conditions
thereunder shall have been satisfied or waived.
(d) Documents. This Agreement and the following documents shall have
been duly authorized, executed and delivered by the respective party or
parties thereto, shall each be satisfactory in form and substance to such
parties (acting directly or by authorization to its special counsel) and
shall each be in full force and effect; there shall not have occurred any
default thereunder, or any event which with the lapse of time or the giving
of notice or both would be a default thereunder, and copies executed or
certified as requested by each party of such documents shall have been
delivered to such party or its special counsel (provided that counterpart
No. 1 of the Lease shall be delivered to the Indenture Trustee):
(i) this Agreement;
(ii) the Lease;
(iii) the Trust Agreement;
(iv) the Indenture;
(v) the Tax Indemnity Agreement (to be delivered to the Lessee and
the Owner Participant only);
(vi) the Purchase Agreement together with a warranty bill of sale
from the Manufacturer;
(vii) the Purchase Agreement Assignment;
(viii)the Consent and Agreement;
(ix) the Engine Consent and Agreement; and
(x) any Ancillary Agreements.
(e) Financing Statements. A Uniform Commercial Code ("UCC")
financing statement or statements covering all the security interests created
by or pursuant to the Granting Clause of the Indenture shall have been
executed and delivered by the Owner Trustee, as debtor, and by the Indenture
Trustee, as secured party, and such financing statement or statements shall
have been duly filed in all places, and all other actions shall have been
taken, which in the opinion of special counsel for the Pass Through Trustee or
the Underwriters are necessary or desirable to perfect said security interests.
(f) Corporate Documents. The Owner Trustee, the Indenture Trustee,
the Pass Through Trustee, the Owner Participant, the Lessee and the
Underwriters (acting directly or by authorization to its counsel) shall have
received the following, in each case in form and substance satisfactory to it:
(i) copies, certified by the Secretary or an Assistant
Secretary of the Lessee, of the certificate of incorporation and
bylaws of the Lessee and of the resolutions of the Board of Directors
of the Lessee duly authorizing the execution, delivery and
performance by the Lessee of this Agreement, the Lease, the Tax
Indemnity Agreement, the Pass Through Agreement, the Series
Supplements, the other Operative Agreements to which Lessee is or is
to be a party and each other document to be executed and delivered by
the Lessee in connection with the transactions contemplated hereby
together with an incumbency certificate of the Lessee as to the
person or persons authorized to execute and deliver said documents on
behalf of the Lessee and the signatures of such person or persons;
(ii) a copy of the articles of incorporation and bylaws and
other instruments of the Owner Participant certified by the Secretary
or Assistant Secretary of the Owner Participant (or other like
instruments satisfactory to the Owner Trustee, the Owner Participant,
the Indenture Trustee and the Pass Through Trustee), authorizing the
execution and delivery by the Owner Participant of this Agreement and
the Trust Agreement, together with an incumbency certificate of the
Owner Participant as to the person or persons authorized to execute
and deliver said documents on behalf of the Owner Participant and the
signatures of such person or persons;
(iii) a copy of the charter and bylaws and other instruments of
__________ Trust Company, certified by the Secretary or Assistant
Secretary of __________ Trust Company (or other like instruments
satisfactory to such Participant), authorizing the execution and
delivery by __________ Trust Company or the Owner Trustee, as the
case may be, of this Agreement, the Trust Agreement, the Indenture,
each of the other Operative Agreements to which it is or is to be a
party and the Certificates, whether in its individual capacity or as
Owner Trustee, together with an incumbency certificate of __________
Trust Company as to the person or persons authorized to execute and
deliver said documents on behalf of __________ Trust Company and the
signatures of such person or persons;
(iv) a copy of the charter and bylaws and other instruments of
the Indenture Trustee, certified by the Secretary or Assistant
Secretary of the Indenture Trustee (or other like instruments
satisfactory to such Participant), authorizing the execution and
delivery by the Indenture Trustee of each of this Agreement, the
Indenture and the other Operative Agreements to which it is or is to
be a party, together with an incumbency certificate of the Indenture
Trustee as to the person or persons authorized to execute and deliver
said documents on behalf of the Indenture Trustee and the signatures
of such person or persons;
(v) a copy of the articles of association and by-laws of the
Pass Through Trustee certified by the Secretary or an Assistant
Secretary of the Pass Through Trustee which by-laws include a
provision duly authorizing the execution, delivery and performance by
the Pass Through Trustee of this Participation Agreement, the Pass
Through Agreement, the Series Supplements and any other document
executed or authenticated by or on behalf of the Pass Through Trustee
in connection with the transactions contemplated hereby, together
with an incumbency certificate as to the person or persons authorized
to execute and deliver such documents on behalf of the Pass Through
Trustee; and
(vi) such other documents, evidences, materials, and
information with respect to the Lessee, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and the Owner Participant
as any such Person may reasonably request in order to establish the
consummation of the transactions contemplated by this Agreement.
(g) Officer's Certificate of Lessee. On the Certificate Closing
Date, the following statements shall be true, the Pass Through Trustee, the
Owner Participant, the Owner Trustee and the Indenture Trustee shall have
received a certificate signed by the Assistant Treasurer or any other duly
authorized officer of the Lessee, dated the Certificate Closing Date,
stating that:
(i)the representations and warranties of the Lessee contained in
the Operative Agreements (excluding the Tax Indemnity Agreement) and
in any certificate delivered pursuant hereto or thereto are true and
correct on and as of the Certificate Closing Date as though made on
and as of such date (except to the extent that such representations
and warranties relate solely to an earlier date, in which case such
certificate shall state that such representations and warranties were
true and correct on and as of such earlier date);
(ii)no material adverse change has occurred in the financial
condition, business or operations of the Lessee from that shown in
the unaudited consolidated financial statements of the Lessee for the
quarter ending _________________; and
(iii) no event has occurred and is continuing which constitutes an
Event of Loss, a Default or an Event of Default under the Lease.
(h) Officer's Certificate of Owner Participant. On the Certificate
Closing Date, the following statements shall be true, and the Pass Through
Trustee, the Owner Trustee and the Indenture Trustee shall have received a
certificate from the Owner Participant signed by a duly authorized officer
of the Owner Participant dated the Certificate Closing Date, stating that:
(i)the representations and warranties of the Owner Participant
contained in this Agreement and the Trust Agreement and in any
certificate delivered pursuant hereto are true and correct on and as
of the Certificate Closing Date as though made on and as of such date
(except to the extent that such representations and warranties relate
solely to an earlier date, in which case such certificate shall state
that such representations and warranties were true and correct on and
as of such earlier date);
(ii)no Lessor's Liens attributable to the Owner Participant exist;
and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or inaction on the part of the Owner Participant, an Event of
Default or an Indenture Event of Default.
(i) Other Officer's Certificates. On the Certificate Closing Date,
the following statements shall be true, and the Lessee, the Owner
Participant, the Pass Through Trustee, the Owner Trustee and the Indenture
Trustee shall have received a certificate from each of the Owner Trustee
(in the case of the Lessee, the Owner Participant, the Pass Through
Trustee, and the Indenture Trustee), the Indenture Trustee (in the case of
the Lessee, the Owner Participant, the Pass Through Trustee, and the Owner
Trustee) and the Pass Through Trustee (in the case of the Owner
Participant, the Lessee, the Owner Trustee and the Indenture Trustee)
signed by a duly authorized officer, dated the Certificate Closing Date,
stating with respect to the Owner Trustee, the Pass Through Trustee or the
Indenture Trustee, as the case may be, that:
(i)the representations and warranties of the Owner Trustee in its
individual capacity and as trustee, the Pass Through Trustee in its
individual capacity and as trustee and the Indenture Trustee in its
individual capacity and as trustee contained in this Agreement, the
Lease and in the Indenture and in any certificate delivered hereto or
thereto are true and correct on and as of the Certificate Closing
Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date,
in which case such certificate shall state that such representations
and warranties were true and correct on and as of such earlier date);
(ii)to the best of its knowledge, no event has occurred and is
continuing or would result from the purchase or lease of the
Aircraft, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, an Event of Default
or an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to ______________
or the Owner Trustee affecting the Trust Indenture Estate or the
Lessor's Estate or any part thereof.
(j) Legal Opinions. Each party hereto (acting directly or by
authorization to its special counsel) and the Underwriters shall have
received from the following counsel the respective legal opinions
satisfactory to it as to scope and substance (and covering such other
matters as it may reasonably request) and dated the Certificate Closing
Date:
(i) _______________, Esq., Vice President, Law - Corporate and
Business Transactions of the Lessee, in the form of Exhibit
A(1)(a)(i) hereto;
(ii)_____________________, special counsel for the Owner
Participant, in the form of Exhibit A(2)(a) hereto and
_______________, Esq., general counsel for the Owner Participant, in
the form of Exhibit A(2)(b) hereto;
(iii)_____________________, special counsel for the Indenture
Trustee, in the form of Exhibit A(3) hereto;
(iv)_____________________, special counsel for the Pass Through
Trustee, in the form of Exhibit A(4) hereto;
(v) _____________________, special counsel for the Owner Trustee,
in the form of Exhibit A(5)(a)(i) hereto; and
(vi)Davis Polk & Wardwell, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(i) hereto.
(k) Organizational Documents. Davis Polk & Wardwell, special
counsel to Lessee, and _____________________, special counsel to the Owner
Participant, shall have received copies, certified as of the Certificate
Closing Date as being accurate, of the corporate organizational documents
of the Lessee, the Owner Participant, the Owner Trustee, the Pass Through
Trustee and the Indenture Trustee.
(l) Payment of Taxes. (A) All taxes payable in connection with the
execution, delivery, recording and filing of all financing statements and
the documents and instruments referred to in subparagraph (e) of this
Section 4.01, or in connection with the purchase of the Aircraft by the
Owner Trustee and the issuance of the Certificates and the making by the
Owner Participant of its equity investment and for which the Lessee is
responsible hereunder shall have been duly paid or caused to be paid in
full by the Lessee; (B) All sales or use taxes and duties related to the
consummation of the transactions contemplated by the Operative Agreements
and for which the Lessee is responsible pursuant to Article 7 hereof shall
have been duly paid in full by the Lessee other than, in the case of both
clauses (A) and (B), such taxes which are being contested by the Lessee in
good faith and by appropriate proceedings so long as such proceedings do
not involve any material danger of the sale, forfeiture or loss of the
Aircraft.
(m) No Indenture Event of Default. No Indenture Event of Default
attributable to either ____________ or the Owner Trustee shall have
occurred and be continuing.
(n) Event of Default; Default; Event of Loss. No Default or Event
of Default or Event of Loss or event, which with the passage of time or if
continued unremedied or unaltered would constitute an Event of Loss, shall
have occurred or be in existence.
(o) Withholding Tax Certificate. The Lessee shall have received
evidence that each Holder which is not a U.S. person has delivered duly
executed Treasury Department Forms 4224, 1001, W-8 or W-9, as the case may
be, to the Pass Through Trustee relating to all amounts payable to such
Holders.
(p) Other Agreements. The Lessee and the Pass Through Trustee shall
have entered into the Pass Through Agreement and the Series Supplements, all
conditions to the effectiveness of each thereof shall have been satisfied
or waived and the Pass Through Certificates shall have been issued pursuant
to the Series Supplements. The Lessee shall have entered into the
Underwriting Agreement, all conditions to the effectiveness thereof shall
have been satisfied or waived, and the Pass Through Certificates shall have
been delivered pursuant to the Underwriting Agreement.
Section 4.02. Conditions Precedent (Delivery Date). The parties
agree that the obligation of each of the Owner Participant, the Owner Trustee,
the Indenture Trustee and the Pass Through Trustee to participate in the
transactions contemplated hereby on the Delivery Date are subject to the
fulfillment to the satisfaction of the Owner Participant, the Owner Trustee,
the Indenture Trustee and the Pass Through Trustee (or waiver by the Owner
Participant, the Owner Trustee, the Indenture Trustee or the Pass Through
Trustee), prior to or on the Delivery Date, of the following conditions
precedent:
(a) Notice, Etc. Each party hereto shall have received a Delivery
Notice pursuant to Section 3.01 hereof at least three (3) Business Days
prior to the Delivery Date.
(b) Legal Investment. No change shall have occurred in applicable
laws or regulations, or interpretations of any such laws or regulations by
applicable regulatory authorities, which, in the opinion of the Owner
Participant, the Pass Through Trustee or the Indenture Trustee, would make
it illegal for the Owner Participant, the Pass Through Trustee or the
Indenture Trustee, and no change in circumstances outside the control of
the Owner Participant, the Pass Through Trustee or the Indenture Trustee
shall have occurred which would otherwise make it illegal or otherwise in
contravention of guidance issued by regulatory authorities for the Owner
Participant, the Pass Through Trustee or the Indenture Trustee, to
participate in the transaction to be consummated on the Delivery Date; and
no action or proceeding shall have been instituted nor shall governmental
action before any court, governmental authority or agency be threatened
which in the opinion of counsel for the Owner Participant, the Pass Through
Trustee or the Indenture Trustee is not frivolous, nor shall any order have
been issued or proposed to be issued by any court, or governmental
authority or agency, as of the Delivery Date, to set aside, restrain,
enjoin or prevent the consummation of any of the transactions contemplated
by this Agreement or by any of the other Operative Agreements.
(c) Documents. The documents referred to in Section 4.01(d) hereof
shall each be in full force and effect and the following documents shall
have been duly authorized, executed and delivered by the respective party
or parties thereto, shall each be satisfactory in form and substance to
such parties (acting directly or by authorization to its special counsel)
and shall each be in full force and effect; there shall not have occurred
any default thereunder, or any event which with the lapse of time or the
giving of notice or both would be a default thereunder, and copies executed
or certified as requested by each party of such documents shall have been
delivered to such party or its special counsel (provided that counterpart
No. 1 of the Lease Supplement shall be delivered to the Indenture Trustee):
(i) the Lease Supplement covering the Aircraft, dated the Delivery
Date;
(ii) an Indenture and Security Agreement Supplement covering the
Aircraft, dated the Delivery Date;
(iii) the Invoice; and
(iv) the Bills of Sale.
(d) Insurance. The Pass Through Trustee and the Indenture Trustee
shall each have received such evidence as it deems appropriate to
establish, including, without limitation, an independent insurance broker's
report, together with certificates of insurance from such broker, in form
and substance satisfactory to the Pass Through Trustee and the Indenture
Trustee, that the insurance required by Article 13 of the Lease is in
effect.
(e) Title, Airworthiness and Registration. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee shall have
received evidence from the Lessee reasonably satisfactory to each such
Person to the effect that:
(A) the Owner Trustee has good and marketable title to the
Aircraft, free and clear of Liens, except the rights of the Owner
Trustee and the Lessee under the Lease, the rights of the Indenture
Trustee under the Indenture and the beneficial interest of the Owner
Participant created by the Trust Agreement and the interest created
by the Indenture and the Indenture Supplement;
(B) the Aircraft has been duly certified by the Aeronautics
Authority as to type and airworthiness in accordance with the terms
of the Operative Agreements;
(C) on the Delivery Date, the FAA Bill of Sale, the Lease and
Lease Supplement, the Trust Agreement, the Indenture, and the
Indenture Supplement shall have been duly filed for recordation with
the Federal Aviation Administration pursuant to the Act;
(D) the Aircraft shall be registered in the name of the Owner
Trustee and the Lessee shall have permanent authority to operate the
Aircraft.
(f) Officers' Certificate of Lessee. On the Delivery Date, the
following statements shall be true, the Pass Through Trustee, the Owner
Participant, the Owner Trustee and the Indenture Trustee shall have
received a certificate signed by the Assistant Treasurer or any other duly
authorized officer of the Lessee, dated the Delivery Date, stating that:
(i)the representations and warranties of the Lessee contained in
the Operative Agreements (excluding the Tax Indemnity Agreement) and
in any certificate delivered pursuant hereto or thereto are true and
correct on and as of the Delivery Date as though made on and as of
such date (except to the extent that such representations and
warranties relate solely to an earlier date, in which case such
certificate shall state that such representations and warranties were
true and correct on and as of such earlier date);
(ii)no material adverse change has occurred in the financial
condition, business or operations of the Lessee from that shown in
the unaudited consolidated financial statements of the Lessee for the
quarter ending _________________; and
(iii) no event has occurred and is continuing which constitutes an
Event of Loss, a Default or an Event of Default under the Lease.
(g) Officer's Certificate of Owner Participant. On the Delivery
Date, the following statements shall be true, and the Pass Through Trustee,
the Owner Trustee and the Indenture Trustee shall have received a
certificate from the Owner Participant signed by a duly authorized officer
of the Owner Participant dated the Delivery Date, stating that:
(i)the representations and warranties of the Owner Participant
contained in this Agreement and the Trust Agreement and in any
certificate delivered at the closing pursuant hereto are true and
correct on and as of the Delivery Date as though made on and as of
such date (except to the extent that such representations and
warranties relate solely to an earlier date, in which case such
certificate shall state that such representations and warranties were
true and correct on and as of such earlier date);
(ii)no Lessor's Liens attributable to the Owner Participant exist;
and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or inaction on the part of the Owner Participant, an Event of
Default or an Indenture Event of Default.
(h) Other Officer's Certificates. On the Delivery Date, the
following statements shall be true, and the Lessee, the Owner Participant,
the Pass Through Trustee, the Owner Trustee and the Indenture Trustee shall
have received a certificate from each of the Owner Trustee (in the case of
the Lessee, the Owner Participant, the Pass Through Trustee, and the
Indenture Trustee), the Indenture Trustee (in the case of the Lessee, the
Owner Participant, the Pass Through Trustee, and the Owner Trustee) and the
Pass Through Trustee (in the case of the Owner Participant, the Lessee, the
Owner Trustee and the Indenture Trustee) signed by a duly authorized
officer, dated the Delivery Date, stating with respect to the Owner
Trustee, the Pass Through Trustee or the Indenture Trustee, as the case may
be, that:
(i)the representations and warranties of the Owner Trustee in its
individual capacity and as trustee, the Pass Through Trustee in its
individual capacity and as trustee and the Indenture Trustee in its
individual capacity and as trustee contained in this Agreement, the
Lease and in the Indenture and in any certificate delivered hereto or
thereto are true and correct on and as of the Delivery Date as though
made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii)to the best of its knowledge, no event has occurred and is
continuing or would result from the purchase or lease of the
Aircraft, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, an Event of Default
or an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to ______________
or the Owner Trustee affecting the Trust Indenture Estate or the
Lessor's Estate or any part thereof.
(i) Legal Opinion. Each party hereto (acting directly or by
authorization to its special counsel) and the Underwriters shall have
received from the following counsel the respective legal opinions
satisfactory to it as to scope and substance (and covering such other
matters as it may reasonably request) and dated the Delivery Date:
(i) _______________, Esq., Vice President, Law - Corporate and
Business Transactions of the Lessee, in the form of Exhibit
A(1)(a)(ii) hereto;
(ii)Davis Polk & Wardwell, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(ii) hereto.
(iii)_____________________, special counsel for the Owner Trustee,
in the form of Exhibit A(5)(a)(ii) hereto; and
(iv)counsel for the Engine Manufacturer, in the form of Exhibit
A(6) hereto;
(v) counsel for the Manufacturer, in the form of Exhibit A(7)
hereto; and
(vi)Daugherty, Fowler & Peregrin, special aviation counsel, in the
form of Exhibit A(8) hereto.
(j) Report of Aircraft Expert. The Owner Participant shall have
received a report or reports prepared by BK Associates, Inc. addressed to
the Owner Participant (with a copy of such report to the Lessee and the
Indenture Trustee) which reports shall be in form and substance
satisfactory to the Owner Participant, to the effect that:
(i) (A) the estimated fair market value of the Aircraft net of any
cost to the Owner Participant or the Owner Trustee of return at the
end of the Basic Term and the maximum allowable Fixed Renewal Term
(determined without including in such value any increase or decrease
for inflation or deflation during the Term) is equal to or greater
than 20% of the Purchase Price for the Aircraft and (B) at least 20%
of the useful economic life of the Aircraft is remaining at the end
of the Basic Term and the maximum allowable Fixed Renewal Term;
(ii)the estimated useful life of the Aircraft is at least 125% of
the Interim Term, the Basic Term and the maximum allowable Fixed
Renewal Term;
(iii)the Purchase Price of the Aircraft is equal to the fair
market value of the Aircraft on the Delivery Date; and
(iv)the estimated fair market value of the Aircraft on the Purchase
Option Date (taking into account a reasonable estimate for inflation
and deflation) is less than or equal to the Purchase Option Price.
(k) Payment of Taxes. (A) All taxes payable in connection with the
execution, delivery, recording and filing of all financing statements and
the documents and instruments referred to in subparagraph (e) of this
Section 4.02, or in connection with the purchase of the Aircraft by the
Owner Trustee and the issuance of the Certificates and the making by the
Owner Participant of its equity investment and for which the Lessee is
responsible hereunder shall have been duly paid or caused to be paid in
full by the Lessee; (B) All sales or use taxes and duties related to the
consummation of the transactions contemplated by the Operative Agreements
and for which the Lessee is responsible pursuant to Article 7 hereof shall
have been duly paid in full by the Lessee other than, in the case of both
clauses (A) and (B), such taxes which are being contested by the Lessee in
good faith and by appropriate proceedings so long as such proceedings do
not involve any material danger of the sale, forfeiture or loss of the
Aircraft.
(l) No Indenture Event of Default. No Indenture Event of Default
attributable to either ____________ or the Owner Trustee shall have
occurred and be continuing.
(m) Event of Default; Default; Event of Loss. No Default or Event
of Default or Event of Loss or event, which with the passage of time or if
continued unremedied or unaltered would constitute an Event of Loss, shall
have occurred or be in existence.
(n) Payments. The Owner Participant shall have made available its
Commitment to the Owner Trustee and the other payments contemplated by
Section 3.02 hereof shall have been made.
(o) Release of Debt Portion. The Indenture Trustee shall have
released the Debt Portion from (or such lesser amount as may then be held
in) the Collateral Account.
Section 4.03. Opinion of Special Aviation Counsel. Promptly upon the
recording of the documents specified in 4.02(e)(C), pursuant to the Act, the
Lessee will cause Messrs. Daugherty, Fowler & Peregrin, special counsel in
Oklahoma City, Oklahoma, to deliver to the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee an opinion as to
the due recording of such documents and as to the lack of filing of any
intervening documents with respect to the Aircraft.
Section 4.04. Conditions Precedent to Lessee's Obligations. The
Lessee's obligation to participate in the transactions contemplated hereby on
the Certificate Closing Date is subject to the conditions that, prior to or on
the Certificate Closing Date, the Lessee shall have received the certificates
and other documents which are referred to in, or the opinions to be addressed
to it under, as the case may be, paragraphs (d), (f)(ii)-(v), (h), (i),
(j)(ii)-(vi) and (k) of Section 4.01 hereof and the Underwriters shall have
made available the amounts required to be paid by them pursuant to Section
2.01 hereof, and the Lessee's obligation to participate in the transactions
contemplated hereby on the Delivery Date, is subject to the conditions that,
on or prior to the Delivery Date, the Lessee shall have received the documents
which are referred to in, or the opinions to be addressed to it under, as the
case may be, paragraphs (c), (g), (h) and (i)(ii)-(v) of Section 4.02 hereof
and the Indenture Trustee shall have released the Debt Portion from (or such
lesser amount as may then be held in) the Collateral Account.
ARTICLE 5
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.01. Lessee's Representations and Warranties. The Lessee
represents and warrants to the Owner Participant, the Owner Trustee (in its
individual capacity and as Owner Trustee), the Pass Through Trustee (in its
individual capacity and as Pass Through Trustee) and the Indenture Trustee (in
its individual capacity and as Indenture Trustee) that, on the date hereof and
as of the Certificate Closing Date and the Delivery Date:
(a) the Lessee is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware with its principal
place of business and chief executive office in Memphis, Tennessee, and is
duly qualified to do business as a foreign corporation in good standing in
all jurisdictions in which it has intrastate routes, or offices or major
overhaul facilities or in which other activities of the Lessee require such
qualification;
(b) the Lessee has full power, authority and legal right to conduct
its current business and operations as currently conducted and to own or
hold under lease its properties and to enter into and perform its
obligations under this Agreement, the Lease, the Tax Indemnity Agreement,
the Lease Supplement, the Bills of Sale, the Purchase Agreement, the
Purchase Agreement Assignment, the Pass Through Agreement and the Series
Supplements (the "Lessee Documents");
(c) the Lessee is an "air carrier" within the meaning of the Act and
a holder of a certificate under Sections 401 and 418 of the Act and an "air
carrier operating certificate" issued under Section 604 of the Act;
(d) the Lessee possesses all necessary certificates, franchises,
licenses, permits, rights and concessions and consents which are material
to the operation of the routes flown by it and the conduct of its business
and operations as currently conducted;
(e) the Lessee Documents have each been duly authorized, executed and
delivered or, in the case of the Operative Agreements identified in Section
4.02(c) hereof, will on the Delivery Date be executed and delivered by the
Lessee and constitutes (or will constitute, as the case may be) the legal,
valid and binding obligations of the Lessee enforceable against it in
accordance with the terms thereof with respect to each other party which
shall have duly executed and delivered such documents or substantially
performed its obligations thereunder except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws of general application to or affecting the enforcement of
creditors' rights, or equitable principles;
(f) no authorization, consent or approval of, notice to or filing
with any governmental authority is required for the execution, delivery or
performance by the Lessee of the Lessee Documents or for the use and
maintenance of the Aircraft except for those that have been or, on or
before the Certificate Closing Date or the Delivery Date will have been
duly made, given or accomplished;
(g) neither the execution, delivery or performance by the Lessee of
the Lessee Documents, nor compliance with the terms and provisions hereof
or thereof, conflicts or will conflict with or will result in a breach or
violation of any of the terms, conditions or provisions of, or will require
any consent or approval under, any law, governmental rule or regulation or
the charter documents, as amended, or bylaws, as amended, of the Lessee or
any order, writ, injunction or decree of any court or governmental
authority against the Lessee or by which it or any of its properties is
bound or any indenture, mortgage or contract or other agreement or
instrument to which the Lessee is a party or by which it or any of its
properties is bound, or constitutes or will constitute a default thereunder
or will result in the imposition of any Lien upon any of its properties;
(h) except as set forth in the opinion of the Vice President, Law -
Corporate and Business Transactions of the Lessee referred to in Section
3.01(l)(i), as to which the Vice President, Law - Corporate and Business
Transactions can express no opinion on the date hereof or as of the
Certificate Closing Date or the Delivery Date, as the case may be,
concerning the Lessee's liability (if any) or the effect of any adverse
determination upon the financial condition, business or operations of the
Lessee or the ability of the Lessee to perform its obligations under the
Lessee Documents, there are no pending or, to the knowledge of the Lessee,
threatened actions, suits or proceedings (whether or not purportedly on
behalf of the Lessee) pending or, to the knowledge of the Lessee,
threatened investigations against or affecting the Lessee or any of its
property before or by any court or administrative agency which, if
adversely determined would materially and adversely affect the consolidated
financial condition, business or operations of the Lessee, or the ability
of the Lessee to perform its obligations under the Lessee Documents;
(i) the Lessee has filed or caused to be filed all tax returns which
are required to be filed and has paid or caused to be paid all taxes shown
to be due and payable pursuant to such returns or pursuant to any
assessment received by the Lessee (other than assessments the payment of
which is being contested in good faith by the Lessee and any assessments,
the nonpayment of which would not have a material adverse effect on the
Lessee's consolidated financial condition and other than as set forth in
the _________ filed in respect of the quarter ended ___________, 199_), and
the Lessee has no knowledge of any related actual or proposed deficiency or
additional assessment which either in any case or in the aggregate would
materially adversely affect the Lessee's consolidated financial condition;
(j) except for (A) the filing for recording pursuant to the Act of
the documents referred to in Section 3.01(h)(C), (B) the filings referred
to in Section 3.01(f) and (C) the taking of possession by the Indenture
Trustee of the original counterpart of the Lease, no further action,
including any filing or recording of any document, is necessary or
advisable in order to establish and perfect the Owner Trustee's title to
and interest in the Aircraft as against the Lessee and any third parties,
or to perfect the first security interest in and mortgage lien on the Trust
Indenture Estate in favor of the Indenture Trustee with respect to such
portion of the Aircraft as is covered by the recording system established
by the Act;
(k) on the Delivery Date the Owner Trustee will receive good and
marketable title to the Aircraft, free and clear of Liens, except the
rights of the Owner Trustee and the Lessee under the Lease and the Lease
Supplement, the Lien of the Indenture, the rights of the Owner Participant
under the Trust Agreement and the rights of the Indenture Trustee under the
Indenture;
(l) the representations and warranties of the Lessee set forth in
Section ___ of the Underwriting Agreement are true and correct;
(m) with respect to ERISA, except as otherwise disclosed:
(i) none of the Pension Plans nor their related trusts have been
terminated in a distress termination pursuant to Section 4041(c) of
ERISA or by the PBGC pursuant to Section 4042 of ERISA, nor have any
actions been taken to so terminate any Pension Plan or related trust
and neither the Lessee nor any ERISA Affiliate has incurred or could
reasonably expect to incur any material liability with respect to a
Pension Plan under Section 4062, 4063, 4064 or 4069 of ERISA;
(ii)there have been no "reportable events" (as such term is
defined in Section 4043(b) of ERISA) with respect to any Pension Plan
which have resulted or could reasonably be expected to result in any
material liability of the Lessee;
(iii)no "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA or Section 412 of the Code) exists with
respect to any Pension Plan, whether or not waived, nor has any
request for a waiver under Section 412(d) of the Code been, or is
reasonably likely to be, filed with respect to any of the Pension
Plans;
(iv)neither the Lessee nor any ERISA Affiliate has failed to make
any contribution or payment to any Pension Plan which has resulted or
could reasonably be expected to result in the imposition of a Lien
under Section 302(f) of ERISA or Section 412(n) of the Code;
(v) all Pension Plans are in compliance in all material respects
with all applicable provisions of ERISA and the Code and have been so
administered and operated by the Lessee and/or ERISA Affiliates, as
applicable;
(vi)neither the Lessee nor any ERISA Affiliate has incurred or is
reasonably likely to incur any material withdrawal liability pursuant
to Section 4201 or 4204 of ERISA or any material liability under
Section 515 of ERISA; and
(vii)to the best of the Lessee's knowledge, neither the Lessee nor
any ERISA Affiliate has engaged in a "prohibited transaction" (within
the meaning of Section 4975 of the Code or Section 406 of ERISA)
which could reasonably be expected to subject the Lessee to the tax
or penalties on prohibited transactions imposed by Section 4975 of
the Code or Section 502 of ERISA;
As used in this Section 5.01(m), the term "Pension Plan" means an employee
pension benefit plan as defined in Section 3(2) of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA) which is
covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and which is maintained, or contributed to,
by the Lessee or any ERISA Affiliate, and the term "ERISA Affiliate" means
any entity which together with the Lessee would be treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code;
(n) the Lessee is a Citizen of the United States;
(o) no governmental approval of any kind is required by the Owner
Participant or for the Owner Participant's execution of or performance
under this Agreement or any agreement contemplated hereby by reason of any
fact or circumstance of the Lessee, the nature of the Aircraft or the
Lessee's proposed operations or use of the Aircraft;
(p) on the Delivery Date, all premiums with respect to the insurance
required to be provided by the Lessee prior to the Delivery Date under
Article 13 of the Lease shall have been paid by the Lessee;
(q) on the Delivery Date, all sales or use taxes then due and for
which the Lessee is responsible pursuant to Article 7 hereof shall have
been paid, other than such taxes which are being contested by the Lessee in
good faith and by appropriate proceedings so long as such proceedings do
not involve any danger of the sale, forfeiture or loss of the Aircraft;
(r) the Lessee is not in default under any mortgage, deed of trust,
indenture or other instrument or agreement to which the Lessee is a party
or by which it or any of its properties or assets may be bound, or in
violation of any applicable law, which default or violation would have a
material adverse effect on the financial condition, business or operations
of the Lessee or its ability to perform any of its obligations under the
Lessee Documents; and
(s) no Event of Default or Event of Loss or event, which with the
passage of time or if continued unremedied or unaltered would constitute an
Event of Loss, has occurred or exists.
Section 5.02. Intentionally Left Blank.
Section 5.03. Certain Covenants of Lessee. The Lessee covenants and
agrees with the Owner Participant, the Owner Trustee (in its individual
capacity and as Owner Trustee), the Indenture Trustee (in its individual
capacity and as Indenture Trustee) and the Pass Through Trustee (in its
individual capacity and as Pass Through Trustee) as follows:
(a) The Lessee will cause to be done, executed, acknowledged and
delivered all such further acts, conveyances and assurances as the Owner
Trustee, the Indenture Trustee or any Participant shall reasonably require
for accomplishing the purposes of this Agreement, the Bills of Sale, the
Indenture, the Indenture Supplement, the Tax Indemnity Agreement, the Lease
and the Lease Supplement and the other Operative Agreements to which it is
a party;
(b) The Lessee at all times hereafter will cause the Aircraft to
remain duly registered, in the name of the Owner Trustee, under the Act;
provided, however, that the Owner Participant, the Owner Trustee and the
Indenture Trustee agree that, if the Lessee has requested their consent to
the registration of the Aircraft, in the name of the Owner Trustee (or, if
appropriate, in the name of Lessee or a sublessee as a "lessee" or a
"sublessee"), at Lessee's expense, in a country listed in Schedule III
hereto with which (other than in the case of Taiwan) the United States then
maintains normal and full diplomatic relations, the Owner Participant, the
Owner Trustee, the Indenture Trustee and Pass Through Trustee will, upon
receipt of the assurances and opinion described below, consent to such
change in registration.
The Owner Participant, the Owner Trustee in its individual capacity,
the Pass Through Trustee and the Indenture Trustee shall have received:
(i) assurances satisfactory to them:
(A) to the effect that the insurance provisions of the Lease
have been and will be complied with upon such change of registry;
(B) that the Lessee will pay any expenses of the Owner
Participant, the Owner Trustee, the Pass Through Trustee and the
Indenture Trustee in connection with such change of registry;
(C) as to the continuation of the Indenture as a first
priority lien on the Aircraft;
(D) as to the protection of the right, title and interest of
the Owner Trustee in the Aircraft;
(E) that such change will not result in the imposition of, or
increase in the amount of, any Tax for which the Lessee is not
required to indemnify, or is not then willing to enter into a
binding agreement to indemnify, the Owner Participant, the Owner
Trustee (or any successor, assign or Affiliate thereof) or the
Lessor's Estate pursuant to Article 7 hereof; and
(F) that such new country of registry (x) would provide
substantially equivalent protection for the rights of owner
participants, lessors or lenders in similar transactions as
provided under United States law (except that, in the absence of
restrictions under the laws of such country on rights and remedies
of lessors and secured parties similar to those imposed by
Sections 362 and 363 of the Bankruptcy Code, rights and remedies
similar to those available under Section 1110 of the Bankruptcy
Code shall not be required), and (y) imposes aircraft maintenance
standards not materially less stringent than those of the
Aeronautics Authority; and
(ii) a favorable opinion of counsel (reasonably satisfactory in form
and substance to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee and the Owner Participant) in the new jurisdiction of registry to
the effect:
(A) that the terms (including, without limitation, the
governing law, service-of-process and jurisdictional-submission
provisions thereof) of the Lease and the Indenture are legal,
valid, binding and enforceable in such jurisdiction;
(B) that it is not necessary for the Owner Participant, the
Owner Trustee, the Pass Through Trustee or the Indenture Trustee
to register or qualify to do business in such jurisdiction in
connection with the registration in the new jurisdiction and the
exercise of any rights or remedies with respect to the Aircraft;
(C) that the courts of such jurisdiction would provide
substantially equivalent protection to the Lessor, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee as
provided under United States law (with the exception described in
paragraph (b)(i)(F) of this Section 5.03);
(D) that there is no tort liability of the owner, lessor or
mortgagee of an aircraft not in possession thereof under the laws
of such jurisdiction, other than tort liability which might have
been imposed on such owner, lessor or mortgagee under the laws of
the United States or any state thereof (it being understood that,
in the event such latter opinion cannot be given in a form
satisfactory to the Owner Participant, such opinion shall be
waived, if insurance reasonably satisfactory to the Owner
Participant, the Indenture Trustee, the Pass Through Trustee and
the Owner Trustee, in its individual capacity, is provided, at
Lessee's expense to cover such risk); and
(E) (unless the Lessee shall have agreed to provide insurance
reasonably satisfactory to the Indenture Trustee and the Owner
Participant covering the risk of requisition of use of the
Aircraft by the government of registry of the Aircraft) that the
laws of such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into United States Dollars for the loss of use of the
Aircraft in the event of such requisition.
(iii) with respect to such other matters as the Owner Participant, the
Owner Trustee, the Pass Through Trustee or the Indenture Trustee may
reasonably request.
(c) The Lessee shall promptly file any reports, or furnish to the
Owner Trustee and the Owner Participant such information as may be required
to enable the Owner Trustee and the Owner Participant timely to file any
reports required to be filed by the Owner Trustee as the Lessor and the
Owner Participant under the Lease with any governmental authority;
(d) The Lessee will cause the FAA Bill of Sale, the Lease, the Lease
Supplement, the Trust Agreement, the Trust Agreement and Trust Indenture
Supplement and the Indenture to be promptly filed and recorded and will
maintain the recordation thereof, to the extent permitted under the
Aviation Act, or required under any other applicable law;
(e) The Lessee will furnish to the Owner Participant, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee annually after
the execution of this Agreement, by March 31 of each year, commencing with
the year 199_, an opinion of Special Aviation Counsel, or other counsel
acceptable to the Lessor and the Indenture Trustee specified from time to
time by the Lessee:
(i) stating either (1) that in the opinion of such counsel such
action has been taken with respect to the recording, filing,
re-recording and re-filing of the Lease, the Indenture, the Trust
Agreement, and any supplements to any of them and any financing
statements, continuation statements or other instruments, and all
other action has been taken, as is necessary to maintain the
perfection of the security interests created by said documents and
reciting the details of such action, or (2) that in the opinion of
such counsel no such action is necessary to maintain the perfection
of such security interests;
(ii) specifying all other action which needs to be taken during
the succeeding 14 months in order to maintain the perfection of such
security interests; and
(iii) stating that the Owner Trustee is the owner of legal title
to the Aircraft, and the Aircraft is free and clear of all Liens,
except the security interest created by the Indenture and such as are
permitted by the Lease and the Indenture.
(f) The Lessee shall preserve and maintain its corporate existence
and all of its rights, privileges and franchises necessary in the normal
conduct of its business;
(g) The Lessee shall not enter into any merger or consolidation, or
convey, transfer or lease all or substantially all of its assets as an
entirety to any Person, unless the surviving corporation or Person which
acquires by conveyance, transfer or lease all or substantially all of the
assets of the Lessee as an entirety (i) is a domestic corporation organized
and existing under the laws of the United States or a political subdivision
thereof, (ii) is a Citizen of the United States, (iii) is a certificated
Air Carrier, (iv) expressly assumes by an instrument in writing in form and
substance satisfactory to the Indenture Trustee, the Pass Through Trustee
and the Owner Trustee all of the Lessee's obligations hereunder and under
the Lease and each agreement contemplated hereby and thereby, and the
Lessee delivers such instrument to the Indenture Trustee, the Pass Through
Trustee, the Owner Participant and the Owner Trustee, (v) provides an
opinion from counsel to the Lessee which counsel shall be reasonably
satisfactory to the Owner Participant and the Indenture Trustee and which
opinion shall be reasonably satisfactory to the Owner Participant and the
Indenture Trustee that such merger, consolidation, conveyance, transfer or
lease and the instrument noted in clause (iv) above comply with this
Section 5.03(g), that such instrument is a legal, valid and binding
obligation of, and is enforceable against, such survivor or Person, and
that all conditions precedent herein provided for relating to such
transaction have been complied with, and (vi) immediately after such
merger, consolidation or conveyance, transfer or lease, as the case may be,
the surviving company is in compliance with all of the terms and conditions
of this Agreement and the Lease and each agreement contemplated hereby and
thereby; provided that no such merger, consolidation or conveyance,
transfer or lease shall be permitted if the same gives rise to an Event of
Default;
(h) The Lessee agrees to give prompt written notice to each
Participant and the Indenture Trustee of any change in the address of its
chief executive office (as such term is used in Section 9-103(3) of the
Tennessee Uniform Commercial Code) or of any change in its corporate name;
and
(i) The Lessee agrees to furnish to the Owner Participant, the
Lessor and the Indenture Trustee:
(A) as soon as available, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Lessee,
a consolidated balance sheet as of the end of such fiscal year,
and the related consolidated statements of income, retained
earnings and cash flows for the fiscal year then ended as prepared
and certified by the Lessee's independent certified public
accountants, including their opinion;
(B) within sixty (60) days after the end of the first, second
and third quarterly accounting periods in each fiscal year of the
Lessee, a consolidated balance sheet of the Lessee prepared by it
as of the close of the accounting period then ended, together with
the related consolidated statements of income, retained earnings
and cash flows for such accounting period certified by the chief
accounting officer or a financial vice president of the Lessee;
(C) promptly upon their general transmission, copies of all
regular and periodic reports furnished by the Lessee to its
stockholders;
(D) promptly after filing with the Securities and Exchange
Commission, copies of the Lessee's annual reports on Form 10-K,
quarterly reports on Form 10-Q and, if requested, any registration
statement or prospectus filed by the Lessee with any securities
exchange or with the SEC;
(E) promptly upon any officer of the Lessee obtaining
knowledge of any condition or event which constitutes an Event of
Default, an officer's certificate specifying the nature and period
of existence thereof and what action the Lessee has taken or is
taking or proposes to take with respect thereto; and
(F) from time to time, such other financial information as the
Lessor, the Owner Participant or the Indenture Trustee may
reasonably request.
Concurrently with the delivery of the financial statements referred to in
clause (A) above, the Lessee shall deliver to the Lessor, the Owner
Participant, and the Indenture Trustee a certificate of the Lessee, signed
by any one of the President, the Chief Financial Officer, the General
Counsel, the Treasurer or the principal accounting officer of the Lessee,
stating that the signer, or an officer reporting to same, is familiar with
the relevant terms of this Agreement and the Lease and the signer has
reviewed, or has caused to be made under such person's supervision a
review, of the activities of the Lessee and that, to the best of his or her
knowledge, there does not exist an Event of Default.
Section 5.04. Survival of Representations and Warranties. The
representations and warranties of the Lessee provided in Sections 5.01 and
5.02 shall survive the Closings hereunder and the expiration or other
termination of this Agreement, the Tax Indemnity Agreement, the Trust
Agreement, the Indenture and the Lease.
ARTICLE 6
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Acquisitions and Offerings of Participations. Owner
Trustee. The Owner Trustee represents and warrants, in its individual
capacity, that neither it nor anyone acting on its behalf has directly or
indirectly offered or will directly or indirectly offer any beneficial
interest in the Lessor's Estate, or in any similar security relating to the
Aircraft, for sale to, or solicited any offer to acquire any of the sale from
anyone (other than the Owner Participant).
Section 6.02. Citizenship. (a) Generally. Each of the Owner
Trustee, in its individual capacity, and the Owner Participant severally
represents and warrants that it is or will be a Citizen of the United States
on the Delivery Date. If the Owner Participant or Owner Trustee in its
individual capacity does not comply with the requirements of this Section
6.02, the Owner Trustee, the Indenture Trustee and the Owner Participant
hereby agree that a Default or an Event of Default shall not be deemed to have
occurred and be continuing under the Lease due to non-compliance by the Lessee
with the registration requirements in the Lease and Section 5.03(b) hereof.
(b) Owner Trustee. The Owner Trustee, in its individual capacity,
agrees that if at any time it shall have knowledge that it has ceased to be a
Citizen of the United States, it will resign immediately as the Owner Trustee
if such citizenship is necessary under the Act as in effect at such time or,
if it is not necessary under the Act as in effect at such time, if it is
informed in writing by the Lessee or the Owner Participant that such lack of
United States citizenship would have any adverse effect on the Lessee or the
Owner Participant. The Owner Trustee, in its individual capacity, further
agrees that if at any time it appears reasonably probable that it will cease
to be a Citizen of the United States based on information that is (i) known to
a Responsible Officer or (ii) generally known to the public, it will promptly
so notify, to the extent permitted by law, all parties to this Agreement.
(c) Owner Participant. The Owner Participant agrees, solely for the
benefit of the Lessee, the Indenture Trustee, the Pass Through Trustee and the
Holders, that if (i) it shall cease to be, or believes itself likely to cease
to be, a Citizen of the United States and (ii) the Aircraft shall or would
therefore become ineligible for registration in the name of the Owner Trustee
under the Act and regulations then applicable thereunder, then the Owner
Participant acting continuously and in good faith, shall give notice thereof
to the Lessee and the Indenture Trustee and shall (at its own expense and
without any reimbursement or indemnification from the Lessee) promptly effect
a voting trust or other similar arrangement or take any other action as may be
necessary to prevent any deregistration, or to maintain the United States
registration, of the Aircraft. It is agreed that the Owner Participant shall
be liable to pay promptly on request (A) to each of the other parties hereto
and to each Holder any damages actually suffered by any such other party or
Holder as the result of the representation and warranty of the Owner
Participant in the first sentence of Section 6.02(a) proving to be untrue as
of the Delivery Date; (B) to the Lessee as reimbursement an amount equal to
the average daily Basic Rent or Renewal Rent for each day after the Owner
Participant's loss of citizenship that results in a loss of United States
registration and grounding of the Aircraft; and (C) to the Lessee, any
sublessee or any Holder for any damages which may be actually incurred by the
Lessee, any Sublessee or any Holder as a result of the Owner Participant's
failure to comply with its obligations pursuant to the first sentence of this
Section 6.02(c). Each party hereto agrees, upon the request and at the sole
expense of the Owner Participant, to cooperate with the Owner Participant to
undertake any reasonable request in complying with its obligations under the
provisions of the first sentence of this Section 6.02(c).
Section 6.03. Representations, Warranties and Covenants of Owner
Participant. (a) Representations and Warranties. In addition to and without
limiting its other representations and warranties provided for in this Article
6, the Owner Participant represents and warrants that:
(i) it is a corporation duly incorporated and validly existing in
good standing under the laws of its jurisdiction of incorporation and it
has full corporate power, authority and legal right to enter into and to
carry out the transactions contemplated by this Agreement, the Tax
Indemnity Agreement, and the Trust Agreement;
(ii) the execution, delivery and performance by it of this
Agreement, the Tax Indemnity Agreement, and the Trust Agreement have been
duly authorized by all necessary corporate action on its part and, assuming
the accuracy of the Lessee's representations in Section 5.01(o) hereof, do
not require any governmental approvals that would be required to be
obtained by the Owner Participant;
(iii) based in part on the representations, warranties and covenants
contained in Section 5.01(m), 5.02 and 6.01(b), neither the execution,
delivery or performance by the Owner Participant of this Agreement, the Tax
Indemnity Agreement, and the Trust Agreement nor compliance with the terms
and provisions hereof or thereof, conflicts or will conflict with or will
result in a breach or violation of any of the terms, conditions or
provisions of, any law, governmental rule or regulation applicable to the
Owner Participant or the charter documents, as amended, or bylaws, as
amended, of the Owner Participant or any order, writ, injunction or decree
of any court or governmental authority against the Owner Participant or by
which it or any of its properties is bound or any indenture, mortgage or
contract or other agreement or instrument to which the Owner Participant is
a party or by which it or any of its properties is bound, or constitute or
will constitute a default thereunder or will result in the imposition of
any lien upon any of its properties;
(iv) this Agreement, the Tax Indemnity Agreement and the Trust
Agreement have been or on the Delivery Date will be duly authorized,
executed and delivered by the Owner Participant and constitute or on the
Delivery Date will constitute the legal, valid and binding obligation of
the Owner Participant enforceable against it in accordance with their terms
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws of general application to
or affecting the enforcement of creditors' rights, or equitable principles;
(v) it is not in default under any mortgage, deed of trust,
indenture or other instrument or agreement to which the Owner Participant
is a party or by which it or any of its properties or assets may be bound,
or in violation of any applicable law, which default or violation would
have a material adverse effect on the ability of the Owner Participant to
perform its obligations under this Agreement, the Tax Indemnity Agreement
and the Trust Agreement to which it is or is to be a party;
(vi) it is a Citizen of the United States on the Refunding Date and
in the event that it ceases to be a Citizen of the United States, it will
comply with Section 6.02(c);
(vii) there are no pending or, to the knowledge of the Owner
Participant, threatened actions or proceedings against the Owner
Participant before any court or administrative agency which would
materially adversely affect the ability of the Owner Participant to perform
its obligations under this Agreement, the Tax Indemnity Agreement, and the
Trust Agreement;
(viii)neither the execution and delivery by it of this Agreement, the
Tax Indemnity Agreement, or the Trust Agreement nor the performance of its
obligations thereunder requires the consent or approval of or the giving of
notice to, the registration with, or the taking of any other action in
respect of, any governmental authority or agency that would be required to
be obtained or taken by the Owner Participant except for filings
contemplated by this Agreement;
(ix) on the Delivery Date the Owner Participant shall have a
tangible net worth of at least $50,000,000.00 or the obligations of the
Owner Participant shall be guaranteed by an Affiliate of the Owner
Participant that has a tangible net worth of at least $50,000,000; and
(x) no part of the funds to be used by it to acquire the interests
to be acquired by it under this Agreement constitutes assets (within the
meaning of ERISA and any applicable rules and regulations) of an employee
benefit plan subject to Title I of ERISA or of any individual retirement
account or an employee benefit plan subject to Section 4975 of the Code.
Notwithstanding the foregoing or anything else contained in this
Agreement, the Owner Participant makes no representation or warranty in
this Agreement with respect to laws, rules or regulations relating to
aviation or to the nature or use of the equipment owned by the Owner
Trustee, other than such laws, rules or regulations relating to the
citizenship requirements of the Owner Participant under applicable aviation
law.
(b) Lessor's Liens. The Owner Participant further represents,
warrants and covenants that there are no Lessor's Liens against, on or with
respect to the Aircraft or the Lessor's Estate or the Trust Indenture Estate
attributable to it, and that there will not be any Lessor's Lien against, on
or with respect to the Aircraft or the Lessor's Estate or the Trust Indenture
Estate attributable to it on the Certificate Closing Date. The Owner
Participant agrees with and for the benefit of the Lessee, the Indenture
Trustee, the Pass Through Trustee and each Holder that the Owner Participant
will, at its own cost and expense, take such action as may be necessary to
duly discharge and satisfy in full, promptly after the same first becomes
known to the Owner Participant, any Lessor's Lien against, on or with respect
to the Lessor's Estate or the Trust Indenture Estate attributable to the Owner
Participant (or an Affiliate thereof) or the consolidated group of taxpayers
of which it is a part); provided, however, that the Owner Participant shall
not be required to so discharge or satisfy such Lessor's Lien while it is
contesting such Lien in good faith (having provided adequate reserves to the
extent required in accordance with generally accepted accounting principles) by
appropriate proceedings diligently prosecuted and of which the Owner
Participant shall have given notice to the Indenture Trustee as long as:
(i)such contest does not involve any material danger of the sale,
forfeiture or loss of title to any part of the Trust Indenture Estate or
materially adversely affect the Lien on the Trust Indenture Estate created
by the Indenture, or materially interfere with the payment of Rent or the
timely application thereof to payments of principal of and interest on, the
Certificates or to other amounts payable to the Indenture Trustee or each
Holder or the material performance of any other terms under the Lease; and
(ii)such contest does not interfere with the Lessee's right of quiet
enjoyment under the Lease as provided in Section 6.09 of this Agreement and
in Section 18.01 of the Lease.
(c) Indemnity for Lessor's Liens. The Owner Participant agrees to
indemnify and hold harmless the Lessee, the Indenture Trustee and each Holder
and any subsequent Holder from and against any loss, cost, expense or damage
which may be suffered by the Lessee, the Indenture Trustee or any such Holder
as the result of the failure of the Owner Participant to discharge and satisfy
any Lessor's Liens attributable to the Owner Participant or the consolidated
group of tax payers of which it is a part and required to be discharged as
described in Section 6.03(b).
(d) Assignment of Interests of Owner Participant. The Owner
Participant agrees that it will not assign, convey or otherwise transfer any
of its right, title or interest in and to the Operative Agreements or the
Lessor's Estate except in accordance with the provisions of Article 5 of the
Trust Agreement.
(e) Owner Participant Payments. The Owner Participant agrees,
solely for the benefit of the Owner Trustee, to make available to the Owner
Trustee funds sufficient to pay to the Indenture Trustee on the Commencement
Date an amount equal to the difference between the amounts of principal and
interest scheduled to be paid on the Certificates on such date, and the amount
of Basic Rent, if any, scheduled to be paid by the Lessee on such date (the
"Excess Amount"), and the Owner Trustee shall upon receipt thereof make such
funds available to the Indenture Trustee to pay amounts due and owing under
the Certificates on the Commencement Date, provided that the Owner Participant
shall not be obligated to make such funds available if an Event of Default
under the Lease shall have occurred and be continuing on the date on which
such funds are to be made available, but in any event the Lessee shall be
obligated to make a pre-payment of Basic Rent pursuant to the Lease in an
amount sufficient to pay in full the amounts of principal and interest due on
the Certificates on such date.
Section 6.04. Representations and Warranties of Owner Trustee. (a)
In addition to and without limiting its other representations and warranties
provided for in this Article 6, the Owner Trustee represents and warrants, in
its individual capacity with respect to items (i), (ii), (v) and (vi) as the
Owner Trustee with respect to item (iii) below and in its individual capacity
or as the Owner Trustee as indicated in item (iv) below that:
(i) it is a ___________________ duly organized and validly existing
in good standing under the laws of the ___________________ with its
principal place of business and chief executive office (as such terms are
used in Article 9 of the Uniform Commercial Code) in __________, ________,
and, assuming the Trust Agreement has been duly authorized, executed and
delivered by the Owner Participant, has full corporate power and authority,
in its individual capacity or as the Owner Trustee, as the case may be, to
execute, deliver and perform this Agreement, the Trust Agreement, the
Lease, the Certificates and the Indenture;
(ii) the execution, delivery and performance by the Owner Trustee,
either in its individual capacity or as the Owner Trustee, as the case may
be, of this Agreement, the Trust Agreement, the Lease, the Certificates and
the Indenture have been duly authorized by all necessary corporate action
on its part, and do not contravene its certificate of incorporation or
by-laws;
(iii) each of this Agreement, the Trust Agreement, the Lease, the
Certificates and the Indenture constitute the legal, valid and binding
obligation of the Owner Trustee enforceable against it in accordance with
its respective terms and the performance by the Owner Trustee of any of its
obligations thereunder does not contravene any lease, regulation or
contractual restriction binding on the Owner Trustee;
(iv) there are no pending or, to its knowledge, threatened actions or
proceedings against the Owner Trustee before any court or administrative
agency which would materially and adversely affect the ability of the Owner
Trustee, either in its individual capacity or as the Owner Trustee, as the
case may be, to perform its obligations under this Agreement, the Trust
Agreement, the Lease, the Certificates and the Indenture;
(v) it shall give the Lessee, the Indenture Trustee and the Owner
Participant thirty (30) days prior written notice in the event of any
change in its chief executive office; and
(vi) neither the execution and delivery by it, either in its
individual capacity or as the Owner Trustee, as the case may be, of any of
this Agreement, the Trust Agreement, the Lease, the Certificates and the
Indenture, requires the consent or approval of or the giving of notice to,
the registration with, or the taking of any other action in respect of, any
Federal or ________ governmental authority or agency governing its banking
or trust powers.
(b) Lessor's Liens. The Owner Trustee, in its individual capacity,
further represents, warrants and covenants that there are no Lessor's Liens
against, on or with respect to the Aircraft or the Lessor's Estate or the
Trust Indenture Estate attributable to it in its individual capacity, and that
there will not be any Lessor's Liens against, on or with respect to the
Aircraft or the Lessor's Estate or the Trust Indenture Estate attributable to
it in its individual capacity on the Certificate Closing Date or the Delivery
Date. The Owner Trustee, in its trust capacity, and at the cost and expense
of the Lessee, covenants that it will in its trust capacity promptly take such
action as may be necessary to discharge duly any Lessor's Liens attributable
to it in its trust capacity. The Owner Trustee, in its individual capacity,
covenants and agrees that it will at its own expense take such action as may
be necessary to duly discharge and satisfy in full, promptly after the same
shall first become known to it, any Lessor's Liens against, on or with respect
to the Lessor's Estate or the Trust Indenture Estate attributable to it in its
individual capacity or the consolidated group of taxpayers of which it (in
such capacity) is a part which may arise at any time after the date of this
Agreement; provided, however, that the Owner Trustee shall not be required to
so discharge or satisfy a Lessor's Lien while it is contesting such lien in
good faith by appropriate proceedings diligently prosecuted and of which the
Owner Trustee shall have given notice to the Owner Participant and the
Indenture Trustee as long as:
(i)such contest does not involve any danger of the sale, forfeiture
or loss of title to any part of the Trust Indenture Estate or, as to the
Owner Participant, the Lessor's Estate, or adversely affect the Lien on the
Trust Indenture Estate created by the Indenture or interfere with the
payment of Rent or the timely application thereof to payments of principal
of, and interest on, the Certificates or to other amounts payable to the
Indenture Trustee or each Holder or the performance of any other terms
under the Lease; and
(ii)such contest does not interfere with the Lessee's right of quiet
enjoyment under the Lease as provided in Section 6.09 of this Agreement and
Section 18.01 of the Lease.
(c) Indemnity for Lessor's Liens. The Owner Trustee, in its
individual capacity, agrees to indemnify and hold harmless the Lessee, the
Indenture Trustee, the Owner Participant, each Holder, the Pass Through
Trustee, the Owner Trustee and any subsequent Holder from and against any
loss, cost, expense or damage which may be suffered by the Lessee, the
Indenture Trustee, the Owner Participant, each Holder, the Pass Through
Trustee, the Owner Trustee or any such Holder as a result of the failure of
the Owner Trustee to discharge and satisfy any Lessor's Liens attributable to
it in its individual capacity, as described in Section 6.04(b).
(d) Securities Act. None of ____________, the Owner Trustee or any
Person authorized by either of them to act on its behalf has directly or
indirectly offered or sold any interest in the Lessor's Estate or the
Certificates, or in any similar security relating to the Lessor's Estate, or
in any security the offering of which for purposes of the Securities Act of
1933, as amended, would be deemed to be part of the same offering as the
offering of the aforementioned securities to, or solicited any offer to
acquire any of the same from, any Person.
Section 6.05. Representations and Warranties of the Indenture
Trustee. (a) The Indenture Trustee in its individual capacity represents as
follows:
(i) it is a ___________________ duly organized and validly existing
in good standing under the laws of the ___________________ and has the
corporate power and authority to enter into and perform its obligations
under the Indenture and this Agreement and to authenticate the Certificates
to be delivered on the Certificate Closing Date;
(ii) the Indenture, this Agreement and the authentication of the
Certificates to be delivered on the Certificate Closing Date have been duly
authorized by all necessary corporate action on its part, and neither the
execution and delivery thereof nor its performance of any of the terms and
provisions thereof will violate any Federal or ______________ law or
regulation relating to its banking or trust powers or contravene or result
in any breach of, or constitute any default under, its articles of
association or by-laws;
(iii) each of the Indenture and this Agreement has been duly executed
and delivered by it and, assuming that each such agreement is the legal,
valid and binding obligation of each other party thereto, is the legal,
valid and binding obligation of the Indenture Trustee, enforceable against
the Indenture Trustee in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws or equitable principles of general application to or
affecting the enforcement of creditors' rights; and
(iv) neither the execution and delivery by it of the Indenture, this
Agreement and the other Operative Agreements to which it is or is to be a
party, nor the performance by it of any of the transactions contemplated
hereby or thereby, requires the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in
respect of, any Federal or state governmental authority or agency governing
its banking and trust powers.
(b) The Indenture Trustee, in its individual capacity, further
represents, warrants and covenants that there are no Indenture Trustee's Liens
attributable to it in its individual capacity against, on or with respect to
the Lessor's Estate or the Trust Indenture Estate or, as at and following the
Delivery Date, the Aircraft, and that there will not be any Indenture
Trustee's Liens against, on or with respect to the Lessor's Estate or the
Trust Indenture Estate on the Certificate Closing Date or, as at and following
the Delivery Date, the Aircraft. The Indenture Trustee, in its individual
capacity, covenants and agrees that it will at its own expense take such
action as may be necessary to duly discharge and satisfy in full, promptly
after the same shall first become known to it, any Indenture Trustee's Liens
against, on or with respect to the Aircraft or the Lessor's Estate or the
Trust Indenture Estate attributable to it in its individual capacity.
(c) Indemnity for Indenture Trustee's Liens. The Indenture Trustee,
in its individual capacity, agrees to indemnify and hold harmless the Lessee,
the Owner Participant, each Holder, the Owner Trustee and any subsequent
Holders from and against any loss, cost, expense or damage which may be
suffered by the Lessee, the Indenture Trustee, the Owner Participant, the
Owner Trustee or any Holders as a result of the failure of the Indenture
Trustee to discharge and satisfy any Indenture Trustee's Liens attributable to
it in its individual capacity, as described in Section 6.05(b).
Section 6.06. Intentionally Left Blank.
Section 6.07. Indenture Trustee's Notice of Default. The Indenture
Trustee agrees to give the Owner Participant notice of any Payment Default
promptly upon its having actual knowledge thereof.
Section 6.08. Releases from Indenture. The Indenture Trustee
covenants and agrees, for the benefit of the Lessee and the Owner Participant,
to execute and deliver the instruments of release from the Lien of the
Indenture which it is required to execute and deliver in accordance with the
provisions of Section 14.01 of the Indenture, and the Owner Participant
agrees, for the benefit of the Lessee, to cause the Owner Trustee to request
the Indenture Trustee to execute and deliver such instruments of release.
Section 6.09. Covenant of Quiet Enjoyment. Each of the Owner
Participant, the Indenture Trustee, the Pass Through Trustee and the Owner
Trustee covenants and agrees as to itself only that, so long as no Event of
Default under the Lease has occurred and is continuing, the Owner Participant
(or the Owner Trustee or the Pass Through Trustee or the Indenture Trustee, as
the case may be) nor any Person lawfully claiming through the Owner
Participant (or the Owner Trustee or the Indenture Trustee, as the case may
be) shall interfere with the Lessee's right quietly to enjoy the Aircraft
during the Term without hindrance or disturbance by the Owner Participant (or
the Owner Trustee or the Pass Through Trustee or the Indenture Trustee, as the
case may be).
Section 6.10. Survival of Representations, Warranties and Covenants.
The representations, warranties and covenants of the Owner Participant, the
Owner Trustee (in its individual and trust capacities), the Pass Through
Trustee and the Indenture Trustee provided for in this Article 6, and their
respective obligations under any and all of them, shall survive the closing of
this transaction and the expiration or other termination of this Agreement,
the Lease, the Indenture or the Trust Agreement.
Section 6.11. Lessee's Assumption of the Certificates. (a) Subject
to compliance by the Lessee with all of its obligations under the Operative
Agreements, each of the Owner Participant, the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Lessee covenants and agrees that if
the Lessee elects to terminate the Lease and to purchase the Aircraft pursuant
to Section 4.02(a)(A), (B), (D) or (E) of the Lease, then the Owner Trustee
will transfer to the Lessee, without recourse or warranty (except as to the
absence of Lessor's Liens) all of the Owner Trustee's right, title and
interest in and to the Aircraft, and if the Lessee, in connection with such
purchase, elects to assume the obligations of the Owner Trustee pursuant to
the Indenture and the Certificates, each of the parties shall execute and
deliver appropriate documentation permitting the Lessee to assume such
obligations on the basis of full recourse to the Lessee, maintaining the
security interest in the Aircraft created by the Indenture, releasing the
Owner Participant and the Owner Trustee from all obligations in respect of the
Certificates except any obligations which shall have occurred prior to such
assumption, the Indenture and all other Operative Agreements and all such
other actions as are reasonably necessary to permit such assumption by the
Lessee.
(b) In connection with such assumption:
(i) the Lessee shall execute and deliver an instrument satisfactory
in form and substance to the Indenture Trustee (A) pursuant to which the
Lessee irrevocably and unconditionally assumes and undertakes, with full
recourse to the Lessee, to pay, satisfy and discharge when and as due (at
the stated maturity thereof, by acceleration or otherwise) the principal
of, Make-Whole Premium, if any, and interest on all Certificates then
outstanding (or on the Lessee's substituted obligations) in accordance with
their terms and to punctually perform and observe all of the covenants and
obligations hereunder and under the Indenture (as the same may be amended
in connection with such assumption) to be performed or observed by the
Owner Trustee and (B) which incorporates therein such provisions from the
Lease as may be appropriate, including, without limitation, events of
default substantially similar in scope and effect to those set forth in the
Lease and covenants substantially similar to the covenants of the Lessee
under the Lease;
(ii) the instrument referred to in paragraph (i) of this Section
6.11(b), any Uniform Commercial Code financing statements relating thereto,
and any other documents which shall be necessary to establish the Lessee's
title to and interest in the Aircraft or to establish and perfect the
security interest in the Aircraft (or the Lessee's substituted obligations)
shall be filed in such form, manner and places as are necessary for such
purpose; and
(iii) the Indenture Trustee shall have received (A) from counsel for
the Lessee (who may be the Lessee's General Counsel) a legal opinion, in
form and substance satisfactory to the Indenture Trustee (w) with respect
to the compliance of the assumption contemplated hereby with the terms,
provisions and conditions hereof, (x) with respect to the validity and
enforceability of the instrument referred to in paragraph (i) of this
Section 6.11(b) and (y) with respect to the establishment and perfection of
the first and prior Lien and security interest in the Aircraft (or the
Lessee's substituted obligations) referred to in paragraph (ii) of this
Section 6.11(b), and (B) from Special Aviation Counsel, a legal opinion
comparable to the respective opinions delivered on the Certificate Closing
Date with such changes therein as may be appropriate in light of such
assumption and covering such additional matters as the Indenture Trustee
shall reasonably request.
(c) The Lessee shall pay all reasonable expenses of the Indenture
Trustee in connection with such assumption.
Section 6.12. Indebtedness of Owner Trustee. So long as the
Indenture is in effect, the Owner Trustee, not in its individual capacity, but
solely as trustee under the Trust Agreement, shall not incur any indebtedness
for borrowed money except as expressly contemplated herein or in any other
Operative Agreement excluding the Tax Indemnity Agreement and shall not
engage in any business or other activity other than the transactions
contemplated herein or in any other Operative Agreement excluding the Tax
Indemnity Agreement and all necessary or appropriate activity related thereto.
Section 6.13. Pass Through Trustee Representations and Warranties.
The Pass Through Trustee, in its individual capacity, represents and warrants
as of the date hereof (except as otherwise provided), as of the Pass Through
Closing Date, the Certificate Closing Date and the Delivery Date that:
(i) it is a ___________________ duly organized and validly existing
in good standing under the laws of the ___________________ and has the
corporate power and authority to enter into and perform its obligations
under the Pass Through Agreement, the Series Supplements and this Agreement
and to execute and authenticate the Pass Through Certificates to be
delivered on the Pass Through Closing Date;
(ii) the execution, delivery and performance of this Agreement, the
Pass Through Agreement and the Series Supplements and the performance of its
obligations hereunder and thereunder (including the execution and
authentication of the Pass Through Certificates to be delivered on the Pass
Through Closing Date) have been duly authorized by all necessary corporate
action on its part, and, subject to (A) the registration of the issuance
and sale of the Pass Through Certificates under the Securities Act, (B)
compliance with any applicable state securities laws and (C) the
qualification of the Pass Through Agreement under the Trust Indenture Act,
neither the execution and delivery thereof nor its performance of any of
the terms and provisions thereof will violate any Federal law or regulation
relating to its banking or trust powers or contravene or result in any
breach of, or constitute any default under its articles of association, or
by-laws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it or its properties may be
bound or affected; and
(iii) each of this Agreement and the Pass Through Agreement has been,
and as of the Pass Through Closing Date the Series Supplements will be, duly
executed and delivered by it and, assuming that each such agreement is the
legal, valid and binding obligation of each other party thereto, is or will
be, as the case may be, the legal, valid and binding obligation of the Pass
Through Trustee, enforceable in accordance with its terms except as limited
by bankruptcy, insolvency, moratorium, reorganization, receivership,
fraudulent conveyance or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors' rights
and remedies generally from time to time in effect, regardless of whether
such enforceability is considered in a proceeding at equity or at law.
ARTICLE 7
TAXES
Section 7.01. Lessee's Obligation to Pay Taxes. (a) Generally. The
Lessee agrees promptly to pay when due, and to indemnify and hold each
Indemnitee harmless from all license and registration fees and all taxes,
fees, levies, imposts, recording duties, charges or withholdings of any nature
whatsoever, together with any assessments, penalties, fines, additions to tax
or interest thereon (individually, a "Tax," and collectively called "Taxes"),
however imposed (whether imposed upon any Indemnitee, the Lessee, all or any
part of the Aircraft, Airframe, any Engine or any Part or on the Lessor's
Estate or otherwise), by any Federal, state or local government or taxing
authority in the United States, or by any government or taxing authority of a
foreign country or of any political subdivision or taxing authority thereof or
by a territory or possession of the United States or an international taxing
authority, upon or with respect to, based upon or measured by:
(i) the Aircraft, the Airframe, any Engine or any Part;
(ii) the location, replacement, conditioning, control, purchase,
reregistration, repossession, improvement, maintenance, redelivery,
manufacture, acquisition, purchase, financing, refinancing, mortgaging,
ownership, acceptance, rejection, delivery, non-delivery, leasing,
subleasing, transport, insuring, inspection, registration, assembly,
abandonment, preparation, installment, possession, use, operation, return,
presence, storage, repair, transfer of title, modification, rebuilding,
imposition of any lien, sale or other disposition of the Aircraft, Airframe
or any part thereof or interest therein;
(iii) the rentals, receipts or earnings arising from the purchase,
financing, ownership, delivery, leasing, possession, use, operation,
return, storage, transfer of title, sale or other disposition of the
Aircraft, the Airframe or any part thereof;
(iv) any or all of the Operative Agreements;
(v) the property, or the income or other proceeds received with
respect to the property, held by the Owner Trustee under the Trust
Agreement or after an Event of Default under the Lease, by the Indenture
Trustee under the Indenture;
(vi) otherwise with respect to or by reason of the transactions
described in or contemplated by the Pass Through Agreement, the Series
Supplements, the Operative Agreements; or
(vii) the payment of the principal or interest or other amounts
payable with respect to the Pass Through Certificates or Certificates.
(b) Exceptions. The indemnity provided for in Section 7.01(a) shall
not extend to any of the following:
(i) Taxes imposed on or measured by the net or gross income or
excess profits, receipts, minimum tax, capital, franchise, net worth or
conduct of business taxes of any Indemnitee (other than sales, use, rental,
license, ad valorem, property and taxes in the nature of the foregoing)
(the "Income Taxes") and value-added taxes, except in the case of an Income
Tax, to the extent that such Income Tax would have been imposed by any
state or local government or taxing authority in the United States or by a
government or taxing authority of a foreign country or of any political
subdivision or taxing authority thereof if the operation, registration,
location, presence, or use of the Aircraft, Airframe or any part thereof,
in such state or foreign country were the sole connection between such
Indemnitee and such jurisdiction; provided, however, that the provisions of
this paragraph (b)(i) shall not exclude from the indemnity described in
Section 7.01(a) any Income Taxes for which the Lessee would be required to
indemnify an Indemnitee so that any payment under the Operative Agreements
is made on an After-Tax Basis;
(ii) Taxes arising out of or measured by acts, omissions, events or
periods of time (or any combination of the foregoing) which occur after
(and not fairly attributable to acts, omissions or events occurring prior
to) the payment of all amounts payable by the Lessee pursuant to the
Operative Agreements, or the earlier discharge in full of the Lessee's
payment obligations under the Lease, and the earliest of (x) the expiration
of the Term of the Lease and return of the Aircraft in accordance with
Article 12 of the Lease, or (y) the termination of the Lease in accordance
with the applicable provisions of the Lease and return of the Aircraft,
except that Taxes incurred in connection with the exercise of any remedies
pursuant to Article 17 of the Lease following the occurrence of an Event of
Default shall not be excluded from the indemnity described in Section
7.01(a);
(iii) As to the Owner Trustee, taxes imposed against the Owner
Trustee upon or with respect to any fees for services rendered in its
capacity as trustee under the Trust Agreement or, as to the Indenture
Trustee, taxes imposed against the Indenture Trustee upon or with respect
to any fees received by it for services rendered in its capacity as trustee
under the Indenture;
(iv) Taxes imposed on an Indemnitee that would not have been imposed
but for the willful misconduct, or gross negligence of such Indemnitee or
the breach by such Indemnitee of any representation, warranty or covenant
contained in the Operative Agreements or any document delivered in
connection therewith;
(v) Taxes imposed on the Owner Trustee or the Owner Participant or
any successor, assign or Affiliate thereof which became payable by reason
of any voluntary or involuntary transfer or disposition by such Indemnitee
subsequent to the Delivery Date, including revocation of the Trust, of any
interest in some or all of the Aircraft, Airframe, Engines or Parts thereof
or its interest in the Lessor's Estate (other than Taxes that result from
transfers or dispositions which occur (x) while an Event of Default under
the Lease has occurred and is continuing at the time of such transfer or
disposition or (y) by reason of dispositions which occur as a result of the
exercise of the Lessee's right to participate in a pooling or interchange
agreement pursuant to Articles 7 or 8 of the Lease or as a result of the
exercise of the Lessee's right of replacement pursuant to Articles 8, 9, 10
or 11 or Section 12.02 of the Lease or (z) pursuant to the exercise of a
purchase option by the Lessee under 4.02 of the Lease (other than the
purchase option referred to in Section 4.02(a)(B) of the Lease) or a
disposition of the Aircraft under Article 10 of the Lease);
(vi) Taxes imposed on the Owner Participant for which the Lessee is
obligated to indemnify the Owner Participant pursuant to the Tax Indemnity
Agreement;
(vii) Any Taxes imposed on a successor, assign or other transferee of
any entity or person which on the Certificate Closing Date is an Indemnitee
(for purposes of this clause (vii) an original Indemnitee) or such original
Indemnitee to the extent that such Taxes exceed the amount of Taxes that
would have been imposed and would have been indemnifiable pursuant to
Section 7.01(a) had there not been a succession, assignment or other
transfer by an original Indemnitee of any such interest of such Indemnitee
in the Aircraft or any part thereof or any interest in or under any
Operative Agreement or any proceeds thereunder or any interest in the Trust
Indenture Estate or the mortgaged property provided, however, that the
exclusion provided by this clause (vii) shall not apply in the case of any
transfer occurring after a declaration of an Event of Default that shall be
continuing;
(viii)any Taxes which have been included in the Purchase Price;
(ix) any Taxes which would not have been imposed but for a Lessor's
Lien or a Indenture Trustee's Lien; and
(x) Taxes with respect to any prohibited transaction, within the
meaning of Section 4975(c)(1) of the Code or Section 406 of ERISA.
(c) Withholding. The Pass Through Trustee shall withhold any Taxes
required to be withheld on payments to any Holder who is not a U.S. person
except to the extent that such Holder has furnished evidence satisfactory to
the Pass Through Trustee of any exemption from withholding claimed by such
Holder. If by reason of any Holder's failure promptly to notify the Pass
Through Trustee that it is not a U.S. person entitled to an exemption, the
Pass Through Trustee fails to withhold a Tax required to be withheld with
respect to any Pass Through Certificate, the Lessee will indemnify the Owner
Trustee and the Owner Participant against any such Taxes required to be
withheld and any interest and penalties with respect thereto. The Pass
Through Trustee in its individual capacity shall indemnify the Lessee for
interest and penalties on such withholding tax if it received appropriate
notification of such Holder's status and failed to withhold.
Section 7.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Tax indemnified against under Section 7.01
shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Tax not
been incurred. If any Indemnitee actually realizes a tax benefit by reason of
the payment of any Tax paid or indemnified against by the Lessee, such
Indemnitee shall promptly pay to the Lessee to the extent such tax benefit was
not previously taken into account in computing such payment, but not before
the Lessee shall have made all payments then due to such Indemnitee under this
Agreement, the Tax Indemnity Agreement and any other Operative Agreement, an
amount equal to the lesser of (x) the sum of such tax benefit plus any other
tax benefit realized by such Indemnitee that would not have been realized but
for any payment made by such Indemnitee pursuant to this sentence and not
already paid to the Lessee, and (y) the amount of the payment required to be
made under Sections 7.01 and 7.02 by the Lessee to such Indemnitee plus the
amount of any other payments by the Lessee to such Indemnitee theretofore
required to be made under Sections 7.01 and 7.02 (and the excess, if any, of
the amount described in clause (x) above over the amount described in clause
(y) above shall be carried forward and applied to reduce pro tanto any
subsequent obligations of the Lessee to make payments pursuant to Section
7.01); provided, however, that notwithstanding the foregoing portions of this
sentence, such Indemnitee shall not be obligated to make any payment to the
Lessee pursuant to this sentence as long as an Event of Default shall have
occurred and be continuing under the Lease. The Lessee shall reimburse on an
After-Tax Basis such Indemnitee for any payment of a tax benefit pursuant to
the preceding sentence to the extent that such tax benefit is disallowed or
reduced in a taxable year subsequent to the year of such payment (including
the expiration of any tax credit carryovers or carrybacks of such Indemnitee
that would not otherwise have expired).
Section 7.03. Time of Payment. Any amount payable to an Indemnitee
pursuant to this Article 7 shall be paid within 30 days after receipt of a
written demand therefor from such Indemnitee accompanied by a written
statement describing in reasonable detail the basis for such indemnity and the
computation of the amount so payable, provided that in the case of amounts
which are being contested by the Lessee in good faith or by the Indemnitee
pursuant to Section 7.04, such amount shall be payable 30 days after the time
such contest is finally resolved.
Section 7.04. Contests. If a written claim is made against any
Indemnitee for Taxes with respect to which the Lessee is liable for a payment
or indemnity hereunder, such Indemnitee shall promptly give the Lessee notice
in writing of such claim and shall furnish the Lessee with copies of any
requests for information from any taxing authority relating to such Taxes with
respect to which the Lessee may be required to indemnify hereunder; provided,
however, that the failure of an Indemnitee to give such notice or furnish such
copy shall not terminate any of the rights of such Indemnitee under this
Article 7, except to the extent that the Lessee has been materially and
adversely prejudiced by the failure to provide such notice. The Indemnitee
shall in good faith, with due diligence and at the Lessee's expense, if timely
requested in writing by the Lessee, contest (or, at the Indemnitee's option,
require the Lessee to contest in the name of the Lessee, if permitted by law,
or the Indemnitee) the validity, applicability or amount of such Taxes by:
(i)resisting payment thereof if lawful and practicable or not paying
the same except under protest if protest is necessary and proper in each
case so long as non-payment will not result in a material risk of the sale,
forfeiture or loss of, or the creation of a Lien other than a Lessor's Lien
on the Aircraft, Airframe or any parts; or
(ii)if the payment be made, using reasonable efforts to obtain a
refund thereof in appropriate administrative and judicial proceedings.
If the Indemnitee elects to conduct the contest it shall determine in
consultation with the Lessee, the manner in which to contest such Taxes and
the Indemnitee shall advise the Lessee of actions to be taken in implementing
such contest and shall consider in good faith any suggestion made by the
Lessee as to the method of pursuing such contest. Notwithstanding the
preceding sentences of this Section 7.04, such Indemnitee shall not be
required to take any action unless the Lessee shall have (i) agreed to
indemnify the Indemnitee for any liability or reasonable expense which such
Indemnitee incurred as a result of contesting such Taxes including without
limitation (y) reasonable attorneys' and accountants' fees and (z) the amount
of any interest, penalty or additions to tax which may ultimately be payable
as the result of contesting such Taxes, (ii) delivered to the Indemnitee a
written acknowledgment of the Lessee's obligation to such Indemnitee pursuant
to this Agreement to the extent that the contest is not successful, provided,
however, that such acknowledgement shall not preclude the Lessee from raising
defenses to liability under this Agreement if a decision in such contest is
rendered which articulates the cause of such Tax and the cause, as so
articulated, is not one for which the Lessee is responsible to pay an
indemnity hereunder and (iii) made all payments and indemnities (other than
contested payments and indemnities) then due to the Indemnitee hereunder or
with respect to any of the transactions contemplated by or under the Operative
Agreements. In no event shall such Indemnitee be required or the Lessee
permitted to contest pursuant to this Section 7.04 the imposition of any Tax
for which the Lessee is obligated to indemnify any Indemnitee hereunder
unless, if such contest shall be conducted in a manner referencing payment of
the claim in advance, Lessee shall have advanced sufficient funds, on an
interest free basis to make the payment required, and agreed to indemnify the
Indemnitee against any additional net after-tax cost to such Indemnitee of
such advance.
Nothing contained in this Section 7.04 shall require any Indemnitee to
contest, or permit Lessee to contest, a claim which such Indemnitee would
otherwise be required to contest pursuant to this Section 7.04, if such
Indemnitee shall waive payment by Lessee of any amount that might otherwise be
payable by Lessee under this Article 8 in connection with such claim.
Section 7.05. Refunds. Upon receipt by an Indemnitee of a refund of
all or any part of any Taxes which the Lessee shall have paid for such
Indemnitee or for which the Lessee shall have reimbursed or indemnified such
Indemnitee, and provided there shall not have occurred and be continuing any
Event of Default (in which case payment shall not be made to the Lessee until
such Event of Default shall have been cured), such Indemnitee shall pay to the
Lessee an amount equal to the amount of such refund less (x) reasonable
expenses not previously reimbursed, (y) all payments then due to such
Indemnitee under this Article 7 and (z) Taxes payable with respect to receipt
thereof, including interest received attributable thereto, plus any tax benefit
actually realized by such Indemnitee as a result of any payment by such
Indemnitee made pursuant to this sentence.
Section 7.06. Lessee's Reports. In case any report or return is
required to be made with respect to any obligation of the Lessee under this
Article 7, the Lessee shall make such report or return, except for any such
report or return that the Owner Trustee or the Owner Participant has notified
the Lessee that it intends to file, in such manner as will show the ownership
of the Aircraft in the Owner Trustee and shall send a copy of the applicable
portions of such report or return to the Indemnitee and the Owner Trustee or
will notify the Indemnitee of such requirement and make such report or return
in such manner as shall be satisfactory to such Indemnitee and the Owner
Trustee. The Lessee will provide such information as the Owner Trustee or the
Owner Participant may reasonably require from the Lessee to enable the Owner
Trustee or the Owner Participant to fulfill its tax filing requirements with
respect to the transactions contemplated by the Operative Agreements, other
than the Tax Indemnity Agreement, and any audit information request arising
from any such filing. The Owner Trustee or the Owner Participant will provide
such information as the Lessee may reasonably require from the Owner
Participant to enable the Lessee to fulfill its tax filing requirements with
respect to the transactions contemplated by the Operative Agreements, other
than the Tax Indemnity Agreement, and any audit information request arising
from such filing. The Lessee shall hold the Owner Trustee and the Owner
Participant harmless from and against any liabilities, including penalties,
additions to tax, fines and interest, imposed upon the Owner Trustee or the
Owner Participant to the extent directly attributable to any insufficiency or
inaccuracy in any return, statement, or report prepared by the Lessee or
information supplied by the Lessee, or directly attributable to the Lessee's
failure to supply information as required by this Section 7.06. The Owner
Trustee and the Owner Participant shall hold the Lessee harmless from and
against any liabilities, including penalties, additions to tax, fines and
interest, imposed upon the Lessee to the extent directly attributable to any
insufficiency or inaccuracy in any information the Owner Trustee or the Owner
Participant is required to supply to the Lessee pursuant to this Section 7.06.
Section 7.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 7 and the Lessee's obligations under any and all of them shall survive
the expiration or other termination of the Operative Agreements but, as to
such indemnities, only with respect to losses, liabilities, obligations,
damages, penalties, claims, actions, suits, costs, expenses and disbursements
caused by events occurring or existing prior to or incurred in the process of
(i) the return or disposition of the Aircraft under Article 12 or Article 17
of the Lease, or (ii) the termination of the Lease or the Indenture or, if
later, the return of the Aircraft.
Section 7.08. Property Taxes. To the extent permitted by the
applicable state or local law, the Lessee shall pay directly any personal
property tax, ad valorem tax or similar tax applicable to the Aircraft, the
Airframe, any Engine, or any Parts and file any returns or reports required
with respect thereto; provided, however, that the Lessee shall not make any
statements or take any action which would indicate that the Lessee is the
owner of the Aircraft, the Airframe, any Engine or any Part or would otherwise
be inconsistent with the terms of the Lease and the position thereunder of the
Owner Trustee and the Owner Participant. Copies of such returns or reports,
together with evidence of payment of any tax due, shall be sent by the Lessee
to the Owner Participant on request.
ARTICLE 8
GENERAL INDEMNITY
Section 8.01. Generally. (a) The Lessee agrees to indemnify each
Indemnitee against and agrees to protect, defend, save and keep harmless each
Indemnitee from any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, disbursements and expenses
(including legal fees and expenses and all costs and expenses relating to
amendments, supplements and waivers under the Operative Agreements, the Pass
Through Agreement and the Series Supplements except as otherwise provided in
Section 9.01 of every kind and nature (whether or not any of the transactions
contemplated by this Agreement are consummated) (individually, an "Expense,"
collectively, "Expenses"), which may be imposed on, incurred or suffered by or
asserted against any Indemnitee, in any way relating to, based on or arising
out of:
(i) this Agreement, the Lease, the Indenture, the Trust Agreement,
the Pass Through Agreement, the Series Supplements or any other Operative
Agreement or any sublease or any transactions contemplated hereby or
thereby;
(ii) the operation, possession, use, non-use, maintenance, storage,
overhaul, delivery, non-delivery, control, repair or testing of the
Aircraft, Airframe, or any Engine or any engine used in connection with the
Airframe, or any part thereof by the Lessee any sublessee or any other
Person whatsoever, whether or not such operation, possession, use, non-use,
maintenance, storage, overhaul, delivery, non-delivery, control, repair or
testing is in compliance with the terms of the Lease, including without
limitation, claims for death, personal injury or property damage or other
loss or harm to any Person whatsoever, including, without limitation, any
passengers, shippers or other persons wherever located, and claims relating
to any laws, rules or regulations, including, without limitation,
environmental control, noise and pollution laws, rules or regulation;
(iii) the manufacture, design, sale, return, purchase, acceptance,
rejection, delivery, non-delivery, condition, repair, modification,
servicing, rebuilding, airworthiness, registration, reregistration,
performance, non-performance, sublease, merchantability, fitness for use,
alteration, substitution or replacement of any Airframe, Engine, or Part
under the Lease, or other transfer of use or possession, or other
disposition of the Aircraft, the Airframe, or any Engine, including,
without limitation, latent and other defects, whether or not discoverable,
strict tort liability, and any claims for patent, trademark or copyright
infringement;
(iv) any breach of or failure to perform or observe, or any other
non-compliance with, any condition, covenant or agreement to be performed,
or other obligations of the Lessee under any of the Operative Agreements,
or the falsity or inaccuracy of any representation or warranty of the
Lessee in any of the Operative Agreements (other than representations and
warranties in the Tax Indemnity Agreement);
(v) with respect to the Indenture Trustee, the enforcement of the
terms of the Indenture or any document in connection with the Indenture and
the administration of the Trust Indenture Estate; and
(vi) the offer, issuance, sale or delivery of any Certificate or any
Pass Through Certificate or interest in the Lessor's Estate in the manner
contemplated by this Agreement, the Indenture, the Indenture Supplement or
the Trust Agreement and in the case of the Owner Participant, its
obligations arising under Section 6.01 of the Trust Agreement.
The foregoing indemnity by the Lessee is intended to include and cover, but is
not limited to, any Expense to which the Indemnitees may be subject as a
result of their respective ownership or leasing of any interest in the
Aircraft, Airframe, any Engine or Part during the Term, whether or not in the
Lessee's possession or control, insofar as such Expense relates to any
activity or event whatsoever involving such item while it is under lease to
the Lessee (or after termination of the Lease in connection with the exercise
of remedies thereunder to the extent that such Expense is attributable to the
transactions contemplated hereby and by the other Operative Agreements), and
such Expense does not fall within any of the exceptions listed in Section
8.01(b) hereof.
(b) Exceptions. The indemnity provided for in Section 8.01(a) shall
not extend to any Expense of any Indemnitee:
(i) resulting from or arising out of the willful misconduct or gross
negligence of such Indemnitee;
(ii) in respect of the Aircraft to the extent attributable to acts
or events which occur after the Aircraft is no longer part of the Lessor's
Estate or leased under the Lease or, if the Aircraft remains a part of the
Lessor's Estate, after the expiration of the Term (other than pursuant to
Article 17 of the Lease, in which case the indemnity provided in Section
8.01(a) hereof shall survive for so long as Lessor shall be entitled to
exercise remedies under such Article 17), or from acts or events which
occur after return of possession of the Aircraft by the Lessee in
accordance with the provisions of the Lease but in any such case only to
the extent not fairly attributable to acts or omissions of the Lessee prior
to expiration of the Term, including without limitation the Lessee's
failure to fully discharge all of its obligations under the Lease or the
other Operative Agreements;
(iii) which is a Tax, whether or not the Lessee is required to
indemnify therefor pursuant to Article 7 or pursuant to the Tax Indemnity
Agreement;
(iv) which is a cost or expense required to be paid by the Owner
Participant pursuant to Section 9.01 and which is reflected in Basic Rent;
(v) which would not have been incurred by such Indemnitee if such
Indemnitee had not been in breach of its representations or warranties, or
had not defaulted in the observance and performance of the terms and
provisions provided to be observed and performed by it, in this Agreement,
the Lease, the Indenture, the Trust Agreement, or any other Operative
Agreement to which it is a party unless such breach or default shall be a
result of the breach or default of any of the foregoing by the Lessee;
(vi) which is a payment required to be made by the Owner Participant
pursuant to Section 2.01 but nothing contained in this Section 8.01(b)(vi)
shall be deemed or construed to limit the obligations of the Lessee to the
Indenture Trustee and Holders pursuant to Section 3.05 of the Lease;
(vii) in the case of the Owner Participant, Lessor's Liens to the
extent attributable to the Owner Participant, in the case of the Owner
Trustee, Lessor's Liens to the extent attributable to the Owner Trustee and
in the case of the Indenture Trustee, Indenture Trustee's Liens;
(viii)in the case of the Owner Participant or the Owner Trustee, to
the extent resulting from or arising out of, the offer or sale by the Owner
Participant or the Owner Trustee after the Certificate Closing Date of any
interest in the Aircraft, the Lessor's Estate or the Trust Agreement or any
similar interest, unless such offer or sale shall occur during a period
when an Event of Default has occurred and is continuing; or
(ix) resulting from or arising out of any prohibited transaction,
within the meaning of Section 4975(c)(1) of the Code or Section 406 of
ERISA.
Section 8.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Expense indemnified against under Section
8.01 shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Expense not
been incurred. If any Indemnitee realizes a permanent tax benefit by reason
of the payment of such Expense paid or indemnified against by the Lessee which
was not considered in the computation thereof, such Indemnitee shall promptly
pay to the Lessee, but not before the Lessee shall have made all payments
theretofore due such Indemnitee under this Agreement, the Tax Indemnity
Agreement and any other Operative Agreement, an amount equal to the lesser of
(x) the sum of such tax benefit plus any other permanent tax benefit realized
by such Indemnitee as the result of any payment made by such Indemnitee
pursuant to this sentence and (y) the amount of such payment pursuant to this
Section 8.02 by the Lessee to such Indemnitee plus the amount of any other
payments by the Lessee to such Indemnitee theretofore made pursuant to this
Section 8.02 less the amount of any payments by such Indemnitee to the Lessee
theretofore made pursuant to this Section 8.02 (and the excess, if any, of the
amount described in clause (x) above over the amount described in clause (y)
above shall be carried forward and applied to reduce pro tanto any subsequent
obligations of the Lessee to make payments pursuant to this Section 8.02), it
being intended that no Indemnitee should realize a net tax benefit pursuant to
this Section 8.02 unless the Lessee shall first have been made whole for any
payments by it to such Indemnitee pursuant to this Section 8.02; provided,
however, that notwithstanding the foregoing portions of this sentence, such
Indemnitee shall not be obligated to make any payment to the Lessee pursuant to
this sentence as long as an Event of Default shall have occurred and be
continuing. Any taxes that are imposed on any Indemnitee as a result of the
disallowance or reduction of such tax benefit referred to in the next
preceding sentence in a taxable year subsequent to the year of allowance and
utilization by such Indemnitee (including the expiration of any tax credit
carryovers or carrybacks of such Indemnitee that would not otherwise have
expired) shall be indemnifiable pursuant to the provisions of Section 7.01
hereof.
Section 8.03. Subrogation. Upon the payment in full of any indemnity
pursuant to this Article 8 by the Lessee (but not earlier), the Lessee shall be
subrogated to any right of the Indemnitee in respect of the matter against
which such indemnity has been made.
Section 8.04. Notice and Payment. Each Indemnitee and the Lessee
shall give prompt written notice one to the other of any liability of which
such party has knowledge for which the Lessee is, or may be, liable under this
Article 8; provided, however, that failure to give such notice shall not
terminate any of the rights of Indemnitees under this Article 8, except to the
extent that the Lessee has been materially prejudiced by the failure to
provide such notice. Unless otherwise provided in the Operative Agreements,
any amount payable to an Indemnitee pursuant to this Article 8 shall be paid
within 30 days after receipt of a written demand therefor from such Indemnitee
accompanied by a written statement describing in reasonable detail the basis
for such indemnity and the computation of the amount so payable, provided that
in the case of amounts which are being contested by the Lessee in good faith or
by the Indemnitee pursuant to Section 8.06, such amount shall be payable 30
days after the time such contest is finally resolved.
Section 8.05. Refunds. If any Indemnitee shall obtain a recovery of
all or any part of any amount which the Lessee shall have paid to such
Indemnitee or for which the Lessee shall have reimbursed such Indemnitee under
this Article 8, and provided there shall not have occurred an Event of Default
(in which case payment shall not be made to the Lessee until such Event of
Default shall have been cured) such Indemnitee shall pay to the Lessee the
amount of any such recovery, including interest received with respect to the
recovery, net of any Taxes paid or payable as a result of the receipt of the
recovery and interest, plus any net additional income tax benefits realized by
Indemnitee as the result of any payment made pursuant to this sentence less
any reasonable costs and expense of any Indemnitee not reimbursed by the
Lessee; provided, however, that such amount shall not be payable (a) before
such time as the Lessee shall have made all payments or indemnities then due
and payable to such Indemnitee under this Article 8 or (b) to the extent that
the amount of such payment would exceed the amount of all prior payments by
the Lessee to such Indemnitee pursuant to this Article 8, less the amount of
all prior payments by such Indemnitee to the Lessee pursuant to this Article
8. Any subsequent loss of such recovery or tax benefit shall be subject to
full indemnification hereunder.
Section 8.06. Defense of Claims. The Lessee or its insurers shall
have the right (in each such case at the Lessee's sole expense) to investigate
or, provided that the Lessee or its insurers shall not reserve the right to
dispute liability with respect to any insurance policies pursuant to which
coverage is sought, defend any claim covered by insurance for which
indemnification is sought pursuant to this Article 8 and each Indemnitee shall
cooperate with the Lessee or its insurers with respect thereto. No Indemnitee
shall enter into any settlement or other compromise with respect to any claim
described in this Section 8.06 without the prior written consent of the Lessee,
which consent shall not unreasonably be withheld, unless such Indemnitee
waives its right to be indemnified under this Article 8 with respect to such
claim.
Section 8.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 8 and the Lessee's obligations under any and all of them shall survive
the closing of this transaction and the expiration or other termination of
this Agreement, the Tax Indemnity Agreement, the Trust Agreement, the
Indenture and the Lease but, as to such indemnities, only with respect to
losses, liabilities, obligations, damages, penalties, claims, actions, suits,
costs, expenses and disbursements caused by events occurring or existing prior
to or incurred in the process of (i) the return or disposition of the Aircraft
under Article 12 or Article 17 of the Lease, or (ii) the termination of the
Lease or the Indenture or, if later, the return of the Aircraft.
ARTICLE 9
TRANSACTION COSTS
Section 9.01. Transaction Costs and Other Costs. (a) Transaction
Costs. For the purposes of this Agreement, Transaction Costs are ___% of the
Purchase Price and include, without limitation, the following:
(i) The reasonable fees, expenses and disbursements of (A) Special
Aviation Counsel, (B) ______________, special counsel for the Owner
Participant, (C) _______________, special counsel for the Indenture
Trustee, (D) _______________, special counsel for the Owner Trustee, (E)
Davis Polk & Wardwell, special counsel to the Lessee and (F)
______________, special counsel for the Pass Through Trustee;
(ii) Printing and duplicating expenses and all fees, taxes and other
charges payable in connection with the recording or filing on or before the
Delivery Date of the instruments described in this Agreement, the fees and
expenses of ______________, financial advisor to the Owner Participant and
the fees and expenses (including computer time-sharing charges) of
_______________, financial advisor to the Lessee;
(iii) The initial fees, initial expenses, initial disbursements and
the initial costs of distributing the Certificates and Pass Through
Certificates (but not the continuing fees, expenses, disbursements and
costs of distribution) of the Owner Trustee, as lessor under the Lease and
as trustee under the Trust Agreement and with respect to the administration
of the Lease and the Lessor's Estate, and of the Indenture Trustee as
trustee under the Indenture with respect to the administration of the Trust
Indenture Estate;
(iv) Reimbursement to the Owner Participant for any and all fees,
expenses and disbursements of the character referred to above which shall
have been paid by the Owner Participant (including without limitation any
amounts paid in connection with any report by _____________);
(v) Reasonable out-of-pocket expenses of the Owner Participant;
(vi) Any other amounts approved by the Lessee and the Owner
Participant;
(vii) The initial fees, expenses and disbursements of the
Underwriters and (counsel for the Underwriters), other than those fees,
expenses and disbursements contemplated by the Underwriting Agreement, as
being payable by the Underwriters; and
(ix) The reasonable fees and expenses of the Lessee's financial
advisor.
(b) Payment. If the transactions contemplated by this Agreement are
consummated, as and when any portion of Transaction Costs becomes due and
payable, the Owner Participant shall immediately make such payment or, if the
Lessee shall have already made such payment, shall reimburse the Lessee
therefor or shall, as soon as practicable, furnish the Owner Trustee funds
sufficient to, and the Owner Trustee shall, as soon as practicable, make
payment of such portion to the person or persons entitled to payment upon
presentation to the Owner Trustee of bills or invoices for the amount of such
payment. If such transactions are not so consummated, the Lessee shall pay or
cause to be paid the Transaction Costs; provided, however, that if the failure
of such transactions to be consummated is due to the Owner Participant's
failure to negotiate the Operative Agreements in good faith, the Lessee shall
have no obligation to pay any costs and expenses incurred by the Owner
Participant in connection with the transactions contemplated by this
Agreement, but the Lessee shall be obligated to pay all other Transaction
Costs.
(c) Continuing Expenses. The continuing fees, expenses and
disbursements (including reasonable counsel fees) of the Owner Trustee, as
lessor under the Lease and as trustee under the Trust Agreement with respect
to the administration of the Lease and the Lessor's Estate, the continuing
fees, expenses and disbursements (including reasonable counsel fees and
initial fees relating to the establishment of a replacement trustee) of the
Indenture Trustee, as trustee under the Indenture with respect to the
administration of the Trust Indenture Estate, and the continuing fees,
expenses and disbursements (including reasonable counsel fees and critical fees
relating to the establishment of a replacement trustee) of the Pass Through
Trustee, shall be paid by Lessee, including without limitation any amounts
payable to the Indenture Trustee or on account of requests by the Indenture
Trustee for indemnification, under Section 9.11 and Article 11 of the
Indenture.
(d) Amendments and Supplements. Without limitation of the
foregoing, the Lessee agrees:
(i) to pay to the Owner Trustee, the Owner Participant, the
Indenture Trustee and the Pass Through Trustee, all costs and expenses
(including reasonable legal fees and expenses) incurred by any of them in
connection with the entering into or giving or withholding of any
amendments or supplements or waivers or consents, including without
limitation, any amendment, waiver, modification or consent resulting from
any work-out, restructuring or similar proceeding relating to the
performance or nonperformance by the Lessee of its obligations under the
Operative Agreements or with respect to this Agreement, the Lease, the
Indenture, the Certificates, the Tax Indemnity Agreement or any other
document or instrument delivered pursuant to any of them, which amendment,
supplement, waiver or consent is required by any provision of any Operative
Agreement or is requested by the Lessee or necessitated by the action or
inaction of the Lessee; provided, however, that the Lessee shall not be
responsible for fees and expenses incurred in connection with the offer,
sale or other transfer (whether pursuant to Article 5 of the Trust
Agreement or otherwise) by the Owner Participant or the Owner Trustee after
the Delivery Date of any interest in Aircraft, the Lessor's Estate or the
Trust Agreement or any similar interest; and
(ii) to pay the fees, costs and expenses of all appraisers involved
in an independent appraisal of the Aircraft to the extent required under
Section 4.03 of the Lease.
ARTICLE 10
SUCCESSOR OWNER TRUSTEE
Section 10.01. Appointment of Successor Owner Trustee. (a)
Resignation and Removal. The Owner Trustee or any successor Owner Trustee may
resign or may be removed by the Owner Participant, a successor Owner Trustee
may be appointed and a corporation may become Owner Trustee under the Trust
Agreement only in accordance with the provisions of Section 3.11 of the Trust
Agreement and the provision of paragraphs (b) and (c) of this Section 10.01.
(b) Conditions to Appointment. The appointment in any manner of a
successor Owner Trustee pursuant to Section 3.11 of the Trust Agreement shall
be subject to the following conditions:
(i) Such successor Owner Trustee shall be a Citizen of the United
States;
(ii) Such successor Owner Trustee shall be a bank or a trust company
having combined capital, surplus and undivided profits of at least
$100,000,000;
(iii) Such appointment shall not violate any provisions of the Act or
any applicable rule or regulation of the applicable regulatory agency or
body of any other jurisdiction in which the Aircraft may then be registered
or create a relationship which would be in violation of the Act or any
applicable rule or regulation of the applicable regulatory agency or body
of any other jurisdiction in which the Aircraft may then be registered; and
(iv) Such successor Owner Trustee shall enter into an agreement or
agreements, in form and substance satisfactory to the Lessee, Owner
Participant, the Pass Through Trustee and the Indenture Trustee whereby
such successor Owner Trustee confirms that it shall be deemed a party to
this Agreement, the Trust Agreement, the Lease, the Lease Supplement, the
Certificates, the Indenture, and the Indenture Supplement and agrees to be
bound by all the terms of such documents applicable to the Owner Trustee
and makes the representations and warranties contained in Section 6.04
hereof (except that it may be duly incorporated, validly existing and in
good standing under the laws of the United States of America or any State
thereof).
(c) Appointment. For so long as the Aircraft remains registered
under the Act, the Owner Participant agrees to appoint promptly a successor
Owner Trustee meeting the requirements of Section 10.01(b) in the event the
Owner Participant has knowledge that the Owner Trustee at any time shall not
be a Citizen of the United States.
(d) Revocation. The Owner Participant agrees not to revoke and
terminate the Trust Agreement except in accordance with Section 4.01(a) of the
Trust Agreement or amend the Trust Agreement except pursuant to Section 6.02
of the Trust Agreement.
ARTICLE 11
LIABILITIES AND INTERESTS OF THE
OWNER PARTICIPANT AND EACH CERTIFICATEHOLDER
Section 11.01. Liabilities of the Owner Participant. The Owner
Participant shall have no obligation or duty to the Lessee or to any Holder
with respect to the transactions contemplated by this Agreement, except those
obligations or duties expressly set forth in this Agreement, the Indenture,
the Trust Agreement, the Tax Indemnity Agreement, the Bills of Sale, the Lease
or any other Operative Agreement to which the Owner Participant is a party and
the Owner Participant shall not be liable for the performance by any party
hereto of such other party's obligations or duties hereunder. Under no
circumstances shall the Owner Participant as such be liable to the Lessee, nor
shall the Owner Participant be liable to any Holder, for any action or
inaction on the part of the Owner Trustee or the Indenture Trustee in
connection with this Agreement, the Indenture, the Bills of Sale, the Lease,
the Trust Agreement, the ownership of the Aircraft, the administration of the
Lessor's Estate or the Trust Indenture Estate or otherwise, whether or not
such action or inaction is caused by the willful misconduct or gross
negligence of the Owner Trustee or the Indenture Trustee.
Section 11.02. Interest of Holders of Certificates. A Holder of a
Certificate shall have no further interest in, or other right with respect to,
the Trust Indenture Estate when and if the principal of and interest on all
Certificates held by such Holder and all other sums payable to such Holder
under this Agreement, under the Indenture and under such Certificates shall
have been paid in full.
ARTICLE 12
OTHER DOCUMENTS
Section 12.01. Consent of Lessee to Other Documents. The Lessee
hereby consents in all respects to the execution and delivery of the Trust
Agreement and the Indenture and to all of the terms of said documents, and the
Lessee acknowledges receipt of an executed counterpart of the Trust Agreement
and Indenture; it being agreed that such consent shall not be construed to
require the Lessee's consent to any future supplement to, or amendment, waiver
or modification of the terms of the Trust Agreement, the Indenture or the
Certificates, except that prior to the occurrence and continuance of an Event
of Default, no section of the Indenture or the Trust Agreement shall be
amended or modified in any manner materially adverse to the Lessee without its
consent.
Section 12.02. Further Assurances. The Lessee agrees that, except as
otherwise provided in the Indenture, the Owner Trustee may not enter into any
amendment, modification or supplement of, or give any waiver or consent with
respect to, or approve any matter or document as being satisfactory under the
Lease without the prior consent of the Indenture Trustee and the Owner
Participant and that, except as otherwise provided in the Indenture, upon an
Indenture Event of Default, the Indenture Trustee may act as the Lessor under
the Lease to the exclusion of the Owner Trustee. The Lessee further agrees to
deliver to the Indenture Trustee and the Owner Participant a copy of each
notice, statement, request, report or other communication given or required to
be given to the Owner Trustee under the Lease.
ARTICLE 13
NOTICES
Section 13.01. Notices. All notices, demands, declarations and other
communications required by this Agreement shall be in writing and shall be
deemed received (a) if given by telecopier when transmitted and the
appropriate telephonic confirmation received if transmitted on a Business Day
and during normal business hours of the recipient, and otherwise on the next
Business Day following transmission, (b) if given by certified mail, return
receipt requested, postage prepaid five Business Days after being deposited in
the United States mail, (c) if given by telex, upon receipt by the party
transmitting the telex of such party's callback code at the end of such telex
(receipt of confirmation in writing not being necessary to the effectiveness
of any telex) and (d) if given by Federal Express service or other means, when
received or personally delivered, addressed:
(a) If to the Lessee, to its office at 2005 Corporate Avenue,
Memphis, Tennessee 38132, Attention: Senior Vice President and Chief
Financial Officer with a copy to Senior Vice President and General Counsel;
telephone (901) 395-3388, facsimile (901) 395-4758; (Telex No. 82-2163, answer
back FEDEX INT MFS), or at such other address as Lessee shall from time to
time designate in writing to Lessor, Indenture Trustee and the Owner
Participant;
(b) If to Lessor or Owner Trustee, to its office at
________________________; Attention: _____________________; telephone
_____________; facsimile ______________; or to such other address as Lessor
shall from time to time designate in writing to the Lessee, the Indenture
Trustee, with a copy to Owner Participant at the Owner Participant's address
as provided in subsection (c) below;
(c) If to the Owner Participant, to its office at
___________________________; Attention: _____________________; telephone
_____________; facsimile ______________; or to such other address as the Owner
Participant may from time to time designate in writing to the Lessee and the
Indenture Trustee;
(d) If to Indenture Trustee, to its office at
_________________________; Attention: _____________________; telephone
_____________; facsimile ______________; or to such other address as the
Indenture Trustee shall from time to time designate in writing to the Lessor,
the Lessee and the Owner Participant; and
(e)If to the Pass Through Trustee, to its office at
_______________________; Attention: _____________________; telephone
_____________; facsimile ______________; or to such other address as the Pass
Through Trustee shall from time to time designate in writing to the Lessor,
the Lessee or the Owner Participant.
ARTICLE 14
REFINANCING
Section 14.01. Refinancing. (a) Subject to the terms and
conditions of this Section 14.01, the Lessee may request the Owner Participant
to participate in the refinancing in full or in part (but in no event less
than all the Certificates of each series being refinanced) of the Certificates
during the Basic Term on any Rent Payment Date (a "Refinancing"). So long as
there is no material risk of adverse tax consequences, such Refinancing may be
placed in either the private or public markets, in the United States or
elsewhere, in United States dollars, and on terms reasonably satisfactory to
the Owner Participant. The Owner Participant agrees to negotiate promptly in
good faith to conclude an agreement with the Lessee as to the term of any such
refinancing transaction (including the terms of any debt to be issued in
connection with such refinancing and the documentation to be executed in
connection therewith). Without the consent of the Owner Participant, the
prospectus and other offering materials relating to any Refinancing in the
form of a public offering shall not identify the Owner Participant and shall
not include any financial statements of the Owner Participant or any Affiliate
thereof. In connection with any such Refinancing in the form of a public
offering, the Lessee shall indemnify the Owner Participant for any liabilities
under federal, state or foreign securities laws resulting from such offering.
The aggregate principal amount of the new Certificates issued in connection
with each Refinancing shall be the same as the aggregate principal amount
outstanding on the Certificates being refinanced (assuming no principal on
the old Certificates was due on the date of such refinancing).
(b) Such Refinancing shall be permitted at any time after the
Delivery Date but only _____ Refinancings shall be permitted during the Basic
Term. The Lessee shall give each Loan Participant at least ten days revocable
written notice of the proposed date of the Refinancing, which notice shall
become irrevocable upon the agreement in principle of the parties to the terms
of any such Refinancing as contemplated in Section 14.01(a).
If such Refinancing shall occur, then, commencing on the Payment Date
next succeeding the date of such Refinancing, each installment of Basic Rent
payable under the Lease shall be adjusted by an amount determined by the Owner
Participant to provide the Lessee with 100% of the after-tax benefit obtained
by the Owner Participant as a result of the Refinancing to the extent the
foregoing can be accomplished in a manner consistent with the maintenance of
the Owner's Economic Return. At the request and expense of the Lessee, the
accuracy of the calculation of such reductions shall be certified to the
Lessee by the firm of independent public accountants then retained by the
Owner Participant and, in order to enable them to verify such reductions and
subject to the execution of an appropriate confidentiality agreement, the
Owner Participant shall make available to such accountants all information
reasonably necessary for such verification, including the name of the lease
analysis program used by the Owner Participant to calculate such reductions.
Prior to the consummation of any Refinancing pursuant to this Section
14.01, the Owner Participant and the Lessee shall agree upon a schedule
setting forth each installment of Basic Rent giving effect to the reduction of
Basic Rent and the Stipulated Loss Values, Purchase Option Price and
Termination Values payable pursuant to the Lease as a result of the
Refinancing, which shall maintain Owner's Economic Return and comply with
Section 3.04 of the Lease, and thereafter the amounts set forth in such
schedule shall become the amounts payable under the Lease as installments of
Basic Rent, Stipulated Loss Value, Purchase Option Price and Termination
Values, as the case may be. Upon the consummation of the Refinancing, the
evidence of indebtedness issued pursuant to the Refinancing shall be considered
"Certificates" for purposes of this Agreement, the Lease and the Indenture.
(c) Intentionally Left Blank.
(d) Each party agrees to take or cause to be taken all requested
action, including, without limitation, the execution and delivery of any
documents and instruments, including, without limitation, amendments or
supplements to the Lease, which may be reasonably necessary or desirable to
effect such Refinancing, including, in the case of the Owner Participant,
direction to the Owner Trustee by the Owner Participant to prepay the relevant
Certificates; provided, however, that such Refinancing shall be subject to the
satisfaction of each of the following conditions:
(i) Payment of principal, accrued interest and any other amounts
due and owing on the Certificates payable under Section 6.02 of the
Indenture;
(ii) Payment in full of all other amounts then due and owing by the
Lessee under this Agreement, the Indenture, the Lease, the Trust Agreement,
and the Certificates then outstanding shall have been made by the Lessee;
(iii) Such party shall have received such opinions of counsel
(including, without limitation, an opinion for the benefit of the Owner
Participant that such Refinancing shall not result in any adverse tax
consequences to Owner Participant), certificates and other documents as it
may reasonably request, each in form and substance reasonably satisfactory
to such party;
(iv) All authorizations, approvals and consents which in the
reasonable judgment of the Owner Participant are necessary for such
Refinancing shall have been obtained;
(v) The Lessee shall have provided or agreed to provide to the Owner
Participant, as Supplemental Rent under the Lease, sufficient funds to pay
the costs and expenses referred to in Section 14.01(e); and
(vi) The satisfaction or waiver by each other party to this
Agreement of the conditions set forth in this Section 14.01 to such party's
obligations under this Section 14.01.
(e) The Lessee shall pay to the Owner Participant and the Owner
Participant shall pay, from such funds, all costs and expenses of each party,
including the reasonable fees, expenses and disbursements of their respective
counsel in connection with a Refinancing or proposed Refinancing pursuant to
this Section 14.01; provided, however, that the costs of the Owner Participant
shall include only reasonable out-of-pocket expenses.
(f) In connection with any prepayment of the Certificates pursuant
to Section 6.02 of the Indenture resulting from a Refinancing or the exercise
by the Lessee of its purchase option contained in Section 4.02(a)(A),
4.02(a)(B), 4.02(a)(D) or 4.02(a)(E) of the Lease, the Lessee agrees to
furnish to the Indenture Trustee and the Pass Through Trustee not later than
the third Business Day prior to the Prepayment Date (as defined in said
Section 6.02) a calculation of all amounts payable thereon in sufficient
detail to indicate the basis for such calculation.
ARTICLE 15
MISCELLANEOUS
Section 15.01. Owner for Federal Tax Purposes. It is hereby agreed
between the Owner Participant and the Lessee (but the Lessee makes no
representation to such effect) that for Federal income tax purposes the Owner
Participant will be the owner of the Aircraft and the Lessee will be the
lessee of the Aircraft.
Section 15.02. Collateral Account. (a) The Indenture Trustee shall
notify the Owner Trustee and the Lessee of any losses incurred on the
Specified Investments in the Collateral Account promptly upon the realization
thereof, as well as any fees, commissions and other costs, Taxes (other than
income taxes) and expenses, if any, incurred by the Indenture Trustee in
connection with its administration of the Collateral Account (collectively,
"Losses"). Promptly upon receipt of such notification but, in any event, no
later than the earlier of the Delivery Date and the Cut-Off Date, the Lessee
shall pay to the Indenture Trustee, on behalf of the Owner Trustee, for
deposit into the Collateral Account, an amount equal to such Losses (net of
any investment earnings).
(b) The Lessee shall pay to the Indenture Trustee, on behalf of the
Owner Trustee, on the Commencement Date an amount equal to the aggregate
amount of interest accrued on the Certificates from (and including) the
Certificate Closing Date to (but excluding) the Delivery Date.
(c) If the Aircraft has neither (i) been purchased by the Owner
Trustee on the Delivery Date nor (ii) been acquired by the Lessee in the
manner contemplated by Section 3.05(a)(ii) hereof, the Lessee agrees to pay to
the Indenture Trustee, on behalf of the Owner Trustee, on the 15th day
following the Cut-Off Date the excess, if any, of the amounts payable under
Section 6.02(b)(1) of the Indenture over the amounts released from the
Collateral Account under Section 2.15 of the Indenture.
(d) All amounts payable by the Lessee pursuant to this Section 15.02
shall be paid to the Indenture Trustee at its principal office at
____________________________ __________________________________, Attention:
__________________________, or as the Indenture Trustee may otherwise direct
within the United States, by wire transfer of immediately available funds in
U.S. Dollars no later than 10:30 a.m., New York City time, on the due date of
such payment.
Section 15.03. Counterparts. This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
Section 15.04. No Oral Modifications. Neither this Agreement nor
any of its terms may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification is sought. No such written termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy shall have been
delivered to the Owner Trustee and the Indenture Trustee. A copy of each such
termination, amendment, supplement, waiver or modification shall also be
delivered to each other party to this Agreement other than the Original Loan
Participant.
Section 15.05. Captions. The table of contents preceding this
Agreement and the headings of the various Articles and Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions of this Agreement.
Section 15.06. Successors and Assigns. The terms of this Agreement
shall be binding upon, and shall inure to the benefit of, the Lessee and its
successors and assigns, each party and its successors and assigns, including
without limitation each Holder of a Certificate, the Owner Participant and its
successors and assigns, the Owner Trustee and its successor as Owner Trustee
(and any additional trustee appointed), the Indenture Trustee and its
successors as Indenture Trustee (and any additional trustee appointed) under
the Indenture and the Pass Through Trustee and its successors as Pass Through
Trustee (and any additional trustee appointed).
Section 15.07. Concerning the Owner Trustee, Pass Through Trustee and
Indenture Trustee. Each of __________ Trust Company, ____________ and
_____________, is entering into this Agreement solely in their respective
capacities, in the case of __________ Trust Company, not in its individual
capacity but solely as trustee under the Trust Agreement, in the case of
______________, as trustee under the Pass Through Agreement and in the case of
__________________________, as mortgagee under the Indenture, and except as
otherwise expressly provided in this Agreement or in the Lease, the Indenture,
the Pass Through Agreement or the Trust Agreement, neither
________________________, _____________________ nor _________________________,
shall be personally liable for or on account of its statements,
representations, warranties, covenants or obligations under this Agreement;
provided, however, that each of __________ Trust Company, ________________ and
______________ accepts the benefits running to it under this Agreement, and
each agrees that (except as otherwise expressly provided in this Agreement or
any other Operative Agreement to which it is a party) it shall be liable in
its individual capacity for its own gross negligence or willful misconduct
(whether in its capacity as trustee or in its individual capacity), and for
any negligence in connection with any inaccuracy of representations and
warranties or any breach of covenants (which covenants, in the case of the
Indenture Trustee shall be those set forth in Sections 6.05(b) and 6.05(c)
hereof and Sections 3.02, 3.04, 3.07, 9.01, 9.02 and 9.06 of the Indenture)
made in its individual capacity pursuant to or in connection with this
Agreement or the other Operative Agreements to which it is a party.
Section 15.08. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 15.09. Public Release of Information. Subject to applicable
legal requirements, so long as there shall not have occurred an Event of
Default or Indenture Event of Default, each party shall in each instance
obtain the prior written approval of each other party concerning the exact
text and timing of news releases, articles and other information releases to
the public media concerning this Agreement.
Section 15.10. Certain Limitations on Reorganization. The Holders
of the Certificates and the Indenture Trustee agree that, if (i) the Lessor's
Estate or the Trust becomes a debtor subject to the reorganization provisions
of the Bankruptcy Code or any other applicable bankruptcy or insolvency
statutes, (ii) pursuant to such reorganization provision, the Owner
Participant is held to have recourse liability to the Indenture Trustee or the
Holder of any Certificate directly or indirectly on account of any amount
payable as principal, interest or premium on the Certificates, and (iii) the
Holder of any Certificate or the Indenture Trustee actually receives any
Recourse Amount which reflects any payment by the Owner Participant on account
of (ii) above, then such Certificate Holder or the Indenture Trustee, as the
case may be, shall promptly refund to the Owner Participant such Recourse
Amount. For purposes of this Section 15.10, "Recourse Amount" means the
amount by which the portion of such payment by the Owner Participant on
account of clause (ii) above received by such Certificate Holder or Indenture
Trustee exceeds the amount which would have been received by such Certificate
Holder or the Indenture Trustee if the Owner Participant had not become
subject to the recourse liability referred to in (ii) above. Nothing
contained in this Section shall prevent any Certificate Holder or the
Indenture Trustee from enforcing any individual obligation (and retaining the
proceeds thereof) of the Owner Participant under this Agreement or any other
Operative Agreement to the extent herein or therein provided, for which the
Owner Participant has expressly agreed by the terms of this Agreement to
accept individual responsibility. Nothing contained herein shall be construed
as requiring any Holder to refund any amount distributed to such Holder
pursuant to the Indenture.
Section 15.11. Governing Law. This Agreement shall in all respects
be governed by, and construed in accordance with, the laws of the State of New
York.
Section 15.12. Section 1110 Compliance. The Participants and the
Lessee agree that the transactions contemplated by the Operative Agreements
are intended to be and should be construed so as to be entitled to the
benefits and protections of 11 U.S.C. Section 1110.
Section 15.13. Authorization to Owner Trustee. The Owner Participant
hereby authorizes and instructs the Owner Trustee to enter into, and to
perform its obligations contemplated under, this Agreement, the Trust
Agreement, the Indenture and the Lease and to execute the Certificates
referred to herein and to deliver them to the Indenture Trustee for
authentication. The Lessee, the Owner Participant, the Owner Trustee and the
Indenture Trustee hereby consent to the Lease, the Trust Agreement and the
Indenture.
ARTICLE 16
CONFIDENTIALITY
Section 16.01. Confidentiality. The Owner Trustee, the Owner
Participant, the Pass Through Trustee, the Indenture Trustee and the Lessee
shall keep the Operative Agreements other than the Lease, the Lease
Supplement, the Indenture, the Indenture Supplement, and FAA Bill of Sale (the
"Confidential Documents") confidential and shall not disclose, or cause to be
disclosed, the same to any Person, except (a) to prospective transferees of
the Owner Trustee's or the Owner Participant's interest in the trust or the
Aircraft who agree in writing to hold such information confidential and
deliver a copy of such agreement to the Lessee, (b) to prospective transferees
of the Indenture Trustee's interest or the Pass Through Trustee's interest or
any Holder's interest, who agree in writing to hold such information
confidential and delivers a copy of such agreement to the Lessee, (c) to the
Owner Trustee's or the Owner Participant's accountants, counsel or special
counsel who have been instructed and shall have agreed in writing to keep such
information confidential or (d) as may be required by any statute, court or
administrative order or decree or governmental ruling or regulation, including
Internal Revenue Service auditors, state taxing authorities state insurance
authorities or state or federal banking authorities, provided, however, that,
except with respect to disclosures to Persons described in clause (d) of this
sentence, any and all disclosures of all or any part of the Confidential
Documents which are permitted shall be made only to the extent necessary to
meet the specific requirements or needs of the Persons to whom such
disclosures are hereby permitted.
IN WITNESS WHEREOF, the parties have caused this Participation
Agreement to be executed by their respective, duly authorized officers as of
the date first above written.
LESSEE:
FEDERAL EXPRESS CORPORATION
By:__________________________________________
Name:
Title: Vice President and Treasurer
OWNER PARTICIPANT:
_______________________________
By:__________________________________________
Name:
Title:
OWNER TRUSTEE:
_______________________________,
not in its individual capacity,
but solely as Owner Trustee
By:__________________________________________
Name:
Title:
INDENTURE TRUSTEE:
_______________________________,
not in its individual capacity,
but solely as Indenture Trustee
By:__________________________________________
Name:
Title:
PASS THROUGH TRUSTEE:
_______________________________,
not in its individual capacity,
but solely as Pass Through Trustee
By:__________________________________________
Name:
Title:
SCHEDULE I
PURCHASE PRICE, DEBT PORTION AND OWNER PARTICIPANT COMMITMENT
Purchase Price $_____________________
Debt Portion $_____________________
Owner Participant Commitment $_____________________
SCHEDULE II
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements referred to below, unless otherwise
defined in an Operative Agreement or the context thereof shall otherwise
require. In the case of any conflict between the provisions of this Schedule
and the provisions of any Operative Agreement, the provisions of such
Operative Agreement shall control the construction of such Operative Agreement.
[All other terms used in the Indenture that are defined in the
Trust Indenture Act (as defined below) or the Securities Act (as defined
below) have the meanings assigned to such terms in the Trust Indenture Act or
the Securities Act as in force on the date of the Indenture, except as
otherwise expressly provided or unless the context requires.](1)
- ------------
(1) To be used for a qualified Indenture.
Unless the context otherwise requires, (i) references to
agreements shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Act or Federal Aviation Act. The Federal Aviation Act of 1958, as
amended and in effect, on the date of the Lease or as subsequently amended, or
any successor or substituted legislation at the time in effect and applicable,
and the regulations promulgated pursuant thereto.
Aeronautics Authority. As appropriate, the Federal Aviation
Administration and/or the Administrator of the Federal Aviation
Administration, any successor to the former United States Civil Aeronautics
Board, or any person, governmental department, bureau, commission or agency
succeeding to the functions of any of the foregoing.
Affiliate. With respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership or voting securities or by contract
or otherwise.
After-Tax Basis. A basis such that any payment received or deemed
to have been received by a Person shall be supplemented by a further payment
to such Person so that the sum of the two payments, after deduction of all
Taxes resulting from the receipt or accrual of such payments, shall be equal
to the payment received or deemed to have been received. In the case of
amounts payable to the Lessor, the Owner Participant, or any corporate
affiliate of the Owner Participant, it shall be presumed that such Person is
at all times subject to Federal income tax at the maximum marginal rate
generally applicable to corporations from time to time.
Air Carrier. Any air carrier which is a United States "domestic
air carrier" as defined in Part 121 of the Federal Aviation Regulations, and
any "foreign air carrier" (as defined in the Act) as to which there is in
force a permit granted under Section 402 of the Act.
Aircraft. The Airframe to be sold by the Lessee to the Owner
Trustee pursuant to the Participation Agreement and leased under the Lease (or
any permitted substitute Airframe) together with the _____ Engines (or any
Replacement Engine) whether or not any of such initial or Replacement Engines
may from time to time be installed on such Airframe or may be installed on any
other airframe or on any other aircraft, including any aircraft substituted
pursuant to Section 11.03 of the Lease. Prior to delivery of the initial
Lease Supplement, references in the Operative Agreements (including Section
3.05 of the Participation Agreement) to the Aircraft shall mean the
__________________ airframe bearing FAA Registration Number N_____ and
Manufacturer's serial number _____, together with
_________________________________ engines bearing Manufacturer's serial numbers
___________________.
Airframe. The ________________________ aircraft (excluding the
Engines or engines from time to time installed thereon) leased by Lessor to
Lessee pursuant to the Lease and the Lease Supplement and having the United
States FAA Registration Number and manufacturer's serial number specified in
the Lease Supplement, including (i) all Parts so long as the same shall be
incorporated or installed in or attached to such Airframe, or so long as title
to any such Parts shall remain vested in Lessor in accordance with the terms
of Section 8.01(b) of the Lease after removal from such Airframe, and (ii) any
replacement airframe which may be substituted pursuant to Section 11.03 of the
Lease.
Ancillary Agreements. Any written agreement of the Lessee entered
into on the Delivery Date or at any time thereafter in connection with the
transaction contemplated by the Operative Agreements or the Original
Agreements, in each case as amended from time to time.
Appraisal. The report prepared by BK Associates, Inc. and
delivered to the Owner Participant and Lessee on the Delivery Date pursuant to
Section 4.02(j) of the Participation Agreement.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended,
and any successor thereto.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease.
Basic Term. The period commencing at the beginning of the day on
the Commencement Date and ending at the end of the day on the day immediately
preceding the date _________ years from the Commencement Date, or such earlier
date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under
the Trust Agreement.
Bills of Sale. Collectively, the FAA Bills of Sale for the
Aircraft, an additional full warranty bill of sale covering the Aircraft (and
specifically referring to each Engine) executed by the Lessee as owner of the
Aircraft in favor of the Owner Trustee and dated the Delivery Date and an
additional full warranty bill of sale covering the Aircraft executed by the
Manufacturer in favor of Lessee.
Burdensome Indemnity Payment. A Loss, as defined in the Tax
Indemnity Agreement, which causes the aggregate net present value of all
Losses paid or payable by the Lessee as of the determination date discounted
semi-annually at the Debt Rate to the date of determination to exceed ___% of
the Purchase Price.
Business Day. Any day other than a Saturday, Sunday or other day
on which commercial banking institutions in __________, ________,
______________, ____, New York, New York, ________________________ or Memphis,
Tennessee are authorized or required by law to close.
Certificate Closing Date. The date of the closing with respect to
the purchase of Certificates by the Pass Through Trustee contemplated by
Section 2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
199_-[SERIES NAME]), issued by the Owner Trustee pursuant to the Indenture and
any certificate issued in exchange therefor or replacement thereof pursuant to
the Indenture.
Change in Tax Law. Any change to the Code or the Treasury
regulations promulgated thereunder or the publication of any revenue ruling,
revenue procedure or any informational release by the Internal Revenue Service
or the Department of Treasury, provided that the Owner Participant or the
Lessee has notified the other parties of such change in writing prior to the
Delivery Date.
Change in Tax Rate. Any amendment, modification, deletion,
addition, or change to the Code which is enacted into law after the Delivery
Date which changes the highest marginal statutory rate of Federal income tax
applicable to the Owner Participant (other than a change which is in the
nature of a minimum tax).
Citizen of the United States. A citizen of the United States as
defined in Section 101(16) of the Act, or any analogous part of any successor
or substituted legislation or regulation at the time in effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.12 of the Indenture.
Commencement Date. ________________________.
Commission. The Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after
the execution and delivery of this Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties on such date.
Commitment. The amount of the Owner Participant's participation
in the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement means the
Consent and Agreement dated as of ____________, executed by the Manufacturer,
as the same may be amended, modified or supplemented from time to time.
Cut-Off Date. ___________,19__.
Corporate Base Rate. The rate announced from time to time by
________ as its Corporate Base Rate.
Debt Portion. The amount specified as such on Schedule I to the
Participation Agreement.
Debt Rate. The average weighted rate of interest on the
Certificates issued pursuant to the Indenture.
Default. Any event or condition, which, with the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
Delayed Delivery Notice. A certificate signed by a Responsible
Officer of the Lessee (i) requesting that the Pass Through Trustee temporarily
delay purchase of the Certificates to a date later than the Pass Through
Closing Date, (ii) stating the amount of the purchase price of each such
Certificate and the aggregate purchase price of all such Certificates, (iii)
stating the reasons for such delay and (iv) either (1) setting or resetting
the Delivery Date (which shall be on or prior to the Cut-Off Date), or (2)
indicating that such Delivery Date will be set by subsequent written notice not
less than three Business Days prior to such new Delivery Date (which shall be
on or prior to the applicable Cut-off Date).
Delivery Date. The date on which the Aircraft is to be delivered
and sold by the Lessee to the Lessor and leased by the Lessor to the Lessee
under the Lease, which date is also the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
Depository. The depository of the Registered Global Certificate,
if any, representing the Equipment Trust Certificates issued under the
Indenture and any successor to such depository appointed by the Company
pursuant hereto. Such depository initially shall be Depository Trust Company,
a New York corporation.
Eligible Deposit Account. Either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution with corporate trust powers
organized under the laws of the United States or any state thereof, or the
District of Columbia, and whose deposits are insured by the Federal Deposit
Insurance Corporation, provided that such institution also must have a
combined capital and surplus of at least $100,000,000 and a rating of A or
better from the Thomson Bank Watch.
Eligible Institution. A depository institution organized under
the laws of the United States or any one of the states thereof, or the
District of Columbia, or any domestic branch of a foreign bank, which in any
such case at all times (a) has either (x) a long-term unsecured debt rating of
at least Aa2 by Moody's or (y) a short-term certificate of deposit rating of
P-1 by Moody's, (b) has either (x) a long-term unsecured debt rating of a
least AA by S&P or (y) a short-term certificate of deposit rating of A-1+ by
S&P and (c) is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the ______________________ engines listed by its
manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Sections 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts incorporated or installed in or attached to any such
Engine and all Parts removed from any such Engine so long as title to such
Parts shall remain vested in the Lessor in accordance with the terms of
Article 8 of the Lease after removal from such Engine. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, all Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent and Agreement. The Engine Consent and Agreement
dated as of ________, executed by the Engine Manufacturer, as the same may be
amended from time to time.
Engine Manufacturer. ________________________, a ________
corporation.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default. Each of the events specified in Article 16 of
the Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 180 days (or in any event if such loss is continuing
on the last day of the Term) due to theft or disappearance, or (B) for a
period in excess of 60 days (or in any event if such loss is continuing on the
last day of the Term) due to the destruction, damage beyond economic repair or
rendition of such property permanently unfit for normal use by the Lessee for
any reason whatsoever; (ii) any damage to such property which results in an
insurance settlement with respect to such property on the basis of a total
loss, or constructive or compromised total loss; (iii) (x) condemnation,
confiscation or seizure of, or requisition of title to such property, or (y)
requisition of use of such property (A) by a foreign government or
instrumentality or agency thereof, or any purported government or
instrumentality or agency thereof, for a period in excess of 180 days, or (B)
by the Government for a period extending beyond the Term, provided that no
Event of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of up to six months in the event that the Aircraft,
the Airframe or any Engine is requisitioned by the Government pursuant to an
activation as part of the Civil Reserve Air Fleet Program, as such term is
defined in Section 7.02(a)(iv) of the Lease; and (iv) as a result of any law,
rule, regulation, order or other action by the Aeronautics Authority or other
governmental body having jurisdiction, the use of the Aircraft or Airframe in
the normal course of air transportation of cargo shall have been prohibited by
virtue of a condition affecting all aircraft of the same type for a period of
eighteen (18) consecutive months, unless the Lessee, prior to the expiration
of such eighteen month period, shall be diligently carrying forward all steps
which are necessary or desirable to permit the normal use of the Aircraft or
Airframe or, in any event, if such use shall have been prohibited for a period
of two (2) consecutive years or for a period extending beyond the end of the
Term, unless the Lessee, prior to the expiration of such two (2) year period
shall have conformed at least one __________________ aircraft (but not
necessarily the Aircraft or the Airframe) to the requirements of any such law,
rule, regulation, order, or other action and shall have commenced regular
commercial use and shall be diligently carrying forward, on a
non-discriminatory basis, all steps necessary or desirable to permit the
normal use of the Aircraft by the Lessee; provided, that if there is a conflict
between the operation of clause (iv) above and Section 12.05 of the Lease (by
reference to Section 12.04(ix) thereof), such Section 12.05 of the Lease shall
control. The date of such Event of Loss shall be the date of (i) loss of such
property or its use for a period in excess of 180 days due to theft or
disappearance, or loss for a period in excess of 60 days due to damage beyond
economic repair or loss of use of the Airframe because of requisition for use
for a period in excess of 180 days (or shorter period due to insurance
settlement), (ii) an insurance settlement on the basis of total loss with
respect to such property, (iii) condemnation, confiscation, seizure or
requisition of title, or (iv) prohibition from usage for the periods described
in clause (iv) above. An Event of Loss with respect to the Aircraft shall be
deemed to have occurred if any Event of Loss occurs with respect to the
Airframe.
Excepted Payments. Collectively, (i) all right, title and
interest of the Owner Participant or the Owner Trustee in, to and under the
Tax Indemnity Agreement and any moneys due or to become due under the Tax
Indemnity Agreement and payments of Supplemental Rent or other payments by the
Lessee in either case in respect of the Tax Indemnity Agreement, (ii)
indemnity payments and interest thereon and other amounts payable by the
Lessee to the Owner Participant or to the Trust Company or any of their
respective Affiliates, successors, assigns, directors, officers, employees,
agents or servants pursuant to Article 7 or 8 of the Participation Agreement
or any corresponding payment of Supplemental Rent under the Lease; (iii)
proceeds of public liability insurance in respect of the Aircraft payable to
the Owner Participant or Trust Company, or any of their Affiliates, successors
or assigns, as a result of insurance claims made, or losses suffered, by, or
amounts in respect of such indemnities paid for the benefit of, the Owner
Participant or the Trust Company either pursuant to the Lease (which shall
include proceeds of any self-insurance by the Lessee) or maintained by the
Trust Company or the Owner Participant and not required to be maintained under
the Lease; (iv) proceeds of any insurance in respect of the Aircraft which is
separately acquired and paid for by the Owner Participant (directly or through
the Owner Trustee) or the Lessor in accordance with Section 13.05 of the
Lease; (v) indemnity payments payable by the Owner Participant to the Trust
Company pursuant to Section 6.01 of the Trust Agreement; (vi) Transaction
Costs or other expenses paid or payable by the Lessee to, or for the benefit
of, the Owner Trustee, Trust Company or the Owner Participant pursuant to
Section 9.01 of the Participation Agreement, Section 3.02(b) of the Lease and
Section 2.02 of the Participation Agreement; (vii) the right to enforce, and
the proceeds of any such enforcement of, any right to receive the proceeds of
any of the amounts referred to in clauses (i) through (vi) above and (viii)
any payments in respect of interest to the extent attributable to the payments
referred to in clauses (i) through (vii) above.
Expense and Expenses. Have the meaning specified in Section
8.01(a) of the Participation Agreement.
FAA Bills of Sale. The bill of sale for the Airframe on AC Form
8050-2, or such other form as may be approved by the Aeronautics Authority
executed by the Lessee in favor of the Lessor and dated the Delivery Date and
the bill of sale for the Airframe on AC Form 8050-2, or such other form as may
be approved by the Aeronautics Authority executed by the manufacturer in favor
of the Lessee.
Fair Market Renewal Term. One or more terms of one or more years,
but not to exceed ____ years in the aggregate and which term(s) shall
immediately follow the end of the Basic Term or the Fixed Renewal Term with
respect to which the Lessee has exercised its option to renew the Lease
pursuant to Section 4.01(a)(B) thereof.
Fair Market Rental. An amount determined on the basis of, and
equal in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. In such determination, it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease. Fair Market Rental shall be determined in
accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and
equal in amount to, the value which would be obtained in an arm's-length
transaction between an informed and willing purchaser under no compulsion to
buy and an informed and willing seller unaffiliated with such purchaser and
under no compulsion to sell. In such determination it shall be assumed that
the Aircraft is in the condition required under the Lease in the case of
return of the Aircraft pursuant to Article 12 of the Lease. Fair Market Value
shall be determined in accordance with the provisions of Section 4.03 of the
Lease.
Federal Aviation Administration and FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rental. An amount equal to 50% of the average
semiannual payments of Basic Rent during the Basic Term as such payments may be
adjusted pursuant to Section 3.04 of the Lease.
Fixed Renewal Term. Up to ____ renewal terms, each term to be not
less than ____ year, but not more than _____ years in the aggregate.
Government. The United States of America or an agency or
instrumentality thereof.
Holder. As of any particular time, the person in whose name a
Certificate shall be registered.
Indebtedness of any Person means at any time, without duplication,
(i) all obligations of such Person for borrowed money or the deferred purchase
price of property, or evidenced by bonds, debentures, notes or other similar
instruments, or arising under leases that are properly capitalized under
generally accepted accounting principles applicable to such Person and (ii)
all guarantees by such Person of such obligations described in clause (i)
above of third parties.
Indemnitee. Each of the Owner Trustee, in its individual capacity
and as trustee, the Owner Participant, the Original Loan Participant, the
Indenture Trustee, in its individual capacity and as trustee, and any
successor (including any trustee which may succeed to the Lessor's interest
under the Lease), and any Affiliate, assign, officer, director, employee,
agent and servant of any of the foregoing, the Lessor's Estate and the Trust
Indenture Estate. Neither the Certificate Holder nor any holder of a Pass
Through Certificate shall be deemed to be an Indemnitee.
Indenture. The Trust Indenture and Security Agreement, dated as of
___________, 199_, as amended and restated as of _____________, 199_, between
the Lessor and the Indenture Trustee and the Indenture Supplement and any
amendment or supplement hereto or thereto from time to time entered into.
Indenture Default. Any event or condition, which, with the lapse
of time or the giving of notice, or both, would constitute an Indenture Event
of Default.
Indenture Documents. The Participation Agreement, the Trust
Agreement (including any Trust Agreement Supplements), the Lease (including
any Lease Supplements), the Indenture (including any Indenture Supplements),
the Certificates, the Purchase Agreement Assignment, the FAA Bills of Sale,
the Consent and Agreement and the Engine Consent and Agreement.
Indenture Event of Default. Each of the events specified in
Section 7.01 of the Indenture.
Indenture Supplement. Any Indenture Supplement, substantially in
the form of Exhibit A to the Indenture, entered into between the Indenture
Trustee and the Owner Trustee, which Indenture Supplement shall incorporate by
reference the provisions of the Indenture including any amendments entered
into subsequent to the Delivery Date.
Indenture Trustee. _______________________, a national banking
association, not in its individual capacity but solely as Indenture Trustee
under the Indenture and each other Person which may from time to time be
acting as successor trustee under the Indenture.
Indenture Trustee's Liens. Any Lien on the Trust Indenture Estate
resulting from (i) claims against the Indenture Trustee not related to the
administration of the Trust Indenture Estate or any transactions pursuant to
the Indenture or any document included in the Trust Indenture Estate or (ii)
any act or omission of the Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements or is in violation of
any of the terms of the Operative Agreements.
Independent Appraisal. An appraisal conducted pursuant to Section
4.03 of the Lease.
Independent Investment Banker. An independent investment banking
institution of national standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests, or any material
indirect financial interest, in the Lessee or any Affiliate of the Lessee, and
is not connected with the lessee or any Affiliate of the Lessee, as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions; provided, that if the Indenture Trustee shall
not have received written notice of such an appointment at least 10 days prior
to the Prepayment Date or if an Event of Default shall have occurred and be
continuing, "Independent Investment Banker" shall mean such an institution
appointed by the Indenture Trustee.
Interest Payment Date means each _________ and ________ beginning
with __________, 199_; provided, that if any such day is not a Business Day,
the relevant Interest Payment Date shall be the next succeeding Business Day.
Interim Term. The period commencing on the Delivery Date and
ending at the end of the day immediately preceding the Commencement Date.
Invoice. The invoice for the Aircraft given by the Lessee to the
Lessor.
Lease. The Lease Agreement dated as of __________, 199_, entered
into by the Lessor and the Lessee and the Lease Supplement and any amendment or
supplement hereto or thereto from time to time entered into.
Lease Supplement. Any Lease Supplement, substantially in the form
of Exhibit A to the Lease, entered into between the Lessor and the Lessee for
the purpose of leasing the Aircraft pursuant to the terms of the Lease, which
Lease Supplement shall incorporate by reference the provisions of the Lease
including any amendments or supplements entered into subsequent to the
Delivery Date.
Lessee. Federal Express Corporation, a Delaware corporation, and
its successors and assigns in its capacity as lessee.
Lessor. __________ Trust Company, a ________ banking corporation,
not in its individual capacity except as otherwise expressly stated, but
solely as Owner Trustee under the Trust Agreement, and its successors and
assigns.
Lessor's Estate. All estate, right, title and interest of the
Owner Trustee in and to the Collateral Account, the Liquid Collateral, the
Aircraft, the Lease, any Lease Supplement, the Bills of Sale, any warranty
with respect to the Airframe and the Engines, all amounts of Basic Rent and
Supplemental Rent, including without limitation, insurance proceeds (other
than insurance proceeds payable to or for the benefit of the Owner Trustee for
its own account or in its individual capacity, the Owner Participant or any
Holder or the Indenture Trustee) and requisition, indemnity or other payments
of any kind for or with respect to the Aircraft (except amounts owing to the
Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity or any Holder, or to any of their respective directors,
officers, employees and agents pursuant to Articles 7 and 8 of the
Participation Agreement). Notwithstanding the foregoing, "Lessor's Estate"
shall not include any Excepted Payment.
Lessor's Liens. Liens on the Lessor's Estate or the Trust
Indenture Estate arising as a result of (i) claims against the Lessor, in its
individual capacity or as Owner Trustee, or the Owner Participant, in each
case not related to the transactions contemplated by the Operative Agreements,
(ii) acts or omissions of the Lessor in its individual capacity or as Owner
Trustee, and, in the case of the Lessor in its individual capacity, arising
from its gross negligence or willful misconduct either not related to the
transactions contemplated by or expressly prohibited under the Operative
Agreements and any act or omission of the Owner Participant which is not
related to the transactions contemplated by the Operative Agreements or is in
violation of any of the terms of the Operative Agreements, (iii) Taxes or
Expenses imposed against the Lessor, in its individual capacity or as Owner
Trustee, Owner Participant, Lessor's Estate or the trust created by the Trust
Agreement which are not indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement or the Participation Agreement, or (iv) claims against the
Lessor or the Owner Participant arising from the voluntary transfer by the
Lessor or the Owner Participant of its interests in the Aircraft other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Articles 10 or 11 of
the Lease and other than a transfer pursuant to the exercise of the remedies
set forth in Article 17 of the Lease.
Letter of Representations. A letter from the Company and the Owner
Trustee to, and accepted by, the Depository, as such letter may be modified or
supplemented, or any successor letter thereto.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest.
Liquid Collateral. All amounts and securities deposited from time
to time in the Collateral Account and all the products, investments, earnings
and proceeds of the foregoing, including, but not limited to, all proceeds of
the investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Losses. Has the meaning specified in Section 15.02(a) of the
Participation Agreement.
Majority in Interest of Certificate Holders. As of a particular
date of determination, the Holders of more than 50% in aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding
for purposes of this definition any Certificates held by (i) the Owner
Participant unless all Certificates then outstanding shall be held by the
Owner Participant, (ii) by the Lessee, (iii) by the Indenture Trustee or (iv)
by any Affiliate of either.
Make-Whole Premium. With respect to each Certificate to be prepaid
pursuant to Sections 6.02(ii), 6.02(iv) and 6.02(v) of the Indenture an amount
determined as of the day before the applicable Prepayment Date which an
Independent Investment Banker determines to be equal to an excess of (i) the
present values of all remaining scheduled payments of such principal amount or
portion thereof and interest thereon (excluding interest accrued from the
immediately preceding Payment Date to such Prepayment Date) to the Maturity of
such Certificate in accordance with generally accepted financial practices
assuming a 360-day year consisting of twelve 30-day months at a discount rate
equal to Treasury Yield, all as determined by the Independent Investment
Banker over (ii) the unpaid principal amount of such Certificate.
Manufacturer. _____________________________, a ________
corporation.
Maturity. With respect to any Certificate, the date on which the
principal amount of such Certificate is due and payable.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Basic Rent set forth in Schedule II of the Lease, discounted
at a rate per semi-annual period equal to (a) the Debt Rate as of the date of
determination divided by (b) two.
Non-U.S. Person. Any Person other than (i) a citizen or resident
of the United States, as defined in Section 7701(a)(30) of the Code (for
purposes of this definition, the "United States"), (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof or therein, or (iii) any
estate or trust that is subject to United States federal income taxation
regardless of the source of its income.
Obsolete Parts. Parts which the Lessee deems obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate means a certificate signed by a Responsible
Officer of the Owner Trustee or the Lessee, as the case may be, delivered to
the Indenture Trustee. Each such certificate shall include the statements
provided for in Section 15.07.
Operative Agreements. The Participation Agreement, the Trust
Agreement, the Bills of Sale, the Lease, the Lease Supplement, the Certificates
outstanding at the time of reference, the Indenture, the Indenture and Security
Agreement Supplement, the Consent and Agreement, the Purchase Agreement
Assignment, the Engine Consent and Agreement, the Pass Through Agreement and
the Tax Indemnity Agreement, each as amended from time to time.
Opinion of Counsel means a written opinion of legal counsel, who
in the case of counsel (a) for the Lessee may be (i) an attorney employed by
the Lessee who is generally empowered to deliver such written opinions, (ii)
Davis Polk & Wardwell or a successor firm or (iii) other counsel designated by
the Lessee and reasonably satisfactory to the Indenture Trustee, (b) for the
Owner Trustee, may be (i) Potter Anderson & Corroon or (ii) other counsel
designated by the Owner Trustee and reasonably satisfactory to the Indenture
Trustee and (c) for the Indenture Trustee, may be (i) Powell, Goldstein,
Frazer & Murphy or (ii) other counsel designated by the Indenture Trustee.
Owner Participant. ____________________________, a __________
corporation, and any successor thereto, and any person to which Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Trustee. __________ Trust Company, a ________ banking
corporation, not in its individual capacity except as otherwise expressly
stated, but solely as Owner Trustee under the Trust Agreement, and its
successors and assigns.
Owner's Economic Return. The Owner Participant's anticipated
after-tax yield and aggregate after-tax cash flow during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Basic Rent, Stipulated
Loss Value and Termination Value percentages, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement, dated as of
___________, 199_ among the Lessee, the Owner Trustee not in its individual
capacity except as otherwise expressly stated therein, but solely as trustee,
the Owner Participant, the Pass Through Trustee, solely as pass through
trustee, and the Indenture Trustee in its individual capacity and as trustee
as amended, modified or supplemented, or the terms thereof waived.
Parts. All appliances, parts, components, instruments,
appurtenances, accessories, furnishings and other equipment of whatever nature
(other than complete Engines or engines) which may from time to time be
incorporated or installed in or attached to the Airframe or any Engine and, so
long as title thereto shall remain vested in the Lessor in accordance with the
terms of Article 8 of the Lease, after removal from the Airframe or Engines.
Pass Through Agreement. The Pass Through Trust Agreement dated as
of ___________, 199_ between the Lessee and the Pass Through Trustee, as such
Pass Through Agreement may be modified, supplemented or amended from time to
time in accordance with the provisions thereof.
Pass Through Certificates. Any of the 199_ Pass Through
Certificates, Series ___ or 199_ Pass Through Certificates, Series ___, in
each case as issued by the related Pass Through Trust; and "Pass Through
Certificates" means all of the Pass Through Certificates issued by each of the
Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of
the Pass Through Certificates to the Underwriter pursuant to the Underwriting
Agreements takes place.
Pass Through Trust. The Federal Express Pass Through Trust,
199_-____ or Federal Express Pass Through Trust 199_-_, in each case formed
pursuant to the related Series Supplement in accordance with the Pass Through
Agreement; and "Pass Through Trusts" means both of such Pass Through Trusts.
Pass Through Trustee. ________________, a national banking
association, in its capacity as Pass Through Trustee under the Pass Through
Agreement and each Pass Through Trust, and its successors and assigns as Pass
Through Trustee thereunder.
Past Due Rate. At any time a rate of interest per annum equal to
__% per annum plus the Debt Rate.
Paying Agent has the meaning set forth in Section 3.04 of the
Indenture.
Payment Date. Each _______ and ___________, commencing
_____________, 199_, thereafter until all Certificates have been paid in full.
Payment Default. Any event specified in Section 16.01(a) or
16.01(b) of the Lease which with the giving of notice or lapse of time or both
would constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a ) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local, foreign
or any agency, instrumentality, division or body thereof).
Prepayment Date. The meaning specified in Section 6.02 of the
Indenture.
Prepayment Price. The meaning specified in Section 6.02(b) of the
Indenture.
Proposed Termination Date. The proposed date of termination of the
Lease as specified by the Lessee in its notice given pursuant to Section 10.01
thereof.
Purchase Agreement. The Purchase Agreement, dated as of
_____________, between the Manufacturer and the Lessee relating to the
purchase by the Lessee of the Aircraft, as originally executed or as modified,
amended or supplemented in accordance with the terms thereof, but only insofar
as the foregoing relates to the Aircraft.
Purchase Agreement Assignment. The Purchase Agreement Assignment
dated as of _____, executed by the Lessee and the Owner Trustee.
Purchase Option Date. ______________________.
Purchase Option Price. The amount to be paid by Lessee to Lessor
on the Purchase Option Date pursuant to Section 4.02(a)(B) of the Lease, which
amount is set forth in the Appraisal.
Purchase Price. Has the meaning specified in Section 2.01(b) of
the Participation Agreement.
Record Date. As used with respect to any Interest Payment Date
(except a date for payment for defaulted interest), __________ for __________
Interest Payment Dates and _________ for ____________ Interest Payment Dates,
whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 14.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant
to Section 14.01 of the Participation Agreement.
Register has the meaning set forth in Section 3.02 of the
Indenture.
Registered Global Certificate. The Equipment Trust Certificate,
if any, issued to the Depository in accordance with Section 2.12 of the
Indenture and bearing the legend prescribed in Exhibit B to the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Renewal Rent. The amount payable by the Lessee as rent in
accordance with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. Any of the Fixed Renewal Terms or Fair Market
Renewal Terms which immediately follow the end of the Basic Term with respect
to which the Lessee has exercised its option to renew the Lease pursuant to
Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic
Rent, Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each _________ and __________, commencing
___________, 199_, and continuing thereafter during the Term.
Replacement Engine. A ______________________ ______ engine (or an
engine of the same or another manufacturer of the same or of equal or greater
value, and utility), which shall have been substituted for an Engine pursuant
to Sections 7.02(a)(vii), 10.03, 11.03 11.04, or 12.02 of the Lease and leased
pursuant to the Lease, together with all Parts relating to such engine.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement) or the Indenture Trustee, any officer in its
Corporate Trust Administration Department designated by such person to perform
obligations under the Operative Agreements, and with respect to any other
party, any corporate officer or other employee of a party who, in the normal
performance of his operational responsibilities, with respect to the subject
matter of any covenant, agreement or obligation of such party pursuant to any
Operative Agreement, would have responsibility for and knowledge of such
matter and the requirements of any Operative Agreement with respect thereto.
Scheduled Delivery Date. The Delivery Date specified in the
Delivery Notice pursuant to Section 3.01 of the Participation Agreement.
Securities Act. The Securities Act of 1933, as amended.
SEC. The Securities and Exchange Commission of the United States
and any successor agencies or authorities.
Series Supplement. The Series Supplement 199_-_ to be executed and
delivered by the Lessee and the Pass Through Trustee or the Series Supplement
199_-_ to be executed and delivered by the Lessee and the Pass Through
Trustee, in each case as such Series Supplement may be modified, supplemented
or amended from time to time in accordance with the provisions thereof and
"Series Supplements" means both of such Series Supplements.
Significant Expenditure. Has the meaning specified in Section
4.02(a)(D) of the Lease.
Sinking Fund Payment Date. __________________
Sinking Fund Payment Price. _________________
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Specified Investments. Shall mean (a) direct obligations of the
United States of America or obligations fully guaranteed by the United States
of America; (b) commercial paper rated A-1/P-1 by Standard & Poor's Ratings
Group and Moody's Investors Service, Inc., respectively or, if such ratings
are unavailable, rated by any nationally recognized rating organization in the
United States equal to the highest rating assigned by such rating
organization; (c) overnight federal funds transactions with members of the
Federal Reserve Systems arranged by federal funds brokers; and (d) overnight
repurchase agreements with respect to the securities described in clause (a)
above entered into with an office of a bank or trust company which is located
in the United States of America of any bank or trust company which is
organized under the laws of the United States or any state thereof and has
capital surplus and undivided profits aggregating at least $500 million.
Stipulated Loss Value. As of any Stipulated Loss Value
Determination Date during the Basic Term, the amount determined by multiplying
the Purchase Price by the percentage set forth in Schedule III of the Lease
under the heading "Stipulated Loss Value Factors" opposite such date (as such
Schedule III may be adjusted from time to time as provided in Section 3.04 of
the Lease), and during any Renewal Term, the amount determined pursuant to
Section 4.01(b) of the Lease. Notwithstanding any other provisions of the
Lease or the Participation Agreement or the Indenture, each Stipulated Loss
Value for the Aircraft shall be, under any circumstances and in any event, an
amount, together with Basic Rent due and owing through the date of payment of
Stipulation Loss Value, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Factors."
Supplemental Rent. All amounts, liabilities and obligations which
the Lessee assumes or agrees to pay under the Lease or under the Participation
Agreement or Tax Indemnity Agreement or any other Ancillary Agreement to the
Lessor or others, including, without limitation, payments of Stipulated Loss
Value and amounts calculated by reference to Termination Value and any other
amounts due on the Certificates pursuant to the Indenture, and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement, but excluding Basic
Rent or the Fixed Renewal Rental.
Tax. Shall have the meaning set forth in Section 7.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement, dated as of
___________, 199_, between the Lessee and the Owner Participant, as from time
to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Interim Term and the Basic Term of the lease for the
Aircraft under the Lease and, if renewed pursuant to Section 4.01 of the
Lease, each Renewal Term for the Aircraft for which the Lease is renewed, or
such earlier date on which the Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during the Basic Term that
is on or after _________________.
Termination Value. As of any Termination Date, the amount
determined by multiplying the Purchase Price by the percentage set forth in
Schedule IV of the Lease under the heading "Termination Value Factors"
opposite such Termination Date (as such Schedule IV may be adjusted from time
to time as provided in Section 3.04 of the Lease). Notwithstanding any other
provisions of the Lease, the Participation Agreement or the Indenture, each
Termination Value shall be, under any circumstances and in any event, an
amount, together with Basic Rent due and owing through the date of payment of
any amount calculated by reference to Termination Value, at least sufficient
to pay in full as of such date of payment of the aggregate unpaid principal
amount of and accrued interest on the Certificates outstanding on such date of
payment.
Transaction Costs. All of the documented costs and expenses
incurred by the Lessee, the Owner Trustee, the Underwriters, the Indenture
Trustee and the Participants as contemplated by Section 9.01(a) of the
Participation Agreement.
"Treasury Yield". (i) In the case of a Certificate having a
Maturity within one year after the Prepayment Date the average yield to
maturity on a government bond equivalent basis of the applicable United States
Treasury Bill due the week of Maturity of such Certificate and (ii) in the
case of a Certificate having a Maturity one year or more after the Prepayment
Date, the average yield of the most actively traded United States Treasury
Note (as reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate
Systems, Inc., a financial news service, or if such report is not available,
a source deemed comparable by the Independent Investment Banker selected to
determine the Make-Whole Premium and reasonably acceptable to the Lessee)
corresponding in maturity to such Certificate (or, if there is no
corresponding maturity, an interpolation of maturities by the Independent
Investment Banker), in each case determined by the Independent Investment
Banker selected to determine the Make-Whole Premium based on the bid price as
of 10:00 a.m. and 2:00 p.m. New York time, on the second Business Day
preceding the Prepayment Date.
Trust Agreement. The Trust Agreement, dated as of _________, 1992,
between the Owner Participant and the Owner Trustee in its individual
capacity, as from time to time modified, amended or supplemented pursuant to
its applicable provisions and in accordance with the Operative Agreements.
Trust Company. __________ Trust Company, a ________ banking
corporation, in its individual capacity and not as Owner Trustee, and its
successors under the Trust Agreement, in their respective individual
capacities and not as Owner Trustees.
[Trust Indenture Act. Except as otherwise provided in Section
4.04, 13.01 and 13.08 of the Indenture, the Trust Indenture Act of 1939, as
amended, as in force on the date that the Indenture was first qualified under
such Act.](2)
- ----------------
(2) To be added in the case of a qualified Indenture.
Trust Indenture Estate. The property, rights and privileges
described in the Granting Clause of the Indenture, other than (i) Excepted
Payments, including, without limitation all right, title and interest of the
Owner Participant in, to and under the Tax Indemnity Agreement and any moneys
due and to become due under the Tax Indemnity Agreement, all as provided in
the Indenture, and (ii) rights granted to the Owner Trustee or the Owner
Participant under the Indenture, including without limitation Sections 2.05,
7.02, 8.01, 8.02, 8.03, 13.01 and 13.02 thereof.
Underwriters. __________________.
Underwriting Agreement. The agreement among the Lessee and the
several Underwriters dated __________, 199_, relating to the purchase by such
Underwriters of the Pass Through Certificates.
United States or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there
is in force a certificate issued pursuant to Section 401 or Section 418 of the
Federal Aviation Act, and as to which there is in force an air carrier
operating certificate issued pursuant to Part 121 of the regulations under
such Act, or which may operate as an air carrier by certification or otherwise
under any successor or substitute provision thereof or in absence thereof.
SCHEDULE III
PERMITTED COUNTRY LIST
Argentina Luxembourg
Australia Malaysia
Austria Malta
Bahamas Mexico
Barbados Netherlands
Belgium New Zealand
Brazil Norway
British Virgin Islands Peoples Republic of China
Canada Portugal
Cayman Islands Republic of China (Taiwan)
Denmark Singapore
Egypt South Korea
Finland Spain
France Sweden
Germany Switzerland
Greece Thailand
Grenada Trinidad & Tabago
Hong Kong United Kingdom
Iceland
Indonesia
Ireland
Italy
Jamaica
Japan
SCHEDULE IV
PASS THROUGH TRUST INFORMATION
1. Federal Express Corporation Pass Through Trust, 199_-__
Federal Express Corporation Trust No. N_____
Interest Rate: ____%
Maturity: ________________
Principal Amount: $_____________
2. Federal Express Corporation Pass Through Trust, 199_-__
Federal Express Corporation Trust No. N_____
Interest Rate: ____%
Maturity: ________________
Principal Amount: $_____________
EXHIBIT A(1)(a)(i)
TO
PARTICIPATION AGREEMENT
Opinion of Lessee's Counsel
(Certificate Closing Date)
EXHIBIT A(1)(a)(ii)
TO
PARTICIPATION AGREEMENT
Opinion of Lessee's Counsel
(Delivery Date)
EXHIBIT A(1)(b)(i)
TO
PARTICIPATION AGREEMENT
Opinion of Lessee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(1)(b)(ii)
TO
PARTICIPATION AGREEMENT
Opinion of Lessee's Special Counsel
(Delivery Date)
EXHIBIT A(2)(a)
TO
PARTICIPATION AGREEMENT
Opinion of Owner Participant's Special Counsel
EXHIBIT A(2)(b)
TO
PARTICIPATION AGREEMENT
Opinion of Owner Participant's Counsel
EXHIBIT A(3)
TO
PARTICIPATION AGREEMENT
Opinion of Indenture Trustee's Counsel
EXHIBIT A(4)
TO
PARTICIPATION AGREEMENT
Opinion of Pass Through Trustee's Counsel
EXHIBIT A(5)(a)
TO
PARTICIPATION AGREEMENT
Opinion of Owner Trustee's Counsel
(Certificate Closing Date)
EXHIBIT A(5)(b)
TO
PARTICIPATION AGREEMENT
Opinion of Owner Trustee's Counsel
(Delivery Date)
EXHIBIT A(6)
TO
PARTICIPATION AGREEMENT
Opinion of Engine Manufacturer's Counsel
EXHIBIT A(7)
TO
PARTICIPATION AGREEMENT
Opinion of Manufacturer's Counsel
EXHIBIT A(8)
TO
PARTICIPATION AGREEMENT
Opinion of Special Aviation Counsel
EXHIBIT B
TO
PARTICIPATION AGREEMENT
Form of Lease Agreement
EXHIBIT C
TO
PARTICIPATION AGREEMENT
Form of Indenture
EXHIBIT D
TO
PARTICIPATION AGREEMENT
Form of Trust Agreement
EXHIBIT E
TO
PARTICIPATION AGREEMENT
Form of Purchase Agreement Assignment, Consent and Agreement and Engine
Consent and Agreement
Exhibit 4(f)(2)
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N_____)
Dated as of ______________, 199_
between
________________________,
Trustor
and
________________________,
Owner Trustee
COVERING ONE [MANUFACTURER/MODEL] AIRCRAFT
SERIAL NO. _____, REGISTRATION NO. N_____
TABLE OF CONTENTS
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Direction to Owner Trustee............. 1
SECTION 1.02. Declaration of Trust..................................... 2
SECTION 1.03. Conditions Precedent and Advances by Trustor............. 2
ARTICLE 2
DISTRIBUTIONS
SECTION 2.01. Predelivery Funding; Rent, Etc........................... 2
SECTION 2.02. Excepted Payments........................................ 3
SECTION 2.03. Other Receipts........................................... 3
SECTION 2.04. Distributions after Default.............................. 4
SECTION 2.05. Distributions after Release of Lien of Indenture......... 4
SECTION 2.06. Manner of Making Distributions........................... 4
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and Duties........................... 5
SECTION 3.02. Limitation on Authority of Owner Trustee................. 6
SECTION 3.03. Notice of Default........................................ 6
SECTION 3.04. Action Upon Instructions................................. 6
SECTION 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
SECTION 3.06. Certain Rights of Owner Trustee.......................... 8
SECTION 3.07. No Representations or Warranties as to Certain Matters... 10
SECTION 3.08. Status of Moneys Received................................ 11
SECTION 3.09. Self-Dealing............................................. 11
SECTION 3.10. Definition of a Responsible Officer...................... 11
SECTION 3.11. Resignation or Removal of Owner Trustee.................. 12
SECTION 3.12. Estate and Rights of Successor Owner Trustee............. 12
SECTION 3.13. Merger or Consolidation of Owner Trustee................. 13
SECTION 3.14. Co-Trustees.............................................. 13
SECTION 3.15. Interpretation of Agreements............................. 14
SECTION 3.16. Not Acting in Individual Capacity........................ 15
SECTION 3.17. Tax Returns.............................................. 15
ARTICLE 4
TERMINATION OF TRUST
SECTION 4.01. Termination.............................................. 15
SECTION 4.02. Distribution of Lessor's Estate upon Termination......... 16
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification.......................................... 18
SECTION 6.02. Supplements and Amendments............................... 19
SECTION 6.03. Nature of Title of Trustor............................... 20
SECTION 6.04. Power of Owner Trustee to Convey......................... 20
SECTION 6.05. Notices.................................................. 20
SECTION 6.06. Situs of Trust; Applicable Law; Severability............. 21
SECTION 6.07. Successors and Assigns................................... 21
SECTION 6.08. Headings and Table of Contents........................... 21
SECTION 6.09. Definitions.............................................. 22
SECTION 6.10. Identification of Trust.................................. 22
SECTION 6.11. Counterparts............................................. 22
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N_____)
TRUST AGREEMENT (Federal Express Corporation Trust No. N_____) dated
as of _______________, 199__, (this "Agreement") between
_____________________, a _____________________________ (in its individual
capacity, "TC", and not in its individual capacity but solely as trustee
hereunder, the "Owner Trustee"), and _____________________, a
____________________________ (together with its successors and permitted
assigns, the "Trustor");
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Owner Trustee in the Collateral Account and released on the Delivery
Date in order to finance a portion of the Purchase Price of the Aircraft, to
acquire the Aircraft from the Lessee on the Delivery Date, to lease the
Aircraft to the Lessee on the Delivery Date and to receive the benefits
provided for herein.
WHEREAS, TC is willing to accept the trust as herein provided and to
perform its obligations hereunder not in its individual capacity but solely as
the Owner Trustee.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, TC and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs the Owner Trustee, not individually but
solely as the Owner Trustee hereunder:
(a) to execute and deliver as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, this Agreement and each of the
other Operative Agreements to which it is a party and to enter into and
perform the transactions contemplated thereby; including, without
limitation, accepting title to, and delivery of, the Aircraft from the
Lessee on the Delivery Date, and to take all appropriate action to cause
the Airframe to be registered with the Federal Aviation Administration in
the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
SECTION 1.02. Declaration of Trust. TC hereby declares and agrees
that it will, and in its capacity the Owner Trustee does, hold the Lessor's
Estate upon the trusts herein set forth for the use and benefit of the
Trustor, subject, however, to the provisions of, and the Lien created by, the
Indenture.
SECTION 1.03. Conditions Precedent and Advances by Trustor. The
Trustor shall make to the Owner Trustee the advances, if any, required to be
made by the Trustor pursuant to Section 6.03(e) of the Participation Agreement
in the manner and subject to the conditions provided therein. The Trustor
also agrees to make additional advances to the Owner Trustee in such amounts
and at such times as may be necessary to permit the Owner Trustee to satisfy
its obligations under Section 9.01(b) of the Participation Agreement. The
right and obligation of the Owner Trustee to take the actions required by
Section 1.01 hereof shall be subject to the condition that the terms and
conditions of Sections 4.01 and 4.02 of the Participation Agreement shall have
been complied with in a manner satisfactory to the Owner Trustee and the
Trustor.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the Lease
will be security for the Certificates pursuant to the Indenture which provides
that all moneys payable by the Lessee to the Owner Trustee under the Lease
(other than Excepted Payments) are to be paid to the Indenture Trustee while
the Lien of the Indenture is in effect. Except as otherwise provided in
Section 2.04, the Owner Trustee shall promptly apply each payment of Excess
Amount, Rent (other than Excepted Payments), Stipulated Loss Value,
Termination Value, and any proceeds from the sale of the Aircraft received by
it as follows:
(x) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article 5
of the Indenture; provided, that any payments received by the Owner Trustee
from (i) the Lessee with respect to the Owner Trustee's fees and
disbursements under this Agreement, or (ii) the Trustor pursuant to Section
6.01 shall not be paid over to the Indenture Trustee but shall be retained
by the Owner Trustee and applied toward the purpose for which such payments
were made;
(y) any amount remaining after application in full in accordance with
paragraph (x) of this Section 2.01(b) and which represents payments for
which provision as to the application thereof is made in any other
Operative Agreement shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of such Operative
Agreement; and
(z) after application in accordance with paragraphs (x) and (y) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
SECTION 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
SECTION 2.03. Other Receipts. Except as otherwise provided in
Section 2.04, any payment received by the Owner Trustee, other than those
referred to in Sections 2.01 and 2.02, shall be payable prior to the release
of the Lien of the Indenture directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid over
to the Indenture Trustee without deduction, set off or adjustment of any kind)
for distribution in accordance with the provisions of Article 5 of the
Indenture; and following such application or release of Lien, any such payment
for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
SECTION 2.04. Distributions after Default. Except as otherwise
provided in Section 2.02, (i) all payments received and amounts realized by
the Owner Trustee after an Indenture Event of Default shall have occurred and
shall be continuing and after the Certificates shall have become or been
declared due and payable pursuant to Section 7.02 of the Indenture or the
Lease shall have been declared in default (including, without limitation, any
amounts realized by the Owner Trustee or the Trustor from the exercise of any
remedies pursuant to Section 17.01 of the Lease), as well as (ii) all funds
then held or thereafter received by the Owner Trustee as part of this Trust
Agreement, the Lease or otherwise, shall be distributed to the Trustor.
SECTION 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a),
shall, to the extent required, be retained by the Owner Trustee as
reimbursement for all expenses hereunder or under the Lease not theretofore
reimbursed under this Agreement, the Lease or otherwise and to which the Owner
Trustee is entitled to be reimbursed pursuant to the provisions thereof, and
any balance remaining thereafter shall be distributed to the Trustor.
SECTION 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to the account set forth in the
Participation Agreement or to such other account or accounts of the Trustor as
it may designate from time to time by written notice to the Owner Trustee (and
the Owner Trustee shall use reasonable efforts to cause such funds to be
transferred by wire transfer on the same day as received, but in any case not
later than the next succeeding Business Day), and (ii) the Indenture Trustee
pursuant to this Article 2 by paying the amount to be distributed to the
Indenture Trustee in the manner specified in the Indenture; provided, that the
Owner Trustee shall invest overnight, for the benefit of the Trustor, in
investments that would be permitted by Article 23 of the Lease (but only to
the extent funds are received on or prior to 1:00 P.M. _____ Time and such
investments are available and, if such investments are not available to the
Owner Trustee which, after consultation with the Trustor, the Trustor shall
direct) all funds not transferred by wire transfer on the same day as they
were received. Notwithstanding the foregoing but subject always to the
provisions of, and the Lien created by, the Indenture, the Owner Trustee will,
if so requested by the Trustor by written notice, pay any and all amounts
payable by the Owner Trustee hereunder to the Trustor either (i) by crediting,
or causing the Indenture Trustee to credit, such amount or amounts to an
account or accounts maintained by the Trustor with the Owner Trustee in its
individual capacity or with the Indenture Trustee, as the case may be, in
immediately available funds, or (ii) by mailing, or causing the Indenture
Trustee to mail, an official bank check or checks in such amount or amounts
payable to the Trustor at such address as the Trustor shall have designated
in writing to the Owner Trustee.
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and Duties. TC accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Documents in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Article 5 of the
Lease, Sections 6.01, 6.02(a) and (b) and 6.04 of the Participation Agreement
or its representations, warranties and covenants given in its individual
capacity in Section 3.08(ii) of the Indenture, (c) the failure to use ordinary
care in receiving, handling and disbursing funds, (d) Lessor's Liens
attributable to it in its individual capacity, and (e) taxes, fees, or other
charges on, based on, or measured by, any fees, commissions or compensation
received by the Owner Trustee in connection with the transactions contemplated
by the Lease, the Indenture and this Agreement.
SECTION 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Airframe,
Engines or any other property at any time constituting a part of the Lessor's
Estate, or otherwise to take or refrain from taking any action under or in
connection with the Operative Agreements, except (i) to execute and deliver
the Operative Agreements, (ii) to exercise and carry out or cause to be
exercised or carried out the rights, duties and obligations of the Owner
Trustee hereunder and under the Operative Agreements, or (iii) as expressly
provided in written instructions from the Trustor given pursuant to Section
3.03 or 3.04; provided, that nothing in this Section 3.02 shall limit in any
manner the obligation of the Owner Trustee to perform and observe all the
terms of the Operative Agreements or the obligations of the Owner Trustee
under Article 2 of this Agreement.
SECTION 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an event or condition, which with the lapse of time or the giving of
notice, or both, would constitute an Indenture Default, the Owner Trustee
shall give or cause to be given to the Trustor and the Indenture Trustee
prompt notice (in any event, within ten days of the discovery thereof) of such
Default, Event of Default, Indenture Default or such event or condition by
telegram, telex, or facsimile followed by prompt written notice thereof by
first-class certified mail, postage prepaid, return receipt requested.
Subject to the terms of Section 3.06(e) and the rights of the Indenture
Trustee under the Indenture, the Owner Trustee shall take such action with
respect to such Default, Event of Default, Indenture Default or such event or
condition as shall be specified in written instructions from the Trustor, and
if the Owner Trustee shall not have received instructions from the Trustee
within 20 days after giving notice of such Default, Event of Default,
Indenture Default or such event or condition to the Trustor, the Owner Trustee
may take such action, or refrain from taking such action, with respect to such
Default, Event of Default, Indenture Default or such event or condition as it
shall deem advisable in the best interests of the Trustor; provided, that the
Owner Trustee shall be under no duty to take or refrain from taking any such
action. For all purposes of this Agreement and the Lease, in the absence of
actual knowledge of a Responsible Officer of the Owner Trustee, the Owner
Trustee shall not be deemed to have knowledge of a Default, Event of Default,
Indenture Default or such event or condition unless notified in writing by the
Lessee, the Trustor, the Indenture Trustee or any Certificate Holder.
SECTION 3.04. Action Upon Instructions. Subject in all respects to
the terms of the Operative Agreements and the rights of the Indenture Trustee,
the Holders of the Certificates and the Lessee, respectively, thereunder, and
subject further to the terms of Article 2 and Sections 3.03, 3.05 and 3.06,
upon the written instructions at any time and from time to time of the
Trustor, the Owner Trustee will take such of the following actions as may be
specified in such instructions:
(a) give such notice or direction or exercise such right, remedy or
power under the Operative Agreements, or take such other action, as shall
be specified in such instructions;
(b) take such action to preserve or protect the Lessor's Estate
(including the discharge of Liens and encumbrances) as may be specified in
such instructions;
(c) approve as satisfactory to it all matters required by the terms
of the Operative Agreements to be satisfactory to the Owner Trustee (it
being understood that without written instructions of the Trustor, the
Owner Trustee shall not approve of any matter as satisfactory to it),
except such approvals as may be required with respect to the Trustor's
transfer of its Beneficial Interest pursuant to Article 5;
(d) after the expiration of the term of the Lease, convey in
accordance with such instructions, the Aircraft and all of the Owner
Trustee's right, title and interest in and to the Aircraft or any part
thereof for such amount, on such terms and to such purchaser or purchasers
as shall be designated in such instructions, or retain, lease or otherwise
dispose of the Aircraft or any part thereof as shall be specified in such
instructions;
(e) execute and file any financing statement (and any continuation
statement with respect to any such financing statement) or any other similar
document relating to the Lessor's Estate or the security interests and
assignments created by the Operative Agreements, as may be specified in
such instructions (which instructions shall be accompanied by an execution
form of such financing statement or such continuation statement, as the
case may be); and
(f) any other action as specified by the Trustor.
SECTION 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) the Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii)in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, the Owner
Trustee agrees in its individual capacity that it will, at its own cost and
expense, promptly take such action as may be necessary to discharge duly all
Lessor's Liens attributable to it in its individual capacity and will claim no
indemnity therefor hereunder or under the Participation Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01, Section 3.01 shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
SECTION 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by any party hereto or
to any other Operative Agreement shall be sufficiently evidenced by a
request, direction or authorization in writing, delivered to the Owner
Trustee, and signed in the name of such party by any of the Chairman of the
Board, the President, any Vice President, the Treasurer or Assistant
Treasurer or the Secretary or Assistant Secretary or other duly authorized
officer of such party; and any resolution of the Board of Directors or
committee thereof of such party shall be sufficiently evidenced by a copy
of such resolution certified by the Secretary or an Assistant Secretary of
such party to have been duly adopted and to be in full force and effect on
the date of such certification, and delivered to the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor or the Indenture Trustee and
notice of such need for such proof or establishment shall be delivered to
the Trustor, who may advise the Owner Trustee in respect of such matter and
the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the Operative Agreements at the
request or direction of the Trustor unless the Persons making such request
or direction shall have offered to the Owner Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction; nor shall the
Owner Trustee be required to take any action deemed to impose on the Owner
Trustee any obligation to take any action, if the Owner Trustee shall have
been advised by its counsel that such action is unlawful or is contrary to
the terms of this Agreement or the Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Airframe and Engines personally
or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture, the Owner Trustee
shall not have any duty (i) to see to any recording or filing of the Lease
or of this Agreement or any financing statement or other notice or document
relating thereto or contemplated under the Operative Agreements or to see
to the maintenance of any such recording or filing (other than FAA
reporting requirements contained in 14 C.F.R. Sections 47.45 and 47.51),
(ii) to see to any insurance on the Aircraft or any part thereof or to
effect or maintain any such insurance, whether or not the Lessee shall be
in default with respect thereto, other than to forward to the Trustor
copies of all certificates, reports and other written information which it
receives from the Lessee pursuant to the Lease, (iii) to see to the payment
or discharge of any tax, assessment or other governmental charges or any
Lien (except any Lessor's Lien attributable to it in its individual
capacity) owing with respect to, or assessed or levied against any part of
the Lessor's Estate, (iv) to confirm or verify any financial statements or
reports of the Lessee, or (v) to inspect the Aircraft at any time or
ascertain or inquire as to the performance or observance of any of the
Lessee's covenants under the Lease.
SECTION 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR TC MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that TC represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft were conveyed to it by the Lessee and TC represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall
be free of all Lessor's Liens attributable to it, and that the Owner Trustee
shall comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is
a party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or TC and except that TC
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the Operative Agreements to which the Owner Trustee is a party have been (or
at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by TC and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of TC enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
SECTION 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement shall
constitute trust funds for the purpose for which they were paid or are held,
but need not be segregated in any manner from any other moneys except to the
extent required by law and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
SECTION 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
SECTION 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of the Owner Trustee customarily
performing functions similar to those performed by any of the above designated
officers.
SECTION 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 6.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation to be effective only
upon the appointment of a successor trustee and the acceptance of such
appointment by such successor. In addition, the Trustor may at any time
remove the Owner Trustee without cause by an instrument in writing delivered
to the Owner Trustee and the Indenture Trustee, such removal to be effective
only upon the appointment by the Trustor of a successor Owner Trustee and the
acceptance of such appointment by such successor. Upon the giving of notice of
resignation or removal of the Owner Trustee, the Trustor may appoint a
successor Owner Trustee by an instrument signed by the Trustor. If the
Trustor shall not have so appointed a successor Owner Trustee within 30 days
after such resignation or removal, the Owner Trustee, the Indenture Trustee or
the Trustor may apply to any court of competent jurisdiction to appoint a
successor Owner Trustee to act until such time, if any, as a successor or
successors shall have been appointed by the Trustor as above provided. Any
successor Owner Trustee so appointed by a court shall be superseded by any
successor Owner Trustee subsequently appointed by the Trustor.
Each successor Owner Trustee appointed as herein provided shall be a
trust company or banking corporation which is a Citizen of the United States,
having its principal place of business in the United States and having a
combined capital and surplus of at least $100,000,000, if there be such an
institution willing, able and legally qualified to perform the duties of the
Owner Trustee hereunder upon reasonable or customary terms.
SECTION 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trusts hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trusts
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trusts hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority into the name of the successor Owner
Trustee.
SECTION 3.13. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee in its individual capacity may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Owner Trustee shall be a party, or
any corporation to which substantially all the business of the Owner Trustee
in its individual capacity may be transferred, shall, subject to the last
sentence of Section 3.11, be the Owner Trustee under this Agreement without
further act; provided, that such corporation shall not also be the Indenture
Trustee.
SECTION 3.14. Co-Trustees. At any time, if the Owner Trustee and the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more persons approved by the Trustor and the Owner Trustee, to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. If the
Trustor shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee alone shall have the
power to make such appointment. The Owner Trustee shall not be liable for any
act or omission of any co-trustee or separate trustee appointed under this
Section 3.14, except with respect to an appointment made pursuant to the
immediately preceding sentence if the Owner Trustee shall have failed to
exercise due care in making such appointment. No appointment of, or action by,
any co-trustee or separate trustee appointed under this Section 3.14 will
relieve the Owner Trustee of any of its obligations under any Operative
Agreement or otherwise affect any of the terms of the Indenture or adversely
affect the interests of the Indenture Trustee or the Holders of the
Certificates in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies, the
Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (including the holding of title
to the Lessor's Estate) the Owner Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by such additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent in
writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(E) the Trustor, at any time, by an instrument in writing may remove
any such additional trustee.
SECTION 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
may request instructions of the Trustor and, to the extent that the Owner
Trustee acts in good faith in accordance with any instructions received from
the Trustor, shall not be liable to any Person; provided, that in the event
that no response is made to the Owner Trustee by the Trustor within 25 days
after such request, the Owner Trustee shall not be liable to any Person for
acts taken by the Owner Trustee in good faith or for any failure to act,
except to the extent provided in the last sentence of Section 3.01.
SECTION 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01.
SECTION 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any agreement
contemplated hereby. The Trustor shall be responsible for causing to be
prepared and filed all income tax returns required to be filed by the Trustor.
The Owner Trustee, upon request, will furnish the Trustor with all such
information as may be reasonably required from the Owner Trustee in connection
with the preparation of such tax returns. The Owner Trustee shall be
responsible for causing to be prepared at the request and expense of the
Trustor all income tax returns required to be filed with respect to the trust
created hereby and shall execute and file such returns. The Trustor, upon
request, will furnish the Owner Trustee with all such information as may be
reasonably required from the Trustor in connection with the preparation of such
income tax returns.
ARTICLE 4
TERMINATION OF TRUST
SECTION 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, then on the date specified in such notice the
trust created and provided for hereby shall cease and terminate; provided,
that this trust shall not be subject to revocation or termination by the
Trustor prior to the payment in full and discharge of the Certificates and
all other indebtedness secured by the Indenture and the release of the Lien
of the Indenture and the security interest granted thereby or prior to
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 110 years from the earlier execution of this Agreement by
either party hereto; provided, however, that if the Trust shall be or
become valid under applicable law for a period subsequent to 110 years from
the earlier execution of this Agreement by either party hereto or, without
limiting the generality of the foregoing, if legislation shall become
effective providing for the validity or permitting the effective grant of
such trust for a period, in gross, exceeding the period for which such
trust is hereinabove stated to extend and be valid, then such trust shall
not terminate as provided in the first part of this sentence but shall
extend to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
SECTION 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this trust pursuant to the provisions of Section 4.01,
the Owner Trustee shall convey the Lessor's Estate to such purchaser or
purchasers or the Trustor and for such amount and on such terms as shall be
specified in written instructions from the Trustor delivered to the Owner
Trustee prior to the date of termination; provided, that (i) if at the time of
any termination the Lease remains in force and effect, then the Lessor's
Estate shall be sold as a unit (and not in parcels) and subject to the Lease,
and (ii) in the event such written instructions are not delivered to the Owner
Trustee on or before the date of termination, the Owner Trustee shall transfer
title to the Lessor's Estate to the Trustor. Upon making such transfer or
sale and accounting for all funds which have come into its hands, the Owner
Trustee shall be entitled to receipt of any sums due and owing to the Owner
Trustee for expenses incurred pursuant hereto as set forth in Section 2.05.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Trustor may assign, convey or otherwise transfer to a single
institutional investor all (but not less than all) of the Beneficial Interest,
provided that it gives the Lessee and the Indenture Trustee at least 30 days'
notice of such assignment, conveyance or other transfer and provided further
that the Trustor agrees by a written instrument in form and substance
reasonably satisfactory to the Indenture Trustee and the Owner Trustee to
remain liable for all obligations of the Trustor under this Agreement and the
Operative Agreements to which the Trustor is a party to the extent (but only
to the extent) incurred on or before the date of such transfer and provided
that the transferee agrees by a written instrument in form and substance
reasonably satisfactory to the Indenture Trustee and the Owner Trustee to
assume primary liability for all obligations as a trustor under this Agreement
and the Operative Agreements to which such trustor is a party incurred after
the date of transfer and the Trustor shall remain secondarily liable for all
such obligations assumed by its successor as Trustor; provided, that the
Trustor need not so agree to remain and shall not be so secondarily liable if
(a) such transferee is (i) a bank, savings institution, finance company,
leasing company or trust company, national banking association acting for its
own account or in a fiduciary capacity as trustee or agent under any pension,
retirement, profit sharing or similar trust or fund, insurance company,
fraternal benefit society or corporation acting for its own account having a
combined capital and surplus (or, if applicable, consolidated tangible net
worth or its equivalent) of not less than $50,000,000, (ii) a subsidiary of
any Person described in clause (i) where such Person provides (A) support for
the obligations assumed by such transferee reasonably satisfactory to the
Lessee, the Owner Trustee and the Indenture Trustee or (B) an unconditional
guaranty reasonably satisfactory to the Lessee, the Owner Trustee and the
Indenture Trustee of such subsidiary's obligations, or (iii) an Affiliate of
the original Trustor, so long as such Affiliate has a combined capital and
surplus (or, if applicable, consolidated tangible net worth or its equivalent)
of not less than $50,000,000 or the obligations assumed by such Affiliate are
guaranteed or otherwise supported to the same extent as the obligations of the
original Trustor being transferred were guaranteed or supported immediately
prior to such transfer, (b) such transferee is legally capable of binding
itself to the obligations of the Trustor and expressly agrees to assume all
obligations of the Trustor under the Participation Agreement and this
Agreement and (c) such transferee shall provide representations substantially
similar to that contained in Section 6.03 of the Participation Agreement. In
the event of any such assignment, conveyance and transfer, the transferee
shall become a party to this Agreement and shall agree to be bound by all the
terms of and will undertake all of the obligations of the Trustor contained in
this Agreement and the Operative Agreements in such manner as is reasonably
satisfactory to the Owner Trustee and the Indenture Trustee. A transferee
hereunder shall be (i) a "United States Person" as defined in Section
7701(a)(30) of the Code (or any successor provision thereto) or if the
transferee shall not be such "United States Person" then each Certificate
Holder shall be provided an indemnity in form and substance reasonably
satisfactory to each such Certificate Holder, for any Taxes that may be
imposed on such Certificate Holders (currently or in the future) due to such
transferee's failure to be such a "United States Person" and (ii) a Citizen of
the United States or has established a voting trust, voting powers or other
arrangement to permit the Owner Trustee to be the registered owner of the
Aircraft under the Federal Aviation Act. No such assignment, conveyance or
transfer shall violate any provision of law or regulation or create a
relationship which would be in violation thereof. The Owner Trustee shall not
be on notice of or otherwise bound by any such assignment, conveyance or
transfer unless and until it shall have received an executed counterpart of
the instrument of such assignment, conveyance or transfer. Upon any such
disposition by the Trustor to a transferee as above provided, the transferee
shall be deemed the "Trustor" for all purposes hereof, and shall be deemed to
have made all the payments previously made by its transferor and to have
acquired the same interest in the Lessor's Estate as theretofore held by its
transferor; and each reference herein to the "Trustor" shall thereafter be
deemed a reference to such transferee. Notwithstanding anything to the
contrary contained in this Article 5, in no event shall the Trustor transfer
its interest in the Beneficial Interest to (i) any entity whose business is
that of a nationwide or worldwide overnight or expedited delivery small
package air courier, cargo or freight deliverer or which competes with Lessee,
and/or (ii) to an employee benefit plan subject to ERISA or an individual
retirement account or an employee benefit plan subject to Section 4975 of the
Code (hereinafter collectively referred to as an "ERISA Plan"), or to an
entity using the assets of an ERISA Plan to acquire its interest in the
Beneficial Interest.
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification. The Trustor and its assigns agree to
reimburse and save the Owner Trustee, in its individual capacity, harmless
against any and all loss, damage, liability, claims, demands, disbursements
and expenses, including taxes (excluding taxes imposed against the Owner
Trustee upon or with respect to any fees for services rendered in its capacity
as Trustee hereunder) and reasonable counsel fees, which are not required to
be indemnified by the Lessee pursuant to Section 8.01 of the Participation
Agreement and which may be incurred by reason of its being the Owner Trustee
or acting hereunder or under the Operative Agreements, but solely by reason
thereof and arising out of or relating solely to this Agreement or the
Operative Agreements or the Aircraft or the Rents and other sums payable
therefor, or by reason of any occurrence directly relating thereto while so
acting, and to secure the payment thereof, the Owner Trustee, in its
individual capacity, shall have a Lien on the Lessor's Estate and the proceeds
thereof, including income, prior to any interest therein of the Trustor and
its assigns (but subject to the rights of the Lessee under the Operative
Agreements and subject and subordinate to the Lien of the Indenture), except
only in respect of any such loss, damage, liability, claims, demands,
disbursements and expenses, including taxes and counsel fees, arising from or
as a result of (A) the Owner Trustee's willful misconduct or gross negligence
(in its individual capacity or as trustee), (B) any inaccuracy of any
representation of the Owner Trustee or any breach by the Owner Trustee of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 6.01, 6.02(a) and (b) and 6.04 of the
Participation Agreement and its representations and warranties given in its
individual capacity in Section 3.08(ii) of the Indenture or elsewhere in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by the Owner
Trustee in connection with the transactions contemplated by the Lease, the
Indenture and this Agreement, (F) Taxes excluded from indemnification pursuant
to Section 7.01(b) of the Participation Agreement (disregarding for the
purposes of this Section 6.01, subsections (ii) and (v) of Section 7.01(b) of
the Participation Agreement) or (G) Expenses excluded from indemnification
pursuant to Section 8.01(b) of the Participation Agreement (disregarding for
the purposes of this Section 6.01, subsections (ii), (iv), (vi), and (viii) of
Section 8.01(b) of the Participation Agreement); provided, that, before
asserting any right to payment or indemnification hereunder, the Owner Trustee
shall first demand (but need not exhaust its remedies with respect to) its
corresponding right to payment or indemnification from the Lessee pursuant to
the Participation Agreement. It is further understood that the distribution
by the Owner Trustee of all or any part of the Lessor's Estate as provided in
Section 4.02 of this Agreement shall not impair the right of the Owner Trustee
to indemnity, payment and reimbursement as herein provided. In the event the
Owner Trustee makes any advances at any time to pay or to provide for the
payment of any such loss, damage, liability, claim, demand or expense, then
the Owner Trustee, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Corporate Base Rate. The provisions of this
Section shall continue in force and effect notwithstanding the termination of
this trust or the resignation, inability or incapacity to act or removal of
the Owner Trustee. Except as provided in this Section 6.01, the Owner Trustee
(in its individual capacity or as trustee) agrees that it shall have no right
against the Trustor or (subject to the provisions of the Indenture) the Trust
Indenture Estate for any fee as compensation for its services hereunder.
SECTION 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) TC and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Article
13 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document and (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee. It shall not be necessary that any request pursuant
to this Section specify the particular form of the proposed document to be
executed pursuant to such request, but it shall be sufficient if such request
shall indicate the substance thereof. Promptly after the execution by TC or
the Owner Trustee of any document pursuant to this Section, the Owner Trustee
shall mail a conformed copy thereof to the Trustor and the Indenture Trustee,
but the failure of the Owner Trustee to mail such conformed copies shall not
impair or affect the validity of such document.
SECTION 6.03. Nature of Title of Trustor. The Trustor shall not
have any legal title to any part of the Lessor's Estate. No transfer, by
operation of law or otherwise, of the right, title and interest of the Trustor
in and to the Lessor's Estate or the trusts hereunder shall operate to
terminate this Agreement or Lessor's Estate.
SECTION 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to the terms of this Agreement or the Operative Agreements
shall bind the Trustor and shall be effective to transfer or convey all right,
title and interest of the Owner Trustee and the Trustor in and to the
Operative Agreements or the Aircraft or such part thereof. No purchaser or
other grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such assignment, sale, transfer or conveyance or
as to the application of any sale or other proceeds with respect thereto by
the Owner Trustee.
SECTION 6.05. Notices. All notices, demands, declarations and other
communications required by this Agreement shall be in writing and shall be
deemed received (a) if given by telecopier when transmitted and the
appropriate telephonic confirmation received if transmitted on a Business Day
and during normal business hours of the recipient, and otherwise on the next
Business Day following transmission, (b) if given by certified mail, return
receipt requested, postage prepaid five Business Days after being deposited in
the United States mails, (c) if given by telex, upon receipt by the party
transmitting the telex of such party's callback code at the end of such telex
(receipt of confirmation in writing not being necessary to the effectiveness
of any telex) and (d) if given by Federal Express service or other means, when
received or personally delivered, addressed:
If to the Owner Trustee:__________________________
__________________________
__________________________
Attention:
Facsimile:
If to the Trustor: __________________________
__________________________
__________________________
Attention:
Facsimile:
If to the Indenture
Trustee: __________________________
__________________________
__________________________
Attention:
Facsimile:
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
SECTION 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF ________, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do not
increase the obligations or liabilities of the Owner Trustee or the Trustor.
SECTION 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
SECTION 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
SECTION 6.09. Definitions. The capitalized terms used herein,
unless otherwise herein defined or the context hereof shall otherwise
require, shall have the respective meanings set forth in Schedule II to the
Participation Agreement dated as of _______________, 199__, among Federal
Express Corporation, the Trustor, ________________________, not in its
individual capacity but solely as Owner Trustee except as otherwise
expressly provided therein, ________________________, as Indenture Trustee
and ________________________, as Pass Through Trustee which schedule is
attached hereto as Schedule I and by this reference incorporated herein.
SECTION 6.10. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N____FE."
SECTION 6.11. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
IN WITNESS WHEREOF, TC and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
____________________________________
By: ________________________________
Name:
Title:
____________________________________
By: ________________________________
Name:
Title:
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements referred to below, unless otherwise
defined in an Operative Agreement or the context thereof shall otherwise
require. In the case of any conflict between the provisions of this Schedule
and the provisions of any Operative Agreement, the provisions of such
Operative Agreement shall control the construction of such Operative Agreement.
[All other terms used in the Indenture that are defined in the Trust
Indenture Act (as defined below) or the Securities Act (as defined below) have
the meanings assigned to such terms in the Trust Indenture Act or the
Securities Act as in force on the date of the Indenture, except as otherwise
expressly provided or unless the context requires.](1)
- ------------
(1) To be used for a qualified Indenture.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Act or Federal Aviation Act. The Federal Aviation Act of 1958, as
amended and in effect, on the date of the Lease or as subsequently amended, or
any successor or substituted legislation at the time in effect and applicable,
and the regulations promulgated pursuant thereto.
Aeronautics Authority. As appropriate, the Federal Aviation
Administration and/or the Administrator of the Federal Aviation
Administration, any successor to the former United States Civil Aeronautics
Board, or any person, governmental department, bureau, commission or agency
succeeding to the functions of any of the foregoing.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership or voting securities or by contract
or otherwise.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person shall be supplemented by a further payment to
such Person so that the sum of the two payments, after deduction of all Taxes
resulting from the receipt or accrual of such payments, shall be equal to the
payment received or deemed to have been received. In the case of amounts
payable to the Lessor, the Owner Participant, or any corporate affiliate of
the Owner Participant, it shall be presumed that such Person is at all times
subject to Federal income tax at the maximum marginal rate generally
applicable to corporations from time to time.
Air Carrier. Any air carrier which is a United States "domestic air
carrier" as defined in Part 121 of the Federal Aviation Regulations, and any
"foreign air carrier" (as defined in the Act) as to which there is in force a
permit granted under Section 402 of the Act.
Aircraft. The Airframe to be sold by the Lessee to the Owner Trustee
pursuant to the Participation Agreement and leased under the Lease (or any
permitted substitute Airframe) together with the _____ Engines (or any
Replacement Engine) whether or not any of such initial or Replacement Engines
may from time to time be installed on such Airframe or may be installed on any
other airframe or on any other aircraft, including any aircraft substituted
pursuant to Section 11.03 of the Lease. Prior to delivery of the initial
Lease Supplement, references in the Operative Agreements (including Section
3.05 of the Participation Agreement) to the Aircraft shall mean the
__________________ airframe bearing FAA Registration Number N_____ and
Manufacturer's serial number _____, together with
_________________________________ engines bearing Manufacturer's serial numbers
___________________.
Airframe. The ________________________ aircraft (excluding the
Engines or engines from time to time installed thereon) leased by Lessor to
Lessee pursuant to the Lease and the Lease Supplement and having the United
States FAA Registration Number and manufacturer's serial number specified in
the Lease Supplement, including (i) all Parts so long as the same shall be
incorporated or installed in or attached to such Airframe, or so long as title
to any such Parts shall remain vested in Lessor in accordance with the terms
of Section 8.01(b) of the Lease after removal from such Airframe, and (ii) any
replacement airframe which may be substituted pursuant to Section 11.03 of the
Lease.
Ancillary Agreements. Any written agreement of the Lessee entered
into on the Delivery Date or at any time thereafter in connection with the
transaction contemplated by the Operative Agreements or the Original
Agreements, in each case as amended from time to time.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant and Lessee on the Delivery Date pursuant to Section
4.02(j) of the Participation Agreement.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Commencement Date and ending at the end of the day on the day immediately
preceding the date _________ years from the Commencement Date, or such earlier
date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Bills of Sale. Collectively, the FAA Bills of Sale for the Aircraft,
an additional full warranty bill of sale covering the Aircraft (and
specifically referring to each Engine) executed by the Lessee as owner of the
Aircraft in favor of the Owner Trustee and dated the Delivery Date and an
additional full warranty bill of sale covering the Aircraft executed by the
Manufacturer in favor of Lessee.
Burdensome Indemnity Payment. A Loss, as defined in the Tax Indemnity
Agreement, which causes the aggregate net present value of all Losses paid or
payable by the Lessee as of the determination date discounted semi-annually at
the Debt Rate to the date of determination to exceed ___% of the Purchase
Price.
Business Day. Any day other than a Saturday, Sunday or other day on
which commercial banking institutions in __________, ________, ______________,
____, New York, New York, ________________________ or Memphis, Tennessee are
authorized or required by law to close.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
199_-[SERIES NAME]), issued by the Owner Trustee pursuant to the Indenture and
any certificate issued in exchange therefor or replacement thereof pursuant to
the Indenture.
Change in Tax Law. Any change to the Code or the Treasury regulations
promulgated thereunder or the publication of any revenue ruling, revenue
procedure or any informational release by the Internal Revenue Service or the
Department of Treasury, provided that the Owner Participant or the Lessee has
notified the other parties of such change in writing prior to the Delivery
Date.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Citizen of the United States. A citizen of the United States as
defined in Section 101(16) of the Act, or any analogous part of any successor
or substituted legislation or regulation at the time in effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.12 of the Indenture.
Commencement Date. ________________________.
Commission. The Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution and delivery of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement means the Consent
and Agreement dated as of ____________, executed by the Manufacturer, as the
same may be amended, modified or supplemented from time to time.
Cut-Off Date. ___________,19__.
Corporate Base Rate. The rate announced from time to time by
________ as its Corporate Base Rate.
Debt Portion. The amount specified as such on Schedule I to the
Participation Agreement.
Debt Rate. The average weighted rate of interest on the Certificates
issued pursuant to the Indenture.
Default. Any event or condition, which, with the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
Delayed Delivery Notice. A certificate signed by a Responsible
Officer of the Lessee (i) requesting that the Pass Through Trustee temporarily
delay purchase of the Certificates to a date later than the Pass Through
Closing Date, (ii) stating the amount of the purchase price of each such
Certificate and the aggregate purchase price of all such Certificates, (iii)
stating the reasons for such delay and (iv) either (1) setting or resetting
the Delivery Date (which shall be on or prior to the Cut-Off Date), or (2)
indicating that such Delivery Date will be set by subsequent written notice
not less than three Business Days prior to such new Delivery Date (which shall
be on or prior to the applicable Cut-off Date).
Delivery Date. The date on which the Aircraft is to be delivered and
sold by the Lessee to the Lessor and leased by the Lessor to the Lessee under
the Lease, which date is also the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
Depository. The depository of the Registered Global Certificate, if
any, representing the Equipment Trust Certificates issued under the Indenture
and any successor to such depository appointed by the Company pursuant hereto.
Such depository initially shall be Depository Trust Company, a New York
corporation.
Eligible Deposit Account. Either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution with corporate trust powers
organized under the laws of the United States or any state thereof, or the
District of Columbia, and whose deposits are insured by the Federal Deposit
Insurance Corporation, provided that such institution also must have a
combined capital and surplus of at least $100,000,000 and a rating of A or
better from the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the ______________________ engines listed by its
manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Sections 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts incorporated or installed in or attached to any such
Engine and all Parts removed from any such Engine so long as title to such
Parts shall remain vested in the Lessor in accordance with the terms of
Article 8 of the Lease after removal from such Engine. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, all Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent and Agreement. The Engine Consent and Agreement dated
as of ________, executed by the Engine Manufacturer, as the same may be amended
from time to time.
Engine Manufacturer. ________________________, a ________
corporation.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 180 days (or in any event if such loss is continuing
on the last day of the Term) due to theft or disappearance, or (B) for a
period in excess of 60 days (or in any event if such loss is continuing on the
last day of the Term) due to the destruction, damage beyond economic repair or
rendition of such property permanently unfit for normal use by the Lessee for
any reason whatsoever; (ii) any damage to such property which results in an
insurance settlement with respect to such property on the basis of a total
loss, or constructive or compromised total loss; (iii) (x) condemnation,
confiscation or seizure of, or requisition of title to such property, or (y)
requisition of use of such property (A) by a foreign government or
instrumentality or agency thereof, or any purported government or
instrumentality or agency thereof, for a period in excess of 180 days, or (B)
by the Government for a period extending beyond the Term, provided that no
Event of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of up to six months in the event that the Aircraft,
the Airframe or any Engine is requisitioned by the Government pursuant to an
activation as part of the Civil Reserve Air Fleet Program, as such term is
defined in Section 7.02(a)(iv) of the Lease; and (iv) as a result of any law,
rule, regulation, order or other action by the Aeronautics Authority or other
governmental body having jurisdiction, the use of the Aircraft or Airframe in
the normal course of air transportation of cargo shall have been prohibited by
virtue of a condition affecting all aircraft of the same type for a period of
eighteen (18) consecutive months, unless the Lessee, prior to the expiration
of such eighteen month period, shall be diligently carrying forward all steps
which are necessary or desirable to permit the normal use of the Aircraft or
Airframe or, in any event, if such use shall have been prohibited for a period
of two (2) consecutive years or for a period extending beyond the end of the
Term, unless the Lessee, prior to the expiration of such two (2) year period
shall have conformed at least one __________________ aircraft (but not
necessarily the Aircraft or the Airframe) to the requirements of any such law,
rule, regulation, order, or other action and shall have commenced regular
commercial use and shall be diligently carrying forward, on a
non-discriminatory basis, all steps necessary or desirable to permit the
normal use of the Aircraft by the Lessee; provided, that if there is a
conflict between the operation of clause (iv) above and Section 12.05 of the
Lease (by reference to Section 12.04(ix) thereof), such Section 12.05 of the
Lease shall control. The date of such Event of Loss shall be the date of (i)
loss of such property or its use for a period in excess of 180 days due to
theft or disappearance, or loss for a period in excess of 60 days due to
damage beyond economic repair or loss of use of the Airframe because of
requisition for use for a period in excess of 180 days (or shorter period due
to insurance settlement), (ii) an insurance settlement on the basis of total
loss with respect to such property, (iii) condemnation, confiscation, seizure
or requisition of title, or (iv) prohibition from usage for the periods
described in clause (iv) above. An Event of Loss with respect to the Aircraft
shall be deemed to have occurred if any Event of Loss occurs with respect to
the Airframe.
Excepted Payments. Collectively, (i) all right, title and interest
of the Owner Participant or the Owner Trustee in, to and under the Tax
Indemnity Agreement and any moneys due or to become due under the Tax
Indemnity Agreement and payments of Supplemental Rent or other payments by the
Lessee in either case in respect of the Tax Indemnity Agreement, (ii)
indemnity payments and interest thereon and other amounts payable by the
Lessee to the Owner Participant or to the Trust Company or any of their
respective Affiliates, successors, assigns, directors, officers, employees,
agents or servants pursuant to Article 7 or 8 of the Participation Agreement
or any corresponding payment of Supplemental Rent under the Lease; (iii)
proceeds of public liability insurance in respect of the Aircraft payable to
the Owner Participant or Trust Company, or any of their Affiliates, successors
or assigns, as a result of insurance claims made, or losses suffered, by, or
amounts in respect of such indemnities paid for the benefit of, the Owner
Participant or the Trust Company either pursuant to the Lease (which shall
include proceeds of any self-insurance by the Lessee) or maintained by the
Trust Company or the Owner Participant and not required to be maintained under
the Lease; (iv) proceeds of any insurance in respect of the Aircraft which is
separately acquired and paid for by the Owner Participant (directly or through
the Owner Trustee) or the Lessor in accordance with Section 13.05 of the
Lease; (v) indemnity payments payable by the Owner Participant to the Trust
Company pursuant to Section 6.01 of the Trust Agreement; (vi) Transaction
Costs or other expenses paid or payable by the Lessee to, or for the benefit
of, the Owner Trustee, Trust Company or the Owner Participant pursuant to
Section 9.01 of the Participation Agreement, Section 3.02(b) of the Lease and
Section 2.02 of the Participation Agreement; (vii) the right to enforce, and
the proceeds of any such enforcement of, any right to receive the proceeds of
any of the amounts referred to in clauses (i) through (vi) above and (viii)
any payments in respect of interest to the extent attributable to the payments
referred to in clauses (i) through (vii) above.
Expense and Expenses. Have the meaning specified in Section 8.01(a)
of the Participation Agreement.
FAA Bills of Sale. The bill of sale for the Airframe on AC Form
8050-2, or such other form as may be approved by the Aeronautics Authority
executed by the Lessee in favor of the Lessor and dated the Delivery Date and
the bill of sale for the Airframe on AC Form 8050-2, or such other form as may
be approved by the Aeronautics Authority executed by the manufacturer in favor
of the Lessee.
Fair Market Renewal Term. One or more terms of one or more years,
but not to exceed ____ years in the aggregate and which term(s) shall
immediately follow the end of the Basic Term or the Fixed Renewal Term with
respect to which the Lessee has exercised its option to renew the Lease
pursuant to Section 4.01(a)(B) thereof.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. In such determination, it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease. Fair Market Rental shall be determined in
accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell. In such determination it shall be assumed that the
Aircraft is in the condition required under the Lease in the case of return of
the Aircraft pursuant to Article 12 of the Lease. Fair Market Value shall be
determined in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration and FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rental. An amount equal to 50% of the average
semiannual payments of Basic Rent during the Basic Term as such payments may
be adjusted pursuant to Section 3.04 of the Lease.
Fixed Renewal Term. Up to ____ renewal terms, each term to be not
less than ____ year, but not more than _____ years in the aggregate.
Government. The United States of America or an agency or
instrumentality thereof.
Holder. As of any particular time, the person in whose name a
Certificate shall be registered.
Indebtedness of any Person means at any time, without duplication,
(i) all obligations of such Person for borrowed money or the deferred purchase
price of property, or evidenced by bonds, debentures, notes or other similar
instruments, or arising under leases that are properly capitalized under
generally accepted accounting principles applicable to such Person and (ii)
all guarantees by such Person of such obligations described in clause (i)
above of third parties.
Indemnitee. Each of the Owner Trustee, in its individual capacity
and as trustee, the Owner Participant, the Original Loan Participant, the
Indenture Trustee, in its individual capacity and as trustee, and any
successor (including any trustee which may succeed to the Lessor's interest
under the Lease), and any Affiliate, assign, officer, director, employee,
agent and servant of any of the foregoing, the Lessor's Estate and the Trust
Indenture Estate. Neither the Certificate Holder nor any holder of a Pass
Through Certificate shall be deemed to be an Indemnitee.
Indenture. The Trust Indenture and Security Agreement, dated as of
___________, 199_, as amended and restated as of _____________, 199_, between
the Lessor and the Indenture Trustee and the Indenture Supplement and any
amendment or supplement hereto or thereto from time to time entered into.
Indenture Default. Any event or condition, which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. The Participation Agreement, the Trust Agreement
(including any Trust Agreement Supplements), the Lease (including any Lease
Supplements), the Indenture (including any Indenture Supplements), the
Certificates, the Purchase Agreement Assignment, the FAA Bills of Sale, the
Consent and Agreement and the Engine Consent and Agreement.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Supplement. Any Indenture Supplement, substantially in the
form of Exhibit A to the Indenture, entered into between the Indenture Trustee
and the Owner Trustee, which Indenture Supplement shall incorporate by
reference the provisions of the Indenture including any amendments entered
into subsequent to the Delivery Date.
Indenture Trustee. _______________________, a national banking
association, not in its individual capacity but solely as Indenture Trustee
under the Indenture and each other Person which may from time to time be
acting as successor trustee under the Indenture.
Indenture Trustee's Liens. Any Lien on the Trust Indenture Estate
resulting from (i) claims against the Indenture Trustee not related to the
administration of the Trust Indenture Estate or any transactions pursuant to
the Indenture or any document included in the Trust Indenture Estate or (ii)
any act or omission of the Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements or is in violation of
any of the terms of the Operative Agreements.
Independent Appraisal. An appraisal conducted pursuant to Section
4.03 of the Lease.
Independent Investment Banker. An independent investment banking
institution of national standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests, or any material
indirect financial interest, in the Lessee or any Affiliate of the Lessee, and
is not connected with the lessee or any Affiliate of the Lessee, as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions; provided, that if the Indenture Trustee shall
not have received written notice of such an appointment at least 10 days prior
to the Prepayment Date or if an Event of Default shall have occurred and be
continuing, "Independent Investment Banker" shall mean such an institution
appointed by the Indenture Trustee.
Interest Payment Date means each _________ and ________ beginning with
__________, 199_; provided, that if any such day is not a Business Day, the
relevant Interest Payment Date shall be the next succeeding Business Day.
Interim Term. The period commencing on the Delivery Date and ending
at the end of the day immediately preceding the Commencement Date.
Invoice. The invoice for the Aircraft given by the Lessee to the
Lessor.
Lease. The Lease Agreement dated as of __________, 199_, entered
into by the Lessor and the Lessee and the Lease Supplement and any amendment or
supplement hereto or thereto from time to time entered into.
Lease Supplement. Any Lease Supplement, substantially in the form of
Exhibit A to the Lease, entered into between the Lessor and the Lessee for the
purpose of leasing the Aircraft pursuant to the terms of the Lease, which
Lease Supplement shall incorporate by reference the provisions of the Lease
including any amendments or supplements entered into subsequent to the
Delivery Date.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and assigns in its capacity as lessee.
Lessor. __________ Trust Company, a ________ banking corporation,
not in its individual capacity except as otherwise expressly stated, but
solely as Owner Trustee under the Trust Agreement, and its successors and
assigns.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Bills of Sale, any warranty with respect
to the Airframe and the Engines, all amounts of Basic Rent and Supplemental
Rent, including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee for its own
account or in its individual capacity, the Owner Participant or any Holder or
the Indenture Trustee) and requisition, indemnity or other payments of any
kind for or with respect to the Aircraft (except amounts owing to the Owner
Participant, to the Indenture Trustee, to the Owner Trustee in its individual
capacity or any Holder, or to any of their respective directors, officers,
employees and agents pursuant to Articles 7 and 8 of the Participation
Agreement). Notwithstanding the foregoing, "Lessor's Estate" shall not include
any Excepted Payment.
Lessor's Liens. Liens on the Lessor's Estate or the Trust Indenture
Estate arising as a result of (i) claims against the Lessor, in its individual
capacity or as Owner Trustee, or the Owner Participant, in each case not
related to the transactions contemplated by the Operative Agreements, (ii)
acts or omissions of the Lessor in its individual capacity or as Owner
Trustee, and, in the case of the Lessor in its individual capacity, arising
from its gross negligence or willful misconduct either not related to the
transactions contemplated by or expressly prohibited under the Operative
Agreements and any act or omission of the Owner Participant which is not
related to the transactions contemplated by the Operative Agreements or is in
violation of any of the terms of the Operative Agreements, (iii) Taxes or
Expenses imposed against the Lessor, in its individual capacity or as Owner
Trustee, Owner Participant, Lessor's Estate or the trust created by the Trust
Agreement which are not indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement or the Participation Agreement, or (iv) claims against the
Lessor or the Owner Participant arising from the voluntary transfer by the
Lessor or the Owner Participant of its interests in the Aircraft other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Articles 10 or 11 of
the Lease and other than a transfer pursuant to the exercise of the remedies
set forth in Article 17 of the Lease.
Letter of Representations. A letter from the Company and the Owner
Trustee to, and accepted by, the Depository, as such letter may be modified or
supplemented, or any successor letter thereto.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Losses. Has the meaning specified in Section 15.02(a) of the
Participation Agreement.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% in aggregate unpaid principal
amount of all Certificates outstanding as of such date excluding for purposes
of this definition any Certificates held by (i) the Owner Participant unless
all Certificates then outstanding shall be held by the Owner Participant, (ii)
by the Lessee, (iii) by the Indenture Trustee or (iv) by any Affiliate of
either.
Make-Whole Premium. With respect to each Certificate to be prepaid
pursuant to Sections 6.02(ii), 6.02(iv) and 6.02(v) of the Indenture an amount
determined as of the day before the applicable Prepayment Date which an
Independent Investment Banker determines to be equal to an excess of (i) the
present values of all remaining scheduled payments of such principal amount or
portion thereof and interest thereon (excluding interest accrued from the
immediately preceding Payment Date to such Prepayment Date) to the Maturity of
such Certificate in accordance with generally accepted financial practices
assuming a 360-day year consisting of twelve 30-day months at a discount rate
equal to Treasury Yield, all as determined by the Independent Investment
Banker over (ii) the unpaid principal amount of such Certificate.
Manufacturer. _____________________________, a ________ corporation.
Maturity. With respect to any Certificate, the date on which the
principal amount of such Certificate is due and payable.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Basic Rent set forth in Schedule II of the Lease, discounted
at a rate per semi-annual period equal to (a) the Debt Rate as of the date of
determination divided by (b) two.
Non-U.S. Person. Any Person other than (i) a citizen or resident of
the United States, as defined in Section 7701(a)(30) of the Code (for purposes
of this definition, the "United States"), (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
any political subdivision thereof or therein, or (iii) any estate or trust
that is subject to United States federal income taxation regardless of the
source of its income.
Obsolete Parts. Parts which the Lessee deems obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate means a certificate signed by a Responsible
Officer of the Owner Trustee or the Lessee, as the case may be, delivered to
the Indenture Trustee. Each such certificate shall include the statements
provided for in Section 15.07.
Operative Agreements. The Participation Agreement, the Trust
Agreement, the Bills of Sale, the Lease, the Lease Supplement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
Purchase Agreement Assignment, the Engine Consent and Agreement, the Pass
Through Agreement and the Tax Indemnity Agreement, each as amended from time
to time.
Opinion of Counsel means a written opinion of legal counsel, who in
the case of counsel (a) for the Lessee may be (i) an attorney employed by the
Lessee who is generally empowered to deliver such written opinions, (ii) Davis
Polk & Wardwell or a successor firm or (iii) other counsel designated by the
Lessee and reasonably satisfactory to the Indenture Trustee, (b) for the Owner
Trustee, may be (i) Potter Anderson & Corroon or (ii) other counsel designated
by the Owner Trustee and reasonably satisfactory to the Indenture Trustee and
(c) for the Indenture Trustee, may be (i) Powell, Goldstein, Frazer & Murphy
or (ii) other counsel designated by the Indenture Trustee.
Owner Participant. ____________________________, a __________
corporation, and any successor thereto, and any person to which Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Trustee. __________ Trust Company, a ________ banking
corporation, not in its individual capacity except as otherwise expressly
stated, but solely as Owner Trustee under the Trust Agreement, and its
successors and assigns.
Owner's Economic Return. The Owner Participant's anticipated
after-tax yield and aggregate after-tax cash flow during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Basic Rent, Stipulated
Loss Value and Termination Value percentages, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement, dated as of
___________, 199_ among the Lessee, the Owner Trustee not in its individual
capacity except as otherwise expressly stated therein, but solely as trustee,
the Owner Participant, the Pass Through Trustee, solely as pass through
trustee, and the Indenture Trustee in its individual capacity and as trustee
as amended, modified or supplemented, or the terms thereof waived.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine and, so long as title
thereto shall remain vested in the Lessor in accordance with the terms of
Article 8 of the Lease, after removal from the Airframe or Engines.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
___________, 199_ between the Lessee and the Pass Through Trustee, as such Pass
Through Agreement may be modified, supplemented or amended from time to time in
accordance with the provisions thereof.
Pass Through Certificates. Any of the 199_ Pass Through Certificates,
Series ___ or 199_ Pass Through Certificates, Series ___, in each case as
issued by the related Pass Through Trust; and "Pass Through Certificates"
means all of the Pass Through Certificates issued by each of the Pass Through
Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriter pursuant to the Underwriting
Agreements takes place.
Pass Through Trust. The Federal Express Pass Through Trust,
199_-____ or Federal Express Pass Through Trust 199_-_, in each case formed
pursuant to the related Series Supplement in accordance with the Pass Through
Agreement; and "Pass Through Trusts" means both of such Pass Through Trusts.
Pass Through Trustee. ________________, a national banking
association, in its capacity as Pass Through Trustee under the Pass Through
Agreement and each Pass Through Trust, and its successors and assigns as Pass
Through Trustee thereunder.
Past Due Rate. At any time a rate of interest per annum equal to __%
per annum plus the Debt Rate.
Paying Agent has the meaning set forth in Section 3.04 of the
Indenture.
Payment Date. Each _______ and ___________, commencing _____________,
199_, thereafter until all Certificates have been paid in full.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a ) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local, foreign
or any agency, instrumentality, division or body thereof).
Prepayment Date. The meaning specified in Section 6.02 of the
Indenture.
Prepayment Price. The meaning specified in Section 6.02(b) of the
Indenture.
Proposed Termination Date. The proposed date of termination of the
Lease as specified by the Lessee in its notice given pursuant to Section 10.01
thereof
Purchase Agreement. The Purchase Agreement, dated as of
_____________, between the Manufacturer and the Lessee relating to the
purchase by the Lessee of the Aircraft, as originally executed or as modified,
amended or supplemented in accordance with the terms thereof, but only insofar
as the foregoing relates to the Aircraft.
Purchase Agreement Assignment. The Purchase Agreement Assignment
dated as of _____, executed by the Lessee and the Owner Trustee.
Purchase Option Date. ______________________.
Purchase Option Price. The amount to be paid by Lessee to Lessor on
the Purchase Option Date pursuant to Section 4.02(a)(B) of the Lease, which
amount is set forth in the Appraisal.
Purchase Price. Has the meaning specified in Section 2.01(b) of the
Participation Agreement.
Record Date. As used with respect to any Interest Payment Date
(except a date for payment for defaulted interest), __________ for __________
Interest Payment Dates and _________ for ____________ Interest Payment Dates,
whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 14.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 14.01 of the Participation Agreement.
Register has the meaning set forth in Section 3.02 of the Indenture.
Registered Global Certificate. The Equipment Trust Certificate, if
any, issued to the Depository in accordance with Section 2.12 of the Indenture
and bearing the legend prescribed in Exhibit B to the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. Any of the Fixed Renewal Terms or Fair Market Renewal
Terms which immediately follow the end of the Basic Term with respect to which
the Lessee has exercised its option to renew the Lease pursuant to Section
4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each _________ and __________, commencing
___________, 199_, and continuing thereafter during the Term.
Replacement Engine. A ______________________ ______ engine (or an
engine of the same or another manufacturer of the same or of equal or greater
value, and utility), which shall have been substituted for an Engine pursuant
to Sections 7.02(a)(vii), 10.03, 11.03 11.04, or 12.02 of the Lease and leased
pursuant to the Lease, together with all Parts relating to such engine.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement) or the Indenture Trustee, any officer in its
Corporate Trust Administration Department designated by such person to perform
obligations under the Operative Agreements, and with respect to any other
party, any corporate officer or other employee of a party who, in the normal
performance of his operational responsibilities, with respect to the subject
matter of any covenant, agreement or obligation of such party pursuant to any
Operative Agreement, would have responsibility for and knowledge of such
matter and the requirements of any Operative Agreement with respect thereto.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
Securities Act. The Securities Act of 1933, as amended.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Series Supplement. The Series Supplement 199_-_ to be executed and
delivered by the Lessee and the Pass Through Trustee or the Series Supplement
199_-_ to be executed and delivered by the Lessee and the Pass Through
Trustee, in each case as such Series Supplement may be modified, supplemented
or amended from time to time in accordance with the provisions thereof and
"Series Supplements" means both of such Series Supplements.
Significant Expenditure. Has the meaning specified in Section
4.02(a)(D) of the Lease.
Sinking Fund Payment Date. __________________
Sinking Fund Payment Price. _________________
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Specified Investments. Shall mean (a) direct obligations of the
United States of America or obligations fully guaranteed by the United States
of America; (b) commercial paper rated A-1/P-1 by Standard & Poor's Ratings
Group and Moody's Investors Service, Inc., respectively or, if such ratings
are unavailable, rated by any nationally recognized rating organization in the
United States equal to the highest rating assigned by such rating
organization; (c) overnight federal funds transactions with members of the
Federal Reserve Systems arranged by federal funds brokers; and (d) overnight
repurchase agreements with respect to the securities described in clause (a)
above entered into with an office of a bank or trust company which is located
in the United States of America of any bank or trust company which is
organized under the laws of the United States or any state thereof and has
capital surplus and undivided profits aggregating at least $500 million.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Basic Term, the amount determined by multiplying the Purchase
Price by the percentage set forth in Schedule III of the Lease under the
heading "Stipulated Loss Value Factors" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with Basic Rent due and owing through the date of payment of
Stipulation Loss Value, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Factors."
Supplemental Rent. All amounts, liabilities and obligations which
the Lessee assumes or agrees to pay under the Lease or under the Participation
Agreement or Tax Indemnity Agreement or any other Ancillary Agreement to the
Lessor or others, including, without limitation, payments of Stipulated Loss
Value and amounts calculated by reference to Termination Value and any other
amounts due on the Certificates pursuant to the Indenture, and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement, but excluding Basic
Rent or the Fixed Renewal Rental.
Tax. Shall have the meaning set forth in Section 7.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement, dated as of
___________, 199_, between the Lessee and the Owner Participant, as from time
to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Interim Term and the Basic Term of the lease for the
Aircraft under the Lease and, if renewed pursuant to Section 4.01 of the
Lease, each Renewal Term for the Aircraft for which the Lease is renewed, or
such earlier date on which the Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during the Basic Term that is
on or after _________________.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factors" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with Basic Rent due and owing through the date of payment of any amount
calculated by reference to Termination Value, at least sufficient to pay in
full as of such date of payment of the aggregate unpaid principal amount of
and accrued interest on the Certificates outstanding on such date of payment.
Transaction Costs. All of the documented costs and expenses incurred
by the Lessee, the Owner Trustee, the Underwriters, the Indenture Trustee and
the Participants as contemplated by Section 9.01(a) of the Participation
Agreement.
"Treasury Yield". (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the Lessee) corresponding
in maturity to such Certificate (or, if there is no corresponding maturity,
an interpolation of maturities by the Independent Investment Banker), in each
case determined by the Independent Investment Banker selected to determine the
Make-Whole Premium based on the bid price as of 10:00 a.m. and 2:00 p.m. New
York time, on the second Business Day preceding the Prepayment Date.
Trust Agreement. The Trust Agreement, dated as of _________, 1992,
between the Owner Participant and the Owner Trustee in its individual
capacity, as from time to time modified, amended or supplemented pursuant to
its applicable provisions and in accordance with the Operative Agreements.
Trust Company. __________ Trust Company, a ________ banking
corporation, in its individual capacity and not as Owner Trustee, and its
successors under the Trust Agreement, in their respective individual
capacities and not as Owner Trustees.
[Trust Indenture Act. Except as otherwise provided in Section 4.04,
13.01 and 13.08 of the Indenture, the Trust Indenture Act of 1939, as amended,
as in force on the date that the Indenture was first qualified under such
Act.](2)
- ------------
(2)To be added in the case of a qualified Indenture.
Trust Indenture Estate. The property, rights and privileges
described in the Granting Clause of the Indenture, other than (i) Excepted
Payments, including, without limitation all right, title and interest of the
Owner Participant in, to and under the Tax Indemnity Agreement and any moneys
due and to become due under the Tax Indemnity Agreement, all as provided in
the Indenture, and (ii) rights granted to the Owner Trustee or the Owner
Participant under the Indenture, including without limitation Sections 2.05,
7.02, 8.01, 8.02, 8.03, 13.01 and 13.02 thereof.
Underwriters. __________________.
Underwriting Agreement. The agreement among the Lessee and the
several Underwriters dated ______________, 199_, relating to the purchase by
such Underwriters of the Pass Through Certificates.
United States or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 401 or Section 418 of the
Federal Aviation Act, and as to which there is in force an air carrier
operating certificate issued pursuant to Part 121 of the regulations under
such Act, or which may operate as an air carrier by certification or otherwise
under any successor or substitute provision thereof or in absence thereof.
(2)To be added in the case of a qualified Indenture.
Exhibit 4(g)(2)
LEASE AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N_____)
Dated as of _______________, 199_
between
________________________,
Not in its Individual Capacity,
but Solely as Owner Trustee,
Lessor
and
FEDERAL EXPRESS CORPORATION,
Lessee
COVERING ONE [MANUFACTURER/MODEL] AIRCRAFT
SERIAL NO. _____, REGISTRATION NO. N_____
CERTAIN OF THE RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE
AGREEMENT OF _____________________________, AS OWNER TRUSTEE, HAS BEEN
ASSIGNED TO AND IS SUBJECT TO A LIEN AND SECURITY INTEREST IN FAVOR OF
_____________________________, INDENTURE TRUSTEE UNDER TRUST INDENTURE,
MORTGAGE AND SECURITY AGREEMENT DATED AS OF THE DATE HEREOF FOR THE BENEFIT OF
THE HOLDERS OF THE CERTIFICATES REFERRED TO IN SUCH TRUST INDENTURE, MORTGAGE
AND SECURITY AGREEMENT. THIS LEASE AGREEMENT HAS BEEN EXECUTED IN SEVERAL
COUNTERPARTS. ONLY ORIGINAL COUNTERPART NO. __ CONTAINS THE RECEIPT THEREFOR
EXECUTED BY _____________________________, ON THE SIGNATURE PAGES THEREOF.
TABLE OF CONTENTS
Page
Initial Recitals.............................................................1
ARTICLE 1
DEFINITIONS
ARTICLE 2
ACCEPTANCE UNDER THE LEASE
Section 2.01. Sale and Lease of Aircraft............................... 1
Section 2.02. Delivery................................................. 2
Section 2.03. Notice of Purchase Price................................. 2
Section 2.04. Bills of Sale............................................ 2
Section 2.05. Method of Payment........................................ 2
Section 2.06. Recordation of Lease..................................... 2
ARTICLE 3
RENT AND RENT ADJUSTMENT
Section 3.01. Owner Participant Payments............................... 3
Section 3.02. Basic Rent............................................... 3
Section 3.03. Supplemental Rent........................................ 3
Section 3.04. Adjustments to Basic Rent, Stipulated Loss Value and
Termination Value After the Delivery Date.............. 3
Section 3.05. Minimum Basic Rent....................................... 5
Section 3.06. Payment to Indenture Trustee............................. 5
Section 3.07. Costs and Expenses....................................... 6
ARTICLE 4
RENEWAL OPTIONS AND PURCHASE OPTIONS
Section 4.01. Renewal Options.......................................... 6
Section 4.02. Purchase Option.......................................... 7
Section 4.03. Appraisal Procedures..................................... 9
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.01. Lessor's Representations and Warranties.................. 10
Section 5.02. Disclaimer of Representations and Warranties............. 11
Section 5.03. Modification of Other Warranties......................... 11
ARTICLE 6
LIENS
Section 6.01. Liens.................................................... 12
ARTICLE 7
AIRCRAFT REGISTRATION, MAINTENANCE AND OPERATION
Section 7.01. Registration, Maintenance and Operation.................. 13
Section 7.02. Possession and Permitted Transfer and Sublease........... 15
Section 7.03. Insignia................................................. 19
ARTICLE 8
REPLACEMENT AND POOLING OF PARTS
Section 8.01. Replacement of Parts..................................... 19
Section 8.02. Pooling of Parts......................................... 20
ARTICLE 9
ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section 9.01. Required Alterations and Modifications................... 21
Section 9.02. Other Alterations and Modifications...................... 21
ARTICLE 10
VOLUNTARY TERMINATION
Section 10.01. Right of Termination Upon Obsolescence or Surplus....... 22
Section 10.02. Retention of Aircraft by the Lessor..................... 25
Section 10.03. Voluntary Termination as to Engines..................... 26
ARTICLE 11
LOSS, DESTRUCTION, REQUISITION
Section 11.01. Lessee's Election Rights................................ 26
Section 11.02. Payment of Stipulated Loss Value........................ 27
Section 11.03. Replacement of Airframe and Engines..................... 27
Section 11.04. Event of Loss with Respect to an Engine................. 29
Section 11.05. Application of Payments from the Government or Others... 31
Section 11.06. Requisition of an Airframe and the Installed Engines
for Use by Government................................. 32
Section 11.07. Requisition for Use by Government of an Engine Not
Installed on the Airframe............................. 32
Section 11.08. Application of Payments During Existence of Certain
Defaults.............................................. 33
ARTICLE 12
RETURN OF AIRCRAFT
Section 12.01. Return of Aircraft...................................... 33
Section 12.02. Return of Engines....................................... 34
Section 12.03. Return of Manuals....................................... 34
Section 12.04. Condition of Aircraft................................... 34
Section 12.05. Delayed Return of Aircraft.............................. 36
Section 12.06. Storage................................................. 36
Section 12.07. Special Markings........................................ 37
Section 12.08. Lessor's Option to Purchase Parts....................... 37
ARTICLE 13
INSURANCE
Section 13.01. Public Liability and Property Damage Liability
Insurance............................................. 37
Section 13.02. Insurance Against Loss or Damage to Aircraft and Engines 39
Section 13.03. Application of Insurance Proceeds....................... 41
Section 13.04. Reports................................................. 42
Section 13.05. Lessor's Insurance...................................... 43
Section 13.06. Self-Insurance.......................................... 43
ARTICLE 14
INSPECTION
Section 14.01. Right of Inspection..................................... 43
Section 14.02. No Obligation to Inspect................................ 44
ARTICLE 15
ASSIGNMENT
Section 15.01. Lessee's Right to Assign................................ 45
Section 15.02. Citizenship............................................. 45
ARTICLE 16
EVENTS OF DEFAULT
Section 16.01. Events of Default....................................... 45
ARTICLE 17
REMEDIES
Section 17.01. Remedies Upon Lessee's Default.......................... 47
Section 17.02. Cumulative Remedies..................................... 50
Section 17.03. Waiver.................................................. 50
Section 17.04. Lessor's Right to Perform for Lessee.................... 50
ARTICLE 18
COVENANT OF QUIET ENJOYMENT
Section 18.01. Quiet Enjoyment......................................... 51
ARTICLE 19
FURTHER ASSURANCES; FINANCIAL INFORMATION
Section 19.01. Further Assurances...................................... 51
ARTICLE 20
NET LEASE
Section 20.01. Nature of Lease......................................... 52
ARTICLE 21
SUCCESSOR LESSOR
Section 21.01. Successor Lessor........................................ 53
Section 22.02. Lease Subject to Indenture.............................. 53
Section 22.03. Consent of Lessee to Assignment of Lease as Security.... 54
ARTICLE 23
SECURITY FUNDS
Section 23.01. Investment of Security Funds............................ 54
ARTICLE 24
CONCERNING THE LESSOR
Section 24.01. Lessor's Entry Into Lease............................... 55
ARTICLE 25
NOTICES
Section 25.01. Notices................................................. 56
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Heading and Captions............................ 57
Section 26.02. References.............................................. 57
Section 26.03. APPLICABLE LAW.......................................... 57
Section 26.04. Severability............................................ 57
Section 26.05. No Oral Modification.................................... 57
Section 26.06. Agreement as Chattel Paper.............................. 58
Section 26.07. Counterparts and Effective Date......................... 58
Section 26.08. Public Release of Information........................... 58
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties................................... 58
Section 27.02. Section 1110 Compliance................................. 58
Schedule I Definitions
Schedule II Basic Rent
Schedule III Stipulated Loss Values
Schedule IV Termination Values
Exhibit A Form of Lease Supplement No. 1
Exhibit B Form of Purchase Agreement Assignment, Consent and Agreement
and Engine Consent and Agreement
LEASE AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N_____)
Lease Agreement (this "Lease") made as of _________, 199_, between
____________________, a ______________________, not in its individual capacity
except as expressly provided herein but solely as Owner Trustee under the
Trust Agreement (as defined in Article 1 below) (the "Lessor"), and FEDERAL
EXPRESS CORPORATION, a Delaware corporation (the "Lessee").
W I T N E S S E T H :
WHEREAS, subject to the terms and conditions set forth in the
Participation Agreement (as hereinafter defined), the Lessee desires on the
Delivery Date (as hereinafter defined) to sell to and lease from the Lessor
and the Lessor is willing to purchase from and lease to the Lessee the
Aircraft (as hereinafter defined) in accordance with the terms and conditions
set forth in this Lease.
NOW, THEREFORE, in consideration of the mutual promises herein, and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged by the parties, the Lessor and the Lessee agree as follows:
ARTICLE 1
DEFINITIONS
Unless the context otherwise requires, the capitalized terms herein
shall have the meanings given in Schedule II of the Participation Agreement, a
copy of which schedule is annexed hereto as Schedule I, for all purposes of
this Lease and shall be equally applicable to both the singular and the plural
forms of the terms defined.
ARTICLE 2
ACCEPTANCE UNDER THE LEASE
Section 2.01. Sale and Lease of Aircraft. The Lessor, subject to
satisfaction or waiver of the conditions set forth in this Lease and in the
Participation Agreement, hereby agrees to purchase the Aircraft from the
Lessee, and the Lessee agrees to sell the Aircraft to the Lessor on the
Delivery Date and simultaneously the Lessor agrees to lease the Aircraft to
the Lessee, and the Lessee hereby agrees to lease the Aircraft from the
Lessor. Such lease shall last for the Term, at all times during which full
legal title to the Aircraft shall remain vested in the Lessor (and its
successors and permitted assigns) to the exclusion of the Lessee,
notwithstanding the possession and use thereof by the Lessee or any other
party.
Section 2.02. Delivery. The Lessor hereby authorizes one or more
persons designated by the Lessee as the authorized representative or
representatives of the Lessor to accept delivery of the Aircraft. The Lessee
hereby agrees that such acceptance by such authorized representative or
representatives on behalf of the Lessor shall, without further act,
irrevocably constitute acceptance by the Lessee of the Aircraft for all
purposes of this Lease. Delivery of the Aircraft to the Lessor shall be at
Memphis, Tennessee or at such other place as the parties hereto may agree
upon. All costs of placing the Aircraft at Memphis, Tennessee or at such other
location for delivery on the Delivery Date shall be borne by the Lessee.
Section 2.03. Notice of Purchase Price. At least two Business Days
prior to the Delivery Date, the Lessee shall give to the Lessor notice of the
Aircraft's availability for delivery and sale to the Lessor, which notice
shall specify the Purchase Price on the Delivery Date payable by the Lessor
pursuant to Section 2.01 of the Participation Agreement. The Lessee's notice
shall specify also the manufacturer's serial number of the Airframe and each
Engine and the Aeronautics Authority registration number of the Aircraft.
Section 2.04. Bills of Sale. The Lessee agrees that simultaneously
with payment by the Lessor of the Purchase Price on the Delivery Date, the
Lessee will deliver to the Lessor the Manufacturer's full warranty bill of
sale covering the Aircraft and the Lessee's full warranty bill of sale
covering the Aircraft, and will deliver to Special Aviation Counsel for
recordation at the FAA Air Registry in Oklahoma City, Oklahoma, the
Manufacturer's FAA Bill of Sale for the Aircraft and the Lessee's FAA Bill of
Sale for the Aircraft. The Lessee's Bills of Sale shall be executed by the
Lessee, as owner of the Aircraft, in favor of the Lessor, shall be dated the
Delivery Date, and shall evidence the conveyance to the Lessor of good and
marketable title to the Aircraft, free and clear of all Liens whatsoever,
except the right of the Lessee under the Lease and the Lease Supplement, the
Lien of the Indenture and the rights of the Owner Participant under the Trust
Agreement.
Section 2.05. Method of Payment. The Lessor, subject to
satisfaction or waiver of the conditions set forth in this Lease and in the
Participation Agreement, shall pay the Purchase Price on the Delivery Date in
US dollars in immediately available funds by transfer to such parties and in
such amounts as is identified in Section 2.01(b) of the Participation
Agreement.
Section 2.06. Recordation of Lease. Simultaneously with the
delivery of the Aircraft hereunder, the Lessee will deliver to Special
Aviation Counsel the Lease and Lease Supplement No. 1 for due filing and
recordation with the Aeronautics Authority.
ARTICLE 3
RENT AND RENT ADJUSTMENT
Section 3.01. Owner Participant Payments. The Owner Participant has
agreed to make available to the Lessor funds sufficient to pay to the
Indenture Trustee on the Commencement Date an amount equal to the difference
between the amounts scheduled to be paid on the Certificates on such date and
the amount of Basic Rent, if any, scheduled to be paid by the Lessee on such
date (without regard to Section 3.05 hereof), all in accordance with the
provisions of Section 6.03(e) of the Participation Agreement. To the extent
such amount is not paid on the Commencement Date, the Lessee shall make a
prepayment of Basic Rent equal to such amount and, if not otherwise
reimbursed, the Lessee shall have the right to offset such amount pursuant to
Section 3.05 hereof.
Section 3.02. Basic Rent. The Lessee agrees to pay to the Lessor,
on each Rent Payment Date, Basic Rent for the Aircraft during the Basic Term,
each payment being set forth on Schedule II hereto opposite the applicable
Rent Payment Date, subject to increase or decrease as provided in Section 3.04
of this Lease. Each payment of Basic Rent shall be made in arrears or in
advance, and shall apply to a specific time period, all as stated in Schedule
II hereto.
Section 3.03. Supplemental Rent. The Lessee agrees to pay or cause
to be paid to the Lessor, or to whomever shall be entitled to it, any and all
Supplemental Rent promptly as the same shall become due. If the Lessee fails
to pay any Supplemental Rent when due, the Lessor shall have all rights,
powers and remedies provided for in this Lease, or by law or equity or
otherwise in the case of nonpayment of Basic Rent. The Lessee will also pay
to the Lessor, on demand, as Supplemental Rent, to the extent permitted by
applicable law, an amount equal to interest at the Past Due Rate on any part
of any installment of Basic Rent not paid when due, for any period until the
same shall be paid and on any payment of Supplemental Rent not paid when due,
for the period until the same shall be paid. The expiration or other
termination of the Lessee's obligation to pay Basic Rent shall not limit or
otherwise modify the obligations of the Lessee with respect to the payment of
Supplemental Rent.
Section 3.04. Adjustments to Basic Rent, Stipulated Loss Value and
Termination Value After the Delivery Date. The percentages for Basic Rent
referred to in Schedule II hereto and for Stipulated Loss Value and
Termination Value in, respectively Schedule III and Schedule IV hereto shall
be adjusted (upward or downward) subject to the minimum value established by
Section 3.05 hereof and the definitions of Stipulated Loss Value and
Termination Value to reflect (i) payments pursuant to Section 5 of the Tax
Indemnity Agreement by an adjustment of Basic Rent, (ii) any costs and
expenses paid by the Lessor pursuant to Section 2.01(h) of the Participation
Agreement greater or less than the percentage of the Purchase Price set forth
therein, (iii) any Refinancing pursuant to Section 14.01 of the Participation
Agreement or (iv) any reoptimization required by the Owner Participant of
amounts in excess of the outstanding principal and accrued interest on the
Loan Certificates or (v) the Delivery Date being other than
__________________. Each such adjustment pursuant to clause (i), (ii), (iii)
or (v) of the first sentence of this Section 3.04 shall maintain the Owner's
Economic Return (and, while maintaining such Return, minimize the aggregate
Net Present Value of Rents to the Lessee). In the event of an adjustment
pursuant to clause (iv) of the first sentence of this Section 3.04, the Owner
Participant may recalculate Basic Rent as set forth in Schedule II hereto in
order to maintain the Owner's Economic Return, and recalculate the Excess
Amount set forth in Schedule II hereto, the Stipulated Loss Value percentages
set forth in Schedule III hereto and the Termination Value percentages set
forth in Schedule IV hereto in a manner consistent with such recalculation of
Basic Rent; provided that any such recalculations may not (A) increase the Net
Present Value of Rents to the Lessee, (B) increase as of any date the sum of
(1) the Net Present Value of Rents to the Lessee payable through such date
plus (2) the present value of the Stipulated Loss Value, or the Termination
Value as of such date, in each case discounted to the Delivery Date at the
Debt Rate, beyond such net present values as of the Delivery Date, or (C)
otherwise result in any adverse impact (including tax consequences) to the
Lessee. The Owner Participant shall promptly notify the Lessee and the Lessor
and the Lessee shall promptly notify the Owner Participant and the Lessor of
the need for any such adjustment. As promptly as feasible after any such
notification, the Lessor shall furnish the Lessee with a notice setting forth
the amount of any such adjustments together with the calculations upon which
the adjustments are based; provided, however, that the Lessor and the Owner
Participant shall not be required to disclose to the Lessee in such notice any
confidential or proprietary information (including methodology or assumptions)
relating to such calculations. At the request and, subject to the next
succeeding sentence, expense of the Lessee, the accuracy of the calculation of
such adjustments and the consistency of the calculation with the calculation
used to determine Basic Rent shall be verified first, by __________________
_____ or such other financial advisor chosen by the Lessee and second, if such
adjustments are still believed to be in error, by a firm of nationally
recognized independent public accountants selected by the Lessee and, in order
to enable them to verify such adjustments, the Owner Participant shall make
available to such accountants (for their own confidential use and not to be
disclosed to the Lessee or any other Person and subject to the execution of a
satisfactory confidentiality agreement) all information reasonably necessary
for such verification, including the name of the lease analysis program used
by the Owner Participant to calculate such adjustments. The Lessee will pay
the reasonable costs and expenses of the verification under this Section 3.04
unless as a result of such verification process by the independent public
accountants Basic Rent is adjusted and such adjustment causes the net present
value of Basic Rent, computed as of the Delivery Date and discounted at the
Debt Rate to decline by 10 or more basis points (in which event the Owner
Participant shall pay the reasonable costs and expenses of such verification
process). The Lessor and the Lessee shall execute and deliver an amendment to
this Lease to reflect each adjustment under this Section 3.04.
All adjustments under this Section 3.04 shall be consistent with the
requirements of Revenue Procedure 75-21 and Revenue Procedure 75-28 as in
effect on the Delivery Date (or, in the case of a Refinancing, on the date of
such adjustment) and shall not cause the Lease to be a "disqualified leaseback
or long-term agreement" within the meaning of Section 467 of the Code (in the
case of a Refinancing, as in effect on the date of such adjustment) and shall
be made in the same manner that such requirements were satisfied in
calculating Basic Rent as originally set forth on Schedule II (provided that
the test of Rev. Proc. 75-28, Section 4.08 shall be applied on a prospective
basis from the date of such adjustment).
Section 3.05. Minimum Basic Rent. Notwithstanding any other
provisions of the Operative Agreements to the contrary, each installment of
Basic Rent due on each Rent Payment Date, shall be, under any and all
circumstances, an amount at least sufficient to pay in full any installment of
principal of and interest on the Certificates required to be paid pursuant to
the Certificates (other than amounts becoming due on account of the exercise
of remedies pursuant to Article 17 hereof) on such Rent Payment Date. To the
extent that any such scheduled amounts payable by the Owner Participant as
referred to in Section 3.01 are not paid when due, for any reason whatsoever,
the Lessee shall make a prepayment of Basic Rent in such amounts and on such
scheduled due dates. Unless otherwise reimbursed, the Lessee shall be
entitled to offset, without limitation of any other rights the Lessee may have
against the Lessor for nonpayment of scheduled amounts payable by the Owner
Participant as referred to in Section 3.01, against any payments due from the
Lessee to the Lessor (including without limitation, Basic Rent and payments
due to the Lessor under Article 9 of the Participation Agreement or to the
Owner Participant under the Tax Indemnity Agreement and Excepted Payments),
until the Lessee has fully offset such prepayment of Basic Rent plus interest
thereon at the Corporate Base Rate plus 5% per annum from the date of advance
until the date of such offset; provided, however, that in the case of any
payment due from the Lessee which is distributable under the terms of the
Indenture, the Lessee's right of offset shall be limited to the amount
distributable to the Lessor thereunder (and shall not include any amounts
distributable to the Indenture Trustee in its individual capacity or to the
Holders of the Certificates). No such offset or aggregate combined effect of
separate offsets shall reduce the amount of any installment of Basic Rent to
an amount insufficient to pay in full the payments then required to be made on
account of the principal of and interest on the Certificates then outstanding.
Section 3.06. Payment to Indenture Trustee. All Rent payable by the
Lessee to the Lessor shall be paid to the Lessor at its principal office at
_____________________________________________ , or as the Lessor may otherwise
direct, by wire transfer of immediately available funds in Dollars with
sufficient information to identify sources and applications of such funds in
US Dollars no later than 12:00 noon, ___________ Time on the due date of such
payment; provided, however, that so long as the Indenture shall not have been
discharged the Lessor hereby directs, and the Lessee agrees, that all Rent
(other than Excepted Payments) shall be paid directly to the Indenture Trustee
at its principal office at _________________________________________________,
Attention: _________________________________ , or as the Indenture Trustee may
otherwise direct by wire transfer of immediately available funds in US Dollars
no later than 12:00 noon, _________ Time, on the due date of such payment. In
any case where a scheduled Rent Payment Date shall not be a Business Day, such
Rent Payment Date shall be adjourned to the next succeeding Business Day.
Section 3.07. Costs and Expenses. All obligations under this Lease
shall be done, performed and complied with at the Lessee's (or any
sublessee's) cost and expense, whether or not so expressed, unless otherwise
expressly stated to the contrary.
ARTICLE 4
RENEWAL OPTIONS AND PURCHASE OPTIONS
Section 4.01. Renewal Options. (a) Election to Renew. Provided
that (i) no Event of Default shall have occurred and be continuing at the time
of renewal, (ii) this Lease has not otherwise expired or terminated, and (iii)
the Lessee shall not previously have given notice under Section 4.02 during
the Basic Term or the Renewal Term in which a notice of renewal under this
Section 4.01 is given, the Lessee may (A) by written notice delivered to the
Lessor and the Owner Participant not less than 120 days prior to the end of
the Basic Term or the preceding Fixed Renewal Term, as the case may be, elect
to extend the Term for ___ Fixed Renewal Term(s) commencing on the expiration
of the Basic Term or the preceding Fixed Renewal Term, as the case may be, for
a rent equal to the lesser of the then current Fair Market Rental and the
Fixed Renewal Rental; and (B) by written notice delivered to the Lessor not
less than 120 days prior to the end of the Basic Term or the preceding Renewal
Term, as the case may be, elect to extend the Term for a Fair Market Renewal
Term commencing on the expiration of the Basic Term or the preceding Renewal
Term, as the case may be, for a rent equal to the then-current Fair Market
Rental of the Aircraft. The Basic Term may be extended pursuant to the Fair
Market Rental option for up to ___ successive one-year periods.
(b) Terms and Conditions. Each such renewal shall be on the same
terms and conditions as provided herein, except that (i) rent for the Aircraft
due during each Renewal Term shall be payable semi-annually in arrears on the
dates corresponding to the Rent Payment Dates during such Renewal Term, and
(ii) during any Renewal Term, the Stipulated Loss Value for the Aircraft shall
as of any Rent Payment Date during the Renewal Term equal a value based on the
Fair Market Value of the Aircraft as of the commencement of such Renewal Term
assuming the Aircraft is in the condition and repair required to be maintained
by the provisions of this Lease.
Section 4.02. Purchase Option. (a) Election to Purchase. Provided
that (i) this Lease has not otherwise expired or terminated, and (ii) the
Lessee shall not have previously given notice under Section 4.01(a) hereof
within the required notice period pursuant to this Section 4.02(a), the Lessee
may:
(A) by written notice delivered to the Lessor, the Indenture Trustee
and the Owner Participant not less than 120 days prior to the applicable
Rent Payment Date, elect to terminate the Lease and purchase the Aircraft
on any Rent Payment Date on or after the fifth anniversary of the
Commencement Date, for, at the Lessee's option, either (1) an amount equal
to the greater of the Fair Market Value or the Termination Value on such
date or (2)(i) the assumption by the Lessee, pursuant to Section 6.11 of
the Participation Agreement, of all of the obligations of the Lessor under
the Indenture and the Certificates and (ii) the payment to the Lessor of an
amount equal to the excess of (A) the greater of (I) the Termination Value
for the Aircraft, computed as of the Termination Date or (II) the Fair
Market Value of the Aircraft on the Termination Date, over (B) the unpaid
principal of the Certificates plus accrued interest as of such date. Such
notice (which shall be revocable by the Lessee upon at least 30 days
written notice prior to the applicable Rent Payment Date) shall either
direct the Lessor to prepay the Certificates in full on such Termination
Date pursuant to Section 6.02 of the Indenture or state that the Lessee
shall exercise its option to assume the Certificates pursuant to Section
6.11 of the Participation Agreement; or
(B) by irrevocable written notice delivered to the Lessor and the
Owner Participant not less than 120 days prior to the Purchase Option Date,
elect to terminate the Lease and purchase the Aircraft on the Purchase
Option Date for, at the Lessee's option, either (1) an amount equal to the
Purchase Option Price, or (2) (i) the assumption by the Lessee, pursuant to
Section 6.11 of the Participation Agreement of all of the obligations of
the Lessor under the Indenture and the Certificates and (ii) the payment to
the Lessor of an amount equal to the Purchase Option Price less the unpaid
principal of the Certificates plus accrued interest as of such date; or
(C) by irrevocable written notice delivered to the Lessor and the
Owner Participant not less than 120 days prior to the end of the Basic Term
or any Renewal Term, elect to terminate the Lease and purchase the Aircraft
on the first day following such Basic Term or Renewal Term at a price equal
to the Fair Market Value of the Aircraft on such day; provided, however,
that the Lessee shall have paid all Rent due and payable under this Lease
on or prior to the expiration of any such Renewal Term; or
(D) in the event of any Significant Expenditure (as defined below)
with respect to the Aircraft required at any time on or after the third
anniversary of the Commencement Date, elect to terminate the Lease and
purchase the Aircraft on any Rent Payment Date occurring after such third
anniversary for, at the Lessee's option, the amount specified in either
Clause (1) or Clause (2) of Section 4.02(a)(A); it being understood that
Fair Market Value for this purpose shall be determined without regard to
any Significant Expenditure. For purposes of this paragraph (D) the term
"Significant Expenditure" means expenditures in respect of non-severable
improvements (i.e. improvements which cannot by the terms of Section
9.02(b) be removed from the Aircraft) which in the Lessee's reasonable
judgment would exceed $2,500,000 and which the Owner Participant and the
Holder will not permit to be financed on similar terms and conditions then
available for similar transactions through the issuance of additional
non-recourse notes of the Lessor or through additional equity investments
of the Owner Participant or both (it being understood that this Section
4.02(D) shall not impose any obligation on the Owner Participant or the
Holder to provide such financing); or
(E) in the event that a Burdensome Indemnity Payment shall occur at
any time on or after the third anniversary of the Commencement Date, elect
to terminate the Lease and purchase the Aircraft on the first Rent Payment
Date following the date that the Owner Participant provides the Lessee with
a written notice (the "Burdensome Indemnity Payment Date") of any Loss (as
defined in Section 5 of the Tax Indemnity Agreement) that is a Burdensome
Indemnity Payment for, at the Lessee's option, either (1) the payment to
the Lessor in immediately available funds of an amount equal to the greater
of the Fair Market Value of the Aircraft or the Termination Value for the
Aircraft, determined in each case as of such Burdensome Indemnity Payment
Date, or (2) the assumption by the Lessee, pursuant to Section 6.11 of the
Participation Agreement, of all of the obligations of the Lessor under the
Indenture and the Certificates and the payment to the Lessor in immediately
available funds of an amount equal to the excess of (A) the greater of (I)
the Termination Value for the Aircraft, or (II) the Fair Market Value of
the Aircraft, both computed as of the Burdensome Indemnity Payment Date,
over (B) the unpaid principal of the Certificates outstanding plus accrued
interest as of such date.
The Lessee shall give the Lessor, the Owner Participant and the
Indenture Trustee not less than 120 days prior written notice of its
election to terminate pursuant to Sections 4.02(a)(D) and 4.02(a)(E). Such
notice shall either direct the Lessor to prepay the Certificates in full on
such Termination Date pursuant to Section 6.02 of the Indenture or state
that the Lessee shall exercise its option to assume the Certificates
pursuant to Section 6.11 of the Participation Agreement. The Lessee's
notice pursuant to Sections 4.02(a)(D) and 4.02(a)(E) hereof shall become
irrevocable 10 days prior to the Rent Payment Date or the Burdensome
Indemnity Payment Date, as the case may be.
(b) Terms and Conditions. (i) If the Lessee elects to purchase the
Aircraft pursuant to Section 4.02(a) hereof, the Lessee shall pay to the
Lessor on the applicable termination date by wire transfer of immediately
available funds all accrued Basic Rent to and including such purchase date (if
payable in arrears but not in advance), the applicable purchase price and all
other Supplemental Rent due under this Lease (including, without limitation,
the Make-Whole Premium, if any) and amounts due under the Participation
Agreement and the Tax Indemnity Agreement, whereupon the Lessor will transfer
to the Lessee, without recourse or warranty (except as to the absence of
Lessor's Liens), all of the Lessor's right, title and interest in and to the
Aircraft on an "as-is, where is" basis. In connection with such transfer, the
Lessee shall prepare and the Lessor shall execute or arrange for the execution
of a bill of sale evidencing such transfer and such other documents as the
Lessee may reasonably require. In connection with any termination of the
Lease, the Lessee shall pay, at the time of the applicable Termination Date,
all related reasonable costs and expenses of the Owner Participant, the
Lessor, the Indenture Trustee and the Holders. If no purchase under Section
4.02(a) shall have occurred on the applicable purchase date this Lease shall
continue in full force and effect as if no notice had been given by the Lessee.
Section 4.03. Appraisal Procedures. (a) Generally. Whenever Fair
Market Rental or Fair Market Value are required to be determined under this
Lease (unless otherwise provided herein), they shall be determined by the
mutual agreement of the Owner Participant and the Lessee in accordance with
the definitions of such terms in Article 1. If the Lessee and the Owner
Participant cannot agree within twenty (20) days after the Lessee's notice of
election to purchase the Aircraft or notice to extend the Term, as the case
may be, such amount shall be determined by independent appraisal conducted by
appraisers selected pursuant to Section 4.03(b). At any time prior to final
determination of such amount pursuant to Section 4.03(b), the Lessee and the
Owner Participant shall be entitled to submit to the appraisers (and shall
submit to each other any bids submitted to the appraisers) any bids from
unrelated third parties, and such bids shall be accorded the weight such
appraisers deem appropriate. The Owner Participant and the Lessee shall each
have an opportunity to comment on any such bids after receiving a copy thereof.
(b) Selection. If an independent appraisal is required pursuant to
this Lease, the Owner Participant and the Lessee shall consult for the purpose
of appointing a mutually acceptable, qualified aircraft appraiser. If they
are unable to agree on a single appraiser within ten (10) Business Days, then
the independent appraisal shall be arrived at by mutual agreement of two
nationally recognized, independent aircraft appraisers, one chosen by the
Owner Participant and one chosen by the Lessee, or, if such appraisers cannot
agree on the amount of such appraisal, their appraisals shall be treated in
the manner described in Section 4.03(c) hereof with an appraisal arrived at
by a third nationally recognized, independent aircraft appraiser chosen by the
mutual consent of such two appraisers; provided, however, that if either party
shall fail to appoint an appraiser within fifteen (15) Business Days after a
written request to do so by the other party, or if such two appraisers cannot
agree on the amount of such appraisal and fail to appoint a third appraiser
within twenty (20) Business Days after the date of the appointment of the
second of such appraisers, then either party may initiate an arbitration
proceeding with the American Arbitration Association for purposes of
appointing a nationally recognized, independent aircraft appraiser.
(c) Valuation. If one appraiser is chosen, the value determined by
such appraiser shall be final and binding upon the Owner Participant and the
Lessee. If two appraisers are chosen, one appraiser by the Owner Participant
and one by the Lessee, and such appraisers agree on the value, such value
shall be final and binding upon the Owner Participant and the Lessee. If
three appraisers shall be appointed and the difference between the
determination which is farther from the middle determination is more than 125%
of the difference between the middle determination and the third
determination, then such farther determination shall be excluded, the
remaining two determinations shall be averaged, and such average shall be
final and binding upon the Owner Participant and the Lessee. Otherwise, the
average of all three determinations shall be final and binding upon the Owner
Participant and the Lessee.
(d) Rules of Appraisal. Any appraisal pursuant to this Section 4.03
shall be conducted in accordance with the commercial rules of the American
Arbitration Association as then in effect, as modified by this Section 4.03
and the definitions of Fair Market Value and Fair Market Rental. All expenses
of any independent appraisal shall be borne by the Lessee, except that each of
the Lessee and the Lessor shall bear any fees, costs and expenses of its
respective attorneys in connection with such appraisal except in the case of
an Event of Default or in the case of a revocation by the Lessee of its
election to terminate the Lease pursuant to and permitted by Section 4.02 or
Article 10 hereof, in which case such expenses shall be borne by the Lessee.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.01. Lessor's Representations and Warranties. The Lessor
in its individual capacity represents and warrants to the Lessee that on the
Delivery Date (i) the Lessor shall have received whatever title to the
Aircraft as was conveyed to it by the Lessee, (ii) the Aircraft shall be free
of Lessor's Liens attributable to the Lessor in its individual capacity and
(iii) the Lessor in its individual capacity is a Citizen of the United States.
Section 5.02. Disclaimer of Representations and Warranties. THE
LESSEE ACKNOWLEDGES AND AGREES THAT (i) THE AIRFRAME AND EACH ENGINE IS OF A
SIZE, DESIGN, AND CAPACITY AND MANUFACTURE SELECTED BY AND ACCEPTABLE TO THE
LESSEE, (ii) THE LESSEE IS SATISFIED THAT THE AIRFRAME AND EACH ENGINE IS
SUITABLE FOR ITS PURPOSES, (iii) THE LESSOR IS NOT A MANUFACTURER NOR A DEALER
IN PROPERTY OF SUCH KIND AND (iv) THE AIRFRAME AND EACH ENGINE IS LEASED
HEREUNDER SUBJECT TO ALL APPLICABLE LAWS AND GOVERNMENTAL REGULATIONS NOW IN
EFFECT OR HEREAFTER ADOPTED AND IN THE STATE AND CONDITION OF EVERY PART
THEREOF WHEN THE SAME FIRST BECAME SUBJECT TO THIS LEASE, WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND BY THE LESSOR, THE INDENTURE TRUSTEE OR
THE OWNER PARTICIPANT. THE LESSOR LEASES THE AIRFRAME AND EACH ENGINE, AS-IS,
WHERE-IS, AND NEITHER THE LESSOR, THE INDENTURE TRUSTEE, THE PASS THROUGH
TRUSTEE NOR THE OWNER PARTICIPANT MAKES, HAS MADE OR SHALL BE DEEMED TO HAVE
MADE, AND EACH WILL HAVE BEEN DEEMED TO HAVE EXPRESSLY DISCLAIMED, ANY
WARRANTY OR REPRESENTATION EITHER EXPRESS OR IMPLIED, AS TO (A) THE TITLE,
AIRWORTHINESS, WORKMANSHIP, CONDITION, FITNESS FOR ANY PARTICULAR USE OR
PURPOSE, DESIGN, OPERATION OR MERCHANTABILITY OF THE AIRFRAME, EACH ENGINE OR
ANY PART THEREOF, (B) THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE, (C) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR
COPYRIGHT, (D) THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT,
(E) THE LESSOR'S TITLE THERETO, (F) THE LESSEE'S OR ANY SUBLESSEE'S RIGHT TO
THE QUIET ENJOYMENT THEREOF (EXCEPT THAT THE LESSOR AGREES NOT TO INTERFERE
WITH THE LESSEE'S OR ANY SUBLESSEE'S QUIET ENJOYMENT THEREOF EXCEPT AS
OTHERWISE PROVIDED IN THIS LEASE) OR (G) ANY OTHER MATTER WHATSOEVER, IT BEING
AGREED THAT ALL SUCH RISKS, AS BETWEEN THE LESSOR AND THE LESSEE, ARE TO BE
BORNE BY THE LESSEE. It is agreed that, as among the Lessor, the Indenture
Trustee, the Pass Through Trustee, the Owner Participant and the Lessee, all
risks incident to the matters discussed in the preceding sentence are to be
borne by the Lessee. The provisions of this Section 5.02 have been negotiated
by the Lessor and the Lessee and, except as provided in Section 5.01 hereof,
are intended to be a complete exclusion and negation of any representations or
warranties of the Lessor, the Indenture Trustee, the Pass Through Trustee and
the Owner Participant, express or implied, with respect to the Airframe and
each Engine that may arise pursuant to any law now or hereafter in effect, or
otherwise.
Section 5.03. Modification of Other Warranties. None of the
provisions of this Article 5 or any other provision of this Lease shall be
deemed to amend, modify or otherwise affect the representations, warranties or
other obligations (express or implied) of the Lessee, the Manufacturer or the
Engine Manufacturer or any of their respective subcontractors or suppliers,
with respect to the Airframe, the Engines or any Parts incorporated or
installed in or attached to the Airframe or Engines, or to release the Lessee,
the Manufacturer or the Engine Manufacturer or any of their respective
subcontractors or suppliers from any such representation, warranty or
obligation. So long as an Event of Default shall not have occurred and be
continuing under this Lease and to the extent permitted under the applicable
warranty, patent indemnity, or service-life policy, (i) the Lessor and the
Lessee agree that the Lessor shall assign or otherwise make available to the
Lessee such rights as the Lessor may have under any warranty, patent
indemnity, or service-life policy made or given by the Manufacturer or Engine
Manufacturer or any of their respective subcontractors or suppliers, and any
other claims against the Manufacturer and Engine Manufacturer or any such
subcontractor or supplier with respect to the Aircraft; and (ii) all payments
pursuant to any manufacturer's or subcontractor's warranty, patent indemnity,
or service-life policy obligation shall be paid to the Lessee for application
to the cost of repair or correction of any condition of the Aircraft which
gave rise to such payment.
ARTICLE 6
LIENS
Section 6.01. Liens. The Lessee will not directly or indirectly
create, incur, assume or suffer to exist, and will promptly, at its own cost
and expense, take such action as may be necessary to discharge, any Lien on or
with respect to the Lessor's Estate or this Lease or the Aircraft, the
Airframe or any Engine or any Part or title thereto or any interest therein
except:
(a) the respective rights of the Lessor and the Lessee as provided
in this Lease, the first and prior perfected security interest and lien of
the Indenture and the rights of the Owner Participant, the Lessor and the
Indenture Trustee under the Trust Agreement, the Indenture and the
Participation Agreement;
(b) the rights of any assignee, sublessee or transferee under a
sublease or an assignment expressly permitted by the terms of this Lease;
(c) Lessor's Liens and Indenture Trustee's Liens to the extent
required to be discharged by the Owner Participant, the Lessor or the
Indenture Trustee, as the case may be, in accordance with Sections 6.03(b),
6.04(b) or 6.05(b) of the Participation Agreement;
(d) Liens for taxes imposed against the Lessor, the Owner
Participant, the Indenture Trustee or the Holders, against which the Lessee
has not indemnified (and is not obligated to indemnify) the Lessor, the
Owner Participant, the Indenture Trustee or the Holders;
(e) Liens for taxes imposed against the Lessee either not yet due or
being contested in good faith by appropriate proceedings so long as such
Liens or proceedings do not involve any material danger of the sale,
forfeiture or loss of the Aircraft, the Airframe or any Engine or any
interest therein;
(f) materialmen's, mechanics', workmen's, repairmen's, employees' or
other like Liens arising against the Lessee in the ordinary course of the
Lessee's business for amounts the payment of which is either not yet
overdue or is being contested in good faith by appropriate proceedings so
long as such Liens or proceedings do not involve any danger of the sale,
forfeiture or loss of the Aircraft, the Airframe or any Engine or any
interest therein;
(g) Liens arising from judgment or awards against the Lessee with
respect to which at the time an appeal or proceeding for review is being
prosecuted in good faith and with respect to which there shall have been
secured a stay of execution pending such appeal or proceeding for review
and then only for the period of such stay; and
(h) the right of any Person (other than the Lessee) to claim a
portion of the insurance proceeds received or receivable as a result of an
Event of Loss with respect to the Airframe, which right arises out of such
Person's having a direct interest in an engine (other than an Engine)
installed on the Airframe as a lessor, conditional vendor, owner or
otherwise.
ARTICLE 7
AIRCRAFT REGISTRATION, MAINTENANCE AND OPERATION
Section 7.01. Registration, Maintenance and Operation. The Lessee,
at its own cost and expense, shall:
(a) upon payment by the Lessor of the Purchase Price on the Delivery
Date, cause the Aircraft to be duly registered in the name of the Lessor as
owner, pursuant to the Act and, subject to the proviso to Section 5.03(b)
of the Participation Agreement, to remain at all times duly registered
pursuant to the Act and at all times act in accordance with the rules and
regulations of the Aeronautics Authority or the applicable laws, rules and
regulations of any other jurisdiction in which the Aircraft may then be
registered in accordance with Section 5.03(b) of the Participation
Agreement;
(b) maintain, service, repair and overhaul the Aircraft (or cause
the same to be done) so as to keep the Aircraft (and any engine which is
not an Engine but is installed on the Aircraft) in good condition, ordinary
wear and tear excepted, and in any event (i) in accordance with the
applicable regulations of the applicable Aeronautics Authority or
regulatory agency or body of any other jurisdiction in which the Aircraft
may then be registered in accordance with Section 5.03(b) of the
Participation Agreement and the Lessee's maintenance program approved by
the applicable Aeronautics Authority, (ii) in the same manner and with the
same care used by the Lessee with respect to other ___________ aircraft and
__________________________ engines owned or operated by the Lessee, to the
extent that the same regulations, and the Lessee's FAA-approved maintenance
program shall apply to any such aircraft and related engines, owned or
leased by the Lessee, and utilized in similar circumstances, (iii) so as to
keep the Aircraft in such condition as may be necessary to enable its
airworthiness certification to be maintained in good standing at all times
under the Act or any applicable rule or regulation of the applicable
regulatory agency or body of any other jurisdiction in which the Aircraft
may then be registered, in each case without in any way discriminating
against the Aircraft or any part thereof, whether by reason of its leased
status or otherwise; and, provided, however, the Lessee shall not be in
default of its obligation in this Section 7.01(b)(iii) to maintain the
Aircraft's airworthiness certification in good standing if the Aircraft
loses its airworthiness certification, such loss is curable and the Lessee
undertakes such cure promptly, diligently, and continuously, using its best
efforts but, provided, further, that in the event such loss is not a loss
of the character described in clause (iv) of the definition of Event of
Loss and is not curable or, if curable, has not been cured within
twenty-four (24) months of the date the airworthiness certification was
lost, the Lease shall terminate on the Rent Payment Date next succeeding
the earlier of (1) the date it is determined that the loss of the
airworthiness certificate is not curable, or (2) the date twenty-four (24)
months after the airworthiness certificate is lost or (3) the last day of
the Term whereupon, in any such case, the Aircraft shall be sold within 90
days after the date of such termination in accordance with the procedure
set forth in Section 10.01(b) and the Lessee shall make the payments to the
Lessor set forth in Section 10.01(c) and provided, that this Lease shall
continue in full force and effect until the Aircraft is sold according to
such procedures;
(c) maintain, or cause to be maintained, all records, logs and other
materials in respect of the Aircraft required by the Aeronautics Authority,
or the applicable regulatory agency or body of any other jurisdiction in
which the Aircraft may then be registered, to be maintained (which records,
logs and other materials shall, as between the Lessor and the Lessee and
all parties claiming through the Lessee, be the property of the Lessor but
shall become the property of the Lessee upon purchase by the Lessee of the
Aircraft pursuant to the terms of this Lease or upon the occurrence of an
Event of Loss and the Lessee's compliance with Section 11.03 hereof);
(d) promptly furnish to the Lessor such information within the
Lessee's possession as may be required to enable the Lessor to file any
reports to be filed by the Lessor with any governmental authority because
of the Lessor's ownership of the Aircraft;
(e) not maintain, service, repair, overhaul, use or operate the
Aircraft or any Engine in violation of any airworthiness certificate or
registration relating thereto, or in violation of any law or any license,
rule, regulation or order of or by any government or governmental authority
having jurisdiction over the Lessee or the Aircraft or any Engine or any
service bulletin relating to the Aircraft or any Engine or for any purpose
for which the Aircraft or any Engine is not designed; provided, however,
that the Lessee (or if a sublease shall then be in effect, the sublessee
thereunder) may in good faith contest the validity or application of any
such law, license, rule, regulation or order in any manner that does not
adversely affect the Lessor, its right, title or interest in the Aircraft
or any Engine or the interests of the Indenture Trustee or the Owner
Participant therein, or in any Operative Agreement (excluding any interests
indemnified for under the Tax Indemnity Agreement); and if any such law,
license, rule, regulation or order requires alteration of the Aircraft or
any Engine, the Lessee will conform therewith at its own cost and expense
and will maintain the Aircraft or any Engine, in compliance with such law,
license, rule, regulation or order;
(f) not operate or locate the Airframe or any Engine, or suffer the
Airframe or any Engine to be operated or located (x) in any area excluded
from coverage by any insurance policy in effect with respect to the
Airframe or any Engine required by the terms of Article 13 or (y) in any
area that is a war zone or recognized or, in the Lessee's reasonable
judgment, threatened area of hostilities, unless the Lessee has obtained,
prior to the operation or location of the Airframe or any Engine in such
area, indemnification from the Government, or other insurance, against the
risks and in the amounts required by, and in compliance with, Article 13
covering such area (except, in the case of a requisition for use by the
Government, to the extent that the Lessee certifies that such insurance is
unobtainable after diligent effort or is obtainable only at reasonably high
rates or on unduly burdensome terms and conditions) (and naming the Lessor,
or so long as this Lease is assigned to the Indenture Trustee, the
Indenture Trustee, as loss payee in respect of indemnification or insurance
payable in respect of casualties to the Aircraft) or unless the Aircraft is
only temporarily located in such area as a result of an isolated occurrence
attributable to a hijacking, medical emergency, equipment malfunction,
weather conditions, navigational error or other similar unforeseen
circumstances and the Lessee is using its good faith efforts to remove the
Aircraft from such area.
Section 7.02. Possession and Permitted Transfer and Sublease. (a)
Conditions. The Lessee will not, without the prior written consent of the
Lessor and the Owner Participant, sublease or otherwise in any manner deliver,
transfer or relinquish possession of the Aircraft, the Airframe or any Engine
or install any Engine, or permit any Engine to be installed, on any airframe
other than the Airframe; provided, that, so long as (i) no Event of Default
shall have occurred and be continuing, and (ii) the Lessee shall comply with
the provisions of Article 13, the Lessee may without the prior written consent
of the Lessor and the Owner Participant:
(i) so long as the sublessee is generally meeting its material
obligations as they come due and is not subject to a proceeding or final
order under applicable bankruptcy, insolvency or reorganization laws on the
date the sublease is entered into, (A) sublease the Aircraft or any Engine
to a U.S. Air Carrier as to which there is in force a certificate issued
pursuant to Section 401 or Section 408 of the Act, (B) sublease the
Aircraft to an Air Carrier which is principally based in and domiciled in
one of the countries listed on Schedule III of the Participation Agreement,
(C) sublease the Aircraft to any Air Carrier principally based in and
domiciled in a country which, at the inception of such sublease, is a
signatory to the Convention on the International Recognition of Rights in
Aircraft, or (D) sublease the Aircraft to any other Air Carrier not
described in this Section which shall be reasonably acceptable to the Owner
Participant and the Indenture Trustee; provided, that, with respect to
clauses (B) and (C) above, at the time of any such sublease (other than
with respect to Taiwan) the United States of America maintains normal and
full with respect to diplomatic relations with the country in which such
Air Carrier is principally based and domiciled. In the case of any
sublease (w) such sublessee shall operate and maintain the Aircraft in
compliance with this Lease, (x) such sublease shall provide that such
sublessee will not transfer possession of, or any other rights to, the
subleased Airframe or Aircraft to any other person without the prior
written consents of the Lessor and the Owner Participant (except as
permitted by subparagraphs (ii) and (iii) below), and (y) such sublease
shall expire not later than the expiration of the Basic Term or any
applicable Renewal Term hereof. Prior to any sublease to an Air Carrier
permitted under this Section 7.02(a)(i)(C) or (D): (I) the maintenance
standards of the aeronautical authority of the country of domicile or
principal operation of the sublessee taken as a whole shall be not
materially less stringent than those of the FAA and the sublease will
provide that the maintenance performed during such sublease will meet in
all material respects such maintenance standards; (II) the Lessee will
provide opinions of counsel reasonably satisfactory to the Lessor and Owner
Participant and the Indenture Trustee with respect to the validity and
enforceability of the Operative Agreements and the sublease in such
country; and that the laws of such country require fair compensation by the
government of such country payable in a currency freely convertible into US
Dollars for the loss of the use of the Aircraft in the event of a
requisition of use by such government; (III) import and export
certificates, if required, shall be procured at the Lessee's own cost and
expense by the Lessee; (IV) duties and tariffs, if applicable, shall be paid
for by the Lessee; and (V) the Lessee shall effect or cause to be effected
at the Lessee's own cost and expense all recordings and filings that are
required to continue the Lessor's right, title and interest to the Aircraft
and rights under the Lease (and sublease) and to perfect the Lien of the
Indenture;
(ii) subject the Airframe or permit the Airframe to be subjected to
normal interchange agreements or subject the Engines or permit any Engine
to be subjected to normal interchange or pooling agreements or
arrangements, in each case customary in the airline industry, entered into
by the Lessee in the ordinary course of its business with any Air Carrier;
provided that no transfer of the registration of the Airframe or any Engine
shall be effected and that throughout the period that the Airframe or any
Engine is subjected to such interchange or pooling agreement or arrangement
the terms of this Lease shall be observed; and provided, further, that no
such agreement or arrangement contemplates or requires the transfer of
title to the Airframe or any Engine, and if the Lessor's title to any
Engine shall be divested under any such agreement or arrangement, such
divestiture shall be deemed to be an Event of Loss with respect to such
Engine and the Lessee shall comply with Section 11.04 of this Lease in
respect of such Engine;
(iii) deliver or permit the delivery of possession of the Airframe or
any Engine to their respective manufacturers or certified maintenance
providers for testing, service, repair, maintenance or overhaul work or for
alterations or modifications in or additions to the Airframe or Engine to
the extent required or permitted by the terms of Article 9 hereof;
(iv) transfer or permit the transfer of possession of the Airframe
or any Engine pursuant to a contract or agreement with the Government or
pursuant to the Civil Reserve Air Fleet Program ("CRAF Program")
administered pursuant to Executive Order No. 20999, as amended, or any
similar or substitute programs, so long as the Lessee (or any permitted
sublessee or transferee pursuant to this Section) shall promptly notify the
Lessor upon such transfer of possession and provide the Indenture Trustee
with the name and address of the Contracting Officer or Representative of
the Military Aircraft Command provided, that if such transfer of possession
continues beyond the end of the Basic Term or the then-current Renewal
Term, the Basic Term or the Renewal Term, as applicable, shall be
automatically extended (including the obligation to pay Rent per diem at a
rate equal to the average daily Basic Rent over the Basic Term) for up to
six (6) months after the end of the Term;
(v) install or permit the installation of an Engine on an airframe
which is owned by the Lessee or any permitted sublessee free and clear of
all Liens, except (A) Liens of the type permitted under Section 6.01
hereof, (B) Liens which apply only to the engines (other than an Engine),
appliances, parts, instruments, appurtenances, accessories, furnishings and
other equipment (other than Parts) installed on such airframe and which do
not apply to substantially all of such airframe and (C) the rights of an
Air Carrier under normal interchange or pooling agreements which are
customary in the airline industry and do not contemplate or require the
transfer of title to such airframe or the engines installed on it;
(vi) install or permit the installation of an Engine on an airframe
leased to the Lessee or any permitted sublessee or transferee or purchased
by the Lessee subject to a conditional sale or other security agreement,
provided that (A) such lease, conditional sale or other security agreement
does not cover the Engine so installed and the Lessor and the Indenture
Trustee shall have received from the lessor, conditional vendor or secured
party of such airframe a written agreement (which may be the lease or
conditional sale or other security agreement covering such airframe),
whereby such lessor, conditional vendor or secured party expressly agrees
that neither it nor its successors or assigns will acquire or claim any
right, title or interest in any Engine by reason of such Engine being
installed on such airframe at any time, and (B) such airframe is and
remains free and clear of all Liens except the rights of the parties to the
lease or conditional sale or other security agreement covering such
airframe and Liens of the type permitted by subparagraph (v) of this
Section 7.02(a);
(vii) install or permit the installation of an Engine on an airframe
owned by the Lessee, leased to the Lessee or purchased by the Lessee
subject to a conditional sale or other security agreement under
circumstances where neither subparagraph (v) nor subparagraph (vi) of this
Section 7.02(a) is applicable, provided that such installation shall be
deemed an Event of Loss with respect to such Engine and the Lessee shall
comply with Section 11.04 hereof in respect of such Engine, the Lessor not
intending to waive any right, title or interest it may have to or in such
Engine under applicable law until compliance by the Lessee with such
Section 11.04; and
(viii)enter into a wet lease under which the Lessee has effective
control of the Aircraft in the ordinary course of the Lessee's business
which shall not be considered a transfer of possession hereunder, provided
that the Lessee's obligations under this Lease shall continue in full force
and effect notwithstanding any such wet lease.
(b) Rights of Transferee. Notwithstanding the provisions of Section
7.02(a) hereof, the rights of any transferee who takes possession of the
Aircraft, the Airframe or any Engine by reason of a transfer permitted by
Section 7.02(a) hereof shall be subject and subordinate to, and any sublease
or wet lease permitted by Section 7.02(a) hereof shall be made expressly
subject and subordinate to, all the terms of this Lease, including, without
limitation, the Lessor's right to repossession pursuant to Article 17 and to
avoid such sublease upon such repossession, and the Lessee shall remain
primarily liable for the performance of all the terms of this Lease to the same
extent as if such sublease or transfer had not occurred. Any such sublease
shall include appropriate provisions for the maintenance and insurance of the
Aircraft, the Airframe and each Engine in accordance with the provisions of
this Lease and shall provide assurances reasonably satisfactory to the Lessor
that the sublessee may not further sublease any of such equipment. The Lessee
shall notify the Lessor and the Indenture Trustee within 60 days after any
sublease and will promptly upon request from the Lessor and the Indenture
Trustee provide a copy of any sublease which has a term in excess of six (6)
months and deliver to Lessor all other documents required hereunder relating
to such sublease or transfer of possession.
(c) No Release of Lessee/Costs of Subleasing. No sublease,
interchange or pooling agreement or other relinquishment of possession
permitted under this Article 7 of either the Aircraft, the Airframe or any
Engine shall in any way discharge or diminish any of the Lessee's obligations
to the Lessor, the Indenture Trustee or the Owner Participant under this
Lease, the Participation Agreement or the Tax Indemnity Agreement or extend
beyond the end of the Term (except as provided in Section 7.02(a)(iv).
Subject to the terms and conditions of this Lease, the Lessee will retain the
right to cure any default by any sublessee permitted pursuant to this Section
7.02 and to terminate such sublease upon such default. The Lessee shall pay
all costs of the Owner Participant and the Lessor incurred in connection with
such subleasing.
Section 7.03. Insignia. (a) Nameplate. The Lessee agrees to affix
to and maintain in the cockpit of the Airframe, in a clearly visible location,
and on each Engine, a clearly visible metal nameplate bearing the inscription
"_________________ TRUST COMPANY, as Owner Trustee, OWNER AND LESSOR," and, so
long as such Airframe or Engines shall be subject to the Lien of the
Indenture, the additional inscription "___________________________, AS
TRUSTEE, Indenture Trustee."
(b) Lessee's Marks. During the Term, the Lessee may cause the
Aircraft to be lettered "Federal Express Corporation" or may letter, paint or
mark it in some other appropriate manner for convenience of identification of
the Lessee's interest or the interest of any permitted sublessee (including
but not limited to the Lessee's or any permitted sublessee's customary colors
and insignia) and to bear insignia plates or other markings identifying the
supplier or manufacturer of the Airframe or the Engines or any Parts of either.
ARTICLE 8
REPLACEMENT AND POOLING OF PARTS
Section 8.01. Replacement of Parts. (a) Generally. The Lessee, at
its own cost and expense, will replace or cause to be replaced as promptly as
practicable all Parts which may from time to time be incorporated or installed
in or attached to the Airframe or any Engine and which may from time to time
become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use for any reason, except as
otherwise provided in Section 9.01 or 9.02 hereof. In addition, the Lessee
may, at its own cost and expense, remove or cause to be removed in the
ordinary course of maintenance, service, repair, overhaul or testing, any
Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated,
damaged beyond repair or permanently rendered unfit for use, provided that the
Lessee, except as otherwise provided in Sections 9.01 or 9.02 hereof, will, at
its own cost and expense, replace such Parts as promptly as practicable. All
replacement Parts shall be free and clear of Liens (except for pooling
arrangements to the extent permitted by Section 8.02 hereof and Liens
permitted under Section 6.01(f) hereof) and shall be in as good operating
condition as, and shall have a value and utility at least equal to, the Parts
replaced, assuming such replaced Parts were in the condition and repair
required to be maintained by the provisions of this Lease.
(b) Title. All Parts at any time removed from the Airframe or any
Engine shall remain the property of the Lessor until such Parts shall be
replaced by Parts which have been incorporated or installed in or attached to
the Airframe or any Engine and which meet the requirements for replacement
Parts specified in Section 8.01(a) hereof. Immediately upon any replacement
Part becoming incorporated or installed in or attached to the Airframe or any
Engine, and without further act (subject only to a pooling arrangement to the
extent permitted by Section 8.02 hereof):
(i) title to the replaced Part shall vest in the Lessee, free and
clear of all rights of the Lessor, and shall no longer be deemed a Part
under this Agreement;
(ii) title to such replacement Part shall vest in the Lessor; and
(iii) such replacement Part shall become subject to this Lease and to
the Lien of the Indenture, and shall be deemed part of the Airframe or such
Engine for all purposes to the same extent as the Parts originally
incorporated or installed in or attached to the Airframe or such Engine.
Section 8.02. Pooling of Parts. Any Part removed from the Airframe
or any Engine as permitted in Section 8.01(a) hereof may be subjected by the
Lessee to any normal pooling arrangement customary in the airline industry and
entered into with other Air Carriers in the ordinary course of the Lessee's
business, provided that the Part replacing such removed Part shall be
incorporated or installed in or attached to the Airframe or such Engine, as
promptly as practicable after the removal of such removed Part. In addition,
any replacement Part when incorporated or installed in or attached to the
Airframe or any Engine in accordance with Section 8.01(a) hereof may be owned
by another Air Carrier subject to such normal pooling arrangement, provided
that the Lessee, at its own cost and expense and as promptly as possible,
either:
(a) causes title to such replacement Part to vest in the Lessor in
accordance with Section 8.01(b) hereof by the Lessee acquiring title to
such replacement Part for the benefit of, and transferring such title to,
the Lessor free and clear of all Liens (other than Liens permitted under
Section 6.01 hereof); or
(b) replaces such replacement Part by incorporating or installing in
or attaching to the Airframe or such Engine a further replacement Part
owned by the Lessee free and clear of all Liens (other than Liens permitted
under Section 6.01 hereof) and by causing title to such further replacement
Part to vest in the Lessor in accordance with Section 8.01(b) hereof.
All replacement Parts shall meet the standards set forth in Section
8.01(a).
ARTICLE 9
ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section 9.01. Required Alterations and Modifications. The Lessee,
at its own cost and expense, shall make or cause to be made such alterations
and modifications in and additions to the Aircraft as may be required from
time to time to meet the applicable requirements of the Aeronautics Authority
or any other governmental authority with jurisdiction over the Aircraft and/or
the Lessee's operations and aircraft; provided, however, that the Lessee may
in good faith contest the validity or application of any such requirements in
any reasonable manner that does not adversely affect the Lessor, its title or
interest in the Aircraft or any Engine, the first and prior perfected Lien and
security interest of the Indenture, or the interests of the Indenture Trustee,
the Owner Participant or the Holders of the Certificates in the Aircraft or
any Engine, or in any Operative Agreement (excluding any interests indemnified
for under the Tax Indemnity Agreement). All such alterations, modifications
or additions shall be made on or before the date mandated thereto, taking into
account postponements resulting from a contest or otherwise and shall be made
at such time and in such a manner so as not to discriminate against the
Aircraft whether by reason of its leased status or otherwise. Title to all
alterations, modifications and additions made pursuant to this Section 9.01
shall without further act vest in the Lessor and become subject to this Lease.
Section 9.02. Other Alterations and Modifications. (a) Generally.
The Lessee, at its own cost and expense, may from time to time make such
alterations and modifications in and additions to the Airframe or any Engine
as the Lessee may deem desirable in the proper conduct of its business,
including, without limitation, removal of Obsolete Parts, provided that no
such alteration, modification, addition or removal shall create any adverse
tax consequences for the Owner Participant not otherwise indemnified for,
materially diminish the value or utility of the Airframe or any Engine or
impair its condition or airworthiness below its value, utility, condition and
airworthiness immediately prior to such alteration, modification, addition or
removal, assuming that the Airframe or such Engine was then in the condition
and airworthiness required to be maintained by the terms of this Lease, or
cause the Airframe or any Engine to become "limited use property" within the
meaning of Revenue Procedure 76-30, 1976-2 C.B. 647, except that the value
(but not the utility, condition or airworthiness) of the Airframe or any
Engine may be reduced by the value of any such Obsolete Parts which shall have
been removed.
(b) Title to Installed Parts. Title to each Part incorporated or
installed in or attached or added to the Airframe or any Engine as the result
of any alteration, modification, removal or addition made pursuant to Section
9.02(a) shall without further act vest in the Lessor and become subject to
this Lease; provided, however, that the Lessee may remove any such Part at any
time during the Term if:
(i) such Part is in addition to, and not in replacement of or
substitution for, any Part originally incorporated or installed in or
attached or added to the Airframe or such Engine on the Delivery Date or
any Part in replacement of, or substitution for, any such Part;
(ii) such Part is not required to be incorporated or installed in or
attached or added to the Airframe or such Engine pursuant to the terms of
Article 7 or the first sentence of Section 9.01; and
(iii) such Part can be removed from the Airframe or such Engine
without (A) causing material damage to the Aircraft or diminishing or
impairing the utility, condition or airworthiness required to be maintained
by the terms of this Lease or (B) diminishing the value or utility which
the Airframe or such Engine would have had at such time had such
alteration, modification, removal or addition not occurred assuming the
Aircraft was then in the condition required to be maintained by the terms
of this Lease.
(c) Title to Removed Parts. Upon the removal by the Lessee of any
such Part as provided in subsection (b) above, title thereto shall, without
further act, vest in the Lessee and such Part shall no longer be deemed a
Part. Any Part not removed by the Lessee as above provided prior to the
return of the Aircraft to the Lessor hereunder shall remain the property of
the Lessor and subject to this Lease.
ARTICLE 10
VOLUNTARY TERMINATION
Section 10.01. Right of Termination Upon Obsolescence or Surplus.
(a) Option to Terminate. So long as no Event of Default shall have occurred
and be continuing, the Lessee shall have the right, at its option, on any
Termination Date, on at least 120 days' prior written notice to the Lessor and
the Owner Participant, to terminate this Lease with respect to the lease of
the Aircraft as of a Termination Date if the Aircraft shall have become
obsolete or surplus to the operations of the Lessee; provided that the Lessee
shall have in the event of a termination for obsolescence or surplusage,
furnished to the Lessor, the Indenture Trustee and the Owner Participant a
certificate of the Lessee's President, Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer, Treasurer or Assistant Treasurer
stating the determination of Lessee that the Aircraft is obsolete or surplus
to its needs. The Lessee shall have the right to revoke its notice of
termination not less than ten days prior to the proposed Termination Date.
(b) Sale Procedure. During the period from the giving of notice
pursuant to Section 10.01(a) hereof until the proposed Termination Date, the
Lessee, as agent for the Lessor, shall use its reasonable efforts to obtain
bids for the cash purchase on the proposed Termination Date (or such earlier
date as shall be consented to in writing by the Lessor) of the Airframe which
shall have the Engines installed thereon (provided that the Airframe may be
sold with engines meeting the requirements set forth herein for Replacement
Engines in lieu of the Engines so long as the aggregate number of Engines and
Replacement Engines being sold with the Airframe equals three), and the Lessor
may, if it desires to do so, seek to obtain such bids. The Lessor and the
Owner Participant may, upon request, inspect any bids obtained by Lessee. No
bid may be submitted by the Lessee, the Lessor or the Owner Participant, any
Person, firm or corporation affiliated with the Lessee, the Lessor or the
Owner Participant (or with whom or which the Lessee, the Lessor or the Owner
Participant has any arrangement or understanding as to the subsequent use of
the Aircraft by the Lessee, the Lessor or the Owner Participant or any of
their respective Affiliates) or any agent or person acting on behalf of the
Lessee, the Lessor or the Owner Participant or any such Person, firm or
corporation. The Lessee may reject any bid which is less than the applicable
Termination Value. If the Lessor receives any such bid which is higher than
the highest cash bid received by the Lessee, the Lessor shall, at least twenty
(20) days prior to the proposed Termination Date, certify to the Lessee in
writing the amount and terms of such bid and the name and address of the party
submitting such bid. The Lessor may not, less than fifteen (15) days prior to
the Termination Date, elect to retain the Aircraft. The Lessee may, not less
than ten (10) days prior to the Termination Date, elect to revoke its notice
pursuant to Section 10.01(a) hereof. Subject to the provisions of Section
10.02 hereof, on the proposed Termination Date or such earlier date of sale as
shall be consented to in writing by the Lessor, the Lessee shall deliver the
Airframe which shall have the Engines installed on it (provided that the
Airframe may be delivered with engines meeting the requirements set forth
herein for Replacement Engines in lieu of the Engines so long as the aggregate
number of Engines and Replacement Engines being delivered with the Airframe
equals three) to the bidder which shall have submitted the highest cash bid
(whether certified to the Lessor by the Lessee or directly received by the
Lessor and certified to the Lessee) and shall duly transfer to the Lessor
title to any such engines not owned by the Lessor, and the Lessor shall upon
payment in full of all amounts due and owing pursuant to Section 10.01(c)
hereof, without recourse or warranty (except as to the absence of Lessor's
Liens), simultaneously sell the Airframe and Engines or engines to such bidder
for the bid price to be paid by wire transfer of immediately available funds.
(c) Payments to the Lessor. The total selling price realized at a
sale pursuant to Section 10.01(b) hereof shall be retained by the Lessor (or
the Indenture Trustee, so long as the Indenture is in force) and, in addition,
on or before the proposed Termination Date (or any earlier date of sale), the
Lessee shall pay to the Lessor, by wire transfer of immediately available
funds, the sum of:
(i) the excess, if any, of the Termination Value for the Aircraft
computed as of Prepayment Date over the net proceeds of such sale after
deducting all documented costs and expenses incurred by the Lessor and
Owner Participant in connection with such sale, provided that such
documented costs and expenses shall not be deducted with respect to any
broker or finder employed by the Lessor in connection with the sale of the
Aircraft and which locates the purchaser for the Aircraft; plus
(ii) the installment of Basic Rent due with respect to the Aircraft
on the Prepayment Date the proposed Termination Date if payable in arrears
but not if payable in advance (whether or not the date of sale is on or
prior to such Termination Date); plus
(iii) all other amounts then due and payable by the Lessee under this
Lease or any other Operative Agreement (including but not limited to, any
Make-Whole Premium) on or prior to the Prepayment Date.
(d) Transfer of Uninstalled Engines. Upon payment of the amounts
described in Section 10.01(c) and upon transfer to the Lessor of title to
engines which have been returned in lieu of Engines as provided in Section
10.01(b), and upon payment of all other amounts then due under this Lease, the
Lessor will transfer to the Lessee, without recourse or warranty (except as to
the absence of Lessor's Liens), all of the Lessor's right, title and interest
in and to any Engines which were replaced with engines pursuant to Section
10.01(b), and shall deliver to the Lessee such instrument as the Lessor shall
have received from the Indenture Trustee, releasing such Engines from the Lien
of the Indenture.
(e) Limitation on the Lessor's Duties. The Lessor shall be under no
duty to solicit bids, to inquire into the efforts of the Lessee to obtain bids
or otherwise to take any action in connection with any such sale other than to
transfer to the purchaser named in the highest cash bid as referred to above
(or to such purchaser and to the Lessee, as the case may be), without recourse
or warranty (except as to the absence of Lessor's Liens), all of the Lessor's
right, title and interest in and to the Aircraft, against receipt by the
Lessor of the payments provided for.
(f) Termination of the Lessee's Obligations. Upon the sale of the
Aircraft pursuant to this Section 10.01 and upon compliance by the Lessee with
the further provisions of this Article 10, the obligation of the Lessee to pay
Basic Rent with respect to the Aircraft shall cease for any Rent Payment Date
(other than any Basic Rent payable in arrears on the Rent Payment Date falling
on the Prepayment Date) occurring after the proposed Termination Date and the
Term shall end effective as of the proposed Termination Date. If no sale
shall have occurred on or before the proposed Termination Date, this Lease
shall continue in full force and effect and, for purposes of Section 10.01(a)
hereof, it shall be deemed that the Lessee has rescinded its notice of
termination.
Section 10.02. Retention of Aircraft by the Lessor. (a) Generally.
Notwithstanding Section 10.01, the Lessor may, subject to Section 10.02(b)
hereof, elect to retain the Aircraft after receipt of the Lessee's notice of
termination given in accordance with Section 10.01(a), by giving the Lessee
and the Indenture Trustee written, irrevocable notice of such election not
less than fifteen (15) days prior to the proposed Termination Date. If the
Lessor so elects, the Lessee shall pay to the Lessor on the proposed
Termination Date, by wire transfer of immediately available funds the sum of:
(i) the installment of Basic Rent due with respect to the Aircraft
on the proposed Prepayment Date if payable in arrears but not if payable in
advance (whether or not title to the Aircraft is transferred on or prior to
such Termination Date); plus
(ii) all other amounts then due and payable by the Lessee under this
Lease and any other Operative Agreement including, but not limited to, any
Make-Whole Premium, on or prior to the Prepayment Date.
(b) Payment of the Certificates. It shall be an absolute condition
precedent to the Lessor's right to retain the Aircraft and to the termination
of the Term pursuant to this Section 10.02 that, on the Prepayment Date, the
Lessor shall have paid to the Holders of the Certificates and such Holders
shall have received the entire outstanding principal amount of, any Make-Whole
Premium and accrued interest on the Certificates on the Prepayment Date and
all other sums due and owing to the Indenture Trustee and the Holders of the
Certificates on or prior to the Prepayment Date under this Lease, the
Indenture or any other Operative Agreement. In the case of Make-Whole Premium
the Lessor may estimate the Make-Whole Premium to be payable on the Prepayment
Date but shall, on the Prepayment Date, pay any additional amounts to reflect
the actual Make-Whole Premium.
(c) Title to Engines. If the Lessor elects to retain the Aircraft
pursuant to this Section 10.02, the Lessee shall deliver the Airframe and the
Engines (provided that the Airframe may be delivered with engines meeting the
requirements set forth herein for Replacement Engines in lieu of the Engines
so long as the aggregate number of Engines and engines being delivered with
the Airframe equals three) to the Lessor in the same manner as if delivery
were made to the Lessor pursuant to Article 12 hereof, and shall duly transfer
to the Lessor right, title and interest to any such engines not owned by the
Lessor, all in accordance with Article 12 hereof. Upon such delivery of the
Airframe and Engines or engines to the Lessor and payment by the Lessee of any
amounts required to be paid by the Lessee pursuant to Section 10.02(a) hereof,
the Lessor will transfer to the Lessee, without recourse or warranty (except
as to the absence of Lessor's Liens), all of the Lessor's right, title and
interest in and to any Engines which were replaced by engines pursuant to this
Section 10.02(c), and shall deliver to the Lessee such instrument as the
Lessor shall have received from the Indenture Trustee, releasing such Engines
from the Lien of the Indenture.
(d) Termination of the Lessee's Obligations. Upon compliance by the
Lessor and the Lessee with the provisions of this Section 10.02 and upon
compliance by the Lessee with the further provisions of this Article 10, the
obligation of the Lessee to pay Basic Rent with respect to the Aircraft shall
cease for any Rent Payment Date (other than Basic Rent payable in arrears on
the Rent Payment Date that is the Payment Date) occurring after the proposed
Termination Date and the Term shall end effective as of the proposed
Termination Date.
Section 10.03. Voluntary Termination as to Engines. So long as no
Event of Default shall have occurred and be continuing, the Lessee shall have
the right at its option and at any time, on at least sixty (60) days' prior
written notice to the Lessor, to terminate this Lease with respect to any
Engine not then installed or held for use on the Airframe, provided that prior
to the date of such termination, the Lessee shall comply with the terms of
Section 11.04 hereof to the same extent as if an Event of Loss had occurred
with respect to such Engine.
ARTICLE 11
LOSS, DESTRUCTION, REQUISITION
Section 11.01. Lessee's Election Rights. The Lessee shall notify
the Lessor as soon as practicable but in no event more than 10 Business Days
following the occurrence of an event which constitutes or might constitute an
Event of Loss with respect to the Airframe or with respect to the Airframe and
the Engines or engines then installed on the Airframe. By written notice to
the Lessor and the Owner Participant given within 60 days of the occurrence of
any Event of Loss, the Lessee shall elect the alternative set forth in Section
11.02 hereof or the alternative set forth in Section 11.03 hereof. The
Lessee's failure to make such election within said 60 days shall be deemed to
be an election of the alternative set forth in Section 11.02 hereof.
Section 11.02. Payment of Stipulated Loss Value. (a) The Lessee
shall, if it has so elected, pay to the Lessor, by wire transfer of
immediately available funds on a Stipulated Loss Value Determination Date
designated by the Lessee upon 30 days irrevocable notice, but in no event
later than 180 days following the occurrence of the Event of Loss (the "Loss
Payment Date"), the sum of (A) the Stipulated Loss Value for the Aircraft,
determined as of the Stipulated Loss Value Determination Date next preceding
the Loss Payment Date (or, if the Loss Payment Date occurs on a Stipulated
Loss Value Determination Date, determined as of such Stipulated Loss Value
Determination Date) together with interest on such amount at the Debt Rate
from such Stipulated Loss Value Determination Date to the Loss Payment Date,
plus (B) any and all Basic Rent due and payable on or prior to the relevant
Stipulated Loss Value Determination Date and unpaid, plus (C) any and all
Supplemental Rent due and payable on or prior to such Loss Payment Date minus
(D) if the relevant Stipulated Loss Value Determination Date is a Rent Payment
Date, the portion, if any, of the Basic Rent installment due and paid by the
Lessee on such Stipulated Loss Value Determination Date pursuant to Section
3.02 hereof to the extent such Basic Rent installment (or portion thereof) is
designated on Schedule II hereto as being payable in advance, together with an
imputed interest amount in respect of such advance payment of Basic Rent (or
portion thereof) at the Debt Rate from the date of payment of such Basic Rent
installment (or portion thereof) by the Lessee to the Loss Payment Date.
(b) Termination of Lease; Title Transfer. Upon payment in full of
the amounts due pursuant to Section 11.02(a), the obligation of the Lessee to
pay Basic Rent on any Rent Payment Date occurring subsequent to the payment of
such amounts shall terminate and the Term shall end. Further, upon such
payment, the Lessor will transfer to the Lessee, without recourse or warranty
(except as to the absence of Lessor's Liens), all of the Lessor's right, title
and interest, if any, in and to the Airframe, Engines and engines with respect
to which such Event of Loss occurred, as well as all of the Lessor's right,
title and interest in and to any Engines constituting part of the Aircraft but
not installed on the Airframe when such Event of Loss occurred, and will
deliver to the Lessee such instrument as the Lessor shall have received from
the Indenture Trustee, releasing such Aircraft from the Lien of the Indenture.
Section 11.03. Replacement of Airframe and Engines. (a) Generally.
So long as no Event of Default shall have occurred and be continuing, and
subject to Section 11.01 hereof, if the Lessee has elected to replace the
Airframe and Engines pursuant to this Section 11.03, the Lessee shall cause to
be duly conveyed to the Lessor within one hundred and eighty (180) days after
the occurrence of such Event of Loss, as replacement for the Airframe and
Engines with respect to which an Event of Loss as described in Section 11.01
hereof has occurred, good and marketable title to a [Make/Model] airframe and
good and marketable title to a number of engines equal to the number of
Engines with respect to which an Event of Loss has occurred of the same or an
improved make and model, owned by the Lessee free and clear of all Liens not
excepted in Section 6.01 hereof, duly certified as an airworthy aircraft by the
Aeronautics Authority and having a value and utility at least equal to, and
being in as good operating condition as, the Airframe and Engines with respect
to which such Event of Loss occurred, assuming that the Airframe and Engines
were then in the condition and airworthiness required to be maintained by the
terms of this Lease immediately prior to the occurrence of such Event of Loss.
In such case and as a condition to such substitution the Lessee, at its own
cost and expense, will also promptly:
(i) furnish the Lessor with originals of, and the Indenture Trustee
with copies of, bills of sale, in form and substance satisfactory to the
Lessor and the Indenture Trustee, with respect to such replacement airframe
and engines;
(ii) cause such replacement airframe and engines to be duly
registered in the name of the Lessor pursuant to the Act or the applicable
laws of any other jurisdiction in which the Aircraft may then be registered
in accordance with Section 5.03(b) of the Participation Agreement;
(iii) cause a Lease Supplement with respect to such replacement
airframe and engines to be duly executed by the Lessee and recorded
pursuant to the Act, or the applicable laws, rules and regulations of any
other jurisdiction in which the Aircraft may then be registered as
permitted by Section 5.03(b) of the Participation Agreement;
(iv) furnish the Lessor with a certificate of a nationally
recognized aircraft appraiser reasonably satisfactory to the Indenture
Trustee and the Owner Participant certifying that such replacement airframe
and engines have a value and utility at least equal to, and are in as good
operating condition as, the Airframe and Engines replaced, assuming such
Airframe and Engines were in the condition and repair required by the terms
of this Lease immediately prior to the occurrence of such Event of Loss;
(v) furnish the Lessor with such evidence as the Lessor or the
Indenture Trustee may reasonably request of compliance with the insurance
provisions of Article 13 with respect to such replacement airframe and
engines;
(vi) provide the Owner Participant and the Lessor with (A) an
opinion of counsel (which opinion and counsel shall be reasonably
satisfactory to the Owner Participant and the Lessor) that it will suffer
no adverse tax consequence not otherwise indemnified for as of the Delivery
Date as a result of such substitution or (B) a satisfactory indemnity for
such consequences;
(vii) comply with the provisions of Section 9.08 of the Indenture;
(viii)cause an Indenture Supplement with respect to such replacement
airframe and engines to be duly executed by the Lessor and the Indenture
Trustee and recorded pursuant to the Act, or the applicable laws, rules and
regulations of any other jurisdiction in which the Aircraft may then be
registered as permitted by Section 5.03(b) of the Participation Agreement
in order that the Lien of the Indenture shall constitute a first and prior
perfected Lien and security interest on and in respect of such replacement
airframe and engines; and
(ix) take such other action, including the filing of UCC financing
statements naming the Indenture Trustee as a secured party with the
Secretary of State of Delaware, as the Lessor or the Indenture Trustee may
reasonably request in order that such replacement airframe and engines
shall be duly and properly titled in the Lessor, leased under this
Agreement and subjected to the Lien of the Indenture to the same extent as
the replaced Airframe and Engines.
(b) Title to Replaced Equipment. Upon compliance by the Lessee with
the terms of Section 11.03(a) hereof, the Lessor will transfer to the Lessee
(subject to any insurer's salvage rights), without recourse or warranty
(except as to the absence of Lessor's Liens), all of the Lessor's right, title
and interest, if any, in and to the Airframe and Engines with respect to which
such Event of Loss occurred. Any Engine constituting part of the Aircraft,
but not installed on the Airframe when such Event of Loss occurred, shall
continue to be property of the Lessor and leased under this Lease as part of
the same equipment as the replacement airframe and engines.
(c) Definitions. Each replacement airframe and engine shall be
deemed part of the property leased under this Lease, each such replacement
airframe shall be deemed an "Airframe," each such replacement engine shall be
deemed an "Engine" and each such replacement airframe and engine shall be
deemed part of the same Aircraft as was the Airframe or Engine replaced.
(d) Rent Adjustments. An Event of Loss covered by this Section
11.03 shall not result in any change in Basic Rent, Stipulated Loss Values,
Termination Values or Purchase Option Price other than adjustments properly
made pursuant to the Tax Indemnity Agreement and the Participation Agreement
subject to the provisions of Section 3.05 hereof.
Section 11.04. Event of Loss with Respect to an Engine. (a)
Generally. Upon the occurrence of an Event of Loss with respect to an Engine
under circumstances in which there has not occurred an Event of Loss with
respect to the Airframe, the Lessee shall give the Lessor and the Indenture
Trustee prompt written notice thereof and shall, as soon as practicable but in
any event within one hundred and twenty (120) days after the occurrence of
such Event of Loss, duly convey or cause to be conveyed to the Lessor, a
replacement for the Engine with respect to which such Event of Loss occurred,
good and marketable title to a replacement engine, free and clear of all Liens
not excepted in Section 6.01 hereof and having a value and utility at least
equal to, and being in as good operating condition as, the Engine with respect
to which such Event of Loss occurred, assuming such Engine was of the value
and utility and in the condition and repair required by the terms of this Lease
immediately prior to the occurrence of such Event of Loss. The standards set
forth in this Section with respect to Replacement Engines shall apply upon any
replacement or substitution of an Engine with a Replacement Engine pursuant to
any other provision of this Lease.
(b) Conditions Precedent. Prior to or at the time of any conveyance
of an Engine pursuant to Section 11.04(a) hereof, the Lessee, at its own cost
and expense will:
(i) furnish the Lessor with, and the Indenture Trustee with copy of
a bill of sale, in form and substance satisfactory to the Lessor, with
respect to such Replacement Engine;
(ii) cause a Lease Supplement covering such Replacement Engine to be
duly executed by the Lessee and filed for recordation pursuant to the Act,
or the applicable laws, rules and regulations of any other jurisdiction in
which the Aircraft may then be registered as permitted by Section 5.03(b)
of the Participation Agreement;
(iii) furnish the Lessor with such evidence of compliance with the
insurance provisions of Article 13 hereof with respect to such Replacement
Engine as the Lessor or the Indenture Trustee may reasonably request;
(iv) furnish the Lessor and the Indenture Trustee with a certificate
of an aircraft advisor reasonably satisfactory to the Owner Participant
(who must be a nationally recognized aircraft authority) certifying that
such Replacement Engine has a value and utility at least equal to, and is
in as good operating condition as, the Engine replaced, assuming such
Engine was in the condition and repair required by the terms of this Lease
immediately prior to the occurrence of such Event of Loss;
(v) provide the Owner Participant and the Lessor with (A) an
opinion of counsel (which counsel and opinion shall be reasonably
satisfactory to the Owner Participant and the Lessor) that it will suffer
no adverse tax consequences not otherwise indemnified for as of the
Delivery Date as a result of such substitution or (B) a satisfactory
indemnity for such consequences;
(vi) comply with the provisions of Section 9.08 of the Indenture;
(vii) cause an Indenture Supplement with respect to such Replacement
Engine to be duly executed by the Lessor and the Indenture Trustee and
recorded pursuant to the Act, or the applicable laws, rules and regulations
of any other jurisdiction in which the Aircraft may be registered as
permitted by Section 5.03(b) of the Participation Agreement in order that
the Indenture shall constitute a first and prior and perfected Lien and
security interest on and in respect of such Replacement Engine; and
(viii)take such other action, including the filing of UCC financing
statements naming the Indenture Trustee as Secured Party with the Secretary
of State of Delaware, as the Lessor or the Indenture Trustee may reasonably
request in order that such Replacement Engine be duly and properly titled
in the Lessor, leased under this Lease and subjected to the Lien of the
Indenture to the same extent as the replaced Engine.
(c) Title Transfer. Upon compliance by the Lessee with the terms of
Sections 11.04(a) and (b) hereof, the Lessor will transfer to the Lessee
(subject to any insurer's salvage rights), without recourse or warranty
(except as to the absence of Lessor's Liens), all of the Lessor's right, title
and interest, if any, in and to the Engine with respect to which such Event of
Loss occurred, and will deliver to the Lessee such instrument as the Lessor
shall have received from the Indenture Trustee, releasing such Engine from the
Lien of the Indenture. Each Replacement Engine shall, after such conveyance,
be deemed part of the property leased under this Lease. An Event of Loss
covered by this Section 11.04 shall not result in any change in Basic Rent,
Stipulated Loss Values, Termination Values or Purchase Option Price, but may
result in payments to be made pursuant to the Tax Indemnity Agreement and the
Participation Agreement.
Section 11.05. Application of Payments from the Government or
Others. (a) Generally. Any payments (other than insurance proceeds the
application of which is provided for in Section 13.03 hereof) received at any
time by the Lessor or by the Lessee from any governmental authority or any
other party, foreign or domestic, with respect to an Event of Loss resulting
from the condemnation, confiscation, theft or seizure of, or requisition of
title to or use of, the Airframe or any Engine will be applied, as
appropriate, in accordance with Section 11.05(b) or Section 11.05(c) hereof.
(b) Payments of Stipulated Loss Value. If the payments described in
Section 11.05(a) hereof are received with respect to the Airframe or with
respect to the Airframe and Engines or engines then installed on the Airframe
and the Lessee has elected the alternative set forth in Section 11.02 hereof,
so much of such payments as shall not exceed the amount required to be paid by
the Lessee pursuant to Section 11.02 hereof shall be paid to the Lessor in
reduction of the Lessee's obligations under Section 11.02 hereof if not
already paid by the Lessee, or, if such obligations have already been
discharged in full by the Lessee, such payments shall be applied to reimburse
the Lessee for its payment of such Stipulated Loss Value and, if and to the
extent specifically included in such payment, to pay to the Lessee interest on
such amount of Stipulated Loss Value at the rate included in such payment if
any, or otherwise at the Debt Rate, for the period from the date of payment by
the Lessee of the Stipulated Loss Value to the date of reimbursement of the
Lessee under this Section 11.05(b). The excess, if any, remaining after such
application shall be divided between the Lessor and the Lessee as their
respective interests may appear.
(c) Payment if the Lessee Elects Replacement. If the payments
described in Section 11.05(a) hereof are received with respect to the Airframe
or with respect to the Airframe and the Engines or engines then installed on
the Airframe and the Lessee has elected the alternative set forth in Section
11.03 hereof, or if such payments are received with respect to an Engine not
then installed on the Airframe under the circumstances contemplated by Section
11.04 hereof, all such payments shall be paid over to or retained by the
Lessee, provided that the Lessee shall have fully performed its obligations
pursuant to Section 11.03 or Section 11.04 hereof, as the case may be, with
respect to the Event of Loss for which such payments are made.
Section 11.06. Requisition of an Airframe and the Installed Engines
for Use by Government. In the event of the requisition for use by the
Government or any other government of registry of the Aircraft, or any agency
or instrumentality thereof of the Airframe and the Engines or engines then
installed on the Airframe during the Term, which requisition does not
constitute an Event of Loss, the Lessee shall promptly notify the Lessor of
such requisition and all of the Lessee's obligations under this Lease with
respect to such Airframe and Engines or engines shall continue to the same
extent as if such requisition had not occurred except to the extent that any
failure or delay in the performance or observance of such obligations (other
than obligations for the payment of Rent) by the Lessee shall have been caused
by such requisition. All payments received by the Lessor, the Lessee or any
permitted sublessee or transferee from the Government or other government of
registry of the Aircraft or any agency or instrumentality thereof for the use
of the Airframe and Engines or engines during the Term (other than any such
requisition which constitutes an Event of Loss, as to which the provisions of
Section 11.05 shall govern) shall, so long as no Event of Default shall have
occurred and be continuing (otherwise such proceeds shall be held pursuant to
Section 23.01 as security for the Lessee's obligations hereunder and under the
Participation Agreement), be paid over to, or retained by the Lessee or such
permitted sublessee or transferee. All payments received by the Lessor, the
Lessee or any such permitted sublessee or transferee from the Government or
government of registry or any agency or instrumentality thereof for the use of
the Airframe and Engines or engines after the Term shall be paid over to, or
retained by, the Lessor (or the Lessee if it shall have purchased the Lessor's
interest therein in accordance with the provisions hereof).
Section 11.07. Requisition for Use by Government of an Engine Not
Installed on the Airframe. In the event of the requisition for use by the
Government or any other government of registry of the Aircraft or any agency
or instrumentality thereof of any Engine not then installed on the Airframe,
the Lessee shall replace such Engine by complying with the terms of Section
11.04 hereof to the same extent as if an Event of Loss had occurred with
respect to such Engine, and any payments received by the Lessor or the Lessee
from the Government or other government of registry or any instrumentality
thereof with respect to such requisition shall, so long as no Event of Default
shall have occurred and be continuing (otherwise such proceeds shall be held
pursuant to Section 23.01 as security for the Lessee's obligations hereunder
and under the Participation Agreement), be paid over to or retained by the
Lessee, provided that the Lessee shall have fully performed its obligations
under Section 11.04 hereof.
Section 11.08. Application of Payments During Existence of Certain
Defaults. Any amount referred to in Section 11.05, 11.06 or 11.07 hereof
which is payable to the Lessee shall not be paid to the Lessee, or, if it has
been previously paid directly to the Lessee, shall not be retained by the
Lessee, if at the time of such payment an Event of Default shall have occurred
and be continuing, but shall be paid to the Indenture Trustee so long as the
Lien of the Indenture is in effect and, after the Lien of the Indenture shall
be paid to and held by the Lessor as provided in Article 23 hereof as security
for the obligations of the Lessee under this Agreement, and at such time as
there shall not be continuing any such Event of Default, such amount shall be
paid to the Lessee.
ARTICLE 12
RETURN OF AIRCRAFT
Section 12.01. Return of Aircraft. Unless the Aircraft is purchased
by the Lessee as provided in Section 4.02 hereof, at the end of the Term, or
upon the termination of this Lease pursuant to Article 10 hereof, the Lessee,
at its own cost and expense, will return the Aircraft by delivering it to the
Lessor on the last day of the Term or on the Termination Date, as the case may
be, at a location and in accordance with the delivery instructions of the
Lessor, but on a route determined by Lessee, which may be the Lessee's
principal maintenance facility in Memphis, Tennessee or such other location
within or outside of the continental United States (or on Lessee's route
structure as in effect on the return date), the Airframe thereof fully equipped
with the same number of Engines of the same or an improved make and model as
were delivered on the Delivery Date (or Replacement Engines), free and clear
of all Liens (other than Lessor's Liens), it being understood that all such
Engines so returned shall be of identical make and model. The Lessor will
give the Lessee at least ten (10) Business Days prior written notice of the
place of such return; provided, however, that if the Lessor shall have made
the request for storage pursuant to Section 12.06 hereof, the Lessee shall
return the Aircraft to the Lessor at the site of the storage.
Section 12.02. Return of Engines. If any engine not owned by the
Lessor shall be delivered with the Airframe as set forth in Section 12.01
hereof, the Lessee, concurrently with such delivery, will, at its own cost and
expense furnish the Lessor with (i) a full warranty bill of sale, in form and
substance reasonably satisfactory to the Lessor, with respect to such engine,
(ii) an opinion of the Lessee's counsel to the effect that, upon such return,
the Lessor will acquire full right, title and interest to such engine and
(iii) a certificate as described in Section 11.04(b)(iv) hereof. The Lessee
shall take such other action as the Lessor may reasonably request in order
that such Replacement Engine shall be duly and properly titled in the Lessor,
and the Lessor will then (i) transfer to the Lessee, without recourse or
warranty (except as to the absence of Lessor's Liens), all the Lessor's right,
title and interest in and to any Engine in lieu of which a Replacement Engine
has been delivered pursuant to Section 12.01, and (ii) deliver to the Lessee
such instrument as the Lessor shall have received from the Indenture Trustee,
releasing such Engine from the Lien of the Indenture.
Section 12.03. Return of Manuals. Upon the return of the Aircraft,
the Lessee shall deliver to the Lessor all logs, manuals, certificates and
technical data, and inspection, modification and overhaul records pertaining
to the Airframe, Engines or engines, which are then in the Lessee's or any
sublessee's possession and reasonably required for the further sale or lease
by the Lessor of the Aircraft, Engines or engines or which are required to be
maintained with respect thereto under applicable rules and regulations of the
Aeronautics Authority.
Section 12.04. Condition of Aircraft. (a) Required Condition. The
Aircraft when returned to the Lessor shall, at the Lessee's own cost and
expense, meet the following requirements:
(i) it shall be registered in the name of the Lessor pursuant to
the Act;
(ii) it shall be clean by airline and cargo handling operating
standards;
(iii) the Airframe shall be returned with the Engines, or any
replacements thereto as herein authorized, provided that the Airframe shall
have an aggregate of _______ Engines (as herein authorized under
Section 12.02 hereof) installed thereon, together with the equipment,
accessories or parts installed thereon on the Delivery Date or replacements
therefor (as herein authorized) and alterations, modifications and
additions thereto made in accordance with the provisions of this Lease;
(iv) it shall be in the condition required by Section 12.04(b)
hereof, and otherwise be in as good condition as when delivered to the
Lessor by the Lessee, ordinary wear and tear excepted;
(v) it shall have a currently effective airworthiness certificate
issued by the Aeronautics Authority;
(vi) it shall comply with any then applicable rules and regulations
imposed by the Aeronautics Authority and, without limitation of the
foregoing, terminate all Aeronautics Authority airworthiness directives and
all mandatory service bulletins of, and mandatory modifications required
by, the Aeronautics Authority or any manufacturer of the Airframe or
Engine, or other manufacturer of an engine then installed on the Airframe
(in compliance with Section 12.02 hereof) applicable to the Aircraft and
required to be terminated during the Term of the Lease pursuant to Section
9.01 hereof and each Engine shall be serviceable in accordance with the
Lessee's Aeronautics Authority approved maintenance program;
(vii) it shall be free and clear of all Liens and rights of others
(other than the Lessor's Liens) including, without limitation, rights of
third parties under pooling, interchange and other agreements referred to
in Section 7.02(a) hereof;
(viii)it shall be in a standard cargo configuration; and
(ix) it shall not be subject to a use prohibition of the character
described in clause (iv) of the definition of "Event of Loss"; provided,
however, that if such a use prohibition shall have occurred and be
continuing and shall be curable by action by the Lessee and the Lessee
shall be undertaking such cure promptly, diligently and continuously, using
its best efforts, then the Lessee shall have a period of eighteen (18)
months from the date of such prohibition to effect such cure and the
provisions of Section 12.05(c) hereof shall apply throughout such period.
(b) Remaining Time. If, at the time of return of the Aircraft, the
Airframe is not being maintained under a continuous maintenance program, then
the Airframe shall have remaining until the next scheduled "C" check at least
25% of the allowable hours between "C" checks permitted under the Lessee's
FAA-approved maintenance program. If, at the time of return of the Aircraft
the Airframe is subject to a continuous maintenance program, there will be no
time-before-overhaul requirement. If, at the time of return of the Aircraft,
the Engines are not being maintained under an on-condition maintenance
program, then the average number of hours on such Engines remaining until the
next scheduled engine heavy maintenance visit shall be at least 25% of the
allowable hours between engine heavy maintenance visits permitted under the
Lessee's FAA-approved maintenance program. If, at the time of return of the
Aircraft, the Engines are subject to an on-condition maintenance program,
there will be no time-before-overhaul requirement. With respect to
maintenance under the Lessee's maintenance program approved by the Aeronautics
Authority, the Lessee shall have treated the Aircraft in a nondiscriminatory
manner with other [Make/Model] aircraft in the Lessee's fleet, and the
Aircraft shall be free and clear of all Liens and rights of others other than
the Lessor's Liens and shall be in compliance in every material respect with
the Lessee's maintenance program as if the Term were not ending.
Section 12.05. Delayed Return of Aircraft. (a) If the return of the
Aircraft to the Lessor in compliance with the terms of this Lease shall be
delayed beyond the scheduled end of the Term because of the occurrence of an
event described in clause (iii)(B) of the definition of Event of Loss, this
Lease shall not terminate but shall continue in full force and effect until
the earlier to occur of the return of the Aircraft or the expiration of the
six-month period (or such shorter period referred to in said clause (iii)(B))
after the scheduled end of the Term, provided that (i) Stipulated Loss Value
and Termination Value during such extension shall be an amount determined in
accordance with Section 4.01(b) hereof, (ii) the Lessee shall pay on demand,
as Basic Rent for each day of such delay and this Lease shall continue, an
amount equal to the daily equivalent of the average Basic Rent paid during the
Basic Term and any then expiring Renewal Term, in each case with such Basic
Rent to include for this purpose the amounts referred to in Section 3.01
hereof, and (iii) neither the Lessee nor any other Person shall use or operate
the Aircraft in any manner, except pursuant to the activation of the Civil
Reserve Airfleet Program.
(b) If, in the case of a delay in return pursuant to paragraph (a)
above, at the expiration of the six-month period following the scheduled end
of the Term the Aircraft has not been returned to the Lessor, an Event of Loss
shall be deemed to have occurred on the date of expiration of such six month
period (or such shorter period referred to in paragraph (a) above) and on such
date (or at such earlier date as an Event of Loss pursuant to clause (iv) of
the definition of Event of Loss shall have occurred) the Lessee shall pay to
the Lessor the Stipulated Loss Value for the Aircraft determined as of such
date; provided, however, that the Lessor shall have the right to waive payment
of Stipulated Loss Value upon return of the Aircraft by the Lessee to the
Lessor and acceptance thereof (subject to any use prohibition of the character
described in clause (iv) of the definition of Event of Loss).
(c) In any other situation in which the Aircraft is not returned to
the Lessor upon the expiration of the Term (other than due to a purchase of
the Aircraft by the Lessee pursuant to this Lease or by a purchaser under
Article 10), the Lessee shall pay on demand as Basic Rent for each day of such
delay and this Lease shall continue, an amount equal to the daily equivalent
of the average Basic Rent paid during the Basic Term and any then expiring
Renewal Term, in each case with such Basic Rent to include for this purpose
the amounts referred to in Section 3.01 hereof.
Section 12.06. Storage. Upon any expiration or termination of this
Lease, at the written request of the Lessor given at least 15 days prior to
such expiration or termination, the Lessee will arrange, or will caused to be
arranged, at no charge to the Lessor (subject, however, to the last sentence
of this Section 12.06), storage at a ramp storage facility for the Aircraft at
the Lessee's principal maintenance facilities in Memphis, Tennessee or one of
the Lessee's other maintenance facilities or at a location selected by the
Lessee used as a location for the parking or storage of aircraft for a period
of up to 30 days, if such storage is available. At the end of such 30 day
period, if the Lessor so requests within days of before the end of such
period, the Lessee will continue to provide such storage at such facility or
location for an additional 30 days at the Lessor's expense. If the Lessee is
required to move the Aircraft from one storage facility to another, such move
shall be at the risk and expense of the Lessor. The maintenance and risk of
loss of, and responsibility for obtaining insurance on, the Aircraft shall be
the responsibility of the Lessor during any period of storage.
Section 12.07. Special Markings. If requested by the Lessor, the
Lessee shall, at the Lessee's cost, remove or paint over all insignias and
other distinctive markings of the Lessee or any sublessee on the Aircraft.
Section 12.08. Lessor's Option to Purchase Parts. At any time after
the Lessee has advised the Lessor that it has determined not to renew this
Lease or purchase the Aircraft, or the Aircraft is otherwise to be returned to
the Lessor, the Lessee shall advise the Lessor of any Part which the Lessee
intends to remove as provided in Section 9.02(b) above, and the Lessor may, at
its option, upon 30 days notice to the Lessee, purchase any or all of such
nonproprietary Parts from the Lessee upon the expiration of the Term at their
then Fair Market Value determined in accordance with the provisions of Section
4.03 hereof.
ARTICLE 13
INSURANCE
Section 13.01. Public Liability and Property Damage Liability
Insurance. (a) Public Liability and Property Damage Liability Insurance.
The Lessee, at its own cost and expense, will maintain or cause to be
maintained with respect to the Aircraft, comprehensive aircraft liability
insurance including, without limitation, passenger legal liability and
property damage liability insurance and cargo legal liability in such amounts,
against such risks (including, without limitation, contractual liability and
war risk and allied perils liability with respect to similar aircraft and
engines which comprise the fleet of the Lessee), with such retentions as the
Lessee customarily maintains (subject to the limitations set forth in Section
13.06 hereof), and with such insurers (which shall be insurers of recognized
responsibility), and such insurance against such other risks as is usually
carried by similar corporations engaged in the same or similar business and
similarly situated as the Lessee and owning or operating aircraft and engines
similar to the Aircraft and Engines; provided that such insurance shall not be
in amounts less than the amount per occurrence as shall have been agreed to on
the Delivery Date by the Owner Participant, Indenture Trustee and the Lessee
unless the Aircraft is not operated and appropriate liability insurance for
the Aircraft on the ground is maintained; provided that in no event shall the
limits of liability for all public liability insurance be less than the
amount, per occurrence, as set forth on the insurance certificate delivered on
the Delivery Date unless the Aircraft is not operated and appropriate
insurance for the Aircraft on the ground is maintained.
(b) Government Indemnification. Notwithstanding Section 13.01(a),
in the event of the requisition for use by the Government of the Airframe or
the Airframe and the Engines or engines then installed on the Airframe, the
Lessee shall maintain throughout the period of such requisition such insurance
as would otherwise be required under this Section 13.01 (except to the extent
that the Lessee certifies that such insurance is unobtainable after diligent
effort or is obtainable only at unreasonably high rates or on unduly
burdensome terms and conditions), provided that the Lessor shall accept, in
lieu of such insurance coverage, indemnification or insurance from the
Government which is substantially the same as otherwise required under this
Article 13.
(c) Policy Terms. Any policy of insurance carried and maintained in
accordance with this Section 13.01, and any policy taken out in substitution or
replacement for any such policy subject to the terms, conditions and
limitations thereof, shall:
(i) name or be amended to name the Lessor in its individual
capacity and as owner of the Aircraft, the Indenture Trustee in its
capacity as such and the Owner Participant and each of their respective
officers and directors in their respective capacities as such as additional
insureds (hereinafter in this paragraph (c) sometimes referred to as
"Additional Insured");
(ii) provide that, in respect of the interest of any Additional
Insured in such policies, the insurance shall not be invalidated by any
action or inaction of the Lessee or any Additional Insured as defined under
the policy of insurance required under this Section 13.01 (other than such
Additional Insured) and shall insure each Additional Insured regardless of
any breach or violation of any warranty, declaration or condition contained
in such policies by the Lessee or any Additional Insured (other than such
Additional Insured) as defined under the policy of insurance required under
this Section 13.01;
(iii) provide that if such insurance is cancelled for any reason, or
any substantial change is made in the policies which adversely affect the
coverage required herein, or if such insurance is allowed to lapse for
nonpayment of premium, such cancellation, change or lapse shall not be
effective as to any Additional Insured or Loss Payee for thirty (30) days
(except in the case of war risk coverage in which event the applicable
period shall be seven (7) days or such other period as may be customary)
after receipt by each such Additional Insured of written notice from such
insurers of such cancellation, change or lapse;
(iv) provide that no Additional Insured shall have any obligation or
liability for premiums or other payments, if any, in connection with such
insurance;
(v) provide that the insurers shall waive any rights of subrogation
against the Additional Insured, to the extent that the Lessee has waived
its rights under this Lease; provided that the exercise by insurers of
rights of subrogation derived from rights retained by the Lessee shall not,
in any way, delay payment of any claim that would otherwise be payable by
such insurers but for the existence of rights of subrogation derived from
rights retained by the Lessee;
(vi) provide that such insurer shall waive the right of such insurer
to any set-off or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of any Additional
Insured;
(vii) provide that all of the provisions of such policy shall operate
in the same manner as if there were a separate policy covering each
Additional Insured; provided, that such policies shall not operate to
increase any insurer's limit of liability; and
(viii)be primary, without right of contribution from any other
insurance which is carried by any Additional Insured with respect to its
interest in the Aircraft.
Section 13.02. Insurance Against Loss or Damage to Aircraft and
Engines. (a) Hull Insurance. The Lessee, at its own cost and expense, shall
maintain or cause to be maintained in effect, with insurers of recognized
responsibility, all-risk ground and flight aircraft hull insurance covering
the Aircraft and all-risk coverage with respect to any Engines and Parts while
temporarily removed from the Aircraft and not replaced by similar Engines or
Parts, including in each case war-risk and allied perils, hijacking (air
piracy) and governmental confiscation and expropriation insurance (except in
the country of registry) with such retentions (subject to the limitations set
forth in Section 13.06) and in such form and amounts as the Lessee customarily
maintains with respect to the aircraft in the Lessee's fleet of the same type
and model and operated on the same routes as the Aircraft (except that the
Lessee shall be required to maintain war-risk, hijacking (air piracy) and
governmental confiscation and expropriation insurance (except in the country
of registry) if the Aircraft is operated on routes where the custom is for
major international Air Carriers flying comparable routes to carry such
insurance), provided that such insurance shall at all times while the Aircraft
is subject to this Lease and the Lien of the Indenture be for an amount not
less than an amount equal to the Stipulated Loss Value for the Aircraft from
time to time.
(b) Policy Terms. Any policies carried and maintained in accordance
with this Section 13.02 and any policies taken out in substitution or
replacement for any such policies subject to the terms, conditions and
limitations thereof shall:
(i) name or be amended to name the Lessor in its individual
capacity and as owner of the Aircraft, the Indenture Trustee and the Owner
Participant and each of their respective officers and directors, in their
respective capacities as such, as additional insureds (hereinafter in this
paragraph (b) sometimes referred to as "Additional Insured"), and the
Lessor, or so long as the Lien of the Indenture shall not have been
disclosed, the Indenture Trustee as loss payees (hereinafter in this
paragraph (b) sometimes referred to as "Loss Payee");
(ii) provide with respect to coverage provided under this Section
13.02, that (i) in the event of a loss involving proceeds in excess of
$5,000,000, the proceeds in respect of such loss up to an amount equal to
the Stipulated Loss Value for the Aircraft shall be payable to the Lessor
(or, so long as the Indenture shall not have been discharged, the Indenture
Trustee), it being understood and agreed that in the case of any payment to
the Lessor (or the Indenture Trustee) otherwise than in respect of an Event
of Loss, the Lessor (or the Indenture Trustee) shall, upon receipt of
evidence satisfactory to it that the damage giving rise to such payment
shall have been repaired or that such payment shall then be required to pay
for repairs then being made, pay the amount of such payment to the Lessee or
its order, and (ii) the entire amount of any loss involving proceeds of
$5,000,000 or less or the amount of any proceeds of any loss in excess of
the Stipulated Loss Value for the Aircraft shall be paid to the Lessee or
its order unless an Event of Default shall have occurred and be continuing
and the insurers have been notified thereof by the Lessor or the Indenture
Trustee (and if the insurers have notice of a Payment Default or Event of
Default such payment shall be made to the Indenture Trustee);
(iii) provide that if such insurance is cancelled for any reason or
any substantial change is made in the policies which adversely affects the
coverage required herein, or if such insurance is allowed to lapse for
nonpayment of premium, such cancellation, change or lapse shall not be
effective as to any Additional Insured or Loss payee for thirty days
(except in the case of war-risk coverage in which event the applicable
period shall be seven (7) days or such other period as may be customary)
after receipt by each such Additional Insured or Loss Payee of written
notice from such Insurer of such cancellation, change or lapse;
(iv) provide that, in respect of the interest of the Lessor (in its
individual capacity and as the Owner Trustee), the Owner Participant or the
Indenture Trustee (in their respective capacities as such) in such policies
the insurance shall not be invalidated by any action or inaction of the
Lessee, any Additional Insured or Loss Payee (other than any action or
inaction of the Lessee, such Additional Insured or Loss Payee) and shall
insure the Lessor (in its individual capacity and as Owner Trustee), the
Owner Participant or the Indenture Trustee regardless of any breach or
violation of any warranty, declaration or condition in such policies by the
Lessee or any other Insured as defined under the policy of insurance
required under this Section 13.02;
(v) provide that the insurers shall waive any rights of subrogation
against the Lessor (in its individual capacity and as Owner Trustee), the
Owner Participant or the Indenture Trustee;
(vi) provide that such insurer shall waive any right of such insurer
to any set-off or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of any Additional
Insured or Loss Payee;
(vii) be primary and without rights of contribution from any other
insurance which is carried by the Lessor, the Owner Participant or the
Indenture Trustee with respect to its interest in the Aircraft; and
(viii)provide that the Lessor, the Owner Participant or the Indenture
Trustee shall have no obligation or liability for premiums or other
payments, if any, in connection with such insurance.
Section 13.03. Application of Insurance Proceeds. (a) Generally.
All insurance proceeds (other than proceeds from policies carried by the
Lessor, the Indenture Trustee or the Owner Participant) received under
policies described in Section 13.02 hereof as the result of the occurrence of
an Event of Loss with respect to the Airframe or an Engine will be applied as
follows:
(i) if such proceeds are received with respect to the Airframe or
with respect to the Airframe and the Engines or engines then installed on
the Airframe and the Lessee has elected the alternative set forth in
Section 11.02 hereof, so much of such proceeds as shall not exceed the
amounts required to be paid by the Lessee pursuant to said Section 11.02
hereof shall be applied in reduction of the Lessee's obligation to pay such
amounts if not already paid by the Lessee, or if already paid by the
Lessee, shall be applied to reimburse the Lessee for its payment of such
amounts, provided that no Event of Default shall have occurred and be
continuing and the balance, if any, of such proceeds remaining will be paid
to the order of the Lessee if and so long as the foregoing proviso is not
satisfied, such proceeds shall be held pursuant to Section 23.01 hereof as
security for the Lessee's obligations hereunder; or
(ii) if such proceeds are received with respect to the Airframe or
the Airframe and the Engines or engines then installed on the Airframe and
the Lessee has elected the alternative set forth in Section 11.03 hereof,
or if such proceeds are received with respect to an Engine not then
installed on the Airframe and not replaced by an Engine or engine under the
circumstances contemplated by Section 11.04 hereof, all such proceeds shall
be paid to the Indenture Trustee (unless the Indenture has been discharged
in which case paid to the Lessor) for disbursement to the order of the
Lessee, after the Lessee shall have fully performed the terms of Sections
11.03 or 11.04 hereof, as applicable, with respect to the Event of Loss for
which such proceeds are paid, provided that no Payment Default or Event of
Default shall have occurred and be continuing; if and so long as the
foregoing proviso is not satisfied, such proceeds shall be held pursuant to
Section 23.01 hereof as security for the Lessee's obligations hereunder.
(b) Payment if no Event of Loss. The insurance proceeds of any
property damage loss not constituting an Event of Loss with respect to the
Airframe or an Engine will be applied in payment (or to reimburse the Lessee)
for repairs or for replacement property in accordance with Articles 7 and 8
hereof, if not already paid for by the Lessee, and any balance remaining after
compliance with said Articles 7 and 8 hereof with respect to such loss shall
be paid to the order of the Lessee, provided that no Event of Default shall
have occurred and be continuing; if and so long as the foregoing proviso is
not satisfied, such proceeds shall be held pursuant to Section 23.01 hereof as
security for the Lessee's obligations hereunder.
(c) Information. If any Additional Insured becomes subject to any
claim covered by any insurance policy maintained pursuant to this Article 13,
the Lessee shall make available any information required by such Additional
Insured in connection with such claim.
Section 13.04. Reports. On or before the Delivery Date and
thereafter upon each subsequent renewal date during the Term, the Lessee's
aviation insurance broker will furnish to the Lessor, the Indenture Trustee
and the Owner Participant a report, stating the types of coverage and limits
carried and maintained on the Aircraft and certifying that such insurance
complies with the terms and conditions of this Lease. The Lessee will cause
its aviation insurance broker to advise the Lessor, the Owner Participant and
the Indenture Trustee in writing promptly of any default in the payment of any
premium and of any other act or omission on the part of the Lessee of which it
has knowledge and which might cause cancellation of all or any part of any
insurance carried by the Lessee with respect to the Aircraft. The Lessee will
cause such insurance broker to agree to advise the Lessor, Indenture Trustee,
and Owner Participant in writing if and when it becomes evident to such broker
that any insurance policy carried and maintained on the Aircraft pursuant to
this Article 13 will not be renewed at the expiration date. The Lessee will
also cause such insurance broker to deliver to the Lessor, the Indenture
Trustee and the Owner Participant, on or prior to the date of expiration of
any insurance policy referenced in a previously delivered certificate of
insurance, a new certificate of insurance, confirming to such parties that
such insurance as certified on the Delivery Date continues in full force and
effect. If the Lessee shall fail to maintain insurance as required, the
Lessor may, at its option, provide such insurance, and in such event, the
Lessee shall, upon demand, reimburse the Lessor as Supplemental Rent, for the
cost of such insurance; provided, however, that no exercise of said option
shall affect the provisions of this Lease, including the provisions that
failure by the Lessee to maintain the prescribed insurance shall constitute a
waiver of any other rights the Lessor may have against the Lessee, or
otherwise constitute an Event of Default.
Section 13.05. Lessor's Insurance. The Lessor may insure the
Airframe or any Engine at its own cost and expense, including insuring the
Aircraft for amounts in excess of the Stipulated Loss Value of the Aircraft,
provided that any insurance so maintained by the Lessor shall not result in a
reduction of coverage or amounts payable under insurance required or permitted
to be maintained by the Lessee under this Article 13 or increase the cost to
the Lessee of maintaining such insurance; provided further, that any insurance
policies of the Lessor insuring the Airframe or any Engine shall provide for a
release to the Lessee of any and all salvage rights in and to the Airframe or
any Engine.
Section 13.06. Self-Insurance. The Lessee may self-insure the risks
required to be insured against by Section 13.01 and Section 13.02 in such
reasonable amounts as are then applicable to other aircraft or engines of the
Lessee of value comparable to the Aircraft, but in no case shall such
self-insurance with respect to all aircraft in the Lessee's fleet in aggregate
exceed an amount equal to the lesser of (i) 50% of the highest replacement
value of any single aircraft in the Lessee's fleet, or (ii) 1.5% of the
average aggregate insured value from time to time of the Lessee's entire
aircraft fleet provided that a standard deductible per occurrence per aircraft
not in excess of the amount customarily allowed as a deductible in the
industry shall be permitted in addition to the above-mentioned self-insurance.
ARTICLE 14
INSPECTION
Section 14.01. Right of Inspection. At reasonable times, and upon
at least five Business Days' prior written notice to the Lessee, the Lessor,
Indenture Trustee or the Owner Participant, or their respective authorized
representatives, may inspect the Aircraft and upon at least 10 Business Days
prior written notice, all Aeronautics Authority-required books and records of
the Lessee and any sublessee relating to the maintenance of the Aircraft and
such Persons shall keep any information obtained thereby confidential and
shall not disclose the same to any Person, except (a) to prospective and
permitted transferees of the Lessor's, the Indenture Trustee's or the Owner
Participant's interest who agree to hold such information confidential, (b) to
the Lessor's, Pass Through Trustee's or the Owner Participant's counsel,
independent insurance advisors or other agents and the Holders who agree to
hold such information confidential, (c) as may be required by any statute,
court or administrative order or decree or governmental ruling or regulation
or (d) as may be necessary for purposes of protecting the interests of any
such Person or for enforcement of this Lease by the Lessor; provided, however,
that any and all disclosures permitted by (c) or (d) above shall be made only
to the extent necessary to meet the specific requirements or needs of the
Persons to whom such disclosures are hereby permitted; any such inspection of
the Aircraft shall be a visual, walk-around inspection of the interior and
exterior of the Aircraft and shall not include opening any panel, bays or the
like without the express consent of the Lessee. Notwithstanding the previous
sentence, the Lessor and the Owner Participant and their respective authorized
representatives shall be entitled to inspect the Aircraft only one time among
themselves during any consecutive twelve month period. Upon receipt by the
Lessee of a written request from the Owner Participant specifying that the
Owner Participant desires to have an authorized representative observe (x) the
next heavy maintenance visit or (y) any "C" Check (or substantially equivalent
successor type of maintenance work) in each case scheduled to be performed on
the Aircraft during the last 18 months of the Term, the Lessee shall cooperate
with the Owner Participant to enable the Owner Participant's representative to
observe such next scheduled heavy maintenance visit or such "C" Check;
provided, that the Owner Participant's authorized representative shall merely
observe such heavy maintenance visit or "C" Check, shall not interfere with or
extend in any manner the normal conduct or duration of the heavy maintenance
visit or "C" Check and shall not be entitled to direct any of the work
performed in connection with such heavy maintenance visit or "C" Check. Any
inspection or other exercise of rights pursuant to this Section 14.01 shall be
made at the sole risk and expense of the Person exercising such inspection or
other rights, and no exercise of such inspection or other rights shall
interfere with the use of the Aircraft by, or the business of, the Lessee or
any sublessee.
Section 14.02. No Obligation to Inspect. Neither the Lessor, the
Indenture Trustee, nor the Owner Participant shall have any duty to make any
inspection pursuant to Section 14.01 and no such party shall incur any
liability or obligation by reason of not making any such inspection.
ARTICLE 15
ASSIGNMENT
Section 15.01. Lessee's Right to Assign. The Lessee shall not, and
shall have no authority or power to assign, convey or sublease any of its
rights under this Lease without the prior written consent of the Lessor except
(i) as otherwise provided in Section 7.02 hereof, or in the case of any
requisition by the Government referred to in Section 7.01 hereof, or (ii) to a
wholly-owned domestic subsidiary of the Lessee which shall be a certificated
Air Carrier. Any such assignment, conveyance or sublease shall in no way
relieve the Lessee from any obligation under this Lease, the Participation
Agreement or the Tax Indemnity Agreement or any other Operative Agreement or
any written agreement of the Lessee entered into in connection with the
transactions contemplated by the Operative Agreements, which shall be and
remain obligations of the Lessee. The Lessor agrees that it will not assign
or convey its right, title and interest in and to this Lease or the Aircraft
except as contemplated by or provided in this Lease, the Trust Agreement, the
Indenture or the Participation Agreement. The terms and provisions of this
Lease shall be binding upon and inure to the benefit of the Lessor and the
Lessee and their respective successors and assigns.
Section 15.02. Citizenship. The Lessee will at all times be a duly
certificated Air Carrier under the Act.
ARTICLE 16
EVENTS OF DEFAULT
Section 16.01. Events of Default. Each of the following events shall
constitute an Event of Default, whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body:
(a) The Lessee shall fail to make any payment of Basic Rent, Renewal
Rent, Stipulated Loss Value, Termination Value, as the case may be, or any
payment pursuant to Section 15.02 of the Participation Agreement or penalty
on the Certificates within five (5) Business Days after the date when due
(except that with respect to any failure to pay Excepted Payments for such
period, such failure shall constitute an Event of Default at the discretion
of the Person to whom such Excepted Payment is payable;
(b) The Lessee shall fail to make any payment of Supplemental Rent
(other than amounts described in clause (a) above within thirty (30) days
after the Lessee has received written notice from the Person entitled to
receive such payment stating that such payment is due (except that with
respect to any failure to pay Excepted Payments for such period, such
failure shall constitute an Event of Default at the discretion of the Owner
Participant);
(c) The Lessee shall fail to procure, carry and maintain insurance
on the Aircraft in accordance with the provisions of Article 13 or such
insurance lapses or is cancelled, provided that no such lapse or
cancellation shall constitute an Event of Default until the earlier of 30
days (seven days or such shorter time as may be standard in the industry
with respect to war risk coverage) after receipt by the Lessor of written
notice of such lapse or cancellation or the date that such lapse or
cancellation is effective as to the Lessor and provided further, that such
failure for a period of not more than 30 days shall not constitute an Event
of Default as long as the Aircraft is insured as required while on the
ground;
(d) The Lessee shall fail to perform or observe any other covenant,
condition or agreement to be performed or observed by it under this Lease,
the Participation Agreement or any other Operative Agreement or any other
written agreement of the Lessee entered into in connection with the
transactions contemplated by the Operative Agreements and such failure
shall continue unremedied for a period of thirty (30) days after the Lessee
shall have received written notice from the Lessor or the Owner Participant
of such failure, provided, that in the event such failure is curable and so
long as (but for no longer than 180 days after such 30 day period) the
Lessee shall have promptly undertaken such cure after receipt of such notice
which undertaking shall be diligently and continuously pursued using the
Lessee's best efforts, such failure shall not constitute an Event of
Default; provided, that failure of the Lessee to maintain the registration
of the Aircraft under the Act pursuant to the Lessee's covenants and
agreement in Section 5.03(b) of the Participation Agreement and in Section
7.01(a) of this Lease, when the lapse of such registration is solely
because the Owner Participant or the Lessor has ceased to be a Citizen of
the United States, shall not constitute a Default or an Event of Default;
(e) An order for relief shall be entered in respect of the Lessee by
a court having jurisdiction in the premises in an involuntary case under
the federal bankruptcy laws as now or hereafter in effect; or if the Lessee
shall consent to the appointment of a custodian, receiver, trustee or
liquidator of itself or of a substantial part of its property; or if the
Lessee is not paying, or shall admit in writing its inability to pay, its
debts generally as they come due or shall make a general assignment for the
benefit of creditors; or if the Lessee shall file, or the Board of
Directors of the Lessee shall authorize the filing of, or grant one or more
persons authority (at their discretion) to make a filing for, a voluntary
petition in bankruptcy or a voluntary petition or an answer seeking
reorganization in a proceeding under any bankruptcy laws (as now or
hereafter in effect) or an answer admitting the material allegations of a
petition filed against the Lessee in any such proceeding; or if the Lessee
shall file, or the Board of Directors of the Lessee shall authorize the
Lessee to, or grant one or more persons authority (at their discretion) to,
seek relief by voluntary petition, answer or consent, under the provisions
of any other or future bankruptcy or other similar law providing for the
reorganization or winding-up of corporations, or providing for an
agreement, composition, extension or adjustment with its creditors;
(f) An order, judgment or decree shall be entered by any court of
competent jurisdiction appointing, without the consent of the Lessee, a
custodian, receiver, trustee, or liquidator of the Lessee or of any
substantial part of its property, or sequestering any substantial part of
the property of the Lessee, or granting any other relief in respect of the
Lessee under the federal bankruptcy laws or other insolvency laws, and any
such order, judgment or decree of appointment or sequestration shall remain
in force undismissed or unvacated for a period of sixty (60) days after the
date of its entry; or
(g) A petition against the Lessee in a proceeding under the federal
bankruptcy law or other insolvency laws (as now or hereafter in effect)
shall be filed and shall not be withdrawn or dismissed within sixty (60)
days, or if, under the provisions of any law providing for reorganization
or winding-up of corporations which may apply to the Lessee, any court of
competent jurisdiction shall assume jurisdiction, custody or control of the
Lessee or of any substantial part of its property and such jurisdiction,
custody or control shall remain in force unrelinquished or unterminated for
a period of sixty (60) days; or
(h) Any representation or warranty made by the Lessee in this Lease
or in the Participation Agreement or in any document or certificate
furnished by the Lessee in connection with or pursuant to this Lease or the
Participation Agreement (except for the Tax Indemnity Agreement) shall at
any time prove to have been incorrect at the time made in any respect
material to the transactions contemplated by this Lease and, if originally
made by the Lessee in good faith, shall remain material and unremedied for
a period of thirty (30) days after the Lessee shall have received written
notice of such misstatement.
ARTICLE 17
REMEDIES
Section 17.01. Remedies Upon Lessee's Default. (a) Remedies
Generally. Upon the occurrence of any Event of Default and at any time after
such occurrence so long as the same shall be continuing, the Lessor may, at
its option, declare this Lease to be in default (except that no such
declaration shall be required in the case of an Event of Default pursuant to
paragraphs (e), (f) or (g) of Section 16.01), and at any time thereafter the
Lessor may do, and the Lessee shall comply with, one or more of the following
with respect to all or any part of the Airframe and the Engines, as the Lessor
in its sole discretion shall elect, to the extent permitted by, and subject to
compliance with, any mandatory requirements of applicable law then in effect:
(i) Demand in writing that the Lessee shall, and upon such written
demand the Lessee shall, at the Lessee's own cost and expense, return
promptly to the Lessor all or such part of the Airframe and the Engines as
the Lessor may demand in the manner and condition required by, and
otherwise in accordance with all of the provisions of, Article 12, or the
Lessor, at its option, may enter upon the premises where such Airframe or
Engines are located and take immediate possession of and remove such
Airframe and Engines (together with any engine which is not an Engine but
is installed on the Airframe, subject to all of the rights of the owner,
lessor, lien holder or secured party of such engine) without the necessity
for first instituting proceedings, or by summary proceedings or otherwise,
all without liability of the Lessor to the Lessee for or by reason of such
entry or taking of possession, whether for the restoration of damage to
property caused by such action or otherwise;
(ii) With or without taking possession thereof, sell or otherwise
dispose of the Airframe or any Engine, at public or private sale and with
or without advertisement or notice to the Lessee, as the Lessor may
determine, and the Lessor may hold the Lessee liable for any installment of
Basic Rent and Renewal Rent due on or before the date of such sale (and, if
Basic Rent or Renewal Rent is payable in arrears, the pro rata portion of
the installment of Basic Rent or Renewal Rent due on the next succeeding
Rent Payment Date in respect of any period commencing on the immediately
preceding Rent Payment Date to the date of such sale), or hold, use,
operate, lease to others or keep idle all or any part of the Airframe or any
Engine as the Lessor, in its sole discretion, may determine, in any such
case free and clear of any rights of the Lessee except as otherwise set
forth in this Article 17, and without any duty to account to the Lessee
with respect to such action or inaction or for any proceeds except to the
extent required by Section 17.01(a)(iv) hereof, in the event the Lessor
elects to exercise its rights under said Section, and in connection with
any sale of the Aircraft or any part thereof pursuant to this Article 17,
the Lessor, the Indenture Trustee, Pass Through Trustee, Holder or the
Owner Participant may bid for and purchase such property;
(iii) Whether or not the Lessor shall have exercised or shall later
at any time exercise any of its rights under Sections 17.01(a)(i) or
17.01(a)(ii) hereof, the Lessor, by written notice to the Lessee specifying
a payment date not earlier than 10 days from the date of such notice, may
demand that the Lessee pay to the Lessor, and the Lessee shall pay to the
Lessor on the payment date specified in such notice, as liquidated damages
for loss of a bargain and not as a penalty (in lieu of the Basic Rent or
Renewal Rent due on Rent Payment Dates occurring after the payment date
specified in such notice), any installment of Basic Rent, Renewal Rent and
any Supplemental Rent due on or before such payment date (and, if Basic
Rent or Renewal Rent is payable in arrears, the pro rata portion of the
installment of Basic Rent or Renewal Rent due on the next succeeding Rent
Payment Date in respect of the period commencing on the Stipulated Loss
Value Determination Date referred to below and ending on the date of such
payment), plus an amount equal to the excess, if any, of the Stipulated
Loss Value for the Aircraft, computed as of the Stipulated Loss Value
Determination Date on or next preceding the payment date specified in such
notice over the actual Fair Market Value of the Aircraft, computed as of
the Stipulated Loss Value Determination Date on or next preceding the
payment date specified in such notice; provided, however, that if (and in
any event prior to the time for payment hereunder) the Lessor is unable
within a reasonable period of time to recover possession of the Aircraft,
or any portion thereof, pursuant to clause (i) above unencumbered by this
Lease and free and clear of all Liens (other than Lessor's Liens), Fair
Market Value of the Aircraft or such portion, shall at the option of the
Lessor to the extent legally enforceable, be zero and after payment in full
by the Lessee of the amount specified above and all other amounts due from
the Lessee under this Lease and the other Operative Agreements, the Lessor
shall promptly transfer (without recourse or warranty other than as to the
absence of the Lessor's Liens) all of its right, title and interest in the
Aircraft or such portion, to the Lessee;
(iv) In the event the Lessor, pursuant to Section 17.01(a)(ii)
hereof, shall have sold the Airframe and/or any Engine, the Lessor, in lieu
of exercising its rights under Section 17.01(a)(iii) hereof, may, if it
shall so elect, demand that the Lessee pay the Lessor, and the Lessee shall
pay to the Lessor, on the date of such sale, as liquidated damages for loss
of a bargain and not as a penalty (in lieu of the Basic Rent or Renewal
Rent or Renewal Rent due after the date on which such sale occurs) any
unpaid Basic Rent or Renewal Rent due on or before the date on which such
sale occurs (and, if Basic Rent or Renewal Rent is payable in arrears, the
pro rata portion of the installment of Basic Rent or Renewal Rent due on
the next succeeding Rent Payment Date in respect of any period commencing
on the Stipulated Loss Value Determination Date referred to below and
ending on the date of such sale), and any Supplemental Rent due on or
before the date on which such sale occurs, plus an amount equal to the
excess, if any, of (A) the Stipulated Loss Value for the Aircraft, computed
as of the Stipulated Loss Value Determination Date next preceding the sale
date, over (B) the net proceeds of such sale (after deduction of all of the
Lessor's costs and expenses of such sale, including, without limitation,
costs of storage, overhaul, maintenance, preparation and transportation of
the Aircraft and brokers' and attorneys' fees) together with interest, to
the extent permitted by applicable law, at the Past Due Rate, on the amount
of such excess from the date of such sale to the date of actual payment by
the Lessee;
(v) Proceed by appropriate court action to enforce the terms of this
Lease or to recover damages for its breach; or
(vi) Terminate or rescind this Lease as to the Airframe or any or all
of the Engines or exercise any other right or remedy which may be available
to the Lessor under applicable law.
(b) Cost of Exercise of Remedies. In addition, the Lessee shall be
liable, except as otherwise provided above, for any and all unpaid Rent due
before, after or during the exercise of any of the Lessor's remedies and for
all reasonable legal fees and other costs and expenses
incurred by the Lessor by reason of the occurrence of any Event of Default or
the exercise of the Lessor's remedies, including, without limitation, all
costs and expenses incurred in connection with the return of the Airframe or
any Engine in accordance with the terms of Article 12 or in placing the
Airframe or Engines in the condition and airworthiness required by such
Article or in connection with any use, operation, maintenance, storage, or
leasing carried out as part of such exercise.
Section 17.02. Cumulative Remedies. Except as otherwise provided, no
remedy referred to in this Article 17 is intended to be exclusive, but each
shall be cumulative and in addition to any other remedy available to the
Lessor at law or in equity; and the exercise or beginning of exercise by the
Lessor of any one or more of such remedies shall not preclude the simultaneous
or later exercise by the Lessor of any or all of such other remedies.
Section 17.03. Waiver. No express or implied waiver by the Lessor
of any Event of Default shall in any way be, or be construed to be, a waiver
of any future or subsequent Event of Default. To the extent permitted by
applicable law, the Lessee waives any rights now or in the future conferred by
statute or otherwise which may require the Lessor to sell, lease or otherwise
use the Airframe or any Engine in mitigation of the Lessor's damages or which
may otherwise limit or modify any of the Lessor's rights or remedies under
this Article 17.
Section 17.04. Lessor's Right to Perform for Lessee. If the Lessee
fails to make any required payment of Rent or fails to perform or comply with
any of its agreements contained in this Lease (other than the Lessee's
obligation to sell the Aircraft to the Lessor pursuant to Article 2), whether
or not such failure shall constitute an Event of Default hereunder, the Lessor
or the Owner Participant may (but shall not be obligated to) make such
payments or perform or comply with such agreement, and the amount of such
payment and the amount of the reasonable costs and expenses of the Lessor or
the Owner Participant incurred in connection with such payment or the
performance of or compliance with such agreement, together with interest (to
the extent permitted by applicable law) at the Past Due Rate from the date of
the making of such payment or the incurring of such costs and expenses by the
Lessor or the Owner Participant, as the case may be, to the date of payment of
such Rent by the Lessee, shall be deemed Supplemental Rent payable by the
Lessee upon demand. No such payment or performance by the Lessor or the Owner
Participant shall be deemed to waive any Default or Event of Default or
relieve the Lessee of its obligations hereunder.
ARTICLE 18
COVENANT OF QUIET ENJOYMENT
Section 18.01. Quiet Enjoyment. So long as no Event of Default
shall have occurred and be continuing, each of the parties hereto covenants
that neither it nor any other person lawfully claiming through it (other than
the holder of a Lien which the Lessee is obligated to discharge pursuant to
Article 6 hereof) shall interfere with the Lessee's right to quietly enjoy the
Aircraft without hindrance or disturbance by it or any such other Person.
ARTICLE 19
FURTHER ASSURANCES; FINANCIAL INFORMATION
Section 19.01. Further Assurances. Promptly upon the execution and
delivery of the Lease, the Lease Supplement, the Indenture, the Indenture
Supplement and the Trust Agreement, the Lessee will cause each such document
to be duly filed for recordation in accordance with the Act and will maintain
the recordation of the Indenture until the Lien of the Indenture shall have
been discharged pursuant to the terms of the Indenture. In addition, the
Lessee will, at the Lessee's own cost and expense, promptly and duly execute
and deliver to the Lessor, the Owner Participant and the Indenture Trustee
such further documents and assurances to carry out the intent and purpose of
this Lease and the Indenture and to establish and protect the rights and
remedies created or intended to be created in favor of the Lessor under this
Lease, and of the Owner Participant under the Operative Agreements, and of the
Indenture Trustee under the Indenture, including, without limitation, the
execution and filing of Uniform Commercial Code financing and continuation
statements, the execution and delivery of supplements and amendments to this
Lease and the Indenture, in recordable form, subjecting to this Lease and the
Indenture any replacement airframe and/or engines delivered by the Lessee
pursuant to Section 11.03 and any Replacement Engine delivered by the Lessee
pursuant to Section 11.04 and the recording and filing of counterparts of this
Lease and the Indenture in accordance with the laws of such jurisdictions as
the Lessor or the Indenture Trustee may from time to time deem advisable.
ARTICLE 20
NET LEASE
Section 20.01. Nature of Lease. (a) The lease of the Aircraft by
the Lessor to the Lessee is a net lease and the Lessee's obligation to pay all
costs and expenses of every character, whether seen or unforeseen, ordinary or
extraordinary, or structural or nonstructural, in connection with the use,
operation, maintenance, repair and reconstruction of the Airframe and each
Engine by the Lessee, including, without limitation, the costs and expenses
particularly set forth in this Lease, it being the intention of the parties
hereto that the obligations of the Lessee shall be absolute and unconditional,
shall be separate and independent covenants and agreements, and shall continue
unaffected unless and until the covenants have been terminated pursuant to an
express provision of this Lease. The obligation to pay Rent shall be absolute
and unconditional and (except as otherwise expressly provided with respect to
Supplemental Rent) shall be paid without notice or demand and such obligation
shall not be affected by any circumstance, including, without limitation:
(i) any set-off (except to the extent set forth in Section 3.05
hereof), counterclaim, recoupment, defense or other right which the Lessee
may have against the Lessor, the Owner Participant, the Indenture Trustee
or anyone else for any reason (including, without limitation, any breach by
the Lessor or the Owner Participant of their respective representations,
warranties, agreements or covenants contained in any of the Operative
Agreements);
(ii) any defect in the title, airworthiness, registration,
eligibility for registration, condition, design, operation, merchantability
or fitness for use of, suitability for a particular purpose of, or any
damage to or loss or destruction of, the Aircraft or any portion thereof,
or any interruption or cessation in the use or possession of the Aircraft
by the Lessee or any sublessee for any reason including, without
limitation, by reason of governmental action;
(iii) any insolvency, bankruptcy, reorganization or similar case or
proceedings by or against the Lessor, the Lessee or any other Person; or
(iv) any other circumstance, happening or event whatsoever, whether
or not unforeseen, whether similar or dissimilar to any of the foregoing.
(b) To the extent permitted by applicable law, the Lessee waives any
and all rights which it may now have or which at any time may have conferred
upon it, by statute or otherwise, to terminate, cancel, quit, rescind or
surrender this Lease, the Airframe, or any Engine or part thereof, other than
in accordance with the terms hereof.
(c) Except as expressly provided herein, each payment of Rent made
by the Lessee shall be final as to the Lessor and the Lessee, and the Lessee
will not seek to return or to recover, abate, suspend, defer or reduce all or
any part of any such payment of Rent from the Lessor or from the Indenture
Trustee for any reason.
ARTICLE 21
SUCCESSOR LESSOR
Section 21.01. Successor Lessor. The Lessee agrees that in the case
of the appointment of any successor trustee for the Lessor pursuant to the
terms of the Participation Agreement, such successor trustee shall, upon
written notice by such successor to the Lessee, succeed to all the rights,
powers and title of the Lessor under this Lease and shall be deemed to be the
Lessor and the owner of the Aircraft for all purposes of this Lease without
the necessity of any consent or approval by the Lessee and without in any way
altering the terms of this Lease or the Lessee's obligations. One such
appointment and designation of a successor trustee shall not exhaust the right
to appoint and designate further successor trustee pursuant to the
Participation Agreement, but such right may be exercised repeatedly so long as
this Lease shall be in effect.
ARTICLE 22
SECURITY FOR LESSOR'S OBLIGATIONS
Section 22.01. Security for Lessor's Obligations to Holders. In
order to secure the indebtedness evidenced by the Certificates, the Indenture
provides, among other things, for the assignment by the Lessor to the
Indenture Trustee of the Trust Indenture Estate, including this Lease and the
Lease Supplement and for the creation of a first mortgage and security
interest in favor of the Indenture Trustee on the Aircraft. The Lessee
consents to and acknowledges such assignment (subject to the reservations and
conditions therein set forth) and the receipt of a copy of the Indenture.
Section 22.02. Lease Subject to Indenture. This Lease shall be
subordinate to the Lien of the Indenture. Notwithstanding the exercise by the
Indenture Trustee of any rights or remedies under or in respect of the
Indenture, the Lessee shall not be relieved of the obligation to perform all
the terms and provisions to be performed by the Lessee under this Lease, and
this Lease shall not terminate or be otherwise affected by reason of any such
exercise of any such rights and remedies unless after an Event of Default
shall have occurred and be continuing this Lease is terminated in respect of
the Aircraft upon the election of the Indenture Trustee in connection with the
exercise of its rights and remedies under the Indenture in respect of the
Aircraft, evidenced by and as stated in written notice of such termination
from the Indenture Trustee to the Lessee.
Section 22.03. Consent of Lessee to Assignment of Lease as Security.
The Lessee hereby accepts and consents to the assignment of this Lease to the
Indenture Trustee and pursuant to the terms of the Indenture, the Indenture
Trustee's rights to receive payments (other than Excepted Payments) due under
this Lease, the right to transfer or assign title to the Aircraft subject to
this Lease, to make all waivers and agreements except as otherwise provided in
the Indenture, to give all notices, consents and releases and to take all
action upon the happening of a Default or Event of Default under this Lease
(except as otherwise specifically provided in the Indenture), or to do any and
all other things whatsoever which the Lessor is or may become entitled to do
under this Lease (except as otherwise provided in the Indenture); all or any
of which rights, obligations, benefits and interests may, pursuant to the
terms of the Indenture, be reassigned or retransferred by the Indenture
Trustee at any time and from time to time (except as otherwise provided in the
Indenture); provided, however, that the Lessor, except to the extent, and for
such time as, it is unable to do so by virtue of the Indenture, shall remain
liable for the performance of all the terms, conditions, covenants and
provisions for which it is obligated under this Lease notwithstanding such
assignment.
ARTICLE 23
SECURITY FUNDS
Section 23.01. Investment of Security Funds. (a) Any amounts
otherwise payable to the Lessee shall be held by the Lessor as security for,
and may be applied by the Lessor against, the obligations of the Lessee under
this Lease during such time as there shall have occurred and be continuing a
Default or Event of Default, and, at such times as there shall not be
continuing a Default or Event of Default, such amounts, net of any amounts
which have been applied by the Lessor against the Lessee's obligations
hereunder, shall be paid to the Lessee. Any amounts which are held by the
Lessor pending payment to the Lessee shall, until paid to the Lessee or
applied against the Lessee's obligations hereunder, be invested by the Lessor,
as directed from time to time, in writing (and in the absence of a written
direction by the Lessee or at any time an Event of Default shall have occurred
and be continuing hereunder, the Lessor shall invest such monies in direct
obligations of the United States of America), by the Lessee and at the expense
and risk of the Lessee, in the following securities (which in the case of
securities referred to in subparagraphs (i) through (iv) of this Section
23.01(a) hereof shall mature within ninety (90) days of the date of purchase):
(i) direct obligations of the United States of America; or
(ii) obligations fully guaranteed by the United States of America; or
(iii) certificates of deposit issued by, or bankers' acceptances of,
or time deposits or a deposit account with, any bank, trust company or
national banking association incorporated or doing business under the laws
of the United States of America or one of its States, having a combined
capital and surplus of at least $500,000,000 and having a rating of "B" or
better from the Thomson Bank Watch; or
(iv) commercial paper rated A-1/P-1 by Standard & Poor's Corporation
and Moody's Investors Service, Inc., respectively (or if neither such
organization shall rate such commercial paper at any time, by any
nationally recognized rating organization in the United States of America)
equal to the highest rating assigned by such rating organization.
(b) At any time any invested funds are distributed to the Lessee,
there shall be promptly remitted to the Lessee any gain (including interest
received) realized as the result of any investment pursuant to Section
23.01(a) hereof (net of any fees, commission and other costs and expenses, if
any, incurred by the Lessor in connection with such investment), unless a
Default or Event of Default shall have occurred and be continuing in which
case such funds shall be applied in the same manner as the principal so
invested. The Lessee shall be responsible for and will promptly pay to the
Indenture Trustee or the Lessor, as the case may be, on demand, the amount of
any loss realized as the result of any such investment (together with any fees,
commissions and other costs and expenses, if any, incurred by the Indenture
Trustee or the Lessor in connection with such investment), such amount to be
disposed of in accordance with the terms of the Indenture or the Lease, as the
case may be.
ARTICLE 24
CONCERNING THE LESSOR
Section 24.01. Lessor's Entry Into Lease. Except as expressly
provided herein, the Lessor and the Lessee agree that this Lease is executed
by _________ Trust Company individually but solely as Owner Trustee under
the Trust Agreement in the exercise of the power and authority conferred and
vested in it as such Owner Trustee, that each and all of the representations,
undertakings and agreements by __________ Trust Company, or for the purpose or
with the intention of binding ____________ Trust Company individually, are
intended to bind only the Lessor's Estate, and that in no case whatsoever
shall __________ Trust Company be personally liable for any loss in respect of
such representations, undertakings and agreements, that actions to be taken
by the Lessor pursuant to its obligation hereunder may, in certain instances,
be taken by the Lessor only upon specific authority of the Owner Participant,
that nothing herein contained shall be construed as creating any liability on
__________ Trust Company, individually or personally, to perform any covenant,
either express or implied, herein, all such liability, if any, being expressly
waived by the Lessee and by each and every person now or hereafter claiming
by, through or under the Lessee except with respect to the gross negligence or
willful misconduct or __________ Trust Company, and that so far as
Trust Company, individually or personally is concerned, the Lessee and any
Person claiming by, through or under the Lessee shall look solely to the
Lessor's Estate for the performance of any obligation under this Lease;
provided, that nothing in this Section 24.01 shall be construed to limit in
scope or substance those representations and warranties of ___________ Trust
Company in its individual capacity set forth in the Participation Agreement.
The term the "Lessor" as used in this Lease shall include any trustee
succeeding _____________ Trust Company as Owner Trustee under the Trust
Agreement. Any obligation of the Lessor hereunder may be performed by the
Owner Participant, and any such performance shall not be construed as
revocation of the trust created by the Trust Agreement. Nothing contained in
this Lease shall restrict the operation of the provisions of the Trust
Agreement with respect to its revocation of the resignation or removal of the
Owner Trustee hereunder.
ARTICLE 25
NOTICES
Section 25.01. Notices. All notices, demands, declarations and other
communications required by this Lease shall be in writing and shall be deemed
received (a) if given by telecopier when transmitted and the appropriate
telephonic confirmation received if transmitted on a Business Day and during
normal business hours of the recipient, and otherwise on the next Business Day
following transmission, (b) if given by certified mail, return receipt
requested, postage prepaid, five Business Days after being deposited in the
United States mails, (c) if given by telex, upon receipt by the party
transmitting the telex of such party's callback code at the end of such telex
(receipt of confirmation in writing not being necessary to the effectiveness
of any telex) and (d) if given by Federal Express service or other means, when
received or personally delivered, addressed:
(a) If to the Lessee, to its office at 2005 Corporate Avenue,
Memphis, Tennessee 38132, Attention: Senior Vice President and Chief
Financial Officer with a copy to Senior Vice President and General Counsel;
telephone (901) 395-3388, facsimile (901) 395-4758; (Telex No. 82-2113,
answer back FEDEX INT MFS), or at such other address as the Lessee shall
from time to time designate in writing to the Lessor, Indenture Trustee and
the Owner Participant;
(b) If to the Lessor or Owner Trustee, to its office at ________,
______________________________, Attention: ____________________________;
telephone ________________, facsimile ____________________; or to
such other address as the Lessor shall from to time designate in
writing to the Lessee and the Indenture Trustee, with a copy to
Owner Participant at the Owner Participant's address as provided in
subsection (c) below;
(c) If to the Owner Participant, to its office at ______________,
______________________________, Attention: ____________________________;
telephone ________________, facsimile ____________________; or to
such other address as the Owner Participant may from time to time designate
in writing to the Lessee and the Indenture Trustee; and
(d) If to the Indenture Trustee, to its office at ______________,
______________________________, Attention: ____________________________;
telephone ________________, facsimile ____________________; or to
such other address as the Indenture Trustee shall from time to time
designate in writing to the Lessor, the Lessee and the Owner
Participant.
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Heading and Captions. All article and section
headings and captions used in this Lease are purely for convenience and shall
not affect the interpretation of this Lease.
Section 26.02. References. Any reference to a specific article or
section number shall be interpreted as a reference to that article or section
of this Lease unless otherwise expressly provided.
Section 26.03. APPLICABLE LAW. THIS LEASE SHALL IN ALL RESPECTS BE
GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK AND IS BEING DELIVERED IN NEW YORK.
Section 26.04. Severability. Any provision of this Lease which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 26.05. No Oral Modification. The terms and provisions of
this Lease may not be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought. Any such change,
waiver, discharge or termination is also subject to the provisions of Article
13 of the Indenture.
Section 26.06. Agreement as Chattel Paper. To the extent that this
Lease constitutes chattel paper (as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction), no security
interest in this Lease may be created through the transfer or possession of
any counterpart other than the original counterpart, which shall be identified
as counterpart No. 1 and containing the receipt executed by the Indenture
Trustee on its signature page.
Section 26.07. Counterparts and Effective Date. This Lease may be
executed in any number of counterparts, each of which shall be an original
(except that only the counterpart bearing the receipt executed by the
Indenture Trustee shall be the original for purposes of perfecting a security
interest therein as chattel paper under the Uniform Commercial Code), but all
of which taken together shall constitute one and the same instrument and any
of the parties hereto may execute this Lease by signing any such counterpart.
Section 26.08. Public Release of Information. Provided no Event of
Default shall have occurred and be continuing, each party shall in each
instance obtain the prior written approval of each party concerning the exact
text and timing of news releases, articles and other informational releases to
the public media concerning this Lease.
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties. It is the intent of the
parties to this Lease that for tax purposes this Lease will be a true lease,
that the Owner Participant (through its interest in the Lessor) shall at all
times be considered to be the owner of the Aircraft which is the subject of
this Lease and that this Lease conveys to the Lessee no right, title or
interest in the Aircraft except as a lessee.
Section 27.02. Section 1110 Compliance. Notwithstanding any
provision herein or elsewhere contained to the contrary, it is understood and
agreed among the parties hereto that the transactions contemplated by this
Agreement are expressly intended to be, shall be and should be construed so as
to be, entitled to the full benefits of Section 1110 of the Bankruptcy Code
and any successor provisions thereof.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Lease to be duly executed as of the date first above written.
LESSOR: _______________________________,
except as expressly provided herein,
not in its individual capacity
but solely as Owner Trustee
By: ______________________________________________
Name:
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By: _______________________________________________
Name:
Title: Vice President and Treasurer
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements referred to below, unless otherwise
defined in an Operative Agreement or the context thereof shall otherwise
require. In the case of any conflict between the provisions of this Schedule
and the provisions of any Operative Agreement, the provisions of such
Operative Agreement shall control the construction of such Operative Agreement.
[All other terms used in the Indenture that are defined in the Trust
Indenture Act (as defined below) or the Securities Act (as defined below) have
the meanings assigned to such terms in the Trust Indenture Act or the
Securities Act as in force on the date of the Indenture, except as otherwise
expressly provided or unless the context requires.](1)
- ------------
(1) To be used for a qualified Indenture.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Act or Federal Aviation Act. The Federal Aviation Act of 1958, as
amended and in effect, on the date of the Lease or as subsequently amended, or
any successor or substituted legislation at the time in effect and applicable,
and the regulations promulgated pursuant thereto.
Aeronautics Authority. As appropriate, the Federal Aviation
Administration and/or the Administrator of the Federal Aviation
Administration, any successor to the former United States Civil Aeronautics
Board, or any person, governmental department, bureau, commission or agency
succeeding to the functions of any of the foregoing.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership or voting securities or by contract
or otherwise.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person shall be supplemented by a further payment to
such Person so that the sum of the two payments, after deduction of all Taxes
resulting from the receipt or accrual of such payments, shall be equal to the
payment received or deemed to have been received. In the case of amounts
payable to the Lessor, the Owner Participant, or any corporate affiliate of
the Owner Participant, it shall be presumed that such Person is at all times
subject to Federal income tax at the maximum marginal rate generally
applicable to corporations from time to time.
Air Carrier. Any air carrier which is a United States "domestic air
carrier" as defined in Part 121 of the Federal Aviation Regulations, and any
"foreign air carrier" (as defined in the Act) as to which there is in force a
permit granted under Section 402 of the Act.
Aircraft. The Airframe to be sold by the Lessee to the Owner Trustee
pursuant to the Participation Agreement and leased under the Lease (or any
permitted substitute Airframe) together with the _____ Engines (or any
Replacement Engine) whether or not any of such initial or Replacement Engines
may from time to time be installed on such Airframe or may be installed on any
other airframe or on any other aircraft, including any aircraft substituted
pursuant to Section 11.03 of the Lease. Prior to delivery of the initial
Lease Supplement, references in the Operative Agreements (including Section
3.05 of the Participation Agreement) to the Aircraft shall mean the
__________________ airframe bearing FAA Registration Number N_____ and
Manufacturer's serial number _____, together with
_________________________________ engines bearing Manufacturer's serial numbers
___________________.
Airframe. The ________________________ aircraft (excluding the
Engines or engines from time to time installed thereon) leased by Lessor to
Lessee pursuant to the Lease and the Lease Supplement and having the United
States FAA Registration Number and manufacturer's serial number specified in
the Lease Supplement, including (i) all Parts so long as the same shall be
incorporated or installed in or attached to such Airframe, or so long as title
to any such Parts shall remain vested in Lessor in accordance with the terms
of Section 8.01(b) of the Lease after removal from such Airframe, and (ii) any
replacement airframe which may be substituted pursuant to Section 11.03 of the
Lease.
Ancillary Agreements. Any written agreement of the Lessee entered
into on the Delivery Date or at any time thereafter in connection with the
transaction contemplated by the Operative Agreements or the Original
Agreements, in each case as amended from time to time.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant and Lessee on the Delivery Date pursuant to Section
4.02(j) of the Participation Agreement.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Commencement Date and ending at the end of the day on the day immediately
preceding the date _________ years from the Commencement Date, or such earlier
date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Bills of Sale. Collectively, the FAA Bills of Sale for the Aircraft,
an additional full warranty bill of sale covering the Aircraft (and
specifically referring to each Engine) executed by the Lessee as owner of the
Aircraft in favor of the Owner Trustee and dated the Delivery Date and an
additional full warranty bill of sale covering the Aircraft executed by the
Manufacturer in favor of Lessee.
Burdensome Indemnity Payment. A Loss, as defined in the Tax Indemnity
Agreement, which causes the aggregate net present value of all Losses paid or
payable by the Lessee as of the determination date discounted semi-annually at
the Debt Rate to the date of determination to exceed ___% of the Purchase
Price.
Business Day. Any day other than a Saturday, Sunday or other day on
which commercial banking institutions in __________, ________, ______________,
____, New York, New York, ________________________ or Memphis, Tennessee are
authorized or required by law to close.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
199_-[SERIES NAME]), issued by the Owner Trustee pursuant to the Indenture and
any certificate issued in exchange therefor or replacement thereof pursuant to
the Indenture.
Change in Tax Law. Any change to the Code or the Treasury regulations
promulgated thereunder or the publication of any revenue ruling, revenue
procedure or any informational release by the Internal Revenue Service or the
Department of Treasury, provided that the Owner Participant or the Lessee has
notified the other parties of such change in writing prior to the Delivery
Date.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Citizen of the United States. A citizen of the United States as
defined in Section 101(16) of the Act, or any analogous part of any successor
or substituted legislation or regulation at the time in effect.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, references to the Code shall
mean the Internal Revenue Code of 1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.12 of the Indenture.
Commencement Date. ________________________.
Commission. The Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution and delivery of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement means the Consent
and Agreement dated as of ____________, executed by the Manufacturer, as the
same may be amended, modified or supplemented from time to time.
Cut-Off Date. ___________,19__.
Corporate Base Rate. The rate announced from time to time by
________ as its Corporate Base Rate.
Debt Portion. The amount specified as such on Schedule I to the
Participation Agreement.
Debt Rate. The average weighted rate of interest on the Certificates
issued pursuant to the Indenture.
Default. Any event or condition, which, with the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
Delayed Delivery Notice. A certificate signed by a Responsible
Officer of the Lessee (i) requesting that the Pass Through Trustee temporarily
delay purchase of the Certificates to a date later than the Pass Through
Closing Date, (ii) stating the amount of the purchase price of each such
Certificate and the aggregate purchase price of all such Certificates, (iii)
stating the reasons for such delay and (iv) either (1) setting or resetting
the Delivery Date (which shall be on or prior to the Cut-Off Date), or (2)
indicating that such Delivery Date will be set by subsequent written notice
not less than three Business Days prior to such new Delivery Date (which shall
be on or prior to the applicable Cut-off Date).
Delivery Date. The date on which the Aircraft is to be delivered and
sold by the Lessee to the Lessor and leased by the Lessor to the Lessee under
the Lease, which date is also the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
Depository. The depository of the Registered Global Certificate, if
any, representing the Equipment Trust Certificates issued under the Indenture
and any successor to such depository appointed by the Company pursuant hereto.
Such depository initially shall be Depository Trust Company, a New York
corporation.
Eligible Deposit Account. Either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution with corporate trust powers
organized under the laws of the United States or any state thereof, or the
District of Columbia, and whose deposits are insured by the Federal Deposit
Insurance Corporation, provided that such institution also must have a
combined capital and surplus of at least $100,000,000 and a rating of A or
better from the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the ______________________ engines listed by its
manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Sections 7.02(a)(vii), 10.03, 11.03, 11.04 or 12.02 of the Lease,
together with all Parts incorporated or installed in or attached to any such
Engine and all Parts removed from any such Engine so long as title to such
Parts shall remain vested in the Lessor in accordance with the terms of
Article 8 of the Lease after removal from such Engine. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, all Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent and Agreement. The Engine Consent and Agreement dated
as of ________, executed by the Engine Manufacturer, as the same may be amended
from time to time.
Engine Manufacturer. ________________________, a ________
corporation.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 180 days (or in any event if such loss is continuing
on the last day of the Term) due to theft or disappearance, or (B) for a
period in excess of 60 days (or in any event if such loss is continuing on the
last day of the Term) due to the destruction, damage beyond economic repair or
rendition of such property permanently unfit for normal use by the Lessee for
any reason whatsoever; (ii) any damage to such property which results in an
insurance settlement with respect to such property on the basis of a total
loss, or constructive or compromised total loss; (iii) (x) condemnation,
confiscation or seizure of, or requisition of title to such property, or (y)
requisition of use of such property (A) by a foreign government or
instrumentality or agency thereof, or any purported government or
instrumentality or agency thereof, for a period in excess of 180 days, or (B)
by the Government for a period extending beyond the Term, provided that no
Event of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of up to six months in the event that the Aircraft,
the Airframe or any Engine is requisitioned by the Government pursuant to an
activation as part of the Civil Reserve Air Fleet Program, as such term is
defined in Section 7.02(a)(iv) of the Lease; and (iv) as a result of any law,
rule, regulation, order or other action by the Aeronautics Authority or other
governmental body having jurisdiction, the use of the Aircraft or Airframe in
the normal course of air transportation of cargo shall have been prohibited by
virtue of a condition affecting all aircraft of the same type for a period of
eighteen (18) consecutive months, unless the Lessee, prior to the expiration
of such eighteen month period, shall be diligently carrying forward all steps
which are necessary or desirable to permit the normal use of the Aircraft or
Airframe or, in any event, if such use shall have been prohibited for a period
of two (2) consecutive years or for a period extending beyond the end of the
Term, unless the Lessee, prior to the expiration of such two (2) year period
shall have conformed at least one __________________ aircraft (but not
necessarily the Aircraft or the Airframe) to the requirements of any such law,
rule, regulation, order, or other action and shall have commenced regular
commercial use and shall be diligently carrying forward, on a
non-discriminatory basis, all steps necessary or desirable to permit the
normal use of the Aircraft by the Lessee; provided, that if there is a
conflict between the operation of clause (iv) above and Section 12.05 of the
Lease (by reference to Section 12.04(ix) thereof), such Section 12.05 of the
Lease shall control. The date of such Event of Loss shall be the date of (i)
loss of such property or its use for a period in excess of 180 days due to
theft or disappearance, or loss for a period in excess of 60 days due to
damage beyond economic repair or loss of use of the Airframe because of
requisition for use for a period in excess of 180 days (or shorter period due
to insurance settlement), (ii) an insurance settlement on the basis of total
loss with respect to such property, (iii) condemnation, confiscation, seizure
or requisition of title, or (iv) prohibition from usage for the periods
described in clause (iv) above. An Event of Loss with respect to the Aircraft
shall be deemed to have occurred if any Event of Loss occurs with respect to
the Airframe.
Excepted Payments. Collectively, (i) all right, title and interest
of the Owner Participant or the Owner Trustee in, to and under the Tax
Indemnity Agreement and any moneys due or to become due under the Tax
Indemnity Agreement and payments of Supplemental Rent or other payments by the
Lessee in either case in respect of the Tax Indemnity Agreement, (ii)
indemnity payments and interest thereon and other amounts payable by the
Lessee to the Owner Participant or to the Trust Company or any of their
respective Affiliates, successors, assigns, directors, officers, employees,
agents or servants pursuant to Article 7 or 8 of the Participation Agreement
or any corresponding payment of Supplemental Rent under the Lease; (iii)
proceeds of public liability insurance in respect of the Aircraft payable to
the Owner Participant or Trust Company, or any of their Affiliates, successors
or assigns, as a result of insurance claims made, or losses suffered, by, or
amounts in respect of such indemnities paid for the benefit of, the Owner
Participant or the Trust Company either pursuant to the Lease (which shall
include proceeds of any self-insurance by the Lessee) or maintained by the
Trust Company or the Owner Participant and not required to be maintained under
the Lease; (iv) proceeds of any insurance in respect of the Aircraft which is
separately acquired and paid for by the Owner Participant (directly or through
the Owner Trustee) or the Lessor in accordance with Section 13.05 of the
Lease; (v) indemnity payments payable by the Owner Participant to the Trust
Company pursuant to Section 6.01 of the Trust Agreement; (vi) Transaction
Costs or other expenses paid or payable by the Lessee to, or for the benefit
of, the Owner Trustee, Trust Company or the Owner Participant pursuant to
Section 9.01 of the Participation Agreement, Section 3.02(b) of the Lease and
Section 2.02 of the Participation Agreement; (vii) the right to enforce, and
the proceeds of any such enforcement of, any right to receive the proceeds of
any of the amounts referred to in clauses (i) through (vi) above and (viii)
any payments in respect of interest to the extent attributable to the payments
referred to in clauses (i) through (vii) above.
Expense and Expenses. Have the meaning specified in Section 8.01(a)
of the Participation Agreement.
FAA Bills of Sale. The bill of sale for the Airframe on AC Form
8050-2, or such other form as may be approved by the Aeronautics Authority
executed by the Lessee in favor of the Lessor and dated the Delivery Date and
the bill of sale for the Airframe on AC Form 8050-2, or such other form as may
be approved by the Aeronautics Authority executed by the manufacturer in favor
of the Lessee.
Fair Market Renewal Term. One or more terms of one or more years,
but not to exceed ____ years in the aggregate and which term(s) shall
immediately follow the end of the Basic Term or the Fixed Renewal Term with
respect to which the Lessee has exercised its option to renew the Lease
pursuant to Section 4.01(a)(B) thereof.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. In such determination, it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease. Fair Market Rental shall be determined in
accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell. In such determination it shall be assumed that the
Aircraft is in the condition required under the Lease in the case of return of
the Aircraft pursuant to Article 12 of the Lease. Fair Market Value shall be
determined in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration and FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Fixed Renewal Rental. An amount equal to 50% of the average
semiannual payments of Basic Rent during the Basic Term as such payments may
be adjusted pursuant to Section 3.04 of the Lease.
Fixed Renewal Term. Up to ____ renewal terms, each term to be not
less than ____ year, but not more than _____ years in the aggregate.
Government. The United States of America or an agency or
instrumentality thereof.
Holder. As of any particular time, the person in whose name a
Certificate shall be registered.
Indebtedness of any Person means at any time, without duplication,
(i) all obligations of such Person for borrowed money or the deferred purchase
price of property, or evidenced by bonds, debentures, notes or other similar
instruments, or arising under leases that are properly capitalized under
generally accepted accounting principles applicable to such Person and (ii)
all guarantees by such Person of such obligations described in clause (i)
above of third parties.
Indemnitee. Each of the Owner Trustee, in its individual capacity
and as trustee, the Owner Participant, the Original Loan Participant, the
Indenture Trustee, in its individual capacity and as trustee, and any
successor (including any trustee which may succeed to the Lessor's interest
under the Lease), and any Affiliate, assign, officer, director, employee,
agent and servant of any of the foregoing, the Lessor's Estate and the Trust
Indenture Estate. Neither the Certificate Holder nor any holder of a Pass
Through Certificate shall be deemed to be an Indemnitee.
Indenture. The Trust Indenture and Security Agreement, dated as of
___________, 199_, as amended and restated as of _____________, 199_, between
the Lessor and the Indenture Trustee and the Indenture Supplement and any
amendment or supplement hereto or thereto from time to time entered into.
Indenture Default. Any event or condition, which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. The Participation Agreement, the Trust Agreement
(including any Trust Agreement Supplements), the Lease (including any Lease
Supplements), the Indenture (including any Indenture Supplements), the
Certificates, the Purchase Agreement Assignment, the FAA Bills of Sale, the
Consent and Agreement and the Engine Consent and Agreement.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Supplement. Any Indenture Supplement, substantially in the
form of Exhibit A to the Indenture, entered into between the Indenture Trustee
and the Owner Trustee, which Indenture Supplement shall incorporate by
reference the provisions of the Indenture including any amendments entered
into subsequent to the Delivery Date.
Indenture Trustee. _______________________, a national banking
association, not in its individual capacity but solely as Indenture Trustee
under the Indenture and each other Person which may from time to time be
acting as successor trustee under the Indenture.
Indenture Trustee's Liens. Any Lien on the Trust Indenture Estate
resulting from (i) claims against the Indenture Trustee not related to the
administration of the Trust Indenture Estate or any transactions pursuant to
the Indenture or any document included in the Trust Indenture Estate or (ii)
any act or omission of the Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements or is in violation of
any of the terms of the Operative Agreements.
Independent Appraisal. An appraisal conducted pursuant to Section
4.03 of the Lease.
Independent Investment Banker. An independent investment banking
institution of national standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests, or any material
indirect financial interest, in the Lessee or any Affiliate of the Lessee, and
is not connected with the lessee or any Affiliate of the Lessee, as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions; provided, that if the Indenture Trustee shall
not have received written notice of such an appointment at least 10 days prior
to the Prepayment Date or if an Event of Default shall have occurred and be
continuing, "Independent Investment Banker" shall mean such an institution
appointed by the Indenture Trustee.
Interest Payment Date means each _________ and ________ beginning with
__________, 199_; provided, that if any such day is not a Business Day, the
relevant Interest Payment Date shall be the next succeeding Business Day.
Interim Term. The period commencing on the Delivery Date and ending
at the end of the day immediately preceding the Commencement Date.
Invoice. The invoice for the Aircraft given by the Lessee to the
Lessor.
Lease. The Lease Agreement dated as of __________, 199_, entered
into by the Lessor and the Lessee and the Lease Supplement and any amendment or
supplement hereto or thereto from time to time entered into.
Lease Supplement. Any Lease Supplement, substantially in the form of
Exhibit A to the Lease, entered into between the Lessor and the Lessee for the
purpose of leasing the Aircraft pursuant to the terms of the Lease, which
Lease Supplement shall incorporate by reference the provisions of the Lease
including any amendments or supplements entered into subsequent to the
Delivery Date.
Lessee. Federal Express Corporation, a Delaware corporation, and its
successors and assigns in its capacity as lessee.
Lessor. __________ Trust Company, a ________ banking corporation,
not in its individual capacity except as otherwise expressly stated, but
solely as Owner Trustee under the Trust Agreement, and its successors and
assigns.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Bills of Sale, any warranty with respect
to the Airframe and the Engines, all amounts of Basic Rent and Supplemental
Rent, including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee for its own
account or in its individual capacity, the Owner Participant or any Holder or
the Indenture Trustee) and requisition, indemnity or other payments of any
kind for or with respect to the Aircraft (except amounts owing to the Owner
Participant, to the Indenture Trustee, to the Owner Trustee in its individual
capacity or any Holder, or to any of their respective directors, officers,
employees and agents pursuant to Articles 7 and 8 of the Participation
Agreement). Notwithstanding the foregoing, "Lessor's Estate" shall not include
any Excepted Payment.
Lessor's Liens. Liens on the Lessor's Estate or the Trust Indenture
Estate arising as a result of (i) claims against the Lessor, in its individual
capacity or as Owner Trustee, or the Owner Participant, in each case not
related to the transactions contemplated by the Operative Agreements, (ii)
acts or omissions of the Lessor in its individual capacity or as Owner
Trustee, and, in the case of the Lessor in its individual capacity, arising
from its gross negligence or willful misconduct either not related to the
transactions contemplated by or expressly prohibited under the Operative
Agreements and any act or omission of the Owner Participant which is not
related to the transactions contemplated by the Operative Agreements or is in
violation of any of the terms of the Operative Agreements, (iii) Taxes or
Expenses imposed against the Lessor, in its individual capacity or as Owner
Trustee, Owner Participant, Lessor's Estate or the trust created by the Trust
Agreement which are not indemnified against by the Lessee pursuant to the Tax
Indemnity Agreement or the Participation Agreement, or (iv) claims against the
Lessor or the Owner Participant arising from the voluntary transfer by the
Lessor or the Owner Participant of its interests in the Aircraft other than a
transfer of the Aircraft pursuant to Section 4.02(a) or Articles 10 or 11 of
the Lease and other than a transfer pursuant to the exercise of the remedies
set forth in Article 17 of the Lease.
Letter of Representations. A letter from the Company and the Owner
Trustee to, and accepted by, the Depository, as such letter may be modified or
supplemented, or any successor letter thereto.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Losses. Has the meaning specified in Section 15.02(a) of the
Participation Agreement.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% in aggregate unpaid principal
amount of all Certificates outstanding as of such date excluding for purposes
of this definition any Certificates held by (i) the Owner Participant unless
all Certificates then outstanding shall be held by the Owner Participant, (ii)
by the Lessee, (iii) by the Indenture Trustee or (iv) by any Affiliate of
either.
Make-Whole Premium. With respect to each Certificate to be prepaid
pursuant to Sections 6.02(ii), 6.02(iv) and 6.02(v) of the Indenture an amount
determined as of the day before the applicable Prepayment Date which an
Independent Investment Banker determines to be equal to an excess of (i) the
present values of all remaining scheduled payments of such principal amount or
portion thereof and interest thereon (excluding interest accrued from the
immediately preceding Payment Date to such Prepayment Date) to the Maturity of
such Certificate in accordance with generally accepted financial practices
assuming a 360-day year consisting of twelve 30-day months at a discount rate
equal to Treasury Yield, all as determined by the Independent Investment
Banker over (ii) the unpaid principal amount of such Certificate.
Manufacturer. _____________________________, a ________ corporation.
Maturity. With respect to any Certificate, the date on which the
principal amount of such Certificate is due and payable.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Basic Rent set forth in Schedule II of the Lease, discounted
at a rate per semi-annual period equal to (a) the Debt Rate as of the date of
determination divided by (b) two.
Non-U.S. Person. Any Person other than (i) a citizen or resident of
the United States, as defined in Section 7701(a)(30) of the Code (for purposes
of this definition, the "United States"), (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
any political subdivision thereof or therein, or (iii) any estate or trust
that is subject to United States federal income taxation regardless of the
source of its income.
Obsolete Parts. Parts which the Lessee deems obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate means a certificate signed by a Responsible
Officer of the Owner Trustee or the Lessee, as the case may be, delivered to
the Indenture Trustee. Each such certificate shall include the statements
provided for in Section 15.07.
Operative Agreements. The Participation Agreement, the Trust
Agreement, the Bills of Sale, the Lease, the Lease Supplement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
Purchase Agreement Assignment, the Engine Consent and Agreement, the Pass
Through Agreement and the Tax Indemnity Agreement, each as amended from time
to time.
Opinion of Counsel means a written opinion of legal counsel, who in
the case of counsel (a) for the Lessee may be (i) an attorney employed by the
Lessee who is generally empowered to deliver such written opinions, (ii) Davis
Polk & Wardwell or a successor firm or (iii) other counsel designated by the
Lessee and reasonably satisfactory to the Indenture Trustee, (b) for the Owner
Trustee, may be (i) Potter Anderson & Corroon or (ii) other counsel designated
by the Owner Trustee and reasonably satisfactory to the Indenture Trustee and
(c) for the Indenture Trustee, may be (i) Powell, Goldstein, Frazer & Murphy
or (ii) other counsel designated by the Indenture Trustee.
Owner Participant. ____________________________, a __________
corporation, and any successor thereto, and any person to which Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Trustee. __________ Trust Company, a ________ banking
corporation, not in its individual capacity except as otherwise expressly
stated, but solely as Owner Trustee under the Trust Agreement, and its
successors and assigns.
Owner's Economic Return. The Owner Participant's anticipated
after-tax yield and aggregate after-tax cash flow during the Interim Term and
the Basic Term utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and assumptions as
were utilized by the Owner Participant in determining Basic Rent, Stipulated
Loss Value and Termination Value percentages, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement, dated as of
___________, 199_ among the Lessee, the Owner Trustee not in its individual
capacity except as otherwise expressly stated therein, but solely as trustee,
the Owner Participant, the Pass Through Trustee, solely as pass through
trustee, and the Indenture Trustee in its individual capacity and as trustee
as amended, modified or supplemented, or the terms thereof waived.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine and, so long as title
thereto shall remain vested in the Lessor in accordance with the terms of
Article 8 of the Lease, after removal from the Airframe or Engines.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
___________, 199_ between the Lessee and the Pass Through Trustee, as such Pass
Through Agreement may be modified, supplemented or amended from time to time in
accordance with the provisions thereof.
Pass Through Certificates. Any of the 199_ Pass Through Certificates,
Series ___ or 199_ Pass Through Certificates, Series ___, in each case as
issued by the related Pass Through Trust; and "Pass Through Certificates"
means all of the Pass Through Certificates issued by each of the Pass Through
Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriter pursuant to the Underwriting
Agreements takes place.
Pass Through Trust. The Federal Express Pass Through Trust,
199_-____ or Federal Express Pass Through Trust 199_-_, in each case formed
pursuant to the related Series Supplement in accordance with the Pass Through
Agreement; and "Pass Through Trusts" means both of such Pass Through Trusts.
Pass Through Trustee. ________________, a national banking
association, in its capacity as Pass Through Trustee under the Pass Through
Agreement and each Pass Through Trust, and its successors and assigns as Pass
Through Trustee thereunder.
Past Due Rate. At any time a rate of interest per annum equal to __%
per annum plus the Debt Rate.
Paying Agent has the meaning set forth in Section 3.04 of the
Indenture.
Payment Date. Each _______ and ___________, commencing _____________,
199_, thereafter until all Certificates have been paid in full.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a ) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local, foreign
or any agency, instrumentality, division or body thereof).
Prepayment Date. The meaning specified in Section 6.02 of the
Indenture.
Prepayment Price. The meaning specified in Section 6.02(b) of the
Indenture.
Proposed Termination Date. The proposed date of termination of the
Lease as specified by the Lessee in its notice given pursuant to Section 10.01
thereof.
Purchase Agreement. The Purchase Agreement, dated as of
_____________, between the Manufacturer and the Lessee relating to the
purchase by the Lessee of the Aircraft, as originally executed or as modified,
amended or supplemented in accordance with the terms thereof, but only insofar
as the foregoing relates to the Aircraft.
Purchase Agreement Assignment. The Purchase Agreement Assignment
dated as of _____, executed by the Lessee and the Owner Trustee.
Purchase Option Date. ______________________.
Purchase Option Price. The amount to be paid by Lessee to Lessor on
the Purchase Option Date pursuant to Section 4.02(a)(B) of the Lease, which
amount is set forth in the Appraisal.
Purchase Price. Has the meaning specified in Section 2.01(b) of the
Participation Agreement.
Record Date. As used with respect to any Interest Payment Date
(except a date for payment for defaulted interest), __________ for __________
Interest Payment Dates and _________ for ____________ Interest Payment Dates,
whether or not such date is a Business Day.
Recourse Amount. Has the meaning specified in Section 14.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 14.01 of the Participation Agreement.
Register has the meaning set forth in Section 3.02 of the Indenture.
Registered Global Certificate. The Equipment Trust Certificate, if
any, issued to the Depository in accordance with Section 2.12 of the Indenture
and bearing the legend prescribed in Exhibit B to the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. Any of the Fixed Renewal Terms or Fair Market Renewal
Terms which immediately follow the end of the Basic Term with respect to which
the Lessee has exercised its option to renew the Lease pursuant to Section
4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. Each _________ and __________, commencing
___________, 199_, and continuing thereafter during the Term.
Replacement Engine. A ______________________ ______ engine (or an
engine of the same or another manufacturer of the same or of equal or greater
value, and utility), which shall have been substituted for an Engine pursuant
to Sections 7.02(a)(vii), 10.03, 11.03 11.04, or 12.02 of the Lease and leased
pursuant to the Lease, together with all Parts relating to such engine.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement) or the Indenture Trustee, any officer in its
Corporate Trust Administration Department designated by such person to perform
obligations under the Operative Agreements, and with respect to any other
party, any corporate officer or other employee of a party who, in the normal
performance of his operational responsibilities, with respect to the subject
matter of any covenant, agreement or obligation of such party pursuant to any
Operative Agreement, would have responsibility for and knowledge of such
matter and the requirements of any Operative Agreement with respect thereto.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
Securities Act. The Securities Act of 1933, as amended.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Series Supplement. The Series Supplement 199_-_ to be executed and
delivered by the Lessee and the Pass Through Trustee or the Series Supplement
199_-_ to be executed and delivered by the Lessee and the Pass Through
Trustee, in each case as such Series Supplement may be modified, supplemented
or amended from time to time in accordance with the provisions thereof and
"Series Supplements" means both of such Series Supplements.
Significant Expenditure. Has the meaning specified in Section
4.02(a)(D) of the Lease.
Sinking Fund Payment Date. __________________
Sinking Fund Payment Price. _________________
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Specified Investments. Shall mean (a) direct obligations of the
United States of America or obligations fully guaranteed by the United States
of America; (b) commercial paper rated A-1/P-1 by Standard & Poor's Ratings
Group and Moody's Investors Service, Inc., respectively or, if such ratings
are unavailable, rated by any nationally recognized rating organization in the
United States equal to the highest rating assigned by such rating
organization; (c) overnight federal funds transactions with members of the
Federal Reserve Systems arranged by federal funds brokers; and (d) overnight
repurchase agreements with respect to the securities described in clause (a)
above entered into with an office of a bank or trust company which is located
in the United States of America of any bank or trust company which is
organized under the laws of the United States or any state thereof and has
capital surplus and undivided profits aggregating at least $500 million.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Basic Term, the amount determined by multiplying the Purchase
Price by the percentage set forth in Schedule III of the Lease under the
heading "Stipulated Loss Value Factors" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with Basic Rent due and owing through the date of payment of
Stipulation Loss Value, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Factors."
Supplemental Rent. All amounts, liabilities and obligations which
the Lessee assumes or agrees to pay under the Lease or under the Participation
Agreement or Tax Indemnity Agreement or any other Ancillary Agreement to the
Lessor or others, including, without limitation, payments of Stipulated Loss
Value and amounts calculated by reference to Termination Value and any other
amounts due on the Certificates pursuant to the Indenture, and all amounts
required to be paid by Lessee under the agreements, covenants and indemnities
contained in the Lease or in the Participation Agreement, but excluding Basic
Rent or the Fixed Renewal Rental.
Tax. Shall have the meaning set forth in Section 7.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement, dated as of
___________, 199_, between the Lessee and the Owner Participant, as from time
to time modified, amended or supplemented pursuant to its applicable
provisions.
Term. The Interim Term and the Basic Term of the lease for the
Aircraft under the Lease and, if renewed pursuant to Section 4.01 of the
Lease, each Renewal Term for the Aircraft for which the Lease is renewed, or
such earlier date on which the Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during the Basic Term that is
on or after _________________.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factors" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with Basic Rent due and owing through the date of payment of any amount
calculated by reference to Termination Value, at least sufficient to pay in
full as of such date of payment of the aggregate unpaid principal amount of
and accrued interest on the Certificates outstanding on such date of payment.
Transaction Costs. All of the documented costs and expenses incurred
by the Lessee, the Owner Trustee, the Underwriters, the Indenture Trustee and
the Participants as contemplated by Section 9.01(a) of the Participation
Agreement.
"Treasury Yield". (i) In the case of a Certificate having a Maturity
within one year after the Prepayment Date the average yield to maturity on a
government bond equivalent basis of the applicable United States Treasury Bill
due the week of Maturity of such Certificate and (ii) in the case of a
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the Lessee) corresponding
in maturity to such Certificate (or, if there is no corresponding maturity,
an interpolation of maturities by the Independent Investment Banker), in each
case determined by the Independent Investment Banker selected to determine the
Make-Whole Premium based on the bid price as of 10:00 a.m. and 2:00 p.m. New
York time, on the second Business Day preceding the Prepayment Date.
Trust Agreement. The Trust Agreement, dated as of _________, 1992,
between the Owner Participant and the Owner Trustee in its individual
capacity, as from time to time modified, amended or supplemented pursuant to
its applicable provisions and in accordance with the Operative Agreements.
Trust Company. __________ Trust Company, a ________ banking
corporation, in its individual capacity and not as Owner Trustee, and its
successors under the Trust Agreement, in their respective individual
capacities and not as Owner Trustees.
[Trust Indenture Act. Except as otherwise provided in Section 4.04,
13.01 and 13.08 of the Indenture, the Trust Indenture Act of 1939, as amended,
as in force on the date that the Indenture was first qualified under such
Act.](2)
- ------------------
(2) To be added in the case of a qualified Indenture.
Trust Indenture Estate. The property, rights and privileges
described in the Granting Clause of the Indenture, other than (i) Excepted
Payments, including, without limitation all right, title and interest of the
Owner Participant in, to and under the Tax Indemnity Agreement and any moneys
due and to become due under the Tax Indemnity Agreement, all as provided in
the Indenture, and (ii) rights granted to the Owner Trustee or the Owner
Participant under the Indenture, including without limitation Sections 2.05,
7.02, 8.01, 8.02, 8.03, 13.01 and 13.02 thereof.
Underwriters. __________________.
Underwriting Agreement. The agreement among the Lessee and the
several Underwriters dated _____________, 199_, relating to the purchase by
such Underwriters of the Pass Through Certificates.
United States or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 401 or Section 418 of the
Federal Aviation Act, and as to which there is in force an air carrier
operating certificate issued pursuant to Part 121 of the regulations under
such Act, or which may operate as an air carrier by certification or otherwise
under any successor or substitute provision thereof or in absence thereof.
SCHEDULE II
BASIC RENT
(As a Percentage of Purchase Price)
Rent
Payment
Date Advance Arrears
---- ------- -------
[On each Rent Payment Date, the Lessee will pay as Basic Rent, an amount that
will be at least sufficient to pay in full, as of such Rent Payment Date, the
aggregate unpaid principal amount of due and unpaid installments on the
Certificates outstanding on such Rent Payment Date, together with the accrued
and unpaid interest thereon.]
SCHEDULE III
STIPULATED LOSS VALUES
Stipulated Loss
Date Value Factor
---- ------------
[Stipulated Loss Value will be an amount at least sufficient to pay in full,
as of the date of payment thereof, the aggregate unpaid principal amount
of the Certificates outstanding on such date of payment, together with the
accrued and unpaid interest thereon.]
SCHEDULE IV
TERMINATION VALUES
Termination Termination
Date Value Factor
---- ------------
[Termination Value will be in an amount at least sufficient to pay in full, as
of the date of payment thereof, the aggregate unpaid principal amount
of the Certificates outstanding on such date of payment, together with the
accrued and unpaid interest thereon.]
[EXHIBIT A
to
Lease Agreement]
THE INTEREST OF LESSOR UNDER THIS LEASE SUPPLEMENT
NO. IS SUBJECT TO A SECURITY INTEREST
LEASE SUPPLEMENT NO.
LEASE SUPPLEMENT NO. _, dated ___ __, 199_, between _______________
TRUST COMPANY, a _________ banking corporation, not in its individual
capacity, but solely as Owner Trustee under the Trust Agreement dated as of
______ __, 199_ (the "Lessor"), and FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Lessee").
W I T N E S S E T H :
WHEREAS, the Lessor and the Lessee have entered into that certain
Lease Agreement dated as of ____ __, 199_ (the "Lease", the defined terms in
the Lease being used in this Lease Supplement with the same meaning as in the
Lease), which provides for the execution and delivery of a Lease Supplement,
substantially in the form of this Lease Supplement No. _, for the purpose of
leasing under the Lease the aircraft and engines described below ("Aircraft")
as and when delivered by the Lessor to the Lessee in accordance with the terms
of the Lease;
WHEREAS, the Lease relates to the Aircraft;
WHEREAS, a counterpart of the Lease is attached to and made a part of
this Lease Supplement, and this Lease Supplement, together with such
attachment, is being filed for recordation on this date with the FAA as one
document.
NOW, THEREFORE, for and in consideration of the premises and other
good and sufficient consideration, the Lessor and the Lessee agree as follows:
Section 1. Delivered Aircraft. The Lessor hereby delivers and
leases to the Lessee under the Lease, and the Lessee hereby accepts and leases
from the Lessor under the Lease, the following described [Make/Model] Aircraft
(the "Delivered Aircraft"), which Delivered Aircraft as of the date of this
Lease Supplement consists of the following:
(a) [Make/Model] Airframe; U.S. Registration Number ______;
Manufacturer's Serial No. _____; and
(b) Three (3) [Make/Model] Engines bearing, respectively,
Manufacturer's Serial Nos. ______, ______ and ______ (each of which engines
has 750 or more rated takeoff horsepower or the equivalent of such
horsepower).
Section 2. Delivery Date. The Delivery Date of the Delivered
Aircraft is the date of this Lease Supplement.
Section 3. Purchase Price. The Purchase Price of the Delivered
Aircraft shall be the amount set forth in Schedule II of the Participation
Agreement.
Section 4. Term. The Term for the Delivered Aircraft shall commence
on the Delivery Date, and shall terminate on _______ __, ____, unless earlier
terminated or extended pursuant to the terms of the Lease.
Section 5. Rent. The Lessee hereby agrees to pay the Lessor Rent
for the Delivered Aircraft throughout the Term thereof in accordance with the
terms and provisions of the Lease.
Section 6. Lessee's Acceptance of Delivered Aircraft. The Lessee
hereby confirms to the Lessor that the Delivered Aircraft has been duly marked
in accordance with Section 7.03 of the Lease and that the Lessee has accepted
the Delivered Aircraft for all purposes hereof and of the Lease, as being free
and clear of all Liens except Lessor's Liens.
Section 7. Incorporation of Lease By Reference. All the provisions
of the Lease are hereby incorporated by reference in this Lease Supplement to
the same extent as if fully set forth in this Lease Supplement.
Section 8. Governing Law. THIS LEASE SUPPLEMENT SHALL IN ALL
RESPECT BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK AND IS BEING DELIVERED IN THE STATE OF NEW YORK.
Section 9. Counterparts. This Lease Supplement may be executed in
any number of counterparts, each of which shall be an original (except that
only the counterpart bearing the receipt executed by Indenture Trustee shall
be the original for purposes of perfecting a security interest therein as
chattel paper under the Uniform Commercial Code), but all of which taken
together shall constitute one and the same instrument and any of the parties
hereto may execute this Lease Supplement by signing any such counterpart.
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease
Supplement to be duly executed as of the day and year first above written.
LESSOR: _______________________________,
except as expressly provided herein,
not in its individual capacity
but solely as Owner Trustee
By: ______________________________________________
Name:
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By: _______________________________________________
Name:
Title: Vice President and Treasurer
Receipt of this original counterpart of the Lease Supplement is
hereby acknowledged on this __ day of ___ 199_.
Indenture Trustee: ___________________________,
not in its individual capacity,
but solely as Indenture Trustee
By: ______________________________________________
Name:
Title:
[EXHIBIT B
to
Lease Agreement]
Intentionally Left Blank
[Form varies depending on Manufacturer]
Exhibit 4(i)
==============================================================================
TRUST INDENTURE
_______________
Dated as of July 1, 1996
between
FEDERAL EXPRESS CORPORATION, as Issuer
and
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
_______________
DEBT SECURITIES
==============================================================================
Reconciliation and tie between
Trust Indenture Act of 1939 (the "Trust Indenture Act") and Indenture
<TABLE>
<S> <C>
Indenture
Trust Indenture Act Section Section
- ------------------------------------------------- -------
Section 310(a)(1)................................ 609
(a)(2).................................... 609
(b)....................................... 610
Section 311(b)(4)................................ 613
(b)(6).................................... 613
Section 312(a)................................... 701
(b)....................................... 702
(c)....................................... 702
Section 313(a)................................... 703
(b)(2).................................... 703
(c)....................................... 703
(d)....................................... 703
Section 314(a)................................... 704
(c)(1).................................... 102
(c)(2).................................... 102
(e)....................................... 102
(f)....................................... 102
Section 316(a) (last sentence)................... 101
(a)(1)(A)................................. 502, 512
(a)(1)(B)................................. 513
(b)....................................... 508
Section 317(a)(1)................................ 503
(a)(2).................................... 504
(b)....................................... 1003
Section 318(a)................................... 107
</TABLE>
_________________________
This reconciliation and tie shall not, for any purpose, be deemed to be a part
of the Indenture.
NOTE: Section 318(c) of the Trust Indenture Act provides that the
provisions of Sections 310-317 are a part of and govern every
qualified indenture, whether or not physically contained therein.
TABLE OF CONTENTS
PAGE
----
Parties.............................................................. 1
Recitals of the Company.............................................. 1
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definition:
Act............................................................ 2
Additional Amounts............................................. 2
Affiliate...................................................... 2
Authenticating Agent........................................... 2
Board of Directors............................................. 2
Board Resolution............................................... 2
Business Day................................................... 3
Commission..................................................... 3
Company........................................................ 3
Company Request; Company Order................................. 3
Conversion Event............................................... 3
Corporate Trust Office......................................... 3
Corporation.................................................... 3
Currency....................................................... 3
CUSIP Number................................................... 3
Defaulted Interest............................................. 3
Depository..................................................... 4
Dollars........................................................ 4
ECU............................................................ 4
European Monetary System....................................... 4
European Union................................................. 4
Event of Default............................................... 4
Foreign Currency............................................... 4
Global Security................................................ 4
Government Obligations......................................... 4
Holder......................................................... 5
Indenture...................................................... 5
Indexed Security............................................... 5
Interest....................................................... 5
Interest Payment Date.......................................... 5
_________________________
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
Maturity....................................................... 5
Officer's Certificate.......................................... 5
Opinion of Counsel............................................. 5
Original Issue Discount Security............................... 5
Outstanding.................................................... 5
Paying Agent................................................... 7
Person......................................................... 7
Place of Payment............................................... 7
Predecessor Security........................................... 7
Redemption Date................................................ 7
Redemption Price............................................... 7
Regular Record Date............................................ 7
Responsible Officer............................................ 7
Securities..................................................... 7
Security Register and Security Registrar....................... 7
Special Record Date............................................ 8
Stated Maturity................................................ 8
Subsidiary..................................................... 8
Trustee........................................................ 8
Trust Indenture Act............................................ 8
Vice President................................................. 8
Section 102. Compliance Certificates and Opinions.................. 8
Section 103. Form of Documents Delivered to Trustee................ 9
Section 104. Acts of Holders....................................... 9
Section 105. Notices, Etc. to Trustee and Company.................. 10
Section 106. Notice to Holders; Waiver............................. 10
Section 107. Conflict with Trust Indenture Act..................... 11
Section 108. Effect of Headings and Table of Contents.............. 11
Section 109. Successors and Assigns................................ 11
Section 110. Separability Clause................................... 11
Section 111. Benefits of Indenture................................. 11
Section 112. Governing Law......................................... 12
Section 113. Legal Holidays........................................ 12
Section 114. Language of Notices................................... 12
Section 115. Counterparts.......................................... 12
ARTICLE TWO
Security Forms
Section 201. Forms Generally....................................... 12
Section 202. Form of Trustee's Certificate of Authentication....... 13
Section 203. Global Securities..................................... 13
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.................. 14
Section 302. Denominations......................................... 17
Section 303. Execution, Authentication, Delivery and Dating........ 18
Section 304. Temporary Securities.................................. 19
Section 305. Registration, Transfer and Exchange................... 20
Section 306. Mutilated, Destroyed, Lost and Stolen Securities...... 22
Section 307. Payment of Interest; Interest Rights Preserved........ 23
Section 308. Persons Deemed Owners................................. 25
Section 309. Cancellation.......................................... 25
Section 310. Computation of Interest............................... 25
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture............... 26
Section 402. Application of Trust Money............................ 27
ARTICLE FIVE
Remedies
Section 501. Events of Default..................................... 27
Section 502. Acceleration of Maturity; Rescission and Annulment.... 29
Section 503. Collection of Indebtedness and
Suits for Enforcement by Trustee................... 30
Section 504. Trustee May File Proofs of Claim...................... 30
Section 505. Trustee May Enforce Claims
Without Possession of Securities................... 31
Section 506. Application of Money Collected........................ 32
Section 507. Limitation on Suits................................... 32
Section 508. Unconditional Right of Holders
to Receive Principal Premium and Interest.......... 33
Section 509. Restoration of Rights and Remedies.................... 33
Section 510. Rights and Remedies Cumulative........................ 33
Section 511. Delay or Omission Not Waiver.......................... 33
Section 512. Control by Holders.................................... 34
Section 513. Waiver of Past Defaults............................... 34
Section 514. Undertaking for Costs................................. 34
Section 515. Waiver of Stay or Extension Laws...................... 35
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.................. 35
Section 602. Notice of Defaults.................................... 36
Section 603. Certain Rights of Trustee............................. 37
Section 604. Not Responsible for Recitals or Issuance of Securities 38
Section 605. May Hold Securities................................... 38
Section 606. Money Held in Trust................................... 38
Section 607. Compensation and Reimbursement........................ 38
Section 608. Intentionally Left Blank.............................. 39
Section 609. Corporate Trustee Required; Eligibility............... 39
Section 610. Resignation and Removal; Appointment of Successor..... 40
Section 611. Acceptance of Appointment by Successor................ 41
Section 612. Merger, Conversion, Consolidation
or Succession to Business.......................... 43
Section 613. Preferential Claims................................... 43
Section 614. Appointment of Authenticating Agent................... 43
ARTICLE SEVEN
Holders' Lists and Reports By Trustee and Company
Section 701. Company to Furnish Trustee
Names and Addresses of Holders..................... 45
Section 702. Preservation of Information;
Communications to Holders.......................... 46
Section 703. Reports by Trustee.................................... 47
Section 704. Reports by Company.................................... 47
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc. on Certain Terms........ 48
Section 802. Successor Corporation Substituted..................... 49
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.... 49
Section 902. Supplemental Indentures with Consent of Holders....... 50
Section 903. Execution of Supplemental Indentures.................. 51
Section 904. Effect of Supplemental Indentures..................... 52
Section 905. Conformity with Trust Indenture Act................... 52
Section 906. Reference in Securities to Supplemental Indentures.... 52
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, any Premium, Interest
and Additional Amounts............................. 52
Section 1002. Maintenance of Office or Agency....................... 52
Section 1003. Money for Securities Payments to be Held in Trust..... 53
Section 1004. Corporate Existence................................... 54
Section 1005. Statement as to Default............................... 55
Section 1006. Additional Amounts.................................... 55
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.............................. 56
Section 1102. Election to Redeem; Notice to Trustee................. 56
Section 1103. Selection by Trustee of Securities to be Redeemed..... 56
Section 1104. Notice of Redemption.................................. 57
Section 1105. Deposit of Redemption Price........................... 58
Section 1106. Securities Payable on Redemption Date................. 58
Section 1107. Securities Redeemed in Part........................... 58
ARTICLE TWELVE
Intentionally Left Blank
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Applicability of Article; Company's Option
to Effect Defeasance or Covenant Defeasance........ 59
Section 1302. Defeasance and Discharge.............................. 59
Section 1303. Covenant Defeasance................................... 60
Section 1304. Conditions to Defeasance or Covenant Defeasance....... 60
Section 1305. Deposited Money and Government Obligations to be
Held in Trust; Other Miscellaneous Provisions...... 62
ARTICLE FOURTEEN
Sinking Funds
Section 1401. Applicability of Article.............................. 63
Section 1402. Satisfaction of Sinking Fund Payments with Securities. 63
Section 1403. Redemption of Securities for Sinking Fund............. 64
ARTICLE FIFTEEN
Securities in Foreign Currencies
Section 1501. Applicability of Article.............................. 64
SCHEDULE I Supplemental Indenture................................
EXHIBIT A Form of Debt Security.................................
TRUST INDENTURE
---------------
INDENTURE, dated as of July 1, 1996, between Federal Express
Corporation, a Delaware Corporation (the "Company") and The First National
Bank of Chicago, a national banking association organized under the laws of
the United States of America, as trustee (the "Trustee").
RECITALS
WHEREAS, the Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of
its senior unsecured debentures, bonds, notes or other evidences of
indebtedness (herein called the "Securities"), unlimited as to principal
amount, to bear such rates of interest, to mature at such time or times, to be
issued in one or more series and to have such other provisions as shall be
fixed as hereinafter provided;
WHEREAS, the Company has duly authorized the execution and
delivery of this Indenture. All things necessary to make this Indenture a
valid agreement of the Company, in accordance with its terms, have been done;
and
WHEREAS, this Indenture is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder that are required to
be part of this Indenture and, to the extent applicable, shall be governed by
such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders (as herein defined) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders
of the Securities or of any series thereof, as follows:
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" or "GAAP" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in the United States of America as of the
date of such computation; and
(4) the words "herein," "hereof," "hereto" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms used principally in certain Articles hereof are
defined in those Articles.
"Act" when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" means any additional amounts which are
required hereby or by any Security, under circumstances specified herein or
therein, to be paid by the Company in respect of certain taxes, assessments or
other governmental charges imposed on Holders specified therein and which are
owing to such Holders.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
to act on behalf of the Trustee to authenticate Securities of one or more
series.
"Board of Directors" means the board of directors of the Company
or any duly authorized committee of the board of directors of the Company.
"Board Resolution" means a copy of one or more resolutions
certified by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force and effect
on the date of such certification, delivered to the Trustee.
"Business Day" means any day other than Saturday, Sunday or other
day on which banking institutions in New York, Illinois or Tennessee are
authorized or obligated by law to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
as amended, or, if at any time after the execution of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means Federal Express Corporation or any successor
Corporation which shall have become such under this Indenture.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its President or any Vice President
and delivered to the Trustee.
"Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country or the confederation which
issued such Foreign Currency and for the settlement of transactions by a
central bank or other public institutions of or within the international
banking community, (ii) the ECU both within the European Monetary System and
for the settlement of transactions by public institutions of or within the
European Union or (iii) any currency unit or composite currency other than the
ECU for the purposes for which it was established.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the date of
original execution of this Indenture is located at One First National Plaza,
Suite 0126, Chicago, Illinois 60670-0126.
"Corporation" includes corporations and limited liability
companies and, except for purposes of Article Eight, associations, companies
and business trusts.
"Currency," with respect to any payment, deposit or other transfer
in respect of the principal of or any premium or interest on or any Additional
Amounts with respect to any Security, means Dollars or the Foreign Currency,
as the case may be, in which such payment, deposit or other transfer is
required to be made by or pursuant to the terms hereof or such Security and,
with respect to any other payment, deposit or transfer pursuant to or
contemplated by the terms hereof or such Security, means Dollars.
"CUSIP Number" means the alphanumeric designation assigned to a
Security by Standard & Poor's Ratings Group, CUSIP Service Bureau.
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" means, with respect to the Securities of any series
issuable upon original issuance in whole or in part in the form of one or more
Global Securities, the clearing agency registered under the Securities
Exchange Act of 1934, as amended, specified for that purpose as contemplated
by Section 301.
"Dollars" means a dollar or other equivalent unit of legal tender
for payment of debts in the United States of America.
"ECU" means the European Currency Units as defined and revised
from time to time by the Counsel of the European Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the
European Community.
"European Union" means the European Community, the European Coal
and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 501.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States or by any recognized
confederation or association of such governments.
"Global Security" means a Security bearing the legend specified in
Section 203 evidencing all or part of a series of Securities, issued to the
Depository with respect to such series or its nominee and registered in the
name of such Depository or nominee.
"Government Obligations" means securities which are (x) direct
obligations of the United States of America or the other government or
governments in the confederation which issued the Foreign Currency in which
the principal of or any premium or interest on any Security or any Additional
Amounts in respect thereof shall be payable, in each case where the payment or
payments thereunder are supported by the full faith and credit of such
government or governments, or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America or such other governments or governments, in each case where the
payment or payments thereunder are unconditionally guaranteed as a full faith
and credit obligation by the United States of America or such other
governments or governments, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank as custodian with respect to any such
Government Obligation or a specific payment of principal of or interest on any
such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect to the Government Obligation or the specific payment of
principal of or interest on the Government Obligation evidenced by such
depository receipt.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms
of each particular series of Securities established as contemplated by Section
301.
"Indexed Security" means a Security the terms of which provide
that the principal amount thereof payable at Stated Maturity may be more or
less than the principal face amount thereof at original issuance.
"Interest," with respect to any Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity and, when used with respect to a Security which provides for
the payment of Additional Amounts pursuant to Section 1006, includes such
Additional Amounts.
"Interest Payment Date," with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity," with respect to any Security, means the date on which
the principal of such Security, or an installment of principal, becomes due
and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, notice of redemption or repurchase or
otherwise and includes the Redemption Date.
"Officer's Certificate" means a certificate signed by the
Chairman of the Board, the President or any Vice President of the Company,
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be an employee of or of counsel to the Company, or other counsel reasonably
satisfactory to the Trustee.
"Original Issue Discount Security" means any Security issued
pursuant to this Indenture which provides for declaration of an amount less
than the principal face amount thereof to be due and payable upon acceleration
of the Maturity pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment at the Maturity thereof money
in the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made;
(iii) Securities for whose payment or redemption money or
Government Obligations as contemplated by Section 1304 in the necessary
amount have been theretofore deposited with the Trustee (or another
trustee satisfying the requirements of Section 609) in trust for the
Holders of such Securities in accordance with Section 1305; and
(iv) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, unless there
shall have been presented to the Trustee proof satisfactory to it that
such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the
principal amount of an Original Issue Discount Security that shall be deemed
to be Outstanding shall be equal to the amount of the principal thereof that
would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof pursuant to Section 502, (ii) the
principal amount of any Indexed Security that may be counted in making such
determination and that shall be deemed outstanding for such purpose shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided in this Indenture, (iii) the principal
amount of a Security denominated in a Foreign Currency shall be the Dollar
equivalent, determined on the date of original issuance of such Security, of
the principal amount (or, in the case of an Original Issue Discount Security,
the Dollar equivalent on the date of original issuance of such Security of the
amount determined as provided in (i) above) of such Security, and (iv)
Securities owned by the Company or any other obligor or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of (and premium, if any) or interest on any Securities on behalf
of the Company.
"Person" means any individual, Corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment," with respect to the Securities of any series,
means the place where the principal of (and premium, if any), interest on, and
Additional Amounts with respect to, the Securities of that series are payable
as provided in or pursuant to this Indenture or such Securities.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Redemption Date," with respect to any Security or portion thereof
to be redeemed, means the date fixed for such redemption by or pursuant to
this Indenture or such Security.
"Redemption Price," with respect to any Security or portion
thereof to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture or such Security.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified in or
pursuant to this Indenture or such Security as the "Regular Record Date."
"Responsible Officer," means any officer of the Trustee in its
Corporate Trust Office and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture, provided, however, that if at any time there
is more than one Person acting as Trustee under this Indenture, "Securities"
with respect to any such Person shall mean securities authenticated and
delivered under this Indenture, exclusive, however, of Securities of any
series as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on
any Security means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," with respect to any Security or any installment
of principal thereof or interest thereon or any Additional Amounts, means the
date established by or pursuant to this Indenture or such Security as the
fixed date on which the principal of such Security or such installment of
principal or interest is, or such Additional Amounts are, due and payable.
"Subsidiary" means any Corporation of which at the time of
determination the Company or one or more Subsidiaries owns or controls,
directly or indirectly, more than 50% of the shares of voting stock. For the
purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
If at any time there is more than one such Person, "Trustee" shall mean such
Person and as used with respect to the Securities of any series shall mean the
Trustee with respect to Securities of such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed,
except as provided in Section 905.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
or an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent, if any, have been complied with, except that, in
the case of any such application or request as to which the furnishing of such
documents or any of them is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished. Any Officer's Certificate will
comply with Section 314(e) of the Trust Indenture Act.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the opinion with respect to the matters upon which the certificate or
opinion is based are erroneous. Any such Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect
to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture or any Security, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee
may determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders of Securities
of any series any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, fix in advance a record
date for the determination of Holders of Securities entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. Any such record date
shall be fixed at the Company's discretion. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent and waiver or
other Act may be sought or given before or after the record date, but only the
Holders of Securities of record at the close of business on such record date
shall be deemed to be Holders of Securities for the purpose of determining
whether Holders of the requisite proportion of Securities of such series
Outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Securities of such series Outstanding shall be computed as of such
record date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee, any Security Registrar, any Paying Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
Section 105. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to
or with the Trustee at its Corporate Trust Office; or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company at 2007 Corporate Avenue, Memphis, Tennessee 38132, attention Vice
President and Treasurer, or at any other address previously furnished in
writing to the Trustee by the Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture or any Security provides for notice to
Holders of any event, such notice shall be sufficiently given (unless
otherwise herein or in such Security expressly provided) if in writing and
mailed, first-class postage prepaid, to each Holder affected by such event, at
the Holder's address as it appears in the Security Register, not later than
the latest date, or not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Any notice which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given or
provided.
Where this Indenture or any Security provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Indenture by
any of the provisions of the Trust Indenture Act, such required provision
shall control.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of Tennessee.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) or any
Additional Amounts need not be made at such Place of Payment on such date, but
may be made on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, and no interest shall accrue with
respect to such payments for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, to the next
succeeding Business Day.
Section 114. Language of Notices.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that, if the Company so elects, any published notice
may be in an official language of the country of publication.
Section 115. Counterparts.
This Indenture may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the
same instrument.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substantially the form
attached hereto as Exhibit A as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities.
If any form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at the same time as or prior to the
delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities may be produced in any manner determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issuable in registered form without
coupons and shall not be issuable upon the exercise of warrants.
Section 202. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
The First National Bank of
Chicago,
as Trustee
By: ___________________________
Authorized Officer
Section 203. Global Securities.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issued in global form. Any such Security
may provide that it or any number of such Securities shall represent the
aggregate amount of all Outstanding Securities of such series (or such lessor
amount as is permitted by the terms thereof) from time to time endorsed
thereon and may also provide that the aggregate amount of Outstanding
Securities represented thereby may from time to time be increased or reduced
to reflect exchanges. Any endorsement of any Security in global form to
reflect the amount, or any increase or decrease in the amount, or changes in
the rights of Holders, of Outstanding Securities represented thereby shall be
made in such manner and by such Person as shall be specified therein or in the
Company Order to be delivered pursuant to Section 303 or 304 with respect
thereto.
Subject to the provisions of Section 303 and, if applicable,
Section 304, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person specified
therein or in the applicable Company Order. If a Company Order pursuant to
Section 303 or 304 has been, or simultaneously is, delivered, any instructions
by the Company with respect to a Security in global form shall be in writing
but need not be accompanied by or contained in an Officer's Certificate and
need not be accompanied by an Opinion of Counsel.
Notwithstanding the provisions of Section 307, unless otherwise
specified in or pursuant to this Indenture or any Securities, payment of
principal of, any premium and interest on, and any Additional Amounts in
respect of, any Security in global form shall be made to the Person specified
therein.
Notwithstanding the provisions of Section 308 and except as
provided in the preceding paragraph, the Company, the Trustee and any agent of
the Company and the Trustee shall treat as the Holder, the holder of such
global Security in registered form.
Any Global Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depository. This Security is exchangeable
for Securities registered in the name of a Person other than the
Depository or its nominee only in the limited circumstances described in
the Indenture, and no transfer of this Security (other than a transfer
of this Security as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) may be registered except in such
limited circumstances."
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and (subject to Section 303)
set forth in an Officer's Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series (subject to the last paragraph of this Section 301):
(1) the title of the Securities and the series in which such
Securities shall be included (which shall distinguish the Securities of the
series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303 are deemed never to have been
authenticated and delivered hereunder);
(3) the date or dates on which the principal of the Securities
of the series is payable;
(4) the Person to whom any interest on any Security of the
series shall be payable if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, the rate or rates, which may be
fixed or variable, at which the Securities of the series shall bear interest,
if any, if the rate is variable, the manner of calculation thereof, the date
or dates from which such interest shall accrue, the Interest Payment Dates on
which such interest shall be payable and the Regular Record Date for the
interest payable on any Interest Payment Date;
(5) the place or places where the principal of (and premium, if
any) and interest, if any, on Securities of the series shall be payable;
(6) the date or dates on which, the period or periods within
which, the price or prices at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part, at the option
of the Company;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions
or at the option of a Holder thereof and the date or dates on which, the
period or periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation and any provisions for the
remarketing of such securities so redeemed or purchased;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the method by which such portion is to be determined;
(10) the application, if any, of either or both of Section 1302
and Section 1303 to the Securities of the series;
(11) if other than Dollars, the Foreign Currency in which payment
of the principal of, any premium or interest on or any Additional Amounts with
respect to any of such Securities shall be payable;
(12) if the principal of (and premium, if any) or interest, if
any, on the Securities of that series are to be payable, at the election of
the Company or a holder thereof, in a currency (including a composite
currency) other than that in which the Securities are stated to be payable,
the date or dates on which, the period or periods within which, and the terms
and conditions upon which, such election may be made;
(13) if the amount of payments of principal of (and premium if
any) or interest, if any, on the Securities of the series may be determined
with reference to an index, formula or other method or methods based on a
currency (including a composite currency) other than that in which the
Securities are stated to be payable, the terms and conditions upon which and
the manner in which such amounts shall be determined and paid or payable;
(14) if the amount of payments of principal of, any premium or
interest on the Securities of the series may be determined with reference to
an index, the manner in which such amounts shall be determined;
(15) whether any Securities of the series are to be issuable upon
original issuance in the form of one or more Global Securities and, if so, (i)
the Depository with respect to such Global Security or Securities and (ii) the
circumstances under which any such Global Security may be exchanged for
Securities registered in the name of, and any transfer of such Global Security
may be registered to, a Person other than such Depository or its nominee, if
other than as set forth in Section 305;
(16) whether and under what circumstances Additional Amounts on
such Securities or any of them shall be payable;
(17) the notice, if any, to Holders regarding the determination
of interest on a floating rate Security and the manner of giving such notice,
and the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(18) intentionally left blank;
(19) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to any Securities,
whether or not such Events of Default or covenants are consistent with the
Events of Default or covenants set forth herein;
(20) if any of such Securities are to be issuable in global form
and are to be issuable in definitive form (whether upon original issue or upon
exchange of a temporary Security) only upon receipt of certain certificates or
other documents or satisfaction of other conditions, then the form and terms
of such certificates, documents or conditions;
(21) if there is more than one Trustee, the identify of the
Trustee and, if not the Trustee, the identity of each Security Registrar,
Paying Agent or Authenticating Agent with respect to such Securities; and
(22) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture) and any deletions from or
modifications or additions to this Indenture in respect of such series.
All Securities of any one series shall be substantially identical
except as to denomination, currency, rate of interest, or method of
determining the rate of interest, if any, Maturity, and the date from which
interest, if any, shall accrue and except as may otherwise be provided in or
pursuant to such Board Resolution referred to above and (subject to Section
303) set forth in the Officer's Certificate referred to above or in any
indenture supplemental hereto. If any of the terms of the series are
established by action taken pursuant to a Board Resolution, a copy of the
Board Resolution shall be delivered to the Trustee at the same time as or
prior to the delivery of the Officer's Certificate setting forth the terms of
the series.
Notwithstanding any contrary terms of this Section 301, the terms
of the Securities of any series may provide, without limitation, that the
Securities shall be authenticated and delivered by the Trustee on original
issue from time to time upon telephonic or written order of Persons designated
in the Officer's Certificate or supplemental indenture and that such Persons
are authorized to determine, consistent with such Officer's Certificate or any
supplemental indenture, such terms and conditions of the Securities of such
series as are specified in such certificate or supplemental indenture. All
Securities of any one series may be reopened for issuances of additional
Securities of such series or to establish additional terms of such series of
Securities.
Section 302. Denominations.
Unless otherwise provided in or pursuant to this Indenture, the
principal of, any premium and interest on and any Additional Amounts with
respect to the Securities shall be payable in Dollars. The Securities of each
series shall be issuable only in fully registered form without coupons in such
denominations as shall be specified pursuant to Section 301. In the absence
of any such provision with respect to the Securities of any series, the
Securities of such series shall be issuable in denominations of $1,000 and any
integral multiple thereof. Securities not denominated in Dollars shall be
issuable in such denominations as are established with respect to such
Securities in or pursuant to this Indenture.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
President or any Vice President, under its corporate seal reproduced thereon
attested by its Secretary or any Assistant Secretary. The signature of any of
these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were the proper officers of the Company when their signatures
were affixed to such Securities shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed
by the Company to the Trustee for authentication, together with a Company
Order for the authentication and delivery of such Securities, and the Trustee
in accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions or indentures
supplemental hereto as permitted by Sections 201 and 301, in authenticating
such Securities and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying
upon:
(1) an Opinion of Counsel to the effect that:
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form has
been established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms have
been established in conformity with the provisions of this Indenture;
(c) this Indenture has been qualified under the Trust Indenture
Act; and
(d) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting the enforcement
of creditors' rights and to general equity principles and will entitle the
Holders thereof to the benefits of this Indenture; and
(2) an Officer's Certificate stating that, to the best knowledge
of the Person executing such certificate, no event which is, or after notice
or lapse of time would become, an Event of Default with respect to any of the
Securities shall have occurred and be continuing.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver an Opinion of Counsel,
Officer's Certificate or the Company Order otherwise required at or prior to
the time of authentication of each Security of such series if such documents
are delivered at or prior to the time of authentication upon original issuance
of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided
for herein executed by, or on behalf of, the Trustee or by the Authenticating
Agent by manual signature. Such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement
(which need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel) stating that such Security has never been issued and sold
by the Company, for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall not
be entitled to the benefits of this Indenture.
The Trustee shall not be required to authenticate or to cause an
Authentication Agent to authenticate any Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series,
the Company may execute and deliver to the Trustee, and, upon Company Order,
the Trustee shall authenticate and deliver in the manner provided in Section
303, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers of the Company executing such Securities may
determine, as evidenced by their execution of such Securities. Such temporary
Securities may be in global form.
If temporary Securities of any series are issued, the Company will
cause definitive Securities to be prepared without unreasonable delay. After
the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities at the office or agency
of the Company in a Place of Payment for that series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series and of like tenor of authorized
denomination containing terms and provisions that are identical to those of
any temporary Securities. Until so exchanged the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series.
Section 305. Registration, Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
The Company shall have the right to remove and replace from time
to time the Security Registrar for any series of Securities; provided that no
such removal or replacement shall be effective until a successor Security
Registrar with respect to such series of Securities shall have been appointed
by the Company and shall have accepted such appointment by the Company. In
the event that the Trustee shall not be or shall cease to be Security
Registrar with respect to a series of Securities, it shall have the right to
examine the Security Register for such series at all reasonable times. There
shall be only one Security Register for each series of Securities.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in a Place of Payment for such
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and tenor containing identical terms and
provisions.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series containing identical terms
and provisions in any authorized denominations and of a like aggregate
principal amount and tenor, upon surrender of the Securities to be exchanged
at such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed, by
the Holder thereof or the Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities,
other than exchanges pursuant to Section 304, 906 or 1107 not involving any
transfer.
Except as otherwise provided herein, the Company shall not be
required (i) to issue, register the transfer of or exchange Securities of any
series during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Securities of such series
selected for redemption under Section 1103 and ending at the close of business
on the day of such mailing, or (ii) to register the transfer of or exchange
any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any Global Security of any series shall be
exchangeable for definitive Securities only if: (a) such Depository is
unwilling, unable or ineligible to continue as Depository with respect to such
Global Security and a successor depository is not appointed by the Company
within 90 days or if at any time the Depository with respect to such Global
Security ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, or (b) the Company executes and delivers to
the Trustee a Company Order providing that such Global Security shall be so
exchangeable and the transfer thereof so registrable.
If the beneficial owners of interests in a Global Security are
entitled to exchange such interests for definitive Securities as the result of
an event described in the preceding sentence, then without unnecessary delay
but in any event not later than the earliest date on which such interests may
be so exchanged, the Company shall deliver to the Trustee definitive
Securities in such form and denominations as are required by or pursuant to
this Indenture, and of the same series, containing identical terms and in
aggregate principal amount equal to the principal amount of such Global
Security, executed by the Company. On or after the earliest date on which
such interests may be so exchanged, such Global Security shall be surrendered
from time to time by the Depository and in accordance with instructions given
to the Trustee and the Depository (which instructions shall be in writing but
need not be contained in or accompanied by an Officers Certificate or be
accompanied by an Opinion of Counsel), as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or in part, for definitive Securities as
described above without charge.
The Trustee shall authenticate and make available for delivery, in
exchange for each portion of such surrendered Global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such Global
Security to be exchanged, which shall be in the form of Securities, as shall
be specified by the beneficial owner thereof, provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15
days before any selection of Securities of the same series to be redeemed and
ending on the relevant Redemption Date.
Promptly following any such exchange in part, such global Security
shall be returned by the Trustee to such Depository in accordance with the
instructions of the Company referred to above. If a Security is issued in
exchange for any portion of a Global Security after the close of business at
the office or agency for such Security where such exchange occurs on or after
(i) any Regular Record Date for such Security and before the opening of
business at such office or agency on the next Interest Payment Date, or (ii)
any Special Record Date for such Security and before the opening of business
at such office or agency on the related proposed date for payment of interest
or Defaulted Interest, as the case may be, interest shall not be payable on
such Interest Payment Date or proposed date for payment, as the case may be,
in respect of such Security, but shall be payable on such Interest Payment
Date or proposed date for payment, as the case may be, only to the Person to
whom interest in respect of such portion of such Global Security shall be
payable in accordance with the provisions of this Indenture.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If (i) any mutilated Security is surrendered to the Trustee or if
there shall be delivered to the Company and the Trustee evidence to their
satisfaction of the destruction, loss or theft of any Security and (ii) there
shall be delivered to the Company and the Trustee such indemnity as may be
required by them to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Trustee shall authenticate and deliver, in
lieu of any such mutilated, destroyed, lost or stolen Security, a new Security
of the same series containing identical terms and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section
in lieu of any destroyed, lost or stolen Security shall constitute a separate
obligation of the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and
all other Securities of the same series duly issued hereunder.
The provisions of this Section, as amended or supplemented
pursuant to this Indenture, are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on and any Additional Amounts
with respect to any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on, and any Additional Amounts with respect to, any
Security of any series which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Person in whose name the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment. Such money when deposited will be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in
this Clause provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of
such series at the Holder's address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or the
Securities of any particular series pursuant to the provisions of this
Indenture, at the option of the Company, interest on Securities may be paid by
mailing a check to the address of the Person entitled thereto as such address
shall appear in the Security Register or by transfer to an account maintained
by the payee with a bank located in the United States.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Sections 305 and 307) interest on and any
Additional Amounts with respect to such Security and for all other purposes
whatsoever, whether or not any payment with respect to such Security shall be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
No Holder of any beneficial interest in any Global Security held
on its behalf by a Depository shall have any rights under this Indenture with
respect to such Global Security, and such Depository may be treated by the
Company, the Trustee, and any agent of the Company or the Trustee as the owner
of such Global Security for all purposes whatsoever. None of the Company, the
Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration
of transfer, exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever and may deliver to the Trustee (or to an Authenticating Agent for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Securities held by the Trustee shall be disposed of
as directed by a Company Order.
Section 310. Computation of Interest.
Except as otherwise specified pursuant to Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to any series of Securities specified in such Company
Request (except as to rights of registration of transfer or exchange of
Securities), and the Trustee on receipt of the Company Request, at the expense
of the Company, shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture as to such series, when:
(1) either
(A) all Securities of such series theretofore
authenticated and delivered (other than (i) Securities of such
series which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii)
Securities of such series for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to
the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company are to
be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense,
of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest and any Additional
Amounts to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be.
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's
Certificate or an Opinion of Counsel, stating that all conditions
precedent herein relating to the satisfaction and discharge of this
Indenture with respect to such Securities have been complied with.
In the event there are Securities of two or more series hereunder,
the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Securities of such series as to which it is Trustee and if the
other conditions thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture
with respect to the Securities of any series, the obligations of the Company
to the Trustee under Section 607, the obligations of the Trustee to any
Authenticating Agent under Section 614 and, if money shall have been deposited
with the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations under Sections 304, 305, 306, 1002 and 1003, and the obligation to
pay Additional Amounts, if any, with respect to such Securities as
contemplated by Section 1006 (but only to the extent that any Additional
Amounts payable with respect to such Securities exceed the amount deposited in
respect of such Additional Amounts pursuant to Section 401(1)(B), shall
survive.
Section 402. Application of Trust Money.
Subject to the provisions of the penultimate paragraph of Section
1003, all money and Government Obligations deposited with the Trustee pursuant
to Section 401 and Article 13 shall be held in trust and applied by it, in
accordance with the provisions of the Securities of the series for which such
deposit was made and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the
principal (and premium, if any), interest and Additional Amounts for whose
payment such money and Government Obligations has been deposited with the
Trustee; but such money and Government Obligations need not be segregated from
other funds except to the extent required by law.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default," wherever used herein with respect to the
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless such event is specifically
deleted or modified in or pursuant to the supplemental indenture, Board
Resolution or Officer's Certificate establishing the terms of such series
pursuant to this Indenture:
(1) default in the payment of any interest upon any Security of
such series when it becomes due and payable, and continuance of such
default for a period of 30 days;
(2) default in the payment of the principal of (or premium, if
any, on) any Security of such series at its Maturity;
(3) default in the performance, or breach, of any covenant,
agreement or warranty of the Company in this Indenture (other than a
covenant, agreement or warranty a default in whose performance is
elsewhere in this Section specifically dealt with or which has expressly
been included in this Indenture solely for the benefit of series of
Securities other than such series) and continuance of such default for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 50% in principal amount of the Outstanding
Securities of such series a written notice specifying such default and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder;
(4) default in the deposit of any sinking fund payment when and
as due by the terms of a Security of such series;
(5) the entry by a court having jurisdiction of a decree or
order adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under federal
bankruptcy law or any other applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days;
(6) the commencement by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
commencement of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under federal bankruptcy law or any other applicable federal
or state law, or the consent by it to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial
part of its property, or the making by it of a general assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Company in furtherance of any such action; or
(7) any other Event of Default provided pursuant to Section 301
with respect to Securities of such series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 50% in principal amount of the
Outstanding Securities of such series may declare the principal amount of all
the Securities of such series to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon
any such declaration such principal amount shall become immediately due and
payable.
At any time after such a declaration of acceleration with respect
to Securities of any series has been made and before the Stated Maturity
thereof, the Holders of a majority in principal amount of the Outstanding
Securities of such series, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on and any
Additional Amounts with respect to all Securities of such series;
(B) the principal of (and premium, if any on) any
Securities of such series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
borne by the Securities of such series and any Additional Amounts;
(C) to the extent that payment of such interest or
Additional Amounts is lawful, interest upon overdue interest or
Additional Amounts at the rate borne by the Securities of such
series; and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to the Securities of such
series, other than the non-payment of the principal of Securities of
such series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any
Securities when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Securities at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal (and premium, if any) and interest
and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and on any overdue
interest, at the rate borne by the Securities and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sum so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
such Securities, wherever situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of the Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or the property of the Company or of such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the
Securities 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 Company for the payment of overdue principal (and
premium, if any) or interest or Additional Amounts) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest and Additional Amounts owing and
unpaid in respect of the Securities and to file such other papers and
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 Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder 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 Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
premium, if any), interest or Additional Amounts, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under
Section 607;
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any), interest and Additional Amounts on
the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for
principal (and premium, if any), interest and Additional Amounts,
respectively; and
Third: To the payment of the remainder, if any, to the Company or
any other Person lawfully entitled thereto.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of such series;
(2) the Holders of not less than 50% in principal amount of the
Outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceedings; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of such
series.
It being understood and intended that no one or more Holders of Securities
shall have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the right of
any other such Holders of Securities of such series, or to obtain or to seek
to obtain priority or preference over any other such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all such Holders of Securities.
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any, on) and (subject to
Section 307) interest on, and any Additional Amounts with respect to, such
Security on the respective Stated Maturities expressed in such Security (or,
in the case of redemption, on the Redemption Date) and to institute suit for
the enforcement of any such payment and such rights shall not be impaired
without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceedings has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law
or with this Indenture or with such Securities;
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(3) subject to Section 601, the Trustee need not take any action
which might be prejudicial to the Holders of such series not consenting.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to
such series and its consequences, except a default:
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist with
respect to such series, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
Section 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or
to any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct; except that:
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions
of this Section.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear
in the Security Register, notice of such default hereunder known to the
Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of (or premium, if any) or interest on any Security, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; and
provided, further, that in the case of any default of the character specified
in Section 501(3) with respect to the Securities of such series no such notice
to Holders shall be given until at least 60 days after the occurrence thereof.
For the purpose of this Section, the term "default" means any event which is,
or after notice or lapse of time or both would become, an Event of Default
with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable indemnity against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assume no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities, except
that the Trustee represents that it is duly authorized to execute and deliver
this Indenture, authenticate the Securities and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1 supplied to the Company are true and accurate,
subject to the qualifications set forth therein. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Section 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section 606. Money Held in Trust.
Except as otherwise provided herein, money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including
the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent that any such loss,
liability or expense was due to the Trustee's negligence or bad faith.
Section 608. Intentionally Left Blank
Section 609. Corporate Trustee Required; Eligibility.
(1) There shall at all times be a Trustee hereunder which shall:
(i) be a Corporation organized and doing business under
the laws of the United States of America, any State
thereof or the District of Columbia authorized under
such laws to exercise corporate trust powers;
(ii) be eligible under Section 310(a) of the Trust
Indenture Act to act as trustee under an indenture
qualified under the Trust Indenture Act; and
(iii) have a combined capital and surplus of at least
$100,000,000 and subject to supervision or examination
by federal or state authority.
If such Corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
(2) The following Indenture shall be considered specifically
described herein for purposes of clause (i) of the proviso contained in
Section 310(b)(1) of the Trust Indenture Act: Indenture between
AllianceAirport Authority Inc. (the "Authority") and The First National Bank
of Chicago, as trustee, dated as of April 1, 1996 relating to the Authority's
Special Facilities Revenue Bonds (Federal Express Corporation Project), Series
1996.
Section 610. Resignation and Removal; Appointment of Successor.
(a) 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 in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by the Company or by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series, delivered to
the Trustee, and to the Company in the case of an Act of the Holders.
(d) If at any time:
(1) the Trustee shall fail to comply with the obligations
imposed upon it under Section 310(b) of the Trust Indenture Act with
respect to the Securities after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Security for at
least six months;
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company may remove the Trustee with respect to
all Securities or the Securities of such series, or (ii) subject to Section
514, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of such Holder and all other similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
with respect to all Securities of such series and the appointment of a
successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company shall
promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those Series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series).
If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the
Holders of 75% in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment
in accordance with the applicable requirements of Section 611, become the
successor Trustee with respect to the Securities of such series and supersede
the successor Trustee appointed by the Company.
If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any Holder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and
addresses appear in the Security Register. Each notice shall include the name
of the successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every successor Trustee appointed hereunder
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which,
(1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor
Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary
or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee.
It being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee.
Upon the execution and delivery of such supplemental indenture, the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such a acceptance such successor Trustee shall be qualified and
eligible under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to
Business.
Any Corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any Corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any Corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities.
Section 613. Preferential Claims.
Reference is made to Section 311 of the Trust Indenture Act. For
purposes of Section 311(b)(4) and (6) of such Act:
(1) "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after delivery
of the goods or securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand; and
(2) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Company for the purpose of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and which is secured
by documents evidencing title to, possession of, or a lien upon, the goods,
wares or merchandise or the receivables or proceeds arising from the sale of
the goods, wares or merchandise previously constituting the security, provided
the security is received by the Trustee simultaneously with the creation of
the creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
Section 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the
Trustee may appoint an Authenticating Agent or Agents with respect to one or
more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon original
issuance, exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in the Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by
an Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and
shall at all times be a Corporation organized and doing business under the
laws of the United States of America, any state thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any Corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided that such Corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving 30 days'
written notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time such Authenticating Agent shall cease to be eligible in accordance
with the provision of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance
of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally
named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provision of this Section.
The Trustee agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By _______________________________
As Authenticating Agent
By _______________________________
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee
with respect to the Securities of each series:
(a) semi-annually, not later than each Interest Payment Date for
such series (or, in the case of any series not having semi-annual
Interest Payment Dates, semi-annually, not later than the dates
determined pursuant to Section 301 for such series) a list, in such form
as the Trustee may reasonably require, of the names and addresses of the
Holders as of the preceding Regular Record Date (or as of such other
date determined pursuant to Section 301 for such series) therefor, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
provided, however, that so long as the Trustee is the Security Registrar no
such list shall be required to be furnished.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of the Securities
of each series contained in the most recent list furnished to the Trustee as
provided in Section 701 and the names and addresses of such Holders received
by the Trustee in its capacity as Security Registrar. The Trustee may destroy
any list of the Holders of Securities of any series furnished to it as
provided in Section 701 upon receipt of a new list of such Holders.
(b) If three or more Holders of Securities of any series (herein
referred to as "applicants") apply in writing to the Trustee, and furnish to
the Trustee reasonable proof that each such applicant has owned a Security of
such series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series with respect to
their rights under this Indenture or under the Securities of such series and
is accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall, within five
Business Days after the receipt of such application, at its election, either:
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a) with
respect to the Securities of such series, or
(ii) inform such applicants as to the approximate number of
Holders of Securities of such series whose names and addresses appear
in the information preserved at the time by the Trustee in accordance
with Section 702(a), and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in
such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Securities of such series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 702(a) a copy of the form or proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless
within five days after such tender the Trustee shall mail to such applicants
and file with the Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the Trustee,
such mailing would be contrary to the best interest of the Holders or would be
in violation of applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the
entry of an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 702(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 702(b).
Section 703. Reports by Trustee.
(a) Within 60 days after May 1 of each year commencing with
the year 1997, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Security Register, such brief report
dated as of such May 1, if any, as may be required by Section 313(a) of the
Trust Indenture Act.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company.
The Company will notify the Trustee when any Securities are listed on any
stock exchange.
Section 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports which the
Company may be required to file with the Commission pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee
and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in respect
of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc. on Certain Terms.
Nothing contained in this Indenture or in any of the Securities
shall prevent any consolidation or merger of the Company with or into any
other Person, or successive consolidations or mergers in which the Company or
its successor or successors shall be a party or parties, or shall prevent any
conveyance, transfer or lease of the property of the Company as an entirety or
substantially as an entirety, to any Person, unless:
(1) in case the Company shall consolidate with or merge into
another Corporation or convey, transfer or lease its properties and
assets as, or substantially as, an entirety to any Person, the
Corporation formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance, transfer, or lease
the properties and assets of the Company, as, or substantially as, an
entirety shall be a Corporation organized and existing under the laws of
the United States of America, any state thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of (and premium,
if any), interest on and any Additional Amounts with respect to all the
Securities and the performance of every covenant of this Indenture on
the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, or event which after notice or lapse of time, or both,
would become an Event of Default, shall have occurred and be continuing;
and
(3) the Company shall have delivered to the Trustee an Officer's
Certificate or an Opinion of Counsel, stating that such consolidation,
merger, conveyance, transfer or lease and such supplemental indenture
comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Section 802. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other Corporation or any conveyance, transfer or lease of the
properties and assets of the Company as, or substantially as, an entirety to
any Person in accordance with Section 801, the successor Corporation formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Corporation has been named
as the Company herein, and thereafter, except in the case of a lease to
another Person, the predecessor Corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities;
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and, if such covenants are
to be for the benefit of less than all series of Securities, stating
that such covenants are expressly being included solely for the benefit
of such series) or to surrender any right or power herein conferred upon
the Company;
(3) to add any additional Events of Default with respect to
Securities of any or all series;
(4) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision;
(5) to secure the Securities of any or all series;
(6) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities of any
series in any material respect;
(7) to add to or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable or not registrable as
to principal, and with or without interest coupons;
(8) to establish the form or terms of Securities of any series
as permitted by Sections 201 and 301;
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b);
(10) to add to, delete from or revise the conditions, limitations
and restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth;
(11) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the defeasance
and discharge of any series of Securities pursuant to Article 13,
provided that no such supplement shall materially adversely affect the
interest of the Holders of any Securities then Outstanding; or
(12) to amend or supplement any provision contained herein or in
any supplemental indenture, provided that no such amendment or
supplement shall materially adversely affect the interest of the Holders
of any Securities then Outstanding.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by
such supplemental indenture, by Act of said Holders delivered to the
Company and the Trustee, the Company and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of
the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any such Security, or reduce the principal
amount thereof or any interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 502, or
change any Place of Payment where, or the currency in which, any such
Security or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on
or after the Stated Maturity thereof (or, in the case of redemption, on
or after the Redemption Date);
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of those Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture; or
(3) modify any of the provisions of this Section or Section 513,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby.
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect
to such covenant or the provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities or any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in
effect.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, any Premium, Interest and
Additional Amounts.
The Company covenants and agrees for the benefit of the Holders of
each series of Securities that it will duly and punctually pay the principal
of (and premium, if any) and interest on and any Additional Amounts with
respect to the Securities of that series in accordance with the terms of the
Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of such series may be
presented or surrendered for registration or transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities of
such series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may
be made or served at the Corporate Trust Office of Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
Unless otherwise specified with respect to any Securities pursuant
to Section 301, if and so long as the Securities of any series (i) are
denominated in a Foreign Currency or (ii) may be payable in a Foreign
Currency, or so long as it is required under any other provision of this
Indenture, then the Company will maintain with respect to each such series of
Securities, or as so required, at least one exchange rate agent.
Section 1003. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities of
such series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or before each due date of the principal of
or interest on any Securities of such series, deposit with a Paying Agent a
sum sufficient to pay the principal (or premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of such series in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of such series) in the making of
any payment of principal (and premium, if any) or interest on the
Securities of such series; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
received by the Trustee (or another trustee satisfying the requirements of
Section 609) in respect of Government Obligations deposited with the Trustee
(or such other trustee) pursuant to Section 1304, or then held by the Company,
in trust for the payment of the principal of (and premium, if any) or interest
on any Security of any series and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall
be paid to the Company on Company Request, or (if then held by the Company)
shall be discharged from such trust. The Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.
The Trustee or such Paying Agent, before being required to make
any such repayment, may publish, in the English language, in a newspaper
customarily published on each Business Day and of general circulation in the
City of New York, New York, or to be mailed to such Holder or both, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the earlier of the date of such
publication or such mailing, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and franchises; provided,
however, that the foregoing shall not obligate the Company to preserve any
such right or franchise if the Company shall determine that the preservation
thereof is no longer desirable in the conduct of its business and that the
loss thereof is not disadvantageous in any material respect to any Holder.
Section 1005. Statement as to Default.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officer's Certificate, stating as to each signer
thereof that he or she is familiar with the affairs of the Company and whether
or not to such officer's knowledge the Company is in compliance (without
regard to any period of grace or requirement of notice) with all conditions
and covenants of this Indenture. The officer executing such certificate shall
be the Company's principal executive, finance or accounting officer and such
certificate need not comply with Section 314(e) of the Trust Indenture Act.
Section 1006. Additional Amounts
If any Securities of a series provide for the payment of
Additional Amounts, the Company agrees to pay to the Holder of any such
Security Additional Amounts as provided in or pursuant to this Indenture or
such Securities. Whenever in this Indenture there is mentioned, in any
context, the payment of the principal of or any premium or interest on, or in
respect of, any Security of any series or the net proceeds received on the
sale or exchange of any Security of any series, such mention shall be
deemed to include mention of the payment of Additional Amounts provided by
the terms of such series established hereby or pursuant hereto to the
extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to such terms, and express mention of
the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.
Except as otherwise provided in or pursuant to this Indenture or
the Securities of the applicable series, if the Securities of a series provide
for the payment of Additional Amounts, at least 10 days prior to the first
Interest Payment Date with respect to such series of Securities (or if the
Securities of such series shall not bear interest prior to Maturity, the first
day on which a payment of principal is made), and at least 10 days prior to
each date of payment of principal or interest if there has been any change
with respect to the matters set forth in the below-mentioned Officer's
Certificate, the Company shall furnish to the Trustee and the Paying Agent, if
other than the Trustee, an Officer's Certificate instructing the Trustee and
such Paying Agent whether such payment of principal of an premium, if any, or
interest on the Securities of such series shall be made to Holders of
Securities of such series who are United States aliens without withholding for
or on account of any tax, assessment or other governmental charge described in
the Securities of such series. If any such withholding shall be required,
then such Officer's Certificate shall specify by country the amount, if any,
required to be withheld on such payments to such Holders of Securities, and
the Company agrees to pay to the Trustee or such Paying Agent the Additional
Amounts required by the terms of such Securities.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 301 for Securities of any series) in
accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
In case of any redemption of less than all the Securities of any
series, the Company shall, at least 60 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date and of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of
the Securities to be redeemed. In the case of any redemption of Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officer's Certificate evidencing compliance with
such restriction.
Section 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of a specified tenor are to be redeemed), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities
of such series subject to such redemption and not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series and tenor or any
integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series. If less than all of the Securities of such series
and of a specified tenor are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 45 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities of such series and specified
tenor not previously called for redemption in accordance with the preceding
sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities which has been or is
to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed. Failure to give notice by
mailing in the manner herein provided to the Holder of any Securities
designated for redemption as a whole or in part, or any defect in the notice
to any such Holder, shall not affect the validity of the proceedings for the
redemption of any other Securities or portion thereof.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any Series
and tenor are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular Securities
to be redeemed;
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date;
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(6) that the redemption is for a sinking fund, if such is the
case;
(7) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder of such
Security will receive, without charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining
unredeemed; and
(8) the CUSIP Number or the Euroclear or the Cedel Bank
reference numbers of such Securities, if any (or any other numbers used
by a Depository to identify such Securities).
Notice of redemption of Securities to be redeemed shall be given
by the Company or, on Company Request, by the Trustee at the expense of the
Company.
Section 1105. Deposit of Redemption Price.
On or before any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such
date (unless the Company shall default in the payment of the Redemption Price)
such Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Regular or Special Record
Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or the Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor of
any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
If a Global Security is so surrendered, the Company shall execute,
and the Trustee shall authenticate and deliver to the Depository, without
service charge, a new Global Security in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Global Security so
surrendered.
ARTICLE TWELVE
Intentionally Left Blank
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance.
If pursuant to Section 301 provision is made for either or both of
(a) defeasance of the Securities of a series under Section 1302 or (b)
covenant defeasance of the Securities of a series under Section 1303 to apply
to Securities of any series, then the provisions of such Section or Sections,
as the case may be, together with the other provisions of this Article
Thirteen, shall be applicable to the Securities of such series, and the
Company may at its option, at any time, with respect to the Securities of such
series, elect to have either Section 1302 (if applicable) or Section 1303 (if
applicable) be applied to the Outstanding Securities of such series upon
compliance with the conditions set forth below in this Article Thirteen.
Section 1302. Defeasance and Discharge.
Upon the Company's exercise of the above option applicable to this
Section, the Company shall be deemed to have been discharged from its
obligations with respect to the Outstanding Securities of such series on the
date the conditions set forth below are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
Outstanding Securities of such series and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder:
(A) the rights of Holders of Outstanding Securities of such series
to receive, solely from the trust fund described in Section 1304 and as more
fully set forth in such Section, payments in respect of the principal of (and
premium, if any) and interest, if any, on and Additional Amounts, if any, with
respect to, such Securities when such payments are due;
(B) the Company's obligations with respect to such Securities
under Sections 304, 305, 306, 607, 1002, 1003 and 1006 (but only to the extent
that any Additional Amounts payable exceed the amount deposited in respect
of such Additional Amounts pursuant to Section 1304(1) below);
(C) the rights, powers, trusts, duties and immunities and other
provisions in respect of the Trustee hereunder; and
(D) this Article Thirteen.
Subject to compliance with this Article Thirteen, the Company may exercise its
option under this Section 1302 notwithstanding the prior exercise of its
option under Section 1303 with respect to the Securities of such series.
Section 1303. Covenant Defeasance.
Upon the Company's exercise of the above option applicable to this
Section, the Company shall be released from its obligations under Sections
801, 1005, 501(3) (as to Sections 801 and 1005), 501(5), 501(6) and 501(7) (if
Section 501(7) is specified as applicable to the Securities of such series)
with respect to the Outstanding Securities of such series on and after the
date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance").
For this purpose, such covenant defeasance means that, with
respect to the Outstanding Securities of such series, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section, whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of
any reference in any such Section to any other provision herein or in any
other document, but the remainder of this Indenture and such Securities shall
be unaffected thereby. Following a covenant defeasance, payment of the
Securities of such series may not be accelerated because of an Event of
Default specified above in this Section 1303.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Securities of such series.
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 609 who shall agree to comply with the
provisions of this Article Thirteen applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (A) an amount in Dollars or in such Foreign
Currency in which such Securities are then specified as payable at
Stated Maturity, or (B) Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide on the due date of any
payment, money in an amount, or (C) a combination thereof,
sufficient, without reinvestment, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, (i) the principal of (and
premium, if any, on) and each installment of principal of (and
premium, if an) and interest on the Outstanding Securities of such
series on the Stated Maturity of such principal or installment of
principal or interest and (ii) any mandatory sinking fund payments or
analogous payments applicable to the Outstanding Securities of such
series on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities.
Before such a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of any series of Securities at a
future date in accordance with any redemption provisions contained in
the Supplemental Indenture relating to such series, which shall be
given effect in applying the foregoing.
(2) No Event of Default or event with which notice of lapse of
time or both would become an Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the
date of such deposit and, with respect to defeasance only, at any time
during the period ending on the 123rd day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not cause the
Trustee for the Securities of such series to have a conflicting interest
for purposes of the Trust Indenture Act with respect to any securities
of the Company.
(4) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by
which it is bound.
(5) Such defeasance or covenant defeasance shall not cause any
Securities of such series then listed on any registered national
securities exchange under the Securities Exchange Act of 1934, as
amended, to be deleted.
(6) In the case of an election under Section 1302, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (y) since the date of this
Indenture there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.
(7) In the case of an election under Section 1303, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred.
(8) Such defeasance or covenant defeasance shall be effected in
compliance with any additional terms, conditions or limitations which
may be imposed on the Company in connection therewith pursuant to
Section 301.
(9) The Company shall have delivered to the Trustee an Officer's
Certificate or an Opinion of Counsel, stating that all conditions
precedent provided for in the Indenture relating to either the
defeasance under Section 1302 or the covenant defeasance under Section
1303 (as the case may be) have been complied with.
Section 1305. Deposited Money and Government Obligations to be Held
in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003,
all money and Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee -- collectively, for
purposes of this Section 1305, the "Trustee") pursuant to Section 1304 in
respect of the Outstanding Securities of such series shall be held in trust
and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (but not including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Holders of such Securities, of all sums due
and to become due thereon in respect of principal (and premium, if any) and
interest and Additional Amounts, if any, but such money need not be segregated
from other funds except to the extent required by law.
Unless otherwise specified in or pursuant to this Indenture or any
Security, if after a deposit referred in Section 1302 has been made, (a)
Holder of a Security in respect of which such deposit was made is entitled to,
and does, elect pursuant to Section 301 or the terms of such Security to
receive payment in a Currency other than that in which the deposit pursuant to
1302 has been made in respect of such Security, or (b) a Conversion Event
occurs in respect of the Foreign Currency in which the deposit pursuant to
Section 1302 has been made, the indebtedness represented by such Security
shall be deemed to have been, and will be, fully discharged and satisfied
through the payment of the principal of (and premium, if any), and interest,
if any, on and Additional Amounts, if any, with respect to, such Security as
the same becomes due out of the proceeds yielded by converting (from time to
time as specified below in the case of any such election) the amount or other
property deposited in respect of such Security into the Currency in which such
Security becomes payable as a result of such election or Conversion Event
based on (x) in the case of payments made pursuant to clause (a) above, the
applicable market exchange rate for such Currency in effect on the second
Business Day prior to each payment date, or (y) with respect to a Conversion
Event, the applicable market exchange rate for such Foreign Currency in effect
(as nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities of such series.
Anything in this Article Thirteen to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Obligations held by it as provided in Section
1304 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, are in excess of the amount thereof which would then be required
to be deposited to effect an equivalent defeasance or covenant defeasance.
ARTICLE FOURTEEN
Sinking Funds
Section 1401. Applicability of Article.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of a series, except as otherwise
permitted or required in or pursuant to this Indenture or any Security of such
series issued pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount
provided for by the terms of Securities of such series is herein referred to
as an "optional sinking fund payment." If provided for by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 1402. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series and this Indenture.
Section 1402. Satisfaction of Sinking Fund Payments with Securities.
The Company may (1) deliver Outstanding Securities of a series
(other than any of such Securities previously called for redemption) and (2)
apply as a credit Securities of such series which have been redeemed either at
the election of the Company pursuant to the terms of such series of
Securities, or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment required to be
made pursuant to the terms of such Securities, as provided by the terms of
such Securities, provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose
by the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such
required sinking fund payment shall be reduced accordingly.
Section 1403. Redemption of Securities for Sinking Fund.
Not less than 75 days prior to each sinking fund payment date for
any series of Securities, the Company will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for such series pursuant to the terms of such series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 1402, and the optional
amount, if any, to be added in cash to the next ensuing mandatory sinking
fund payment, hereof and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 days prior to each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given the name of and at the
expense of the Company in the manner provided in Section 1104. Such notice
having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE FIFTEEN
Securities in Foreign Currencies
Section 1501. Applicability of Article.
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same Currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in this Indenture or the Securities, any amount in respect of any
Security denominated in a Currency other than Dollars shall be treated for any
such action or distribution as that amount of Dollars that could be obtained
for such amount on such reasonable basis of exchange and as of the record date
with respect to Securities of such series (if any) for such action,
determination of rights or distribution (or, if there shall be no applicable
record date, such other date reasonably proximate to the date of such action,
determination of rights or distribution) as the Company may specify in a
written notice to the Trustee or, in the absence of such written notice, as
the Trustee may determine.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed and attested, all as of the day and year first above
written.
FEDERAL EXPRESS CORPORATION,
Issuer
Attest:
______________________________ By __________________________
Name: Name:
Title: Title:
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
Attest:
______________________________ By __________________________
Name: Name:
Title: Title:
SCHEDULE I
FEDERAL EXPRESS CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
__________________________________________________________________
Supplemental Indenture
No. __
Dated as of _____________, ______
__________________________________________________________________
___% Notes due __________________, ______
SUPPLEMENTAL INDENTURE NO. ___, dated as of __________, _____
between Federal Express Corporation, a Delaware Corporation (the "Company")
and The First National Bank of Chicago, a national banking association
organized under the laws of the United States of America (herein called the
"Trustee") as Trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company and the Trustee have executed and delivered an
Indenture dated as of July 1, 1996, as amended or supplemented (the
"Indenture") to provide for the issuance from time to time of the Company's
Securities.
Sections 201 and 301 of the Indenture provide that the form and
terms of Securities of any series may be established pursuant to an indenture
supplemental to the Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and under the Indenture and
duly issued by the Company and to make this Supplemental Indenture No. ___ a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, this Indenture witnesseth:
For and in consideration of the premises and the purchase of the
Securities by the holders hereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of the holders of the Securities of the
series hereby established, as follows:
ARTICLE ONE
Relation to the Indenture;
Definitions and Other Provisions of
General Application
Section 1.01. Relation to the Indenture. This Supplemental
Indenture No. ___ constitutes an integral part of the Indenture.
Section 1.02. Definitions and Other Provisions of General
Application. For all purposes of this Supplemental Indenture No. ___ unless
otherwise specified herein:
(a) all terms defined in this Indenture which are used and not
otherwise defined herein shall have the meanings they are given in the
Indenture; and
(b) the provisions of general application stated in Section 101
of the Indenture shall apply to this Supplemental Indenture No. __, except
that the words "herein," "hereof," "hereto" and "hereunder" and other words of
similar import refer to this Supplemental Indenture as a whole and not to the
Indenture or any particular Article, Section or other subdivision of the
Indenture or this Supplemental Indenture No. ___.
ARTICLE TWO
The Series of Notes
Section 2.01. Title.
There shall be a series of Securities designated the "___% Notes
due __________, __________" (the "Notes").
Section 2.02. Principal Amount.
The aggregate principal amount of the Notes which may be
authenticated and delivered under this Supplemental Indenture shall not exceed
$__________ (except for Notes which may be authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes
pursuant to Sections 304, 305, 306, 906 or 1107 of the Indenture).
Section 2.03. Maturity.
The date on which the principal of the Notes shall be payable
shall be __________.
Section 2.04. Interest.
[The Notes shall bear interest at the rate of [ ]% per annum.
Interest shall accrue from __________, _____ or from the most recent Interest
Payment Date to which interest has been paid or provided for. Accrued
interest shall be payable on _________, _____ and on each _____ and _____
thereafter, to the persons in whose names the Notes are registered at the
close of business on the preceding _____ or _____, as the case may be.]
[Insert other interest provisions if necessary]
Section 2.05. Place of Payment.
[The Place of Payment for the Notes shall be at the Corporate
Trust office of the Trustee at ____________ or such other office of the Paying
Agent as the Paying Agent may reasonably request by notice to the Company and
the Trustee (if the Paying Agent is not the Trustee).]
Section 2.06. Redemption.
[Insert redemption terms]
The provisions of Article Thirteen of the Indenture [shall/shall
not] apply to the Notes.
Section 2.08. Intentionally left blank.
Section 2.09. Form of Notes.
The Notes shall be in the form of Exhibit A attached hereto.
Section 2.10 Currency.
[Insert currency terms.]
Section 2.11 Sinking Fund.
[Insert sinking fund terms.]
Section 2.13 Additional Amounts.
The provisions of Section 1006 of the Indenture [shall/shall not]
apply to the Notes.
ARTICLE THREE
Miscellaneous Provisions
Section 3.01. Supplemental Indenture.
The Indenture, as supplemented and amended by this Supplemental
Indenture No. __, is in all respects hereby adopted, ratified and confirmed.
Section 3.02. Counterparts.
This Supplemental Indenture No. __ may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture No. __ to be duly executed, as of the day and year
first written above.
FEDERAL EXPRESS CORPORATION
Attest:
_______________________________ By ___________________________
Name: Name:
Title: Title:
THE FIRST NATIONAL BANK OF
CHICAGO
Attest:
______________________________ By __________________________
Name: Name:
Title: Title:
Exhibit A
to Indenture
REGISTERED
No. ____________ PRINCIPAL AMOUNT:
$ __________________
CUSIP NO. ____________
FEDERAL EXPRESS CORPORATION
___% Note due __________,____
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITORY") (55 WATER
STREET, NEW YORK, NEW YORK), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY, AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
FEDERAL EXPRESS CORPORATION, a Delaware Corporation, (the
"Company" which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
CEDE & CO.
C/O THE DEPOSITORY TRUST COMPANY
55 WATER STREET
NEW YORK, NEW YORK 10041
or registered assigns, the principal sum of
DOLLARS
on ______________________,________ (the "Maturity Date") and to pay interest
thereon from ______________,__________ or from the most recent "Interest
Payment Date" to which interest has been paid or duly provided for,
semi-annually on _______________ and ______________ of each year, commencing
____________,_________, and on the Maturity Date, at the rate of _____% per
annum, until the principal hereof is paid or duly provided for. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Note (or one or more Predecessor Notes) is registered at the close of
business on the "Regular Record Date" for such interest, which shall be the
____________ or ___________ (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to
the registered Holder on such Regular Record Date and may either be paid
to the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee referred to on the
reverse hereof, notice of which shall be given to Holders of Notes of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.
The Company will at all times appoint and maintain a Paying Agent
(which may be the Trustee) authorized by the Company to pay the principal of
and interest on any Notes of this series on behalf of the Company and having
an office or agency in Chicago, Illinois and in such other cities, if any, as
the Company may designate in writing to the Trustee (the "Place of Payment")
where Notes of this series may be presented or surrendered for payment and
where notices, designations or requests in respect for payments with respect
to Notes of this series may be served. The Company has initially appointed
The First National Bank of Chicago as such Paying Agent.
Interest payments on this Note will be computed and paid on the
basis of a 360-day year of twelve 30-day months. Interest payable on this
Note on any Interest Payment Date and on the Maturity Date will include
interest accrued from and including the most recent Interest Payment Date to
which interest has been paid or duly provided for (or from and including
_____,___________, if no interest has been paid on this Note) to but excluding
such Interest Payment Date or the Maturity Date, as the case may be.
If any Interest Payment Date or the Maturity Date falls on a day
that is not a Business Day (as defined below), principal or interest payable
with respect to such Interest Payment Date or Maturity Date, as the case may
be, will be paid on the next succeeding Business Day with the same force and
effect as if it were paid on the date such payment was due, and no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be. "Business
Day" means any day other than Saturday, Sunday or other day on which banking
institutions in New York, Illinois or Tennessee are obligated or authorized by
law to close.
The principal and interest payable on this Note will be made by
wire transfer of immediately available funds to the Holder hereof in such
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed
by the Trustee by manual signature, this Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
FEDERAL EXPRESS CORPORATION
By:_______________________________
Name:
Title:
Attest:
_______________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated therein referred to in the
within-mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO,
As Trustee
By:____________________________
Authorized Signatory
Dated:__________________________
FEDERAL EXPRESS CORPORATION
___% Note due ______________,____
This Note is one of a duly authorized issue of securities of the
Company (herein called the "Notes"), limited in aggregate principal amount to
$________________ (except as otherwise provided in the Indenture), issued and
to be issued as one series of debt securities of the Company under an
Indenture, dated as of July __, 1996, as amended and supplemented from time to
time (the "Indenture"), between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes and of the terms upon which the Notes
are, and are to be, authenticated and delivered. In addition to the Notes,
the Company is authorized to issue an unlimited amount of debt securities in
one or more series (herein collectively with the Notes called the "Debt
Securities") under the Indenture.
This Note is not redeemable at the option of the Company or at the
option of the Holder prior to the Maturity Date [and is not subject to any
sinking fund].
In case an Event of Default with respect to the Notes of this
series shall occur and be continuing, the principal of the Notes of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of
(i) the entire indebtedness of this Note or (ii) certain respective covenants
and Events of Default with respect to this Note, in each case upon compliance
with certain conditions set forth therein, which provisions apply to the
Notes.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Debt
Securities or each series to be affected under the Indenture at any time by
the Company and the Trustee with the consent of a majority in principal
amount of each series of Debt Securities to be affected if less than all
series are to be affected by such modification or amendment. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Debt Securities of each series at the time
Outstanding, on behalf of the Holders of all Debt Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of
this Note and of any Note or Notes issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, places and rate, and in the currency herein prescribed.
As provided in the Indenture and subject to certain limitations
herein and therein set forth, the transfer of this Note is registerable in the
Security Register, upon surrender of this Note for registration of transfer at
the office or agency of the Company in the Place of Payment, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar, duly executed by, the Holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Notes of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations
herein and therein set forth, Notes of this series issued in definitive
registered form are exchangeable for the same aggregate principal amount of
Notes of this series and of like tenor and authorized denominations, as
requested by the Holder surrendering the same.
The Notes of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple of $1,000
in excess thereof.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse under or upon any obligation, covenant or agreement of
the Corporation in the Indenture or any indenture supplemental thereto or in
any Note, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, of the Corporation or of any successor Corporation, either directly or
through the Corporation or any successor Corporation, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.
At the option of the Corporation and upon satisfaction of certain
conditions specified in the Indenture, either (a) the Corporation shall be
deemed to have paid and discharged the entire indebtedness on the Notes or (b)
the Corporation need not comply with certain covenants contained in the
Indenture, in each case upon the deposit by the Corporation with the Trustee
in trust for the Holders of the Notes of an amount of funds or obligations
issued or guaranteed by the United States of America sufficient to pay and
discharge upon the stated maturity thereof the entire indebtedness evidenced
by the Notes, all as provided in the Indenture .
This Note shall be governed by and construed in accordance with
the laws of the State of Tennessee.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT ______________ Custodian ______________
(Cust) (Minor)
under Uniform Gifts to Minors Act
_________________________________
(State)
Additional abbreviations may also be used
though not in the above list.
__________________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assigns(s) and
transfer(s) unto
____________________________________________________________________________
____________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________
/____________________________/
____________________________________________________________________________
____________________________________________________________________________
(Please Print or Type Name and Address
Including Postal Zip Code of Assignee)
____________________________________________________________________________
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
____________________________________________________________________________
____________________________________________________________________________to
transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated:_____________________________
Signature Guaranteed
_______________________________________
NOTICE: Signature must be guaranteed NOTICE: The signature to this
by a member firm of the New York Stock assignment must correspond
Exchange or a commercial bank or trust with the name as written upon
company. the face of the within Note
in every particular,
without alteration or
enlargement or any change
whatever.
Exhibit 5(a)(1)
[Letterhead of Davis Polk & Wardwell]
July 3, 1996
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation (the "Corporation"), in connection with
the preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), of a shelf Registration Statement on Form S-3 (the "Registration
Statement"). The Registration Statement relates to up to $1,000,000,000
aggregate principal amount of Equipment Trust Certificates (the
"Certificates") that may be issued by the Corporation in one or more series
from time to time on a delayed basis. Each series of Certificates will be
issued pursuant to the provisions of a separate Trust Indenture and Security
Agreement to be entered into among First Security Bank, National
Association, as Owner Trustee (the "Owner Trustee"), State Street Bank and
Trust Company, as Indenture Trustee (the "Indenture Trustee"), and the
Corporation, as Lessee, substantially in the form filed as Exhibit 4(b)(1) to
the Registration Statement (each, an "Indenture" and, in the case of a
refinancing transaction, each, as originally executed and as supplemented by a
related Indenture Supplement, an "Original Indenture").
In connection with the opinions expressed below, we have
examined originals, or copies certified to our satisfaction, of such
agreements, documents and certificates of governmental officials and corporate
officers as we have deemed necessary or advisable as a basis for such
opinions. In such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies. We have also examined the form of Indenture filed with the
Commission. Unless otherwise defined herein, capitalized terms used herein
have the meanings assigned thereto in the related Indentures.
Based on the foregoing, it is our opinion that:
Assuming (i) the due authorization, execution and delivery of
the Indentures and the Trust Agreements and, in the case of a refinancing
transaction, the Original Indentures and the related Indenture Supplements by
each of the parties thereto (other than the Corporation), (ii) that the Trust
Agreements, the Original Indentures, if any, and the related Indenture
Supplements have not been terminated, varied, transferred or assigned, (iii)
the due authorization, execution, issuance and delivery by the Owner Trustee,
and the due authentication and delivery by the Indenture Trustee, of the
Certificates to be issued under each such Indenture, in each case in
accordance with the terms of such Indenture and (iv) in the case of a
refinancing transaction, that the outstanding Original Loan Certificate under
each Original Indenture is delivered by the holder thereof to the Indenture
Trustee thereunder for cancellation and is cancelled, (A) the Indentures, when
duly executed and delivered, will constitute valid and binding agreements of
each of the parties thereto, and (B) the Certificates, when duly authorized,
executed, issued and delivered by the Owner Trustee and duly authenticated and
delivered by the Indenture Trustee in accordance with the terms of the
respective Indentures and sold in accordance with the related purchase
agreement or underwriting agreement between the Corporation and the purchasers
or underwriters, as the case may be, named therein, will be valid and binding
obligations of the Owner Trustee and will be entitled to the benefits of the
applicable Indenture.
In giving the foregoing opinion we do not purport to be experts
on, or to express any opinion herein concerning, any laws other than the laws
of the state of New York and the laws of the United States. In giving the
forgoing opinion, we express no opinion as to the priority of the security
interests created by the Original Indentures, if any, or the Indentures.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the prospectus, and in any subsequently filed
prospectus supplements, relating to the Certificates that constitutes part of
the Registration Statement.
Very truly yours,
/s/ DAVIS POLK & WARDWELL
Exhibit 5(a)(2)
[Letterhead of Davis Polk & Wardwell]
July 3, 1996
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation (the "Corporation"), in connection with
the preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), of a shelf Registration Statement on Form S-3 (the "Registration
Statement"). The Registration Statement relates to up to $1,000,000,000
aggregate amount of Pass Through Certificates (the "Pass Through
Certificates") that may be issued by the Corporation in one or more series
from time to time on a delayed basis. The Pass Through Certificates will be
issued pursuant to the provisions of the Pass Through Trust Agreement dated as
of June 1, 1996 between the Corporation and State Street Bank and Trust
Company, as Pass Through Trustee (the "Pass Through Trustee"), filed as
Exhibit 4(a)(1) to the Registration Statement (the "Pass Through Agreement")
as supplemented by a separate Series Supplement for each series of Pass
Through Certificates (each, a "Series Supplement").
In connection with the opinions expressed below, we have
examined originals, or copies certified to our satisfaction, of such
agreements, documents and certificates of governmental officials and corporate
officers as we have deemed necessary or advisable as a basis for such
opinions. In such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies. We have also examined the Pass Through Agreement filed with the
Commission. Unless otherwise defined herein, capitalized terms used herein
have the meanings assigned thereto in the Pass Through Agreement.
Based on the foregoing, it is our opinion that:
Assuming (i) the due authorization, execution and delivery
of the Pass Through Agreement and each applicable Series Supplement by each
of the parties thereto (other than the Corporation), (ii) that the Pass
Through Agreement and each applicable Series Supplement have not been
terminated, varied, transferred or assigned, (iii) the due authorization,
execution, issue, delivery and authentication by the Pass Through Trustee
of the Pass Through Certificates to be issued under the Pass Through
Agreement and each applicable Series Supplement, in each case in accordance
with the terms of such Pass Through Agreement and each such Series
Supplement and (iv) that any outstanding equipment trust certificates
previously issued by the Owner Trustee under any related Indenture have
been delivered to the Indenture Trustee thereunder for cancellation and
have been cancelled, (A) the Pass Through Agreement constitutes, and each
applicable Series Supplement when duly executed and delivered will
constitute, valid and binding agreements of each of the parties thereto,
and (B) the Pass Through Certificates, when duly authorized, executed,
issued, delivered and authenticated by the Pass Through Trustee in
accordance with the terms of the Pass Through Agreement and each applicable
Series Supplement and sold in accordance with the related purchase
agreement or underwriting agreement between the Corporation and the
purchasers or underwriters, as the case may be, named therein, will be
valid and binding obligations of the Pass Through Trustee and will be
entitled to the benefits of the Pass Through Agreement and each applicable
Series Supplement.
In giving the foregoing opinion we do not purport to be experts
on, or to express any opinion herein concerning, any laws other than the laws
of the state of New York and the laws of the United States.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to our firm under the
captions "Legal Matters" and "Federal Income Tax Consequences" in the
prospectus, and in any subsequently filed prospectus supplements, relating to
the Pass Through Certificates that constitutes part of the Registration
Statement.
Very truly yours,
/s/ DAVIS POLK & WARDWELL
Exhibit 5(b)
[Letterhead of Bingham, Dana & Gould LLP]
July 3, 1996
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Attention: Chief Financial Officer
RE: FEDERAL EXPRESS CORPORATION -- PASS THROUGH
CERTIFICATES -- SHELF REGISTRATION
Ladies and Gentlemen:
We are acting as special counsel to State Street Bank and Trust
Company, individually ("SSB"), and as Pass Through Trustee (the "Pass Through
Trustee") under the Pass Through Trust Agreement, dated as of June 1, 1996
(the "Agreement"), between Federal Express Corporation (the "Company") and the
Pass Through Trustee. Pursuant to the Agreement and one or more supplemental
agreements to be entered into from time to time between the Company and the
Pass Through Trustee, the Pass Through Trustee will execute, authenticate and
deliver, upon the Company's request, Pass Through Certificates in one or more
series in an aggregate principal amount of up to $1,000,000,000.00 ("Pass
Through Certificates"), to be registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "1933 Act"),
under the Company's Registration Statement on Form S-3 filed on the date
hereof, (the "Registration Statement"). Except as otherwise defined herein,
terms used herein shall have the meanings set forth in the Agreement.
Our representation of the Pass Through Trustee has been as special
counsel for the purposes stated above. As to all matters of fact (including
factual conclusions and characterizations and descriptions of purpose,
intention or other state of mind), we have relied entirely upon (i) the
representations of the parties set forth in the Operative Agreements and (ii)
certificates delivered to us by the management of SSB and have assumed,
without independent inquiry, the accuracy of those representations and
certificates.
We have examined the Agreement, the Pass Through Certificates, the
Certificate of the Massachusetts Commissioner of Banks as to SSB, and
originals, or copies certified or otherwise identified to our satisfaction, of
other such records, documents, certificates, or other instruments as we have
deemed necessary or advisable for the purposes of this opinion.
We have assumed the genuineness of all signatures (other than
those on behalf of SSB and the Pass Through Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of SSB and the Pass Through Trustee).
Each opinion set forth below relating to the enforceability of any
agreement or instrument against the Pass Through Trustee, is subject to the
following general qualifications:
(i) as to any agreement to which the Pass Through Trustee, as
applicable, is a party, we assume that such agreement is the legal,
valid and binding obligation of each other party (other than the Pass
Through Trustee) thereto;
(ii) the enforceability of any obligation of the Pass Through
Trustee may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshalling and other similar laws and rules
of law affecting the enforcement generally of creditors' rights and
remedies (including such as may deny giving effect to waivers of
debtors' or guarantors' rights);
(iii) the enforcement of any rights and the availability of any
specific or equitable relief of any kind may in all cases be subject
to an implied duty of good faith and to general principles of equity
(regardless of whether such enforceability or relief is considered
in a proceeding at law or in equity).
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this
opinion. The opinions set forth in paragraphs 1 and 2 below are based on
and limited to the Federal laws of the United States and the internal
substantive laws of the Commonwealth of Massachusetts and the opinion set
forth in paragraph 3 below is based on and limited to the internal
substantitive laws of the Commonwealth of Massachusetts. No opinion is
expressed herein as to the application or effect of federal securities laws or
as to the securities or so-called "Blue Sky" laws of any state or other
jurisdiction. In addition, no opinion is expressed as to matters governed by
Title 49 of the United States Code, or by any other law, statute, rule or
regulation of the United States relating to the acquisition, ownership,
registration, use, operation, maintenance, repair, replacement or sale of or
the nature of the Aircraft, Airframe or Engines.
With your permission, with respect to paragraph 2 below in
connection with our opinion relating to the legality, validity and binding
effect of the documents there referred to, to the extent that the laws of the
Commonwealth of Massachusetts do not govern such documents, we have assumed
that the laws of the jurisdictions whose laws govern such documents are not
materially different from the internal substantive laws of the Commonwealth of
Massachusetts.
Based on and subject to the foregoing, we are of the opinion that:
1. State Street Bank is a Massachusetts trust company duly
organized and validly existing in good standing with the
Massachusetts Commissioner of Banks under the laws of the
Commonwealth of Massachusetts with the power and authority to
execute, deliver and carry out, individually or as Pass Through
Trustee, as the case may be, the terms of the Agreement, the
supplements contemplated thereby and the Pass Through Certificates.
2. With respect to the Pass Through Certificates, when (a)
supplemental agreements contemplated by the Agreement shall have been
prepared in accordance with the terms of the Agreement, (b) the
Agreement and such supplemental agreements shall have been duly
authorized, executed and delivered by the Company and the
Pass Through Trustee in accordance with the terms and conditions of
the Agreement, and (c) the Pass Through Certificates shall have been
duly executed, authenticated, issued and delivered by the Pass
Through Trustee and sold as contemplated by each of the Registration
Statement, the Prospectus and the Agreement as so supplemented,
assuming that the terms of the Pass Through Certificates are in
compliance with then applicable law, (i) the Agreement, as so
supplemented will constitute a valid and binding obligation of the
Pass Through Trustee enforceable against the Pass Through
Trustee in accordance with its terms, and (ii) the Pass Through
Certificates will be validly issued and will be entitled to the
benefits of the Agreement as so supplemented.
3. The discussion in the prospectus forming part of the
Registration Statement entitled "Certain Massachusetts Taxes," insofar
as it relates to statements of law or legal conclusions, is correct in
all material respects.
We hereby consent to the filing of this opinion as an Exhibit to
the Registration Statement, and to the reference to us under the captions
"Legal Matters" and "Certain Massachusetts Taxes," in the prospectus and in any
subsequently filed prospectus supplements. In giving this consent, we do not
thereby admit that we are in the category of person whose consent is required
under Section 7 of the 1933 Act or the Rules and Regulations of the Securities
and Exchange Commission.
Very truly yours,
/s/ BINGHAM, DANA & GOULD LLP
Exhibit 5(c)
[Letterhead of Ray, Quinney & Nebeker]
July 3, 1996
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Attention: Chief Financial Officer
RE: FEDERAL EXPRESS CORPORATION -- EQUIPMENT TRUST
CERTIFICATES -- SHELF REGISTRATION
Ladies and Gentlemen:
We have acted as counsel to First Security Bank,
National Association, a national banking association, in its individual
capacity ("First Security") and not in its individual capacity but solely
as owner trustee ("Owner Trustee") under one or more Trust Agreements
("Trust Agreements"), in connection with the filing by Federal Express
Corporation ("Federal Express") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "1933 Act"), of the
Registration Statement on Form S-3 to which this opinion is attached as
Exhibit 5(c), which Registration Statement we understand is to be filed
with the Securities and Exchange Commission on or about the date hereof (as
such Registration Statement may be amended from time to time, the
"Registration Statement"). The Registration Statement relates to the
issuance from time to time of up to $1,000,000,000 aggregate principal
amount of Equipment Trust Certificates (the "Certificates") that will be
issued by the Owner Trustee in connection with certain leveraged lease
finance transactions pursuant to one or more Trust Agreements, each between
First Security and the owner participant named therein (the "Owner
Participant"), and one or more Trust Indenture and Security Agreements
(individually an "Indenture", collectively the "Indentures") among the
Owner Trustee, State Street Bank and Trust Company ("SSB") as indenture
trustee, and Federal Express.
We have examined a form of Trust Agreement and a form of Indenture
which you have furnished to us and which have been filed as exhibits to the
Registration Statement. We have also examined originals or copies of such
other documents, such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes of this opinion.
The opinions set forth herein are limited to the federal laws of
the United States of America governing the banking and trust powers of First
Security, the laws of the State of Utah and, solely with respect to the
validity and binding nature of the Indentures and the Certificates, the laws
of the State of New York. Insofar as the opinions expressed herein involve
the laws of the State of New York, we have with your permission and without
independent investigation relied entirely upon the opinion letter of even date
herewith of Davis Polk & Wardwell, and the opinions set forth herein are
subject to each of the assumptions, exceptions, qualifications and limitations
contained in such opinion letter. We have assumed that the Trust Agreements
and the Indentures will not differ in any material respect from the forms of
Trust Agreement and Indenture filed as exhibits to the Registration Statement
and that no relevant provision of Utah, New York or United States of America
federal law will have differed in any material respect from such law as in
effect on the date hereof.
Based upon the foregoing and upon an examination of such questions
of law as we have considered necessary or appropriate, and subject to the
assumptions, exceptions and qualifications set forth below, we advise you
that, in our opinion:
1. First Security is a national banking association duly
organized and validly existing under the laws of the United States of
America holding a valid certificate to do business as a national banking
association, with banking and trust powers.
2. Upon the execution and delivery by First Security and the
Owner Trustee, as the case may be, of each of the Trust Agreements and
the Indentures and assuming that at the time of such execution and
delivery First Security continues in existence as a national banking
association in good standing and has maintained its current full
corporate power and authority to enter into and perform the Trust
Agreements and the Indentures, each of the Trust Agreements and the
Indentures will constitute a legal, valid and binding obligation of the
Owner Trustee (and, to the extent set forth in the respective Trust
Agreements and Indentures, of First Security) enforceable against the
Owner Trustee (and, to the extent set forth in the respective Trust
Agreements and Indentures, against First Security) in accordance with
its terms subject to (i) applicable bankruptcy, insolvency, moratorium,
reorganization, receivership and similar laws affecting the rights and
remedies of creditors generally, and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law); and assuming each of the Trust Agreements was
properly authorized, executed and delivered by the owner participant
named therein and that the terms of the Trust Agreements are not in
violation of any laws, documents, judgments, regulations or other
provisions applicable to the owner participant, each of the Trust
Agreements constitutes, under the laws of the State of Utah, a legal,
valid and binding obligation of the owner participant enforceable
against the owner participant named therein in accordance with its terms
subject to (i) applicable bankruptcy, insolvency, moratorium,
reorganization, receivership and similar laws affecting the rights and
remedies of creditors generally, and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
3. Assuming (i) the due authorization, execution and delivery of
each of the Indentures by each of the parties to each such document
(other than First Security or the Owner Trustee, as the case may be),
(ii) that each such party (other than First Security or the Owner
Trustee, as the case may be) had, at the time of execution, the
corporate power, authority and legal right to execute, deliver and
perform each Indenture to which it is a party, (iii) that each such
party (other than First Security or the Owner Trustee, as the case may
be) continues to have such power, authority and legal right, (iv) that
the execution, delivery and performance of each such Indenture by each
such party (other than First Security or the Owner Trustee, as the case
may be) did not and does not violate such party's respective charter or
by-laws and fully complies with all laws and governmental rules and
regulations (federal, state, or otherwise) that may be applicable to
such party, in its individual or trust capacity, as the case may be, (v)
that no such document has been terminated, amended, transferred or
assigned, and (vi) that First Security or the Owner Trustee, as the case
may be, has maintained its current full corporate power and authority to
enter into and perform the Trust Agreements and Indentures and to enter
into, issue and perform the Certificates to be issued under each
Indenture, (a) upon the execution and delivery of the Indentures by
First Security or the Owner Trustee, as the case may be, the Indentures
will constitute valid and binding agreements of First Security or the
Owner Trustee, as the case may be, and (b) upon the due execution by the
Owner Trustee and the due authentication by SSB of each Certificate to
be issued under each such Indenture, in each case in accordance with the
terms of each such Indenture, each such Certificate, when issued and
sold in accordance with the purchase agreement or underwriting agreement
between Federal Express and the purchasers or underwriters, as the case
may be, named therein will be a valid and binding obligation of the
Owner Trustee and will be entitled to the benefits of the Indenture
pursuant to which it was issued.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the prospectus and in any subsequently filed prospectus
supplements forming part of the Registration Statement. In giving this
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the 1933 Act or the rules and
regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ RAY, QUINNEY & NEBEKER
Exhibit 5(d)(1)
[COMPANY LETTERHEAD]
July 3, 1996
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Ladies and Gentlemen:
I am Vice President - Law of Federal Express Corporation (the
"Company") and have acted as such in connection with the preparation and
filing of a Registration Statement on Form S-3, as amended (the "Registration
Statement") and the four prospectuses contained therein (collectively, the
"Prospectuses") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"). The Registration
Statement relates to:
(i) Equipment Trust Certificates, to be issued in one or more
series in an aggregate principal amount of up to $1 billion pursuant to one or
more Trust Indenture and Security Agreements (the "Indentures") to be
entered into among the Company, State Street Bank and Trust Company, as
Indenture Trustee, and First Security Bank, National Association, a
national banking association, as Owner Trustee;
(ii) Pass Through Certificates, to be issued in one or more series
in an aggregate amount of up to $1 billion pursuant to a Pass Through Trust
Agreement (the "Pass Through Agreement") dated as of June 1, 1996 between the
Company and State Street Bank and Trust Company, as Pass Through Trustee;
(iii) Debt Securities, to be issued in one or more series in an
aggregate principal amount of up to $1 billion pursuant to a Trust Indenture
to be entered into between the Company and The First National Bank of Chicago,
as Trustee; or
(iv) Preferred Stock and Common Stock of the Company, to be issued
in an aggregate amount of up to $1 billion.
In connection with the opinions expressed below, I or attorneys
under my supervision have examined originals, or copies certified to my
satisfaction, of such agreements, documents, certificates and statements of
government officials and other papers as we have deemed necessary or advisable
as a basis for such opinions. In such examination we have assumed the
genuineness of all signatures and the authenticity of all documents
submitted to us as originals, and the conformity with the originals of all
documents submitted to us as copies. I or attorneys under my supervision
have also examined the Pass Through Agreement and the forms of Indentures
filed with the Securities and Exchange Commission.
Based upon the foregoing, it is my opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware and is duly
authorized to carry on the business in which it is engaged.
2. The execution and delivery by the Company of each Indenture
and the Pass Through Agreement has been duly authorized by the Company.
I am qualified to practice law in the State of Tennessee and I do
not purport to be an expert on, or to express any opinion herein concerning,
any laws other than the laws of the State of Tennessee, the corporate laws
of the State of Delaware and the federal laws of the United States.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Legal
Matters" in the Prospectuses and in any subsequently filed Prospectus
Supplements. In giving such consent, I do not admit that I am in the category
of persons whose consent is required under Section 7 of the Securities Act.
Sincerely,
FEDERAL EXPRESS CORPORATION
/s/ GEORGE W. HEARN
-----------------------------
George W. Hearn
Vice President - Law
Exhibit 5(d)(2)
[COMPANY LETTERHEAD]
July 3, 1996
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Ladies and Gentlemen:
I am Vice President - Law of Federal Express Corporation (the
"Company") and have acted as such in connection with the preparation and
filing of a Registration Statement on Form S-3, as amended (the
"Registration Statement") and the four prospectuses contained therein
(collectively, the "Prospectuses") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). The Registration Statement relates to:
(i) Equipment Trust Certificates, to be issued in one or more series
in an aggregate principal amount of up to $1 billion pursuant to one or
more Trust Indenture and Security Agreements to be entered into among the
Company, State Street Bank and Trust Company, as Indenture Trustee, and
First Security Bank, National Association, a national banking
association, as Owner Trustee;
(ii) Pass Through Certificates, to be issued in one or more series in
an aggregate amount of up to $1 billion pursuant to a Pass Through Trust
Agreement dated as of June 1, 1996 between the Company and State Street Bank
and Trust Company, as Pass Through Trustee;
(iii) Debt Securities, to be issued in one or more series in an
aggregate principal amount of up to $1 billion pursuant to a Trust
Indenture (the "Trust Indenture") to be entered into between the Company
and The First National Bank of Chicago, as Trustee; or
(iv) Preferred Stock and Common Stock of the Company, to be issued in
an aggregate amount of up to $1 billion (collectively referred to herein as
the "Shares").
In connection with the opinions expressed below, I or attorneys under
my supervision have examined originals, or copies certified to my
satisfaction, of such agreements, documents, certificates and statements of
government officials and other papers as we have deemed necessary or
advisable as a basis for such opinions. In such examination we have
assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, and the conformity with the
originals of all documents submitted to us as copies. I or attorneys under
my supervision have also examined the form of Trust Indenture filed with
the Securities and Exchange Commission.
Based upon the foregoing, it is my opinion that:
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware and is duly
authorized to carry on the business in which it is engaged.
2. The execution and delivery by the Company of the Trust Indenture
has been duly authorized by the Company.
3. Subject to (i) the determination of the terms of the Debt
Securities in accordance with the Trust Indenture, (ii) the issuance, sale,
authentication and delivery of the Debt Securities as contemplated by the
Trust Indenture and the underwriting agreement for debt securities in
substantially the form filed as Exhibit 1(c) to the Registration Statement,
and (iii) the Registration Statement being declared effective, the Debt
Securities, when issued and sold, will be legally issued and the valid and
binding obligations of the Company enforceable in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principals relating
to or limiting creditors rights generally.
4. The Shares will be legally issued, fully paid and nonassessable
when issued and sold and paid for on the terms contemplated by the
underwriting agreements for Preferred Stock and Common Stock in
substantially the forms filed as Exhibits 1(d) and 1(e), respectively, to
the Registration Statement.
I do not find it necessary for purposes of this opinion and,
accordingly, do not purport to cover herein the application of the "Blue
Sky" or securities laws of the various states to the sales of the Debt
Securities or the Shares.
I am qualified to practice law in the State of Tennessee and I do not
purport to be an expert on, or to express any opinion herein concerning,
any laws other than the laws of the State of Tennessee, the corporate laws
of the State of Delaware and the federal laws of the United States.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Legal
Matters" in the Prospectuses and in any subsequently filed Prospectus
Supplements. In giving such consent, I do not admit that I am in the category
of persons whose consent is required under Section 7 of the Securities Act.
Sincerely,
FEDERAL EXPRESS CORPORATION
/s/ GEORGE W. HEARN
-------------------------------------
George W. Hearn
Vice President - Law
Exhibit 23(e)
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 registration statement of our
reports dated June 29, 1995, included (or incorporated by reference) in
Federal Express Corporation's Form 10-K for the year ended May 31, 1995,
and to all references to our firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
--------------------------
Arthur Andersen LLP
Memphis, Tennessee
July 1, 1996
Exhibit 24
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a
Delaware corporation (the "Corporation"), does hereby constitute and appoint
Frederick W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them,
with full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18 day of June,
1996.
/s/ ROBERT H. ALLEN
-------------------
Robert H. Allen
STATE OF TEXAS
COUNTY OF HARRIS
I, Earlene L. Barbeau, a Notary Public in and for the aforesaid State and
County, do hereby certify that Robert H. Allen, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ EARLENE L. BARBEAU
----------------------
NOTARY PUBLIC
My Commission Expires:
March 8, 1997
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18 day of June, 1996.
/s/ HOWARD H. BAKER, JR.
-----------------------
Howard H. Baker, Jr.
STATE OF TENNESSEE
COUNTY OF SCOTT
I, Betty B. Lowe, a Notary Public in and for the aforesaid State and
County, do hereby certify that Howard H. Baker, Jr. personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ BETTY B. LOWE
-----------------
NOTARY PUBLIC
My Commission Expires:
August 27, 1997
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of
June, 1996.
/s/ ANTHONY J.A. BRYAN
-----------------------
Anthony J.A. Bryan
STATE OF Rhode Island
COUNTY OF Washington
I, Jennifer E. Adams, a Notary Public in and for the aforesaid State
and County, do hereby certify that Anthony J.A. Bryan, personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ JENNIFER E. ADAMS
----------------------
NOTARY PUBLIC
My Commission Expires:
6/18/97
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June, 1996.
/s/ ROBERT L. COX
-----------------
Robert L. Cox
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Lillian W. Powers, a Notary Public in and for the aforesaid State and
County, do hereby certify that Robert L. Cox, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ LILLIAN W. POWERS
---------------------
NOTARY PUBLIC
My Commission Expires:
April 29, 1997
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June, 1996.
/s/ RALPH D. DE NUNZIO
----------------------
Ralph D. DeNunzio
STATE OF NEW YORK
COUNTY OF NEW YORK
I, Pauline E. Kalahele, a Notary Public in and for the aforesaid State and
County, do hereby certify that Ralph D. DeNunzio personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ PAULINE E. KALAHELE
-----------------------
NOTARY PUBLIC
My Commission Expires:
February 28, 1998
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as her true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
____________, 1996.
____________________________
Judith L. Estrin
STATE OF ________________
COUNTY OF ______________
I, _____________________, a Notary Public in and for the aforesaid State
and County, do hereby certify that Judith L. Estrin, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that she signed and
delivered the foregoing instrument as her free and voluntary act, for the uses
and purposes therein set forth.
____________________________
NOTARY PUBLIC
My Commission Expires:
__________________________
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June, 1996.
/s/ PHILIP GREER
----------------
Philip Greer
STATE OF NEW YORK
COUNTY OF NEW YORK
I, Kathleen M. Rode, a Notary Public in and for the aforesaid State and
County, do hereby certify that Philip Greer, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ KATHLEEN M. RODE
--------------------
NOTARY PUBLIC
My Commission Expires:
May 31, 1998
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June, 1996.
/s/ J.R. HYDE, III
------------------
J.R. Hyde, III
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Nancy C. Phillips, a Notary Public in and for the aforesaid State and
County, do hereby certify that J. R. Hyde, III, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ NANCY C. PHILLIPS
---------------------
NOTARY PUBLIC
My Commission Expires:
June 12, 2000
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of __________,
1996.
____________________________
Charles T. Manatt
STATE OF ________________
COUNTY OF ______________
I, ____________________, a Notary Public in and for the aforesaid State and
County, do hereby certify that Charles T. Manatt, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
____________________________
NOTARY PUBLIC
My Commission Expires:
__________________________
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr., and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such officer a Registration Statement
on Form S-3 to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to a shelf registration for
equipment trust certificates, pass through certificates, debt securities,
preferred stock and common stock in an aggregate amount up to $1 billion and
any and all amendments to such Registration Statement whether filed prior or
subsequent to the time such Registration Statement becomes effective,
including amendments to the Registration Statement for the same offering that
are to be effective upon filing pursuant to Rule 462(b) under the Securities
Act of 1933, as amended; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
June, 1996.
/s/ GEORGE J. MITCHELL
-----------------------
George J. Mitchell
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
I, Nancy H. Eng, a Notary Public in and for the aforesaid State
and County, do hereby certify that George J. Mitchell personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ NANCY H. ENG
-----------------
NOTARY PUBLIC
My Commission Expires:
January 20, 1998
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June,1996.
/s/ JACKSON W. SMART, JR.
--------------------------
Jackson W. Smart, Jr.
STATE OF ILLINOIS
COUNTY OF COOK
I, Esperanza Acosta, a Notary Public in and for the aforesaid State and
County, do hereby certify that Jackson W. Smart, Jr. personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ ESPERANZA ACOSTA
--------------------
NOTARY PUBLIC
My Commission Expires:
February 8, 1997
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June, 1996.
/s/ JOSHUA I. SMITH
-------------------
Joshua I. Smith
STATE OF MARYLAND
COUNTY OF ANNE ARUNDEL
I, Gaye P. Cotton, a Notary Public in and for the aforesaid State and
County, do hereby certify that Joshua I. Smith, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ GAYE P. COTTON
------------------
NOTARY PUBLIC
My Commission Expires:
April 24, 1999
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, Alan B. Graf, Jr. and James S. Hudson, and each of them, with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June, 1996.
/s/ PETER S. WILLMOTT
---------------------
Peter S. Willmott
STATE OF ILLINOIS
COUNTY OF COOK
I, Joan L. Noble, a Notary Public in and for the aforesaid State and
County, do hereby certify that Peter S. Willmott personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ JOAN L. NOBLE
-----------------
NOTARY PUBLIC
My Commission Expires:
March 5, 1999
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, the principal executive officer and a director of
FEDERAL EXPRESS CORPORATION, a Delaware corporation (the "Corporation"), does
hereby constitute and appoint Alan B. Graf, Jr. and James S. Hudson, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such officer and director, a
Registration Statement on Form S-3 to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, with respect
to a shelf registration for equipment trust certificates, pass through
certificates, debt securities, preferred stock and common stock in an
aggregate amount up to $1 billion and any and all amendments to such
Registration Statement whether filed prior or subsequent to the time such
Registration Statement becomes effective, including amendments to the
Registration Statement for the same offering that are to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended;
and hereby ratifies and confirms all that such attorneys-in-fact and agents,
or any of them, or their or his substitute or substitutes may lawfully do or
cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of June, 1996.
/s/ FREDERICK W. SMITH
----------------------
Frederick W. Smith
STATE OF TENNESSEE
COUNTY OF SHELBY
I, June Y. Fitzgerald, a Notary Public in and for the aforesaid State and
County, do hereby certify that Frederick W. Smith, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ JUNE Y. FITZGERALD
----------------------
NOTARY PUBLIC
My Commission Expires:
January 26, 1999
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, the principal financial officer of FEDERAL EXPRESS
CORPORATION, a Delaware corporation (the "Corporation"), does hereby
constitute and appoint Frederick W. Smith and James S. Hudson, and each of
them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such officer, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates, pass through certificates, debt
securities, preferred stock and common stock in an aggregate amount up to $1
billion and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective, including amendments to the Registration Statement for the same
offering that are to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June, 1996.
/s/ ALAN B. GRAF, JR.
---------------------
Alan B. Graf, Jr.
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Edna M. Kennon, a Notary Public in and for the aforesaid State and
County, do hereby certify that Alan B. Graf, Jr., personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ EDNA M. KENNON
------------------
NOTARY PUBLIC
My Commission Expires:
September 14, 1999
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, the principal accounting officer and controller of
FEDERAL EXPRESS CORPORATION, a Delaware corporation (the "Corporation"), does
hereby constitute and appoint Frederick W. Smith and Alan B. Graf, Jr., and
each of them, with full power of substitution and resubstitution, as his true
and lawful attorneys-in-fact and agents, with full power and authority to
execute in the name and on behalf of the undersigned as such officer, a
Registration Statement on Form S-3 to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, with respect
to a shelf registration for equipment trust certificates, pass through
certificates, debt securities, preferred stock and common stock in an
aggregate amount up to $1 billion and any and all amendments to such
Registration Statement whether filed prior or subsequent to the time such
Registration Statement becomes effective, including amendments to the
Registration Statement for the same offering that are to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended;
and hereby ratifies and confirms all that such attorneys-in-fact and agents,
or any of them, or their or his substitute or substitutes may lawfully do or
cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June, 1996.
/s/ JAMES S. HUDSON
-------------------
James S. Hudson
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Delores Wolfmeyer, a Notary Public in and for the aforesaid State and
County, do hereby certify that James S. Hudson, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ DELORES M. WOLFMEYER
------------------------
NOTARY PUBLIC
My Commission Expires:
December 1, 1996
Exhibit 25(a)
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617)654-3253
(Name, address and telephone number of agent for service)
_____________________
Federal Express Corporation
(Exact name of obligor as specified in its charter)
Delaware 71-0427007
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2005 Corporate Avenue
Memphis, Tennessee 38132
(901) 369-3600
(Address of principal executive offices) (Zip Code)
____________________
Equipment Trust Certificates; Pass Through Certificates
(Title of indenture securities)
==============================================================================
GENERAL
Item 1. General Information.
-------------------
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority
to which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
Item 2. Affiliations with Obligor.
-------------------------
If the Obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 6.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
----------------
List below all exhibits filed as part of this statement of
eligibility.
1. A copy of the articles of association of the trustee as now
in effect.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement
of Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference
thereto.
2. A copy of the certificate of authority of the trustee to
commence business, if not contained in the articles of
association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as Exhibit
2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
3. A copy of the authorization of the trustee to exercise
corporate trust powers, if such authorization is not contained
in the documents specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration Statement
of Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
5. A copy of each indenture referred to in Item 4. if the obligor
is in default.
Not applicable.
6. The consents of United States institutional trustees required
by Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility and
Qualification which relates to matters peculiarly within the knowledge of
the obligor or any underwriter for the obligor, the trustee has relied upon
information furnished to it by the obligor and the underwriters, and the
trustee disclaims responsibility for the accuracy or completeness of such
information.
The answer furnished to Item 2. of this statement will be amended,
if necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility and qualification to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Boston and The Commonwealth of Massachusetts, on the 17th day
of June, 1996.
STATE STREET BANK AND TRUST COMPANY
By: /s/ E. Decker Adams
-----------------------------------
E. Decker Adams
Vice President
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance
by Federal Express Corporation, of its Equipment Trust Certificates; Pass
Through Certificates, we hereby consent that reports of examination by
Federal, State, Territorial or District authorities may be furnished by
such authorities to the Securities and Exchange Commission upon request
therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ E. Decker Adams
--------------------------------
E. Decker Adams
Vice President
Dated: June 17, 1996
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company
of Boston, Massachusetts and foreign and domestic subsidiaries, a state
banking institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business December 31, 1995, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner
of Banks under General Laws, Chapter 172, Section 22(a).
Thousands of
ASSETS Dollars
- ------ ------------
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ......... 1,331,827
Interest-bearing balances .................................. 5,971,326
Securities ................................................... 6,325,054
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ........................ 5,436,994
Loans and lease financing receivables:
Loans and leases, net of unearned income ........ 4,308,339
Allowance for loan and lease losses ............. 63,491
Loans and leases, net of unearned income and allowances .... 4,244,848
Assets held in trading accounts .............................. 1,042,846
Premises and fixed assets .................................... 374,362
Other real estate owned ...................................... 3,223
Investments in unconsolidated subsidiaries ................... 31,624
Customers' liability to this bank on acceptances outstanding . 57,472
Intangible assets ............................................ 68,384
Other assets.................................................. 670,058
Total assets ................................................. 25,558,018
===========
LIABILITIES
Deposits:
In domestic offices ....................................... 6,880,231
Noninterest-bearing ........................ 4,728,115
Interest-bearing ....................................... 2,152,116
In foreign offices and Edge subsidiary .................... 9,607,427
Noninterest-bearing ........................ 28,265
Interest-bearing ........................... 9,579,162
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary .................... 5,913,969
Demand notes issued to the U.S. Treasury and Trading
Liabilities ............................................... 530,406
Other borrowed money ........................................ 493,191
Bank's liability on acceptances executed and outstanding .... 57,387
Other liabilities ........................................... 620,287
Total liabilities ........................................... 24,102,898
EQUITY CAPITAL
Common stock ................................................ 29,176
Surplus ..................................................... 228,448
Undivided profits ........................................... 1,197,496
Total equity capital ........................................ 1,455,120
Total liabilities and equity capital ........................ 25,558,018
===========
I, Rex S. Schuette, Senior Vice President and Comptroller of the above
named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5. A copy of each indenture referred to in Item 4. if the
obligor is in default.
Not applicable.
6. The consents of United States institutional trustees required
by Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of
its supervising or examining authority is annexed
hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility and
Qualification which relates to matters peculiarly within the knowledge of
the obligor or any underwriter of the obligor, the trustee has relied upon
the information furnished to it by the obligor and the underwriters, and
the trustee disclaims responsibility for the accuracy or completeness of
such information.
The answer to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
duly organized and existing under the laws of The Commonwealth of
Massachusetts, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Boston and The Commonwealth of
Massachusetts, on the 17th day of June, 1996.
STATE STREET BANK AND TRUST COMPANY
By: /s/ E. Decker Adams
-------------------------------
E. Decker Adams
Vice President
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance
by Federal Express Corporation of its Equipment Trust Certificates; Pass
Through Certificates, we hereby consent that reports of examination by
Federal, State, Territorial or District authorities may be furnished by
such authorities to the Securities and Exchange Commission upon request
therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ E. Decker Adams
---------------------------------
E. Decker Adams
Vice President
Dated: June 17, 1996
Exhibit 25(b)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)____
_______________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
_______________________
FEDERAL EXPRESS CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 71-0427007
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
2005 Corporate Avenue
Memphis, Tennessee 38132
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 24th day of June,
1996.
The First National Bank of Chicago,
Trustee,
By /s/ JOHN R. PRENDIVILLE
---------------------------------
John R. Prendiville
Vice President
*Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First
National Bank of Chicago, filed as Exhibit 26 to the Registration
Statement on Form S-3 of The CIT Group Holdings, Inc. filed with the
Securities and Exchange Commission on February 16, 1993 (Registration
No. 33-58418).
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 24, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Federal Express
Corporation and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
The First National Bank of Chicago
By /s/ JOHN R. PRENDIVILLE
---------------------------------
John R. Prendiville
Vice President
EXHIBIT 7
Legal Title of Bank: The First National Bank Call Date: 03/31/96
of Chicago ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Page RC-1
Suite 0460
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts C400
Thousands RCFD BIL MIL THOU <-
-------------- ---- --- --- ---- ----
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository
institutions (from Schedule RC-A):
a. Noninterest-bearing balances and
currency and coin(1)............. 0081 3,047,140 1.a.
b. Interest-bearing balances(2)..... 0071 8,488,390 1.b.
2. Securities
a. Held-to-maturity securities
(from Schedule RC-B, column A)... 1754 0 2.a.
b. Available-for-sale securities
(from Schedule RC-B, column D)..... 1773 997,155 2.b.
3. Federal funds sold and securities
purchased under agreements to
resell in domestic offices of the
bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold................ 0276 3,384,301 3.a.
b. Securities purchased under
agreements to resell.............. 0277 685,531 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned
income (from Schedule RC-C)....... RCFD 2122
16,884,488 4.a.
b. LESS: Allowance for loan and
lease losses...................... RCFD 3123
358,448 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128
0 4.c.
d. Loans and leases, net of unearned
income, allowance, and reserve
(item 4.a minus 4.b and 4.c) 2125 16,526,040 4.d.
5. Assets held in trading accounts...... 3545 10,974,841 5.
6. Premises and fixed assets (including
capitalized leases).................. 2145 592,581 6.
7. Other real estate owned (from
Schedule RC-M)....................... 2150 9,952 7.
8. Investments in unconsolidated
subsidiaries and associated
companies (from Schedule RC-M)....... 2130 42,098 8.
9. Customers' liability to this bank on
acceptances outstanding.............. 2155 564,435 9.
10.Intangible assets (from Schedule RC-M) 2143 96,463 10.
11.Other assets (from Schedule RC-F).... 2160 1,703,124 11.
12.Total assets (sum of items 1 through 11) 2170 47,112,051 12.
- -----------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
</TABLE>
Legal Title of Bank: The First National Bank Call Date: 03/31/96
of Chicago ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Page RC-2
Suite 0460
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts C400
Thousands RCFD BIL MIL THOU <-
-------------- ---- --- --- ---- ----
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of
totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 14,251,874 13.a.
(1) Noninterest-bearing(1)....... RCON 6631 5,707,786 13.a.(1)
(2) Interest-bearing............. RCON 6636 8,544,088 13.a.(2)
b. In foreign offices, Edge and
Agreement subsidiaries, and
IBFs (from Schedule RC-E,
part II)....................... RCFN 2200 12,839,836 13.b.
(1) Noninterest bearing........ RCFN 6631 196,311 13.b.(1)
(2) Interest-bearing........... RCFN 6636 12,643,525 13.b.(2)
14. Federal funds purchased and securities
sold under agreements to repurchase in
domestic offices of the bank and of
its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased.......... RCFD 0278 2,692,008 14.a.
b. Securities sold under agreements
to repurchase.................... RCFD 0279 1,165,032 14.b.
15. a. Demand notes issued to the
U.S. Treasury.................... RCON 2840 77,000 15.a.
b. Trading Liabilities.............. RCFD 3548 7,103,300 15.b.
16. Other borrowed money:
a. With original maturity of one
year or less..................... RCFD 2332 2,223,560 16.a.
b. With original maturity of more
than one year.................... RCFD 2333 144,665 16.b.
17. Mortgage indebtedness and obligations
under capitalized leases............ RCFD 2910 283,041 17.
18. Bank's liability on acceptance
executed and outstanding............ RCFD 2920 564,435 18.
19. Subordinated notes and debentures... RCFD 3200 1,275,000 19.
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,411,087 20.
21. Total liabilities (sum of items 13
through 20)......................... RCFD 2948 44,030,838 21.
22. Limited-Life preferred stock and
related surplus..................... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and
related surplus..................... RCFD 3838 0 23.
24. Common stock........................ RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related
to preferred stock)................. RCFD 3839 2,320,326 25.
26. a. Undivided profits and capital
reserves......................... RCFD 3632 559,707 26.a.
b. Net unrealized holding gains
(losses) on available-for-sale
securities....................... RCFD 8434 730 26.b.
27. Cumulative foreign currency
translation adjustments............. RCFD 3284 (408) 27.
28. Total equity capital (sum of items
23 through 27)...................... RCFD 3210 3,081,213 28.
29. Total liabilities, limited-life
preferred stock, and equity capital
(sum of items 21, 22, and 28)....... RCFD 3300 47,112,051 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number
of the statement below that best describes
the most comprehensive level of auditing Number
work performed for the bank by independent -------------
external auditors as of any date during 1993........ | RCFD 6724 2| M.1.
-------------
1 = Independent audit of the bank conducted in accordance
with generally accepted auditing standards by a certified
public accounting firm which submits a report on the bank
2 = Independent audit of the bank's parent holding company
conducted in accordance with generally accepted auditing
standards by a certified public accounting firm which
submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
4. = Directors' examination of the bank performed by other
external auditors (may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external mauditors
7 =Other audit procedures (excluding tax preparation work)
8 =No external audit work
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
