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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: May 22, 1997
(Date of earliest event reported)
FEDERAL EXPRESS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of Incorporation)
1-7806 71-0427007
(Commission File Number) (IRS Employer Identification No.)
2005 Corporate Avenue, Memphis, Tennessee 38132
(Address of principal executive offices)
Registrant's Telephone Number, including area code: (901) 369-3600
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following documents are being filed in connection with, and
incorporated by reference in, the Registrant's Registration Statement on Form
S-3 No. 333-07691, which was declared effective on July 10, 1996, as amended
by Post-Effective Amendment No. 1 to such Registration Statement, which was
declared effective on April 28, 1997.
Exhibit Description of Exhibit
- ------- ----------------------
1 Underwriting Agreement relating to Federal Express
Corporation 1997-1-A Pass Through Trust, 1997-1-B Pass
Through Trust and 1997-1-C Pass Through Trust
4.a.1 Pass Through Trust Agreement dated as of May 1, 1997,
between Federal Express Corporation and First Security
Bank, National Association (the "Pass Through Trustee")
(Filed as Exhibit 4.a.3 to Registrant's Form 8-K
dated May 12, 1997, Commission File No. 1-7806, and
incorporated herein by reference.)
4.a.2 Revised form of Pass Through Certificates
(included in Exhibit 4.a.3)
4.a.3 Forms of Series Supplements 1997-1-A, 1997-1-B and
1997-1-C to the Pass Through Trust Agreement between
Federal Express Corporation and the Pass Through Trustee
relating to the Pass Through Certificates
4.a.4 Form of Intercreditor Agreement among the Pass Through
Trustee, Kredietbank N.V., New York Branch (the "Liquidity
Provider"), and First Security Bank, National Assocation
(the "Subordination Agent")
4.a.5 Forms of Irrevocable Revolving Credit Agreements for
Class A and Class B Pass Through Certificates between the
Subordination Agent and the Liquidity Provider
4.b.1 Forms of Trust Indenture and Security Agreements (Federal
Express Corporation Trust Nos. N670FE, N671FE, N672FE,
N673FE, N674FE, N581FE, N583FE, N584FE and N587FE
respectively) between State Street Bank and Trust Company
of Connecticut, National Association or Wilmington Trust
Company, as the case may be (the "Owner Trustee") and
First Security Bank, National Association (the "Indenture
Trustee") relating to Equipment Trust Certificates
(Federal Express Corporation Trust Nos. N670FE, N671FE,
N672FE, N673FE, N674FE, N581FE, N583FE, N584FE and
N587FE, respectively) in connection with the offering of
Pass Through Certificates
4.b.2 Forms of Equipment Trust Certificates
(included in Exhibit 4.b.1)
4.c Forms of Participation Agreements (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE, N581FE, N583FE, N584FE and N587FE, respectively)
among Federal Express Corporation, the applicable Owner
Participant, the Original Loan Participants, if any, the
Original Indenture Trustee, if any, the Indenture
Trustee, the Owner Trustee, the Pass Through Trustee and
the Subordination Agent relating to Equipment Trust
Certificates (Federal Express Corporation Trust Nos.
N670FE, N671FE, N672FE, N673FE, N674FE, N581FE, N583FE,
N584FE and N587FE, respectively)
4.d Forms of Trust Agreements (Federal Express Corporation
Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE, N581FE,
N583FE, N584FE and N587FE, respectively) between the
applicable Owner Participant and the Owner Trustee
relating to Equipment Trust Certificates (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE, N581FE, N583FE, N584FE and N587FE, respectively)
4.e Forms of Lease Agreements (Federal Express Corporation
Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE, N581FE,
N583FE, N584FE and N587FE, respectively) between the Owner
Trustee, as Lessor, and Federal Express Corporation,
relating to Equipment Trust Certificates (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE, N581FE, N583FE, N584FE and N587FE, respectively)
4.f Forms of Ancillary Agreement I (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE and N587FE respectively) among the Federal Express
Corporation, as Lessee, the applicable Owner Participant,
the Indenture Trustee and the Owner Trustee relating to
Equipment Trust Certificates (Federal Express Corporation
Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE and
N587FE, respectively)
4.g Forms of Owner Participant Guaranty (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE, N581FE and N587FE) in favor of Federal Express
Corporation, the Owner Trustee, the Indenture Trustee and
the Pass Through Trustee, relating to Equipment Trust
Certificates (Federal Express Corporation Trust No.
N670FE, N671FE, N672FE, N673FE, N674FE, N581FE and N587FE)
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FEDERAL EXPRESS CORPORATION
/s/ MICHAEL W. HILLARD
By: _____________________________________
Michael W. Hillard
Vice President and Controller
(principal accounting officer)
Dated: May 22, 1997
EXHIBIT INDEX
Exhibit Description of Exhibit
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1 Underwriting Agreement relating to Federal Express
Corporation 1997-1-A Pass Through Trust, 1997-1-B Pass
Through Trust and 1997-1-C Pass Through Trust
4.a.1 Pass Through Trust Agreement dated as of May 1, 1997,
between Federal Express Corporation and First Security
Bank, National Association (the "Pass Through Trustee")
(Filed as Exhibit 4.a.3 to Registrant's Form 8-K
dated May 12, 1997, Commission File No. 1-7806, and
incorporated herein by reference.)
4.a.2 Revised form of Pass Through Certificates
(included in Exhibit 4.a.3)
4.a.3 Forms of Series Supplements 1997-1-A, 1997-1-B and
1997-1-C to the Pass Through Trust Agreement between
Federal Express Corporation and the Pass Through Trustee
relating to the Pass Through Certificates
4.a.4 Form of Intercreditor Agreement among the Pass Through
Trustee, Kredietbank N.V., New York Branch (the "Liquidity
Provider"), and First Security Bank, National Assocation
(the "Subordination Agent")
4.a.5 Forms of Irrevocable Revolving Credit Agreements for
Class A and Class B Pass Through Certificates between the
Subordination Agent and the Liquidity Provider
4.b.1 Forms of Trust Indenture and Security Agreements (Federal
Express Corporation Trust Nos. N670FE, N671FE, N672FE,
N673FE, N674FE, N581FE, N583FE, N584FE and N587FE
respectively) between State Street Bank and Trust Company
of Connecticut, National Association or Wilmington Trust
Company, as the case may be (the "Owner Trustee") and
First Security Bank, National Association (the "Indenture
Trustee") relating to Equipment Trust Certificates
(Federal Express Corporation Trust Nos. N670FE, N671FE,
N672FE, N673FE, N674FE, N581FE, N583FE, N584FE and
N587FE, respectively) in connection with the offering of
Pass Through Certificates
4.b.2 Forms of Equipment Trust Certificates
(included in Exhibit 4.b.1)
4.c Forms of Participation Agreements (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE, N581FE, N583FE, N584FE and N587FE, respectively)
among Federal Express Corporation, the applicable Owner
Participant, the Original Loan Participants, if any, the
Original Indenture Trustee, if any, the Indenture
Trustee, the Owner Trustee, the Pass Through Trustee and
the Subordination Agent relating to Equipment Trust
Certificates (Federal Express Corporation Trust Nos.
N670FE, N671FE, N672FE, N673FE, N674FE, N581FE, N583FE,
N584FE and N587FE, respectively)
4.d Forms of Trust Agreements (Federal Express Corporation
Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE, N581FE,
N583FE, N584FE and N587FE, respectively) between the
applicable Owner Participant and the Owner Trustee
relating to Equipment Trust Certificates (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE, N581FE, N583FE, N584FE and N587FE, respectively)
4.e Forms of Lease Agreements (Federal Express Corporation
Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE, N581FE,
N583FE, N584FE and N587FE, respectively) between the Owner
Trustee, as Lessor, and Federal Express Corporation,
relating to Equipment Trust Certificates (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE, N581FE, N583FE, N584FE and N587FE, respectively)
4.f Forms of Ancillary Agreement I (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE and N587FE respectively) among the Federal Express
Corporation, as Lessee, the applicable Owner Participant,
the Indenture Trustee and the Owner Trustee relating to
Equipment Trust Certificates (Federal Express Corporation
Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE and
N587FE, respectively)
4.g Forms of Owner Participant Guaranty (Federal Express
Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE,
N674FE, N581FE and N587FE) in favor of Federal Express
Corporation, the Owner Trustee, the Indenture Trustee and
the Pass Through Trustee, relating to Equipment Trust
Certificates (Federal Express Corporation Trust No.
N670FE, N671FE, N672FE, N673FE, N674FE, N581FE and N587FE)
EXECUTION DOCUMENT
UNDERWRITING AGREEMENT
May 22, 1997
between
FEDERAL EXPRESS CORPORATION
and
MORGAN STANLEY & CO. INCORPORATED
FIRST CHICAGO CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
Pass Through Certificates, 1997-1-A
Pass Through Certificates, 1997-1-B
Pass Through Certificates, 1997-1-C
TABLE OF CONTENTS
Page
----
SECTION 1. Representations and 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............................................ 15
SECTION 7. Contribution............................................... 16
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery........................................... 17
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
Pass Through Certificates, 1997-1-A
Pass Through Certificates, 1997-1-B
Pass Through Certificates, 1997-1-C
UNDERWRITING AGREEMENT
May 22, 1997
MORGAN STANLEY & CO. INCORPORATED
FIRST CHICAGO CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
c/o MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Federal Express Corporation, a Delaware corporation (the "Company"),
proposes that First Security Bank, National Association, acting not in its
individual capacity but solely as pass through trustee (the "Pass Through
Trustee") under the Pass Through Trust Agreement dated as of May 1, 1997 (the
"Basic Agreement"), as supplemented for each class of pass through
certificates (the "Pass Through Certificates") to be purchased hereunder
(each, a "Class") by a Series Supplement (each, a "Series Supplement"), in
each case between the Company and the Pass Through Trustee (for each Class,
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 expected
dates set forth on Exhibit A hereto (the "Offered Certificates") on the terms
and conditions stated herein and in Schedule II.
Each Class of Pass Through Certificates will represent interests in a
separate trust (each, a "Pass Through Trust") established pursuant to the
related Pass Through Agreement to fund the purchase of equipment trust
certificates (the "Equipment Certificates") which are to be issued as
nonrecourse obligations by certain owner trustees, each acting not in its
individual capacity but solely as owner trustee (each, an "Owner Trustee"), in
connection with separate leveraged lease transactions relating to four
McDonnell Douglas MD-11F aircraft and five Airbus A300F4-605R aircraft (each,
an "Aircraft" and, collectively, the "Aircraft"). The proceeds from the sale
of the Equipment Certificates will be used to (i) finance a portion of the
purchase price to be paid by the Owner Trustee on behalf of eight Owner Trusts
(Trust Nos. N581FE, N583FE, N584FE, N670FE, N671FE, N672FE, N673FE and
N674FE), and (ii) refinance the aggregate outstanding principal amount of the
Original Loan Certificates issued by the related Owner Trust in connection
with a transaction relating to Trust No. N587FE. Each series of Equipment
Certificates will be issued under a separate Trust Indenture and Security
Agreement between First Security Bank, National Association, 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.
Payments of interest on the Class A and Class B Pass Through
Certificates to be issued by the related Pass Through Trust will be entitled
to the benefits of a separate liquidity facility for each such Pass Through
Trust. Kredietbank N.V., acting through its New York branch (the "Liquidity
Provider"), will enter into a separate revolving credit agreement (a "Liquidity
Facility") to be dated as of May 1, 1997 for the benefit of the holders of the
Class A and Class B Certificates issued by the related Pass Through Trust.
The Liquidity Provider and the holders of the Offered Certificates will be
entitled to the benefits of an Intercreditor Agreement to be dated as of May
1, 1997 (the "Intercreditor Agreement") among each Pass Through Trust, First
Security Bank, National Association, as Subordination Agent (the
"Subordination Agent"), and the Liquidity Provider.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-07691) 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 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 duly
executed and delivered 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. 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 Class of Offered Certificates will constitute valid and
legally binding obligations of the Pass Through 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 Pass Through Trustee to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Pass Through Trustee, at the purchase price
specified in Exhibit A hereto, the respective amounts of each Class of Offered
Certificates set forth opposite the name of such Underwriter in Schedule I.
It is understood that you propose to offer the Offered Certificates for sale
to the public as set forth in the Prospectus.
(b) Payment of the purchase price for any Offered Certificates to be
purchased by the Underwriters shall be made at either the Company's offices in
Memphis, Tennessee or the office of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York 10017, or at such other place as shall be agreed
upon by you and the Company, at 9:00 A.M., New York City time, on the third
business day (unless postponed in accordance with the provisions of Section
10) following the date hereof or at such other date, time or location
specified in Schedule II, or as otherwise shall be agreed upon by you and the
Company (such time and date being referred to as a "Closing Time").
Delivery of the Offered Certificates shall be made for your account as
specified in Schedule II against payment by you of the purchase price thereof
to, or upon the order of, the Pass Through 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
class 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 Pass Through 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 Pass Through Trustee, the Subordination Agent,
each Liquidity Provider, the related Owner Trustees and the Indenture Trustee
and their respective counsel, and of any registrar, paying agent and
authenticating agent;
(v) the qualification of the Offered Certificates under
securities laws in accordance with the provisions of Section 3(g), including
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters in connection therewith and in connection with the preparation of
any Blue Sky Survey and any Legal Investment Survey;
(vi) the printing and delivery to the Underwriters in quantities
as hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or supplements
thereto, and the delivery by the Underwriters of the Prospectus and any
amendments or supplements thereto in connection with solicitations or
confirmations of sales of the Offered Certificates;
(vii) the preparation and delivery to the Underwriters of copies
of the Pass Through Agreements and the other Operative Agreements, including
all expenses incident to the performance of the Company's obligations under
the Pass Through Agreements, Participation Agreements, Indentures, Leases and
each of the other agreements and instruments referred to in the Indentures and
Participation Agreements;
(viii) any fees charged by rating agencies for the rating of the
Offered Certificates; and
(ix) all fees and disbursements of your counsel, as heretofore
agreed.
If this Agreement is terminated by you in accordance with the provisions
of Section 5 or clause (i) of Section 9 hereof, the Company shall reimburse
upon demand the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the
Underwriters that shall have been incurred by you in connection with the
proposed purchase and sale of the Offered Certificates.
SECTION 5. Conditions of Underwriters' Obligations.
The several obligations of the Underwriters to purchase the Offered
Certificates pursuant to this Agreement will be subject at all times to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in
any certificate furnished pursuant to the provisions hereof, to the
performance and observance by the Company of all covenants and agreements
contained herein, or in Schedule II hereto, on its part to be performed and
observed and to the following additional conditions precedent:
(a) Stop Order; Ratings Change; etc. At the Closing Time, (i) no stop
order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission, (ii) the rating assigned as of the date of this Agreement
by any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g) under the 1933 Act Regulations, to any
debt securities of the Company (including for purposes of this Section
5(a)(ii) any rating indicated by the Company as of the date of this Agreement
as the rating orally confirmed to the Company by any such rating organization
as the rating to be assigned to the Offered Certificates) shall not have been
lowered since the execution of this Agreement nor shall any such rating
organization have publicly announced that it has placed any debt securities of
the Company on what is commonly termed a "watch list" for possible
downgrading, and (iii) there shall not have come to your attention any facts
that would cause you to believe that the Prospectus, including the Prospectus
Supplement, at the time it was required to be delivered to a purchaser of the
Offered Certificates, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not misleading.
(b) Legal Opinions. At the Closing Time, you shall have received the
following documents:
(1) Opinion of Special Counsel to the Company. The opinion of
Davis Polk & Wardwell, special counsel to the Company, dated as of such date,
in form and substance satisfactory to you, to the effect set forth in Exhibit
B and the opinions of such counsel required to be delivered pursuant to each
Participation Agreement, dated as of such date, in form and substance
satisfactory to you, to the effect set forth in Exhibits C-1 and C-2.
(2) Opinion of Company Counsel. The opinion of the 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
Shearman & Sterling, 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, on behalf of all of the Underwriters, to
Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036,
Attention: Equipment Finance Group, with copies thereof directed to Joel S.
Klaperman, Shearman & Sterling, 599 Lexington Avenue, New York, New York
10022. 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
/s/ ROBERT D. HENNING
By: _______________________________
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director,
Structured Finance
CONFIRMED AND ACCEPTED, as of
the date first above written:
MORGAN STANLEY & CO. INCORPORATED
FIRST CHICAGO CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
By: Morgan Stanley & Co. Incorporated
/s/ MORGAN STANLEY & CO. INCORPORATED
By: ________________________________________
Acting on behalf of themselves and the
other named Underwriters
Exhibit A
FEDERAL EXPRESS CORPORATION
Pass Through Certificates, 1997-1-A
Pass Through Certificates, 1997-1-B
Pass Through Certificates, 1997-1-C
[CAPTION]
<TABLE>
Aggregate
1997 Pass Underwriting
Through Final Discounts
Certificates Purchase Interest Expected Principal and
Designation Price Rate Distribution Date Amount Commissions
- ----------------- -------------- ---------- ------------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
1997-1-A $310,854,000 7.50% January 15, 2018 $310,854,000
1997-1-B $115,800,000 7.52% January 15, 2018 $115,800,000
1997-1-C $129,185,000 7.65% January 15, 2014 $129,185,000
TOTAL $555,839,000 $555,839,000 $3,612,953
</TABLE>
Exhibit B
Opinion of Davis Polk & Wardwell,
Special Counsel for the Company
The opinion of Davis Polk & Wardwell, special counsel for the Company,
to be delivered pursuant to Section 5(b)(1) of the Underwriting Agreement
shall be to the effect that:
1. The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
2. The Registration Statement has become effective under the
1933 Act and the Basic Agreement has been duly qualified under the 1939
Act.
3. Although we are not aware of any judicial authority, none of
the Pass Through Trusts is required to be registered under the
Investment Company Act of 1940, as amended.
4. The Pass Through Trusts will not themselves be subject to
federal income tax. 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", "Description of the
Equipment Trust Certificates", "Description of the Liquidity Facilities",
"Description of the Intercreditor Agreement" and "ERISA Considerations"
insofar as such statements constitute a summary of the Pass Through Agreement,
the Leases, the Liquidity Facilities, the Intercreditor Agreement, the
Participation Agreements and the Indentures, fairly present the information
called for by the 1933 Act and the rules and regulations of the SEC under the
1933 Act (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 Trust
Certificates - Remedies," insofar as such statements constitute a description
of Section 1110 of the Bankruptcy Code as such Section would be applicable to
the Equipment Certificates, fairly summarize the material provisions of such
Section as such Section would be applicable to the Equipment Certificates.
The Pass Through 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 First Security Bank, National Association, as to
all of which we are not called upon to express a belief) at the time the
Registration Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that,
as of the Closing Time, either the Registration Statement or the Prospectus
(except for the financial statements and other financial information set forth
or incorporated by reference therein, as to which we are not called upon to
express a belief), contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading.
The foregoing opinions are subject to the following qualifications:
(a) We are members of the Bar of the State of New York and the
foregoing opinions are limited to the laws of the State of New York, the
federal laws of the United States of America and the General Corporation Law
of the State of Delaware.
(b) We express no opinion as to the scope, effect or other
matters arising under the Transportation Code, or the rules and regulations
thereunder or as to matters involving filing and recording with the Federal
Aviation Administration.
(c) This opinion is issued solely to you in connection with the
above matter and may not be relied upon by you for any other purpose or relied
upon by or furnished to any other person without our prior written consent.
Exhibit C-1
[Letterhead of Davis Polk & Wardwell]
May __, 1997
To each of the Parties
named on the Schedule hereto
Re: Federal Express Corporation Trust No. N587FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express Corporation,
a Delaware
corporation ("Federal Express"), in connection with the transactions
contemplated by the Participation Agreement (Federal Express Corporation Trust
No. N587FE), dated as of December 1, 1996, as amended and restated as of May
1, 1997 (the "Participation Agreement"), among Federal Express, as Lessee,
Comerica Leasing Corporation and Norwest Bank Minnesota, National Association,
as Owner Participants, Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee, State Street Bank and Trust Company, not
in its individual capacity but solely as Original Indenture Trustee, Morgan
Guaranty Trust Company of New York, as Original Loan Participant, and First
Security Bank, National Association, not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee, Pass Through Trustee and as
Subordination Agent, relating to the Aircraft. This opinion is being
delivered pursuant to Section 4.01(l)(vi) of the Participation Agreement.
Capitalized terms not otherwise defined herein have the meanings assigned
thereto in the Participation Agreement.
Pursuant to the Original Participation Agreement, the Owner
Participant and the Original Loan Participants participated in the payment of
the Purchase Price of one McDonnell Douglas MD-11F Aircraft which was
purchased by the Owner Trustee pursuant to the Bills of Sale, subjected to the
Lien of the Original Indenture and leased to Federal Express under the
Original Lease. The Participation Agreement provides, among other things, for
the refinancing of the Original Loan Certificates using the proceeds from the
public offering of Pass Through Certificates. Three Classes 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 telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. With respect to that portion, if any, of the Aircraft and
the other property included in the Lessor's Estate as may not be covered by
the recording system established by the FAA pursuant to Section 44107 of the
Transportation Code, no filing or recording of any document or other action
was or is necessary in order to establish the Owner Trustee's title thereto
and interest therein as against Federal Express and any third parties.
2. The Lease creates a valid leasehold interest in the
Aircraft, the entitlement thereof to the benefits of recordation under the
Transportation Code being subject to the due and timely filing and, where
appropriate, recording of (A) the Lease (with the Indenture attached as an
exhibit), (B) the Indenture and (C) the Trust Agreement.
3. 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 cancelled, (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 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 3 are subject to the due filing and, where
appropriate, recording with the FAA of the documents referred to in paragraph
2 above.
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,
or did not on the date of execution thereof, violate, and fully comply, or did
fully comply on the date of execution thereof, with, any laws and governmental
rules and regulations of the State of New York that may be applicable to
Federal Express. The opinion set forth in this paragraph 4(b) is rendered
without regard to the taking of any action or the conduct of any other
business by Federal Express in the State of New York other than the
transactions contemplated by the Transaction Agreements.
5. 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 5 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
action, the conduct of any business or the exercise of any other powers by
Wilmington Trust Company in its individual or trust capacity in the State of
New York not related to the transactions contemplated by the Transaction
Agreements. We have assumed that Wilmington Trust Company 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 Wilmington Trust
Company is required to comply with said Section 131.3.
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 is subject, to the extent
provided in the Indenture, to the Lien of the Indenture in favor of the
Holders of the Certificates issued and to be issued under the Indenture.
7. The Indenture creates, as security for the Certificates duly
issued and to be issued under the Indenture, the first priority security
interest in the Aircraft it purports to create, the perfection and rank
thereof being subject to the registration with the FAA of the Aircraft in the
name of the Owner Trustee and the due 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. Except for (i) the filings and recordings referred to in
paragraph 2 above, (ii) the registration of the issuance and sale of the Pass
Through Certificates under the Securities Act and (iii) compliance with the
securities laws of each applicable state, 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.
9. It is not necessary, in connection with the creation of the
beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
10. 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 George W. Hearn, Vice President - Law 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 3(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity which
may affect the remedies provided in the agreements referred to in said
opinions, which laws and principles, however, do not in our opinion make
the remedies provided in said agreements inadequate for the practical
realization of the benefits of the security intended to be provided
thereby.
(d) This opinion is rendered solely to you at Federal Express's
request in connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by any other
Person without our prior written consent.
(e) We rendered an opinion dated December 13, 1996 (the "Delivery
Date Opinion"), a copy of which is attached hereto, in connection with
the financing and acquisition of the Aircraft on such date. We hereby
consent and agree that the addressees hereto who were not addressees to
the Delivery Date Opinion may rely on the Delivery Date Opinion as fully
and with the same force and effect as if such addressees were originally
named therein on the date of the Delivery Date Opinion.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
Two International Place
4th Floor
Boston, Massachusetts 02110
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Original Indenture Trustee
State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Agent and Original Loan Participant
Morgan Guaranty Trust Company of New York
60 Wall Street
22nd Floor
New York, New York 10260
Owner Participants
Comerica Leasing Corporation
29201 Telegraph Road
2nd Floor
Southfield, Michigan 48034
Norwest Bank Minnesota, National Association
733 Marquette Avenue
Suite 300
Minneapolis, Minnesota 55479-2048
Underwriters
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
First Chicago Capital Markets, Inc.
Corporate Securities
One First National Plaza
Chicago, Illinois 60670
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan & Co.
60 Wall Street
New York, New York 10260
Liquidity Provider
Kredietbank N.V., New York Branch
125 West 55th Street
New York, New York 10019
Exhibit C-2
[Form of Opinion of Davis Polk & Wardwell]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No.
[N581FE][N583FE][N584FE][N670FE][N671FE][N672FE][N673FE][N674FE]
Ladies and Gentlemen:
We have acted as special counsel for Federal Express Corporation,
a Delaware corporation ("Federal Express"), in connection with the
transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No.
[N581FE][N583FE][N584FE][N670FE][N671FE][N672FE][N673FE][N674FE]), dated as of
May 1, 1997 (the "Participation Agreement"), among Federal Express, as Lessee,
[AmSouth Leasing, Ltd. and BTM Funding Corporation, as Owner
Participants][Federal, as initial Owner Participant][PMCC Leasing Corporation,
as Owner Participant], [Wilmington Trust Company][State Street Bank and Trust
Company of Connecticut, National Association], not in its individual capacity,
except as otherwise stated, but solely as Owner Trustee, and First Security
Bank, National Association, not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee, Pass Through Trustee and
Subordination Agent, relating to the Aircraft. This opinion is being
delivered pursuant to Section 4.01(k)(v) of the Participation Agreement.
Capitalized terms not otherwise defined herein have the meanings assigned
thereto in the Participation Agreement.
The Participation Agreement provides, among other things, for the
financing on the Delivery Date of a portion of the Owner Trustee's payment of
the Purchase Price of one [McDonnell Douglas MD-11F] [Airbus A300F4-605R]
Aircraft using the proceeds from the public offering of the Pass Through
Certificates. On the Certificate Closing Date, three Classes 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
"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 telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. 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 and
performance of 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, 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) 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 Certificate Closing Date Document is in compliance with all
applicable laws and governmental rules and regulations (other than the laws
of the United States and the State of New York), then: (A) to the extent
governed by New York law, each Certificate Closing Date Document in form
constitutes a legal, valid and binding agreement of each party thereto
enforceable against each such party in accordance with its terms; (B) the
Indenture creates, for the benefit of the Holders, the security interest in
the Trust Indenture Estate that it purports to create, except that no opinion
is given with respect to perfection of such security interest on the date
hereof; (C) the Certificates, when issued to and acquired by the Pass Through
Trustee, will be legal, valid and binding obligations of the Owner Trustee
enforceable against the Owner Trustee in accordance with their terms and the
terms of the Indenture and will be entitled to the benefits of the Indenture,
including the benefit of the security interest created thereby, except that no
opinion is given with respect to perfection of such security interest on the
date hereof; (D) the Pass Through Certificates, when issued to and acquired by
the Underwriters in accordance with the Underwriting Agreement, will be legal,
valid and binding obligations of the Pass Through Trustee enforceable against
the Pass Through Trustee in accordance with their terms and will be entitled
to the benefits of the Pass Through Agreement and the Series Supplement
relating thereto; and (E) the beneficial interest of the Owner Participant
under the Trust Agreement in and to the properties which are part of the Trust
Indenture Estate is subject, to the extent provided in the Indenture, to the
Lien of the Indenture in favor of the Holders.
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 action or the conduct of any
other business by Federal Express in the State of New York other than the
transactions contemplated by the Certificate Closing Date Documents.
3. The execution, delivery and performance of the Certificate
Closing Date Documents (other than the Certificates) 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
action, the conduct of any business or the exercise of any other powers by
State Street Bank and Trust Company of Connecticut, National Association in
its individual or trust capacity in the State of New York not related to the
transactions contemplated by the Certificate Closing Date Documents. We have
assumed that State Street Bank and Trust Company of Connecticut, National
Association 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 State Street Bank and Trust Company of Connecticut, National
Association is required to comply with said Section 131.3.
4. It is not necessary, in connection with the creation of the
beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
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 opinion of George W. Hearn,
Vice President - Law 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.
(c) The opinion contained in paragraph 1(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity which
may affect the remedies provided in the agreements referred to in said
opinions, which laws and principles, however, do not in our opinion make
the remedies provided in said agreements inadequate for the practical
realization of the benefits of the security intended to be provided
thereby.
(d) This opinion is rendered solely to you at Federal Express's
request in connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by any other
Person without our prior written consent.
Very truly yours,
Davis Polk & Wardwell
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
Two International Place
4th Floor
Boston, Massachusetts 02110
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Owner Participant
[AmSouth Leasing, Ltd.
c/o AmSouth Leasing Corporation
1900 Fifth Avenue North, 8th Floor
Birmingham, Alabama 35203
BTM Funding Corporation
c/o BTM Capital Corporation
125 Summer Street
Boston, Massachusetts 02110]
[PMCC Leasing Corporation
200 First Stamford Place
Stamford, Connecticut 06902]
Underwriters
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
First Chicago Capital Markets, Inc.
Corporate Securities
One First National Plaza
Chicago, Illinois 60670
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan & Co.
60 Wall Street
New York, New York 10260
Liquidity Provider
Kredietbank N.V., New York Branch
125 West 55th Street
New York, New York 10019
Exhibit D
Form of Opinion of Company Counsel
May __, 1997
MORGAN STANLEY & CO. INCORPORATED
FIRST CHICAGO CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
c/o MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036
Re: Federal Express Corporation
1997 Pass Through Certificates, 1997-1-A, 1997-1-B and 1997-1-C (the
"Offered Certificates")
Ladies and Gentlemen:
This opinion is directed to the Underwriters pursuant to Section 5(b)(2)
of the Underwriting Agreement dated May __, 1997 (the "Underwriting
Agreement"), among the Company and you, with respect to the offer and sale of
the Offered Certificates. All terms defined or used in the Underwriting
Agreement have the same meaning when used herein, unless otherwise noted.
I am Vice President - Law of the Company and have acted as such in
connection with the Offered Certificates and the Underwriting Agreement. I or
attorneys under my supervision have made such examination and investigation as
we have deemed necessary in order to give the following opinion.
Based on the foregoing, it is my opinion that:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and 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.
George W. Hearn
Schedule I
to
Underwriting
Agreement
Dated: May 22, 1997
FEDERAL EXPRESS CORPORATION
Pass Through Certificates, 1997-1-A
Pass Through Certificates, 1997-1-B
Pass Through Certificates, 1997-1-C
[CAPTION]
<TABLE>
Aggregate Aggregate Aggregate
Amount of Amount of Amount of
1997-1-A 1997-1-B 1997-1-C Total
Pass Pass Pass Aggregate
Through Through Through Amount to be
Underwriters Certificates Certificates Certificates Purchased
- ---------------------------------------- --------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
MORGAN STANLEY & CO. $77,715,000 $28,950,000 $32,297,000 $138,962,000
INCORPORATED
FIRST CHICAGO CAPITAL MARKETS, INC. 77,713,000 28,950,000 32,296,000 138,959,000
GOLDMAN, SACHS & CO. 77,713,000 28,950,000 32,296,000 138,959,000
J.P. MORGAN SECURITIES INC. 77,713,000 28,950,000 32,296,000 138,959,000
</TABLE>
Schedule I
to
Underwriting
Agreement
Dated: May 22, 1997
FEDERAL EXPRESS CORPORATION
Pass Through Certificates, 1997-1-A
Pass Through Certificates, 1997-1-B
Pass Through Certificates, 1997-1-C
To: Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Re: Underwriting Agreement dated May 22, 1997
Title of Offered Certificates:
Pass Through Certificates, 1997-1-A
Pass Through Certificates, 1997-1-B
Pass Through Certificates, 1997-1-C
Current ratings:
Moody's S&P
Class A Aa3 AAA
Class B A1 AA-
Class C Baa1 BBB+
Interest rate:
Class A ........7.50%
Class B ........7.52%
Class C ........7.65%
Interest payable:
each January 15 and July 15 commencing on July 15, 1997
Public offering price:
100%, plus accrued interest from May 28, 1997
Closing date, time and location:
May 28, 1997, 9:00 A.M., New York City time
Davis Polk & Wardwell
450 Lexington Avenue
Conference Rooms 810 and 814
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 Class of the Offered Certificates shall be represented by a
separate global certificate.
Exceptions, if any, to Section 3(i) of the Underwriting Agreement:
None
MORGAN STANLEY & CO. INCORPORATED
FIRST CHICAGO CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
By: Morgan Stanley & Co. Incorporated
/s/ MORGAN STANLEY & CO. INCORPORATED
By: _______________________________________
Acting on behalf of themselves and the
other named Underwriters
Accepted:
FEDERAL EXPRESS CORPORATION
/s/ ROBERT D. HENNING
By: ________________________________
Name: Robert D. Henning
Title: Assistant Treasurer and
Managing Director, Structured
Finance
SERIES SUPPLEMENT 1997-1-A
Dated May 28, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
to
PASS THROUGH TRUST AGREEMENT
Dated as of May 1, 1997
$310,854,000
Federal Express Corporation
Pass Through Trust, 1997-1-A
Federal Express Corporation
1997-1 Pass Through Certificates,
Class A
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........................... 5
SECTION 2.02. Declaration of Trust; Authorization...................... 5
SECTION 2.03. Issuance of Pass Through Certificates.................... 6
SECTION 2.04. Purchase of Equipment Certificates....................... 6
SECTION 2.05. Representations and Warranties of the Company............ 6
SECTION 2.06. The Intercreditor Agreement.............................. 6
SECTION 2.07. Conditions Precedent..................................... 6
SECTION 2.08. Acceptance of Appointment of Pass Through Trustee........ 7
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....................................... 7
SECTION 3.02. Record Dates............................................. 7
SECTION 3.03. Certificate Account and Special Payments Account......... 7
SECTION 3.04. Form of Pass Through Certificates........................ 8
SECTION 3.05. Indenture Documents...................................... 8
SECTION 3.06. Appointment of Authenticating Agent; Paying Agent and
Registrar.............................................. 8
SECTION 3.07. Predelivery Funding...................................... 8
SECTION 3.08. ERISA.................................................... 9
SECTION 3.09. Intercreditor Agreement.................................. 9
SECTION 3.10. Ranking of Equipment Certificates........................ 9
SECTION 3.11. No Cross-Default or Cross-Collateralization of Equipment
Certificates........................................... 9
SECTION 3.12. Ranking of 1997-1-A Pass Through Certificates............ 9
SECTION 3.13. Liquidity Facility....................................... 9
SECTION 3.14. Purchase Rights of Certificateholders.................... 9
SECTION 3.15. PTC Event of Default..................................... 9
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart Form.......................... 10
SECTION 4.02. Reports by the Company................................... 10
SECTION 4.03. Modification and Ratification of Pass Through Agreement.. 10
SECTION 4.04. Termination.............................................. 10
EXHIBIT A Form of Pass Through Certificate
SCHEDULE I Equipment Certificates; related Indenture Documents
SCHEDULE II Cut-Off Date for each of the Aircraft
SERIES SUPPLEMENT 1997-1-A
SERIES SUPPLEMENT 1997-1-A, dated May 28, 1997 (this "Series
Supplement"), between FEDERAL EXPRESS CORPORATION, a Delaware corporation (the
"Company") and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, as Pass Through Trustee (the "Pass Through Trustee"), to the Pass
Through Trust Agreement, dated as of May 1, 1997 (the "Pass Through
Agreement"), between the Company and the Pass Through Trustee.
RECITALS
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, Section 2.01 of the Pass Through Agreement provides, among
other things, that the Company and the Pass Through Trustee may execute and
deliver one or more series supplements, each for the purpose of forming a
separate pass through trust for the benefit of the certificateholders of the
class 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 class 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 Class rather than to any Pass Through Trust or Class
generally shall, when used in this Series Supplement, relate solely to the
Federal Express Corporation Pass Through Trust, 1997-1-A, or the Federal
Express Corporation 1997-1 Pass Through Certificates, Class A, as the case may
be, whether or not expressly so stated herein.
"Aircraft" means four McDonnell Douglas MD-11F aircraft and five
Airbus A300F4-605R aircraft, including the Engines (as such term is defined in
the related Participation Agreement) relating thereto, leased, or expected to
be leased, by the related Owner Trustee to the Company pursuant to one of nine
separate Leases, and, collectively, means all of the foregoing.
"Aircraft Delivery Date" means, for each Aircraft, the date on which
such Aircraft is delivered and sold to the Lessor (as such term is defined in
the related Participation Agreement) and leased by the Lessor to the Lessee
(as such term is defined in the related Participation Agreement) under the
Lease (as such term is defined in the related Participation Agreement), which
date shall also be the date of the initial Lease Supplement (as such term is
defined in the related Participation Agreement).
"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 Class of
Pass Through Certificates designated in Section 2.01 hereof.
"Collateral Account" means each of the Collateral Accounts
established pursuant to the Indentures for each of Federal Express Corporation
Trust Nos. N581FE, N583FE, N584FE, N670FE, N671FE, N672FE, N673FE and N674FE
into which the proceeds of sale of the related Equipment Certificates will be
deposited respectively.
"Cut-Off Date" means the date listed on Schedule II hereto for each
Aircraft.
"Delivery Date" means, for any Equipment Certificates, the Refunding
Date or the Pass Through Closing Date (as such term is defined in the related
Participation Agreement) for such Equipment Certificates.
"Equipment Certificates" means those Equipment Trust Certificates
listed in Schedule I hereto.
"Final Expected Distribution Date" means January 15, 2018.
"Final Legal Distribution Date" means July 15, 2019.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of May 1, 1997 among the Pass Through Trustee, the Liquidity Provider and the
Subordination Agent.
"Interest Drawing" has the meaning specified in the Intercreditor
Agreement.
"Issuance Date" means the date defined as the Closing Time in the
Underwriting Agreement.
"Liquidity Facility" means the Irrevocable Revolving Credit Agreement
Class A Pass Through Certificates dated as of May 1, 1997 between the
Subordination Agent and the Liquidity Provider.
"Liquidity Provider" means Kredietbank N.V., New York Branch or any
replacement liquidity provider.
"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.
"Pool Balance" means, for any Pass Through Trust or for the Pass
Through Certificates issued by any Pass Through Trust, as of any date, the
original aggregate face amount of the Pass Through Certificates of such Pass
Through Trust less the aggregate amount of all payments on such Pass Through
Certificates other than payments made in respect of interest or premium or
reimbursement of any costs and expenses in connection therewith. The Pool
Balance for each Pass Through Trust as of any Regular Distribution Date or
Special Distribution Date will be computed after giving effect to the payment
of principal, if any, on the Equipment Certificates or other Trust Property
held in such Pass Through Trust and the distribution thereof being made on
that date.
"Pool Factor" means, for any Pass Through Trust as of any Regular
Distribution Date or Special Distribution Date the quotient (rounded to the
seventh decimal place) computed by dividing (i) the Pool Balance by (ii) the
original aggregate face amount of the Pass Through Certificates of the related
Class. The Pool Factor for each Pass Through Trust as of any Regular
Distribution Date or Special Distribution Date will be computed after giving
effect to the payment of principal, if any, on such Equipment Certificates or
other Trust Property held in such Pass Through Trust and the distribution
thereof being made on that date.
"PTC Event of Default" has the meaning set forth in Section 3.15
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.
"Specified Investments" has the meaning set forth in Schedule II to
the Participation Agreements.
"Subordination Agent" means First Security Bank, National
Association, a national banking association.
"Trust Property" means, for this Pass Through Trust: (i) the
Equipment Certificates held in this Pass Through Trust; (ii) the rights of
this Pass Through Trust under the Intercreditor Agreement (including all
monies receivable in respect of such rights); (iii) all monies receivable
under the Liquidity Facility for this Pass Through Trust; and (iv) funds from
time to time deposited with the Pass Through Trustee in accounts relating to
this Pass Through Trust.
"Underwriters" means the several Underwriters named in the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement dated May
22, 1997 among the Company and Morgan Stanley & Co. Incorporated, First
Chicago Capital Markets, Inc., Goldman, Sachs & Co. and J.P. Morgan & Co.
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, 1997-1-A (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 1997-1
Pass Through Certificates, Class A (herein sometimes called the "1997-1-A Pass
Through Certificates"). The 1997-1-A 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 1997-1-A Pass Through Certificates that may
be authenticated, delivered and outstanding under this Series Supplement is
limited to $310,854,000.
SECTION 2.02. Declaration of Trust; Authorization. Each initial
Certificateholder, by its acceptance of any 1997-1-A 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, the Intercreditor 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
1997-1-A Pass Through Certificates and (ii) the Pass Through Trustee shall
deliver the 1997-1-A 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. The Intercreditor Agreement. The Pass Through Trustee
is hereby directed to execute and deliver the Intercreditor Agreement on or
prior to the Issuance Date in the form delivered to the Pass Through Trustee
by the Company. The Pass Through Trustee represents and warrants that the
Intercreditor Agreement will be duly executed and delivered by one of its
officers who is duly authorized to execute and deliver such document on its
behalf.
SECTION 2.07. 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 1997-1-A Pass
Through Certificates.
SECTION 2.08. Acceptance of Appointment of Pass Through Trustee.
First Security Bank, National Association 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. First Security Bank, National Association 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 January 15 and July 15, commencing on July 15, 1997. The Special
Distribution Date is any Business Day on which a Special Payment is to be
distributed.
SECTION 3.02. Record Dates. The Record Dates for the Regular
Distribution Dates are December 31 and June 30, 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 1997-1-A Pass Through
Certificates will be substantially in the form of Exhibit A hereto. The
1997-1-A Pass Through Certificates will be issued pursuant to a book-entry
system in the form of one or more Registered Global Certificates 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
1997-1-A Pass Through Certificates initially shall be First Security Bank,
National Association. First Security Bank, National Association 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 and Delayed Equipment
Certificates. (a) Predelivery Funding. During the period between the date of
issuance of Equipment Certificates by the Owner Trustee in respect of Federal
Express Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE, N581FE,
N583FE and N584FE and the Aircraft Delivery Date for the related Aircraft,
such Equipment Certificates will not be secured by such Aircraft or the
related Lease, but will be secured by each Collateral Account. Pursuant to
the related Indenture, the Indenture Trustee on behalf of the related Owner
Trustee will deposit the proceeds from the sale of the related Equipment
Certificates into each Collateral Account.
Sums deposited in each Collateral Account will be invested as set
forth in the Related Indenture.
(b) Delayed Equipment Certificates. If for any reason Equipment
Certificates are not available for purchase on the Pass Through Closing Date
(as such term is defined in the related Participation Agreement) the Pass
Through Trustee shall invest a corresponding amount of the proceeds received
from the Underwriters pursuant to the Underwriting Agreement in Specified
Investments at the risk and for the benefit of the Company until such
Equipment Certificates are available for purchase.
SECTION 3.08. ERISA. Any Person who is acquiring a Pass Through
Certificate will be deemed to represent and warrant that (i) no 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, have been used to acquire or hold any of the Pass
Through Certificates or (ii) that one or more administrative or statutory
exemptions from the prohibited transaction rules under Section 406 of ERISA
and Section 4975 of the Code applies to its purchase and holding of a Pass
Through Certificate such that its purchase and holding of a Pass Through
Certificate will not result in a non-exempt prohibited transaction under
Section 406 of ERISA and Section 4975 of the Code.
SECTION 3.09. Intercreditor Agreement. The 1997-1-A Pass Through
Certificates are subject to the Intercreditor Agreement.
SECTION 3.10. Ranking of Equipment Certificates. The Equipment
Certificates will be subject to the ranking and priority as set forth in the
related Indenture Documents.
SECTION 3.11. No Cross-Default or Cross-Collateralization of
Equipment Certificates. As set forth in the related Indenture Documents,
there are no cross-collateralization provisions or cross-default provisions in
respect of the Equipment Certificates.
SECTION 3.12. Ranking of 1997-1-A Pass Through Certificates. The
1997-1-A Pass Through Certificates will be subject to the ranking and priority
as set forth in the Intercreditor Agreement.
SECTION 3.13. Liquidity Facility. Payments of interest on the
1997-1-A Pass Through Certificates will be supported by a Liquidity Facility
to be provided by the Liquidity Provider for the benefit of the
Certificateholders.
SECTION 3.14. Purchase Rights of Certificateholders. The
Certificateholders will have the purchase rights, if any, upon the occurrence
and during the continuation of a Triggering Event as set forth in the Pass
Through Agreement.
SECTION 3.15. PTC Event of Default. A PTC Event of Default shall
have occurred if, for any Pass Through Trust, the Pass Through Trustee shall
fail to pay within 10 Business Days of the due date thereof (i) the
outstanding Pool Balance of the 1997-1-A Pass Through Certificates on the
Final Legal Distribution Date or (ii) interest due on the 1997-1 Pass Through
Certificates on any Regular Distribution Date unless the Subordination Agent
has made an Interest Drawing in an amount sufficient to pay such interest and
has distributed such amount to the Certificateholders. Any failure by the Pass
Through Trustee to make expected principal distributions on the 1997-1-A Pass
Through Certificates on any Regular Distribution Date (other than the Final
Legal Distribution Date) will not be a PTC Event of Default.
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
1997-1-A 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
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except
as otherwise expressly provided herein,
but solely as Pass Through Trustee
By: _________________________________________
Name: Greg A. Hawley
Title: Vice President
Exhibit A
to
Series Supplement
FORM OF PASS THROUGH CERTIFICATE
THIS IS A REGISTERED GLOBAL CERTIFICATE REFERRED TO IN
SECTION 2.12 OF THE PASS THROUGH TRUST AGREEMENT.
Unless this pass through certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Pass Through Trustee or its agent for registration or
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 1997-1-A
1997-1 Pass Through Certificate, Class A
CUSIP 31331FAU5
Final Expected Distribution Date: January 15, 2018
evidencing a fractional undivided interest in a pass through trust.
Certificate No. _______
Applicable interest rate on Equipment Certificates held in
Pass Through Trust, 1997-1-A: 7.50%.
$___________ Fractional Undivided Interest representing _______ of the Pass
Through Trust per $1,000 face amount.
THIS CERTIFIES THAT CEDE & CO., for value received, is the registered
owner of a $_________ (_____________ dollars) Fractional Undivided Interest in
the Federal Express Corporation Pass Through Trust, 1997-1-A (the "Pass
Through Trust") created and declared by First Security Bank, National
Association, as pass through trustee (the "Pass Through Trustee"), pursuant to
the Pass Through Trust Agreement dated as of May 1, 1997 (the "Pass Through
Agreement"), as supplemented by Series Supplement 1997-1-A thereto dated May
__, 1997 (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 1997-1 Pass
Through Certificates, Class A." This Pass Through Certificate is issued under
and is subject to the terms, provisions, and conditions of the Pass Through
Agreement, the Series Supplement and the Intercreditor Agreement, 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 includes (i) the Equipment Certificates held in such
Pass Through Trust, (ii) the rights of such Pass Through Trust under the
Intercreditor Agreement (including all monies receivable in respect of such
rights), (iii) all monies receivable under the Liquidity Facility for such
Pass Through Trust, and (iv) funds from time to time deposited with the Pass
Through Trustee in accounts relating to such Pass Through Trust. (the "Trust
Property"). Each series of Equipment Certificates is secured by a security
interest in (A) an aircraft leased to or, in the case of the Airbus
A300F4-605R Aircraft, 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 Specified Investments purchased
with the proceeds of the sale of such series of Equipment Certificates. Each
of the Pass Through Certificates represents a Fractional Undivided Interest in
the Pass Through Trust and the Trust Property, and has 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 class of Pass Through
Certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Pass Through Agreement,
the Series Supplement and the Intercreditor Agreement, from funds then
available to the Pass Through Trustee, there will be distributed on each
January 15 and July 15 (a "Regular Distribution Date"), commencing on July 15,
1997, 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,
the Series Supplement and the Intercreditor Agreement, 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 any Business Day
on which a Special Payment is to be distributed.
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 acquiring this Pass Through Certificate will be deemed to
represent and warrant that (i) no 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, have
been used to acquire or hold any of the Pass Through Certificates or (ii) that
one or more administrative or statutory exemptions from the prohibited
transaction rules under Section 406 of ERISA and Section 4975 of the Code
applies to its purchase and holding of this Pass Through Certificate such that
its purchase and holding of this Pass Through Certificate will not result in a
non-exempt prohibited transaction under Section 406 of ERISA and Section 4975
of the Code.
This Pass Through Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
Reference is hereby made to the further provisions of this Pass Through
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Pass Through Trustee, by manual signature, this Pass Through Certificate shall
not be entitled to any benefit under the Pass Through Trust or be valid for
any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee has caused this Pass Through
Certificate to be duly executed.
FEDERAL EXPRESS CORPORATION
PASS THROUGH TRUST, 1997-1-A
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise expressly provided herein, but
solely as Pass Through Trustee
By: __________________________________
Authorized Signatory
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated: May ___, 1997
This is one of the Pass Through Certificates referred to in the
within-mentioned Pass Through Agreement and the Series Supplement.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise expressly provided herein, but
solely 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, the Intercreditor Agreement and the
Series Supplement. Subject to the Intercreditor Agreement, 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, the Intercreditor 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, the Intercreditor Agreement and the Series Supplement and reference
is made to the Pass Through Agreement, the Intercreditor 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, the Intercreditor Agreement and the Series Supplement
may be examined by any Certificateholder upon request during normal business
hours at the principal office of the Pass Through Trustee, and at such other
places designated by the Pass Through Trustee.
As of the date of issuance of this Pass Through Certificate, and assuming
that no prepayment 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:
Class A Trust
Equipment Certificates
Regular Scheduled Payments
Distribution Date of Principal Expected Pool Factor
- --------------------- ------------------------ ----------------------
May 28, 1997 0 1.00000000
July 15, 1997 0 1.00000000
January 15, 1998 $ 2,582,007 0.9916938
July 15, 1998 2,183,726 0.9846689
January 15, 1999 3,781,639 0.9725036
July 15, 1999 1,824,711 0.9666336
January 15, 2000 4,381,953 0.9525371
July 15, 2000 1,878,088 0.9464954
January 15, 2001 4,755,783 0.9311963
July 15, 2001 1,504,258 0.9263572
January 15, 2002 5,644,273 0.9081999
July 15, 2002 615,768 0.9062190
January 15, 2003 5,510,536 0.8884919
July 15, 2003 749,504 0.8860808
January 15, 2004 4,443,848 0.8717852
July 15, 2004 1,816,192 0.8659426
January 15, 2005 3,997,728 0.8530821
July 15, 2005 2,262,318 0.8458044
January 15, 2006 4,443,848 0.8315087
July 15, 2006 1,816,198 0.8256661
January 15, 2007 4,930,209 0.8098059
July 15, 2007 1,329,833 0.8055279
January 15, 2008 6,260,042 0.7853897
July 15, 2008 0 0.7853897
January 15, 2009 6,260,042 0.7652515
July 15, 2009 0 0.7652515
January 15, 2010 7,587,306 0.7408436
July 15, 2010 0 0.7408436
January 15, 2011 11,187,831 0.7048530
July 15, 2011 0 0.7048530
January 15, 2012 17,265,476 0.6493109
July 15, 2012 0 0.6493109
January 15, 2013 41,565,514 0.5155969
July 15, 2013 0 0.5155969
January 15, 2014 29,254,801 0.4214859
July 15, 2014 80,029 0.4212284
January 15, 2015 48,486,399 0.2652504
July 15, 2015 313,361 0.2642423
January 15, 2016 46,924,316 0.1132894
July 15, 2016 564,520 0.1114734
January 15, 2017 33,575,713 0.0034622
July 15, 2017 0 0.0034622
January 15, 2018 1,076,230 0.0000000
Each Certificateholder of this Pass Through Certificate by its acceptance
hereof, acknowledges that the terms of the Participation Agreement, the Lease
and the Indenture as they relate to two of the aircraft may differ from the
terms set forth or incorporated by reference in this Pass Through Certificate.
The Pass Through Agreement, the Intercreditor 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, the Intercreditor 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, the
Intercreditor 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, 1997-1-A
Class A
Equipment Certificates;
Related Indenture Documents
1. Equipment Certificates (Federal Express Corporation Trust No. N581FE):
Interest Rate: 7.50%
Maturity: January 15, 2017
Principal Amount: $35,615,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N581FE) dated as of May 1, 1997, between Wilmington Trust Company, not
in its individual capacity, except as otherwise provided therein, but
solely as Owner Trustee, and First Security Bank, National Association, not
in its individual capacity, except as otherwise provided therein, but
solely as Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N581FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee,
AmSouth Leasing, Ltd. and BTM Funding Corporation, as Owner Participants,
Wilmington Trust Company, not in its individual capacity, except as
otherwise provided therein, but solely as Owner Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Indenture Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Pass Through Trustee, and First
Security Bank, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N581FE) dated as of
May 1, 1997, among AmSouth Leasing, Ltd. and BTM Funding Corporation, as
Owner Participants, and Wilmington Trust Company;
Lease Agreement (Federal Express Corporation Trust No. N581FE) dated as of
May 1, 1997, between Wilmington Trust Company, not in its individual
capacity, except as otherwise provided therein, but solely as Owner Trustee
and Lessor, and Federal Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N581FE)
dated May 28, 1997, by AmSouth Bank of Alabama, as the Owner Participant
Guarantor in favor of the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee.
Owner Participant Guaranty (Federal Express Corporation Trust No. N581FE)
dated May 28, 1997, by BTM Capital Corporation, as the Owner Participant
Guarantor in favor of the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee.
2. Equipment Certificates (Federal Express Corporation Trust No. N583FE):
Interest Rate: 7.50%
Maturity: January 15, 2016
Principal Amount: $34,220,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N583FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N583FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee and
Initial Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Owner Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Indenture Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Pass Through Trustee, and First
Security Bank, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N583FE) dated as of
May 1, 1997, between Federal Express Corporation, as Initial Owner
Participant, and State Street Bank and Trust Company of Connecticut,
National Association; and Lease Agreement (Federal Express Corporation
Trust No. N583FE) dated as of May 1, 1997, between State Street Bank
and Trust Company of Connecticut, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Owner Trustee and Lessor, and Federal Express Corporation, as Lessee.
3. Equipment Certificates (Federal Express Corporation Trust No. N584FE):
Interest Rate: 7.50%
Maturity: January 15, 2016
Principal Amount: $36,665,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N584FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N584FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee and
Initial Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Owner Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Indenture Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Pass Through Trustee, and First
Security Bank, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N584FE) dated as of
May 1, 1997, between Federal Express Corporation, as Initial Owner
Participant, and State Street Bank and Trust Company of Connecticut,
National Association; and
Lease Agreement (Federal Express Corporation Trust No. N584FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee.
4. Equipment Certificates (Federal Express Corporation Trust No. N587FE):
Interest Rate: 7.50%
Maturity: January 15, 2015
Principal Amount: $37,512,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N587FE) dated as of December 1, 1996, as amended and restated as of May
1, 1997, between Wilmington Trust Company, not in its individual capacity,
except as otherwise provided therein, but solely as Owner Trustee, and
First Security Bank, National Association, not in its individual capacity,
except as otherwise provided therein, but solely as Indenture Trustee;
Trust Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N587FE) dated December 13, 1996, between Wilmington
Trust Company, not in its individual capacity, except as otherwise provided
therein, but solely as Owner Trustee, and First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N587FE)
dated as of December 1, 1996, as amended and restated as of May 1, 1997,
among Federal Express Corporation, as Lessee, CMCA Lease, Inc. and Norwest
Bank Minnesota, National Association, as Owner Participants, Wilmington
Trust Company, not in its individual capacity, except as otherwise provided
therein, but solely as Owner Trustee, State Street Bank and Trust Company,
not in its individual capacity, except as otherwise provided therein, but
solely as Original Indenture Trustee, First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Indenture Trustee, First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Pass Through Trustee, First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Subordination Agent, and Morgan Guaranty Trust
Company of New York, as Original Loan Participant;
Trust Agreement (Federal Express Corporation Trust No. N587FE) dated as of
December 1, 1996, as amended and restated as of May 1, 1997, among CMCA
Lease, Inc. and Norwest Bank Minnesota, National Association, as Owner
Participants, and Wilmington Trust Company;
Lease Agreement (Federal Express Corporation Trust No. N587FE) dated as of
December 1, 1996, as amended and restated as of May 1, 1997, between
Wilmington Trust Company, not in its individual capacity, except as
otherwise provided therein, but solely as Owner Trustee and Lessor, and
Federal Express Corporation, as Lessee;
Lease Supplement No. 1 (Federal Express Corporation Trust No. N587FE) dated
December 13, 1996, between Wilmington Trust Company, not in its individual
capacity, except as otherwise provided therein, but solely as Owner Trustee
and Lessor, and Federal Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N587FE)
dated December 13, 1996, as amended and restated as of May 28, 1997, by
Comerica Bank, as the Owner Participant Guarantor in favor of the Lessee,
the Owner Trustee, the Indenture Trustee and the Pass Through Trustee.
5. Equipment Certificates (Federal Express Corporation Trust No. N670FE):
Interest Rate: 7.50%
Maturity: January 15, 2017
Principal Amount: $33,352,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N670FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N670FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N670FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N670FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N670FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
6. Equipment Certificates (Federal Express Corporation Trust No. N671FE):
Interest Rate: 7.50%
Maturity: January 15, 2017
Principal Amount: $33,352,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N671FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N671FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N671FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N671FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N671FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
7. Equipment Certificates (Federal Express Corporation Trust No. N672FE):
Interest Rate: 7.50%
Maturity: January 15, 2018
Principal Amount: $33,374,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N672FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N672FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N672FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N672FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N672FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
8. Equipment Certificates (Federal Express Corporation Trust No. N673FE):
Interest Rate: 7.50%
Maturity: January 15, 2018
Principal Amount: $33,382,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N673FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N673FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N673FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N673FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N673FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
9. Equipment Certificates (Federal Express Corporation Trust No. N674FE):
Interest Rate: 7.50%
Maturity: January 15, 2018
Principal Amount: $33,382,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N674FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N674FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N674FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N674FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N674FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
Schedule II
to
Series Supplement
Cut-Off Date for each of the Aircraft
Federal Express Corporation Manufacturer's Serial
Trust No. Number Cut-Off Date
- ---------------------------- ---------------------- -------------------
N670FE 777 September 1, 1997
N671FE 778 September 18, 1997
N672FE 779 November 17, 1997
N673FE 780 December 10, 1997
N674FE 781 December 22, 1997
N581FE 48419 September 4, 1997
N583FE 48421 December 15, 1997
N584FE 48436 April 15, 1998
SERIES SUPPLEMENT 1997-1-B
Dated May 28, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
to
PASS THROUGH TRUST AGREEMENT
Dated as of May 1, 1997
$115,800,000
Federal Express Corporation
Pass Through Trust, 1997-1-B
Federal Express Corporation
1997-1 Pass Through Certificates,
Class B
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........................... 5
SECTION 2.02. Declaration of Trust; Authorization...................... 5
SECTION 2.03. Issuance of Pass Through Certificates.................... 6
SECTION 2.04. Purchase of Equipment Certificates....................... 6
SECTION 2.05. Representations and Warranties of the Company............ 6
SECTION 2.06. The Intercreditor Agreement.............................. 6
SECTION 2.07. Conditions Precedent..................................... 6
SECTION 2.08. Acceptance of Appointment of Pass Through Trustee........ 7
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....................................... 7
SECTION 3.02. Record Dates............................................. 7
SECTION 3.03. Certificate Account and Special Payments Account......... 7
SECTION 3.04. Form of Pass Through Certificates........................ 8
SECTION 3.05. Indenture Documents...................................... 8
SECTION 3.06. Appointment of Authenticating Agent; Paying Agent and
Registrar.............................................. 8
SECTION 3.07. Predelivery Funding...................................... 8
SECTION 3.08. ERISA.................................................... 9
SECTION 3.09. Intercreditor Agreement.................................. 9
SECTION 3.10. Ranking of Equipment Certificates........................ 9
SECTION 3.11. No Cross-Default or Cross-Collateralization of Equipment
Certificates........................................... 9
SECTION 3.12. Ranking of 1997-1-B Pass Through Certificates............ 9
SECTION 3.13. Liquidity Facility....................................... 9
SECTION 3.14. Purchase Rights of Certificateholders.................... 9
SECTION 3.15. PTC Event of Default..................................... 9
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart Form.......................... 10
SECTION 4.02. Reports by the Company................................... 10
SECTION 4.03. Modification and Ratification of Pass Through Agreement.. 10
SECTION 4.04. Termination.............................................. 10
EXHIBIT A Form of Pass Through Certificate
SCHEDULE I Equipment Certificates; related Indenture Documents
SCHEDULE II Cut-Off Date for each of the Aircraft
SERIES SUPPLEMENT 1997-1-B
SERIES SUPPLEMENT 1997-1-B, dated May 28, 1997 (this "Series
Supplement"), between FEDERAL EXPRESS CORPORATION, a Delaware corporation (the
"Company") and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, as Pass Through Trustee (the "Pass Through Trustee"), to the Pass
Through Trust Agreement, dated as of May 1, 1997 (the "Pass Through
Agreement"), between the Company and the Pass Through Trustee.
RECITALS
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, Section 2.01 of the Pass Through Agreement provides, among
other things, that the Company and the Pass Through Trustee may execute and
deliver one or more series supplements, each for the purpose of forming a
separate pass through trust for the benefit of the certificateholders of the
class 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 class 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 Class rather than to any Pass Through Trust or Class
generally shall, when used in this Series Supplement, relate solely to the
Federal Express Corporation Pass Through Trust, 1997-1-B, or the Federal
Express Corporation 1997-1 Pass Through Certificates, Class B, as the case may
be, whether or not expressly so stated herein.
"Aircraft" means four McDonnell Douglas MD-11F aircraft and five
Airbus A300F4-605R aircraft, including the Engines (as such term is defined in
the related Participation Agreement) relating thereto, leased, or expected to
be leased, by the related Owner Trustee to the Company pursuant to one of nine
separate Leases, and, collectively, means all of the foregoing.
"Aircraft Delivery Date" means, for each Aircraft, the date on which
such Aircraft is delivered and sold to the Lessor (as such term is defined in
the related Participation Agreement) and leased by the Lessor to the Lessee
(as such term is defined in the related Participation Agreement) under the
Lease (as such term is defined in the related Participation Agreement), which
date shall also be the date of the initial Lease Supplement (as such term is
defined in the related Participation Agreement).
"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 Class of
Pass Through Certificates designated in Section 2.01 hereof.
"Collateral Account" means each of the Collateral Accounts
established pursuant to the Indentures for each of Federal Express Corporation
Trust Nos. N581FE, N583FE, N584FE, N670FE, N671FE, N672FE, N673FE and N674FE
into which the proceeds of sale of the related Equipment Certificates will be
deposited respectively.
"Cut-Off Date" means the date listed on Schedule II hereto for each
Aircraft.
"Delivery Date" means, for any Equipment Certificates, the Refunding
Date or the Pass Through Closing Date (as such term is defined in the related
Participation Agreement) for such Equipment Certificates.
"Equipment Certificates" means those Equipment Trust Certificates
listed in Schedule I hereto.
"Final Expected Distribution Date" means January 15, 2018.
"Final Legal Distribution Date" means July 15, 2019.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of May 1, 1997 among the Pass Through Trustee, the Liquidity Provider and the
Subordination Agent.
"Interest Drawing" has the meaning specified in the Intercreditor
Agreement.
"Issuance Date" means the date defined as the Closing Time in the
Underwriting Agreement.
"Liquidity Facility" means the Irrevocable Revolving Credit Agreement
Class B Pass Through Certificates dated as of May 1, 1997 between the
Subordination Agent and the Liquidity Provider.
"Liquidity Provider" means Kredietbank N.V., New York Branch or any
replacement liquidity provider.
"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.
"Pool Balance" means, for any Pass Through Trust or for the Pass
Through Certificates issued by any Pass Through Trust, as of any date, the
original aggregate face amount of the Pass Through Certificates of such Pass
Through Trust less the aggregate amount of all payments on such Pass Through
Certificates other than payments made in respect of interest or premium or
reimbursement of any costs and expenses in connection therewith. The Pool
Balance for each Pass Through Trust as of any Regular Distribution Date or
Special Distribution Date will be computed after giving effect to the payment
of principal, if any, on the Equipment Certificates or other Trust Property
held in such Pass Through Trust and the distribution thereof being made on
that date.
"Pool Factor" means, for any Pass Through Trust as of any Regular
Distribution Date or Special Distribution Date the quotient (rounded to the
seventh decimal place) computed by dividing (i) the Pool Balance by (ii) the
original aggregate face amount of the Pass Through Certificates of the related
Class. The Pool Factor for each Pass Through Trust as of any Regular
Distribution Date or Special Distribution Date will be computed after giving
effect to the payment of principal, if any, on such Equipment Certificates or
other Trust Property held in such Pass Through Trust and the distribution
thereof being made on that date.
"PTC Event of Default" has the meaning set forth in Section 3.15
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.
"Specified Investments" has the meaning set forth in Schedule II to
the Participation Agreements.
"Subordination Agent" means First Security Bank, National
Association, a national banking association.
"Trust Property" means, for this Pass Through Trust: (i) the
Equipment Certificates held in this Pass Through Trust; (ii) the rights of
this Pass Through Trust under the Intercreditor Agreement (including all
monies receivable in respect of such rights); (iii) all monies receivable
under the Liquidity Facility for this Pass Through Trust; and (iv) funds from
time to time deposited with the Pass Through Trustee in accounts relating to
this Pass Through Trust.
"Underwriters" means the several Underwriters named in the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement dated May
22, 1997 among the Company and Morgan Stanley & Co. Incorporated, First
Chicago Capital Markets, Inc., Goldman, Sachs & Co. and J.P. Morgan & Co.
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, 1997-1-B (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 1997-1
Pass Through Certificates, Class B (herein sometimes called the "1997-1-B Pass
Through Certificates"). The 1997-1-B 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 1997-1-B Pass Through Certificates that may
be authenticated, delivered and outstanding under this Series Supplement is
limited to $115,800,000.
SECTION 2.02. Declaration of Trust; Authorization. Each initial
Certificateholder, by its acceptance of any 1997-1-B 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, the Intercreditor 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
1997-1-B Pass Through Certificates and (ii) the Pass Through Trustee shall
deliver the 1997-1-B 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. The Intercreditor Agreement. The Pass Through Trustee
is hereby directed to execute and deliver the Intercreditor Agreement on or
prior to the Issuance Date in the form delivered to the Pass Through Trustee
by the Company. The Pass Through Trustee represents and warrants that the
Intercreditor Agreement will be duly executed and delivered by one of its
officers who is duly authorized to execute and deliver such document on its
behalf.
SECTION 2.07. 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 1997-1-B Pass
Through Certificates.
SECTION 2.08. Acceptance of Appointment of Pass Through Trustee.
First Security Bank, National Association 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. First Security Bank, National Association 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 January 15 and July 15, commencing on July 15, 1997. The Special
Distribution Date is any Business Day on which a Special Payment is to be
distributed.
SECTION 3.02. Record Dates. The Record Dates for the Regular
Distribution Dates are December 31 and June 30, 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 1997-1-B Pass Through
Certificates will be substantially in the form of Exhibit A hereto. The
1997-1-B Pass Through Certificates will be issued pursuant to a book-entry
system in the form of one or more Registered Global Certificates 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
1997-1-B Pass Through Certificates initially shall be First Security Bank,
National Association. First Security Bank, National Association 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 and Delayed Equipment
Certificates. (a) Predelivery Funding. During the period between the date of
issuance of Equipment Certificates by the Owner Trustee in respect of Federal
Express Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE, N581FE,
N583FE and N584FE and the Aircraft Delivery Date for the related Aircraft,
such Equipment Certificates will not be secured by such Aircraft or the
related Lease, but will be secured by each Collateral Account. Pursuant to
the related Indenture, the Indenture Trustee on behalf of the related Owner
Trustee will deposit the proceeds from the sale of the related Equipment
Certificates into each Collateral Account.
Sums deposited in each Collateral Account will be invested as set
forth in the Related Indenture.
(b) Delayed Equipment Certificates. If for any reason Equipment
Certificates are not available for purchase on the Pass Through Closing Date
(as such term is defined in the related Participation Agreement) the Pass
Through Trustee shall invest a corresponding amount of the proceeds received
from the Underwriters pursuant to the Underwriting Agreement in Specified
Investments at the risk and for the benefit of the Company until such
Equipment Certificates are available for purchase.
Sums deposited in each Collateral Account will be invested as set
forth in the Related Indenture.
SECTION 3.08. ERISA. Any Person who is acquiring a Pass Through
Certificate will be deemed to represent and warrant that (i) no 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, have been used to acquire or hold any of the Pass
Through Certificates or (ii) that one or more administrative or statutory
exemptions from the prohibited transaction rules under Section 406 of ERISA
and Section 4975 of the Code applies to its purchase and holding of a Pass
Through Certificate such that its purchase and holding of a Pass Through
Certificate will not result in a non-exempt prohibited transaction under
Section 406 of ERISA and Section 4975 of the Code.
SECTION 3.09. Intercreditor Agreement. The 1997-1-B Pass Through
Certificates are subject to the Intercreditor Agreement.
SECTION 3.10. Ranking of Equipment Certificates. The Equipment
Certificates will be subject to the ranking and priority as set forth in the
related Indenture Documents.
SECTION 3.11. No Cross-Default or Cross-Collateralization of
Equipment Certificates. As set forth in the related Indenture Documents,
there are no cross-collateralization provisions or cross-default provisions in
respect of the Equipment Certificates.
SECTION 3.12. Ranking of 1997-1-B Pass Through Certificates. The
1997-1-B Pass Through Certificates will be subject to the ranking and priority
as set forth in the Intercreditor Agreement.
SECTION 3.13. Liquidity Facility. Payments of interest on the
1997-1-B Pass Through Certificates will be supported by a Liquidity Facility
to be provided by the Liquidity Provider for the benefit of the
Certificateholders.
SECTION 3.14. Purchase Rights of Certificateholders. The
Certificateholders will have the purchase rights, if any, upon the occurrence
and during the continuation of a Triggering Event as set forth in the Pass
Through Agreement.
SECTION 3.15. PTC Event of Default. A PTC Event of Default shall
have occurred if, for any Pass Through Trust, the Pass Through Trustee shall
fail to pay within 10 Business Days of the due date thereof (i) the
outstanding Pool Balance of the 1997-1-B Pass Through Certificates on the
Final Legal Distribution Date or (ii) interest due on the 1997-1 Pass Through
Certificates on any Regular Distribution Date unless the Subordination Agent
has made an Interest Drawing in an amount sufficient to pay such interest and
has distributed such amount to the Certificateholders. Any failure by the Pass
Through Trustee to make expected principal distributions on the 1997-1-B Pass
Through Certificates on any Regular Distribution Date (other than the Final
Legal Distribution Date) will not be a PTC Event of Default.
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
1997-1-B 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
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise expressly provided herein, but
solely as Pass Through Trustee
By: _________________________________________
Name: Greg A. Hawley
Title: Vice President
Exhibit A
to
Series Supplement
FORM OF PASS THROUGH CERTIFICATE
THIS IS A REGISTERED GLOBAL CERTIFICATE REFERRED TO IN
SECTION 2.12 OF THE PASS THROUGH TRUST AGREEMENT.
Unless this pass through certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Pass Through Trustee or its agent for registration or
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 1997-1-B
1997-1 Pass Through Certificate, Class B
CUSIP 31331FAV3
Final Expected Distribution Date: January 15, 2018
evidencing a fractional undivided interest in a pass through trust.
Certificate No. _______
Applicable interest rate on Equipment Certificates held in
Pass Through Trust, 1997-1-B: 7.52%.
$___________ Fractional Undivided Interest representing _______ of the Pass
Through Trust per $1,000 face amount.
THIS CERTIFIES THAT CEDE & CO., for value received, is the registered
owner of a $_________ (_____________ dollars) Fractional Undivided Interest in
the Federal Express Corporation Pass Through Trust, 1997-1-B (the "Pass
Through Trust") created and declared by First Security Bank, National
Association, as pass through trustee (the "Pass Through Trustee"), pursuant to
the Pass Through Trust Agreement dated as of May 1, 1997 (the "Pass Through
Agreement"), as supplemented by Series Supplement 1997-1-B thereto dated May
__, 1997 (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 1997-1 Pass
Through Certificates, Class B." This Pass Through Certificate is issued under
and is subject to the terms, provisions, and conditions of the Pass Through
Agreement, the Series Supplement and the Intercreditor Agreement, 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 includes (i) the Equipment Certificates held in such
Pass Through Trust, (ii) the rights of such Pass Through Trust under the
Intercreditor Agreement (including all monies receivable in respect of such
rights), (iii) all monies receivable under the Liquidity Facility for such
Pass Through Trust, and (iv) funds from time to time deposited with the Pass
Through Trustee in accounts relating to such Pass Through Trust. (the "Trust
Property"). Each series of Equipment Certificates is secured by a security
interest in (A) an aircraft leased to or, in the case of the Airbus
A300F4-605R Aircraft, 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 Specified Investments purchased
with the proceeds of the sale of such series of Equipment Certificates. Each
of the Pass Through Certificates represents a Fractional Undivided Interest in
the Pass Through Trust and the Trust Property, and has 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 class of Pass Through
Certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Pass Through Agreement,
the Series Supplement and the Intercreditor Agreement, from funds then
available to the Pass Through Trustee, there will be distributed on each
January 15 and July 15 (a "Regular Distribution Date"), commencing on July 15,
1997, 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,
the Series Supplement and the Intercreditor Agreement, 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 any Business Day
on which a Special Payment is to be distributed.
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 acquiring this Pass Through Certificate will be deemed to
represent and warrant that (i) no 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, have
been used to acquire or hold any of the Pass Through Certificates or (ii) that
one or more administrative or statutory exemptions from the prohibited
transaction rules under Section 406 of ERISA and Section 4975 of the Code
applies to its purchase and holding of this Pass Through Certificate such that
its purchase and holding of this Pass Through Certificate will not result in a
non-exempt prohibited transaction under Section 406 of ERISA and Section 4975
of the Code.
This Pass Through Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
Reference is hereby made to the further provisions of this Pass Through
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Pass Through Trustee, by manual signature, this Pass Through Certificate shall
not be entitled to any benefit under the Pass Through Trust or be valid for
any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee has caused this Pass Through
Certificate to be duly executed.
FEDERAL EXPRESS CORPORATION
PASS THROUGH TRUST, 1997-1-B
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise expressly provided herein, but
solely as Pass Through Trustee
By: __________________________________________
Authorized Signatory
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated: May ___, 1997
This is one of the Pass Through Certificates referred to in the
within-mentioned Pass Through Agreement and the Series Supplement.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise expressly provided herein, but
solely 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, the Intercreditor Agreement and the
Series Supplement. Subject to the Intercreditor Agreement, 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, the Intercreditor 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, the Intercreditor Agreement and the Series Supplement
and reference is made to the Pass Through Agreement, the Intercreditor
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, the Intercreditor Agreement
and the Series Supplement may be examined by any Certificateholder upon
request during normal business hours at the principal office of the Pass
Through Trustee, and at such other places designated by the Pass Through
Trustee.
As of the date of issuance of this Pass Through Certificate, and assuming
that no prepayment 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:
Class B Trust
Equipment Certificates
Regular Scheduled Payments
Distribution Date of Principal Expected Pool Factor
- --------------------- ---------------------- --------------------
May 28, 1997 0 1.00000000
July 15, 1997 0 1.00000000
January 15, 1998 $1,171,776 0.9898810
July 15, 1998 0 0.9898810
January 15, 1999 1,947,506 0.9730632
July 15, 1999 0 0.9730632
January 15, 2000 2,347,516 0.9527910
July 15, 2000 0 0.9527910
January 15, 2001 2,347,516 0.9325189
July 15, 2001 0 0.9325189
January 15, 2002 2,347,516 0.9122467
July 15, 2002 0 0.9122467
January 15, 2003 2,075,927 0.8943199
July 15, 2003 271,589 0.8919746
January 15, 2004 1,800,026 0.8764303
July 15, 2004 547,490 0.8717024
January 15, 2005 1,518,492 0.8585893
July 15, 2005 829,030 0.8514302
January 15, 2006 1,666,446 0.8370395
July 15, 2006 681,072 0.8311580
January 15, 2007 3,469,888 0.8011935
July 15, 2007 280,600 0.7987704
January 15, 2008 4,599,212 0.7590535
July 15, 2008 0 0.7590535
January 15, 2009 9,247,657 0.6791947
July 15, 2009 0 0.6791947
January 15, 2010 13,818,441 0.5598644
July 15, 2010 0 0.5598644
January 15, 2011 24,124,500 0.3515354
July 15, 2011 0 0.3515354
January 15, 2012 21,710,472 0.1640529
July 15, 2012 0 0.1640529
January 15, 2013 6,077,266 0.1115722
July 15, 2013 0 0.1115722
January 15, 2014 0 0.1115722
July 15, 2014 0 0.1115722
January 15, 2015 0 0.1115722
July 15, 2015 0 0.1115722
January 15, 2016 548,889 0.1068322
July 15, 2016 0 0.1068322
January 15, 2017 2,408,507 0.0860344
July 15, 2017 0 0.0860334
January 15, 2018 9,262,666 0.0000000
Each Certificateholder of this Pass Through Certificate by its acceptance
hereof, acknowledges that the terms of the Participation Agreement, the Lease
and the Indenture as they relate to two of the aircraft may differ from the
terms set forth or incorporated by reference in this Pass Through Certificate.
The Pass Through Agreement, the Intercreditor 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, the Intercreditor 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, the
Intercreditor 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, 1997-1-B
Class B
Equipment Certificates;
Related Indenture Documents
1. Equipment Certificates (Federal Express Corporation Trust No. N581FE):
Interest Rate: 7.52%
Maturity: January 15, 2013
Principal Amount: $13,210,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N581FE) dated as of May 1, 1997, between Wilmington Trust Company, not
in its individual capacity, except as otherwise provided therein, but
solely as Owner Trustee, and First Security Bank, National Association, not
in its individual capacity, except as otherwise provided therein, but
solely as Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N581FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee,
AmSouth Leasing, Ltd. and BTM Funding Corporation, as Owner Participants,
Wilmington Trust Company, not in its individual capacity, except as
otherwise provided therein, but solely as Owner Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Indenture Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Pass Through Trustee, and First
Security Bank, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N581FE) dated as of
May 1, 1997, among AmSouth Leasing, Ltd. and BTM Funding Corporation, as
Owner Participants, and Wilmington Trust Company;
Lease Agreement (Federal Express Corporation Trust No. N581FE) dated as of
May 1, 1997, between Wilmington Trust Company, not in its individual
capacity, except as otherwise provided therein, but solely as Owner Trustee
and Lessor, and Federal Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N581FE)
dated May 28, 1997, by AmSouth Bank of Alabama, as the Owner Participant
Guarantor in favor of the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee.
Owner Participant Guaranty (Federal Express Corporation Trust No. N581FE)
dated May 28, 1997, by BTM Capital Corporation, as the Owner Participant
Guarantor in favor of the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee.
2. Equipment Certificates (Federal Express Corporation Trust No. N583FE):
Interest Rate: 7.52%
Maturity: January 15, 2016
Principal Amount: $12,811,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N583FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N583FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee and
Initial Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Owner Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Indenture Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Pass Through Trustee, and First
Security Bank, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N583FE) dated as of
May 1, 1997, between Federal Express Corporation, as Initial Owner
Participant, and State Street Bank and Trust Company of Connecticut,
National Association; and
Lease Agreement (Federal Express Corporation Trust No. N583FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee.
3. Equipment Certificates (Federal Express Corporation Trust No. N584FE):
Interest Rate: 7.52%
Maturity: January 15, 2017
Principal Amount: $13,616,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N584FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N584FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee and
Initial Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Owner Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Indenture Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Pass Through Trustee, and First
Security Bank, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N584FE) dated as of
May 1, 1997, between Federal Express Corporation, as Initial Owner
Participant, and State Street Bank and Trust Company of Connecticut,
National Association; and
Lease Agreement (Federal Express Corporation Trust No. N584FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee.
4. Equipment Certificates (Federal Express Corporation Trust No. N587FE):
Interest Rate: 7.52%
Maturity: January 15, 2010
Principal Amount: $13,796,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N587FE) dated as of December 1, 1996, as amended and restated as of May
1, 1997, between Wilmington Trust Company, not in its individual capacity,
except as otherwise provided therein, but solely as Owner Trustee, and
First Security Bank, National Association, not in its individual capacity,
except as otherwise provided therein, but solely as Indenture Trustee;
Trust Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N587FE) dated December 13, 1996, between Wilmington
Trust Company, not in its individual capacity, except as otherwise provided
therein, but solely as Owner Trustee, and First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N587FE)
dated as of December 1, 1996, as amended and restated as of May 1, 1997,
among Federal Express Corporation, as Lessee, CMCA Lease, Inc. and Norwest
Bank Minnesota, National Association, as Owner Participants, Wilmington
Trust Company, not in its individual capacity, except as otherwise provided
therein, but solely as Owner Trustee, State Street Bank and Trust Company,
not in its individual capacity, except as otherwise provided therein, but
solely as Original Indenture Trustee, First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Indenture Trustee, First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Pass Through Trustee, First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Subordination Agent, and Morgan Guaranty Trust
Company of New York, as Original Loan Participant;
Trust Agreement (Federal Express Corporation Trust No. N587FE) dated as of
December 1, 1996, as amended and restated as of May 1, 1997, among CMCA
Lease, Inc. and Norwest Bank Minnesota, National Association, as Owner
Participants, and Wilmington Trust Company;
Lease Agreement (Federal Express Corporation Trust No. N587FE) dated as of
December 1, 1996, as amended and restated as of May 1, 1997, between
Wilmington Trust Company, not in its individual capacity, except as
otherwise provided therein, but solely as Owner Trustee and Lessor, and
Federal Express Corporation, as Lessee;
Lease Supplement No. 1 (Federal Express Corporation Trust No. N587FE) dated
December 13, 1996, between Wilmington Trust Company, not in its individual
capacity, except as otherwise provided therein, but solely as Owner Trustee
and Lessor, and Federal Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N587FE)
dated December 13, 1996, as amended and restated as of May 28, 1997, by
Comerica Bank, as the Owner Participant Guarantor in favor of the Lessee,
the Owner Trustee, the Indenture Trustee and the Pass Through Trustee.
5. Equipment Certificates (Federal Express Corporation Trust No. N670FE):
Interest Rate: 7.52%
Maturity: January 15, 2018
Principal Amount: $12,507,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N670FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N670FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N670FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N670FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N670FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
6. Equipment Certificates (Federal Express Corporation Trust No. N671FE):
Interest Rate: 7.52%
Maturity: January 15, 2018
Principal Amount: $12,507,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N671FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N671FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N671FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N671FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N671FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
7. Equipment Certificates (Federal Express Corporation Trust No. N672FE):
Interest Rate: 7.52%
Maturity: January 15, 2018
Principal Amount: $12,515,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N672FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N672FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N672FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N672FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N672FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
8. Equipment Certificates (Federal Express Corporation Trust No. N673FE):
Interest Rate: 7.52%
Maturity: January 15, 2018
Principal Amount: $12,408,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N673FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N673FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N673FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N673FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N673FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
9. Equipment Certificates (Federal Express Corporation Trust No. N674FE):
Interest Rate: 7.52%
Maturity: January 15, 2018
Principal Amount: $12,430,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N674FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N674FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N674FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N674FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N674FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
Schedule II
to
Series Supplement
Cut-Off Date for each of the Aircraft
Federal Express Corporation Manufacturer's Serial
Trust No. Number Cut-Off Date
- ---------------------------- ---------------------- -------------------
N670FE 777 September 1, 1997
N671FE 778 September 18, 1997
N672FE 779 November 17, 1997
N673FE 780 December 10, 1997
N674FE 781 December 22, 1997
N581FE 48419 September 15, 1997
N583FE 48421 December 15, 1997
N584FE 48436 April 15, 1998
SERIES SUPPLEMENT 1997-1-C
Dated May 28, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
to
PASS THROUGH TRUST AGREEMENT
Dated as of May 1, 1997
$129,185,000
Federal Express Corporation
Pass Through Trust, 1997-1-C
Federal Express Corporation
1997-1 Pass Through Certificates,
Class C
___________________________________________________________________________
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........................... 5
SECTION 2.02. Declaration of Trust; Authorization...................... 5
SECTION 2.03. Issuance of Pass Through Certificates.................... 6
SECTION 2.04. Purchase of Equipment Certificates....................... 6
SECTION 2.05. Representations and Warranties of the Company............ 6
SECTION 2.06. The Intercreditor Agreement.............................. 6
SECTION 2.07. Conditions Precedent..................................... 6
SECTION 2.08. Acceptance of Appointment of Pass Through Trustee........ 7
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....................................... 7
SECTION 3.02. Record Dates............................................. 7
SECTION 3.03. Certificate Account and Special Payments Account......... 7
SECTION 3.04. Form of Pass Through Certificates........................ 8
SECTION 3.05. Indenture Documents...................................... 8
SECTION 3.06. Appointment of Authenticating Agent; Paying Agent and
Registrar.............................................. 8
SECTION 3.07. Predelivery Funding...................................... 8
SECTION 3.08. ERISA.................................................... 9
SECTION 3.09. Intercreditor Agreement.................................. 9
SECTION 3.10. Ranking of Equipment Certificates........................ 9
SECTION 3.11. No Cross-Default or Cross-Collateralization of Equipment
Certificates........................................... 9
SECTION 3.12. Ranking of 1997-1-C Pass Through Certificates............ 9
SECTION 3.13. Liquidity Facility....................................... 9
SECTION 3.14. Purchase Rights of Certificateholders.................... 9
SECTION 3.15. PTC Event of Default..................................... 9
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart Form.......................... 10
SECTION 4.02. Reports by the Company................................... 10
SECTION 4.03. Modification and Ratification of Pass Through Agreement.. 10
SECTION 4.04. Termination.............................................. 10
EXHIBIT A Form of Pass Through Certificate
SCHEDULE I Equipment Certificates; related Indenture Documents
SCHEDULE II Cut-Off Date for each of the Aircraft
SERIES SUPPLEMENT 1997-1-C
SERIES SUPPLEMENT 1997-1-C, dated May 28, 1997 (this "Series
Supplement"), between FEDERAL EXPRESS CORPORATION, a Delaware corporation (the
"Company") and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, as Pass Through Trustee (the "Pass Through Trustee"), to the Pass
Through Trust Agreement, dated as of May 1, 1997 (the "Pass Through
Agreement"), between the Company and the Pass Through Trustee.
RECITALS
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, Section 2.01 of the Pass Through Agreement provides, among
other things, that the Company and the Pass Through Trustee may execute and
deliver one or more series supplements, each for the purpose of forming a
separate pass through trust for the benefit of the certificateholders of the
class 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 class 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 Class rather than to any Pass Through Trust or Class
generally shall, when used in this Series Supplement, relate solely to the
Federal Express Corporation Pass Through Trust, 1997-1-C, or the Federal
Express Corporation 1997-1 Pass Through Certificates, Class C, as the case may
be, whether or not expressly so stated herein.
"Aircraft" means four McDonnell Douglas MD-11F aircraft and five
Airbus A300F4-605R aircraft, including the Engines (as such term is defined in
the related Participation Agreement) relating thereto, leased, or expected to
be leased, by the related Owner Trustee to the Company pursuant to one of nine
separate Leases, and, collectively, means all of the foregoing.
"Aircraft Delivery Date" means, for each Aircraft, the date on which
such Aircraft is delivered and sold to the Lessor (as such term is defined in
the related Participation Agreement) and leased by the Lessor to the Lessee
(as such term is defined in the related Participation Agreement) under the
Lease (as such term is defined in the related Participation Agreement), which
date shall also be the date of the initial Lease Supplement (as such term is
defined in the related Participation Agreement).
"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 Class of
Pass Through Certificates designated in Section 2.01 hereof.
"Collateral Account" means each of the Collateral Accounts
established pursuant to the Indentures for each of Federal Express Corporation
Trust Nos. N581FE, N583FE, N584FE, N670FE, N671FE, N672FE, N673FE and N674FE
into which the proceeds of sale of the related Equipment Certificates will be
deposited respectively.
"Cut-Off Date" means the date listed on Schedule II hereto for each
Aircraft.
"Delivery Date" means, for any Equipment Certificates, the Refunding
Date or the Pass Through Closing Date (as such term is defined in the related
Participation Agreement) for such Equipment Certificates.
"Equipment Certificates" means those Equipment Trust Certificates
listed in Schedule I hereto.
"Final Expected Distribution Date" means January 15, 2014.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of May 1, 1997 among the Pass Through Trustee, the Liquidity Provider (as
defined therein) and the Subordination Agent.
"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.
"Pool Balance" means, for any Pass Through Trust or for the Pass
Through Certificates issued by any Pass Through Trust, as of any date, the
original aggregate face amount of the Pass Through Certificates of such Pass
Through Trust less the aggregate amount of all payments on such Pass Through
Certificates other than payments made in respect of interest or premium or
reimbursement of any costs and expenses in connection therewith. The Pool
Balance for each Pass Through Trust as of any Regular Distribution Date or
Special Distribution Date will be computed after giving effect to the payment
of principal, if any, on the Equipment Certificates or other Trust Property
held in such Pass Through Trust and the distribution thereof being made on
that date.
"Pool Factor" means, for any Pass Through Trust as of any Regular
Distribution Date or Special Distribution Date the quotient (rounded to the
seventh decimal place) computed by dividing (i) the Pool Balance by (ii) the
original aggregate face amount of the Pass Through Certificates of the related
Class. The Pool Factor for each Pass Through Trust as of any Regular
Distribution Date or Special Distribution Date will be computed after giving
effect to the payment of principal, if any, on such Equipment Certificates or
other Trust Property held in such Pass Through Trust and the distribution
thereof being made on that date.
"PTC Event of Default" has the meaning set forth in Section 3.15
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.
"Specified Investments" has the meaning set forth in Schedule II to
the Participation Agreements.
"Subordination Agent" means First Security Bank, National
Association, a national banking association.
"Trust Property" means, for this Pass Through Trust: (i) the
Equipment Certificates held in this Pass Through Trust; (ii) the rights of
this Pass Through Trust under the Intercreditor Agreement (including all
monies receivable in respect of such rights); and (iii) funds from time to
time deposited with the Pass Through Trustee in accounts relating to this
Pass Through Trust.
"Underwriters" means the several Underwriters named in the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement dated May
22, 1997 among the Company and Morgan Stanley & Co. Incorporated, First
Chicago Capital Markets, Inc., Goldman, Sachs & Co. and J.P. Morgan & Co.
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, 1997-1-C (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 1997-1 Pass Through Certificates, Class C (herein
sometimes called the "1997-1-C Pass Through Certificates"). The 1997-1-C
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 1997-1-C Pass Through
Certificates that may be authenticated, delivered and outstanding under
this Series Supplement is limited to $129,185,000.
SECTION 2.02. Declaration of Trust; Authorization. Each initial
Certificateholder, by its acceptance of any 1997-1-C 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, the Intercreditor 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
1997-1-C Pass Through Certificates and (ii) the Pass Through Trustee shall
deliver the 1997-1-C 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. The Intercreditor Agreement. The Pass Through Trustee
is hereby directed to execute and deliver the Intercreditor Agreement on or
prior to the Issuance Date in the form delivered to the Pass Through Trustee
by the Company. The Pass Through Trustee represents and warrants that the
Intercreditor Agreement will be duly executed and delivered by one of its
officers who is duly authorized to execute and deliver such document on its
behalf.
SECTION 2.07. 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 1997-1-C Pass
Through Certificates.
SECTION 2.08. Acceptance of Appointment of Pass Through Trustee.
First Security Bank, National Association 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. First Security Bank, National Association 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 January 15 and July 15, commencing on July 15, 1997. The Special
Distribution Date is any Business Day on which a Special Payment is to be
distributed.
SECTION 3.02. Record Dates. The Record Dates for the Regular
Distribution Dates are December 31 and June 30, 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 1997-1-C Pass Through
Certificates will be substantially in the form of Exhibit A hereto. The
1997-1-C Pass Through Certificates will be issued pursuant to a book-entry
system in the form of one or more Registered Global Certificates 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
1997-1-C Pass Through Certificates initially shall be First Security Bank,
National Association. First Security Bank, National Association 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 and Delayed Equipment
Certificates. (a) Predelivery Funding. During the period between the date of
issuance of Equipment Certificates by the Owner Trustee in respect of Federal
Express Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE, N581FE,
N583FE and N584FE and the Aircraft Delivery Date for the related Aircraft,
such Equipment Certificates will not be secured by such Aircraft or the
related Lease, but will be secured by each Collateral Account. Pursuant to
the related Indenture, the Indenture Trustee on behalf of the related Owner
Trustee will deposit the proceeds from the sale of the related Equipment
Certificates into each Collateral Account.
Sums deposited in each Collateral Account will be invested as set
forth in the Related Indenture.
(b) Delayed Equipment Certificates. If for any reason Equipment
Certificates are not available for purchase on the Pass Through Closing Date
(as such term is defined in the related Participation Agreement) the Pass
Through Trustee shall invest a corresponding amount of the proceeds received
from the Underwriters pursuant to the Underwriting Agreement in Specified
Investments at the risk and for the benefit of the Company until such
Equipment Certificates are available for purchase.
SECTION 3.08. ERISA. Any Person who is acquiring a Pass Through
Certificate will be deemed to represent and warrant that (i) no 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, have been used to acquire or hold any of the Pass
Through Certificates or (ii) that one or more administrative or statutory
exemptions from the prohibited transaction rules under Section 406 of ERISA
and Section 4975 of the Code applies to its purchase and holding of a Pass
Through Certificate such that its purchase and holding of a Pass Through
Certificate will not result in a non-exempt prohibited transaction under
Section 406 of ERISA and Section 4975 of the Code.
SECTION 3.09. Intercreditor Agreement. The 1997-1-C Pass Through
Certificates are subject to the Intercreditor Agreement.
SECTION 3.10. Ranking of Equipment Certificates. The Equipment
Certificates will be subject to the ranking and priority as set forth in the
related Indenture Documents.
SECTION 3.11. No Cross-Default or Cross-Collateralization of
Equipment Certificates. As set forth in the related Indenture Documents,
there are no cross-collateralization provisions or cross-default provisions in
respect of the Equipment Certificates.
SECTION 3.12. Ranking of 1997-1-C Pass Through Certificates. The
1997-1-C Pass Through Certificates will be subject to the ranking and priority
as set forth in the Intercreditor Agreement.
SECTION 3.13. [Intentionally Left Blank].
SECTION 3.14. Purchase Rights of Certificateholders. The
Certificateholders will have the purchase rights, if any, upon the occurrence
and during the continuation of a Triggering Event as set forth in the Pass
Through Agreement.
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
1997-1-C 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
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as otherwise
expressly provided herein, but solely as Pass Through
Trustee
By: _________________________________________
Name: Greg A. Hawley
Title: Vice President
Exhibit A
to
Series Supplement
FORM OF PASS THROUGH CERTIFICATE
THIS IS A REGISTERED GLOBAL CERTIFICATE REFERRED TO IN
SECTION 2.12 OF THE PASS THROUGH TRUST AGREEMENT.
Unless this pass through certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Pass Through Trustee or its agent for registration or
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 1997-1-C
1997-1 Pass Through Certificate, Class C
CUSIP 31331FAW 1
Final Expected Distribution Date: January 15, 2014
evidencing a fractional undivided interest in a pass through trust.
Certificate No. _______
Applicable interest rate on Equipment Certificates held in
Pass Through Trust, 1997-1-C: 7.65%.
$___________ Fractional Undivided Interest representing _______ of the Pass
Through Trust per $1,000 face amount.
THIS CERTIFIES THAT CEDE & CO., for value received, is the registered
owner of a $_________ (_____________ dollars) Fractional Undivided Interest in
the Federal Express Corporation Pass Through Trust, 1997-1-C (the "Pass
Through Trust") created and declared by First Security Bank, National
Association, as pass through trustee (the "Pass Through Trustee"), pursuant to
the Pass Through Trust Agreement dated as of May 1, 1997 (the "Pass Through
Agreement"), as supplemented by Series Supplement 1997-1-C thereto dated May
__, 1997 (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 1997-1 Pass
Through Certificates, Class C." This Pass Through Certificate is issued
under and is subject to the terms, provisions, and conditions of the Pass
Through Agreement, the Series Supplement and the Intercreditor Agreement,
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 includes (i) the Equipment
Certificates held in such Pass Through Trust, (ii) the rights of such Pass
Through Trust under the Intercreditor Agreement (including all monies
receivable in respect of such rights), and (iii) funds from time to time
deposited with the Pass Through Trustee in accounts relating to such Pass
Through Trust. (the "Trust Property"). Each series of Equipment
Certificates is secured by a security interest in (A) an aircraft leased to
or, in the case of the Airbus A300F4-605R Aircraft, 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 Specified
Investments purchased with the proceeds of the sale of such series of
Equipment Certificates. Each of the Pass Through Certificates represents a
Fractional Undivided Interest in the Pass Through Trust and the Trust
Property, and has 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 class of Pass Through Certificates issued pursuant
thereto.
Subject to and in accordance with the terms of the Pass Through Agreement,
the Series Supplement and the Intercreditor Agreement, from funds then
available to the Pass Through Trustee, there will be distributed on each
January 15 and July 15 (a "Regular Distribution Date"), commencing on July 15,
1997, 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,
the Series Supplement and the Intercreditor Agreement, 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 any Business Day
on which a Special Payment is to be distributed.
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 acquiring this Pass Through Certificate will be deemed to
represent and warrant that (i) no 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, have
been used to acquire or hold any of the Pass Through Certificates or (ii) that
one or more administrative or statutory exemptions from the prohibited
transaction rules under Section 406 of ERISA and Section 4975 of the Code
applies to its purchase and holding of this Pass Through Certificate such that
its purchase and holding of this Pass Through Certificate will not result in a
non-exempt prohibited transaction under Section 406 of ERISA and Section 4975
of the Code.
This Pass Through Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
Reference is hereby made to the further provisions of this Pass Through
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Pass Through Trustee, by manual signature, this Pass Through Certificate shall
not be entitled to any benefit under the Pass Through Trust or be valid for
any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee has caused this Pass Through
Certificate to be duly executed.
FEDERAL EXPRESS CORPORATION
PASS THROUGH TRUST, 1997-1-C
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as otherwise
expressly provided herein, but solely as Pass Through
Trustee
By: ________________________________
Authorized Signatory
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated: May ___, 1997
This is one of the Pass Through Certificates referred to in the
within-mentioned Pass Through Agreement and the Series Supplement.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as otherwise
expressly provided herein, but solely 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, the Intercreditor Agreement and the
Series Supplement. Subject to the Intercreditor Agreement, 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, the Intercreditor 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, the Intercreditor Agreement and the Series Supplement
and reference is made to the Pass Through Agreement, the Intercreditor
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, the Intercreditor Agreement
and the Series Supplement may be examined by any Certificateholder upon
request during normal business hours at the principal office of the Pass
Through Trustee, and at such other places designated by the Pass Through
Trustee.
As of the date of issuance of this Pass Through Certificate, and assuming
that no prepayment 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:
Class C Trust
Equipment Certificates
Regular Scheduled Payments Expected
Distribution Date of Principal Pool Factor
- ----------------------- ------------------------ -------------
May 28, 1997 0 1.00000000
July 15, 1997 0 1.00000000
January 15, 1998 $ 814,093 0.9936982
July 15, 1998 0 0.9936982
January 15, 1999 3,352,943 0.9677437
July 15, 1999 0 0.9677437
January 15, 2000 3,434,834 0.9411552
July 15, 2000 0 0.9411552
January 15, 2001 3,891,533 0.9110314
July 15, 2001 0 0.9110314
January 15, 2002 4,375,413 0.8771621
July 15, 2002 0 0.8771621
January 15, 2003 6,726,455 0.8250937
July 15, 2003 0 0.8250937
January 15, 2004 8,699,834 0.7577497
July 15, 2004 0 0.7577497
January 15, 2005 8,888,210 0.6889475
July 15, 2005 0 0.6889475
January 15, 2006 13,320,067 0.5858391
July 15, 2006 2,326,313 0.5678314
January 15, 2007 23,315,227 0.3873521
July 15, 2007 0 0.3873521
January 15, 2008 8,611,545 0.3206915
July 15, 2008 0 0.3206915
January 15, 2009 10,751,443 0.2374663
July 15, 2009 0 0.2374663
January 15, 2010 7,456,185 0.1797492
July 15, 2010 0 0.1797492
January 15, 2011 928,493 0.1725619
July 15, 2011 0 0.1725619
January 15, 2012 0 0.1725619
July 15, 2012 0 0.1725619
January 15, 2013 123,763 0.1716039
July 15, 2013 0 0.1716039
January 15, 2014 22,168,649 0.0000000
Each Certificateholder of this Pass Through Certificate by its acceptance
hereof, acknowledges that the terms of the Participation Agreement, the Lease
and the Indenture as they relate to two of the aircraft may differ from the
terms set forth or incorporated by reference in this Pass Through Certificate.
The Pass Through Agreement, the Intercreditor 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, the Intercreditor
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, the
Intercreditor 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, 1997-1-C
Class C
Equipment Certificates;
Related Indenture Documents
1. Equipment Certificates (Federal Express Corporation Trust No. N581FE):
Interest Rate: 7.65%
Maturity: January 15, 2009
Principal Amount: $13,008,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N581FE) dated as of May 1, 1997, between Wilmington Trust Company, not
in its individual capacity, except as otherwise provided therein, but
solely as Owner Trustee, and First Security Bank, National Association, not
in its individual capacity, except as otherwise provided therein, but
solely as Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N581FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee,
AmSouth Leasing, Ltd. and BTM Funding Corporation, as Owner Participants,
Wilmington Trust Company, not in its individual capacity, except as
otherwise provided therein, but solely as Owner Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Indenture Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Pass Through Trustee, and First
Security Bank, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N581FE) dated as of
May 1, 1997, among AmSouth Leasing, Ltd. and BTM Funding Corporation, as
Owner Participants, and Wilmington Trust Company;
Lease Agreement (Federal Express Corporation Trust No. N581FE) dated as of
May 1, 1997, between Wilmington Trust Company, not in its individual
capacity, except as otherwise provided therein, but solely as Owner Trustee
and Lessor, and Federal Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N581FE)
dated May 28, 1997, by AmSouth Bank of Alabama, as the Owner Participant
Guarantor in favor of the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee.
Owner Participant Guaranty (Federal Express Corporation Trust No. N581FE)
dated May 28, 1997, by BTM Capital Corporation, as the Owner Participant
Guarantor in favor of the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee.
2. Equipment Certificates (Federal Express Corporation Trust No. N583FE):
Interest Rate: 7.65%
Maturity: January 15, 2009
Principal Amount: $13,988,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N583FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N583FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee and
Initial Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Owner Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Indenture Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Pass Through Trustee, and First
Security Bank, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N583FE) dated as of
May 1, 1997, between Federal Express Corporation, as Initial Owner
Participant, and State Street Bank and Trust Company of Connecticut,
National Association; and
Lease Agreement (Federal Express Corporation Trust No. N583FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee.
3. Equipment Certificates (Federal Express Corporation Trust No. N584FE):
Interest Rate: 7.65%
Maturity: January 15, 2009
Principal Amount: $10,611,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N584FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N584FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee and
Initial Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Owner Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Indenture Trustee, First Security
Bank, National Association, not in its individual capacity, except as
otherwise provided therein, but solely as Pass Through Trustee, and First
Security Bank, National Association, not in its individual capacity, except
as otherwise provided therein, but solely as Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N584FE) dated as of
May 1, 1997, between Federal Express Corporation, as Initial Owner
Participant, and State Street Bank and Trust Company of Connecticut,
National Association; and
Lease Agreement (Federal Express Corporation Trust No. N584FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee.
4. Equipment Certificates (Federal Express Corporation Trust No. N587FE):
Interest Rate: 7.65%
Maturity: January 15, 2007
Principal Amount: $10,446,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N587FE) dated as of December 1, 1996, as amended and restated as of May
1, 1997, between Wilmington Trust Company, not in its individual capacity,
except as otherwise provided therein, but solely as Owner Trustee, and
First Security Bank, National Association, not in its individual capacity,
except as otherwise provided therein, but solely as Indenture Trustee;
Trust Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N587FE) dated December 13, 1996, between Wilmington
Trust Company, not in its individual capacity, except as otherwise provided
therein, but solely as Owner Trustee, and First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N587FE)
dated as of December 1, 1996, as amended and restated as of May 1, 1997,
among Federal Express Corporation, as Lessee, CMCA Lease, Inc. and Norwest
Bank Minnesota, National Association, as Owner Participants, Wilmington
Trust Company, not in its individual capacity, except as otherwise provided
therein, but solely as Owner Trustee, State Street Bank and Trust Company,
not in its individual capacity, except as otherwise provided therein, but
solely as Original Indenture Trustee, First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Indenture Trustee, First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Pass Through Trustee, First Security Bank, National
Association, not in its individual capacity, except as otherwise provided
therein, but solely as Subordination Agent, and Morgan Guaranty Trust
Company of New York, as Original Loan Participant;
Trust Agreement (Federal Express Corporation Trust No. N587FE) dated as of
December 1, 1996, as amended and restated as of May 1, 1997, among CMCA
Lease, Inc. and Norwest Bank Minnesota, National Association, as Owner
Participants, and Wilmington Trust Company;
Lease Agreement (Federal Express Corporation Trust No. N587FE) dated as of
December 1, 1996, as amended and restated as of May 1, 1997, between
Wilmington Trust Company, not in its individual capacity, except as
otherwise provided therein, but solely as Owner Trustee and Lessor, and
Federal Express Corporation, as Lessee;
Lease Supplement No. 1 (Federal Express Corporation Trust No. N587FE) dated
December 13, 1996, between Wilmington Trust Company, not in its individual
capacity, except as otherwise provided therein, but solely as Owner Trustee
and Lessor, and Federal Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N587FE)
dated December 13, 1996, as amended and restated as of May 28, 1997, by
Comerica Bank, as the Owner Participant Guarantor in favor of the Lessee,
the Owner Trustee, the Indenture Trustee and the Pass Through Trustee.
5. Equipment Certificates (Federal Express Corporation Trust No. N670FE):
Interest Rate: 7.65%
Maturity: January 15, 2014
Principal Amount: $16,533,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N670FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N670FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N670FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N670FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N670FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
6. Equipment Certificates (Federal Express Corporation Trust No. N671FE):
Interest Rate: 7.65%
Maturity: January 15, 2014
Principal Amount: $16,458,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N671FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N671FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N671FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N671FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N671FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
7. Equipment Certificates (Federal Express Corporation Trust No. N672FE):
Interest Rate: 7.65%
Maturity: January 15, 2014
Principal Amount: $16,095,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N672FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N672FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N672FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N672FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N672FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
8. Equipment Certificates (Federal Express Corporation Trust No. N673FE):
Interest Rate: 7.65%
Maturity: January 15, 2014
Principal Amount: $16,023,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N673FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N673FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N673FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N673FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N673FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
9. Equipment Certificates (Federal Express Corporation Trust No. N674FE):
Interest Rate: 7.65%
Maturity: January 15, 2014
Principal Amount: $16,023,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal Express Corporation Trust
No. N674FE) dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Indenture Trustee;
Participation Agreement (Federal Express Corporation Trust No. N674FE)
dated as of May 1, 1997, among Federal Express Corporation, as Lessee, PMCC
Leasing Corporation, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Owner
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Indenture
Trustee, First Security Bank, National Association, not in its individual
capacity, except as otherwise provided therein, but solely as Pass Through
Trustee, and First Security Bank, National Association, not in its
individual capacity, except as otherwise provided therein, but solely as
Subordination Agent;
Trust Agreement (Federal Express Corporation Trust No. N674FE) dated as of
May 1, 1997, between PMCC Leasing Corporation, as Owner Participant, and
State Street Bank and Trust Company of Connecticut, National Association;
Lease Agreement (Federal Express Corporation Trust No. N674FE) dated as of
May 1, 1997, between State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
provided therein, but solely as Owner Trustee and Lessor, and Federal
Express Corporation, as Lessee; and
Owner Participant Guaranty (Federal Express Corporation Trust No. N674FE)
dated May 28, 1997, by Philip Morris Capital Corporation, as the Owner
Participant Guarantor in favor of the Lessee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
Schedule II
to
Series Supplement
Cut-Off Date for each of the Aircraft
Federal Express
Corporation Manufacturer's
Trust No. Serial Number Cut-Off Date
------------------- ---------------- -------------------
N670FE 777 September 1, 1997
N671FE 778 September 18, 1997
N672FE 779 November 17, 1997
N673FE 780 December 10, 1997
N674FE 781 December 22, 1997
N581FE 48419 September 4, 1997
N583FE 48421 December 15, 1997
N584FE 48436 April 15, 1998
Intercreditor Agreement
Dated as of
May 1, 1997
AMONG
FIRST SECURITY BANK, NATIONAL ASSOCIATION
not in its individual capacity
but solely as Pass Through Trustee under the
Federal Express Corporation Pass Through Trust 1997-1-A,
Federal Express Corporation Pass Through Trust 1997-1-B
and
Federal Express Corporation Pass Through Trust 1997-1-C
KREDIETBANK N.V., NEW YORK BRANCH
as Class A Liquidity Provider and
Class B Liquidity Provider
AND
FIRST SECURITY BANK, NATIONAL ASSOCIATION
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and trustee hereunder
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions............................................ 2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments from
Monies Received Only................................... 20
SECTION 2.2 Trust Accounts......................................... 21
SECTION 2.3 Deposits to the Collection Account and Special Payments
Account................................................ 22
SECTION 2.4 Distributions of Special Payments...................... 22
SECTION 2.5 Designated Representatives............................. 25
SECTION 2.6 Controlling Party...................................... 25
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution......................... 27
SECTION 3.2 Distribution of Amounts on Deposit in the Collection
Account................................................ 29
SECTION 3.3 Distribution of Amounts on Deposit Following a
Triggering Event....................................... 30
SECTION 3.4 Other Payments......................................... 32
SECTION 3.5 Payments to the Pass Through Trustee and the Liquidity
Providers.............................................. 32
SECTION 3.6 Liquidity Facilities................................... 32
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party.................. 38
SECTION 4.2 Remedies Cumulative.................................... 39
SECTION 4.3 Discontinuance of Proceedings.......................... 40
SECTION 4.4 Right of Certificateholders and Liquidity Providers to
Receive Payments Not to Be Impaired.................... 40
SECTION 4.5 Undertaking for Costs.................................. 40
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF THE PASS THROUGH TRUSTEE, ETC.
SECTION 5.1 Notice of Indenture Event of Default or Triggering
Event.................................................. 40
SECTION 5.2 Indemnification........................................ 41
SECTION 5.3 No Duties Except as Specified in Intercreditor
Agreement.............................................. 41
SECTION 5.4 Notice from the Liquidity Providers and the Pass
Through Trustee........................................ 42
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization, Acceptance of Trusts and Duties......... 42
SECTION 6.2 Absence of Duties...................................... 42
SECTION 6.3 No Representations or Warranties as to Documents....... 42
SECTION 6.4 No Segregation of Monies; No Interest.................. 43
SECTION 6.5 Reliance; Agents; Advice of Counsel.................... 43
SECTION 6.6 Capacity in Which Acting............................... 44
SECTION 6.7 Compensation........................................... 44
SECTION 6.8 May Become Certificateholder........................... 44
SECTION 6.9 Subordination Agent Required; Eligibility.............. 44
SECTION 6.10 Money to Be Held in Trust.............................. 44
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 Scope of Indemnification............................... 45
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 Replacement of Subordination Agent; Appointment of
Successor.............................................. 45
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc............................... 47
SECTION 9.2 Subordination Agent Protected.......................... 48
SECTION 9.3 Effect of Supplemental Agreements...................... 48
SECTION 9.4 Notice to Rating Agencies.............................. 48
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Termination of Intercreditor Agreement................. 48
SECTION 10.2 Intercreditor Agreement for Benefit of the Pass Through
Trustees, Liquidity Providers and Subordination Agent.. 49
SECTION 10.3 Notices................................................ 49
SECTION 10.4 Severability........................................... 50
SECTION 10.5 No Oral Modifications or Continuing Waivers............ 50
SECTION 10.6 Successors and Assigns................................. 50
SECTION 10.7 Headings............................................... 50
SECTION 10.8 Counterpart Form....................................... 50
SECTION 10.9 Subordination.......................................... 50
SECTION 10.10 GOVERNING LAW.......................................... 52
SECTION 10.11 Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity..................................... 52
Schedule 1 Indentures
Schedule 2 Participation Agreements
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of May 1, 1997, among FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association ("Pass
Through Trustee"), not in its individual capacity but solely as Trustee of
each Pass Through Trust (each as defined below), KREDIETBANK N.V., acting
through its New York Branch ("Liquidity Provider"), as Class A Liquidity
Provider and as Class B Liquidity Provider, and FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity except as expressly set forth
herein, but solely as Subordination Agent and trustee hereunder (in such
capacity, together with any successor appointed pursuant to Article VIII
hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture, the related Owner Trustee
proposes to issue on a nonrecourse basis three series of Equipment Trust
Certificates to finance, or refinance the current indebtedness of such Owner
Trustee originally incurred to finance, the purchase of the Aircraft referred
to in such Indenture, which has been or will be leased to Federal Express
Corporation pursuant to the related Lease;
WHEREAS, pursuant to the Participation Agreements, each Pass
Through Trust will acquire those Equipment Trust Certificates having an
interest rate equal to the interest rate applicable to the Pass Through
Certificates to be issued by such Pass Through Trust;
WHEREAS, pursuant to the Pass Through Agreement, each Pass Through
Trust created thereby proposes to issue a single class of Pass Through
Certificates (a "Class") bearing the interest rate and having the final
distribution date described in the relevant series supplement on the terms and
subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters
propose to purchase the Pass Through Certificates issued by each Pass Through
Trust in the aggregate face amount set forth opposite the name of such Pass
Through Trust on Schedule I thereto on the terms and subject to the conditions
set forth therein;
WHEREAS, each Liquidity Provider proposes to enter into a
revolving credit agreement (each, a "Liquidity Facility") with the
Subordination Agent, as agent for the Pass Through Trustee of each Pass
Through Trust, for the benefit of the Certificateholders of both the Class A
Pass Through Trust and the Class B Pass Through Trust (but not the Class C
Pass Through Trust); and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent,
the Pass Through Trustee and the Liquidity Providers agree to the terms of
subordination set forth in this Agreement in respect of each Class of Pass
Through Certificates, and the Subordination Agent, the Pass Through Trustee
and the Liquidity Providers, by entering into this Agreement, hereby
acknowledge and agree to such terms of subordination and the other provisions
of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(1) the terms used herein that are defined in this Article have
the meanings assigned to them in this Article, and include the plural as
well as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without
limitation".
"Acceleration" means, with respect to the amounts payable in
respect of the Equipment Trust Certificates issued under any Indenture,
the declaration or deemed declaration of such amounts to be immediately
due and payable. "Accelerate", "Accelerated" and "Accelerating" have
meanings correlative to the foregoing.
"Adjusted Expected Distributions" means with respect to the Pass
Through Certificates of any Class on any Current Distribution Date the
sum of (x) the amount of accrued and unpaid interest on such Pass
Through Certificates plus (y) the greater of:
(A) the difference between (x) the Pool Balance of such
Pass Through Certificates as of the immediately preceding
Distribution Date and (y) the Pool Balance of such Pass Through
Certificates as of the Current Distribution Date calculated on the
basis that (i) the principal of the Non-Performing Equipment Trust
Certificates held in such Pass Through Trust has been paid in full
and such payments have been distributed to the holders of such
Pass Through Certificates; (ii) the principal of the Performing
Equipment Trust Certificates has been paid when due (but without
giving effect to any acceleration of Performing Equipment Trust
Certificates) and has been distributed to the holders of such Pass
Through Certificates; and (iii) the principal of any Equipment
Trust Certificates formerly held in such Pass Through Trust which
have been sold pursuant to the terms hereof have been paid in full
and such payments have been distributed to the holders of such
Pass Through Certificates; and
(B) the amount, if any, by which (i) the Pool Balance of
such Class of Pass Through Certificates as of the immediately
preceding Distribution Date exceeds (ii) the Aggregate LTV
Collateral Amount for such Class of Pass Through Certificates for
the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B)
above shall not be applicable.
"Affiliate" means, 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" means the power, directly or indirectly, to direct or cause
the direction of the management and policies of such Person whether
through the ownership of voting securities or by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Aggregate LTV Collateral Amount" means, for any Class of Pass
Through Certificates for any Distribution Date, the sum of the
applicable LTV Collateral Amounts for each Aircraft minus the Pool
Balance for each Class of Pass Through Certificates, if any, senior to
such Class after giving effect to any distribution of principal on such
Distribution Date on such senior Class or Classes.
"Aircraft" means, with respect to any Indenture, the "Aircraft"
referred to therein.
"Appraised Current Market Value" of any Aircraft means the lower
of the average and the median of the most recent three LTV Appraisals of
such Aircraft.
"Appraisers" means Aircraft Information Services, Inc., Simat,
Helliesen & Eichner, Inc. and Morten Beyer and Associates, Inc.
"Available Amount" means, with respect to any Liquidity Facility
on any drawing date, an amount equal to (a) the Stated Amount of such
Liquidity Facility, less (b) the amount of each Interest Drawing honored
by the Liquidity Provider under such Liquidity Facility on or prior to
such date which has not been reimbursed or reinstated as of such date;
provided that, following a Downgrade Drawing or a Final Drawing under
such Liquidity Facility, the Available Amount of such Liquidity Facility
shall be zero.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in
Memphis, Tennessee, New York, New York, or the city and state in which
the Pass Through Trustee, the Subordination Agent or any Indenture
Trustee maintains its Corporate Trust Office or receives and disburses
funds.
"Cash Account" means the Class A Cash Account, the Class B Cash
Account or the Class C Cash Account, as applicable.
"Certificateholder" means any holder of one or more Pass Through
Certificates.
"Class" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"Class A Cash Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into
which all amounts drawn under the Class A Liquidity Facility pursuant to
Section 3.6(c) or 3.6(i) shall be deposited.
"Class A Liquidity Facility" means, initially, the irrevocable
revolving credit agreement dated as of May 1, 1997, between the
Subordination Agent, as agent of the Pass Through Trustee of the Class A
Pass Through Trust, and the Class A Liquidity Provider, and, from and
after the replacement of such Agreement pursuant hereto, the Replacement
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Class A Liquidity Provider" means Kredietbank N.V., acting
through its New York Branch, together with any Replacement Liquidity
Provider which has issued a Replacement Liquidity Facility to replace
the Class A Liquidity Facility pursuant to Section 3.6(e).
"Class A Pass Through Certificateholder" means, at any time, any
holder of one or more Class A Pass Through Certificates.
"Class A Pass Through Certificates" means the certificates issued
by the Class A Pass Through Trust, substantially in the form of Exhibit
A to the Class A Supplement, and authenticated by the Pass Through
Trustee of the Class A Pass Through Trust, representing fractional
undivided interests in the Class A Pass Through Trust, and any
certificates issued in exchange therefor or replacement thereof pursuant
to the terms of the Class A Supplement.
"Class A Pass Through Trust" means the Federal Express Corporation
1997-l-A Pass Through Trust created and administered pursuant to the
Class A Supplement.
"Class A Supplement" means the Pass Through Trust Agreement, dated
as of May 1, 1997, between Federal Express Corporation and the Pass
Through Trustee, as supplemented by the Series Supplement 1997-1-A
between Federal Express Corporation and the Pass Through Trustee of the
Class A Pass Through Trust, governing the creation and administration
of the Class A Pass Through Trust and the issuance of the Class A
Pass Through Certificates, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with its terms.
"Class B Cash Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into
which all amounts drawn under the Class B Liquidity Facility pursuant to
Section 3.6(c) or 3.6(i) shall be deposited.
"Class B Liquidity Facility" means, initially, the irrevocable
revolving credit agreement dated as of May 1, 1997, between the
Subordination Agent, as agent of the Pass Through Trustee of the Class B
Pass Through Trust, and the Class B Liquidity Provider, and, from and
after the replacement of such Agreement pursuant hereto, the Replacement
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Class B Liquidity Provider" means Kredietbank N.V., acting
through its New York Branch, together with any Replacement Liquidity
Provider which has issued a Replacement Liquidity Facility to replace
the Class B Liquidity Facility pursuant to Section 3.6(e).
"Class B Pass Through Certificateholder" means, at any time, any
holder of one or more Class B Pass Through Certificates.
"Class B Pass Through Certificates" means the certificates issued
by the Class B Pass Through Trust, substantially in the form of Exhibit
A to the Class B Supplement, and authenticated by the Pass Through
Trustee of the Class B Pass Through Trust, representing fractional
undivided interests in the Class B Pass Through Trust, and any
certificates issued in exchange therefor or replacement thereof pursuant
to the terms of the Class B Supplement.
"Class B Pass Through Trust" means the Federal Express Corporation
1997-1-B Pass Through Trust created and administered pursuant to the
Class B Supplement.
"Class B Supplement" means the Pass Through Trust Agreement,
dated as of May 1, 1997, between Federal Express Corporation and the
Pass Through Trustee, as supplemented by the Series Supplement
1997-1-B between Federal Express Corporation and the Pass Through
Trustee of the Class B Pass Through Trust, governing the creation and
administration of the Class B Pass Through Trust and the issuance of
the Class B Pass Through Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"Class C Pass Through Certificateholder" means, at any time, any
holder of one or more Class C Pass Through Certificates.
"Class C Pass Through Certificates" means the certificates issued
by the Class C Pass Through Trust, substantially in the form of Exhibit
A to the Class C Supplement, and authenticated by the Pass Through
Trustee of the Class C Pass Through Trust, representing fractional
undivided interests in the Class C Pass Through Trust, and any
certificates issued in exchange therefor or in replacement thereof
pursuant to the terms of the Class C Supplement.
"Class C Pass Through Trust" means the Federal Express Corporation
1997-l-C Pass Through Trust created and administered pursuant to the
Class C Supplement.
"Class C Supplement" means the Pass Through Trust Agreement,
dated as of May 1, 1997, between Federal Express Corporation and the
Pass Through Trustee as supplemented by the Series Supplement 1997-1-C
between Federal Express Corporation and the Pass Through Trustee of
the Class C Pass Through Trust, governing the creation and
administration of the Class C Pass Through Trust and the issuance of
the Class C Pass Through Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"Closing Date" means May 28, 1997.
"Collection Account" means the Eligible Deposit Account
established by the Subordination Agent pursuant to Section 2.2 which the
Subordination Agent shall make deposits in and withdrawals from in
accordance with this Agreement.
"Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Pass Through
Trustee, the Subordination Agent or any Indenture Trustee, the office of
such Person in the city at which, at any particular time, its corporate
trust business shall be principally administered.
"Current Distribution Date" means a Distribution Date specified as
a reference date for calculating the Adjusted Expected Distributions or
Expected Distributions with respect to the Pass Through Certificates of
any Pass Through Trust as of such Distribution Date.
"Designated Representatives" means the Trustee Representatives and
the LP Representatives identified under Section 2.5.
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" or "$" means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in
Section 3.6(c).
"Downgraded Facility" has the meaning assigned to such term in
Section 3.6(c).
"Drawing" means an Interest Drawing, a Final Drawing or a Downgrade
Drawing, as the case may be.
"Eligible Deposit Account" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under
the laws of the United States of America or any one of the states
thereof or the District of Columbia (or any U.S. branch of a foreign
bank), having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such
depository institution has a long-term unsecured debt rating from each
Rating Agency of at least A-3 or its equivalent. An Eligible Deposit
Account may be maintained with a Liquidity Provider so long as such
Liquidity Provider is an Eligible Institution; provided that such
Liquidity Provider shall have waived all rights of setoff and
counterclaim with respect to such account; and provided further that no
Cash Account may be maintained with a Liquidity Provider at any time
Federal Express Corporation holds any participation in the related
Liquidity Facility unless written confirmation shall have been received
from each Rating Agency prior to such time to the effect that such
maintenance of the Cash Account with the Liquidity Provider will not
result in a withdrawal or downgrading of the ratings of the Pass Through
Certificates.
"Eligible Institution" means, subject to the last sentence of
Section 2.2(c), (a) the corporate trust department of the Subordination
Agent or any Pass Through Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or
any one of the states thereof or the District of Columbia (or any U.S.
branch of a foreign bank), which has a long-term unsecured debt rating
from each Rating Agency of at least A-3 or its equivalent; provided that
a Liquidity Provider shall not qualify as an Eligible Institution at any
time Federal Express Corporation holds any participation in the related
Liquidity Facility unless written confirmation shall have been received
from each Rating Agency to the effect that such Liquidity Provider's
status as an Eligible Institution will not result in a withdrawal or
downgrading of the ratings of the Pass Through Certificates.
"Equipment Trust Certificates" means, at any time, the Series A
Equipment Trust Certificates, the Series B Equipment Trust Certificates
and the Series C Equipment Trust Certificates, collectively, and in each
case, any Equipment Trust Certificates issued in exchange therefor or
replacement thereof pursuant to the terms of the Indentures.
"Expected Distributions" means, with respect to the Pass Through
Certificates of any Pass Through Trust on any Current Distribution Date,
the sum of (x) accrued and unpaid interest on such Certificates and (y)
the difference between (A) the Pool Balance of such Certificates as of
the immediately preceding Distribution Date and (B) the Pool Balance of
such Certificates as of the Current Distribution Date, calculated on the
basis that (1) the principal of the Equipment Trust Certificates held
in such Pass Through Trust has been paid when due (whether at stated
maturity or upon redemption, prepayment, purchase or acceleration or
otherwise) and such payments have been distributed to the holders of
such Certificates and (2) the principal of any Equipment Trust
Certificates formerly held in such Pass Through Trust that have been
sold pursuant to this Agreement has been paid in full and such payments
distributed to the Certificateholders. For purposes of calculating
Expected Distributions, any premium paid on the Equipment Trust
Certificates held in any Pass Through Trust which has not been
distributed to the Certificateholders of such Pass Through Trust (other
than such premium or a portion thereof applied to the payment of
interest on the Pass Through Certificates of such Pass Through Trust or
the reduction of the Pool Balance of such Pass Through Trust) shall be
added to the amount of such Expected Distributions.
"Federal Express Corporation" means Federal Express Corporation, a
Delaware corporation, and its successors and assigns.
"Federal Express Corporation Bankruptcy Event" means the
occurrence and continuation of any of the following:
(a) an order for relief shall be entered in respect of
Federal Express Corporation by a court having jurisdiction in the
premises in an involuntary case under the federal bankruptcy laws
as now or hereafter in effect; or Federal Express Corporation
shall consent to the appointment of a custodian, receiver, trustee
or liquidator of itself or of a substantial part of its property;
or Federal Express Corporation 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 Federal Express Corporation shall file, or the Board of
Directors of Federal Express Corporation 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 Federal Express
Corporation in any such proceeding; or Federal Express Corporation
shall file, or the Board of Directors of Federal Express
Corporation shall authorize Federal Express Corporation to, or
grant one or more persons authority (at their discretion) to, seek
relief by voluntary petition, answer or consent, under the
provisions of any other or future bankruptcy or other similar law
providing for the reorganization or winding-up of corporations, or
providing for an agreement, composition, extension or adjustment
with its creditors; or
(b) an order, judgment or decree shall be entered by any
court of competent jurisdiction appointing, without the consent of
Federal Express Corporation, a custodian, receiver, trustee, or
liquidator of Federal Express Corporation or of any substantial
part of its property, or sequestering any substantial part of the
property of Federal Express Corporation, or granting any other
relief in respect of Federal Express Corporation 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 60 days after the
date of its entry; or
(c) a petition against Federal Express Corporation 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 60 days, or under the provisions
of any law providing for reorganization or winding-up of
corporations which may apply to Federal Express Corporation, any
court of competent jurisdiction shall assume jurisdiction, custody
or control of Federal Express Corporation or of any substantial
part of its property and such jurisdiction, custody or control
shall remain in force unrelinquished or unterminated for 60 days.
"Final Distributions" means, with respect to the Pass Through
Certificates of any Pass Through Trust on any Distribution Date, the sum
of (a) the aggregate amount of all accrued and unpaid interest on such
Pass Through Certificates and (b) the Pool Balance of such Pass Through
Certificates as of the immediately preceding Distribution Date. For
purposes of calculating Final Distributions, any premium paid on the
Equipment Trust Certificates held in any Pass Through Trust which has
not been distributed to the Certificateholders of such Pass Through
Trust shall be added to the amount of such Final Distributions.
"Final Drawing" means, in respect of a Liquidity Facility, a
borrowing or drawing of all available and undrawn amounts under such
Liquidity Facility in accordance with the provisions thereof other than
a Downgrade Drawing.
"Final Legal Distribution Date" means, July 15, 2019 for the Class
A Pass Through Certificates, July 15, 2019 for the Class B Pass Through
Certificates and January 15, 2014 for the Class C Pass Through
Certificates.
"Indenture" means each Trust Indenture and Security Agreement
listed on Schedule I hereto, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Indenture Event of Default" means, with respect to any Indenture,
any Event of Default (as such term is defined in such Indenture)
thereunder.
"Indenture Trustee" means, with respect to any Indenture, First
Security Bank, National Association, together with any other indenture
trustee appointed pursuant thereto.
"Interest Drawing" has the meaning assigned to such term in
Section 3.6(a).
"Investment Earnings" means investment earnings on funds on
deposit in the Trust Accounts net of losses and investment expenses of
the Subordination Agent in making such investments.
"Lease" means, with respect to any Indenture, the "Lease" referred
to therein.
"Lien" means any mortgage, pledge, lien, charge, claim,
disposition of title, encumbrance, lease, sublease, sub-sublease or
security interest of any kind, including, without limitation, any
thereof arising under any conditional sales or other title retention
agreement.
"Liquidity Event of Default", with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity
Facility.
"Liquidity Expenses" means all Liquidity Obligations other than
(i) the principal amount of any Drawings under the Liquidity Facilities
and (ii) any interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A Liquidity
Facility or the Class B Liquidity Facility, as applicable.
"Liquidity Obligations" means all principal, interest, fees and
other amounts owing to the Liquidity Providers under the Liquidity
Facilities and Articles 8, 9 and 10 of the Participation Agreements.
"Liquidity Provider" means, at any time, the Class A Liquidity
Provider or the Class B Liquidity Provider, as applicable.
"LP Incumbency Certificate" has the meaning assigned to such term
in Section 2.5(b).
"LP Representatives" has the meaning assigned to such term in
Section 2.5(b).
"LTV Appraisal" means a current fair market appraisal (which may
be a "desktop" appraisal) performed by any Appraiser or any other
nationally recognized appraiser on the basis of an arm's-length
transaction between an informed and willing purchaser under no
compulsion to buy and an informed and willing seller under no compulsion
to sell and both having knowledge of all relevant facts.
"LTV Collateral Amount" of any Aircraft for any Class of Pass
Through Certificates on any Distribution Date means the lesser of (i)
the LTV Ratio for such Class of Pass Through Certificates multiplied by
the Appraised Current Market Value of such Aircraft (or with respect to
any such Aircraft which has suffered an Event of Loss under the related
Lease, the amount of the insurance proceeds paid or payable to the
Indenture Trustee in respect thereof) and (ii) the outstanding principal
amount of the Equipment Trust Certificates secured by such Aircraft
after giving effect to any principal payments of such Equipment Trust
Certificates on or before such Distribution Date.
"LTV Ratio" means for the Class A Pass Through Certificates 39.7%,
for the Class B Pass Through Certificates 54.5% and for the Class C Pass
Through Certificates 71.0%.
"Minimum Sale Price" means, with respect to any Aircraft or the
Equipment Trust Certificates issued in respect of such Aircraft, at any
time, the lesser of (a) 75% of the Appraised Current Market Value of
such Aircraft based upon the most recent LTV Appraisal and (b) the
aggregate outstanding principal amount of such Equipment Trust
Certificates, plus accrued and unpaid interest thereon.
"Moody's" means Moody's Investors Service, Inc.
"Non-Controlling Party" means, at any time, the Pass Through
Trustee or the Liquidity Provider which is not the Controlling Party at
such time.
"Non-Extension Drawing" has the meaning provided in Section
3.6(d).
"Non-Performing Equipment Trust Certificates" means Equipment
Trust Certificates other than Performing Equipment Trust
Certificates.
"Officer's Certificate" of any Person means a certification signed
by a Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Participation
Agreements, the Pass Through Agreement, and any other document which
is an "Operative Agreement" under any Participation Agreement.
"Outstanding" means, when used with respect to each Class of Pass
Through Certificates, as of the date of determination, all Pass Through
Certificates of such Class theretofore authenticated and delivered under
the related Pass Through Agreement, except:
(i) Pass Through Certificates of such Class theretofore
cancelled by the Registrar (as defined in such Pass Through
Agreement) or delivered to the Pass Through Trustee thereunder or
such Registrar for cancellation;
(ii) Pass Through Certificates of such Class for which
money in the full amount required to make the final distribution
with respect to such Pass Through Certificates pursuant to Section
11.01 of such Pass Through Agreement has been theretofore
deposited with the Pass Through Trustee in trust for the holders
of such Pass Through Certificates as provided in Section 4.01 of
such Pass Through Agreement pending distribution of such money to
such Certificateholders pursuant to such final distribution
payment; and
(iii) Pass Through Certificates of such Class in exchange
for or in lieu of which other Pass Through Certificates have been
authenticated and delivered pursuant to such Pass Through
Agreement;
provided, however, that in determining whether the holders of the
requisite Outstanding amount of such Pass Through Certificates have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder, any Pass Through Certificates owned by Federal Express
Corporation or any of its Affiliates shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Pass Through
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Pass Through
Certificates that the Pass Through Trustee knows to be so owned shall be
so disregarded. 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 Federal Express Corporation or any of its
Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which is
not in fact received by the Subordination Agent within five days of the
Scheduled Payment Date relating thereto.
"Owner Trustee" means, with respect to any Indenture, the Owner
Trustee (as defined therein) not in its individual capacity but solely
as trustee under the related owner trust agreement, together with any
successor trustee appointed pursuant to such owner trust agreement.
"Participation Agreements" means each of the Participation
Agreements listed on Schedule 2 hereto, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Pass Through Agreement" means the Pass Through Trust Agreement,
dated as of May 1, 1997, between Federal Express Corporation and the
Pass Through Trustee, as supplemented by the Series Supplement 1997-1-A,
the Series Supplement 1997-1-B or the Series Supplement 1997-1-C.
"Pass Through Certificate" means a Class A Pass Through
Certificate, a Class B Pass Through Certificate or a Class C Pass
Through Certificate, as applicable.
"Pass Through Trust" means any of the Class A Pass Through Trust,
the Class B Pass Through Trust or the Class C Pass Through Trust.
"Pass Through Trustee" means, for the Class A, Class B and Class C
Pass Through Trusts, First Security Bank, National Association, not in
its individual capacity except as expressly set forth in the Class A,
Class B and Class C Supplements, respectively, but solely as trustee
under such supplements, together with any successor trustee appointed
pursuant thereto.
"Performing Certificate Deficiency" means any time that less than
65% of the then aggregate outstanding principal amount of all Equipment
Trust Certificates are Performing Equipment Trust Certificates.
"Performing Equipment Trust Certificates" means Equipment Trust
Certificates issued pursuant to an Indenture with respect to which no
payment default has occurred and is continuing (without giving effect to
any acceleration thereof); provided that in the event of a bankruptcy
proceeding involving Federal Express Corporation under Title 11 of the
United States Code (the "Bankruptcy Code"), (i) any payment default
existing during 60-day period under Section 1110(a)(1)(A) of the
Bankruptcy Code (or such longer period as may apply under Section
1110(b) of the Bankruptcy Code) (the "Section 1110 Period") shall not be
taken into consideration, unless during such period the trustee in such
proceeding or Federal Express Corporation refuses to assume or agree to
perform its obligations under the Lease related to such Equipment Trust
Certificates and (ii) any payment default occurring after the date of
the order of relief in such proceeding shall not be taken into
consideration if such payment default is cured under Section
1110(a)(1)(B) of the Bankruptcy Code before the later of 30 days after
the date of such default or the expiration of the Section 1110 Period.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, trustee,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Balance" means, with respect to each Pass Through Trust or
the Pass Through Certificates issued by any Pass Through Trust, as of
any date, (i) the original aggregate face amount of the Pass Through
Certificates of such Pass Through Trust less (ii) the aggregate amount
of all payments made in respect of the Pass Through Certificates of such
Trust other than payments made in respect of interest or premium thereon
or reimbursement of any costs and expenses in connection therewith. The
Pool Balance for each Pass Through Trust or the Pass Through
Certificates issued by any Pass Through Trust as of any Distribution
Date shall be computed after giving effect to any payment of principal,
if any, on the Equipment Trust Certificates or other Trust Property held
in such Pass Through Trust and the distribution thereof to be made on
such date.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PTC Event of Default" means, with respect to each Pass Through
Agreement, the failure to pay within 10 Business Days of the due date
thereof: (i) the outstanding Pool Balance of the applicable Class of
Pass Through Certificates on the Final Legal Distribution Date for such
Class or (ii) interest due on such Pass Through Certificates on any
Distribution Date (unless, in the case of the Class A or Class B
Certificates, the Subordination Agent shall have made an Interest
Drawing with respect thereto in an amount sufficient to pay such
interest and shall have distributed such amount to the holders of the
Pass Through Certificates entitled thereto).
"Rating Agencies" means, collectively, at any time, each
nationally recognized rating agency which shall have been requested to
rate the Pass Through Certificates and which shall then be rating the
Pass Through Certificates. Initially, the Rating Agencies shall consist
of Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed
to be taken, a written confirmation from each of the Rating Agencies
that such action would not result in (i) a reduction of the rating for
any Class of Pass Through Certificates below the then current rating for
such Class of Pass Through Certificates or (ii) a withdrawal or
suspension of the rating of any Class of Pass Through Certificates.
"Regular Distribution Dates" means each January 15 and July 15,
commencing on July 15, 1997; provided, however, that, if any such day
shall not be a Business Day, the related distribution shall be made on
the next succeeding Business Day without additional interest.
"Replacement Liquidity Facility" means, for the Class A Pass
Through Trust or the Class B Pass Through Trust, an irrevocable
revolving credit agreement in substantially the form of the initial
Liquidity Facility for such Pass Through Trust, including reinstatement
provisions or in such other form (which may include a letter of credit)
as shall permit the Rating Agencies to confirm in writing their
respective ratings then in effect for the Pass Through Certificates
(before downgrading of such ratings, if any, as a result of the
downgrading of the Liquidity Provider), in a face amount equal to the
Required Amount for such Liquidity Facility and issued by a Replacement
Liquidity Provider, provided that, if a form of Liquidity Facility that
is not substantially in the form of the replaced Liquidity Facility is
to be used, Federal Express Corporation shall have received a
satisfactory opinion of tax counsel satisfactory to Federal Express
Corporation with respect to such form of Replacement Liquidity Facility
(and a copy of such opinion shall be furnished to the Subordination
Agent).
"Replacement Liquidity Provider" means a Person having unsecured
debt ratings by each Rating Agency which are equal to or higher than the
Threshold Rating.
"Required Amount" means, with respect to each Liquidity Facility
and each Cash Account related thereto, for any day, the sum of the
aggregate amount of interest, calculated at the rate per annum equal to
the Stated Interest Rate for the related Class of Pass Through
Certificates, that would be payable on such Class of Pass Through
Certificates on each of the three successive Regular Distribution Dates
immediately following such day or, if such day is a Regular Distribution
Date, on such day and the succeeding two Regular Distribution Dates, in
each case calculated on the basis of the Pool Balance of such Class of
Pass Through Certificates on such date and without regard to expected
future payments of principal on such Class of Pass Through Certificates.
"Responsible Officer" means (i) with respect to the Subordination
Agent and the Pass Through Trustee, any officer in the corporate trust
administration department of the Subordination Agent or the Pass Through
Trustee or any other officer customarily performing functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because
of such person's knowledge of and familiarity with a particular subject
and (ii) with respect to each Liquidity Provider, any authorized officer
of such Liquidity Provider.
"Scheduled Payment" means, with respect to (x) any Equipment Trust
Certificates, (i) any payment of principal and interest on such
Equipment Trust Certificates (other than an Overdue Scheduled Payment)
due from the obligor thereon or (ii) any payment of interest on the
corresponding Class of Pass Through Certificates with funds drawn under
any Liquidity Facility, which payment represents the installment of
principal at the stated maturity of such installment of principal on
such Equipment Trust Certificates, the payment of regularly scheduled
interest accrued on the unpaid principal amount of such Equipment Trust
Certificates, or both; provided that any payment of principal of,
premium, if any, or interest resulting from the redemption or purchase
of any Equipment Trust Certificates shall not constitute a Scheduled
Payment and (y) the Pass Through Certificates of any Class shall be
deemed to be comprised of interest and principal components, with the
interest component equaling interest accrued at the Stated Interest Rate
for such Class of Pass Through Certificates from (i) the later of (1)
the date of the issuance thereof and (2) the most recent but preceding
Regular Distribution Date to (ii) the Regular Distribution Date on which
such Scheduled Payment is being made, such interest to be considered
payable in arrears on such Regular Distribution Date and to be
calculated and allocated in the same manner as interest on the Equipment
Trust Certificates.
"Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be
made.
"Series A Equipment Trust Certificates" means the 7.50% Series A
Equipment Trust Certificates issued pursuant to each Indenture by the
related Owner Trustee and authenticated by the Indenture Trustee
thereunder, and any such Equipment Trust Certificates issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"Series B Equipment Trust Certificates" means the 7.52% Series B
Equipment Trust Certificates issued pursuant to each Indenture by the
related Owner Trustee and authenticated by the Indenture Trustee
thereunder, and any such Equipment Trust Certificates issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"Series C Equipment Trust Certificates" means the 7.65% Series C
Equipment Trust Certificates issued pursuant to each Indenture by the
related Owner Trustee and authenticated by the Indenture Trustee
thereunder, and any such Equipment Trust Certificates issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"Special Distribution Date" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to Section
2.4(a) for the distribution of such Special Payment in accordance with
this Agreement; provided, however, that, if any such day shall not be a
Business Day, the related distribution shall be made on the next
succeeding Business Day without additional interest.
"Special Payment" means any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Trust
Certificates or the Trust Indenture Estate (as defined in each
Indenture), including Overdue Scheduled Payments, payments in respect of
the redemption or repurchase of any Equipment Trust Certificates and
payments in respect of the sale of any Equipment Trust Certificates to
the related Owner Trustee, Owner Participant or any other Person.
"Special Payments Account" means the Eligible Deposit Account
created pursuant to Section 2.2 as a sub-account in the Collection
Account.
"Specified 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 Investor 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) investments in negotiable certificates
of deposit, time deposits, banker's acceptances, commercial paper or
other direct obligations of, or obligations guaranteed by, commercial
banks organized under the laws of the United States or of any political
subdivision thereof (or any U.S. branch of a foreign bank) with issuer
ratings of at least B/C by Thomson Bankwatch, having maturities no later
than 90 days following the date of such investment; (d) overnight
federal funds transactions with members of the Federal Reserve Systems
arranged by federal funds brokers; and (e) overnight repurchase
agreements with respect to 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.
"Standard & Poor's" means Standard & Poor's Rating Group, a
division of McGraw-Hill Inc.
"Stated Amount" with respect to any Liquidity Facility, means the
Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"Stated Interest Rate" means (i) with respect to the Class A Pass
Through Certificates, 7.50% per annum, (ii) with respect to the Class B
Pass Through Certificates, 7.52% per annum and (iii) with respect to the
Class C Pass Through Certificates, 7.65%.
"Subordination Agent" means First Security Bank, National
Association, not in its individual capacity except as expressly set
forth herein, but solely as agent and trustee as provided for in this
Agreement, together with any successor appointed pursuant to Article
VIII of this Agreement.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, loss, damage, liability, expense, additions to
tax and additional amounts or costs incurred or imposed with respect
thereto) imposed or otherwise assessed by the United States or by any
state, local or foreign government (or any subdivision or agency
thereof) or other taxing authority, including, without limitation:
taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, capital
stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth and similar charges; taxes or
other charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value added, taxes on goods and services, gains taxes, license,
registration and documentation fees, customs duties, tariffs, and
similar charges.
"Threshold Rating" means the short-term unsecured debt rating of
P-1 by Moody's and A-1 by Standard & Poor's; provided that, in the event
a person's short-term unsecured debt is not rated by either Moody's or
Standard & Poor's, the long-term unsecured debt rating by Moody's and
Standard & Poor's at least equal to the initial rating by each of
Moody's and Standard & Poor's on the Class A Pass Through Certificates.
"Triggering Event" means (x) the occurrence of an Indenture Event
of Default under all of the Indentures resulting in a PTC Event of
Default with respect to the most senior Class of Pass Through
Certificates then Outstanding, (y) the Acceleration of, or a failure to
pay at final maturity, all of the outstanding Equipment Trust
Certificates or (z) the occurrence of a Federal Express Corporation
Bankruptcy Event.
"Trust Accounts" has the meaning assigned to such term in Section
2.2(a).
"Trustee Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(a).
"Trustee Representatives" has the meaning assigned to such term in
Section 2.5(a).
"Underwriters" means Morgan Stanley & Co. Incorporated, First
Chicago Capital Markets, Inc., Goldman, Sachs & Co. and J.P. Morgan
Securities Inc.
"Underwriting Agreement" means the Underwriting Agreement dated
May 22, 1997, among the Underwriters and Federal Express Corporation,
relating to the purchase of the Pass Through Certificates by the
Underwriters, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Written Notice" means, from (i) the Pass Through Trustee or
Liquidity Provider, a written instrument executed by the Designated
Representative of such Person, and (ii) the Subordination Agent, a
written instrument executed by a Person designated in the Officer's
Certificate of the Subordination Agent delivered on the Closing Date.
An invoice delivered by a Liquidity Provider pursuant to Section 3.1 in
accordance with its normal invoicing procedures shall constitute Written
Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments from
Monies Received Only. (a) Each Pass Through Trustee hereby acknowledges and
agrees to the terms of subordination set forth in this Agreement in respect of
each Class of Pass Through Certificates and agrees to enforce such provisions
and cause all payments in respect of the Equipment Trust Certificates and the
Liquidity Facilities to be applied in accordance with the terms of this
Agreement. In addition, each Pass Through Trustee hereby agrees to cause the
Equipment Trust Certificates purchased by the related Pass Through Trust to be
registered in the name of the Subordination Agent, as nominee for such Pass
Through Trustee, to be held in trust by the Subordination Agent solely for the
purpose of facilitating the enforcement of the subordination and other
provisions of this Agreement.
(b) Except as otherwise expressly provided in the next
succeeding sentence of this Section 2.1, all payments to be made by the
Subordination Agent hereunder shall be made only from amounts received by it
that constitute Scheduled Payments, Special Payments or payments under
Articles 8, 9 and 10 of the Participation Agreements, and only to the extent
that the Subordination Agent shall have received sufficient income or proceeds
therefrom to enable it to make such payments in accordance with the terms
hereof. Each Pass Through Trustee and the Subordination Agent hereby agree
and, as provided in each Pass Through Agreement, each Certificateholder, by
its acceptance of a Pass Through Certificate, and each Liquidity Provider, by
entering into the Liquidity Facility to which it is a party, has agreed to
look solely to such amounts to the extent available for distribution to it as
provided in this Agreement and that none of the Pass Through Trustees, Owner
Trustees, Indenture Trustees, Owner Participants nor the Subordination Agent
is personally liable to any of them for any amounts payable or any liability
under this Agreement, any Pass Through Agreement, any Liquidity Facility or
such Pass Through Certificate, except (in the case of the Subordination Agent)
as expressly provided herein or (in the case of the Pass Through Trustee) as
expressly provided in each Pass Through Agreement or (in the case of the Owner
Trustees and the Indenture Trustees) as expressly provided in any Operative
Agreement.
SECTION 2.2 Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name
(i) the Collection Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Pass Through Trustees, the Certificateholders and
the Liquidity Providers and (ii) as a sub-account in the Collection Account,
the Special Payments Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Pass Through Trustees, the Certificateholders and
the Liquidity Providers. The Subordination Agent shall establish and maintain
the Cash Accounts pursuant to and under the circumstances set forth in Section
3.6(f) hereof. Upon such establishment and maintenance under Section 3.6(f)
hereof, the Cash Accounts shall, together with the Collection Account,
constitute the "Trust Accounts" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Specified Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of such
investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to Section
2.4 hereof, as the case may be, next following the date of such investment;
provided, however, that following the making of a Downgrade Drawing or a
Non-Extension Drawing under any Liquidity Facility, the Subordination Agent
shall invest and reinvest such amounts at the direction of the Liquidity
Provider funding such Drawing and such Liquidity Provider shall use reasonable
efforts to cause such amounts to be invested in Specified Investments which
yield at least an amount equal to the interest (excluding the Applicable
Margin) that is payable to such Liquidity Provider in respect of such amounts
pursuant to Section 3.07 of the relevant Liquidity Facility (it being
understood that it may not be feasible to obtain such a yield). Unless
otherwise expressly provided in this Agreement (including, without limitation,
with respect to Investment Earnings on deposit in the Cash Accounts, Section
3.6(f) hereof), any Investment Earnings shall be deposited in the Collection
Account when received by the Subordination Agent and shall be applied by the
Subordination Agent in the same manner as the principal amount of such
investment is to be applied and any losses shall be charged against the
principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination
Agent shall not be liable for any loss resulting from any investment,
reinvestment or liquidation required to be made under this Agreement other
than by reason of its willful misconduct or gross negligence. Specified
Investments and any other investment required to be made hereunder shall be
held to their maturities except that any such investment may be sold (without
regard to its maturity) by the Subordination Agent without instructions
whenever such sale is necessary to make a distribution required under this
Agreement. Uninvested funds held hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon, except as otherwise
provided herein with respect to Investment Earnings). The Trust Accounts
shall be held in trust by the Subordination Agent under the sole dominion and
control of the Subordination Agent for the benefit of the Pass Through
Trustees, the Certificateholders and the Liquidity Providers, as the case may
be. If, at any time, any of the Trust Accounts ceases to be an Eligible
Deposit Account, the Subordination Agent shall within 10 Business Days (or
such longer period, not to exceed 30 calendar days, to which each Rating
Agency may consent) establish a new Collection Account, Special Payments
Account or Cash Account, as the case may be, as an Eligible Deposit Account
and shall transfer any cash and/or any investments to such new Collection
Account, Special Payments Account or Cash Account, as the case may be. So
long as the Subordination Agent is an Eligible Institution, the Trust
Accounts shall be maintained with it as Eligible Deposit Accounts.
SECTION 2.3 Deposits to the Collection Account and Special
Payments Account. (a) The Subordination Agent shall, upon receipt thereof,
deposit in the Collection Account all Scheduled Payments received by it.
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the
Equipment Trust Certificates, deposit in the Special Payments Account the
aggregate amount of such Special Payments.
SECTION 2.4 Distributions of Special Payments. (a) Notice of
Special Payment. Except as provided in Section 2.4(e) below, upon receipt by
the Subordination Agent, as registered holder of the Equipment Trust
Certificates, of any notice of a Special Payment (or, in the absence of any
such notice, upon receipt by the Subordination Agent of a Special Payment),
the Subordination Agent shall promptly give notice thereof to each Pass
Through Trustee and the Liquidity Providers. The Subordination Agent shall
promptly calculate the amount of the redemption or purchase of Equipment Trust
Certificates or the amount of any Overdue Scheduled Payment, as the case may
be, comprising such Special Payment under the applicable Indenture or
Indentures and shall promptly send to each Pass Through Trustee a Written
Notice of such amount and the amount allocable to each Pass Through Trust.
Such Written Notice shall also set the distribution date for such Special
Payment (a "Special Distribution Date"), which shall be the first Business Day
which follows the later to occur of (x) the 15th day after the date of such
Written Notice or (y) the date the Subordination Agent receives or expects to
receive such Special Payment. Amounts on deposit in the Special Payments
Account shall be distributed in accordance with Sections 2.4(b) and 2.4(c)
hereof, as applicable.
(b) (i) Redemptions and Purchases of Equipment Trust
Certificates. So long as no Triggering Event shall have occurred (whether or
not continuing), the Subordination Agent shall make distributions pursuant to
this Section 2.4(b) of amounts on deposit in the Special Payments Account on
account of the redemption or purchase (including, without limitation, a
purchase resulting from the sale of the Equipment Trust Certificates permitted
by Article IV hereof) of all of the Equipment Trust Certificates issued
pursuant to an Indenture on the Special Distribution Date for such Special
Payment in the following order of priority:
first, such amount as shall be required to pay (A) all accrued and
unpaid Liquidity Expenses then in arrears plus (B) the product of (x)
the aggregate amount of all accrued and unpaid Liquidity Expenses not in
arrears to such Special Distribution Date multiplied by (y) a fraction,
the numerator of which is the aggregate outstanding principal amount of
Equipment Trust Certificates being redeemed, purchased or prepaid on
such Special Distribution Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Trust
Certificates, shall be distributed to the Liquidity Providers pari passu
on the basis of the amount of Liquidity Expenses owed to each Liquidity
Provider;
second, such amount as shall be required to pay (A) all accrued
and unpaid interest then in arrears on all Liquidity Obligations plus
(B) the product of (x) the aggregate amount of all accrued and unpaid
interest on all Liquidity Obligations not in arrears to such Special
Distribution Date (at the rate provided in the applicable Liquidity
Facility) multiplied by (y) a fraction, the numerator of which is the
aggregate outstanding principal amount of Equipment Trust Certificates
being redeemed, purchased or prepaid on such Special Distribution Date
and the denominator of which is the aggregate outstanding principal
amount of all Equipment Trust Certificates, shall be distributed to the
Liquidity Providers pari passu on the basis of the amount of such
accrued and unpaid interest owed to each Liquidity Provider;
third, such amount as shall be required (A) to pay or reimburse
the Liquidity Providers in an amount equal to the amount of any
unreimbursed Interest Drawings under the Liquidity Facilities shall be
distributed to the Liquidity Providers or (B) so long as no Liquidity
Event of Default shall have occurred and be continuing, to replenish the
Cash Accounts up to their respective Required Amounts shall be deposited
in the Cash Accounts, in each such case, pari passu on the basis of the
amounts of such unreimbursed Interest Drawings and deficiencies;
fourth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Pass Through Certificates on
such Special Distribution Date shall be distributed to the Pass Through
Trustee of the Class A Pass Through Trust;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Pass Through Certificates on
such Special Distribution Date shall be distributed to the Pass Through
Trustee of the Class B Pass Through Trust;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Pass Through Certificates on
such Special Distribution Date shall be distributed to the Pass Through
Trustee of the Class C Pass Through Trust; and
seventh, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance
with Section 3.2 hereof.
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions of amounts on
deposit in the Special Payments Account on account of the redemption or
purchase of all of the Equipment Trust Certificates issued pursuant to an
Indenture on the Special Distribution Date for such Special Payment in
accordance with Section 3.3 hereof.
(c) Other Special Payments. Except as provided in clause (e)
below, any amounts on deposit in the Special Payments Account other than in
respect of amounts to be distributed pursuant to Section 2.4(b) shall be
distributed on the Special Distribution Date therefor in accordance with
Article III hereof.
(d) Investment of Amounts in Special Payments Account. Any
amounts on deposit in the Special Payments Account prior to the distribution
thereof pursuant to Section 2.4(b) or (c) shall be invested in accordance with
Section 2.2(b). Investment Earnings on such investments shall be distributed
in accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. The Subordination Agent will distribute
promptly upon receipt thereof (i) any indemnity payment received by it from
the Owner Participant, the Owner Trustee or Federal Express Corporation in
respect of any Pass Through Trustee or any Liquidity Provider (collectively,
the "Payees") and (ii) any compensation (including, without limitation, any
fees payable to any Liquidity Provider under Section 2.03 of any Liquidity
Facility) received by it from the Owner Participant, the Owner Trustee or
Federal Express Corporation under any Operative Agreement in respect of any
Payee, directly to the Payee entitled thereto.
SECTION 2.5 Designated Representatives. (a) With the delivery
of this Agreement, each Pass Through Trustee shall furnish to the
Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at such Pass Through Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Trustee Incumbency
Certificate") of a Responsible Officer of such Pass Through Trustee certifying
as to the incumbency and specimen signatures of the officers of such Pass
Through Trustee and the attorney-in-fact and agents of such Pass Through
Trustee (the "Trustee Representatives") authorized to give Written Notices on
behalf of such Pass Through Trustee hereunder. Until the Subordination Agent
receives a subsequent Trustee Incumbency Certificate, it shall be entitled to
rely on the last Trustee Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Liquidity
Provider shall furnish to the Subordination Agent, and from time to time
thereafter may furnish to the Subordination Agent, at such Liquidity
Provider's discretion, or upon the Subordination Agent's request (which
request shall not be made more than one time in any 12-month period), a
certificate (an "LP Incumbency Certificate") of any authorized signatory of
such Liquidity Provider certifying as to the incumbency and specimen
signatures of any officer, attorney-in-fact, agent or other designated
representative of such Liquidity Provider (the "LP Representatives" and,
together with the Trustee Representatives, the "Designated Representatives")
authorized to give Written Notices on behalf of such Liquidity Provider
hereunder. Until the Subordination Agent receives a subsequent LP Incumbency
Certificate, it shall be entitled to rely on the last LP Incumbency
Certificate delivered to it hereunder.
SECTION 2.6 Controlling Party. (a) The Pass Through Trustees
and the Liquidity Providers hereby agree that, with respect to any Indenture
at any given time, the Indenture Trustee thereunder will be directed (i) in
taking, or refraining from taking, any action with respect to such Indenture
or the Equipment Trust Certificates issued thereunder, so long as no Indenture
Event of Default has occurred and is continuing thereunder, by the holders of
at least a majority of the outstanding principal amount of such Equipment
Trust Certificates (provided that, for so long as the Subordination Agent
is the registered holder of the Equipment Trust Certificates, the
Subordination Agent shall act with respect to this clause (i) in accordance
with the directions of the Pass Through Trustees representing holders of
Pass Through Certificates representing an undivided interest in such
principal amount of Equipment Trust Certificates), and (ii) after the
occurrence and during the continuance of an Indenture Event of Default
thereunder (which has not been cured by the applicable Owner Trustee or the
applicable Owner Participant pursuant to Section 8.03 of such Indenture),
in taking, or refraining from taking, any action with respect to such
Indenture or such Equipment Trust Certificates, including exercising
remedies thereunder (including accelerating the Equipment Trust
Certificates issued thereunder or foreclosing the Lien on the Aircraft
securing such Equipment Trust Certificates), by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with
respect to any Indenture shall be: (x) the Pass Through Trustee of the Class
A Pass Through Trust; (y) upon payment of Final Distributions to the holders
of Class A Pass Through Certificates, the Pass Through Trustee of the Class B
Pass Through Trust; and (z) upon payment of Final Distributions to the holders
of Class B Pass Through Certificates, the Pass Through Trustee of the Class C
Pass Through Trust. For purposes of giving effect to the foregoing, the Pass
Through Trustees (other than the Controlling Party) irrevocably agree (and the
Certificateholders (other than the Certificateholders represented by the
Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the Equipment
Trust Certificates, shall exercise its voting rights in respect of the
Equipment Trust Certificates as directed by the Controlling Party and any vote
so exercised shall be binding upon the Pass Through Trustees and all
Certificateholders.
The Subordination Agent shall give written notice to all of the
other parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, the Liquidity Provider with
the then greatest amount of unreimbursed Liquidity Obligations payable to it
under the Liquidity Facilities shall have the right to elect, by Written
Notice to the Subordination Agent and each Pass Through Trustee, to become the
Controlling Party hereunder with respect to any Indenture at any time from and
including the date which is 18 months after the earlier of (i) the
Acceleration of the Equipment Trust Certificates under such Indenture and (ii)
a Final Drawing with respect to the Liquidity Facilities, if, in the case of
clauses (i) and (ii) above, at the time of such election all Liquidity
Obligations owed to such Liquidity Provider under the Liquidity Facilities
have not been paid in full.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution. (a) No later than
3:00 P.M. (New York City time) on the Business Day immediately preceding each
Distribution Date (or Special Distribution Date for purposes of Section 2.4(b)
hereof, as the case may be), each of the following Persons shall deliver to
the Subordination Agent a Written Notice setting forth the following
information as at the close of business on such Business Day:
(i) With respect to the Class A Pass Through Certificates, the
Pass Through Trustee of the Class A Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clause "fourth" of
Section 3.2 or Section 2.4(b), as the case may be, hereof;
(ii) With respect to the Class B Pass Through Certificates, the
Pass Through Trustee of the Class B Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clause "fifth" of
Section 3.2 or Section 2.4(b), as the case may be, hereof;
(iii) With respect to the Class C Pass Through Certificates, the
Pass Through Trustee of the Class C Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clause "sixth" of
Section 3.2 or Section 2.4(b), as the case may be, hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "first", "second" and "third" of Section 3.2 or
Section 2.4(b), as the case may be, hereof; and
(v) Each Pass Through Trustee shall set forth the amounts to be
paid to it in accordance with clause "seventh" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a
schedule or similar document provided to the Subordination Agent by the
parties referenced therein or by any one of them, which schedule or similar
document may state that, unless there has been a prepayment of the Pass
Through Certificates, such schedule or similar document is to remain in effect
until any substitute notice or amendment shall be given to the Subordination
Agent by the party providing such notice.
(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the following
Persons, and each of the following Persons shall, upon the request of the
Subordination Agent, deliver a Written Notice to the Subordination Agent
setting forth for such Person the following information:
(i) With respect to the Class A Pass Through Certificates, the
Pass Through Trustee of the Class A Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clauses "first" and
"fifth" (relating to indemnity payments made by the Class A Pass Through
Certificateholders) and "sixth" of Section 3.3 hereof;
(ii) With respect to the Class B Pass Through Certificates, the
Pass Through Trustee of the Class B Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clauses "first" and
"fifth" (relating to indemnity payments made by the Class B Pass Through
Certificateholders) and "seventh" of Section 3.3 hereof;
(iii) With respect to the Class C Pass Through Certificates, the
Pass Through Trustee of the Class C Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clauses "first" and
"fifth" (relating to indemnity payments made by the Class C Pass Through
Certificateholders) and "eighth" of Section 3.3 hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "first", "second" "third" and "fourth" of
Section 3.3 hereof; and
(v) Each Pass Through Trustee shall set forth the amounts to be
paid in accordance with clause "fifth" of Section 3.3 hereof.
(c) At such time as a Pass Through Trustee or a Liquidity
Provider shall have received all amounts owing to it (and, in the case of a
Pass Through Trustee, the Certificateholders for which it is acting) pursuant
to Section 2.4, 3.2 or 3.3 hereof, as applicable, and, in the case of a
Liquidity Provider, its commitment under the related Liquidity Facility shall
have terminated or expired, such Person shall, by a Written Notice, so inform
the Subordination Agent and each other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent
shall be fully protected in relying on any of the information set forth in a
Written Notice provided by the Pass Through Trustee or any Liquidity Provider
pursuant to paragraphs (a) through (c) above and shall have no independent
obligation to verify, calculate or recalculate any amount set forth in any
Written Notice delivered in accordance with such paragraphs.
(e) Any Written Notice delivered by a Pass Through Trustee or a
Liquidity Provider, as applicable, pursuant to Section 3.1(a), 3.1(b) or
3.1(c) hereof, if made prior to 10:00 A.M. (New York City time) shall be
effective on the date delivered (or if delivered later shall be effective as
of the next Business Day). Subject to the terms of this Agreement, the
Subordination Agent shall as promptly as practicable comply with any such
instructions; provided, however, that any transfer of funds pursuant to any
instruction received after 10:00 A.M. (New York City time) on any Business Day
may be made on the next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive from
any Person any information set forth in paragraphs (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such
Person pursuant to Section 3.2 or 3.3 hereof, the Subordination Agent shall
request such information and, failing to receive any such information, the
Subordination Agent shall not make such distribution(s) to such Person. In
such event, the Subordination Agent shall make distributions pursuant to
clauses "first" through "eighth" of Section 3.2 and clauses "first" through
"ninth" of Section 3.3 to the extent it shall have sufficient information to
enable it to make such distributions, and shall continue to hold any funds
remaining, after making such distributions, until the Subordination Agent
shall receive all necessary information to enable it to distribute any funds
so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider or any Pass Through Trustee shall request, the
Subordination Agent shall send to such party a written statement reflecting
all amounts on deposit with the Subordination Agent pursuant to Section 3.1(f)
hereof.
SECTION 3.2 Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments
Account) shall be promptly distributed on each Regular Distribution Date (or,
in the case of any amount described in Section 2.4(c), on the Special
Distribution Date therefor) in the following order of priority and in
accordance with the information provided to the Subordination Agent pursuant
to Section 3.1(a) hereof:
first, such amount as shall be required to pay all accrued and
unpaid Liquidity Expenses owed to each Liquidity Provider shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay in full the
aggregate amount of interest accrued on all Liquidity Obligations (at
the rate, or in the amount, provided in the applicable Liquidity
Facility) and unpaid shall be distributed to the Liquidity Providers
pari passu on the basis of the amount of such accrued and unpaid
interest owed to each Liquidity Provider;
third, such amount as shall be required (A) to pay or reimburse
the Liquidity Providers in an amount equal to the amount of all
Liquidity Obligations then due (other than amounts payable pursuant to
clause "first" or "second" of this Section 3.2) shall be distributed to
the Liquidity Providers, and (B) if applicable, to replenish the Cash
Accounts up to their respective Required Amounts shall be deposited in
the Cash Accounts, in each such case, pari passu on the basis of the
amounts of such unreimbursed Liquidity Obligations and/or deficiencies;
fourth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Pass Through Certificates on
such Distribution Date shall be distributed to the Pass Through Trustee
of the Class A Pass Through Trust;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Pass Through Certificates on
such Distribution Date shall be distributed to the Pass Through Trustee
of the Class B Pass Through Trust;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Pass Through Certificates on
such Distribution Date shall be distributed to the Pass Through Trustee
of the Class C Pass Through Trust;
seventh, such amount as shall be required to pay in full the
aggregate unpaid amount of fees and expenses payable as of such
Distribution Date to the Subordination Agent and each Pass Through
Trustee pursuant to the terms of this Agreement and the Pass Through
Agreements, as the case may be, shall be distributed to the
Subordination Agent and such Pass Through Trustee; and
eighth, the balance, if any, of any such payment remaining
thereafter shall be held in the Collection Account for later
distribution in accordance with this Article III.
SECTION 3.3 Distribution of Amounts on Deposit Following a
Triggering Event. (a) Except as otherwise provided in Sections 3.1(f) and
3.6(b) hereof, upon the occurrence of a Triggering Event and at all times
thereafter, all funds in the Collection Account or the Special Payments
Account shall be promptly distributed by the Subordination Agent in the
following order of priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment Trust
Certificates or any Trust Property, shall be applied by the
Subordination Agent in reimbursement of such costs and expenses, (ii)
each Pass Through Trustee for any amounts of the nature described in
clause (i) above actually incurred by it under the applicable Pass
Through Agreement (to the extent not previously reimbursed), shall be
distributed to such Pass Through Trustee and (iii) any Liquidity
Provider or Certificateholder for payments, if any, made by it to the
Subordination Agent or any Pass Through Trustee in respect of amounts
described in clause (i) above, shall be distributed to such Liquidity
Provider or to the applicable Pass Through Trustee for the account of
such Certificateholder, in each such case, pari passu on the basis of
all amounts described in clauses (i) through (iii) above;
second, such amount remaining as shall be required to pay all
accrued and unpaid Liquidity Expenses shall be distributed to each
Liquidity Provider pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
third, such amount remaining as shall be required to pay accrued
and unpaid interest on the Liquidity Obligations as provided in the
Liquidity Facilities shall be distributed to each Liquidity Provider
pari passu on the basis of the amount of such accrued and unpaid
interest owed to each Liquidity Provider;
fourth, such amount remaining as shall be required (A) to pay in
full the outstanding amount of all Liquidity Obligations, whether or not
then due (other than amounts payable pursuant to clause "second" or
"third" of this Section 3.3) shall be distributed to each Liquidity
Provider that has not funded a Cash Account in accordance with Section
3.6(c) or 3.6(i) hereof, and/or (B) if applicable, so long as no
Performing Certificate Deficiency exists and no Liquidity Event of
Default has occurred and is continuing, to replenish the Cash Accounts
up to their respective Required Amounts shall be deposited in the Cash
Accounts, in each case, pari passu on the basis of the amount of
Liquidity Obligations owed to each Liquidity Provider and/or such
deficiencies;
fifth, such amount as shall be required to reimburse or pay (i)
the Subordination Agent for any Tax (other than Taxes imposed on
compensation paid hereunder), expense, fee, charge or other loss
incurred by or any other amount payable to the Subordination Agent in
connection with the transactions contemplated hereby (to the extent not
previously reimbursed), shall be applied by the Subordination Agent in
reimbursement of such amount, (ii) each Pass Through Trustee for any Tax
(other than Taxes imposed on compensation paid under the applicable Pass
Through Agreement), expense, fee, charge, loss or any other amount
payable to such Pass Through Trustee under the applicable Pass Through
Agreements (to the extent not previously reimbursed), shall be
distributed to such Pass Through Trustee and (iii) each
Certificateholder for payments, if any, made by it pursuant to Section
5.2 hereof in respect of amounts described in clause (i) above, shall be
distributed to the applicable Pass Through Trustee for the account of
such Certificateholder, in each such case, pari passu on the basis of
all amounts described in clauses (i) through (iii) above;
sixth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A Pass Through Certificates
shall be distributed to the Pass Through Trustee of the Class A Pass
Through Trust;
seventh, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Pass Through Certificates
shall be distributed to the Pass Through Trustee of the Class B Pass
Through Trust;
eighth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C Pass Through Certificates
shall be distributed to the Pass Through Trustee of the Class C Pass
Through Trust; and
ninth, such amount remaining shall be retained in the Collection
Account until the immediately succeeding Distribution Date or, if all
Classes of Certificates shall have been paid in full, shall be
distributed to the Owner Trustee.
SECTION 3.4 Other Payments. Any payments received by the
Subordination Agent for which no provision as to the application thereof is
made in this Agreement shall be distributed by the Subordination Agent in the
order of priority specified in Section 3.3.
SECTION 3.5 Payments to the Pass Through Trustee and the
Liquidity Providers. Any amounts distributed hereunder to any Liquidity
Provider shall be paid to such Liquidity Provider by wire transfer of funds
to the address such Liquidity Provider shall provide to the Subordination
Agent. The Subordination Agent shall provide a Written Notice of any such
transfer to the applicable Liquidity Provider, as the case may be, at the
time of such transfer. Any amounts distributed hereunder by the
Subordination Agent to any Pass Through Trustee which shall not be the same
institution as the Subordination Agent shall be paid to such Pass Through
Trustee by wire transfer of funds at the address such Pass Through Trustee
shall provide to the Subordination Agent.
SECTION 3.6 Liquidity Facilities. (a) Interest Drawings. If on
any Distribution Date, after giving effect to the subordination provisions of
this Agreement, the Subordination Agent shall not have sufficient funds for
the payment of any amounts due and owing in respect of accrued interest on the
Class A Pass Through Certificates or the Class B Pass Through Certificates (at
the Stated Interest Rate for such Class of Pass Through Certificates), then,
prior to 12:00 noon (New York City time) on the Business Day following such
Distribution Date, the Subordination Agent shall request a drawing (each such
drawing, an "Interest Drawing") under the Liquidity Facility with respect to
such Class of Pass Through Certificates in an amount equal to the lesser of
(i) an amount sufficient to pay the amount of such accrued interest (at the
Stated Interest Rate for such Class of Pass Through Certificates) and (ii) the
Available Amount under such Liquidity Facility, and shall pay such amount to
the Pass Through Trustee with respect to such Class of Pass Through
Certificates in payment of such accrued interest.
(b) Application of Interest Drawings. Notwithstanding anything
to the contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class A Cash Account, and payable in each case to the Class A Pass Through
Certificateholders, shall be promptly distributed to the Pass Through Trustee
of the Class A Pass Through Trust and (ii) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class B
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class B Cash Account, and payable in each case to the Class B Pass Through
Certificateholders, shall be promptly distributed to the Pass Through Trustee
of the Class B Pass Through Trust.
(c) Downgrade Drawings. If at any time the debt rating of any
Liquidity Provider issued by either Rating Agency is lower than the applicable
Threshold Rating, within 30 days after receiving notice of such downgrading
(but no later than the expiration date of the Liquidity Facility issued by the
downgraded Liquidity Provider (the "Downgraded Facility")), such Liquidity
Provider may arrange, or the Subordination Agent (in consultation with Federal
Express Corporation), may arrange for a Replacement Liquidity Provider to
issue and deliver a Replacement Liquidity Facility to the Subordination Agent.
If a Downgraded Facility has not been replaced in accordance with the terms of
this paragraph, the Subordination Agent shall, on such 30th day (or if such
30th day is not a Business Day, on the next succeeding Business Day) (or, if
earlier, the expiration date of such Downgraded Facility), request a drawing
in accordance with and to the extent permitted by such Downgraded Facility
(such drawing, a "Downgrade Drawing") of all available and undrawn amounts
thereunder. Amounts drawn pursuant to a Downgrade Drawing shall be maintained
and invested as provided in Section 3.6(f) hereof. The Liquidity Provider may
also arrange for a Replacement Liquidity Provider to issue and deliver a
Replacement Liquidity Facility at any time after such Downgrade Drawing so
long as such Downgrade Drawing has not been reimbursed in full to the
Liquidity Provider.
(d) Non-Extension Drawings. If any Liquidity Facility with
respect to any Class of Pass Through Certificates is scheduled to expire on a
date (the "Stated Expiration Date") prior to the date that is 15 days after
the Final Legal Distribution Date for such Class of Pass Through Certificates,
then, no earlier than the 60th day and no later than the 40th day prior to the
then Stated Expiration Date, the Subordination Agent shall request that such
Liquidity Provider extend the Stated Expiration Date for a period of 364 days
after the Stated Expiration Date (unless the obligations of such Liquidity
Provider thereunder are earlier terminated in accordance with such Liquidity
Facility). The Liquidity Provider shall advise the Subordination Agent, no
earlier than 40 days and no later than 25 days prior to such Stated Expiration
Date, whether, in its sole discretion, it agrees to so extend the Stated
Expiration Date. If, on or before such 25th day, such Liquidity Facility
shall not have been so extended or replaced in accordance with Section 3.6(e),
or if the Liquidity Provider fails irrevocably and unconditionally to advise
the Subordination Agent on or before the 25th day prior to the Stated
Expiration Date then in effect that such Stated Expiration Date shall be so
extended, the Subordination Agent shall, on such 25th day (or as soon as
possible thereafter), in accordance with and to the extent permitted by the
terms of the expiring Liquidity Facility (a "Non-Extended Facility"), request
a drawing under such expiring Liquidity Facility (such drawing, a
"Non-Extension Drawing") of all available and undrawn amounts thereunder.
Amounts drawn pursuant to any Non-Extension Drawing shall be maintained and
invested in accordance with Section 3.6(f) hereof.
(e) Issuance of Replacement Liquidity Facility. At any time,
the Subordination Agent may, at its option, in consultation with Federal
Express Corporation, arrange for a Replacement Liquidity Facility to replace
the Liquidity Facility for any Class of Pass Through Certificates; provided
that the initial Liquidity Provider may not be replaced unless there shall
have become due to the initial Liquidity Provider amounts pursuant to Section
3.1, 3.2 or 3.3 of the Liquidity Facilities and the replacement of the initial
Liquidity Provider would reduce or eliminate the obligation to pay such
amounts. In any such consultation, the Subordination Agent shall accept the
recommendations of Federal Express Corporation in the absence of a good faith
reason not to do so. If such Replacement Liquidity Facility is provided at
any time after a Downgrade Drawing or a Non-Extension Drawing has been made,
all funds on deposit in the relevant Cash Account will be returned to the
Liquidity Provider being replaced. No such Replacement Liquidity Facility
executed in connection therewith shall become effective and no such
Replacement Liquidity Facility shall be deemed a "Liquidity Facility" under
the Operative Agreements, unless and until (i) the conditions referred to in
the immediately following paragraph shall have been satisfied and (ii) if such
Replacement Liquidity Facility shall materially adversely affect the rights,
remedies, interests or obligations of the Class A Pass Through
Certificateholders or the Class B Pass Through Certificateholders under any of
the Operative Agreements, the applicable Pass Through Trustee shall have
consented, in writing, to the execution and issuance of such Replacement
Liquidity Facility.
In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of such
Replacement Liquidity Facility, obtain written confirmation from each Rating
Agency that such Replacement Liquidity Facility will not cause a reduction of
the rating then in effect for any Class of Pass Through Certificates by such
Rating Agency (without regard to the ratings of any Liquidity Provider being
replaced pursuant to Section 3.6(c) hereof), (y) pay all Liquidity Obligations
then owing to the replaced Liquidity Provider (which payment shall be made
first from available funds in the Cash Account as described in clause (vii) of
Section 3.6(f) hereof and thereafter from any other available source,
including, without limitation, a drawing under the Replacement Liquidity
Facility, it being understood that no Replacement Liquidity Facility shall
become effective (other than insofar as necessary to permit the repayment of
amounts owed to the replaced Liquidity Provider) until all amounts owed to the
replaced Liquidity Provider have been paid) and (z) cause the issuer of the
Replacement Liquidity Facility to deliver the Replacement Liquidity Facility
to the Subordination Agent, together with a legal opinion opining that such
Replacement Liquidity Facility is an enforceable obligation of such
Replacement Liquidity Provider. Upon satisfaction of the conditions set forth
in this Section 3.6(e), (i) the replaced Liquidity Facility shall terminate
and (ii) such Replacement Liquidity Provider shall be deemed to be a Liquidity
Provider with the rights and obligations of a Liquidity Provider hereunder and
under the other Operative Agreements and such Replacement Liquidity Facility
shall be deemed to be a Liquidity Facility hereunder and under the other
Operative Agreements.
(f) Cash Accounts; Withdrawals; Investments. In the event the
Subordination Agent shall draw all available amounts under the Class A
Liquidity Facility or the Class B Liquidity Facility pursuant to Section
3.6(c) or a Final Drawing shall be made as provided in the Liquidity Facility,
amounts so drawn shall be deposited by the Subordination Agent in the Class A
Cash Account or the Class B Cash Account, respectively. Amounts so deposited
shall be invested in Specified Investments in accordance with Section 2.2(b)
hereof. Investment Earnings on amounts on deposit in the Cash Accounts as a
result of any drawings under Section 3.6(c) hereof (other than to the extent
such drawing becomes a Final Drawing) shall be paid to the respective
Liquidity Provider entitled thereto prior to giving effect to the
distributions below on each Distribution Date commencing on the first
Distribution Date after any such drawing. Investment Earnings on amounts on
deposit in the Cash Accounts as a result of any drawings under Section 3.6(i)
hereof (and amounts which become a Final Drawing) shall be deposited in the
Collection Account. The Subordination Agent shall deliver a written statement
to the recipient Liquidity Provider one day prior to each Distribution Date
setting forth the aggregate amount of Investment Earnings held in the Cash
Accounts as of such date. In addition, from and after the date funds are so
deposited, the Subordination Agent shall make withdrawals from such account as
follows:
(i) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest on the Class A Pass Through Certificates (at the Stated
Interest Rate for the Class A Pass Through Certificates) from any other
source, withdraw from the Class A Cash Account, and pay to the Pass
Through Trustee of the Class A Pass Through Trust an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at
the Stated Interest Rate for the Class A Pass Through Certificates) on
such Class A Pass Through Certificates and (y) the amount on deposit in
the Class A Cash Account;
(ii) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest on the Class B Pass Through Certificates (at the Stated
Interest Rate for the Class B Pass Through Certificates) from any other
source, withdraw from the Class B Cash Account, and pay to the Pass
Through Trustee of the Class B Pass Through Trust an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at
the Stated Interest Rate for the Class B Pass Through Certificates) on
such Class B Pass Through Certificates and (y) the amount on deposit in
the Class B Cash Account;
(iii) on each date on which the Pool Balance of the Class A Pass
Through Trust shall have been reduced by payments made to the Class A
Pass Through Certificateholders pursuant to Section 2.4, 3.2 or 3.3
hereof, the Subordination Agent shall withdraw from the Class A Cash
Account such amount as is necessary so that, after giving effect to the
reduction of the Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class A
Cash Account on such date), the Required Amount (with respect to the
Class A Liquidity Facility) will be on deposit in the Class A Cash
Account and shall first, pay such amount to the Class A Liquidity
Provider until the Liquidity Obligations (with respect to the Class A
Pass Through Certificates) shall have been paid in full, and second,
deposit any remaining amount in the Collection Account;
(iv) on each date on which the Pool Balance of the Class B Pass
Through Trust shall have been reduced by payments made to the Class B
Pass Through Certificateholders pursuant to Section 2.4, 3.2 or 3.3
hereof, the Subordination Agent shall withdraw from the Class B Cash
Account such amount as is necessary so that, after giving effect to the
reduction of the Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class B
Cash Account on such date), the Required Amount (with respect to the
Class B Liquidity Facility) will be on deposit in the Class B Cash
Account and shall first, pay such amount to the Class B Liquidity
Provider until the Liquidity Obligations (with respect to the Class B
Pass Through Certificates) shall have been paid in full, and second,
deposit any remaining amount in the Collection Account;
(v) if a Replacement Liquidity Facility for any Class of Pass
Through Certificates shall be delivered to the Subordination Agent
following the date on which funds have been deposited into the Cash
Account for such Class of Pass Through Certificates, the Subordination
Agent shall withdraw all amounts on deposit in such Cash Account and
shall pay such amounts to the replaced Liquidity Provider until all
Liquidity Obligations owed to such Person shall have been paid in full,
and shall deposit any remaining amount in the Collection Account; and
(vi) following the payment of Final Distributions with respect
to any Class of Pass Through Certificates, on the date on which the
Subordination Agent shall have been notified by the Liquidity Provider
for such Class of Pass Through Certificates that the Liquidity
Obligations owed to such Liquidity Provider have been paid in full, the
Subordination Agent shall withdraw all amounts on deposit in the Cash
Account in respect of such Class of Pass Through Certificates and shall
deposit such amount in the Collection Account.
(g) Reinstatement. With respect to any Interest Drawing under
the Liquidity Facility for any Pass Through Trust, upon the reimbursement of
the applicable Liquidity Provider for all or any part of the amount of such
Interest Drawing, together with any accrued interest thereon, the Available
Amount of such Liquidity Facility shall be reinstated by an amount equal to
the amount so reimbursed to the applicable Liquidity Provider but not to
exceed the Required Amount for such Liquidity Facility; provided, however,
that such Liquidity Facility shall not be so reinstated in part or in full at
any time if (x) both (i) a Triggering Event shall have occurred and (ii) a
Performing Certificate Deficiency exists or (y) a Liquidity Event of Default
shall have occurred and be continuing under such Liquidity Facility. In the
event that at any time prior to both the occurrence of a Triggering Event and
the existence of a Performing Certificate Deficiency funds are withdrawn from
any Cash Account pursuant to clauses (i), (ii) or (iii) of Section 3.6(f)
hereof, then funds received by the Subordination Agent prior to both the
occurrence of a Triggering Event and the existence of a Performing Certificate
Deficiency shall be deposited in such Cash Account as provided in clause
"third" of Section 2.4(b), clause "third" of Section 3.2 or clause "fourth" of
Section 3.3, as applicable, and applied in accordance with Section 3.6(f)
hereof.
(h) Reimbursement. The amount of each drawing under the
Liquidity Facilities shall be due and payable, together with interest thereon,
on the dates and at the rates, respectively, provided in the Liquidity
Facilities.
(i) Final Drawing. If any action is required under a Liquidity
Facility to be taken by the Subordination Agent in order to make a Final
Drawing thereunder, the Subordination Agent shall not fail to take such
action. Upon receipt of the proceeds of a Final Drawing under the related
Liquidity Facility, the Subordination Agent shall maintain and invest such
proceeds in accordance with Section 3.6(f) hereof.
(j) Reduction of Stated Amount. Promptly following each date
on which the Required Amount of the Liquidity Facility for a Class of Pass
Through Certificates is reduced as a result of a distribution to the
Certificateholders of such Class of Pass Through Certificates, the
Subordination Agent shall, if such Liquidity Facility provides for reductions
of the Stated Amount of such Liquidity Facility and if such reductions are not
automatic, request the Liquidity Provider for such Class of Pass Through
Certificates to reduce such Stated Amount to an amount equal to the Required
Amount with respect to such Liquidity Facility (as calculated by the
Subordination Agent after giving effect to such payment). Each such request
shall be made in accordance with the provisions of the applicable Liquidity
Facility.
(k) Relation to Subordination Provisions. Interest Drawings
under the Liquidity Facilities and withdrawals from the Cash Accounts, in each
case, in respect of interest on the Pass Through Certificates of any Class,
will be distributed to the Pass Through Trustee for such Class of Pass Through
Certificates, notwithstanding Sections 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party. (a) (i)
Following the occurrence and during the continuation of an Indenture Event of
Default under any Indenture, the Controlling Party shall direct the Indenture
Trustee under such Indenture in the exercise of remedies available to the
holders of the Equipment Trust Certificates issued pursuant to such Indenture,
including, without limitation, the ability to vote all such Equipment Trust
Certificates in favor of declaring all of the unpaid principal amount of such
Equipment Trust Certificates and accrued interest thereon to be due and
payable under, and in accordance with, the provisions of such Indenture.
Subject to the Owner Trustees' and the Owner Participants' rights set forth in
the Indentures to purchase the Equipment Trust Certificates, if the Equipment
Trust Certificates issued pursuant to any Indenture have been Accelerated
following an Indenture Event of Default with respect thereto, the Controlling
Party may sell, assign, contract to sell or otherwise dispose of and deliver
all (but not less than all) of such Equipment Trust Certificates to any Person
at public or private sale, at any location at the option of the Controlling
Party, all upon such terms and conditions as it may reasonably deem advisable
in accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights set forth in the Indentures to purchase the Equipment Trust
Certificates, and notwithstanding the foregoing, so long as any Pass Through
Certificates remain Outstanding, during the period ending on the date which is
nine months after the earlier of (x) the Acceleration of the Equipment Trust
Certificates issued pursuant to any Indenture or (y) the occurrence of a
Federal Express Corporation Bankruptcy Event, without the consent of the Pass
Through Trustee, (A) no Aircraft subject to the Lien of such Indenture or such
Equipment Trust Certificates may be sold if the net proceeds from such sale
would be less than the Minimum Sale Price for such Aircraft or such Equipment
Trust Certificates and (B) the amount and payment dates of rentals payable by
Federal Express Corporation under the Lease for such Aircraft may not be
adjusted if, as a result of such adjustment, the discounted present value of
all such rentals would be less than 75% of the discounted present value of the
rentals payable by Federal Express Corporation under such Lease before giving
effect to such adjustment, in each case, using the weighted average interest
rate of the Equipment Trust Certificates issued pursuant to such Indenture as
the discount rate.
(iii) At the request of the Controlling Party, the Subordination
Agent may from time to time during the continuance of an Indenture Event of
Default (and before the occurrence of a Triggering Event) commission LTV
Appraisals with respect to the related Aircraft.
(iv) After a Triggering Event occurs and any Equipment Trust
Certificates becomes a Non-Performing Equipment Trust Certificates, the
Subordination Agent shall obtain LTV Appraisals for the Aircraft as soon as
practicable and additional LTV Appraisals on or prior to each anniversary of
the date of such initial LTV Appraisals; provided that, if the Controlling
Party reasonably objects to the appraised value of the Aircraft shown in any
such LTV Appraisals, the Controlling Party shall have the right to obtain or
cause to be obtained substitute LTV Appraisals (including any LTV Appraisals
based upon physical inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of
such Aircraft or Equipment Trust Certificates. In addition, in lieu of any
sale, assignment, contract to sell or other disposition, the Subordination
Agent, on behalf of the Controlling Party, may maintain possession of such
Equipment Trust Certificates and continue to apply monies received in respect
of such Equipment Trust Certificates in accordance with Article III hereof.
In addition, in lieu of such sale, assignment, contract to sell or other
disposition, or in lieu of such maintenance of possession, the Controlling
Party may instruct the Indenture Trustee under such Indenture to foreclose on
the Lien on the related Aircraft or to take any other remedial action
permitted under such Indenture or applicable law.
SECTION 4.2 Remedies Cumulative. Each and every right, power and
remedy given to the Pass Through Trustees, the Controlling Party or the
Subordination Agent specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may, subject always to the terms and
conditions hereof, be exercised from time to time and as often and in such
order as may be deemed expedient by any Pass Through Trustee, the Controlling
Party or the Subordination Agent, as appropriate, 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 any Pass Through Trustee, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
SECTION 4.3 Discontinuance of Proceedings. In case any party to
this Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case each such party shall, subject to any determination in such proceedings,
be restored to its former position and rights hereunder, and all rights,
remedies and powers of such party shall continue as if no such Proceeding had
been instituted.
SECTION 4.4 Right of Certificateholders and Liquidity Providers
to Receive Payments Not to Be Impaired. Anything in this Agreement to the
contrary notwithstanding but subject to each Pass Through Agreement, the right
of any Certificateholder or any Liquidity Provider, respectively, to receive
payments pursuant to Section 2.4, 3.2 or 3.3 hereof when due, or to institute
suit for the enforcement of any such payment on or after the applicable
Distribution Date, shall not be impaired or affected without the consent of
such Certificateholder or such Liquidity Provider, respectively.
SECTION 4.5 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Agreement or in any suit against
any Controlling Party or the Subordination Agent for any action taken or
omitted by it as Controlling Party or Subordination Agent, as the case may be,
a court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees
and expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
The provisions of this Section do not apply to a suit instituted by the
Subordination Agent, a Liquidity Provider or a Pass Through Trustee or a suit
by Certificateholders holding more than 10% of the original principal amount
of any Class of Pass Through Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF THE PASS THROUGH TRUSTEE, ETC.
SECTION 5.1 Notice of Indenture Event of Default or Triggering
Event. (a) In the event the Subordination Agent shall have actual knowledge
of the occurrence of an Indenture Event of Default or a Triggering Event, as
promptly as practicable, and in any event within 10 days after obtaining
knowledge thereof, the Subordination Agent shall transmit by mail to the
Rating Agencies, the Liquidity Providers and the Pass Through Trustees notice
of such Indenture Event of Default or Triggering Event, unless such Indenture
Event of Default or Triggering Event shall have been cured or waived. For all
purposes of this Agreement, in the absence of actual knowledge on the part of
a Responsible Officer, the Subordination Agent shall not be deemed to have
knowledge of any Indenture Event of Default or Triggering Event unless
notified in writing by one or more Pass Through Trustees, one or more
Liquidity Providers or one or more Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each
Liquidity Provider and each Pass Through Trustee, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and other instruments furnished to the
Subordination Agent as registered holder of the Equipment Trust Certificates
or otherwise in its capacity as Subordination Agent to the extent the same
shall not have been otherwise directly distributed to such Liquidity Provider
or such Pass Through Trustee, as applicable, pursuant to the express provision
of any other Operative Agreement.
SECTION 5.2 Indemnification. The Subordination Agent shall not
be required to take any action or refrain from taking any action under Section
5.1 (other than the first sentence thereof) or Article IV hereof unless the
Subordination Agent shall have been indemnified (to the extent and in the
manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under
any obligation to take any action under this Agreement and nothing
contained in this Agreement shall require the Subordination Agent 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. The Subordination Agent shall
not be required to take any action under Section 5.1 (other than the first
sentence thereof) or Article IV hereof, nor shall any other provision of
this Agreement be deemed to impose a duty on the Subordination Agent to
take any action, if the Subordination Agent shall have been advised by
counsel that such action is contrary to the terms hereof or is otherwise
contrary to law.
SECTION 5.3 No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to
take or refrain from taking any action under, or in connection with, this
Agreement, except as expressly provided by the terms of this Agreement; and no
implied duties or obligations shall be read into this Agreement against the
Subordination Agent. The Subordination Agent 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 Section 7.1 hereof)
promptly take such action as may be necessary to duly discharge all Liens on
any of the Trust Accounts or any monies deposited therein which result from
claims against it in its individual capacity not related to its activities
hereunder or any other Operative Agreement.
SECTION 5.4 Notice from the Liquidity Providers and the Pass
Through Trustee. If a Responsible Officer of any Liquidity Provider or any
Pass Through Trustee has notice of an Indenture Event of Default or a
Triggering Event, such Person shall promptly give notice thereof to all other
Liquidity Providers and Pass Through Trustees and to the Subordination Agent,
provided, however, that no such Person shall have any liability hereunder as a
result of its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization, Acceptance of Trusts and Duties. Each
Pass Through Trustee for the Class A and Class B Pass Through Trusts hereby
designates and appoints the Subordination Agent as the agent and trustee of
such Pass Through Trustee under the applicable Liquidity Facility and
authorizes the Subordination Agent to enter into the applicable Liquidity
Facility as agent and trustee for such Pass Through Trustee. Each of the
Liquidity Providers and the Pass Through Trustees hereby designates and
appoints the Subordination Agent as the Subordination Agent under this
Agreement. First Security Bank, National Association, hereby accepts the
duties hereby created and applicable to it as the Subordination Agent and
agrees to perform the same but only upon the terms of this Agreement and
agrees to receive and disburse all monies received by it in accordance with
the terms hereof. The Subordination Agent shall not be answerable or
accountable under any circumstances, except (a) for its own willful misconduct
or negligence, (b) as provided in Section 2.2 hereof and (c) for liabilities
that may result from the inaccuracy of any representation or warranty of the
Subordination Agent made in its individual capacity in any Operative
Agreement. The Subordination Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Subordination
Agent, unless it is proved that the Subordination Agent was negligent in
ascertaining the pertinent facts.
SECTION 6.2 Absence of Duties. The Subordination Agent shall
have no duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.
SECTION 6.3 No Representations or Warranties as to Documents.
The Subordination Agent in its individual capacity does not make nor shall be
deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Agreement or any other Operative Agreement
or as to the correctness of any statement contained in any thereof, except for
the representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party.
The Certificateholders, the Pass Through Trustees and the Liquidity Providers
make no representation or warranty hereunder whatsoever.
SECTION 6.4 No Segregation of Monies; No Interest. Any monies
paid to or retained by the Subordination Agent pursuant to any provision
hereof and not then required to be distributed to any Pass Through Trustee or
any Liquidity Provider as provided in Articles II and III hereof need not be
segregated in any manner except to the extent required by such Articles II and
III and by law, and the Subordination Agent shall not (except as otherwise
provided in Section 2.2 hereof) be liable for any interest thereon; provided,
however, that any payments received or applied hereunder by the Subordination
Agent shall be accounted for by the Subordination Agent so that any portion
thereof paid or applied pursuant hereto shall be identifiable as to the source
thereof.
SECTION 6.5 Reliance; Agents; Advice of Counsel. The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it
to be genuine and believed by it to be signed by the proper party or parties.
As to the Pool Balance of any Pass Through Trust as of any date, the
Subordination Agent may for all purposes hereof rely on a certificate signed
by any Responsible Officer of the applicable Pass Through Trustee, and such
certificate shall constitute full protection to the Subordination Agent for
any action taken or omitted to be taken by it in good faith in reliance
thereon. As to any fact or matter relating to the Liquidity Providers or the
Pass Through Trustees the manner of ascertainment of which is not specifically
described herein, the Subordination Agent may for all purposes hereof rely on
a certificate, signed by any Responsible Officer of the applicable Liquidity
Provider or Pass Through Trustee, as the case may be, as to such fact or
matter, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. The Subordination Agent shall assume, and shall be
fully protected in assuming, that each of the Liquidity Providers and each of
the Pass Through Trustees are authorized to enter into this Agreement and to
take all action to be taken by them pursuant to the provisions hereof, and
shall not inquire into the authorization of each of the Liquidity Providers
and the Pass Through Trustee with respect thereto. In the administration of
the trusts hereunder, the Subordination Agent may execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may consult with counsel, accountants and other
skilled persons to be selected and retained by it, and the Subordination Agent
shall not be liable for the acts or omissions of any agent appointed with due
care or for anything done, suffered or omitted in good faith by it in
accordance with the advice or written opinion of any such counsel, accountants
or other skilled persons.
SECTION 6.6 Capacity in Which Acting. The Subordination Agent
acts hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7 Compensation. The Subordination Agent shall be
entitled to reasonable compensation, including expenses and disbursements, for
all services rendered hereunder and shall have a priority claim to the extent
set forth in Article III hereof on all monies collected hereunder for the
payment of such compensation, to the extent that such compensation shall not
be paid by others. The Subordination Agent agrees that it shall have no right
against any Pass Through Trustee or Liquidity Provider for any fee as
compensation for its services as agent under this Agreement. The provisions
of this Section 6.7 shall survive the termination of this Agreement.
SECTION 6.8 May Become Certificateholder. The institution acting
as Subordination Agent hereunder may become a Certificateholder and have all
rights and benefits of a Certificateholder to the same extent as if it were
not the institution acting as the Subordination Agent.
SECTION 6.9 Subordination Agent Required; Eligibility. There
shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States
of America or of any State thereof or of the District of Columbia having a
combined capital and surplus of at least $100,000,000 (or the obligations of
which, whether now in existence or hereafter incurred, are fully and
unconditionally guaranteed by a corporation organized and doing business under
the laws of the United States, any State thereof or of the District of
Columbia and having a combined capital and surplus of at least $100,000,000),
if there is such an institution willing and able to perform the duties of the
Subordination Agent hereunder upon reasonable or customary terms. Such
corporation shall be a citizen of the United States and shall be authorized
under the laws of the United States or any State thereof or of the District of
Columbia to exercise corporate trust powers and shall be subject to
supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, 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 Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the Subordination
Agent shall resign immediately in the manner and with the effect specified in
Section 8.1.
SECTION 6.10 Money to Be Held in Trust. All Equipment Trust
Certificates, monies and other property deposited with or held by the
Subordination Agent pursuant to this Agreement shall be held in trust for the
benefit of the parties entitled to such Equipment Trust Certificates, monies
and other property. All such Equipment Trust Certificates, monies or other
property shall be held in the Trust Department of the institution acting as
Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 Scope of Indemnification. The Subordination Agent
shall be indemnified hereunder to the extent and in the manner described in
Articles 8 and 9 of the Participation Agreements. The indemnities contained
in such Articles 8 and 9 shall survive the termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 Replacement of Subordination Agent; Appointment of
Successor. The Subordination Agent may resign at any time by so notifying the
Pass Through Trustees and the Liquidity Providers. The Liquidity Provider or
the Controlling Party (or, prior to the occurrence of a Triggering Event, the
Person who would be the Controlling Party if a Triggering Event had occurred)
may remove the Subordination Agent for cause by so notifying the Subordination
Agent and may appoint a successor Subordination Agent. The Controlling Party
(or, prior to the occurrence of a Triggering Event, the Person who would be
the Controlling Party if a Triggering Event had occurred) shall remove the
Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9
hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of
acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party (or, prior to the occurrence of a Triggering
Event, the Person who would be the Controlling Party if a Triggering Event had
occurred), in consultation with Federal Express Corporation, shall promptly
appoint a successor Subordination Agent.
Any corporation into which the Subordination 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
the Subordination Agent shall be a party, or any corporation to which
substantially all the corporate trust business of the Subordination Agent
may be transferred, shall, subject to the terms of Section 6.9 hereof, be
the Subordination Agent hereunder and under the other Operative Agreements
to which the Subordination Agent is a party without further act, except
that such Person shall give prompt subsequent notice of such transaction to
the Liquidity Provider and each Pass Through Trustee.
A successor Subordination Agent shall deliver a written acceptance
of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent, upon which the resignation or removal of the retiring
Subordination Agent shall become effective, and the successor Subordination
Agent shall have all the rights, powers and duties of the Subordination Agent
under this Agreement. The successor Subordination Agent shall send a written
notice of its succession to the Liquidity Providers and the Pass Through
Trustees. The retiring Subordination Agent shall promptly transfer its rights
under each of the Liquidity Facilities and all of the property held by it as
Subordination Agent to the successor Subordination Agent.
If a successor Subordination Agent does not take office within 60
days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or either one or more of the Pass Through
Trustees or Federal Express Corporation may petition any court of competent
jurisdiction for the appointment of a successor Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof
(to the extent applicable), one or more of the Pass Through Trustees, one or
more of the Liquidity Providers or Federal Express Corporation may petition
any court of competent jurisdiction for the removal of the Subordination Agent
and the appointment of a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc. (a) This Agreement may
not be supplemented, amended or modified without the consent of each Pass
Through Trustee (acting with the consent of holders of Pass Through
Certificates of the related Class evidencing interests in the related Pass
Through Trust aggregating not less than a majority in interest in such Trust),
the Subordination Agent and each Liquidity Provider; provided, however, that
this Agreement may be supplemented, amended or modified without the consent of
any Pass Through Trustee (i) if such supplement or amendment cures an
ambiguity or inconsistency or does not materially adversely affect such Pass
Through Trustee or the holders of the related Class of Pass Through
Certificates or (ii) to provide for a Non-Extension Drawing under a
Replacement Liquidity Facility which is scheduled to expire prior to the date
which is 15 days after the Final Legal Distribution Date and for the deposit
of such Non-Extension Drawing in the Class A Cash Account provided, in the
case of this clause (ii), that the Subordination Agent shall have received a
Ratings Confirmation after giving effect to such amendment or modification.
Notwithstanding the foregoing, without the consent of each Certificateholder
and each Liquidity Provider, no supplement, amendment or modification of this
Agreement may (i) reduce the percentage of the interest in any Pass Through
Trust evidenced by the Pass Through Certificates issued by such Pass Through
Trust necessary to consent to modify or amend any provision of this Agreement
or to waive compliance therewith or (ii) modify Section 2.4, 3.2 or 3.3
hereof, relating to the distribution of monies received by the Subordination
Agent hereunder from the Equipment Trust Certificates or pursuant to the
Liquidity Facilities. Nothing contained in this Section shall require the
consent of a Pass Through Trustee at any time following the payment of Final
Distributions with respect to the related Class of Pass Through Certificates.
(b) In the event that the Subordination Agent, as the registered
holder of any Equipment Trust Certificates, receives a request for its consent
to any amendment, modification or waiver under such Equipment Trust
Certificates, the Indenture pursuant to which such Equipment Trust
Certificates were issued, or the Lease, Participation Agreement or other
related document, (i) if no Indenture Event of Default shall have occurred and
be continuing, the Subordination Agent shall request instructions with respect
to each Series of Equipment Trust Certificates from the Pass Through Trustee
of the Pass Through Trust which holds such Equipment Trust Certificates and
shall vote or consent in accordance with the instructions of such Pass Through
Trustee and (ii) if any Indenture Event of Default (which has not been cured
by the applicable Owner Trustee or the applicable Owner Participant pursuant
to Section 4.03 of such Indenture) shall have occurred and be continuing with
respect to such Indenture, the Subordination Agent will exercise its voting
rights as directed by the Controlling Party; provided that no such amendment,
modification or waiver shall, without the consent of each Liquidity Provider,
reduce the amount of rent, supplemental rent or stipulated loss values payable
by Federal Express Corporation under the Lease; and provided further that no
amendment of or supplement to any Indenture, any Lease or any Participation
Agreement or waiver or modification of the terms of, or consent under, any
thereof, shall, without the consent of each Liquidity Provider, have any of
the effects listed in the provisos to Section 7.11 or 13.02 or Section 8.01(c)
of the Indenture.
SECTION 9.2 Subordination Agent Protected. If, in the reasonable
opinion of the institution acting as the Subordination Agent hereunder, any
document required to be executed pursuant to the terms of Section 9.1 affects
any right, duty, immunity or indemnity with respect to it under this Agreement
or any Liquidity Facility, the Subordination Agent may in its discretion
decline to execute such document.
SECTION 9.3 Effect of Supplemental Agreements. Upon the
execution of any amendment or supplement hereto pursuant to the provisions
hereof, this Agreement 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 Agreement of the parties
hereto and beneficiaries hereof 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
agreement shall be and be deemed to be part of the terms and conditions of
this Agreement for any and all purposes. In executing or accepting any
supplemental agreement permitted by this Article IX, the Subordination
Agent shall be entitled to receive, and shall be fully protected in relying
upon, an opinion of counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Agreement.
SECTION 9.4 Notice to Rating Agencies. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Termination of Intercreditor Agreement. Following
payment of Final Distributions with respect to each Class of Pass Through
Certificates and the payment in full of all Liquidity Obligations to the
Liquidity Providers and provided that there shall then be no other amounts due
to the Certificateholders, the Pass Through Trustees, the Liquidity Providers
and the Subordination Agent hereunder or under the Pass Through Agreements,
and that the commitment of the Liquidity Providers under the Liquidity
Facilities shall have expired or been terminated, this Agreement and the
trusts created hereby shall terminate and this Agreement shall be of no
further force or effect. Except as aforesaid or otherwise provided, this
Agreement and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof.
SECTION 10.2 Intercreditor Agreement for Benefit of the Pass
Through Trustees, Liquidity Providers and Subordination Agent. Nothing in
this Agreement, whether express or implied, shall be construed to give to any
Person other than the Pass Through Trustees, the Liquidity Providers and the
Subordination Agent any legal or equitable right, remedy or claim under or in
respect of this Agreement.
SECTION 10.3 Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid or by Federal Express Corporation courier
service, or by confirmed telecopy and
(i) if to the Subordination Agent, addressed to at its office at:
First Security Bank, National Association
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Services
(ii) if to any Pass Through Trustee, addressed to it at its
office at:
First Security Bank, National Association
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Services
(iii) if to any Liquidity Provider, addressed to it at its office
at:
Kredietbank N.V.
New York Branch
125 West 55th Street
New York, New York 10019
Attention: General Manager
Telecopy: (212) 956-5580
Whenever any notice in writing is required to be given by any Pass Through
Trustee or Liquidity Provider or the Subordination Agent to any of the other
of them, such notice shall be deemed given and such requirement satisfied when
such notice is received, if such notice is mailed by certified mail, postage
prepaid or by Federal Express Corporation courier service or is sent by
confirmed telecopy addressed as provided above. 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 Agreement.
SECTION 10.4 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 10.5 No Oral Modifications or Continuing Waivers. No
terms or provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
other Person against whom enforcement of the change, waiver, discharge or
termination is sought and any other party or other Person whose consent is
required pursuant to this Agreement and any waiver of the terms hereof shall
be effective only in the specific instance and for the specific purpose given.
SECTION 10.6 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 assigns of each, all as herein
provided.
SECTION 10.7 Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8 Counterpart Form. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9 Subordination. (a) As between the Liquidity
Providers, on the one hand, and the Pass Through Trustees and the
Certificateholders, on the other hand, this Agreement shall be a subordination
agreement for purposes of Section 510 of the United States Bankruptcy Code, as
amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if prior
to the payment in full to the Liquidity Providers of all Liquidity Obligations
then due and payable, any party hereto shall have received any payment or
distribution in respect of Equipment Trust Certificates or any other amount
under the Indentures or other Operative Agreements which, had the
subordination provisions of this Agreement been properly applied to such
payment, distribution or other amount, would not have been distributed to such
Person, then such payment, distribution or other amount shall be received and
held in trust by such Person and paid over or delivered to the Subordination
Agent for application as provided herein.
(c) If any Pass Through Trustee, any Liquidity Provider or the
Subordination Agent receives any payment in respect of any obligations owing
hereunder (or, in the case of the Liquidity Providers, in respect of the
Liquidity Obligations), which is subsequently invalidated, declared
preferential, set aside and/or required to be repaid to a trustee, receiver or
other party, then, to the extent of such payment, such obligations (or, in the
case of the Liquidity Providers, such Liquidity Obligations) intended to be
satisfied shall be revived and continue in full force and effect as if such
payment had not been received.
(d) The Pass Through Trustees (on behalf of themselves and the
holders of Certificates), the Liquidity Providers and the Subordination Agent
confirm that the payment priorities specified in Sections 2.4, 3.2 and 3.3
shall apply in all circumstances, notwithstanding the fact that the
obligations owed to the Pass Through Trustees and the holders of Certificates
are secured by certain assets and the Liquidity Obligations are not so
secured. The Pass Through Trustees expressly agree (on behalf of themselves
and the holders of Certificates) not to assert priority over the holders of
Liquidity Obligations due to their status as secured creditors in any
bankruptcy, insolvency or other legal proceeding.
(e) Each of the Pass Through Trustees (on behalf of itself and
the holders of Certificates), the Liquidity Providers and the Subordination
Agent may take any of the following actions without impairing its rights under
this Agreement:
(i) obtain a lien on any property to secure any amounts owing to
it hereunder, including, in the case of the Liquidity Providers, the
Liquidity Obligations;
(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it hereunder, including, in
the case of the Liquidity Providers, any of the Liquidity Obligations;
(iii) renew, extend, increase, alter or exchange any amounts owing
to it hereunder, including, in the case of the Liquidity Providers, any
of the Liquidity Obligations, or release or compromise any obligation of
any obligor with respect thereto;
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have; or
(v) take any other action which might discharge a subordinated
party or a surety under applicable law;
provided, however, that the taking of any such actions by any of the Pass
Through Trustees, the Liquidity Providers or the Subordination Agent shall not
prejudice the rights or adversely affect the obligations of any other party
under this Agreement.
SECTION 10.10 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 10.11 Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement,
or for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceedings may be brought
in such courts, and waives any objection that it may now or hereafter
have that the venue of any such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section 10.3
hereof, or at such other address of which the other parties shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each of
the parties warrants and represents that it has reviewed this waiver with its
legal counsel, and that it knowingly and voluntarily waives its jury trial
rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may
have from the jurisdiction of the courts of the United States or of any State
and waives any immunity any of its properties located in the United States may
have from attachment or execution upon a judgement entered by any such court
under the United States Foreign Sovereign Immunities Act of 1976 or any
similar successor legislation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized, as
of the day and year first above written, and acknowledge that this Agreement
has been made and delivered in the City of New York, and this Agreement has
become effective only upon such execution and delivery.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Pass Through
Trustee
By ________________________________
Name:
Title:
KREDIETBANK N.V., NEW YORK BRANCH,
as Class A Liquidity Provider and
Class B Liquidity Provider
By ________________________________
Name:
Title:
By ________________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity except as expressly set
forth herein but solely as
Subordination Agent and trustee
By ________________________________
Name:
Title:
SCHEDULE 1 TO
INTERCREDITOR AGREEMENT
Indentures
SCHEDULE 2 TO
INTERCREDITOR AGREEMENT
Participation Agreements
IRREVOCABLE REVOLVING CREDIT AGREEMENT
CLASS A PASS THROUGH CERTIFICATES
Dated as of May 1, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Subordination Agent,
as agent and trustee for the
Federal Express Corporation 1997-1-A Pass Through Trust,
as Borrower
and
KREDIETBANK N.V., NEW YORK BRANCH,
as Liquidity Provider
Relating to
Federal Express Corporation 1997-1-A Pass Through Trust
7.50% Federal Express Corporation Pass Through Certificates,
Series 1997-1
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms.................................. 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances........................................... 6
Section 2.02 Making the Advances.................................... 6
Section 2.03 Fees................................................... 8
Section 2.04 Reduction or Termination of the Commitment............. 8
Section 2.05 Repayments of Interest Advances or the Final Advance... 8
Section 2.06 Repayments of Downgrade Advances....................... 9
Section 2.07 Payments to the Liquidity Provider Under the
Intercreditor Agreement.............................. 10
Section 2.08 Book Entries........................................... 10
Section 2.09 Payments from Available Funds Only..................... 10
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs........................................ 10
Section 3.02 Capital Adequacy....................................... 11
Section 3.03 Payments Free of Deductions............................ 12
Section 3.04 Payments............................................... 13
Section 3.05 Computations........................................... 13
Section 3.06 Payment on Non-Business Days........................... 13
Section 3.07 Interest............................................... 13
Section 3.08 Replacement of Borrower................................ 15
Section 3.09 Funding Loss Indemnification........................... 15
Section 3.10 Illegality............................................. 15
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01.. 16
Section 4.02 Conditions Precedent to Borrowing...................... 18
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower.................. 18
Section 5.02 Negative Covenants of the Borrower..................... 19
ARTICLE VI
FINAL ADVANCE
Section 6.01 Final Advance.......................................... 19
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendments, Etc........................................ 20
Section 7.02 Notices, Etc........................................... 20
Section 7.03 No Waiver; Remedies.................................... 20
Section 7.04 Further Assurances..................................... 21
Section 7.05 Indemnification; Survival of Certain Provisions........ 21
Section 7.06 Liability of the Liquidity Provider.................... 21
Section 7.07 Costs, Expenses and Taxes.............................. 22
Section 7.08 Binding Effect; Participations......................... 22
Section 7.09 Severability........................................... 24
Section 7.10 GOVERNING LAW.......................................... 24
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial....... 24
Section 7.12 Execution in Counterparts.............................. 25
Section 7.13 Entirety............................................... 25
Section 7.14 Headings; Section References........................... 25
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE
ADVANCES............................................. 25
ANNEX I - Interest Advance Notice of Borrowing
ANNEX II - Downgrade Advance Notice of Borrowing
ANNEX III - Notice of Replacement Borrower
ANNEX IV - Notice of Automatic Reduction of Commitment
IRREVOCABLE REVOLVING CREDIT AGREEMENT
CLASS A PASS THROUGH CERTIFICATES
IRREVOCABLE REVOLVING CREDIT AGREEMENT, CLASS A PASS THROUGH
CERTIFICATES dated as of May 1, 1997 between FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class A Pass Through Trust (as
defined below) (the "Borrower"), and KREDIETBANK N.V., acting through its New
York Branch (the "Liquidity Provider").
W I T N E S S E T H:
WHEREAS, pursuant to the Class A Supplement (such term and all
other capitalized terms used in these recitals having the meanings set forth
or referred to in Section 1.01), the Class A Pass Through Trust is issuing the
Class A Pass Through Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class A Pass Through Certificates in accordance
with their terms, has requested the Liquidity Provider to enter into this
Agreement, providing in part for the Borrower to request in specified
circumstances that Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. (a) Definitions. As used
in this Agreement and unless otherwise expressly indicated, or unless the
context clearly requires otherwise, the following capitalized terms shall have
the following respective meanings for all purposes of this Agreement:
"Advance" means an Interest Advance, a Final Advance, a Downgrade
Advance or an Applied Downgrade Advance.
"Applicable Liquidity Rate" means the rates of interest specified
in Section 3.07 with respect to any Advance or any other amount.
"Applicable Margin" means (x) with respect to any Downgrade
Advance (other than an Applied Downgrade Advance), .275% (27.5 basis
points) per annum and (y) with respect to any other Advance (including
an Applied Downgrade Advance), 1.50% (150 basis points) per annum.
"Applied Downgrade Advance" has the meaning assigned to such term
in Section 2.06(a).
"Available Commitment" means, at any time of determination, an
amount equal to (i) the Commitment at such time less (ii) subject to the
third sentence of Section 2.02(a), the aggregate amount of each Advance
outstanding at such time; provided that following a Downgrade Advance or
a Final Advance, the Available Commitment shall be zero.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to
the higher of (i) the base commercial lending rate announced from time
to time by the Liquidity Provider, or (ii) the rate quoted by the
Liquidity Provider, at approximately 11:00 A.M., New York City time, to
dealers in the New York Federal funds market for overnight offering of
dollars by the Liquidity Provider, for deposit plus .75 of 1 percent
(.75%).
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning assigned to such term in the recital of
parties to this Agreement.
"Borrowing" means the making of Advances requested by delivery of
a Notice of Borrowing or pursuant to Section 6.01.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in
Memphis, Tennessee, New York, New York or, so long as any Class A Pass
Through Certificates are outstanding, the city and state in which the
Pass Through Trustee of the Class A Pass Through Trust maintains its
Corporate Trust Office or receives or disburses funds, and, if the
applicable Business Day relates to any Advance or other amount bearing
interest based on the LIBOR Rate, on which dealings in U.S. dollars are
carried on in the London interbank market (a "London Business Day");
provided, however, that if the day in question relates to the
effectiveness of the LIBOR Rate, Business Day shall mean a London
Business Day on which commercial banks are not required or authorized to
close in New York, New York.
"Commitment" means, initially, $34,971,075, as the same may be
reduced from time to time in accordance with Section 2.04(a).
"Downgrade Advance" means an Advance made pursuant to Section
2.02(b).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"Expenses" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses and disbursements
(including, without limitation, reasonable fees and disbursements of
legal counsel and costs of investigation), provided that Expenses shall
not include any Taxes.
"Expiry Date" means July 30, 2019.
"Final Advance" means an Advance made pursuant to Sections 2.02(c)
and 6.01.
"Intercreditor Agreement" means the Intercreditor Agreement dated
the date hereof, among the Pass Through Trustee, the Liquidity Provider,
the liquidity provider under each Liquidity Facility (other than this
Agreement) and the Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Interest Advance" means an Advance made pursuant to Section
2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each
of the following periods:
(i) the period beginning on the date such LIBOR Advance is
made (or is converted from a Base Rate Advance) and ending on the
next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the next
Regular Distribution Date.
"Lending Office" means the lending office of the Liquidity
Provider, presently located at 125 West 55th Street, New York, New York
10019, or such other lending office as the Liquidity Provider from time
to time shall notify the Borrower as its lending office hereunder.
"LIBOR Advance" means an Advance bearing interest at a rate based
upon the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period, the rate
per annum at which deposits in U.S. dollars are offered for the relevant
Interest Period by the Liquidity Provider to prime banks in the London
interbank market at approximately 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period in the principal
amount of the Advance to which such Interest Period is to apply and for
a period of time comparable to such Interest Period, as quoted by the
Liquidity Provider to the Subordination Agent.
"Liquidity Event of Default" means the occurrence of the
following: all of the Equipment Trust Certificates shall have been
either declared to be immediately due and payable or shall not have been
paid at their final maturity. A Liquidity Event of Default shall not
occur upon an automatic acceleration of the Equipment Trust Certificates
as a result of a Federal Express Corporation Bankruptcy Event.
"Liquidity Indemnitee" means (i) the Liquidity Provider, (ii) each
affiliate of the Liquidity Provider, (iii) the respective directors,
officers, employees, agents and servants of the Liquidity Provider and
its affiliates, and (iv) the successors and permitted assigns of the
persons described in clauses (i) through (iii), inclusive.
"Liquidity Provider" has the meaning assigned to such term in the
recital of parties to this Agreement.
"Non-Excluded Tax" has the meaning specified in Section 3.03.
"Notice of Borrowing" has the meaning specified in Section
2.02(d).
"Notice of Replacement Borrower" has the meaning specified in
Section 3.08.
"Participant" has the meaning assigned to such term in Section
7.08(b).
"Performing Note Deficiency" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Trust
Certificates are Performing Equipment Trust Certificates.
"Prospectus" means the basic prospectus included in the
registration statement on Form S-3 (File No. 333-07691) filed by Federal
Express Corporation relating to certain pass through certificates, as
supplemented by the prospectus supplement dated May 22, 1997 reflecting
the terms of the Pass Through Certificates, as such Prospectus may be
amended or supplemented.
"Related Indemnitee" means, with respect to any Liquidity
Indemnitee, its director, officer, employee, agent, affiliate or
employer.
"Replenishment Amount" has the meaning assigned to such term in
Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the Class A Pass Through Certificates, that would be
payable on the Class A Pass Through Certificates on each of the three
successive semiannual Regular Distribution Dates immediately following
such day or, if such day is a Regular Distribution Date, on such day and
the succeeding two semiannual Regular Distribution Dates, in each case
calculated on the basis of the Pool Balance of the Class A Pass Through
Certificates on such day and without regard to expected future payments
of principal on the Class A Pass Through Certificates.
"Termination Date" means the earliest to occur of the following:
(i) the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class A Pass Through Certificates
have been paid in full (or provision has been made for such payment in
accordance with the Intercreditor Agreement and the Pass Through
Agreements) or are otherwise no longer entitled to the benefits of this
Agreement; (iii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that a Replacement Liquidity Facility has been
substituted for this Agreement in full pursuant to Section 3.6(e) of the
Intercreditor Agreement; (iv) the date on which the Liquidity Provider
makes the Final Advance; and (v) the date on which no Advance is or may
(including by reason of reinstatement as herein provided) become
available for a Borrowing hereunder.
"Unpaid Advance" has the meaning assigned to such term in Section
2.05.
(b) Terms Defined in the Intercreditor Agreement. For all
purposes of this Agreement, the following terms shall have the respective
meanings assigned to such terms in the Intercreditor Agreement:
"Class A Cash Account", "Class A Pass Through Certificateholders",
"Class A Pass Through Certificates", "Class A Pass Through Trust",
"Class A Supplement", "Class B Pass Through Certificates", "Class C Pass
Through Certificates", "Closing Date", "Controlling Party", "Corporate
Trust Office", "Distribution Date", "Equipment Trust Certificates",
"Federal Express Corporation", "Federal Express Corporation Bankruptcy
Event", "Indenture", "Investment Earnings", "Liquidity Facility",
"Moody's", "Operative Agreements", "Participation Agreements", "Pass
Through Agreement", "Pass Through Certificate", "Pass Through Trustee",
"Performing Equipment Trust Certificates", "Person", "Pool Balance",
"Rating Agency", "Regular Distribution Dates", "Replacement Liquidity
Facility", "Responsible Officer", "Scheduled Payment", "Special
Payment", "Standard & Poor's", "Stated Interest Rate", "Subordination
Agent", "Taxes", "Threshold Rating", "Triggering Event", "Underwriters",
"Underwriting Agreement" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances. The Liquidity Provider hereby
irrevocably agrees, on the terms and conditions hereinafter set forth, to make
Advances to the Borrower from time to time on any Business Day during the
period from the Effective Date until 12:00 Noon (New York City time) on the
Expiry Date (unless the obligations of the Liquidity Provider shall be earlier
terminated in accordance with the terms of Section 2.04(b)) in an aggregate
amount at any time outstanding not to exceed the Commitment.
Section 2.02 Making the Advances. (a) Interest Advances shall
be made in one or more Borrowings by delivery to the Liquidity Provider of one
or more written and completed Notices of Borrowing in substantially the form
of Annex I attached hereto, signed by a Responsible Officer of the Borrower,
in an amount not exceeding the Available Commitment at such time and shall be
used solely for the payment when due of interest on the Class A Pass Through
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Available Commitment and the amount available
to be borrowed hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next sentence). Upon
repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Available Commitment shall be reinstated by
the amount of such repaid Interest Advance; provided, however, that the
Available Commitment shall not be so reinstated at any time if (i) both (x) a
Triggering Event shall have occurred and be continuing and (y) a Performing
Note Deficiency exists or (ii) a Liquidity Event of Default shall have
occurred and be continuing.
(b) A Downgrade Advance shall be made in a single Borrowing upon
a downgrading of the rating of the Liquidity Provider resulting in the
Liquidity Provider's ratings not meeting the Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement
Liquidity Facility shall have been delivered to the Borrower in accordance
with said Section 3.6(c), by delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex II
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Available Commitment at such time, and shall be used to fund the
Class A Cash Account in accordance with said Section 3.6(c).
(c) A Final Advance shall be made by the Liquidity Provider
without the necessity for a Notice of Borrowing at the option of the Liquidity
Provider on the occurrence of an event described in Section 6.01(a) or 6.01(b)
in an amount equal to the Available Commitment at such time, and shall be used
to fund the Class A Cash Account.
(d) Each Borrowing (other than the making of a Final Advance)
shall be made on notice in writing (a "Notice of Borrowing") in substantially
the form required by Section 2.02(a) or 2.02(b), as the case may be, given not
later than 12:00 Noon (New York City time) on the Business Day prior to the
day of the proposed Borrowing by the Borrower to the Liquidity Provider. Upon
satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall, before 12:00
Noon (New York City time) on the date of such Borrowing or on such later
Business Day specified by the Borrower in such Notice of Borrowing, make
available to the Borrower, in U.S. dollars and in immediately available funds,
the amount of such Borrowing to be paid to the Borrower in accordance with its
payment instructions. If a Notice of Borrowing is delivered by the Borrower
in respect of any Borrowing after 12:00 Noon (New York City time) on a
Business Day, the Liquidity Provider shall, before 12:00 Noon (New York City
time) on the second Business Day next following the day of receipt of such
Notice of Borrowing or on such later Business Day specified by the Borrower in
such Notice of Borrowing, make available to the Borrower, in U.S. dollars and
in immediately available funds, the amount of such Borrowing to be paid to the
Borrower in accordance with its payment instructions. Payments of proceeds of
a Borrowing shall be made by wire transfer of immediately available funds to
the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(e) Upon the making of any Advance requested pursuant to a
Notice of Borrowing, in accordance with the Borrower's payment instructions,
the Liquidity Provider shall be fully discharged of its obligation hereunder
with respect to such Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in respect of
such Notice of Borrowing to the Borrower or to any other person (including the
holder of any Class A Pass Through Certificates or the Pass Through Trustee of
the Class A Pass Through Trust) who makes to the Pass Through Trustee of the
Class A Pass Through Trust or the Borrower a demand for payment with respect
to any Class A Pass Through Certificates. By paying to the Borrower proceeds
of Advances requested by the Borrower in accordance with the provisions of
this Agreement, the Liquidity Provider makes no representation as to, and
assumes no responsibility for, the correctness or sufficiency for any purpose
of the amount of the Advances so made and requested.
Section 2.03 Fees. (a) The Borrower agrees to pay to the
Liquidity Provider a fee equal to .25% of the Commitment (as in effect on
the Effective Date) plus $8,750 payable in U.S. dollars. Such fee shall
be payable on the Effective Date.
(b) The Borrower shall pay, or shall cause to be paid, to the
Liquidity Provider, a fee equal to .275% per annum on the average Available
Commitment from the Effective Date to the earlier of the date on which a
Downgrade Advance is made and the date on which the Commitment terminates.
Such fee shall be payable in arrears on each Regular Distribution Date.
Nothing contained in this Section 2.03(b) shall require the Borrower to pay
any amount under this Section 2.03(b) other than to the extent the Borrower
shall have funds available therefor.
Section 2.04 Reduction or Termination of the Commitment. (a)
Automatic Reductions. Promptly following each date on which the Required
Amount is reduced as a result of a reduction in the Pool Balance of the Class
A Pass Through Certificates or otherwise, the Commitment shall automatically
be reduced to an amount equal to such reduced Required Amount (as calculated
by the Borrower). The Borrower shall give notice of any such automatic
reduction of the Commitment (substantially in the form of Annex IV hereto) to
the Liquidity Provider (with a copy to Federal Express Corporation) within two
Business Days thereof. The failure by the Borrower to furnish any such notice
shall not affect such automatic reduction of the Commitment.
(b) Termination. Upon the making of any Downgrade Advance or
Final Advance hereunder or the occurrence of the Termination Date, the
obligation of the Liquidity Provider to make further Advances hereunder shall
automatically and irrevocably terminate, and the Borrower shall not be
entitled to request any further Borrowing hereunder.
Section 2.05 Repayments of Interest Advances or the Final
Advance. Subject to Sections 2.07 and 2.09, the Borrower hereby agrees to
pay, or to cause to be paid, to the Liquidity Provider on each date on which
the Liquidity Provider shall make an Interest Advance or the Final Advance, an
amount equal to (a) the amount of such Interest Advance or the Final Advance
(any such Interest Advance or the Final Advance, until repaid, is referred to
herein as an "Unpaid Advance"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07. Subject to Sections 2.06, 2.07
and 2.09, unless otherwise waived by the Liquidity Provider, the Borrower
shall be obligated, without notice of an Advance or demand for repayment from
the Liquidity Provider (which notice and demand are hereby waived by the
Borrower), to repay the Liquidity Provider for all Interest Advances and Final
Advances on the same day as made and all Applied Downgrade Advances on the
same day they become Applied Downgrade Advances in accordance with Section
2.06 hereof. The Borrower and the Liquidity Provider agree that the repayment
in full of each Interest Advance and the Final Advance on the date such
Interest Advance or the Final Advance is made and each Applied Downgrade
Advance on the date it becomes an Applied Downgrade Advance is intended to be
a contemporaneous exchange for new value given to the Borrower by the
Liquidity Provider.
Section 2.06 Repayments of Downgrade Advances. (a) Amounts
advanced hereunder in respect of a Downgrade Advance shall be deposited in the
Class A Cash Account, and invested and withdrawn from the Class A Cash
Account, as set forth in Sections 3.6(c), (e) and (f) of the Intercreditor
Agreement. The Borrower agrees to pay to the Liquidity Provider, on each
Regular Distribution Date, commencing on the first Regular Distribution Date
after the making of a Downgrade Advance, interest on the principal amount
of any such Downgrade Advance as provided in Section 3.07; provided,
however, that (i) any distribution to the Liquidity Provider of Investment
Earnings pursuant to Section 3.6(f) of the Intercreditor Agreement shall
constitute a payment of interest on such Downgrade Advance in the amount of
such Investment Earnings (not to exceed the amount specified in Section
3.07) and (ii) amounts in respect of a Downgrade Advance withdrawn from the
Class A Cash Account for the purpose of paying interest on the Class A Pass
Through Certificates in accordance with Section 3.6(f) of the Intercreditor
Agreement (the amount of any such withdrawal being an "Applied Downgrade
Advance") shall be treated as an Interest Advance under this Agreement for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon. Immediately upon the withdrawal of any amounts from the Class A
Cash Account on account of a reduction in the Required Amount, the Borrower
shall repay the Downgrade Advances in a principal amount equal to the
amount of such reduction, plus interest on the principal amount repaid as
provided in Section 3.07.
(b) At any time when an Applied Downgrade Advance (or any
portion thereof) is outstanding, upon the deposit in the Class A Cash
Account of any amount pursuant to clause "third" of Section 2.4(b), clause
"third" of Section 3.2 or clause "fourth" of Section 3.3 of the
Intercreditor Agreement (any such amount being a "Replenishment Amount")
for the purpose of replenishing the balance thereof up to the Required
Amount at such time, (i) the aggregate outstanding principal amount of all
Applied Downgrade Advances shall be automatically reduced by the amount of
such Replenishment Amount and (ii) the principal amount of the outstanding
Downgrade Advance shall be automatically increased by the amount of such
Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, and prior to the effectiveness of any Replacement
Liquidity Facility, the Borrower agrees that all amounts owing to the
Liquidity Provider shall be repaid in full, whether from advances made by the
Replacement Liquidity Provider, from amounts remaining on deposit in the Class
A Cash Account after giving effect to any application of funds therefrom to
any payment of interest on the Class A Pass Through Certificates on the date
of such replacement, or otherwise.
Section 2.07 Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to
the Liquidity Provider in accordance with the terms thereof. Amounts so paid
to the Liquidity Provider shall be applied by the Liquidity Provider in the
order of priority required by the applicable provisions of Articles II and III
of the Intercreditor Agreement.
Section 2.08 Book Entries. The Liquidity Provider shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time
and the amounts of principal and interest payable hereunder and paid from time
to time in respect thereof; provided, however, that the failure by the
Liquidity Provider to maintain such account or accounts shall not affect the
obligations of the Borrower in respect of Advances.
Section 2.09 Payments from Available Funds Only. All payments to
be made by the Borrower under this Agreement shall be made only from amounts
received by it that constitute Scheduled Payments or Special Payments and only
to the extent that the Borrower shall have sufficient income or proceeds
therefrom to enable the Borrower to make payments in accordance with the terms
hereof after giving effect to the priority of payments provisions set forth in
the Intercreditor Agreement. The Liquidity Provider agrees that it will look
solely to such amounts to the extent available for distribution to it as
provided in the Intercreditor Agreement and this Agreement and that the
Borrower, in its individual capacity, is not personally liable to it for any
amounts payable or liability under this Agreement except as expressly provided
in this Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class A Cash Account shall be available to make
payments only to the extent and for the purposes expressly contemplated in
Section 3.6(f) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs. If the Liquidity Provider shall
determine that (a) any change after the date hereof in any law or regulation
or in the interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof or in the
compliance by the Liquidity Provider (or its head office) with any applicable
direction, request or requirement (whether or not having the force of law) of
any central bank or competent governmental or other authority shall either (i)
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets held by, or deposits in or for the account of, or
loans made by, the Liquidity Provider, or (ii) impose on the Liquidity
Provider any other condition regarding this Agreement or any Advance, or (iii)
change the basis of taxation of any amounts payable to the Liquidity Provider
(other than Taxes imposed on the overall net or gross income of the Liquidity
Provider) and (b) the result of any event referred to in the preceding clause
(i), (ii) or (iii) shall be to increase the cost to the Liquidity Provider of
issuing or maintaining its commitment or funding or maintaining Advances
(which increase in cost shall be determined by the Liquidity Provider's
reasonable allocations of the aggregate of such cost increases resulting from
such event), or to reduce the amount of any sum received or receivable by the
Liquidity Provider under this Agreement with respect thereto, then, upon
demand by the Liquidity Provider (such demand to be made not later than 60
days after a Responsible Officer of the Liquidity Provider obtains actual
knowledge of any event referred to in clause (i), (ii) or (iii) above), the
Borrower shall pay, or cause to be paid, to the Liquidity Provider, from time
to time as specified by the Liquidity Provider, additional amounts which shall
be sufficient to compensate the Liquidity Provider for such increased cost or
reduction; provided that if such demand for payment is made after such 60-day
period, the Borrower shall be obligated to pay such additional amounts only
with respect to such increased cost or reduction actually incurred or effected
on or after the 60th day prior to the date of such demand. A certificate as
to such increased cost or reduction (which shall set forth the basis for such
increased cost or reduction) incurred by the Liquidity Provider as a result of
any event mentioned in clause (i), (ii) and (iii) above, prepared in
reasonable detail and submitted by the Liquidity Provider to the Borrower,
shall be conclusive, absent manifest error, as to the amount thereof.
The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any amount payable under this
Section 3.01 that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous in any
material respect to the Liquidity Provider.
Section 3.02 Capital Adequacy. If the Liquidity Provider shall
determine that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its head
office) with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, in each case after the date hereof, has the effect of reducing the
rate of return on the Liquidity Provider's capital as a consequence of issuing
or maintaining its commitment hereunder or its funding or maintaining Advances
to a level below that which the Liquidity Provider could have achieved but for
such adoption, change or compliance (taking into consideration the Liquidity
Provider's policies with respect to capital adequacy) by an amount deemed by
the Liquidity Provider to be material, then, upon demand by the Liquidity
Provider, the Borrower shall pay to the Liquidity Provider, from time to time
as specified by the Liquidity Provider, additional amounts which shall be
sufficient to compensate the Liquidity Provider for such reduction in respect
of issuing or maintaining its commitment hereunder or its funding or
maintaining Advances. A certificate as to such additional amount describing
the event which has the effect of reducing the rate of return on the Liquidity
Provider's capital, prepared in reasonable detail and submitted by the
Liquidity Provider to the Borrower, shall be conclusive, absent manifest
error, as to the amount thereof.
The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any amount payable under this
Section 3.02 that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous in any
material respect to the Liquidity Provider.
Section 3.03 Payments Free of Deductions. All payments made by
the Borrower under this Agreement shall be made free and clear of, and
without reduction for or on account of, any present or future stamp or
other taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, restrictions or conditions of any nature whatsoever now or
hereafter imposed, levied, collected, withheld or assessed, excluding any
Taxes imposed on the overall net income of the Liquidity Provider and
excluding United States federal income tax withholding to the extent such
withholding is, or would be, actually imposed upon payments to the
Liquidity Provider as of the date of this Agreement (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "Non-Excluded Tax"). If any Non-Excluded Taxes are
required to be withheld from any amounts payable to the Liquidity Provider
under this Agreement, the amounts so payable to the Liquidity Provider
shall be increased to the extent necessary to yield to the Liquidity
Provider (after payment of all Non-Excluded Taxes and taxes imposed on the
receipt of such increase) interest or any other such amounts payable under
this Agreement at the rates or in the amounts specified in this Agreement.
Whenever any Non-Excluded Tax is payable by the Borrower, promptly
thereafter the Borrower shall send the Liquidity Provider certified copies
of tax receipts evidencing such payment by the Borrower. The Liquidity
Provider agrees to provide to the Borrower on or prior to the Effective
Date, and from time to time thereafter after the occurrence of any event
requiring a change in the most recent form previously delivered by it (and
prior to the immediately following due date of any payment by the Borrower
hereunder), to the extent that the Liquidity Provider is legally entitled
to do so, two original Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that the Liquidity Provider is completely
exempt from United States withholding tax on payments pursuant to this
Agreement.
The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any amount payable under this
Section 3.03 that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous in any
material respect to the Liquidity Provider.
Section 3.04 Payments. The Borrower shall make or cause to be
made each payment to the Liquidity Provider under this Agreement so as to
cause the same to be received by the Liquidity Provider not later than 1:00
P.M. (New York City time) on the day when due. The Borrower shall make all
such payments in lawful money of the United States of America, to the
Liquidity Provider in immediately available funds, by wire transfer to The
Bank of New York, One Wall Street, New York, New York 10286, ABA No.
021-000-018, for the account of Kredietbank New York, Account No. 802-3015618,
Attention: Loan Administration (referencing Federal Express Corporation
Liquidity Facility).
Section 3.05 Computations. All computations of interest based on
the Base Rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, and all computations of (x) interest based on the LIBOR Rate and
(y) fees payable to the Liquidity Provider shall be made on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest is payable.
Section 3.06 Payment on Non-Business Days. Whenever any payment
to be made hereunder (other than a payment on LIBOR Advances) becomes due and
payable on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day and interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Advance
becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the
result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding
Business Day.
Section 3.07 Interest. (a) The Borrower shall pay, or shall
cause to be paid, interest on (i) the unpaid principal amount of each Advance
from and including the date of such Advance (or, in the case of an Applied
Downgrade Advance, from and including the date on which the amount thereof was
withdrawn from the Class A Cash Account to pay interest on the Class A Pass
Through Certificates) to but excluding the date such principal amount shall be
paid in full and (ii) any other amount due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by law,
installments of interest on Advances or any such other amount) which is not
paid when due (whether at stated maturity, by acceleration or otherwise) from
and including the due date thereof to but excluding the date such amount is
paid in full, in each such case, at a fluctuating interest rate per annum for
each day equal to the Applicable Liquidity Rate for such Advance or such other
amount as in effect for such day, but in no event at a rate per annum greater
than the maximum rate permitted by applicable law; provided, however, that, if
at any time the otherwise applicable interest rate as set forth in this
Section 3.07 shall exceed the maximum rate permitted by applicable law, then
any subsequent reduction in such interest rate will not reduce the rate of
interest payable pursuant to this Section 3.07 below the maximum rate
permitted by applicable law until the total amount of interest accrued equals
the amount of interest that would have accrued if such otherwise applicable
interest rate as set forth in this Section 3.07 had at all times been in
effect. Nothing contained in this Section 3.07 shall require the Borrower to
pay any amount under this Section 3.07 other than to the extent the Borrower
shall have funds available therefor.
(b) Each Advance will be either a Base Rate Advance or a LIBOR
Advance as provided in this Section. Each such Advance will be a Base Rate
Advance for the period from the date of its borrowing to (but excluding) the
third Business Day following the Liquidity Provider's receipt of the Notice of
Borrowing for such Advance. Thereafter, such Advance shall be a LIBOR
Advance; provided that the Final Advance shall, until repaid in full, be a
Base Rate Advance and the Borrower may not convert the Final Advance into a
LIBOR Advance.
(c) Each LIBOR Advance shall bear interest during each Interest
Period at a per annum rate equal to the LIBOR Rate for such Interest Period
plus the Applicable Margin for such LIBOR Advance, payable in arrears on the
last day of such Interest Period and, in the event of the payment of principal
of such LIBOR Advance on a day other than such last day, on the date of such
payment (to the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a per annum
rate equal to the Base Rate plus the Applicable Margin for such Base Rate
Advance, payable in arrears on each Regular Distribution Date and, in the
event of the payment of principal of such Base Rate Advance on a day other
than a Regular Distribution Date, on the date of such payment (to the extent
of interest accrued on the amount of principal repaid).
(e) [Intentionally Omitted]
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by
applicable law, installments of interest on Advances) shall bear interest at
the Base Rate.
(g) Each change in the Base Rate shall become effective
immediately.
Section 3.08 Replacement of Borrower. Subject to Section
5.02(b), from time to time, upon the effective date and time specified in a
written and completed Notice of Replacement Borrower in substantially the form
of Annex III attached hereto (a "Notice of Replacement Borrower") delivered to
the Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09 Funding Loss Indemnification. The Borrower shall
pay to the Liquidity Provider, upon the request of the Liquidity Provider,
such amount or amounts as shall be sufficient (in the reasonable opinion of
the Liquidity Provider) to compensate it for any loss, cost, or expense
incurred as a result of:
(a) Any payment or prepayment of a LIBOR Advance on a date other
than the last day of the Interest Period for such Advance;
(b) Any failure by the Borrower to borrow or convert, as the
case may be, a LIBOR Advance on the date for borrowing or conversion, as
the case may be, specified in the relevant notice under Section 2.02 or
3.07; or
(c) Any conversion of a LIBOR Advance to a Base Rate Advance
other than on the last day of the Interest Period for such Advance.
Section 3.10 Illegality. Notwithstanding any other provision in
this Agreement, if any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Liquidity Provider (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for the Liquidity Provider (or its Lending Office) to
maintain or fund its LIBOR Advances, then upon notice to the Borrower by the
Liquidity Provider, the outstanding principal amount of the LIBOR Advances
shall be converted to Base Rate Advances (a) immediately upon demand of the
Liquidity Provider, if such change or compliance with such request, in the
judgment of the Liquidity Provider, requires immediate repayment; or (b) at
the expiration of the last Interest Period to expire before the effective date
of any such change or request. In the event any change of the nature
described in the preceding sentence shall make it unlawful or impossible for
the Liquidity Provider (or its Lending Office) to maintain or fund its Base
Rate Advances, the Liquidity Provider shall have the right to cause a
Replacement Liquidity Facility to be substituted for this Agreement, subject
to (i) the satisfaction of the conditions precedent to the effectiveness of,
and the other provisions regarding, a Replacement Liquidity Facility set forth
in Section 3.6(e) of the Intercreditor Agreement and (ii) such Replacement
Liquidity Facility and Replacement Liquidity Provider being reasonably
acceptable to Federal Express Corporation.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section
2.01. Section 2.01 of this Agreement shall become effective on and as of the
first date (the "Effective Date") on which the following conditions precedent
have been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, each dated such date (except for
those documents delivered pursuant to paragraphs (v) and (vii) of this
Section 4.01(a)), and each in form and substance satisfactory to the
Liquidity Provider:
(i) This Agreement duly executed on behalf of the
Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto;
(iii) Counterparts (or certified copies thereof) of each of
the Operative Agreements (other than this Agreement and the
Intercreditor Agreement) which, when taken together, bear the
signatures of all of the respective parties thereto and which
are in full force and effect in accordance with their
respective terms;
(iv) A copy of the Prospectus and specimen copies of the
Class A Pass Through Certificates;
(v) Evidence that, on the Effective Date, the Class A Pass
Through Certificates, the Class B Pass Through Certificates and
the Class C Pass Through Certificates will receive long-term
credit ratings from Moody's of not lower than Aa3, A1 and Baa1,
respectively, and from Standard & Poor's of not lower than AAA, AA
and BBB+, respectively;
(vi) An executed or certified copy of each document,
instrument, certificate and opinion delivered pursuant to the
Class A Supplement, the Intercreditor Agreement, the Participation
Agreements and the other Operative Agreements (together with, in
the case of each such opinion (unless such opinion is addressed to
the Liquidity Provider), other than the opinion of counsel for the
Underwriters, a letter from the counsel rendering such opinion to
the effect that the Liquidity Provider is entitled to rely on such
opinion as if it were addressed to the Liquidity Provider);
(vii) Evidence that there shall have been made and shall be
in full force and effect, all filings, recordings and/or
registrations, and there shall have been given or taken any notice
or other similar action as may be reasonably necessary or, to the
extent reasonably requested by the Liquidity Provider, reasonably
advisable, in order to establish, perfect, protect and preserve
the right, title and interest, remedies, powers, privileges, liens
and security interests of, or for the benefit of, the Pass Through
Trustee and the Liquidity Provider created by the Operative
Agreements;
(viii) Copies of the appraisals attached as exhibits to the
Prospectus; and
(ix) A letter from Federal Express Corporation agreeing to
provide to the Liquidity Provider the periodic financial reports
referred to in Section 4.03 of the Pass Through Agreements; and
(x) Such other documents, instruments, opinions and
approvals (and, if requested by the Liquidity Provider, certified
duplicates or executed copies thereof) as the Liquidity Provider
shall have reasonably requested.
(b) The following statements shall be true and shall be deemed
to have been represented by each party (other than clause (ii) below,
which shall be deemed to have been represented only by Federal Express
Corporation) on and as of the Effective Date:
(i) The representations and warranties of such Person
contained in each Participation Agreement are true and correct on
and as of the Effective Date as though made on and as of the
Effective Date; and
(ii) No event has occurred and is continuing, or would
result from the entering into of this Agreement or the making of
any Advance, which constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full
of all fees and other sums required to be paid to or for the account of
the Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Pass Through
Certificates under the Pass Through Agreements shall have been
satisfied, all conditions precedent to the effectiveness of the other
Liquidity Facilities shall have been satisfied, and all conditions
precedent to the purchase of the Pass Through Certificates by the
Underwriters under the Underwriting Agreement shall have been satisfied
(except for any of such conditions precedent under the Underwriting
Agreement that shall have been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the
date hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness
of Section 2.01 have been satisfied or waived (other than this Section
4.01(e)).
Section 4.02 Conditions Precedent to Borrowing. The obligation
of the Liquidity Provider to make an Advance on the occasion of each Borrowing
shall be subject to the conditions precedent that the Effective Date shall
have occurred and, except in the case of a Final Advance, prior to the date of
such Borrowing, the Borrower shall have delivered a Notice of Borrowing which
conforms to the terms and conditions of this Agreement and has been completed
as may be required by the relevant form of the Notice of Borrowing for the
type of Advance requested.
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower. So long as
any Advance shall remain unpaid or the Liquidity Provider shall have any
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements. Punctually pay or
cause to be paid all amounts payable by it under this Agreement and the
other Operative Agreements and observe and perform in all material
respects the conditions, covenants and requirements applicable to it
contained in this Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity Provider
with reasonable promptness, such other information and data with respect
to the transactions contemplated by the Operative Agreements as from
time to time may be reasonably requested by the Liquidity Provider; and
permit the Liquidity Provider, upon reasonable notice, to inspect the
Borrower's books and records with respect to such transactions and to
meet with officers and employees of the Borrower to discuss such
transactions.
Section 5.02 Negative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will not, without the
written consent of the Liquidity Provider (such consent not to be unreasonably
withheld):
(a) Amendments. Modify, amend or supplement, or give any
consent to any modification, amendment or supplement or make any waiver
with respect to, any provision of the Pass Through Agreements, except
for any supplemental agreement to the Pass Through Agreements provided
for in Section 11.01 thereof.
(b) Borrower. Appoint or permit or suffer to be appointed any
successor Borrower.
ARTICLE VI
FINAL ADVANCE
Section 6.01 Final Advance. If (a) both (i) a Triggering Event
shall have occurred and be continuing and (ii) a Performing Note Deficiency
exists or (b) a Liquidity Event of Default shall have occurred and be
continuing, the Liquidity Provider may, in its discretion, make a Final
Advance whereupon (i) the Liquidity Provider shall have no further obligation
to make Advances hereunder, (ii) all other outstanding Advances shall be
automatically converted into Final Advances for purposes of determining the
Applicable Liquidity Rate for interest payable thereon, and (iii) subject to
Sections 2.07 and 2.09, all Advances, any accrued interest thereon and any
other amounts outstanding hereunder shall become immediately due and payable
to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Liquidity Provider, and, in the case of an amendment, the
Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 7.02 Notices, Etc. Except as otherwise expressly
provided herein, all notices and other communications provided for hereunder
shall be in writing (including telecopier and mailed or delivered or sent by
telecopier):
Borrower: First Security Bank, National Association
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Services
Telephone: (801) 246-5630
Telecopy: (801) 246-5053
Liquidity
Provider: Kredietbank N.V.
New York Branch
125 West 55th Street,
New York, New York 10019
Attention: General Manager
Telephone: (212) 541-0600
Telecopy: (212) 956-5580
or, as to each of the foregoing, at such other address as shall be designated
by such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when
deposited in the mails addressed as specified above, and (iii) if given by
other means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the provisions of
Articles II and III hereof shall not be effective until received by the
Liquidity Provider. A copy of all notices delivered hereunder to either party
shall in addition be delivered to each of the parties to the Participation
Agreements at their respective addresses set forth therein.
Section 7.03 No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 7.04 Further Assurances. The Borrower agrees to do, upon
request, such further acts and things and to execute and deliver to the
Liquidity Provider such additional assignments, agreements, powers and
instruments as the Liquidity Provider may reasonably require or deem advisable
to carry into effect the purposes of this Agreement and the other Operative
Agreements or to better assure and confirm unto the Liquidity Provider its
rights, powers and remedies hereunder and under the other Operative
Agreements.
Section 7.05 Indemnification; Survival of Certain Provisions.
The Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Articles 8 and 9 of the Participation Agreements. In
addition, the Borrower agrees to indemnify, protect, defend and hold harmless
the Liquidity Provider from, against and in respect of, and shall pay on
demand, all Expenses of any kind or nature whatsoever, whether arising before,
on or after the date hereof, that may be imposed, incurred by or asserted
against any Liquidity Indemnitee, in any way relating to, resulting from, or
arising out of or in connection with, this Agreement, the Intercreditor
Agreement or the Participation Agreements; provided, however, that the
Borrower shall not be required to indemnify, protect, defend and hold harmless
any Liquidity Indemnitee in respect of any Expense of such Liquidity
Indemnitee (i) to the extent such Expense is attributable to the gross
negligence or willful misconduct of such Liquidity Indemnitee or any Related
Indemnitee, (ii) that is ordinary and usual operating overhead expense or
(iii) to the extent such Expense is attributable to the failure by such
Liquidity Indemnitee or its Related Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in
any Operative Agreement. The indemnities contained in Articles 8 and 9 of the
Participation Agreements, and the provisions of Sections 3.01, 3.02, 3.03,
7.05 and 7.07, shall survive the termination of this Agreement.
Section 7.06 Liability of the Liquidity Provider. (a) Neither
the Liquidity Provider nor any of its officers or directors shall be liable or
responsible for: (i) the use which may be made of the Advances or any acts or
omissions of the Borrower or any beneficiary or transferee in connection
therewith; (ii) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; or (iii) the making
of Advances by the Liquidity Provider against delivery of a Notice of
Borrowing and other documents which do not comply with the terms hereof;
provided, however, that the Borrower shall have a claim against the Liquidity
Provider, and the Liquidity Provider shall be liable to the Borrower, to the
extent of any damages suffered by the Borrower which were the result of (A)
the Liquidity Provider's willful misconduct or negligence in determining
whether documents presented hereunder comply with the terms hereof, or (B) any
breach by the Liquidity Provider of any of the terms of this Agreement,
including, but not limited to, the Liquidity Provider's failure to make lawful
payment hereunder after the delivery to it by the Borrower of a Notice of
Borrowing strictly complying with the terms and conditions hereof.
(b) The Liquidity Provider shall not be liable or responsible in
any respect for (i) any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with this Agreement or any Notice of Borrowing
delivered hereunder, or (ii) any action, inaction or omission which may be
taken by it in good faith, absent willful misconduct or negligence (in which
event the extent of the Liquidity Provider's potential liability to the
Borrower shall be limited as set forth in the immediately preceding
paragraph), in connection with this Agreement or any Notice of Borrowing.
Section 7.07 Costs, Expenses and Taxes. The Borrower agrees to
pay, or cause to be paid (A) on the Effective Date and on such later date or
dates on which the Liquidity Provider shall make demand, all reasonable
out-of-pocket costs and expenses of the Liquidity Provider in connection with
the preparation, negotiation, execution, delivery, filing and recording of
this Agreement, any other Operative Agreement and any other documents which
may be delivered in connection with this Agreement, including, without
limitation, the reasonable fees and expenses of outside counsel for the
Liquidity Provider and (B) on demand, all reasonable costs and expenses of the
Liquidity Provider (including reasonable counsel fees and expenses) in
connection with (i) the enforcement of this Agreement or any other Operative
Agreement, (ii) the modification or amendment of, or supplement to, this
Agreement or any other Operative Agreement or such other documents which
may be delivered in connection herewith or therewith (whether or not the
same shall become effective) or (iii) any action or proceeding relating to
any order, injunction, or other process or decree restraining or seeking to
restrain the Liquidity Provider from paying any amount under this
Agreement, the Intercreditor Agreement or any other Operative Agreement or
otherwise affecting the application of funds in the Cash Accounts. In
addition, the Borrower shall pay any and all recording, stamp and other
similar taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of this Agreement, any
other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such
taxes or fees.
Section 7.08 Binding Effect; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower and the
Liquidity Provider and their respective successors and assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor the Borrower shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of the other party,
subject to the requirement of Section 7.08(b). The Liquidity Provider may
grant participations herein or in any of its rights or security hereunder and
under the other Operative Agreements to such Persons as the Liquidity Provider
may in its sole discretion select, subject to the requirement of Section
7.08(b). No such participation by the Liquidity Provider, however, will
relieve the Liquidity Provider of its obligations hereunder. In connection
with any participation or any proposed participation, the Liquidity Provider
may disclose to the participant or the proposed participant any information
that the Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges and agrees
that the Liquidity Provider's source of funds may derive in part from its
participants. Accordingly, references in this Agreement and the other
Operative Agreements to determinations, reserve and capital adequacy
requirements, increased costs, reduced receipts and the like as they pertain
to the Liquidity Provider shall be deemed also to include those of each of its
participants (subject, in each case, to the maximum amount that would have
been incurred by or attributable to the Liquidity Provider directly if the
Liquidity Provider had not participated the interest).
(b) If, pursuant to subsection (a) above, the Liquidity Provider
sells any participation to any bank or other entity (each, a "Participant"),
then, concurrently with the effectiveness of such participation, the
Participant shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld by the
Borrower or the Liquidity Provider with respect to any payments to be made to
such Participant in respect of this Agreement, (ii) furnish to the Liquidity
Provider and the Borrower either (x) a statement that it is incorporated under
the laws of the United States or a state thereof or (y) if it is not so
incorporated, two copies of a properly completed United States Internal
Revenue Service Form 4224 or Form 1001, as appropriate, or other applicable
form, certificate or document prescribed by the Internal Revenue Service
certifying, in each case, such Participant's entitlement to a complete
exemption from United States federal withholding tax in respect to any and all
payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the
date that any such form expires or becomes obsolete or (B) after the
occurrence of any event requiring a change in the most recent form previously
delivered by it and prior to the immediately following due date of any payment
by the Borrower hereunder, certifying in the case of a Form 1001 or Form 4224
that such Participant is entitled to a complete exemption from United States
federal withholding tax on payments under this Agreement. Unless the Borrower
has received forms or other documents reasonably satisfactory to it indicating
that payments hereunder are not subject to United States federal withholding
tax, the Borrower will withhold taxes as required by law from such payments at
the applicable statutory rate without any obligation to gross-up or indemnify
pursuant to Section 3.03.
(c) Notwithstanding the other provisions of this Section 7.08,
the Liquidity Provider may assign and pledge all or any portion of the
Advances owing to it to any Federal Reserve Bank or the United States Treasury
as collateral security pursuant to Regulation A of the Board of Governors of
the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such assigned Advances
made by the Borrower to the Liquidity Provider in accordance with the terms of
this Agreement shall satisfy the Borrower's obligations hereunder in respect
of such assigned Advance to the extent of such payment. No such assignment
shall release the Liquidity Provider from its obligations hereunder.
Section 7.09 Severability. Any provision of this Agreement which
is prohibited, unenforceable or not authorized in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
Section 7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial.
(a) Each of the parties hereto hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement,
or for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for
the Southern District of New York, and the appellate courts from any
thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) if such party does not maintain an office for the
transaction of its business in New York, agrees that service of process
in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to each party hereto at its address set
forth in Section 7.02, or at such other address of which the Liquidity
Provider shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS
BEING ESTABLISHED, including, without limitation, contract claims, tort
claims, breach of duty claims and all other common law and statutory claims.
The Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such
legal counsel. THIS WAIVER CANNOT BE MODIFIED ORALLY.
Section 7.12 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13 Entirety. This Agreement and the other Operative
Agreements constitute the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof and supersede all prior
understandings and agreements of such parties.
Section 7.14 Headings; Section References. Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose. Unless the
context otherwise requires or otherwise indicated herein, all Section
references in this Agreement are references to Sections hereof.
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE
LIQUIDITY PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO
DELIVER NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER,
SHALL BE UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN
EACH CASE STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first set forth above.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
------------------------------------
Name:
Title:
KREDIETBANK N.V.,
NEW YORK BRANCH,
as Liquidity Provider
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
Annex I to Irrevocable
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
First Security Bank, National Association, acting not in its
individual capacity but solely as Subordination Agent, as borrower (the
"Borrower"), hereby certifies to KREDIETBANK N.V., acting through its New York
Branch (the "Liquidity Provider"), with reference to the Irrevocable Revolving
Credit Agreement Class A Pass Through Certificates dated as of May 1, 1997,
between the Borrower and the Liquidity Provider (the "Liquidity Agreement";
the terms defined therein and not otherwise defined herein being used
herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of an Interest Advance by the Liquidity Provider to be used for
the payment of interest on the Class A Pass Through Certificates which
was payable on the Distribution Date falling on __________ in accordance
with the terms and provisions of the Class A Supplement and the Class A
Pass Through Certificates and has not been paid pursuant to clause
fourth of Section 3.2 of the Intercreditor Agreement or clause sixth of
Section 3.3 of the Intercreditor Agreement, which Advance is requested
to be made on ___________________.
(3) The amount of the Interest Advance requested hereby (i) is
$________,
to be applied in respect of the payment of interest which was due and payable
on the Class A Pass Through Certificates on such Distribution Date, (ii) does
not include any amount with respect to the payment of principal of, or premium
on, the Class A Pass Through Certificates, the Class B Pass Through
Certificates or the Class C Pass Through Certificates, or interest on the
Class B Pass Through Certificates or the Class C Pass Through Certificates,
(iii) was computed in accordance with the provisions of the Class A Pass
Through Certificates, the Class A Supplement and the Intercreditor Agreement
(a copy of which computation is attached hereto as Schedule I), (iv) does not
exceed the Available Commitment on the date hereof, and (v) has not been and
is not the subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance
with the terms of Sections 3.2 or 3.3 of the Intercreditor Agreement, as
the case may be, (b) no portion of such amount shall be applied by the
Borrower for any other purpose and (c) no portion of such amount until
so applied shall be commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested
hereby be a Base Rate Advance and that such Base Rate Advance be
converted into a LIBOR Rate Advance on the third Business Day following
your receipt of this notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Available Commitment by an
amount equal to the amount of the Interest Advance requested to be made hereby
as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the
amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the __ day of ______________, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
------------------------------------
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II to Irrevocable
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
FIRST SECURITY BANK, NATIONAL ASSOCIATION, acting not in its
individual capacity but solely as Subordination Agent, as borrower (the
"Borrower"), hereby certifies to KREDIETBANK N.V., acting through its New
York Branch (the "Liquidity Provider"), with reference to the Irrevocable
Revolving Credit Agreement Class A Pass Through Certificates dated as of May
1, 1997, between the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined herein being
used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of the Downgrade Advance by the Liquidity Provider to be used for
the funding of the Class A Cash Account in accordance with Section
3.6(c) of the Intercreditor Agreement by reason of the downgrading of
the debt rating of the Liquidity Provider issued by either Rating Agency
below the applicable Threshold Rating, which Advance is requested to be
made on ____________.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_____, which equals the Available Commitment on the date hereof and is
to be applied in respect of the funding of the Class A Cash Account in
accordance with Section 3.6(c) of the Intercreditor Agreement, (ii) does
not include any amount with respect to the payment of the principal of,
or premium on, the Class A Pass Through Certificates, or principal of,
or interest or premium on, the Class B Pass Through Certificates or the
Class C Pass Through Certificates, (iii) was computed in accordance with
the provisions of the Class A Pass Through Certificates, the Class A
Supplement and the Intercreditor Agreement (a copy of which computation
is attached hereto as Schedule I), and (iv) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class
A Cash Account and apply the same in accordance with the terms of
Section 3.6(c) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other
funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested
hereby be a Base Rate Advance and that such Base Rate Advance be
converted into a LIBOR Rate Advance on the third Business Day following
your receipt of this notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of
the Liquidity Provider to make further Advances under the Liquidity Agreement;
and (B) following the making by the Liquidity Provider of the Downgrade
Advance requested by this Notice of Borrowing, the Borrower shall not be
entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the __ day of ______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its
individual capacity but solely as
Subordination Agent, as Borrower
By:
------------------------------------
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
Annex III to Irrevocable
Revolving Credit Agreement
NOTICE OF REPLACEMENT BORROWER
[Date]
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
[Name of Transferee]
[Address of Transferee]
all rights of the undersigned as Borrower under the Liquidity Agreement
referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement.
By this transfer, all rights of the undersigned as Borrower under
the Liquidity Agreement are transferred to the transferee and the transferee
shall hereafter have the sole rights as Borrower thereunder. The undersigned
shall pay any costs and expenses of such transfer, including, but not limited
to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
------------------------------------
Name:
Title:
Annex IV Irrevocable
Revolving Credit Agreement
NOTICE OF AUTOMATIC REDUCTION OF COMMITMENT
[Date]
Ladies and Gentlemen:
The undersigned, duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby notifies Kredietbank N.V., acting
through its New York Branch (the "Liquidity Provider"), with reference to the
Irrevocable Revolving Credit Agreement Class A Pass Through Certificates dated
as of May 1, 1997, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that, pursuant to
Section 2.04(a) of the Liquidity Agreement, the Commitment has been
automatically reduced to $____________.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Automatic Reduction of Commitment as of the ___day of _______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
------------------------------------
Name:
Title:
IRREVOCABLE REVOLVING CREDIT AGREEMENT
CLASS B PASS THROUGH CERTIFICATES
Dated as of May 1, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Subordination Agent,
as agent and trustee for the
Federal Express Corporation 1997-1-B Pass Through Trust,
as Borrower
and
KREDIETBANK N.V., NEW YORK BRANCH,
as Liquidity Provider
Relating to
Federal Express Corporation 1997-1-B Pass Through Trust
7.52% Federal Express Corporation Pass Through Certificates,
Series 1997-1
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms.................................. 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances........................................... 6
Section 2.02 Making the Advances.................................... 6
Section 2.03 Fees................................................... 8
Section 2.04 Reduction or Termination of the Commitment............. 8
Section 2.05 Repayments of Interest Advances or the Final Advance... 8
Section 2.06 Repayments of Downgrade Advances....................... 9
Section 2.07 Payments to the Liquidity Provider Under the
Intercreditor Agreement............................... 10
Section 2.08 Book Entries........................................... 10
Section 2.09 Payments from Available Funds Only..................... 10
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs........................................ 10
Section 3.02 Capital Adequacy....................................... 11
Section 3.03 Payments Free of Deductions............................ 12
Section 3.04 Payments............................................... 13
Section 3.05 Computations........................................... 13
Section 3.06 Payment on Non-Business Days........................... 13
Section 3.07 Interest............................................... 13
Section 3.08 Replacement of Borrower................................ 15
Section 3.09 Funding Loss Indemnification........................... 15
Section 3.10 Illegality............................................. 15
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01.. 16
Section 4.02 Conditions Precedent to Borrowing...................... 18
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower.................. 18
Section 5.02 Negative Covenants of the Borrower..................... 19
ARTICLE VI
FINAL ADVANCE
Section 6.01 Final Advance.......................................... 19
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendments, Etc........................................ 20
Section 7.02 Notices, Etc........................................... 20
Section 7.03 No Waiver; Remedies.................................... 20
Section 7.04 Further Assurances..................................... 21
Section 7.05 Indemnification; Survival of Certain Provisions........ 21
Section 7.06 Liability of the Liquidity Provider.................... 21
Section 7.07 Costs, Expenses and Taxes.............................. 22
Section 7.08 Binding Effect; Participations......................... 22
Section 7.09 Severability........................................... 24
Section 7.10 GOVERNING LAW.......................................... 24
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial....... 24
Section 7.12 Execution in Counterparts.............................. 25
Section 7.13 Entirety............................................... 25
Section 7.14 Headings; Section References........................... 25
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE
ADVANCES.............................................. 25
ANNEX I - Interest Advance Notice of Borrowing
ANNEX II - Downgrade Advance Notice of Borrowing
ANNEX III - Notice of Replacement Borrower
ANNEX IV - Notice of Automatic Reduction of Commitment
IRREVOCABLE REVOLVING CREDIT AGREEMENT
CLASS A PASS THROUGH CERTIFICATES
IRREVOCABLE REVOLVING CREDIT AGREEMENT, CLASS A PASS THROUGH
CERTIFICATES dated as of May 1, 1997 between FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class A Pass Through Trust (as
defined below) (the "Borrower"), and KREDIETBANK N.V., acting through its New
York Branch (the "Liquidity Provider").
W I T N E S S E T H:
WHEREAS, pursuant to the Class B Supplement (such term and all
other capitalized terms used in these recitals having the meanings set forth
or referred to in Section 1.01), the Class B Pass Through Trust is issuing the
Class B Pass Through Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class B Pass Through Certificates in accordance
with their terms, has requested the Liquidity Provider to enter into this
Agreement, providing in part for the Borrower to request in specified
circumstances that Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. (a) Definitions. As used
in this Agreement and unless otherwise expressly indicated, or unless the
context clearly requires otherwise, the following capitalized terms shall have
the following respective meanings for all purposes of this Agreement:
"Advance" means an Interest Advance, a Final Advance, a Downgrade
Advance or an Applied Downgrade Advance.
"Applicable Liquidity Rate" means the rates of interest specified
in Section 3.07 with respect to any Advance or any other amount.
"Applicable Margin" means (x) with respect to any Downgrade
Advance (other than an Applied Downgrade Advance), .275% (27.5 basis
points) per annum and (y) with respect to any other Advance (including
an Applied Downgrade Advance), 1.50% (150 basis points) per annum.
"Applied Downgrade Advance" has the meaning assigned to such term
in Section 2.06(a).
"Available Commitment" means, at any time of determination, an
amount equal to (i) the Commitment at such time less (ii) subject to the
third sentence of Section 2.02(a), the aggregate amount of each Advance
outstanding at such time; provided that following a Downgrade Advance or
a Final Advance, the Available Commitment shall be zero.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to
the higher of (i) the base commercial lending rate announced from time
to time by the Liquidity Provider, or (ii) the rate quoted by the
Liquidity Provider, at approximately 11:00 A.M., New York City time, to
dealers in the New York Federal funds market for overnight offering of
dollars by the Liquidity Provider, for deposit plus .75 of 1 percent
(.75%).
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning assigned to such term in the recital of
parties to this Agreement.
"Borrowing" means the making of Advances requested by delivery of
a Notice of Borrowing or pursuant to Section 6.01.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in
Memphis, Tennessee, New York, New York or, so long as any Class B Pass
Through Certificates are outstanding, the city and state in which the
Pass Through Trustee of the Class B Pass Through Trust maintains its
Corporate Trust Office or receives or disburses funds, and, if the
applicable Business Day relates to any Advance or other amount bearing
interest based on the LIBOR Rate, on which dealings in U.S. dollars are
carried on in the London interbank market (a "London Business Day");
provided, however, that if the day in question relates to the
effectiveness of the LIBOR Rate, Business Day shall mean a London
Business Day on which commercial banks are not required or authorized to
close in New York, New York.
"Commitment" means, initially, $13,062,240, as the same may be
reduced from time to time in accordance with Section 2.04(a).
"Downgrade Advance" means an Advance made pursuant to Section
2.02(b).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"Expenses" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses and disbursements
(including, without limitation, reasonable fees and disbursements of
legal counsel and costs of investigation), provided that Expenses shall
not include any Taxes.
"Expiry Date" means July 30, 2019.
"Final Advance" means an Advance made pursuant to Sections 2.02(c)
and 6.01.
"Intercreditor Agreement" means the Intercreditor Agreement dated
the date hereof, among the Pass Through Trustee, the Liquidity Provider,
the liquidity provider under each Liquidity Facility (other than this
Agreement) and the Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Interest Advance" means an Advance made pursuant to Section
2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each
of the following periods:
(i) the period beginning on the date such LIBOR Advance is
made (or is converted from a Base Rate Advance) and ending on the
next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the next
Regular Distribution Date.
"Lending Office" means the lending office of the Liquidity
Provider, presently located at 125 West 55th Street, New York, New York
10019, or such other lending office as the Liquidity Provider from time
to time shall notify the Borrower as its lending office hereunder.
"LIBOR Advance" means an Advance bearing interest at a rate based
upon the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period, the rate
per annum at which deposits in U.S. dollars are offered for the relevant
Interest Period by the Liquidity Provider to prime banks in the London
interbank market at approximately 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period in the principal
amount of the Advance to which such Interest Period is to apply and for
a period of time comparable to such Interest Period, as quoted by the
Liquidity Provider to the Subordination Agent.
"Liquidity Event of Default" means the occurrence of the
following: all of the Equipment Trust Certificates shall have been
either declared to be immediately due and payable or shall not have been
paid at their final maturity. A Liquidity Event of Default shall not
occur upon an automatic acceleration of the Equipment Trust Certificates
as a result of a Federal Express Corporation Bankruptcy Event.
"Liquidity Indemnitee" means (i) the Liquidity Provider, (ii) each
affiliate of the Liquidity Provider, (iii) the respective directors,
officers, employees, agents and servants of the Liquidity Provider and
its affiliates, and (iv) the successors and permitted assigns of the
persons described in clauses (i) through (iii), inclusive.
"Liquidity Provider" has the meaning assigned to such term in the
recital of parties to this Agreement.
"Non-Excluded Tax" has the meaning specified in Section 3.03.
"Notice of Borrowing" has the meaning specified in Section
2.02(d).
"Notice of Replacement Borrower" has the meaning specified in
Section 3.08.
"Participant" has the meaning assigned to such term in Section
7.08(b).
"Performing Note Deficiency" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Trust
Certificates are Performing Equipment Trust Certificates.
"Prospectus" means the basic prospectus included in the
registration statement on Form S-3 (File No. 333-07691) filed by Federal
Express Corporation relating to certain pass through certificates, as
supplemented by the prospectus supplement dated May 22, 1997 reflecting
the terms of the Pass Through Certificates, as such Prospectus may be
amended or supplemented.
"Related Indemnitee" means, with respect to any Liquidity
Indemnitee, its director, officer, employee, agent, affiliate or
employer.
"Replenishment Amount" has the meaning assigned to such term in
Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the Class B Pass Through Certificates, that would be
payable on the Class B Pass Through Certificates on each of the three
successive semiannual Regular Distribution Dates immediately following
such day or, if such day is a Regular Distribution Date, on such day and
the succeeding two semiannual Regular Distribution Dates, in each case
calculated on the basis of the Pool Balance of the Class B Pass Through
Certificates on such day and without regard to expected future payments
of principal on the Class B Pass Through Certificates.
"Termination Date" means the earliest to occur of the following:
(i) the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class B Pass Through Certificates
have been paid in full (or provision has been made for such payment in
accordance with the Intercreditor Agreement and the Pass Through
Agreements) or are otherwise no longer entitled to the benefits of this
Agreement; (iii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that a Replacement Liquidity Facility has been
substituted for this Agreement in full pursuant to Section 3.6(e) of the
Intercreditor Agreement; (iv) the date on which the Liquidity Provider
makes the Final Advance; and (v) the date on which no Advance is or may
(including by reason of reinstatement as herein provided) become
available for a Borrowing hereunder.
"Unpaid Advance" has the meaning assigned to such term in Section
2.05.
(b) Terms Defined in the Intercreditor Agreement. For all
purposes of this Agreement, the following terms shall have the respective
meanings assigned to such terms in the Intercreditor Agreement:
"Class A Pass Through Certificates", "Class B Cash Account",
"Class B Pass Through Certificateholders", "Class B Pass Through
Certificates", "Class B Pass Through Trust", "Class B Supplement",
"Class C Pass Through Certificates", "Closing Date", "Controlling
Party", "Corporate Trust Office", "Distribution Date", "Equipment Trust
Certificates", "Federal Express Corporation", "Federal Express
Corporation Bankruptcy Event", "Indenture", "Investment Earnings",
"Liquidity Facility", "Moody's", "Operative Agreements", "Participation
Agreements", "Pass Through Agreement", "Pass Through Certificate", "Pass
Through Trustee", "Performing Equipment Trust Certificates", "Person",
"Pool Balance", "Rating Agency", "Regular Distribution Dates",
"Replacement Liquidity Facility", "Responsible Officer", "Scheduled
Payment", "Special Payment", "Standard & Poor's", "Stated Interest Rate",
"Subordination Agent", "Taxes", "Threshold Rating", "Triggering Event",
"Underwriters", "Underwriting Agreement" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances. The Liquidity Provider hereby
irrevocably agrees, on the terms and conditions hereinafter set forth, to make
Advances to the Borrower from time to time on any Business Day during the
period from the Effective Date until 12:00 Noon (New York City time) on the
Expiry Date (unless the obligations of the Liquidity Provider shall be earlier
terminated in accordance with the terms of Section 2.04(b)) in an aggregate
amount at any time outstanding not to exceed the Commitment.
Section 2.02 Making the Advances. (a) Interest Advances shall
be made in one or more Borrowings by delivery to the Liquidity Provider of one
or more written and completed Notices of Borrowing in substantially the form
of Annex I attached hereto, signed by a Responsible Officer of the Borrower,
in an amount not exceeding the Available Commitment at such time and shall be
used solely for the payment when due of interest on the Class B Pass Through
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Available Commitment and the amount available
to be borrowed hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next sentence). Upon
repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Available Commitment shall be reinstated by
the amount of such repaid Interest Advance; provided, however, that the
Available Commitment shall not be so reinstated at any time if (i) both (x) a
Triggering Event shall have occurred and be continuing and (y) a Performing
Note Deficiency exists or (ii) a Liquidity Event of Default shall have
occurred and be continuing.
(b) A Downgrade Advance shall be made in a single Borrowing upon
a downgrading of the rating of the Liquidity Provider resulting in the
Liquidity Provider's ratings not meeting the Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement
Liquidity Facility shall have been delivered to the Borrower in accordance
with said Section 3.6(c), by delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex II
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Available Commitment at such time, and shall be used to fund the
Class B Cash Account in accordance with said Section 3.6(c).
(c) A Final Advance shall be made by the Liquidity Provider
without the necessity for a Notice of Borrowing at the option of the Liquidity
Provider on the occurrence of an event described in Section 6.01(a) or 6.01(b)
in an amount equal to the Available Commitment at such time, and shall be used
to fund the Class B Cash Account.
(d) Each Borrowing (other than the making of a Final Advance)
shall be made on notice in writing (a "Notice of Borrowing") in substantially
the form required by Section 2.02(a) or 2.02(b), as the case may be, given not
later than 12:00 Noon (New York City time) on the Business Day prior to the
day of the proposed Borrowing by the Borrower to the Liquidity Provider. Upon
satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall, before 12:00
Noon (New York City time) on the date of such Borrowing or on such later
Business Day specified by the Borrower in such Notice of Borrowing, make
available to the Borrower, in U.S. dollars and in immediately available funds,
the amount of such Borrowing to be paid to the Borrower in accordance with its
payment instructions. If a Notice of Borrowing is delivered by the Borrower
in respect of any Borrowing after 12:00 Noon (New York City time) on a
Business Day, the Liquidity Provider shall, before 12:00 Noon (New York City
time) on the second Business Day next following the day of receipt of such
Notice of Borrowing or on such later Business Day specified by the Borrower in
such Notice of Borrowing, make available to the Borrower, in U.S. dollars and
in immediately available funds, the amount of such Borrowing to be paid to the
Borrower in accordance with its payment instructions. Payments of proceeds of
a Borrowing shall be made by wire transfer of immediately available funds to
the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(e) Upon the making of any Advance requested pursuant to a
Notice of Borrowing, in accordance with the Borrower's payment instructions,
the Liquidity Provider shall be fully discharged of its obligation hereunder
with respect to such Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in respect of
such Notice of Borrowing to the Borrower or to any other person (including the
holder of any Class B Pass Through Certificates or the Pass Through Trustee of
the Class B Pass Through Trust) who makes to the Pass Through Trustee of the
Class B Pass Through Trust or the Borrower a demand for payment with respect
to any Class B Pass Through Certificates. By paying to the Borrower proceeds
of Advances requested by the Borrower in accordance with the provisions of
this Agreement, the Liquidity Provider makes no representation as to, and
assumes no responsibility for, the correctness or sufficiency for any purpose
of the amount of the Advances so made and requested.
Section 2.03 Fees. (a) The Borrower agrees to pay to the
Liquidity Provider a fee equal to .25% of the Commitment (as in effect on
the Effective Date) plus $8,750 payable in U.S. dollars. Such fee shall
be payable on the Effective Date.
(b) The Borrower shall pay, or shall cause to be paid, to the
Liquidity Provider, a fee equal to .275% per annum on the average Available
Commitment from the Effective Date to the earlier of the date on which a
Downgrade Advance is made and the date on which the Commitment terminates.
Such fee shall be payable in arrears on each Regular Distribution Date.
Nothing contained in this Section 2.03(b) shall require the Borrower to pay
any amount under this Section 2.03(b) other than to the extent the Borrower
shall have funds available therefor.
Section 2.04 Reduction or Termination of the Commitment. (a)
Automatic Reductions. Promptly following each date on which the Required
Amount is reduced as a result of a reduction in the Pool Balance of the Class
B Pass Through Certificates or otherwise, the Commitment shall automatically
be reduced to an amount equal to such reduced Required Amount (as calculated
by the Borrower). The Borrower shall give notice of any such automatic
reduction of the Commitment (substantially in the form of Annex IV hereto) to
the Liquidity Provider (with a copy to Federal Express Corporation) within two
Business Days thereof. The failure by the Borrower to furnish any such notice
shall not affect such automatic reduction of the Commitment.
(b) Termination. Upon the making of any Downgrade Advance or
Final Advance hereunder or the occurrence of the Termination Date, the
obligation of the Liquidity Provider to make further Advances hereunder shall
automatically and irrevocably terminate, and the Borrower shall not be
entitled to request any further Borrowing hereunder.
Section 2.05 Repayments of Interest Advances or the Final
Advance. Subject to Sections 2.07 and 2.09, the Borrower hereby agrees to
pay, or to cause to be paid, to the Liquidity Provider on each date on which
the Liquidity Provider shall make an Interest Advance or the Final Advance, an
amount equal to (a) the amount of such Interest Advance or the Final Advance
(any such Interest Advance or the Final Advance, until repaid, is referred to
herein as an "Unpaid Advance"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07. Subject to Sections 2.06, 2.07
and 2.09, unless otherwise waived by the Liquidity Provider, the Borrower
shall be obligated, without notice of an Advance or demand for repayment from
the Liquidity Provider (which notice and demand are hereby waived by the
Borrower), to repay the Liquidity Provider for all Interest Advances and Final
Advances on the same day as made and all Applied Downgrade Advances on the
same day they become Applied Downgrade Advances in accordance with Section
2.06 hereof. The Borrower and the Liquidity Provider agree that the repayment
in full of each Interest Advance and the Final Advance on the date such
Interest Advance or the Final Advance is made and each Applied Downgrade
Advance on the date it becomes an Applied Downgrade Advance is intended to be
a contemporaneous exchange for new value given to the Borrower by the
Liquidity Provider.
Section 2.06 Repayments of Downgrade Advances. (a) Amounts
advanced hereunder in respect of a Downgrade Advance shall be deposited in
the Class B Cash Account, and invested and withdrawn from the Class B Cash
Account, as set forth in Sections 3.6(c), (e) and (f) of the Intercreditor
Agreement. The Borrower agrees to pay to the Liquidity Provider, on each
Regular Distribution Date, commencing on the first Regular Distribution
Date after the making of a Downgrade Advance, interest on the principal
amount of any such Downgrade Advance as provided in Section 3.07; provided,
however, that (i) any distribution to the Liquidity Provider of Investment
Earnings pursuant to Section 3.6(f) of the Intercreditor Agreement shall
constitute a payment of interest on such Downgrade Advance in the amount of
such Investment Earnings (not to exceed the amount specified in Section
3.07) and (ii) amounts in respect of a Downgrade Advance withdrawn from the
Class B Cash Account for the purpose of paying interest on the Class B Pass
Through Certificates in accordance with Section 3.6(f) of the Intercreditor
Agreement (the amount of any such withdrawal being an "Applied Downgrade
Advance") shall be treated as an Interest Advance under this Agreement for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon. Immediately upon the withdrawal of any amounts from the Class B
Cash Account on account of a reduction in the Required Amount, the Borrower
shall repay the Downgrade Advances in a principal amount equal to the
amount of such reduction, plus interest on the principal amount repaid as
provided in Section 3.07.
(b) At any time when an Applied Downgrade Advance (or any
portion thereof) is outstanding, upon the deposit in the Class B Cash
Account of any amount pursuant to clause "third" of Section 2.4(b), clause
"third" of Section 3.2 or clause "fourth" of Section 3.3 of the
Intercreditor Agreement (any such amount being a "Replenishment Amount")
for the purpose of replenishing the balance thereof up to the Required
Amount at such time, (i) the aggregate outstanding principal amount of all
Applied Downgrade Advances shall be automatically reduced by the amount of
such Replenishment Amount and (ii) the principal amount of the outstanding
Downgrade Advance shall be automatically increased by the amount of such
Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, and prior to the effectiveness of any Replacement
Liquidity Facility, the Borrower agrees that all amounts owing to the
Liquidity Provider shall be repaid in full, whether from advances made by the
Replacement Liquidity Provider, from amounts remaining on deposit in the Class
B Cash Account after giving effect to any application of funds therefrom to
any payment of interest on the Class B Pass Through Certificates on the date
of such replacement, or otherwise.
Section 2.07 Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to
the Liquidity Provider in accordance with the terms thereof. Amounts so paid
to the Liquidity Provider shall be applied by the Liquidity Provider in the
order of priority required by the applicable provisions of Articles II and III
of the Intercreditor Agreement.
Section 2.08 Book Entries. The Liquidity Provider shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time
and the amounts of principal and interest payable hereunder and paid from time
to time in respect thereof; provided, however, that the failure by the
Liquidity Provider to maintain such account or accounts shall not affect the
obligations of the Borrower in respect of Advances.
Section 2.09 Payments from Available Funds Only. All payments to
be made by the Borrower under this Agreement shall be made only from amounts
received by it that constitute Scheduled Payments or Special Payments and only
to the extent that the Borrower shall have sufficient income or proceeds
therefrom to enable the Borrower to make payments in accordance with the terms
hereof after giving effect to the priority of payments provisions set forth in
the Intercreditor Agreement. The Liquidity Provider agrees that it will look
solely to such amounts to the extent available for distribution to it as
provided in the Intercreditor Agreement and this Agreement and that the
Borrower, in its individual capacity, is not personally liable to it for any
amounts payable or liability under this Agreement except as expressly provided
in this Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class B Cash Account shall be available to make
payments only to the extent and for the purposes expressly contemplated in
Section 3.6(f) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs. If the Liquidity Provider shall
determine that (a) any change after the date hereof in any law or regulation
or in the interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof or in the
compliance by the Liquidity Provider (or its head office) with any applicable
direction, request or requirement (whether or not having the force of law) of
any central bank or competent governmental or other authority shall either (i)
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets held by, or deposits in or for the account of, or
loans made by, the Liquidity Provider, or (ii) impose on the Liquidity
Provider any other condition regarding this Agreement or any Advance, or (iii)
change the basis of taxation of any amounts payable to the Liquidity Provider
(other than Taxes imposed on the overall net or gross income of the Liquidity
Provider) and (b) the result of any event referred to in the preceding clause
(i), (ii) or (iii) shall be to increase the cost to the Liquidity Provider of
issuing or maintaining its commitment or funding or maintaining Advances
(which increase in cost shall be determined by the Liquidity Provider's
reasonable allocations of the aggregate of such cost increases resulting from
such event), or to reduce the amount of any sum received or receivable by the
Liquidity Provider under this Agreement with respect thereto, then, upon
demand by the Liquidity Provider (such demand to be made not later than 60
days after a Responsible Officer of the Liquidity Provider obtains actual
knowledge of any event referred to in clause (i), (ii) or (iii) above), the
Borrower shall pay, or cause to be paid, to the Liquidity Provider, from time
to time as specified by the Liquidity Provider, additional amounts which shall
be sufficient to compensate the Liquidity Provider for such increased cost or
reduction; provided that if such demand for payment is made after such 60-day
period, the Borrower shall be obligated to pay such additional amounts only
with respect to such increased cost or reduction actually incurred or effected
on or after the 60th day prior to the date of such demand. A certificate as
to such increased cost or reduction (which shall set forth the basis for such
increased cost or reduction) incurred by the Liquidity Provider as a result of
any event mentioned in clause (i), (ii) and (iii) above, prepared in
reasonable detail and submitted by the Liquidity Provider to the Borrower,
shall be conclusive, absent manifest error, as to the amount thereof.
The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any amount payable under this
Section 3.01 that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous in any
material respect to the Liquidity Provider.
Section 3.02 Capital Adequacy. If the Liquidity Provider shall
determine that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its head
office) with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, in each case after the date hereof, has the effect of reducing the
rate of return on the Liquidity Provider's capital as a consequence of issuing
or maintaining its commitment hereunder or its funding or maintaining Advances
to a level below that which the Liquidity Provider could have achieved but for
such adoption, change or compliance (taking into consideration the Liquidity
Provider's policies with respect to capital adequacy) by an amount deemed by
the Liquidity Provider to be material, then, upon demand by the Liquidity
Provider, the Borrower shall pay to the Liquidity Provider, from time to time
as specified by the Liquidity Provider, additional amounts which shall be
sufficient to compensate the Liquidity Provider for such reduction in respect
of issuing or maintaining its commitment hereunder or its funding or
maintaining Advances. A certificate as to such additional amount describing
the event which has the effect of reducing the rate of return on the Liquidity
Provider's capital, prepared in reasonable detail and submitted by the
Liquidity Provider to the Borrower, shall be conclusive, absent manifest
error, as to the amount thereof.
The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any amount payable under this
Section 3.02 that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous in any
material respect to the Liquidity Provider.
Section 3.03 Payments Free of Deductions. All payments made by
the Borrower under this Agreement shall be made free and clear of, and
without reduction for or on account of, any present or future stamp or
other taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, restrictions or conditions of any nature whatsoever now or
hereafter imposed, levied, collected, withheld or assessed, excluding any
Taxes imposed on the overall net income of the Liquidity Provider and
excluding United States federal income tax withholding to the extent such
withholding is, or would be, actually imposed upon payments to the
Liquidity Provider as of the date of this Agreement (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "Non-Excluded Tax"). If any Non-Excluded Taxes are
required to be withheld from any amounts payable to the Liquidity Provider
under this Agreement, the amounts so payable to the Liquidity Provider
shall be increased to the extent necessary to yield to the Liquidity
Provider (after payment of all Non-Excluded Taxes and taxes imposed on the
receipt of such increase) interest or any other such amounts payable under
this Agreement at the rates or in the amounts specified in this Agreement.
Whenever any Non-Excluded Tax is payable by the Borrower, promptly
thereafter the Borrower shall send the Liquidity Provider certified copies
of tax receipts evidencing such payment by the Borrower. The Liquidity
Provider agrees to provide to the Borrower on or prior to the Effective
Date, and from time to time thereafter after the occurrence of any event
requiring a change in the most recent form previously delivered by it (and
prior to the immediately following due date of any payment by the Borrower
hereunder), to the extent that the Liquidity Provider is legally entitled
to do so, two original Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that the Liquidity Provider is completely
exempt from United States withholding tax on payments pursuant to this
Agreement.
The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any amount payable under this
Section 3.03 that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous in any
material respect to the Liquidity Provider.
Section 3.04 Payments. The Borrower shall make or cause to be
made each payment to the Liquidity Provider under this Agreement so as to
cause the same to be received by the Liquidity Provider not later than 1:00
P.M. (New York City time) on the day when due. The Borrower shall make all
such payments in lawful money of the United States of America, to the
Liquidity Provider in immediately available funds, by wire transfer to The
Bank of New York, One Wall Street, New York, New York 10286, ABA No.
021-000-018, for the account of Kredietbank New York, Account No. 802-3015618,
Attention: Loan Administration (referencing Federal Express Corporation
Liquidity Facility).
Section 3.05 Computations. All computations of interest based on
the Base Rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, and all computations of (x) interest based on the LIBOR Rate and
(y) fees payable to the Liquidity Provider shall be made on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest is payable.
Section 3.06 Payment on Non-Business Days. Whenever any payment
to be made hereunder (other than a payment on LIBOR Advances) becomes due and
payable on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day and interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Advance
becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the
result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding
Business Day.
Section 3.07 Interest. (a) The Borrower shall pay, or shall
cause to be paid, interest on (i) the unpaid principal amount of each Advance
from and including the date of such Advance (or, in the case of an Applied
Downgrade Advance, from and including the date on which the amount thereof was
withdrawn from the Class B Cash Account to pay interest on the Class B Pass
Through Certificates) to but excluding the date such principal amount shall be
paid in full and (ii) any other amount due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by law,
installments of interest on Advances or any such other amount) which is not
paid when due (whether at stated maturity, by acceleration or otherwise) from
and including the due date thereof to but excluding the date such amount is
paid in full, in each such case, at a fluctuating interest rate per annum for
each day equal to the Applicable Liquidity Rate for such Advance or such other
amount as in effect for such day, but in no event at a rate per annum greater
than the maximum rate permitted by applicable law; provided, however, that, if
at any time the otherwise applicable interest rate as set forth in this
Section 3.07 shall exceed the maximum rate permitted by applicable law, then
any subsequent reduction in such interest rate will not reduce the rate of
interest payable pursuant to this Section 3.07 below the maximum rate
permitted by applicable law until the total amount of interest accrued equals
the amount of interest that would have accrued if such otherwise applicable
interest rate as set forth in this Section 3.07 had at all times been in
effect. Nothing contained in this Section 3.07 shall require the Borrower to
pay any amount under this Section 3.07 other than to the extent the Borrower
shall have funds available therefor.
(b) Each Advance will be either a Base Rate Advance or a LIBOR
Advance as provided in this Section. Each such Advance will be a Base Rate
Advance for the period from the date of its borrowing to (but excluding) the
third Business Day following the Liquidity Provider's receipt of the Notice of
Borrowing for such Advance. Thereafter, such Advance shall be a LIBOR
Advance; provided that the Final Advance shall, until repaid in full, be a
Base Rate Advance and the Borrower may not convert the Final Advance into a
LIBOR Advance.
(c) Each LIBOR Advance shall bear interest during each Interest
Period at a per annum rate equal to the LIBOR Rate for such Interest Period
plus the Applicable Margin for such LIBOR Advance, payable in arrears on the
last day of such Interest Period and, in the event of the payment of principal
of such LIBOR Advance on a day other than such last day, on the date of such
payment (to the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a per annum
rate equal to the Base Rate plus the Applicable Margin for such Base Rate
Advance, payable in arrears on each Regular Distribution Date and, in the
event of the payment of principal of such Base Rate Advance on a day other
than a Regular Distribution Date, on the date of such payment (to the extent
of interest accrued on the amount of principal repaid).
(e) [Intentionally Omitted]
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by
applicable law, installments of interest on Advances) shall bear interest at
the Base Rate.
(g) Each change in the Base Rate shall become effective
immediately.
Section 3.08 Replacement of Borrower. Subject to Section
5.02(b), from time to time, upon the effective date and time specified in a
written and completed Notice of Replacement Borrower in substantially the form
of Annex III attached hereto (a "Notice of Replacement Borrower") delivered to
the Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09 Funding Loss Indemnification. The Borrower shall
pay to the Liquidity Provider, upon the request of the Liquidity Provider,
such amount or amounts as shall be sufficient (in the reasonable opinion of
the Liquidity Provider) to compensate it for any loss, cost, or expense
incurred as a result of:
(a) Any payment or prepayment of a LIBOR Advance on a date other
than the last day of the Interest Period for such Advance;
(b) Any failure by the Borrower to borrow or convert, as the
case may be, a LIBOR Advance on the date for borrowing or conversion, as
the case may be, specified in the relevant notice under Section 2.02 or
3.07; or
(c) Any conversion of a LIBOR Advance to a Base Rate Advance
other than on the last day of the Interest Period for such Advance.
Section 3.10 Illegality. Notwithstanding any other provision in
this Agreement, if any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Liquidity Provider (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for the Liquidity Provider (or its Lending Office) to
maintain or fund its LIBOR Advances, then upon notice to the Borrower by the
Liquidity Provider, the outstanding principal amount of the LIBOR Advances
shall be converted to Base Rate Advances (a) immediately upon demand of the
Liquidity Provider, if such change or compliance with such request, in the
judgment of the Liquidity Provider, requires immediate repayment; or (b) at
the expiration of the last Interest Period to expire before the effective date
of any such change or request. In the event any change of the nature
described in the preceding sentence shall make it unlawful or impossible for
the Liquidity Provider (or its Lending Office) to maintain or fund its Base
Rate Advances, the Liquidity Provider shall have the right to cause a
Replacement Liquidity Facility to be substituted for this Agreement, subject
to (i) the satisfaction of the conditions precedent to the effectiveness of,
and the other provisions regarding, a Replacement Liquidity Facility set forth
in Section 3.6(e) of the Intercreditor Agreement and (ii) such Replacement
Liquidity Facility and Replacement Liquidity Provider being reasonably
acceptable to Federal Express Corporation.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section
2.01. Section 2.01 of this Agreement shall become effective on and as of the
first date (the "Effective Date") on which the following conditions precedent
have been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, each dated such date (except for
those documents delivered pursuant to paragraphs (v) and (vii) of this
Section 4.01(a)), and each in form and substance satisfactory to the
Liquidity Provider:
(i) This Agreement duly executed on behalf of the
Borrower;
(ii) The Intercreditor Agreement duly executed on behalf
of each of the parties thereto;
(iii) Counterparts (or certified copies thereof) of each
of the Operative Agreements (other than this Agreement and the
Intercreditor Agreement) which, when taken together, bear the
signatures of all of the respective parties thereto and which
are in full force and effect in accordance with their
respective terms;
(iv) A copy of the Prospectus and specimen copies of the
Class B Pass Through Certificates;
(v) Evidence that, on the Effective Date, the Class A Pass
Through Certificates, the Class B Pass Through Certificates and
the Class C Pass Through Certificates will receive long-term
credit ratings from Moody's of not lower than Aa3, A1 and Baa1,
respectively, and from Standard & Poor's of not lower than AAA,
AA- and BBB+, respectively;
(vi) An executed or certified copy of each document,
instrument, certificate and opinion delivered pursuant to the
Class B Supplement, the Intercreditor Agreement, the Participation
Agreements and the other Operative Agreements (together with, in
the case of each such opinion (unless such opinion is addressed to
the Liquidity Provider), other than the opinion of counsel for the
Underwriters, a letter from the counsel rendering such opinion to
the effect that the Liquidity Provider is entitled to rely on such
opinion as if it were addressed to the Liquidity Provider);
(vii) Evidence that there shall have been made and shall be
in full force and effect, all filings, recordings and/or
registrations, and there shall have been given or taken any notice
or other similar action as may be reasonably necessary or, to the
extent reasonably requested by the Liquidity Provider, reasonably
advisable, in order to establish, perfect, protect and preserve
the right, title and interest, remedies, powers, privileges, liens
and security interests of, or for the benefit of, the Pass Through
Trustee and the Liquidity Provider created by the Operative
Agreements;
(viii) Copies of the appraisals attached as exhibits to the
Prospectus; and
(ix) A letter from Federal Express Corporation agreeing to
provide to the Liquidity Provider the periodic financial reports
referred to in Section 4.03 of the Pass Through Agreements; and
(x) Such other documents, instruments, opinions and
approvals (and, if requested by the Liquidity Provider, certified
duplicates or executed copies thereof) as the Liquidity Provider
shall have reasonably requested.
(b) The following statements shall be true and shall be deemed
to have been represented by each party (other than clause (ii) below,
which shall be deemed to have been represented only by Federal Express
Corporation) on and as of the Effective Date:
(i) The representations and warranties of such Person
contained in each Participation Agreement are true and correct on
and as of the Effective Date as though made on and as of the
Effective Date; and
(ii) No event has occurred and is continuing, or would
result from the entering into of this Agreement or the making of
any Advance, which constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full
of all fees and other sums required to be paid to or for the account of
the Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Pass Through
Certificates under the Pass Through Agreements shall have been
satisfied, all conditions precedent to the effectiveness of the other
Liquidity Facilities shall have been satisfied, and all conditions
precedent to the purchase of the Pass Through Certificates by the
Underwriters under the Underwriting Agreement shall have been satisfied
(except for any of such conditions precedent under the Underwriting
Agreement that shall have been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the
date hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness
of Section 2.01 have been satisfied or waived (other than this Section
4.01(e)).
Section 4.02 Conditions Precedent to Borrowing. The obligation
of the Liquidity Provider to make an Advance on the occasion of each Borrowing
shall be subject to the conditions precedent that the Effective Date shall
have occurred and, except in the case of a Final Advance, prior to the date of
such Borrowing, the Borrower shall have delivered a Notice of Borrowing which
conforms to the terms and conditions of this Agreement and has been completed
as may be required by the relevant form of the Notice of Borrowing for the
type of Advance requested.
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower. So long as
any Advance shall remain unpaid or the Liquidity Provider shall have any
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements. Punctually pay or
cause to be paid all amounts payable by it under this Agreement and the
other Operative Agreements and observe and perform in all material
respects the conditions, covenants and requirements applicable to it
contained in this Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity Provider
with reasonable promptness, such other information and data with respect
to the transactions contemplated by the Operative Agreements as from
time to time may be reasonably requested by the Liquidity Provider; and
permit the Liquidity Provider, upon reasonable notice, to inspect the
Borrower's books and records with respect to such transactions and to
meet with officers and employees of the Borrower to discuss such
transactions.
Section 5.02 Negative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will not, without the
written consent of the Liquidity Provider (such consent not to be unreasonably
withheld):
(a) Amendments. Modify, amend or supplement, or give any
consent to any modification, amendment or supplement or make any waiver
with respect to, any provision of the Pass Through Agreements, except
for any supplemental agreement to the Pass Through Agreements provided
for in Section 11.01 thereof.
(b) Borrower. Appoint or permit or suffer to be appointed any
successor Borrower.
ARTICLE VI
FINAL ADVANCE
Section 6.01 Final Advance. If (a) both (i) a Triggering Event
shall have occurred and be continuing and (ii) a Performing Note Deficiency
exists or (b) a Liquidity Event of Default shall have occurred and be
continuing, the Liquidity Provider may, in its discretion, make a Final
Advance whereupon (i) the Liquidity Provider shall have no further obligation
to make Advances hereunder, (ii) all other outstanding Advances shall be
automatically converted into Final Advances for purposes of determining the
Applicable Liquidity Rate for interest payable thereon, and (iii) subject to
Sections 2.07 and 2.09, all Advances, any accrued interest thereon and any
other amounts outstanding hereunder shall become immediately due and payable
to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Liquidity Provider, and, in the case of an amendment, the
Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 7.02 Notices, Etc. Except as otherwise expressly
provided herein, all notices and other communications provided for hereunder
shall be in writing (including telecopier and mailed or delivered or sent by
telecopier):
Borrower: First Security Bank, National Association
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Services
Telephone: (801) 246-5630
Telecopy: (801) 246-5053
Liquidity
Provider: Kredietbank N.V.
New York Branch
125 West 55th Street,
New York, New York 10019
Attention: General Manager
Telephone: (212) 541-0600
Telecopy: (212) 956-5580
or, as to each of the foregoing, at such other address as shall be designated
by such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when
deposited in the mails addressed as specified above, and (iii) if given by
other means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the provisions of
Articles II and III hereof shall not be effective until received by the
Liquidity Provider. A copy of all notices delivered hereunder to either party
shall in addition be delivered to each of the parties to the Participation
Agreements at their respective addresses set forth therein.
Section 7.03 No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 7.04 Further Assurances. The Borrower agrees to do, upon
request, such further acts and things and to execute and deliver to the
Liquidity Provider such additional assignments, agreements, powers and
instruments as the Liquidity Provider may reasonably require or deem advisable
to carry into effect the purposes of this Agreement and the other Operative
Agreements or to better assure and confirm unto the Liquidity Provider its
rights, powers and remedies hereunder and under the other Operative Agreements.
Section 7.05 Indemnification; Survival of Certain Provisions.
The Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Articles 8 and 9 of the Participation Agreements. In
addition, the Borrower agrees to indemnify, protect, defend and hold harmless
the Liquidity Provider from, against and in respect of, and shall pay on
demand, all Expenses of any kind or nature whatsoever, whether arising before,
on or after the date hereof, that may be imposed, incurred by or asserted
against any Liquidity Indemnitee, in any way relating to, resulting from, or
arising out of or in connection with, this Agreement, the Intercreditor
Agreement or the Participation Agreements; provided, however, that the
Borrower shall not be required to indemnify, protect, defend and hold harmless
any Liquidity Indemnitee in respect of any Expense of such Liquidity
Indemnitee (i) to the extent such Expense is attributable to the gross
negligence or willful misconduct of such Liquidity Indemnitee or any Related
Indemnitee, (ii) that is ordinary and usual operating overhead expense or
(iii) to the extent such Expense is attributable to the failure by such
Liquidity Indemnitee or its Related Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in
any Operative Agreement. The indemnities contained in Articles 8 and 9 of the
Participation Agreements, and the provisions of Sections 3.01, 3.02, 3.03,
7.05 and 7.07, shall survive the termination of this Agreement.
Section 7.06 Liability of the Liquidity Provider. (a) Neither
the Liquidity Provider nor any of its officers or directors shall be liable or
responsible for: (i) the use which may be made of the Advances or any acts or
omissions of the Borrower or any beneficiary or transferee in connection
therewith; (ii) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; or (iii) the making
of Advances by the Liquidity Provider against delivery of a Notice of
Borrowing and other documents which do not comply with the terms hereof;
provided, however, that the Borrower shall have a claim against the Liquidity
Provider, and the Liquidity Provider shall be liable to the Borrower, to the
extent of any damages suffered by the Borrower which were the result of (A)
the Liquidity Provider's willful misconduct or negligence in determining
whether documents presented hereunder comply with the terms hereof, or (B) any
breach by the Liquidity Provider of any of the terms of this Agreement,
including, but not limited to, the Liquidity Provider's failure to make lawful
payment hereunder after the delivery to it by the Borrower of a Notice of
Borrowing strictly complying with the terms and conditions hereof.
(b) The Liquidity Provider shall not be liable or responsible in
any respect for (i) any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with this Agreement or any Notice of Borrowing
delivered hereunder, or (ii) any action, inaction or omission which may be
taken by it in good faith, absent willful misconduct or negligence (in which
event the extent of the Liquidity Provider's potential liability to the
Borrower shall be limited as set forth in the immediately preceding
paragraph), in connection with this Agreement or any Notice of Borrowing.
Section 7.07 Costs, Expenses and Taxes. The Borrower agrees to
pay, or cause to be paid (A) on the Effective Date and on such later date
or dates on which the Liquidity Provider shall make demand, all reasonable
out-of-pocket costs and expenses of the Liquidity Provider in connection
with the preparation, negotiation, execution, delivery, filing and
recording of this Agreement, any other Operative Agreement and any other
documents which may be delivered in connection with this Agreement,
including, without limitation, the reasonable fees and expenses of outside
counsel for the Liquidity Provider and (B) on demand, all reasonable costs
and expenses of the Liquidity Provider (including reasonable counsel fees
and expenses) in connection with (i) the enforcement of this Agreement or
any other Operative Agreement, (ii) the modification or amendment of, or
supplement to, this Agreement or any other Operative Agreement or such
other documents which may be delivered in connection herewith or therewith
(whether or not the same shall become effective) or (iii) any action or
proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any
amount under this Agreement, the Intercreditor Agreement or any other
Operative Agreement or otherwise affecting the application of funds in the
Cash Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable
in connection with the execution, delivery, filing and recording of this
Agreement, any other Operative Agreement and such other documents, and
agrees to save the Liquidity Provider harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes or fees.
Section 7.08 Binding Effect; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower and the
Liquidity Provider and their respective successors and assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor the Borrower shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of the other party,
subject to the requirement of Section 7.08(b). The Liquidity Provider may
grant participations herein or in any of its rights or security hereunder and
under the other Operative Agreements to such Persons as the Liquidity Provider
may in its sole discretion select, subject to the requirement of Section
7.08(b). No such participation by the Liquidity Provider, however, will
relieve the Liquidity Provider of its obligations hereunder. In connection
with any participation or any proposed participation, the Liquidity Provider
may disclose to the participant or the proposed participant any information
that the Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges and agrees
that the Liquidity Provider's source of funds may derive in part from its
participants. Accordingly, references in this Agreement and the other
Operative Agreements to determinations, reserve and capital adequacy
requirements, increased costs, reduced receipts and the like as they pertain
to the Liquidity Provider shall be deemed also to include those of each of its
participants (subject, in each case, to the maximum amount that would have
been incurred by or attributable to the Liquidity Provider directly if the
Liquidity Provider had not participated the interest).
(b) If, pursuant to subsection (a) above, the Liquidity Provider
sells any participation to any bank or other entity (each, a "Participant"),
then, concurrently with the effectiveness of such participation, the
Participant shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld by the
Borrower or the Liquidity Provider with respect to any payments to be made to
such Participant in respect of this Agreement, (ii) furnish to the Liquidity
Provider and the Borrower either (x) a statement that it is incorporated under
the laws of the United States or a state thereof or (y) if it is not so
incorporated, two copies of a properly completed United States Internal
Revenue Service Form 4224 or Form 1001, as appropriate, or other applicable
form, certificate or document prescribed by the Internal Revenue Service
certifying, in each case, such Participant's entitlement to a complete
exemption from United States federal withholding tax in respect to any and all
payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the
date that any such form expires or becomes obsolete or (B) after the
occurrence of any event requiring a change in the most recent form previously
delivered by it and prior to the immediately following due date of any payment
by the Borrower hereunder, certifying in the case of a Form 1001 or Form 4224
that such Participant is entitled to a complete exemption from United States
federal withholding tax on payments under this Agreement. Unless the Borrower
has received forms or other documents reasonably satisfactory to it indicating
that payments hereunder are not subject to United States federal withholding
tax, the Borrower will withhold taxes as required by law from such payments at
the applicable statutory rate without any obligation to gross-up or indemnify
pursuant to Section 3.03.
(c) Notwithstanding the other provisions of this Section 7.08,
the Liquidity Provider may assign and pledge all or any portion of the
Advances owing to it to any Federal Reserve Bank or the United States Treasury
as collateral security pursuant to Regulation A of the Board of Governors of
the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such assigned Advances
made by the Borrower to the Liquidity Provider in accordance with the terms of
this Agreement shall satisfy the Borrower's obligations hereunder in respect
of such assigned Advance to the extent of such payment. No such assignment
shall release the Liquidity Provider from its obligations hereunder.
Section 7.09 Severability. Any provision of this Agreement which
is prohibited, unenforceable or not authorized in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
Section 7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial.
(a) Each of the parties hereto hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative
Agreement, or for recognition and enforcement of any judgment in
respect hereof or thereof, to the nonexclusive general jurisdiction
of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and the
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) if such party does not maintain an office for the
transaction of its business in New York, agrees that service of process
in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to each party hereto at its address set
forth in Section 7.02, or at such other address of which the Liquidity
Provider shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS
BEING ESTABLISHED, including, without limitation, contract claims, tort
claims, breach of duty claims and all other common law and statutory claims.
The Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such
legal counsel. THIS WAIVER CANNOT BE MODIFIED ORALLY.
Section 7.12 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13 Entirety. This Agreement and the other Operative
Agreements constitute the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof and supersede all prior
understandings and agreements of such parties.
Section 7.14 Headings; Section References. Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose. Unless the
context otherwise requires or otherwise indicated herein, all Section
references in this Agreement are references to Sections hereof.
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE
LIQUIDITY PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO
DELIVER NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL
BE UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first set forth above.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By: ____________________________________
Name:
Title:
KREDIETBANK N.V.,
NEW YORK BRANCH,
as Liquidity Provider
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
Annex I to Irrevocable
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
First Security Bank, National Association, acting not in its
individual capacity but solely as Subordination Agent, as borrower (the
"Borrower"), hereby certifies to KREDIETBANK N.V., acting through its New
York Branch (the "Liquidity Provider"), with reference to the Irrevocable
Revolving Credit Agreement Class B Pass Through Certificates dated as of
May 1, 1997, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of an Interest Advance by the Liquidity Provider to be used for
the payment of interest on the Class B Pass Through Certificates which
was payable on the Distribution Date falling on __________ in accordance
with the terms and provisions of the Class B Supplement and the Class B
Pass Through Certificates and has not been paid pursuant to clause
fourth of Section 3.2 of the Intercreditor Agreement or clause sixth of
Section 3.3 of the Intercreditor Agreement, which Advance is requested
to be made on ___________________.
(3) The amount of the Interest Advance requested hereby (i) is
$________, to be applied in respect of the payment of interest which
was due and payable on the Class B Pass Through Certificates on such
Distribution Date, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class A Pass Through
Certificates, the Class B Pass Through Certificates or the Class C
Pass Through Certificates, or interest on the Class A Pass Through
Certificates or the Class C Pass Through Certificates, (iii) was
computed in accordance with the provisions of the Class B Pass
Through Certificates, the Class B Supplement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule
I), (iv) does not exceed the Available Commitment on the date hereof,
and (v) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance
with the terms of Sections 3.2 or 3.3 of the Intercreditor Agreement, as
the case may be, (b) no portion of such amount shall be applied by the
Borrower for any other purpose and (c) no portion of such amount until
so applied shall be commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested
hereby be a Base Rate Advance and that such Base Rate Advance be
converted into a LIBOR Rate Advance on the third Business Day following
your receipt of this notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Available Commitment by an
amount equal to the amount of the Interest Advance requested to be made hereby
as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the
amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the __ day of ______________, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By: ____________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II to Irrevocable
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
FIRST SECURITY BANK, NATIONAL ASSOCIATION, acting not in its
individual capacity but solely as Subordination Agent, as borrower (the
"Borrower"), hereby certifies to KREDIETBANK N.V., acting through its New
York Branch (the "Liquidity Provider"), with reference to the Irrevocable
Revolving Credit Agreement Class A Pass Through Certificates dated as of May
1, 1997, between the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined herein being
used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of the Downgrade Advance by the Liquidity Provider to be used for
the funding of the Class A Cash Account in accordance with Section
3.6(c) of the Intercreditor Agreement by reason of the downgrading of
the debt rating of the Liquidity Provider issued by either Rating Agency
below the applicable Threshold Rating, which Advance is requested to be
made on ____________.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_____, which equals the Available Commitment on the date hereof and is
to be applied in respect of the funding of the Class B Cash Account in
accordance with Section 3.6(c) of the Intercreditor Agreement, (ii) does
not include any amount with respect to the payment of the principal of,
or premium on, the Class B Pass Through Certificates, or principal of,
or interest or premium on, the Class A Pass Through Certificates or the
Class C Pass Through Certificates, (iii) was computed in accordance with
the provisions of the Class B Pass Through Certificates, the Class B
Supplement and the Intercreditor Agreement (a copy of which computation
is attached hereto as Schedule I), and (iv) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class
B Cash Account and apply the same in accordance with the terms of
Section 3.6(c) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other
funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested
hereby be a Base Rate Advance and that such Base Rate Advance be
converted into a LIBOR Rate Advance on the third Business Day following
your receipt of this notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of
the Liquidity Provider to make further Advances under the Liquidity Agreement;
and (B) following the making by the Liquidity Provider of the Downgrade
Advance requested by this Notice of Borrowing, the Borrower shall not be
entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the __ day of ______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its
individual capacity but solely as
Subordination Agent, as Borrower
By: ____________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
Annex III to Irrevocable
Revolving Credit Agreement
NOTICE OF REPLACEMENT BORROWER
[Date]
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
[Name of Transferee]
[Address of Transferee]
all rights of the undersigned as Borrower under the Liquidity Agreement
referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement.
By this transfer, all rights of the undersigned as Borrower under
the Liquidity Agreement are transferred to the transferee and the transferee
shall hereafter have the sole rights as Borrower thereunder. The undersigned
shall pay any costs and expenses of such transfer, including, but not limited
to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By: ____________________________________
Name:
Title:
Annex IV Irrevocable
Revolving Credit Agreement
NOTICE OF AUTOMATIC REDUCTION OF COMMITMENT
[Date]
Ladies and Gentlemen:
The undersigned, duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby notifies Kredietbank N.V., acting
through its New York Branch (the "Liquidity Provider"), with reference to the
Irrevocable Revolving Credit Agreement Class A Pass Through Certificates dated
as of May 1, 1997, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that, pursuant to
Section 2.04(a) of the Liquidity Agreement, the Commitment has been
automatically reduced to $____________.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Automatic Reduction of Commitment as of the ___day of _______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By: ____________________________________
Name:
Title:
TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust No. N670FE)
Dated as of May 1, 1997
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 777, REGISTRATION NO. N670FE
TABLE OF CONTENTS
Page
----
Initial Recitals......................................................... 1
Granting Clause.......................................................... 2
Habendum Clause.......................................................... 6
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................. 8
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.............. 8
Section 2.02. Execution of Certificates................................ 9
Section 2.03. Certificate of Authentication............................ 9
Section 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest........................ 9
Section 2.05. Payments from Trust Indenture Estate Only................ 12
Section 2.06. Registration, Transfer and Exchange...................... 13
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates........................................... 14
Section 2.08. Cancellation of Certificates; Destruction Thereof........ 15
Section 2.09. Temporary Certificates................................... 15
Section 2.10. Termination of Interest in Trust Indenture Estate........ 16
Section 2.11. Certificates in Respect of Replacement Aircraft.......... 16
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements................................... 16
Section 2.13. Establishment of Collateral Account...................... 16
Section 2.14. Investment of Funds on Deposit in the Collateral Account. 17
Section 2.15. Release of Debt Portion and Lien on the Collateral Account
and the Liquid Collateral on Delivery Date............. 18
Section 2.16. Cut-Off Date............................................. 19
Section 2.17. Subordination............................................ 19
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.... 19
Section 3.02. Offices for Payments, etc................................ 20
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee................................................ 20
Section 3.04. Paying Agents............................................ 20
Section 3.05. Covenants of SSB and the Owner Trustee................... 20
Section 3.06. [Reserved]............................................... 21
Section 3.07. Disposal of Trust Indenture Estate....................... 21
Section 3.08. No Representations or Warranties as to Aircraft or
Documents.............................................. 22
Section 3.09. Further Assurances; Financing Statements................. 22
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates.................. 23
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution.................................. 23
Section 5.02. Event of Loss and Replacement; Prepayment................ 24
Section 5.03. Payment After Indenture Event of Default, etc............ 25
Section 5.04. Certain Payments......................................... 27
Section 5.05. Other Payments........................................... 28
Section 5.06. Payments to Owner Trustee................................ 28
Section 5.07. Application of Payments.................................. 28
Section 5.08. Investment of Amounts Held by Indenture Trustee.......... 29
Section 5.09. Withholding Taxes........................................ 30
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity.......................... 30
Section 6.02. Prepayment of Certificates............................... 30
Section 6.03. Notice of Prepayment to Holders.......................... 32
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price.................................................. 33
Section 6.05. Certificates Payable on Prepayment Date.................. 33
Section 6.06. Mandatory Sinking Fund Redemption........................ 33
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default............................... 35
Section 7.02. Remedies................................................. 38
Section 7.03. Return of Aircraft, etc.................................. 40
Section 7.04. Indenture Trustee May Prove Debt......................... 42
Section 7.05. Remedies Cumulative...................................... 44
Section 7.06. Suits for Enforcement.................................... 44
Section 7.07. Discontinuance of Proceedings............................ 45
Section 7.08. Limitations on Suits by Holders.......................... 45
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute Certain
Suits.................................................. 45
Section 7.10. Control by Holders....................................... 46
Section 7.11. Waiver of Past Indenture Default......................... 46
Section 7.12. Notice of Indenture Default.............................. 47
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.... 47
Section 8.02. Owner Participant's Right to Elect to Prepay or Purchase
the Certificates....................................... 50
Section 8.03. Certain Rights of Owner Participant...................... 52
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts..................................... 53
Section 9.02. Duties and Responsibilities of the Indenture Trustee; During
an Indenture Event of Default; Prior to an Indenture
Event of Default....................................... 54
Section 9.03. Certain Rights of the Indenture Trustee.................. 56
Section 9.04. Indenture Trustee Not Responsible for Recitals, Disposition
of Certificates or Application of Proceeds
Thereof................................................ 57
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc....................................... 57
Section 9.06. Moneys Held by Indenture Trustee......................... 57
Section 9.07. Right of Indenture Trustee to Rely on Officer's Certificate,
etc.................................................... 57
Section 9.08. Replacement Airframes and Replacement Engines............ 58
Section 9.09. Indenture and Security Agreement Supplement for
Replacements........................................... 61
Section 9.10. Effect of Replacement.................................... 61
Section 9.11. Compensation............................................. 61
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders..................... 62
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates.......................................... 62
Section 10.03. Holders to Be Treated as Owners......................... 63
Section 10.04. Certificates Owned by Owner Trustee and the Lessee Deemed
Not Outstanding....................................... 63
Section 10.05. Right of Revocation of Action Taken..................... 64
Section 10.06. ERISA................................................... 64
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee....................... 66
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment Successor................................. 66
Section 12.03. Persons Eligible for Appointment as Indenture Trustee... 67
Section 12.04. Acceptance of Appointment by Successor Trustee.......... 67
Section 12.05. Merger, Conversion, Consolidation or Succession to Business
of Indenture Trustee.................................. 68
Section 12.06. Appointment of Separate Trustees........................ 69
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders...... 71
Section 13.02. Supplemental Indentures With Consent of Holders......... 72
Section 13.03. Effect of Supplemental Indenture........................ 74
Section 13.04. Documents to Be Given to Indenture Trustee.............. 74
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures............................................ 74
Section 13.06. No Request Necessary for Lease Supplement or Indenture and
Security Agreement Supplement......................... 74
Section 13.07. Notices to Liquidity Providers.......................... 74
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture............................................. 75
Section 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates............................... 76
Section 14.03. Repayment of Moneys Held by Paying Agent................ 76
Section 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven
Months................................................ 76
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting................................ 77
Section 15.02. No Legal Title to Trust Indenture Estate in Holders..... 77
Section 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding............................................... 77
Section 15.04. Indenture for Benefit of Owner Trustee, Indenture Trustee,
Owner Participant, Holders and Liquidity
Providers............................................. 77
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease................................................. 78
Section 15.06. Notices................................................. 78
Section 15.07. Officer's Certificates and Opinions of Counsel; Statements
to Be Contained Therein............................... 79
Section 15.08. Severability............................................ 80
Section 15.09. No Oral Modifications or Continuing Waivers............. 80
Section 15.10. Successors and Assigns.................................. 80
Section 15.11. Headings................................................ 80
Section 15.12. Normal Commercial Relations............................. 80
Section 15.13. Governing Law; Counterparts............................. 80
Exhibit A -- Form of Indenture and Security Agreement Supplement
Exhibit B -- Form of Certificate
Schedule I -- [Reserved]
Schedule II -- Definitions
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N670FE)
TRUST INDENTURE AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION
TRUST NO. N670FE) dated as of May 1, 1997 (the "Indenture"), between STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, except as otherwise
specifically set forth herein (when acting in such individual capacity,
"SSB"), but solely as owner trustee (the "Owner Trustee") under the Trust
Agreement, as defined herein, and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, as Indenture Trustee hereunder (the "Indenture
Trustee").
W I T N E S S E T H:
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and SSB have, immediately prior to the
execution and delivery of this Indenture, entered into a Trust Agreement
(Federal Express Corporation Trust No. N670FE) dated as of the date hereof (as
amended or otherwise modified from time to time in accordance with the
provisions thereof and of the Participation Agreement, the "Trust Agreement"),
whereby, among other things, SSB has declared a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Lien of this
Indenture for the use and benefit of, and with the priority of payment to, the
holders of the Certificates issued hereunder, and the Owner Trustee is
authorized and directed to execute and deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture, among other
things (i) to provide for the issuance by the Owner Trustee of Certificates as
provided in the Participation Agreement, and (ii) to provide for the
assignment, mortgage and pledge by the Owner Trustee to the Indenture Trustee,
as part of the Trust Indenture Estate hereunder of the Owner Trustee's right,
title and interest in the Liquid Collateral and after the Delivery Date for
the assignment, mortgage and pledge by the Owner Trustee to the Indenture
Trustee, as part of the Trust Indenture Estate hereunder, of among other
things, certain of the Owner Trustee's estate, right, title and interest in
and to the Aircraft and the Indenture Documents and certain payments and other
amounts (other than Excepted Payments) received hereunder or thereunder in
accordance with the terms hereof, as security for, among other things, the
Owner Trustee's obligations to the Certificate Holders and for the benefit and
security of such Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee, and authenticated, issued and delivered
hereunder, the valid obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of the Owner Trustee, enforceable in accordance
with its terms, have been done and performed and have happened.
NOW, THEREFORE, the parties agree as follows:
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual promises contained
herein and to secure (i) the prompt payment of the principal of and Make-Whole
Premium, if any, and interest on, and all other amounts due with respect to,
all the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of the Certificates, and the
prompt payment of any and all amounts from time to time owing under the
Participation Agreement by the Owner Trustee, the Owner Participant or the
Lessee to the Holders (collectively the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions of this Indenture, and in
consideration of the premises and of the covenants in this Indenture and in
the Certificates and of the purchase of the Certificates by their Holders,
and of the sum of $1 paid to the Owner Trustee by the Indenture Trustee at
or before the delivery of this Indenture, the receipt and sufficiency of
which is hereby acknowledged, the Owner Trustee has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged, granted a first
priority security interest in and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and grant a first
priority security interest in and confirm to the Indenture Trustee, its
successors and assigns, in trust for the equal and ratable security and
benefit of the Holders from time to time of the Certificates, a first
priority security interest in and first mortgage Lien on all estate, right,
title and interest of the Owner Trustee in, to and under the following
described property, rights and privileges other than Excepted Payments,
which collectively, excluding Excepted Payments but including all property
specifically subjected to the Lien of this Indenture by the terms hereof,
by any Indenture and Security Agreement Supplement or any mortgage
supplemental to this Indenture, are included within the Trust Indenture
Estate, subject always to the rights granted to the Owner Trustee or the
Owner Participant hereunder and to the other terms and conditions of this
Indenture:
(1) The Airframe, as the same is more particularly described in the
Indenture and Security Agreement Supplement and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture; the Engines,
as the same are more particularly described in the Indenture and Security
Agreement Supplement, whether or not such Engines shall be installed in or
attached to the Airframe or any other airframe, and any Replacement Engine
therefor; and all Parts in respect of the Airframe and the Engines and all
records, logs and other documents at any time maintained with respect to the
foregoing property;
(2) The Lease and all Rent thereunder, including, without limitation,
all amounts of Basic Rent and Supplemental Rent, and payments of any kind
thereunder and including all rights of the Owner Trustee to execute any
election or option or to give or receive any notice, consent, waiver or
approval under or in respect of the Lease or to accept any surrender of the
Aircraft or any part thereof as well as any rights, powers or remedies on the
part of the Owner Trustee, whether arising under the Lease or by statute or at
law or in equity or otherwise arising out of any Event of Default;
(3) The Purchase Agreement, the Purchase Agreement Assignment, the
AVSA Consent and Agreement, the Consent and Agreement, the Consent and
Guaranty, the GTA, the Engine Warranty Assignment and the Engine Consent,
AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty,
the Ancillary Agreements and the Participation Agreement (to the extent of
amounts payable to the Owner Trustee thereunder) (collectively, and together
with the Lease, the Trust Agreement and the Certificates, the "Indenture
Documents"), including all rights of the Owner Trustee to execute any election
or option or to give or receive any notice, consent, waiver or approval under
or in respect of any of the foregoing documents and instruments;
(4) All the tolls, rents, issues, profits, products, revenues and
other income (including sales proceeds) of the property subjected or required
to be subjected to the Lien of this Indenture, and all of the estate, right,
title and interest of the Owner Trustee in and to the same and every part of
said property;
(5) The Collateral Account, the Liquid Collateral and all other
moneys and securities (including Permitted Investments) now or hereafter paid
or deposited or required to be paid or deposited to or with the Indenture
Trustee by or for the account of the Owner Trustee pursuant to any term of any
Operative Agreement, except the Tax Indemnity Agreement, and held or required
to be held by the Indenture Trustee hereunder;
(6) All requisition proceeds with respect to the Aircraft or any part
thereof (to the extent of the Owner Trustee's interest therein pursuant to the
terms of the Lease) and all insurance proceeds with respect to the Aircraft or
any part thereof from insurance required to be maintained by the Lessee under
Article 13 of the Lease, but excluding any insurance maintained by the Lessee
and not required under Article 13 of the Lease; and
(7) All proceeds of the foregoing.
EXCLUDING, HOWEVER, from the foregoing grant of the Lien and security
interest of this Indenture and from the Trust Indenture Estate, (i) 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 all rights
to collect and enforce Excepted Payments and (ii) rights granted to or
retained by the Owner Trustee or the Owner Participant hereunder and SUBJECT
TO the following provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, the Owner Trustee and the Owner Participant shall at all times
retain the right, to the exclusion of the Indenture Trustee, (A) to Excepted
Payments and to commence an action at law to obtain or otherwise demand, sue
for or receive and enforce the payment of such Excepted Payments, (B) to
exercise any election or option or make any decision or determination or to
give or receive any notice (including notice of Default), consent, waiver or
approval in respect of any such Excepted Payment, (C) to adjust (and make any
decision or determination or give any notice or consent with respect to) Basic
Rent and the percentages relating to Stipulated Loss Value and Termination
Value and the FPO Price as provided in Section 3.04 of the Lease and
Section 15.01 of the Participation Agreement, (D) to exercise any election
or option to make any decision or determination, or to give or receive any
notice, consent, waiver or approval, or to take any other action in respect
of, but in each case only to the extent relating to, Excepted Payments
(except for, in respect of any portion of Basic Rent constituting an
Excepted Payment, any action changing the manner by which such Basic Rent
is to be paid), (E) to retain the rights of the "Lessor" with respect to
solicitations of bids, and the election to retain the Aircraft pursuant to
Article 10 of the Lease, (F) to retain the right of "Lessor" to determine
the Fair Market Rental or Fair Market Value pursuant to Article 4 of the
Lease, (G) to exercise all other 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 or purchase options, (H) to retain all rights with respect to
insurance maintained for its own account which Section 13.05 of the Lease
specifically confers on the "Lessor", (I) to approve appraisers, lawyers
and other professionals and receive notices, certificates, reports,
filings, opinions and other documents, in each case with respect to matters
relating to the Owner Participant's tax position, (J) to approve any
accountants to be used in the verification of any Rent adjustment, and (K)
to exercise, to the extent necessary to enable it to exercise its rights
under Section 8.03 hereof, the rights of the "Lessor" under Section 17.04
of the Lease;
(ii) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have the
rights separately but not to the exclusion of the other (agreement of both
required in the case of clause (E) below), (A) to receive from the Lessee all
notices, certificates, reports, filings, opinions of counsel, copies of all
documents and all information which the Lessee is permitted or required to
give or furnish to the "Lessor" pursuant to the Lease or to the Owner Trustee
pursuant to any other Operative Agreement, (B) to exercise inspection rights
pursuant to Section 14.01 of the Lease (provided that if an Indenture Event of
Default shall be continuing, no inspection right of the Owner Trustee shall
interfere with the efforts of the Indenture Trustee to exercise remedies under
the Lease or this Indenture), (C) to maintain separate insurance pursuant to
Section 13.05 of the Lease and to retain all rights with respect to such
insurance maintained for its own account, (D) to give any notice of default
under Section 16.01 of the Lease and (E) the right to consent to changes to
the list of countries on Schedule III to the Participation Agreement;
(iii) subject to the last sentence of this clause (a), (A) so long as
no Indenture Event of Default not constituting an Event of Default shall have
occurred and be continuing (but subject to the provisions of Section 8.01
hereof), the Owner Trustee shall retain the right, to the exclusion of the
Indenture Trustee (or, if an Indenture Event of Default that is also an Event
of Default shall have occurred and be continuing, acting jointly with and not
to the exclusion of the Indenture Trustee), to exercise all rights, elections
and options of the Lessor in connection with the return of the Aircraft under
Article 12 of the Lease (but not Article 17 thereof, it being understood that
the Indenture Trustee shall have the exclusive right to exercise remedies
pursuant to such Article 17, including in respect of any related return of the
Aircraft pursuant to Article 12 of the Lease), including the right to approve
as satisfactory any accountants, engineers, appraisers or counsel to render
services for or issue appraisals, reports, certificates or opinions to the
Owner Trustee and to exercise all rights, elections and options of the Lessor
in connection with the return of the Aircraft pursuant to the express
provisions of the Operative Agreements, and (B) so long as no Indenture Event
of Default not constituting an Event of Default shall have occurred and be
continuing (but subject to the provisions of Section 8.01 hereof), the Owner
Trustee shall retain the right, jointly with the Indenture Trustee (agreement
of both not being required), to further assurances and financial information
from the Lessee pursuant to Section 19.01 of the Lease (other than the right
to receive any funds to be delivered to the "Lessor" under the Lease (except
funds delivered with respect to Excepted Payments) and under the Purchase
Agreement;
(iv) subject to the last sentence of this clause (a), at all times
the Owner Trustee shall have the right as Lessor, but not to the exclusion of
the Indenture Trustee, to seek specific performance of the covenants of the
Lessee under the Lease relating to the protection, insurance, maintenance,
possession and use of the Aircraft; and
(v) at all times the Owner Trustee and the Owner Participant shall
have the rights granted to them under Articles VI, VIII and X and Section 7.02
hereof.
Notwithstanding the foregoing, but subject always to the provisions of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) (other than
with respect to Excepted Payments) declare the Lease to be in default under
Article 17 thereof or any statute (including, without limitation, Article 2-A
of the Uniform Commercial Code) and (B) subject only to the provisions of this
Indenture, (other than in connection with Excepted Payments) exercise the
remedies set forth in such Article 17 of the Lease any statute (including
without limitation Article 2-A of the Uniform Commercial Code), at law and in
Article 7 hereof.
(b) The foregoing provisions in paragraph (a) above shall be equally
applicable to all rights of the Indenture Trustee in respect of Ancillary
Agreement I and Ancillary Agreement II, whether such rights are granted
directly to the Indenture Trustee under such agreements or are granted under
the Granting Clause of this Indenture.
(c) The leasehold interest granted to the Lessee by the Lease shall
not be subject to the security interest granted by this Indenture, and nothing
in this Indenture shall affect the rights of the Lessee under the Lease so
long as no Event of Default has occurred and is continuing.
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 and the rights of the Owner Trustee and the Owner Participant
under this Indenture.
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Documents to perform all of the obligations assumed by it under any
of those documents, all in accordance with and pursuant to the terms and
provisions of those documents, and the Indenture Trustee and the Holders of
the Certificates shall have no obligation or liability under the Indenture
Documents by reason of or arising out of the assignment under this Indenture,
nor shall the Indenture Trustee or the Holders of the Certificates be required
or obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Documents or, except as expressly
provided in this Indenture, to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or present or file
any claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
Effective upon the occurrence and continuance of an Indenture
Event of Default, the Owner Trustee hereby constitutes the Indenture
Trustee the true and lawful attorney of the Owner Trustee, irrevocably,
with full power (in the name of the Owner Trustee or otherwise), subject to
the terms and conditions of this Indenture, to ask, require, demand,
receive, compound and give acquittance for any and all Basic Rent,
Supplemental Rent payable to the Owner Trustee, Stipulated Loss Value and
Termination Value payments, insurance proceeds and any and all moneys and
claims for moneys due and to become due under or arising out of the Lease
(subject to Section 8.01 hereof) or the other Indenture Documents (other
than Excepted Payments), to endorse any checks or other instruments or
orders in connection with the same and to file any claims, take any action
or institute any proceeding which the Indenture Trustee may deem to be
necessary or advisable in the premises.
Under the Lease the Lessee is directed to make all payments of Rent
(other than Excepted Payments not constituting Basic Rent) payable to the
Owner Trustee and all other amounts (other than Excepted Payments not
constituting Basic Rent) 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 not constituting Basic Rent.
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, at the
expense of the Lessee, promptly and duly execute and deliver or cause to be
duly executed and delivered any and all such further instruments and documents
as the Indenture Trustee may reasonably deem desirable in obtaining the full
benefits of the assignment hereunder and of the rights and powers herein
granted; provided, however, that the Owner Trustee shall have no obligation to
execute and deliver or cause to be executed or delivered to the Indenture
Trustee any such instrument or document if such execution and delivery would
result in the imposition of additional liabilities on the Owner Trustee or the
Owner Participant or would result in a burden on the Owner Participant's
business activities, unless the Owner Trustee or the Owner Participant, as the
case may be, is indemnified to its reasonable satisfaction against any losses,
liabilities and expenses incurred in connection with such execution and
delivery.
The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect and shall not have been terminated pursuant
to Section 14.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except in
respect of Excepted Payments or otherwise as provided in or permitted by this
Indenture, enter into an agreement amending or supplementing any of the
Indenture Documents, settle or compromise any claim (other than claims in
respect of Excepted Payments) against the Lessee arising under any of the
Indenture Documents, or 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.
Concurrently with the delivery of this Indenture, the Owner Trustee
has delivered to the Indenture Trustee executed counterparts of the Trust
Agreement and the chattel paper original counterpart of the Lease.
It is hereby further covenanted and agreed by and between the parties
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise requires,
capitalized terms utilized herein shall have the meanings set forth in
Schedule II hereto for all purposes of this Indenture and shall be equally
applicable to both the singular and plural forms of the terms defined.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.
Forthwith upon the execution and delivery of this Indenture, and from time to
time thereafter, Certificates in an aggregate principal amount not in excess
of the amount specified in Section 2.04 hereof (except as otherwise provided
in Sections 2.06 and 2.07 hereof) shall be executed by the Owner Trustee and
delivered to the Indenture Trustee for authentication, and the Indenture
Trustee shall thereupon authenticate and deliver said Certificates to or upon
the oral or written order of the Owner Trustee, signed, if written, by an
authorized officer of the Owner Trustee, without any further action by the
Owner Trustee.
Section 2.02. Execution of Certificates. The Certificates shall be
signed on behalf of the Owner Trustee by an authorized officer of SSB. 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 SSB 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 SSB, 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 SSB; 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 SSB, although
at the date of the execution and delivery of this Indenture any such person
was not such an officer. Certificates bearing the facsimile signatures of
individuals who were authorized officers of SSB 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 (subject
to Section 15.01(d) of the Participation Agreement) 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 Certificate Closing Date,
shall be issued in three separate series consisting of Series A, Series B
and Series C and shall be issued in the Maturities and principal amounts,
and shall bear interest at the rates per annum, specified in the form of
Certificate set forth in Exhibit B.
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Certificates are admitted to trading, or to
conform to general usage.
Each Certificate shall bear interest from the date of original
issuance thereof or from the most recent date to which interest has been paid
and duly provided for, as the case may be, which shall be payable on the dates
specified on the face of the form of Certificate set forth in Exhibit B hereto
until the principal thereof is paid. Interest shall be calculated on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding the preceding paragraph, each Certificate shall bear
interest at the Past Due Rate on any principal, interest and any other amount
payable hereunder or under such Certificate, which shall not be paid in full
when due (whether at stated maturity, by acceleration, by mandatory prepayment
or otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full, payable from time to time on
demand of the Indenture Trustee.
The principal of, and Make-Whole Premium, if any, and interest on,
the Certificates shall be payable at the Corporate Trust Department of the
Indenture Trustee or at any office or agency maintained for such purpose
pursuant to Section 3.02 hereof in immediately available funds prior to
10:30 A.M. (New York time) on the due date thereof and the Indenture
Trustee shall remit all such amounts received by it to the Holders at such
account or accounts at such financial institution or institutions as the
Holders shall have designated to the Indenture Trustee in writing, in
immediately available funds, such payment to be made if the payment was
received prior to 10:30 A.M. New York time by the Indenture Trustee on any
Business Day, by 12:00 noon New York time on such Business Day; otherwise,
the Indenture Trustee shall make payment promptly, but not later than 11:00
A.M. New York time on the next succeeding Business Day; provided, however,
that interest may be payable at the option of the Indenture Trustee or its
Paying Agent, as defined in Section 3.04, by mailing checks for such
interest payable to or upon the written order of the Holders entitled
thereto as they shall appear on the Register. If any amount payable under
the Certificates, or under this Indenture, falls due on a day that is not a
Business Day, then such sum shall be payable on the next succeeding
Business Day, without (provided that payment is made on such next
succeeding Business Day) additional interest thereon for the period of such
extension.
The Holder at the close of business on any Record Date with respect
to any Payment Date shall be entitled to receive the interest if any payable
on such Payment Date notwithstanding any transfer or exchange of such
Certificate subsequent to the Record Date and prior to such Payment Date,
except if and to the extent the Owner Trustee shall default in the payment of
the interest due on such Payment Date, in which case such defaulted interest
shall be paid to the Holder at the close of business on a subsequent Record
Date (which shall be not less than five (5) or more than fifteen (15) Business
Days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Owner Trustee to the Holders not
less than fifteen (15) days preceding such subsequent Record Date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 5.04 hereof (a) any and all indemnity
amounts received by the Owner Trustee which are payable by the Lessee to (i)
the Indenture Trustee in its individual capacity, (ii) the Subordination Agent
or (iii) each Liquidity Provider, in each case pursuant to Article 8 or 9 of
the Participation Agreement (it being acknowledged that the Lessee has been
instructed to pay such amounts to the Person or Persons entitled thereto) and
(b) the Owner Trustee's pro rata share of all amounts owed to each
Liquidity Provider by the Subordination Agent under each Liquidity Facility
other than amounts due as (i) repayments of the principal of advances
thereunder, and (ii) interest on Interest Drawings and Final Drawings
except to the extent included in Net Interest and Related Charges. As used
in this Section, the Owner Trustee's pro rata share means as of any time:
(A) with respect to all amounts other than Net Interest and
Related Charges, a fraction the numerator of which is the aggregate
principal balance then outstanding of the Certificates issued under
this Indenture (other than the Series C Certificate) and the
denominator of which is the aggregate principal balance of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificate), plus
(B) with respect to all Net Interest and Related Charges (x)
if there exists a Payment Default under any Certificate issued under
this Indenture a fraction, the numerator of which is the aggregate
principal balance then outstanding of Certificates issued under this
Indenture (other than the Series C Certificate) and the denominator
of which is the aggregate principal balance then outstanding of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificate) under which there exists a
Payment Default or (y) at all other times, zero.
As used in this Section, "Net Interest and Related Charges" means the sum of
(i) the amount, if any, by which interest payable to each Liquidity Provider
on any Interest Drawing and/or Final Drawing exceeds the amount which would be
payable if such drawings bore interest at the weighted average Past Due Rate
applicable to amounts in default on all Certificates plus (ii) any amounts
payable under Section 3.01, Section 3.02, Section 3.03, Section 3.09 or
Section 7.07 of each Liquidity Facility (or similar provisions of any
replacement Liquidity Facility) which result from any Interest Drawing or
Final Drawing. As used in this Section, a Payment Default when used in
connection with a Certificate issued hereunder or a Certificate issued under
any Related Indenture means a default in the payment of principal thereof or
interest thereon (which default has not been cured), other than solely because
of acceleration.
Section 2.05. Payments from Trust Indenture Estate Only. All
payments to be made by the Owner Trustee under this Indenture shall be made
only from the income and the proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate and from any other amounts of the type
described in Section 5.01 hereof (but only to the extent actually received by
the Indenture Trustee) and only to the extent that the Owner Trustee shall
have sufficient income or proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate (and such other amounts) to enable the
Indenture Trustee to make distributions of the amounts due in respect of the
Certificates in accordance with the terms hereof and thereof. Each Holder by
its acceptance of a Certificate agrees that it will look solely to the income
and proceeds from the Trust Indenture Estate (and such other amounts of the
type described in Section 5.01 hereof but only to the extent actually received
by the Indenture Trustee) to the extent available for distribution to it as
provided herein and that neither the Owner Participant, the Owner Trustee, SSB
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 SSB, the Owner Trustee or the Indenture
Trustee.
SSB 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 SSB's gross negligence or willful misconduct, or as
otherwise expressly provided herein or in the Participation Agreement.
If (1) all or any part of the Lessor's Estate becomes the property of
a debtor subject to the reorganization provisions of the Bankruptcy Code, (2)
pursuant to such reorganization provisions the Owner Participant is required,
by reason of the Owner Participant being held to have recourse liability to
the debtor or the trustee of the debtor directly or indirectly, to make
payment on account of any amount payable as principal of or interest,
Make-Whole Premium or other amounts payable on the Certificates, and (3) the
Indenture Trustee actually receives any Recourse Amount which reflects any
payment by the Owner Participant on account of (2) above, then the Indenture
Trustee shall promptly refund to the Owner Participant such Recourse Amount.
Nothing contained in this paragraph shall prevent the Indenture Trustee from
enforcing any personal recourse obligation (and retaining the proceeds
thereof) of the Owner Participant under the Participation Agreement, or from
retaining any amount paid by the Owner Participant under Sections 5.01, 8.02
and 8.03 hereof.
Section 2.06. Registration, Transfer and Exchange. The Indenture
Trustee will keep, on behalf of the Owner Trustee, at each office or agency to
be maintained for the purpose as provided in Section 3.02 hereof a Register or
Registers on which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Certificates
as provided in this Article. Such Register shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable period of time.
Upon due presentation for registration of transfer of any Certificate
at any such office or agency, the Owner Trustee shall execute and the
Indenture Trustee shall authenticate and deliver in the name of the transferee
or transferees a new Certificate or Certificates of the same Series and
Maturity, principal amount and interest rate and in authorized denominations
for an equal aggregate principal amount; provided, that such Certificate being
transferred shall be cancelled in accordance with Section 2.08 hereof
simultaneously with the issuance of the new Certificate.
Any Certificate or Certificates may be exchanged for a Certificate or
Certificates of the same Series and Maturity and interest rate but in other
authorized denominations, in an equal aggregate principal amount.
Certificates to be exchanged shall be surrendered at any office or agency to
be maintained by the Indenture Trustee for the purpose as provided in Section
3.02 hereof, and the Owner Trustee shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor the Certificate or
Certificates which the Holder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously or previously outstanding.
All Certificates presented for registration of transfer, exchange,
prepayment or payment shall (if so required by the Owner Trustee or the
Indenture Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Owner
Trustee and the Indenture Trustee duly executed by the Holder or its attorney
duly authorized in writing and (except in the case of transfers pursuant to
Section 15.01 of the Participation Agreement) the Indenture Trustee may
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act.
The Indenture Trustee may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any exchange or registration of transfer of
Certificates. No service charge shall be levied for any such transaction.
The Indenture Trustee shall not be required to exchange or register a
transfer of any Certificates (a) for a period of fifteen (15) days immediately
preceding the first mailing of notice of prepayment of such Certificates or
(b) with respect to which notice of prepayment has been given pursuant to
Section 6.03 hereof and such notice has not been revoked.
All Certificates issued upon any transfer or exchange of Certificates
shall be valid obligations of the Owner Trustee, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the
Certificates surrendered upon such transfer or exchange.
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates. In case any temporary or definitive Certificate shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Owner
Trustee in its discretion may execute, and upon the oral or written request of
any officer of SSB, the Indenture Trustee shall authenticate and deliver, a
new Certificate of like Maturity, principal amount and interest rate as the
Certificate being replaced, bearing a number not contemporaneously or
previously outstanding, in exchange and substitution for the mutilated or
defaced Certificate, or in lieu of and substitution for the Certificate so
apparently destroyed, lost or stolen. In the case of any Certificate so
apparently destroyed, lost or stolen, the applicant for a substitute
Certificate shall furnish to the Owner Trustee and to the Indenture Trustee
such security or indemnity as may be required by them to indemnify and defend
and to hold each of them harmless and evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Upon the issuance of any substitute Certificate, the Owner Trustee or
the Indenture Trustee may require payment from the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses incurred in connection therewith.
In case any Certificate which has matured or is about to mature, or has been
called for prepayment in full, shall become mutilated or defaced or be
apparently destroyed, lost or stolen, the Owner Trustee may, instead of
issuing a substitute Certificate, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated or defaced
Certificate), if the applicant of any Certificate so apparently destroyed,
lost or stolen, for such payment shall furnish to the Owner Trustee and to the
Indenture Trustee such security or indemnity as any of them may require to
hold each of them harmless and the applicant shall also furnish to the Owner
Trustee and the Indenture Trustee evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Every substitute Certificate issued pursuant to the provisions of
this Section by virtue of the fact that any Certificate is apparently
destroyed, lost or stolen shall constitute an original additional contractual
obligation of the Owner Trustee, whether or not the apparently destroyed, lost
or stolen Certificate shall be enforceable at any time by anyone and shall be
entitled to all the security and benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and proportionately
with any and all other Certificates duly authenticated and delivered
hereunder. All Certificates shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced, or
apparently destroyed, lost or stolen Certificates and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
Section 2.08. Cancellation of Certificates; Destruction Thereof.
All Certificates surrendered for payment, prepayment, registration of
transfer or exchange, if surrendered to the Owner Trustee or any agent of
the Owner Trustee or the Indenture Trustee, shall be delivered to the
Indenture Trustee for cancellation or, if surrendered to the Indenture
Trustee, shall be cancelled by it; and no Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Indenture Trustee shall destroy cancelled Certificates held
by it and deliver a certificate of destruction to the Owner Trustee. If
the Owner Trustee shall acquire any of the Certificates, such acquisition
shall not operate as a prepayment or satisfaction of the indebtedness
represented by such Certificates unless and until the same are delivered to
the Indenture Trustee for cancellation.
Section 2.09. Temporary Certificates. Pending the preparation of
definitive Certificates, the Owner Trustee may execute and, upon the oral or
written request of an officer of SSB, the Indenture Trustee shall authenticate
and deliver temporary Certificates (printed, lithographed, typewritten or
otherwise reproduced, in each case in form satisfactory to the Indenture
Trustee). Temporary Certificates shall be issuable as registered Certificates
without coupons, of any authorized denomination, and substantially in the form
of the definitive Certificates but with such omissions, insertions and
variations as may be appropriate for temporary Certificates, all as may be
determined by the Owner Trustee with the concurrence of the Indenture Trustee.
Temporary Certificates may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Certificate shall be
executed by the Owner Trustee and, upon the oral or written request of an
authorized officer of the Owner Trustee, be authenticated by the Indenture
Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Certificates. Without unreasonable delay
the Owner Trustee shall execute and shall furnish definitive Certificates and
thereupon temporary Certificates shall be surrendered in exchange therefor
without charge at any office or agency to be maintained by the Indenture
Trustee for the purpose pursuant to Section 3.02 hereof, and, upon the oral
or written request of an authorized officer of the Owner Trustee, the
Indenture Trustee shall authenticate and deliver in exchange for such
temporary Certificates an equal aggregate principal amount of definitive
Certificates of the same Series and 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 and under the other Operative Agreements shall have been paid in
full.
Section 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture and Security Agreement Supplement
covering a Replacement Airframe and/or Replacement Engine, as provided in
Section 9.09 hereof, each Certificate shall be deemed to have been issued in
connection with such Replacement Airframe and/or Replacement Engine and each
Certificate issued thereafter upon a transfer or exchange of, or as a
replacement for, a Certificate, shall be designated as having been issued in
connection with such Replacement Airframe and/or Replacement Engine, but
without any other change therein except as provided for in this Article II.
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements. If, in accordance with and subject to the satisfaction
of the conditions set forth in Section 7.11 of the Participation Agreement,
the Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall be released and discharged from any
further obligations hereunder and under the Certificates and all other
Operative Agreements (except for any recourse obligations of the Owner
Participant or the Owner Trustee in its individual capacity with respect to
matters arising out of events occurring prior to such assumption).
Section 2.13. Establishment of Collateral Account. (a) The
Indenture Trustee shall, pursuant to the Collateral Account Control Agreement,
establish, or cause to be established, with State Street Bank and Trust
Company, who shall represent and warrant that it is a financial intermediary
(as defined in Section 8-313(4) of the Connecticut Uniform Commercial Code),
in its name as secured party hereunder an Eligible Deposit Account entitled
"First Security Bank, National Association, as secured party under the Trust
Indenture and Security Agreement (Federal Express Corporation Trust No.
N670FE) dated as of May 1, 1997, 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) The Collateral Account Control Agreement shall require State
Street Bank and Trust Company to send confirmation to the Indenture Trustee
and the Lessee that it has credited the Specified Investments to the
Collateral Account and to make appropriate entries on its books identifying
the Specified Investments as pledged to the Indenture Trustee.
Section 2.14. Investment of Funds on Deposit in the Collateral
Account. (a) Funds deposited in the Collateral Account shall be invested and
reinvested by the Indenture Trustee, subject to Section 17.02 of the
Participation Agreement, at the risk of the Owner Trustee, in Specified
Investments selected by the Lessee and approved by the Indenture Trustee for
the account of the Owner Trustee in accordance with Section 2.14(b) below;
provided, however, that if Specified Investments meeting the requirements of
Section 2.14(b) are not available on any day on which funds are to be invested
as contemplated by the preceding provisions of this Section 2.14(a), the
Indenture Trustee may leave such funds in the Collateral Account 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 and approved by the Indenture Trustee for the account of the Owner
Trustee which mature on June 2, 1997. 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 referred to in the preceding
sentence may be invested in Specified Investments which mature within 14 days
after the rescheduled Delivery Date. If no Delivery Date occurs, then any
Specified Investment shall mature no later than the 15th day after the Cut-Off
Date.
(c) If for any reason the Indenture Trustee shall be required to
make any distributions of the Liquid Collateral prior to the maturity date of
any Specified Investment, the Indenture Trustee shall cause the same to be
sold in accordance with standard commercial practices, and the Lessee, for the
account of the Owner Trustee, shall forthwith compensate the Indenture Trustee
for any Losses as provided in Section 17.02(a) of the Participation Agreement.
(d) Pursuant to Section 17.02(b) of the Participation Agreement,
interest payable on the Certificates during the period in which funds are on
deposit in the Collateral Account shall be paid by the Lessee.
Section 2.15. Release of Debt Portion and Lien on the Collateral
Account and the Liquid Collateral on Delivery Date. (a) 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, subject to the proviso in Section
3.02(a)(C) of the Participation Agreement, equal to the lesser of (A) the
Debt Portion and (B) the amount actually in the Collateral Account on the
Delivery Date. Such amount so released, together with the amount of any
Losses received from the Lessee pursuant to Section 17.02(a) of the
Participation Agreement, shall be used to finance a portion of the Purchase
Price payable by (x) the Owner Trustee as contemplated by Section 3.02(a)
of the Participation Agreement or (y) if 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.
(b) The Lien of this Indenture on the Collateral Account and the
Liquid Collateral shall terminate on the Delivery Date following the transfer
of amounts described in Section 3.02(a)(C) of the Participation Agreement.
Section 2.16. Cut-Off Date. In the case of a prepayment under
Section 6.02(a)(vi) hereof, the Indenture Trustee shall release from the
Collateral Account all amounts held in the Collateral Account on such date.
Such amount so released, together with the amount of any Losses received from
the Lessee pursuant to Sections 17.02(a) and 17.02(c) of the Participation
Agreement, shall be applied to pay amounts due under Section 6.02(b)(1) hereof
on the Cut-Off Date, and any amount (net of any uncompensated Losses)
remaining after such release and application shall be remitted by the
Indenture Trustee, on behalf of the Owner Trustee, to the Lessee.
Section 2.17. Subordination. (a) The Owner Trustee and, by
acceptance of its Certificates of any Series, each Holder of such Series,
hereby agree that no payment or distribution shall be made on or in respect of
the Secured Obligations owed to such Certificate Holder of such Series,
including any payment or distribution of cash, property or securities after
the commencement of a proceeding of the type referred to in clause (v), (vi)
or (vii) of Section 7.01 hereof, except as expressly provided in Article V
hereof.
(b) By the acceptance of its Certificates of any Series
(other than Series A), each Holder of such Series agrees that in the event
that such Holder, in its capacity as a Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series which it is
not entitled to received under this Section 2.17 or Article V hereof, it will
hold any amount so received in trust for the Senior Holder (as defined in
Section 2.17(c) hereof) and will forthwith turn over such payment to the
Indenture Trustee in the form received to be applied as provided in Article V
hereof.
(c) As used in this Section 2.17, the term "Senior Holder"
shall mean, (i) the Holders of Series A Certificates until the Secured
Obligations in respect of Series A Certificates have been paid in full, (ii)
after the Secured Obligations in respect of Series A Certificates have been
paid in full, the Holders of Series B Certificates until the Secured
Obligations in respect of Series B Certificates have been paid in full and
(iii) after the Secured Obligations in respect of Series B Certificates have
been paid in full, the Holders of Series C Certificates until the Secured
Obligations in respect of Series C Certificates have been paid in full.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.
The Owner Trustee covenants and agrees that it will, subject to Section 2.05
hereof, duly and punctually pay or cause to be paid the principal of, and
interest and Make-Whole Premium, if any, and all other amounts due on, each of
the Certificates and under this Indenture at the place or places, at the
respective times and in the manner provided in this Indenture and in the
Certificates.
Principal and interest and other amounts due hereunder or under the
Certificates shall be payable in dollars on the due date thereof, to the
Indenture Trustee at the Corporate Trust Department (or such other account at
such other financial institution as the Indenture Trustee may designate for
the purpose). If any amount payable under the Certificates or under this
Indenture falls due on a day which is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
Section 3.02. Offices for Payments, etc. So long as any of the
Certificates remain outstanding, the Indenture Trustee will maintain the
following: (a) an office or agency where the Certificates may be presented
for payment and (b) a facility or agency in New York, New York where the
Certificates may be presented for registration of transfer and for exchange
and for prepayment as provided in this Indenture (the "Registrar"). The
Registrar shall keep a register (the "Register") with respect to the
Certificates and their transfer and exchange. The Indenture Trustee may
appoint one or more co-registrars ("Co-Registrars") for the Certificates and
may terminate any such appointment at any time upon written notice. The term
"Registrar" includes any Co-Registrar.
The Indenture Trustee shall initially act as Registrar.
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee. The Owner Trustee, whenever necessary to avoid or fill a vacancy in
the office of Indenture Trustee, will, with the consent of the Lessee,
appoint, in the manner provided in Section 12.02 hereof, an Indenture Trustee,
so that there shall at all times be an Indenture Trustee hereunder.
Section 3.04. Paying Agents. Whenever the Indenture Trustee in its
sole discretion shall appoint a paying agent (the "Paying Agent"), it will
cause the Paying Agent to execute and deliver an instrument in which the
Paying Agent shall agree with the Indenture Trustee, subject to the provisions
of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of, and interest and Make-Whole Premium, if any,
on the Certificates (whether such sums have been paid to it by the
Indenture Trustee or the Owner Trustee) in trust for the benefit of the
Holders or of the Indenture Trustee, and
(b) that it will give the Indenture Trustee notice of any failure by
the Owner Trustee to make any payment of the principal of or interest or
Make-Whole Premium, if any, on the Certificates when the same shall be due
and payable.
Anything in this Section to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section are subject to
the provisions of Sections 14.03 and 14.04 hereof.
Section 3.05. Covenants of SSB and the Owner Trustee.
(a) SSB hereby covenants and agrees to perform its covenants set
forth in Sections 7.04(b) and 7.04(c) of the Participation Agreement.
(b) The Owner Trustee hereby covenants and agrees as follows:
(i) in the event a Responsible Officer of the Owner Trustee shall
have actual knowledge of an Indenture Event of Default, an Indenture
Default or an Event of Loss, the Owner Trustee will give prompt written
notice of such Indenture Event of Default, Indenture Default or Event of
Loss to the Indenture Trustee, the Lessee and the Owner Participant;
(ii) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to the Owner Trustee under the Lease, including,
without limitation, a copy of each report or notice from an insurer or
an insurance broker received pursuant to Article 13 of the Lease, to the
extent that the same shall not have been furnished to the Indenture
Trustee;
(iii) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to the Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Indenture Documents; and
(iv) except as contemplated by the Operative Agreements, the Owner
Trustee will not contract for, create, incur or assume any debt, and will
not guarantee (directly or indirectly or by an instrument having the effect
of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise take action to
become contingently liable, directly or indirectly, in connection with the
debt of any other Person.
Section 3.06. [Reserved]
Section 3.07. Disposal of Trust Indenture Estate. At any time and
from time to time any part of the Trust Indenture Estate may be sold or
disposed of in accordance with the provisions of this Indenture and the Lease.
The Indenture Trustee shall, from time to time, release any part of the Trust
Indenture Estate so sold or disposed of or as to which an Event of Loss has
occurred or as to which the Lease has been terminated from the Lien of this
Indenture. In addition, to the extent that such property constitutes an
Airframe or Engine, the further requirements of Section 9.08 hereof shall be
complied with.
Section 3.08. No Representations or Warranties as to Aircraft or
Documents. NEITHER THE INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR SSB NOR
THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, WORKMANSHIP,
VALUE, CONDITION, DESIGN, COMPLIANCE WITH SPECIFICATIONS, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR USE OR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE
WHATSOEVER, except that SSB warrants that on the Delivery Date (a) the Owner
Trustee shall have received whatever title was conveyed to it by AVSA, and (b)
the Aircraft shall be free and clear of Lessor's Liens attributable to SSB.
Neither SSB, 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 SSB and the Indenture Trustee made under this Indenture or in
the Participation Agreement or of the Owner Participant made under 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, at the expense of the Lessee, the Owner Trustee shall promptly and
duly execute and deliver any and all such further instruments and documents as
may be specified in such request and as are necessary or advisable to perfect,
preserve or protect the Liens and assignments created or intended to be
created hereby, or to obtain for the Indenture Trustee the full benefit of
the specific rights and powers granted herein, including, without
limitation, the execution and delivery of Uniform Commercial Code financing
statements and continuation statements with respect thereto, or similar
instruments relating to the perfection of the Liens or assignments created
or intended to be created hereby.
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates. (a) The
Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Indenture Trustee is not the Registrar, the Registrar
shall furnish to the Indenture Trustee semi-annually not more than ten (10)
days after each Record Date, as of such Record Date, or at such other times as
the Indenture Trustee may request in writing, a list, in such form and as of
such date as the Indenture Trustee may reasonably require, containing all the
information in the possession or control of the Registrar as to the names and
addresses of the Holders and the amounts and Maturities of the Certificates
held by such Holders.
(b) Ownership of the Certificates shall be proved by the Register
kept by the Registrar.
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution. Except as otherwise provided
in Section 5.03 hereof, each installment of Basic Rent, any payment of
interest on overdue installments of Basic Rent, any payment received by the
Indenture Trustee pursuant to Section 8.03(a) hereof and any payment received
by the Indenture Trustee pursuant to Section 17.02(b) or 17.02(c) of the
Participation Agreement shall be distributed by the Indenture Trustee no later
than the time herein provided in the following order of priority:
first, (i) 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 Amount and interest and other amounts (as
well as any interest on any overdue Principal Amount and, to the
extent permitted by applicable law, on any overdue interest and
any other overdue amounts) then due under all Series A
Certificates shall be distributed to the Holders of Series A
Certificates ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments then
due under each Series A Certificate bears to the aggregate amount
of the payments then due under all Series A Certificates;
(ii) after giving effect to paragraph (i) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series B Certificates shall be
distributed to the Holders of Series B Certificates ratably,
without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each
Series B Certificate bears to the aggregate amount of the
payments then due under all Series B Certificates; and
(iii) after giving effect to paragraph (ii) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series C Certificates shall be
distributed to the Holders of Series C Certificates ratably,
without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each
Series C Certificate bears to the aggregate amount of the
payments then due under all Series C Certificates; and
second, the balance if any of such installment or payment remaining
thereafter shall be distributed to the Owner Trustee, or as the
Owner Trustee may request, for distribution pursuant to the Trust
Agreement.
Section 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft (including pursuant to Section 11.03(e) of the Lease, but, in the
case of said Section 11.03(e), subject to the time limits specified therein)
or as the result of, or in connection with any event under the Lease giving
rise to, a prepayment pursuant to Section 6.02 hereof, shall be promptly
distributed by the Indenture Trustee in the following order of priority:
first, to reimburse the Indenture Trustee for any costs or expenses
reasonably incurred in connection with such prepayment,
second, (i) to pay the amounts specified in paragraph (i) of clause
"second" of Section 5.03 hereof then due and payable in respect
of the Series A Certificates;
(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "second" of Section
5.03 hereof then due and payable in respect of the Series B
Certificates; and
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "second" of
Section 5.03 hereof then due and payable in respect of the Series
C Certificates;
provided that payments pursuant to this clause "second" shall be
made without the payment of Make-Whole Premium except in the
particular circumstances provided in Section 6.02(b) 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
Article 11 or 13 of the Lease as the result of loss or damage not
constituting an Event of Loss (x) with respect to the Aircraft, or as a
result of such loss or damage constituting an Event of Loss if and to the
extent that such amounts would at the time be required to be paid to the
Lessee pursuant to said Article 11 or 13 but for the fact that a Payment
Default, Bankruptcy Default or an Event of Default shall have occurred and
be continuing or (y) are pledged to the Lessor as security in connection
with an Event of Loss in accordance with Section 11.03(e) of the Lease,
shall be held by the Indenture Trustee as security for the obligations of
the Lessee under the Lease and the Participation Agreement and shall be
invested in accordance with the terms of Section 5.08 hereof and at such
time as the conditions for payment to the Lessee specified in said Article
11 or 13, as the case may be, shall be fulfilled and there shall not be
continuing any Payment Default, Bankruptcy Default or Event of Default,
such amount, and the proceeds of any investment thereof, shall, to the
extent not theretofore applied, be paid to the Lessee to the extent
provided in the Lease.
Section 5.03. Payment After Indenture Event of Default, etc. Except
as otherwise provided in Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof,
all payments (other than Excepted Payments) received and all amounts held or
realized by the Indenture Trustee 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 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 or the Holders in the
protection, exercise or enforcement of any right, power or remedy
or any damages sustained by the Indenture Trustee or the Holders,
liquidated or otherwise, upon such Indenture Event of Default)
shall be applied by the Indenture Trustee as between itself and
the Holders in reimbursement of such expenses;
second, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of
all Series A Certificates, and the accrued but unpaid interest
and other amounts due thereon and all other Secured Obligations
(other than Make-Whole Premium) in respect of the Series A
Certificates to the date of distribution, shall be distributed to
the Holders of Series A Certificates, and in case the aggregate
amount so to be distributed shall be insufficient to pay in full
as aforesaid, then ratably, without priority of one over the
other, in the proportion that the aggregate unpaid Principal
Amount of all Series A Certificates held by each holder plus the
accrued but unpaid interest and other amounts due hereunder or
thereunder (other than Make-Whole Premium) to the date of
distribution, bears to the aggregate unpaid Principal Amount of
all Series A Certificates held by all such holders plus the
accrued but unpaid interest and other amounts due thereon (other
than Make-Whole Premium) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series B
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series B Certificates to
the date of distribution, shall be distributed to the Holders of
Series B Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series B Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series B
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution; and
(iii) after giving effect to paragraph (ii) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series C
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series C Certificates to
the date of distribution, shall be distributed to the Holders of
Series C Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series C Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series C
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution;
(it being understood that amounts payable under this clause
"second" 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 in respect of (i) the Indenture Trustee in its individual capacity,
(ii) the Subordination Agent, (iii) each Liquidity Provider, and (iv) the
Pass Through Trustee, in each case whether pursuant to Article 8 or 9 of
the Participation Agreement or as Supplemental Rent, directly to the Person
(which may include the Indenture Trustee) entitled thereto. Any payment
received by the Indenture Trustee under clause (b) of the last paragraph of
Section 2.04 shall be distributed to the Subordination Agent to be
distributed in accordance with the terms of the Intercreditor Agreement.
(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 Article 9 of the Lease) shall be distributed
by the Indenture Trustee (a) to the extent received or realized at any time
prior to the payment in full of all obligations to the Holders, in the
order of priority specified in Section 5.01 hereof, and (b) to the extent
received or realized at any time after payment in full of all obligations
to the Holders, in the following order of priority:
first, in the manner provided in clause "first" of Section 5.03 hereof
and
second, in the manner provided in clause "third" of Section 5.03 hereof.
Section 5.06. Payments to Owner Trustee. Any amounts distributed
hereunder by the Indenture Trustee to the Owner Trustee shall be paid to the
Owner Trustee by wire transfer of immediately available funds of the type
received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be designated by notice from the
Owner Trustee to the Indenture Trustee from time to time. The Owner Trustee
hereby notifies the Indenture Trustee that unless and until the Indenture
Trustee receives notice to the contrary from the Owner Trustee, all amounts to
be distributed to the Owner Trustee hereunder for distribution in accordance
with the Trust Agreement shall be distributed by wire transfer of immediately
available funds of the type received by the Indenture Trustee to such account
of the Owner Participant as may be specified pursuant to Section 2.06 of the
Trust Agreement.
Section 5.07. Application of Payments. Each payment of principal of
and interest or other amounts due on each Certificate shall, except as
otherwise provided herein, be applied,
first, to the payment of interest on such Certificate due and payable to
the date of such payment, as provided in such Certificate, as
well as any interest on overdue principal and Make-Whole Premium,
if any, and, to the extent permitted by law, interest and other
amounts due thereunder,
second, to the payment of any other amount (other than the principal of
such Certificate) due hereunder to the Holder of such Certificate
or under such Certificate,
third, to the payment of the principal of such Certificate if then due
hereunder or under such Certificate and
fourth, the balance, if any remaining thereafter, to the payment of the
principal of such Certificate remaining unpaid (provided that
such Certificate shall not be subject to prepayment without the
consent of the affected Holder except as permitted by Sections
6.02, 6.06 and 8.02 hereof); provided that, solely for the
purpose of determining whether an Indenture Event of Default
shall have occurred and be continuing, each such payment shall be
deemed applied in the following order of priority: first, in the
manner provided in clause "first" above, second, in the manner
provided in clause "third" above, third, in the manner provided
in clause "second" above and fourth, in the manner provided in
clause "fourth" above.
Section 5.08. Investment of Amounts Held by Indenture Trustee.
Amounts held by the Indenture Trustee pursuant to Section 5.02(b) hereof or
pursuant to any provision of any Indenture Document providing for investment
by the Indenture Trustee of sums pursuant to Section 23.01 of the Lease or
this Section 5.08 shall be invested by the Indenture Trustee from time to time
in securities selected by (i) so long as no Event of Default shall have
occurred and be continuing, the Lessee (and in the absence of written
direction by the Lessee, the Indenture Trustee shall invest such monies in
direct obligations of the United States of America) or (ii) so long as an
Event of Default shall have occurred and be continuing, the Indenture Trustee
and in each case shall be of the type listed in clauses (i) through (iv) of
Section 23.01 of the Lease. Unless otherwise expressly provided in this
Indenture, any income realized as a result of any such investment, net of the
Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Lessee shall be responsible for and will
promptly pay to the Indenture Trustee or the Lessor, as the case may be, on
demand, the amount of any loss realized as the result of any such investment
(together with any fees, commissions and other costs and expenses, if any,
incurred by the Indenture Trustee or the Lessor in connection with such
investment), such amount to be disposed of in accordance with the terms hereof
or the Lease, as the case may be. The Indenture Trustee shall not be liable
for any loss resulting from any investment made by it or any investment sold
by it under this Indenture in accordance with instructions from the Lessee
other than by reason of its willful misconduct or gross negligence, and any
such investment may be sold (without regard to its maturity) by the Indenture
Trustee without instructions whenever the Indenture Trustee reasonably
believes such sale is necessary to make a distribution required by this
Indenture.
Unless otherwise confirmed in writing, an account statement delivered
by the Indenture Trustee to the Owner Trustee (with a copy to the Lessee)
shall be deemed written confirmation by the Owner Trustee that the investment
transactions identified therein accurately reflect the investment directions
given to the Indenture Trustee by or on behalf of the Lessee, unless the
Lessee notifies the Indenture Trustee in writing to the contrary within 30
days of the date of receipt of such statement.
Section 5.09. Withholding Taxes. The Indenture Trustee shall
withhold any Taxes required to be withheld, except to the extent that the
Holder has furnished evidence satisfactory to the Indenture Trustee of any
exemption from withholding claimed by such Holder and under no circumstances
shall the failure of any such Holder to receive any amounts so withheld
constitute an Indenture Event of Default. Notwithstanding any provision to
the contrary in Sections 5.01 through 5.05 hereof and subject to Article 8 of
the Participation Agreement, if the Lessee is required to pay any such Tax, or
any interest or penalty thereon, or to indemnify the Owner Participant or the
Owner Trustee with respect thereto pursuant to Section 8.01(c) of the
Participation Agreement, the Lessee shall be entitled to receive any payments
otherwise distributable to the Holder of any Certificate who was subject to
such Tax pursuant to Sections 5.01 to 5.05 hereof until the amounts the Lessee
shall have so paid in respect of any such Tax shall have been recovered in
full by the Lessee.
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity. Except as provided
in Sections 6.02, 6.06 and 8.02 hereof, the Certificates may not be prepaid
prior to their respective Maturities.
Section 6.02. Prepayment of Certificates. (a) The Outstanding
Certificates shall be prepaid in full (and not in part):
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08
hereof replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and Section 2.12 hereof shall not be
applicable in connection with such purchase), but subject to Section
6.02(c) below.
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 hereof (unless such notice is revoked in
accordance with such Section).
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) below.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a refinancing of the Certificates, but subject to Section
6.02(c) below.
(vi) As contemplated by Section 2.16 hereof and Section 3.05(b)
of the Participation Agreement if the Delivery Date has not occurred on
or prior to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject to the terms of Section
4.02(a) or 10.01 of the Lease or Article 15 of the Participation Agreement, as
the case may be, shall give irrevocable (subject to Section 6.02(c) hereof)
written notice to the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Certificates shall be
prepaid. In the case of a prepayment of the Certificates pursuant to Section
6.02(a)(i) above, the Certificates shall be prepaid in full on the Loss
Payment Date as defined in Section 11.02 of the Lease. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(iii) above, the
Certificates shall be prepaid in full on the date so designated in the notice
referred to in Section 8.02 hereof. In the case of a prepayment of the
Certificates pursuant to Section 6.02(a)(ii) or (iv) above, the Certificates
shall be prepaid in full on the Termination Date. In the case of a prepayment
of the Certificates pursuant to Section 6.02(a)(v) above, the Certificates
shall be prepaid on the effective date of the Refinancing. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(vi) above, the
Certificates shall be prepaid on the 15th day following the Cut-Off Date. In
the case of a prepayment of the Certificates pursuant to Section 6.02(a)(vii)
above, the Certificates shall be prepaid on the date designated in the notice
referred to therein. The day on which the Certificates are to be prepaid
pursuant to this Section 6.01(b) is herein referred to as the "Prepayment
Date".
On or prior to the Prepayment Date, immediately available funds shall
be deposited with the Indenture Trustee in an amount in respect of the
Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section
6.02 hereof on or after the applicable Premium Termination Date, or (ii)
if such prepayment is made prior to the applicable Premium Termination
Date pursuant to Section 6.02(a)(i), 6.02(a)(iii) (if clause (i) of the
first sentence of Section 8.02(a) hereof is applicable) or 6.02(a)(vi)
above, the sum of (A) the aggregate principal amount of such
Certificates then Outstanding, (B) accrued interest on the Certificates
to the Prepayment Date and (C) all other aggregate sums due the
Indenture Trustee hereunder or under the Participation Agreement or the
Lease, but excluding any Make-Whole Premium or other premium or penalty,
or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to Section 6.02(a)(ii), 6.02(a)(iii) (if clause
(ii) of the first sentence of Section 8.02(a) hereof is applicable),
6.02(a)(iv), 6.02(a)(v) or 6.02(a)(vii) above, the sum of the amounts
specified in clauses (A), (B) and (C) of the preceding clause (1) plus any
Make-Whole Premium payable in respect of all Certificates with respect to
which the Premium Termination Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
(c) If, pursuant to the last paragraph of Section 10.01(f) of the
Lease, no Termination Date shall occur, or if, pursuant to Section 4.02(a) of
the Lease, the Lessee revokes its notice of election to purchase, or if no
refinancing shall occur pursuant to Section 15.01 of the Participation
Agreement, the Lessee shall give notice thereof to the Indenture Trustee, and
the prepayment proposed to be effected in respect thereof shall not occur.
Section 6.03. Notice of Prepayment to Holders. In order to effect
any prepayment set forth in Section 6.02(a) hereof, the Indenture Trustee
shall give prompt notice by first class mail of prepayment to each Holder of
an Outstanding Certificate. Any notice of prepayment given by the Owner
Trustee may be revoked by the Owner Trustee at any time on or before the
Prepayment Date by prompt notice to the Holders except as otherwise provided
in the Lease or the Participation Agreement.
All notices of prepayment shall state:
(1) the Prepayment Date,
(2) the applicable basis for determining the Prepayment Price,
(3) that on the Prepayment Date, subject to the provisions hereof,
the Prepayment Price will become due and payable, and that interest
on the Certificates shall cease to accrue on and after such
Prepayment Date, and
(4) the place or places where such Certificates are to be
surrendered for payment.
Section 6.04. Deposit of Prepayment Price and Sinking Fund
Redemption Price. On the Prepayment Date or the Sinking Fund Redemption
Date (as defined in Section 6.06 hereof), the Owner Trustee shall, to the
extent an amount equal to the Prepayment Price or the Sinking Fund
Redemption Price (as defined in Section 6.06 hereof), as the case may be,
shall not then be held in cash or Permitted Investments (marked-to-market
net of all costs and expenses of liquidation thereof) by the Indenture
Trustee in immediately available funds and deposited for the purpose, pay
to the Indenture Trustee an amount equal to the difference between (a) the
amount then so held and (b) the Prepayment Price or the Sinking Fund
Redemption Price, as the case may be. If there shall so be on deposit
and/or deposited the applicable Prepayment Price or Sinking Fund Redemption
Price on or prior to a Prepayment Date or Sinking Fund Redemption Date,
interest shall cease to accrue in respect of all or, in the case of a
mandatory sinking fund redemption, the relevant portion being prepaid of,
the Outstanding Certificates on and after such Prepayment Date or such
Sinking Fund Redemption Date.
Section 6.05. Certificates Payable on Prepayment Date. On the
Prepayment Date, the Outstanding Certificates shall (except (A) if the
Owner Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise
provided in the Lease) become due and payable and from and after such
Prepayment Date (unless there shall be a default in the payment of the
Prepayment Price) such Certificates shall cease to bear interest. Upon
surrender by any Holder of its Certificate for prepayment in accordance
with said notice, such Holder shall be paid the principal amount of its
Certificate then outstanding, accrued interest thereon to the Prepayment
Date, all other sums due to such Holder hereunder, under the Participation
Agreement or the Lease, plus, if a Make-Whole Premium is payable pursuant
to Section 6.02(b) hereof, the Make-Whole Premium in respect of such
Certificate.
If any Certificate called for prepayment shall not be so paid upon
surrender thereof for prepayment, the principal shall, until paid, continue to
bear interest from the Prepayment Date at the interest rate applicable to such
Certificate.
Section 6.06. Mandatory Sinking Fund Redemption. The
Certificates shall be subject to partial redemption, at the aggregate
principal amount set forth for the Certificates of the respective Series
and Maturity, on a pro rata basis, on each date specified in this Section
(a "Sinking Fund Redemption Date") for such payment on the Certificates of
such Series and Maturity. The Owner Trustee shall deposit funds sufficient
to pay the Sinking Fund Redemption Price with the Indenture Trustee as
provided in Section 6.04 hereof. The Indenture Trustee shall pay from the
amounts so deposited on each applicable Sinking Fund Redemption Date to the
Certificates of each Series in the order of priority set forth in clause
"first" of Section 5.01 and among the Holders of the Certificates of each
Series then Outstanding on a pro rata basis the aggregate principal amount
set forth below, together with accrued interest to such Sinking Fund
Redemption Date, but without Make-Whole Premium (the "Sinking Fund
Redemption Price"):
Principal Amount
<TABLE>
<CAPTION>
Series A Certificates Series B Certificates Series C Certificates
Sinking Fund with a Maturity of with a Maturity of with a Maturity of
Redemption Date January 15, 2017 January 15, 2018 January 15, 2014
- --------------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C>
January 15, 1998 292,850 250,140 190,520
July 15, 1998 374,190 0 0
January 15, 1999 155,254 250,140 333,520
July 15, 1999 511,786 0 0
January 15, 2000 149,287 250,140 333,520
July 15, 2000 517,753 0 0
January 15, 2001 245,388 250,140 333,520
July 15, 2001 421,652 0 0
January 15, 2002 447,707 250,140 333,520
July 15, 2002 219,333 0 0
January 15, 2003 667,040 250,140 427,042
July 15, 2003 0 0 0
January 15, 2004 667,040 250,140 757,173
July 15, 2004 0 0 0
January 15, 2005 667,040 250,140 865,719
July 15, 2005 0 0 0
January 15, 2006 667,040 250,140 835,803
July 15, 2006 0 0 0
January 15, 2007 667,040 250,140 3,783,765
July 15, 2007 0 0 0
January 15, 2008 667,040 250,140 676,225
July 15, 2008 0 0 0
January 15, 2009 667,040 250,140 1,788,770
July 15, 2009 0 0 0
January 15, 2010 667,040 250,140 1,742,978
July 15, 2010 0 0 0
January 15, 2011 667,040 2,179,510 758,530
July 15, 2011 0 0 0
January 15, 2012 667,040 3,178,951 0
July 15, 2012 0 0 0
January 15, 2013 2,910,012 2,059,773 0
July 15, 2013 0 0 0
January 15, 2014 1,987,488 0 3,372,395
July 15, 2014 0 0 0
January 15, 2015 5,780,164 0 0
July 15, 2015 0 0 0
January 15, 2016 6,230,567 0 0
July 15, 2016 0 0 0
January 15, 2017 6,438,169 277,926 0
January 15, 2018 0 1,559,020 0
</TABLE>
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default. "Indenture Event of
Default" means any of the following events (whatever the reason for such
Indenture Event of Default and whether it shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) any Event of Default specified in Article 16 of the Lease (other
than an Event of Default arising solely as the result of the failure to
make an Excepted Payment unless the Owner Participant shall notify the
Indenture Trustee in writing that such failure shall constitute an
Indenture Event of Default); or
(ii) the failure of the Owner Trustee other than by reason of a
Default or an Event of Default (i) to pay principal, interest or Make-Whole
Premium, if any, on any Certificate when due, and such failure shall have
continued unremedied for ten (10) Business Days after the date when due or
(ii) to pay any other amounts hereunder or under the Certificates when due
and such failure shall have continued unremedied for a period of thirty
(30) days after the Owner Trustee and the Owner Participant shall receive
written demand therefor from the Indenture Trustee or by the Holders of not
less than 25% in aggregate principal amount of Outstanding Certificates; or
(iii) (A) any representation or warranty made by SSB, the Owner
Trustee, the Owner Participant or the Owner Participant Guarantor or any
Owner Trustee Guarantor, in any Operative Agreement or in any
certificate of SSB, the Owner Trustee, the Owner Participant, or the
Owner Participant Guarantor furnished to the Indenture Trustee or any
Holder in connection herewith or therewith or pursuant hereto or thereto
shall prove to have been incorrect when made and was and remains in any
respect material to the Holders and if such misrepresentation is capable
of being corrected as of a subsequent date and if such correction is
being sought diligently, and such misrepresentation shall not have been
corrected within 30 days following notice thereof identified as a
"Notice of Indenture Event of Default" being given to the Owner Trustee
and the Owner Participant by the Indenture Trustee or by a Majority in
Interest of Holders; or
(B) any (x) covenant made by the Owner Trustee in the fifth
paragraph following the Habendum Clause hereof or Section 3.05(b)(iii)
hereof or Section 7.02(b) or 7.12 of the Participation Agreement shall
be breached in any respect, (y) covenant made by the Owner Participant
in Section 7.02(c) or the last sentence of Section 7.13 of the
Participation Agreement shall be breached in any respect or (z) other
covenant made by the Owner Trustee, in its individual capacity or as
Owner Trustee, or by any Owner Trustee Guarantor, or by the Owner
Participant or the Owner Participant Guarantor in any Operative
Agreement shall be breached in any respect and such breach shall remain
unremedied for a period of thirty (30) days after there has been given
to the Owner Trustee and the Owner Participant by the Indenture Trustee
or by Certificate Holders of not less than 25% in aggregate principal
amount of Outstanding Certificates a written notice identified as a
"Notice of Indenture Event of Default" specifying such breach and
requiring it to be remedied; or
(iv) the Owner Trustee, the Lessor's Estate, any Owner Trustee
Guarantor, the Owner Participant or the Owner Participant Guarantor
shall file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation;
(v) an order for relief shall be entered in respect of the Owner
Trustee or any Owner Trustee Guarantor or the Owner Participant or the
Owner Participant Guarantor or the Lessor's Estate by a court having
jurisdiction in the premises in an involuntary case under the federal
bankruptcy laws as now or hereafter in effect; or the Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate shall file any answer
admitting or not contesting the material allegations of a petition filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or the Owner Participant Guarantor or the Lessor's Estate in
any proceeding referred to in clause (vi) below or seek or consent or
acquiesce in the appointment of any trustee, custodian, receiver or
liquidator of the Owner Trustee or any Owner Trustee Guarantor or the
Owner Participant or the Owner Participant Guarantor or the Lessor's
Estate, as the case may be, or of all or any substantial part of its
properties; or
(vi) without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered constituting an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or if any such petition shall be filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or the Owner Participant Guarantor or the Lessor's Estate, as
the case may be, and such petition shall not be dismissed within 60 days,
or if, without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered appointing a trustee, custodian, receiver or liquidator of the
Owner Trustee or any Owner Trustee Guarantor or the Owner Participant or
the Owner Participant Guarantor or the Lessor's Estate, as the case may be,
or of all or any substantial part of the properties of the Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate, as the case may be, and such
order shall not be dismissed within 60 days; or
(vii) any Owner Trustee Guaranty or the Owner Participant Guaranty
shall cease to be a valid and enforceable obligation of any Owner Trustee
Guarantor or the Owner Participant Guarantor, as the case may be, or
otherwise shall not be in full force and effect.
Section 7.02. Remedies. (a) If an Indenture Event of Default shall
have occurred and be continuing and so long as the same shall be continuing
unremedied, then and in every such case, the Indenture Trustee may, and when
required by the provisions of Article IX or Section 7.02(c) hereof, shall (i)
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article VII and (ii) in the event such Indenture
Event of Default is an Indenture Event of Default referred to in clause (i) of
Section 7.01 hereof, exercise any and all of the remedies pursuant to Article
17 of the Lease; provided that without the consent of the Owner Trustee and
the Owner Participant such exercise of remedies shall not occur until after
the latest date on which the Owner Trustee may cure the related Event of
Default pursuant to Section 8.03 hereof. The Indenture Trustee may (subject
to the provisions of the next succeeding paragraph) 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 (subject to the provisions of the next
succeeding paragraph) exercise any other right or remedy in lieu of or in
addition to the foregoing that may be available to it under applicable law, or
proceed by appropriate court action to enforce the terms hereof, of the Lease,
or both, or to rescind the Lease. Without limiting any of the foregoing, it
is understood and agreed that the Indenture Trustee may exercise any right of
sale of the Aircraft available to it, even though it shall not have taken
possession of the Aircraft and shall not have possession thereof at the time
of such sale.
Notwithstanding the foregoing, it is understood and agreed that if
the Indenture Trustee shall proceed to foreclose the Lien of this
Indenture, it shall substantially simultaneously therewith, to the extent
the Indenture Trustee is then entitled to do so hereunder and under the
Lease, and is not then stayed or otherwise prevented from doing so, proceed
(to the extent it has not already done so) to declare the Lease in default
and commence the exercise in good faith of one or more of the significant
remedies under Article 17 of the Lease (as the Indenture Trustee determines
in its sole discretion) for the purpose of recovering the Aircraft. It is
further understood and agreed that if the Indenture Trustee is unable to
exercise one or more remedies under Article 17 of the Lease because of any
stay or operation of law or otherwise, the Indenture Trustee shall not be
entitled to foreclose the Lien of this Indenture (A) until the earlier of
(i) 60 days from the date of any such stay or applicable order under
Section 1110 of the Bankruptcy Code plus any extension consented to by the
Indenture Trustee or the Holders of Certificates of such period as
permitted under Section 1110(b) of the Bankruptcy Code and (ii) the date of
actual repossession of the Aircraft by the Indenture Trustee or (B) if the
Lessee has agreed to perform or assume the Lease pursuant to Section 365 or
1110 of the Bankruptcy Code and no Event of Default (other than as
specified in Section 16.01(e), (f) or (g) of the Lease, or other Event of
Default in respect of which the 30-day period referred to in clause
(a)(1)(B)(ii)(I) of Section 1110 of the Bankruptcy Code shall not yet have
expired) shall be continuing. For the avoidance of doubt, it is expressly
understood and agreed that except as aforesaid the above-described
inability of the Indenture Trustee to exercise any right or remedy under
the Lease shall in no event and under no circumstances prevent the
Indenture Trustee from exercising all of its rights, powers and remedies
under this Indenture, including, without limitation, this Article VII. The
Indenture Trustee further agrees that notice of intent to foreclose shall
be given to the Owner Trustee at the earlier of the commencement of any
proceeding or at least 30 days prior to the consummation of foreclosure of
the Lien of this Indenture.
(b) If an Indenture Event of Default under clause (iv), (v) or (vi)
of Section 7.01 hereof shall occur and be continuing, the unpaid principal of
all Outstanding Certificates, together with interest accrued but unpaid
thereon and all other amounts due thereunder, but without Make-Whole Premium,
shall immediately become due and payable, without presentment, demand, protest
or notice, all of which are hereby waived.
(c) If any Indenture Event of Default not described in the preceding
paragraph (b) shall have occurred and be continuing, then and in every such
case, the Indenture Trustee may on its own accord or at the direction of
Holders of not less than 25% in aggregate principal amount of Outstanding
Certificates, at any time, by written notice to the Owner Trustee, the Owner
Participant and the Lessee, declare the principal of all the Certificates to
be due and payable, whereupon the unpaid principal amount of all Outstanding
Certificates, together with accrued interest thereon and all other amounts due
thereunder, but without Make-Whole Premium, shall immediately become due and
payable without presentment, demand, protest or other notice, all of which are
hereby waived. At any time after such declaration and prior to the sale or
disposition of the Trust Indenture Estate, however, the Holders of not less
than 50% in aggregate principal amount of Outstanding Certificates, by notice
to the Indenture Trustee, the Owner Trustee and the Lessee, may rescind such
declaration, whether made by the Indenture Trustee on its own accord or as
directed, if (x) there has been paid or deposited with the Indenture Trustee a
sum sufficient to pay all overdue installments of interest on all Certificates
(together, to the extent permitted by law, with interest on such overdue
installments of interest), the principal on any Certificates that has become
due otherwise than by such declaration of acceleration, all sums paid or
advanced by the Indenture Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel, or (y) all Indenture Events of Default (other than the nonpayment of
principal that has become due solely because of such acceleration) have been
either cured or waived as provided in Section 7.11 hereof. No such rescission
shall affect any subsequent default or impair any right consequent thereon.
(d) Each Holder shall be entitled at any sale to 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 (but
only to the extent that an amount equal to such purchase price would have been
paid to such Holder pursuant to Article V hereof if such purchase price were
paid in cash and the foregoing provisions of this subsection (d) were not
given effect).
Section 7.03. Return of Aircraft, etc. Subject to Section 7.02
hereof: (a) If an Indenture Event of Default shall have occurred and be
continuing, at the request of the Indenture Trustee, the Owner Trustee shall
promptly execute and deliver to the Indenture Trustee such documents as the
Indenture Trustee may deem necessary or advisable to enable the Indenture
Trustee or an agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify,
to obtain possession of all or any part of the Trust Indenture Estate to which
the Indenture Trustee shall at the time be entitled under this Indenture.
Subject to the foregoing, if the Owner Trustee shall for any reason fail to
execute and deliver such documents after such request by the Indenture
Trustee, the Indenture Trustee may pursue all or part of such Trust Indenture
Estate wherever it may be found and enter any of the premises of the Lessee or
the Owner Trustee wherever such Trust Indenture Estate may be or be supposed
to be and search for such Trust Indenture Estate and take possession of and
remove such Trust Indenture Estate. All expenses of pursuing, searching for
and taking such Trust Indenture Estate shall, until paid, be secured by the
Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Trust Indenture Estate, make all such
expenditures for maintenance, insurance and repairs to and of such Trust
Indenture Estate, as the Indenture Trustee may reasonably deem proper. In
each case subject to Section 7.02 hereof, the Indenture Trustee shall have the
right to maintain, use, operate, store, lease, control or manage the Trust
Indenture Estate and to carry on the business and to exercise all rights and
powers of the Owner Participant and the Owner Trustee relating to the Trust
Indenture Estate, as the Indenture Trustee may reasonably deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, insurance, use, operation, storage, leasing, control, management
or disposition of all or any part of the Trust Indenture Estate as the
Indenture Trustee may determine. Further, the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Trust Indenture Estate
other than Excepted Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
under this Indenture. Such tolls, rents (including Rent), revenues, issues,
income, products and profits shall be applied to pay the expenses of the use,
operation, storage, leasing, control, management, or disposition of the Trust
Indenture Estate, and of all maintenance and repairs, and to make all payments
which the Indenture Trustee may be required or may reasonably elect to make
for any taxes, assessments, insurance or other proper charges upon the Trust
Indenture Estate (including the employment of engineers and accountants to
examine, inspect and make reports upon the properties and books and records of
the Owner Trustee and the Lessee), and all other payments which the Indenture
Trustee may be required or authorized to make under any provision of this
Indenture, as well as just and reasonable compensation for the services of the
Indenture Trustee and of all persons properly engaged and employed for such
purposes by the Indenture Trustee; provided, that any excess amounts shall be
promptly distributed in accordance with Section 5.03 hereof.
(c) Subject to Section 7.02 hereof, if an Indenture Event of
Default shall have occurred and be continuing and the Indenture Trustee shall
be entitled to exercise remedies hereunder, and subject to Article VIII
hereof, the Indenture Trustee, either with or without taking possession, and
either before or after taking possession, and without instituting any legal
proceedings whatsoever, may sell, assign, transfer and deliver the whole or,
from time to time, to the extent permitted by law, any part of the Trust
Indenture Estate, or any part thereof, or interest therein, at any private
sale or public auction to the highest bidder, with or without demand,
advertisement or notice, except that in respect of any private sale 30 days
prior written notice by registered mail to the Owner Trustee and the Owner
Participant will be provided, for cash or, with the consent of the Owner
Trustee and the Owner Participant, credit or for other property, for immediate
or future delivery, and for such price or prices and on such terms as the
Indenture Trustee in exercising reasonable commercial discretion may
determine; provided, that any such action shall be at the time lawful and that
all mandatory legal requirements shall be complied with. Any notice required
pursuant to the terms hereof in the case of a public sale, shall state the
time and place fixed for such sale. Any such public sale shall be held at
such time or times within ordinary business hours as the Indenture Trustee
shall fix in the notice of such sale. At any such sale, the Trust Indenture
Estate may be sold in one lot as an entirety or in separate lots. The
Indenture Trustee shall not be obligated to make any sale pursuant to such
notice. The Indenture Trustee may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for such sale, and any such sale may
be made at any time or place to which the same may be so adjourned without
further notice or publication. The Indenture Trustee may exercise such right
of sale without possession or production of the Certificates or proof of
ownership thereof, and as representative of the Holders may exercise such
right without notice to the Holders or without including the Holders as
parties to any suit or proceedings relating to the foreclosure of any part of
the Trust Indenture Estate. The Owner Trustee shall execute any and all such
bills of sale, assignments and other documents, and perform and do all other
acts and things requested by the Indenture Trustee in order to permit
consummation of any sale of the Trust Indenture Estate in accordance with this
Section 7.03(c) and to effectuate the transfer or conveyance referred to in
the first sentence of this Section 7.03(c). Notwithstanding any other
provision of this Indenture, the Indenture Trustee shall not sell the Trust
Indenture Estate or any part thereof unless the Certificates shall have been
accelerated.
(d) To the extent permitted by applicable law, and subject to
Section 7.02 hereof, 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 of 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) 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.
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 Sections 7.02 and 7.03(c) hereof.
In case there shall be pending proceedings relative to the Owner
Trustee under the Bankruptcy Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Owner Trustee or its property, or in case of any other comparable judicial
proceedings relative to the Owner Trustee, or to the creditors or property of
the Owner Trustee, the Indenture Trustee, irrespective of whether the
principal of the Certificates shall then be due and payable as therein or
herein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal, interest and other amounts owing and unpaid in respect of the
Certificates or hereunder, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of the Holders allowed in any judicial
proceedings relative to the Owner Trustee or to the creditors or
property of the Owner Trustee,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Indenture Trustee on their
behalf;
and any trustee, receiver, or liquidator, custodian or other similar official
is hereby authorized by each of the Holders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to the Holders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or willful misconduct.
Nothing contained herein shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Certificates or the rights of any Holder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any Holder
in any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
All rights of action and rights to assert claims under this
Indenture, or under any of the Certificates, may be enforced by the Indenture
Trustee without the possession of such Certificates on any trial or other
proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders, as
provided herein.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Certificates, and it shall not be
necessary to make any Holders parties to such proceedings.
Section 7.05. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee in this Indenture shall be cumulative
and shall be in addition to every other right, power and remedy specifically
given herein or now or hereafter existing at law, in equity or by statute, and
each and every right, power and remedy whether specifically given herein or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Indenture Trustee or the Holders, and
the exercise or the beginning of the exercise of any power or remedy shall not
be construed to be a waiver of the right to exercise at the same time or later
any other right, power or remedy. No delay or omission by the Indenture
Trustee or of any Holder in the exercise of any right, remedy or power or in
the pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Trustee or
the Lessee or to be an acquiescence in any such default.
Section 7.06. Suits for Enforcement. If an Indenture Event of
Default has occurred, has not been waived and is continuing, the Indenture
Trustee may in its discretion and subject to its rights of appropriate
indemnification under Sections 7.08 and 9.03 and Article XI hereof proceed to
protect and enforce its rights and rights of the Holders by such appropriate
judicial proceedings as the Indenture Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture or to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture or by
law; provided, that any sale of any portion of the Trust Indenture Estate
shall be done in accordance with Sections 7.02 and 7.03(c) hereof.
Section 7.07. Discontinuance of Proceedings. In case the Indenture
Trustee or any Holder shall have instituted any proceeding to enforce any
right, power or remedy under this Indenture by foreclosure, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Indenture Trustee or
such Holder, then the Owner Trustee, the Indenture Trustee, the Owner
Participant, the Holders and the Lessee shall, subject to any binding
determination in such proceeding, be restored to their former positions and
rights under this Indenture with respect to the Trust Indenture Estate, and
all rights, remedies and powers of the Indenture Trustee and the Holders
shall continue as if no such proceeding had been instituted.
Section 7.08. Limitations on Suits by Holders. No Holder of any
Certificate shall have any right by virtue or by availing of any provision of
this Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Indenture Trustee written notice that an
Indenture Event of Default shall then have occurred and be continuing, as
hereinbefore provided, and the Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates shall have made written request
upon the Indenture Trustee to institute such action or proceedings in its own
name as trustee hereunder and shall have offered to the Indenture Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Indenture Trustee for 60
days after its receipt of such notice, request and offer of indemnity shall
have failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Indenture
Trustee pursuant to Section 7.10 hereof; it being understood and intended, and
being expressly covenanted by the Holder of each Certificate with every other
Holder of each other Certificate and the Indenture Trustee, that no one or
more Holders shall have any right in any manner whatever to affect, disturb or
prejudice the rights of any other Holder or the Lien of this Indenture or any
part of the Trust Indenture Estate or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under this
Indenture, except in the manner provided herein and for the equal, ratable and
common benefit of all Holders. For the protection and enforcement of the
provisions of this Section, each and every Holder and the Indenture Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute Certain Suits.
Notwithstanding any other provision in this Indenture and any provision of any
Certificate, the right of any Holder to receive payment of the principal of
and interest and Make-Whole Premium, if any, on such Certificate on or after
the respective due dates and in the manner expressed in such Certificate, or,
subject to Section 7.08 hereof, to institute suit for the enforcement of any
such payment on or after such respective dates as provided herein, shall not
be impaired or affected without the consent of such Holder.
Section 7.10. Control by Holders. The Majority in Interest of
Certificate Holders shall have the right to direct the Indenture Trustee as to
the time, method, and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power conferred
on the Indenture Trustee by this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture and the Indenture Trustee shall have received, to the extent
provided in Sections 7.08 and 9.03 and Article XI hereof, such reasonable
indemnification as it may require against the costs, expenses and liabilities
to be incurred by the Indenture Trustee; and provided further that (subject to
the provisions of Section 9.02 hereof) the Indenture Trustee shall have the
right to decline to follow any such direction if the Indenture Trustee, being
advised by counsel, shall determine that the action or proceeding so directed
may not lawfully be taken or if the Indenture Trustee in good faith by its
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers of the Indenture Trustee shall determine that the
action or proceedings so directed would involve the Indenture Trustee in
personal liability or if the Indenture Trustee in good faith shall so
determine that the actions or forebearances specified in or pursuant to such
direction shall be unduly prejudicial to the interests of Holders not joining
in the giving of said direction, it being understood that (subject to Section
9.02 hereof) the Indenture Trustee shall have no duty to ascertain whether or
not such actions or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Indenture
Trustee in its discretion to take any action deemed proper by the Indenture
Trustee and which is not inconsistent with the direction by the Majority in
Interest of Certificate Holders.
Section 7.11. Waiver of Past Indenture Default. Upon written
instructions from the Majority in Interest of Certificate Holders, the
Indenture Trustee shall waive any past Indenture Default and its consequences
and upon any such waiver such Indenture Default shall cease to exist and any
Indenture Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Indenture Default or impair any right consequent
thereon; provided, however, that in the absence of written instructions from
all Holders and each Liquidity Provider, the Indenture Trustee shall not waive
any Indenture Default (a) in the payment of the principal of or Make-Whole
Premium, if any, or interest on, or other amounts due under, any Certificate
then Outstanding, or (b) in respect of a covenant or provision of this
Indenture which, under Article XIII hereof, cannot be modified or amended
without the consent of each Holder.
Section 7.12. Notice of Indenture Default. The Indenture Trustee
shall transmit to the Owner Trustee, the Holders and to the Owner Participant
notice of any Indenture Defaults actually known to a Responsible Officer of
the Indenture Trustee, such notice to be transmitted by mail to the Holders
within 90 days, and to the Owner Trustee and the Owner Participant promptly
after the occurrence thereof, unless such Indenture Default shall have been
cured before the giving of such notice; provided that except in the case of a
default in the payment of the principal of or interest on any Certificate,
under no circumstances shall the Indenture Trustee give such notice to the
Holders until the expiration of a period of 60 days from the occurrence of
such Indenture Default; and provided further that, except in the case of
default in the payment of the principal of or interest on or any other
amount due under any of the Certificates, the Indenture Trustee shall be
protected in withholding such notice to the Holders if and so long as the
board of directors, the executive committee, or a trust committee of
directors or trustees and/or Responsible Officers of the Indenture Trustee
in good faith determines that the withholding of such notice is in the
interests of the Holders.
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.
(a) Subject to Section 13.01 hereof and the provisions of paragraph (a)
immediately following the Granting Clause hereof, without the consent of a
Majority in Interest of Certificate Holders, the respective parties to the
Indenture Documents may not modify, amend or supplement any of said
agreements, or give any consent, waiver, authorization or approval thereunder,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner the
rights of the respective parties thereunder; provided, however, that the
actions specified in subsection (b) of this Section 8.01 may be taken without
the consent of the Indenture Trustee or any Holder.
(b) Subject to the provisions of subsection (c) of this Section
8.01, the Lessor and the respective parties to the Indenture Documents, at any
time and from time to time, without the consent of the Indenture Trustee or of
any Holder, may:
(1) so long as no Indenture Event of Default shall have occurred and
be continuing, modify, amend or supplement the Lease, or give any waiver
with respect thereto, except that without compliance with subsection (a) of
this Section 8.01 the parties to the Lease shall not modify, amend or
supplement, or give any waiver for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions thereof or
of modifying in any manner the rights of the respective parties thereunder,
with respect to the following provisions of the Lease as in effect on the
effective date hereof: Article 2 (except in respect of the Term, if the
result thereof would not be to shorten the Term of the Lease to a period
shorter than the period ending with the Maturity of any Certificate),
Section 3.03 (except to the extent such Section relates to amounts payable
(whether directly or pursuant to this Indenture) to Persons other than
Holders, each Liquidity Provider, the Subordination Agent and the Indenture
Trustee in its individual capacity), Section 3.05, Section 3.06 (except
insofar as it relates to the address or account information of the Owner
Trustee or the Indenture Trustee) (other than as such Sections 3.03, 3.05
and 3.06 may be amended pursuant to Section 3.04 of the Lease as in effect
on the effective date hereof), Section 5.01, Article 6, Article 10 (except
that further restrictions may be imposed on the Lessee), Article 11 (except
that additional requirements may be imposed on the Lessee), Article 13
(except for Section 13.05 and except that additional insurance requirements
may be imposed on the Lessee), Article 14 (except in order to increase the
Lessee's liabilities or enhance the Lessor's rights thereunder), Article 15
(except in the case of an assignment by the Lessor in circumstances where
the Aircraft shall remain registrable under the Federal Aviation Act),
Section 16.01 (except to impose additional or more stringent Events of
Default), Article 17 (except to impose additional remedies), Section 19.01
(except to impose additional requirements on the Lessee), Section 20.01,
Article 22, Section 23.01, Section 26.03 and any definition of terms used
in the Lease, to the extent that any modification of such definition would
result in a modification of the Lease not permitted pursuant to this
subsection (b); provided that the parties to the Lease may take any such
action without the consent of the Indenture Trustee or any Holder to the
extent such action relates to the payment of amounts constituting, or the
Owner Trustee's, the Owner Participant's or the Lessee's rights or
obligations with respect to, Excepted Payments (other than the place, time
and manner of payment of any portion of Basic Rent constituting an Excepted
Payment);
(2) modify, amend or supplement the Trust Agreement and any other
Indenture Document (other than the Lease and the Participation Agreement),
or give any consent, waiver, authorization or approval with respect
thereto, in each case only to the extent any such action shall not
materially adversely impact the interests of the Holders;
(3) modify, amend or supplement the Participation Agreement, or give
any consent, waiver, authorization or approval with respect thereto, except
that without compliance with subsection (a) of this Section 8.01 the
parties to the Participation Agreement shall not modify, amend or
supplement, or give any consent, waiver, authorization or approval for the
purpose of adding provisions to or changing in any manner or eliminating
any of the provisions thereof or of modifying in any manner the rights of
the respective parties thereunder, with respect to the following provisions
of the Participation Agreement as in effect on the effective date hereof:
Article 6 and Section 10.01(b) (insofar as such Article 6 and Section
10.01(b) relate to the Indenture Trustee, the Pass Through Trustee and the
Holders), Article 7 and Sections 3.05, 15.01, 17.02 and 17.11 and Articles
8 and 9 (insofar as such Articles relate to the Indenture Trustee; it being
understood that only the Indenture Trustee's consent in respect thereof
need be obtained) and any definition of terms used in the Participation
Agreement, to the extent that any modification of such definition would
result in a modification of the Participation Agreement not permitted
pursuant to this subsection (b); and
(4) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided the
making of any such other provision shall not adversely affect the interests
of the Holders.
(c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease or the Participation
Agreement, whether effected pursuant to subsection (a) or pursuant to
subsection (b) of this Section 8.01 and anything in such subsections or
elsewhere in this Indenture to the contrary notwithstanding, shall, without
the consent of the Holder of each Outstanding Certificate affected thereby,
and each Liquidity Provider,
(1) modify, amend or supplement the Lease in such a way as to extend
the time of payment of Basic Rent or Stipulated Loss Value or Supplemental
Rent payable to the Holders or any Liquidity Provider or any other amounts
payable for the account of the Holders or any Liquidity Provider (subject
in any event to Section 3.05 of the Lease) upon the occurrence of an Event
of Loss or Termination Value and any other amounts payable for the account
of the Holders (subject in any event to Section 3.05 of the Lease) upon
termination of the Lease with respect to the Aircraft payable under, or as
provided in, the Lease as in effect on the effective date hereof, or reduce
the amount of any installment of Basic Rent or Supplemental Rent so that
the same is less than the payment of principal of, and interest on the
Certificates and Make-Whole Premium, if any, and amounts due to each
Liquidity Provider, as the case may be, to be made from such installment of
Basic Rent or Supplemental Rent, or reduce the aggregate amount of
Stipulated Loss Value, or any other amounts payable under, or as provided
in, the Lease as in effect on the effective date hereof upon the occurrence
of an Event of Loss so that the same is less than the accrued interest on
and the principal as of the Loss Payment Date, of the Certificates at the
time Outstanding or reduce the amount of Termination Value and any other
amounts payable under, or as provided in, the Lease as in effect on the
effective date hereof upon termination of the Lease with respect to the
Aircraft so that the same is less than the accrued interest on and
principal as of the Lease Termination Date and Make-Whole Premium, if any,
of Certificates at the time Outstanding, or
(2) modify, amend or supplement the Lease in such a way as to, or
consent to any assignment of the Lease or give any consent, waiver,
authorization or approval which would, release the Lessee from its absolute
and unconditional obligations in respect of payment of Basic Rent or
Supplemental Rent, or Stipulated Loss Value and any other amounts payable
for the account of the Holders (subject in any event to Section 3.05 of the
Lease) upon the occurrence of an Event of Loss, or Termination Value and
any other amounts payable for the account of the Holders (subject in any
event to Section 3.05 of the Lease) with respect to the Aircraft, payable
under, or as provided in, the Lease as in effect on the effective date
hereof, except for any such assignment pursuant to Section 2.12 hereof, and
except as provided in the Lease as in effect on the effective date hereof.
(d) At all times so long as this Indenture is in effect, the consent
of the Owner Trustee (at the direction of the Owner Participant) shall be
required in order (i) to amend, modify or supplement the Lease or any other
Operative Document to which the Owner Trustee is a party or to waive
compliance by the Lessee with any of its obligations thereunder and (ii) to
grant any consent requested under the Lease.
Notwithstanding the foregoing, but subject always to the provision of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Article 17 (other than with respect to Excepted
Payments) thereof and (B) subject only to the provisions of this Indenture,
exercise the remedies set forth in such Article 17 of the Lease (other than in
connection with Excepted Payments) and in Article 7 hereof.
Nothing in this Indenture shall be deemed to prohibit the Owner
Participant or the Owner Trustee from making demand on the Lessee for, or from
commencing an action at law to obtain the payment of, or from receiving
payment of, any Excepted Payment; provided, however, that if the Owner Trustee
is proceeding under the Lease, the Owner Trustee shall proceed pursuant to
Section 17.01(a)(v), and only Section 17.01(a)(v), of the Lease.
Section 8.02. Owner Participant's Right to Elect to Prepay or
Purchase the Certificates. (a) If (i) an Event of Default shall have occurred
and be continuing for more than 180 days or the Certificates shall have become
due and payable pursuant to Section 7.02(b) or (c) hereof or (ii) an Event of
Default shall have occurred and be continuing for not more than 180 days and
the Certificates shall not have become due and payable pursuant to Section
7.02(b) or (c) hereof, the Owner Participant (or the Owner Trustee on behalf
of the Owner Participant) may, but shall be under no obligation to, do either
of the following:
(1) direct the Owner Trustee to cause the prepayment of all, but not
less than all, of the Certificates then Outstanding by notifying the
Indenture Trustee of such election, which notice in order to be effective
shall state that it is irrevocable (except as provided below) and shall
designate a Prepayment Date which shall be a Business Day which shall be
not less than 15 days after the date of such notice on which the Owner
Trustee shall, in the manner provided for in Section 6.04 hereof, deposit
the sum of amounts contemplated by paragraph "first" under Section 5.03 and
the aggregate Prepayment Price (determined in accordance with Section
6.02(b) hereof) of all such Certificates with the Indenture Trustee. If
such payment by the Owner Trustee to the Indenture Trustee is made, the
Certificates shall cease to accrue interest from and after the Prepayment
Date, and after distribution of such payment to the Holders, the Indenture
Trustee shall release the Trust Indenture Estate from the Lien of this
Indenture; or
(2) purchase all, but not less than all, of the Outstanding
Certificates by notifying the Indenture Trustee of such election, which
notice in order to be effective shall state that it is irrevocable (except
as provided below) and shall designate a date which shall be a Business Day
which shall be not less than 15 days after the date of such notice on which
the Owner Trustee shall pay to the Indenture Trustee an amount equal to the
aggregate unpaid principal amount of all Outstanding Certificates, together
with accrued interest on such amount to the date of purchase, the aggregate
amount of any Make-Whole Premium applicable to each Outstanding Certificate
(if such purchase occurs prior to the Premium Termination Date for such
Outstanding Certificate) in the case of a purchase pursuant to clause
(a)(ii) above (but not if such purchase is pursuant to clause (a)(i)
above), plus all other sums due any Holder or the Indenture Trustee
hereunder or under the Participation Agreement or the Lease. Upon receipt
by the Indenture Trustee of such amount, each Holder will be deemed,
whether or not Certificates shall have been delivered to the Indenture
Trustee on such date, to have thereupon sold, assigned, transferred and
conveyed (and shall promptly take such actions as the Owner Participant
shall reasonably request to evidence such sale, assignment, transfer and
conveyance) to the Owner Participant (without recourse or warranty of any
kind except for its own acts), all of the right, title and interest of such
Holder in and to the Trust Indenture Estate and this Indenture and all
Certificates held by such Holder and the former Holders shall not be
entitled to receive any interest on the principal amount of such
Certificates after the purchase date, and the Owner Participant shall be
deemed to have assumed (and shall promptly take such actions as any Holder
shall reasonably request to evidence such assumption) all of such Holder's
obligations under the Participation Agreement and this Indenture arising
subsequent to such sale. If the Owner Trustee shall so request, such
Holder will comply with all the provisions of Section 2.06 of this
Indenture to enable new Certificates to be issued to the Owner Participant
in such authorized denominations as the Owner Participant shall request.
All charges and expenses required pursuant to Section 2.06 hereof in
connection with the issuance of any such new Certificates shall be borne by
the Owner Participant.
(b) From and after the deposit by the Owner Trustee of the
applicable Prepayment Price or purchase price with the Indenture Trustee
pursuant to Section 8.02(a) hereof, the Owner Trustee shall be entitled to
exercise all remedies of the Indenture Trustee under Article VII hereof as
well as of the Lessor under the Lease.
(c) Any election to prepay or purchase the Certificates under this
Section 8.02 shall be irrevocable, provided that if on the specified date for
prepayment or purchase, the Event of Default giving rise to such election
shall no longer be continuing under the Lease such election shall be deemed to
be automatically withdrawn.
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 date
which is 15 Business Days after the Owner Participant's receipt of written
notice of such Event of Default all principal and interest on the Certificates
then due (as well as any interest on overdue principal and (to the extent
permitted by applicable law) interest), but not including any principal or
interest becoming due on account of such Event of Default, then the failure of
the Lessee to make the payment of such installment of Basic Rent or of
interest on account of such installment's being overdue shall not constitute
or result in an Indenture Event of Default under this Indenture and any
declaration based solely on the same shall be deemed to be automatically
rescinded. Nothing contained in the preceding sentence shall be deemed to
entitle the Owner Trustee to exercise any rights and powers or pursue any
remedies pursuant to Article 17 of the Lease or otherwise except as set forth
in this Indenture, and except that the Owner Trustee or the Owner Participant
may attempt to recover any amount paid by it or them under this Indenture by
demanding of the Lessee payment of such amount, or by commencing an action at
law or equity 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 be subrogated on
an unsecured basis to all the rights of the Indenture Trustee under the Lease
in respect of the payment giving rise to such Event of Default, and any right
to any interest in respect of the same, and shall be entitled to any payment
of Basic Rent (or interest thereon) actually made by the Lessee in respect
of such cured payment upon receipt by the Indenture Trustee; provided that
no such amount shall be paid to the Owner Trustee or the Owner Participant
until all amounts then due and payable to each Certificate Holder hereunder
and thereunder shall have been paid in full and no Indenture Event of
Default shall have occurred and be continuing. Notwithstanding anything in
this Indenture or the Lease to the contrary, the Owner Participant and the
Owner Trustee collectively, shall not be entitled to cure more than six (6)
Events of Default (no more than three (3) of which may be consecutive)
occasioned by defaults in the payment of Basic Rent.
(b) If (A) there shall occur an Event of Default under the Lease for
any reason other than the Lessee's failure to make any payment of an
installment of Basic Rent and (B) the Owner Trustee shall have taken or caused
to be taken such action necessary to cure and shall have cured such Event of
Default prior to the date which is 15 Business Days after the Owner
Participant's receipt of the written notice of such Event of Default, then
the failure of the Lessee to perform such covenant, condition or agreement,
the observance or performance of which was accomplished by the Owner Trustee
hereunder shall not constitute or result in an Indenture Event of Default
under this Indenture and any declaration based solely on the same shall be
deemed to be automatically rescinded. Nothing contained in the preceding
sentence shall be deemed to entitle the Owner Trustee or the Owner
Participant to exercise any rights and powers or pursue any remedies
pursuant to Article 17 of the Lease or otherwise except as set forth in
this Indenture, and except that the Owner Trustee or the Owner Participant
may attempt to recover any amount paid by it or them in effecting such cure
by demanding of the Lessee payment of such amount, plus any interest due,
or by commencing an action at law or in equity against the Lessee for the
payment of such amount or taking appropriate action in a pending action at
law or in equity against the Lessee pursuant to Section 17.01(a)(v), but
only said Section 17.01(a)(v), of the Lease. Upon curing any such Event of
Default pursuant to this Section 8.03(b), the Owner Trustee or the Owner
Participant, as the case may be, shall be subrogated to all the rights of
the Indenture Trustee under the Lease in respect of the payment, agreement
or covenant giving rise to such Event of Default, and any right to any
interest in respect of the same, and shall be entitled to any payment or
other performance upon receipt by the Indenture Trustee; provided that no
such amount shall be paid to the Owner Trustee or the Owner Participant
until all amounts then due and payable to each Certificate Holder hereunder
and thereunder shall have been paid in full and no Indenture Event of
Default shall have occurred and be continuing.
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts. The Indenture Trustee in its
individual capacity hereby accepts the trusts imposed upon it by this
Indenture, and covenants and agrees to perform the same as expressed herein
and agrees to receive and disburse all moneys constituting part of the Trust
Indenture Estate in accordance with the terms hereof.
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an Indenture Event of Default.
(a) The Indenture Trustee, prior to the occurrence of an Indenture Event of
Default and after the curing or waiving of all Indenture Events of Default
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. So long as an
Indenture Event of Default has occurred and has not been cured or waived, the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs. No provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Indenture Event of Default and
after the curing or waiving of all Indenture Events of Default which may have
occurred:
(x) the duties and obligations of the Indenture Trustee shall be
determined solely by the express provisions of this Indenture, and the
Indenture Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read in to this Indenture against
the Indenture Trustee; and
(y) in the absence of bad faith on the part of the Indenture
Trustee, the Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; but in the case of any such
statements, certificate or opinions which by any provision hereof are
specifically required to be furnished to the Indenture Trustee, the Indenture
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible Officers
of the Indenture Trustee, unless it shall be proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action taken or not taken by it in good faith in accordance with the direction
of the Holders of not less than a majority in aggregate principal amount of
Outstanding Certificates relating to the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred upon the Indenture Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Indenture Trustee shall have determined
in good faith that the repayment of such funds or adequate indemnity against
such liability is not reasonably assured to it.
The Indenture Trustee agrees that it will execute and the Owner
Trustee agrees that it will, at the expense of the Lessee, file or cause to be
filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Trust Indenture
Estate as may be specified from time to time in written instructions of the
Holders of not less than 25% in aggregate principal amount of Certificates
(which instructions may, by their terms, be operative only at a future date
and which shall be accompanied by the execution form of such continuation
statement so to be filed); provided that, notwithstanding the foregoing, the
Indenture Trustee may execute and file or cause to be filed any financing
statement which it from time to time deems appropriate.
(b) If any Event of Default shall have occurred and be continuing
and, after the latest date on which the Owner Trustee may cure such Event of
Default pursuant to Section 8.03 hereof, on request of the Holders of not less
than 25% in aggregate principal amount of Outstanding Certificates and subject
to indemnification, to the extent provided in Sections 7.08 and 9.03 and
Article XI hereof, as it may require against the costs, expenses and
liabilities to be incurred, the Indenture Trustee shall exercise such remedies
under Article 17 of the Lease as shall be specified in such request.
(c) The Indenture Trustee agrees that it will, in its individual
capacity and at its own cost and expense (but without any right of indemnity
in respect of any such cost or expense under Article XI hereof) promptly take
such action as may be necessary duly to discharge all Indenture Trustee's
Liens on any part of the Trust Indenture Estate.
(d) The Indenture Trustee will execute and deliver to the Lessee for
filing in accordance with Article 18 of the Lease any properly presented
document, instrument or financing or continuation statement specified in any
opinion delivered pursuant to Section 6.03(e) of the Participation Agreement.
The Indenture Trustee may rely on the act of presentation of any such
document, instrument, financing or continuation statement as evidencing the
fact that it is properly prepared and presented, provided that the Indenture
Trustee shall promptly correct any error in any such document, instrument,
financing or continuation statement of which a Responsible Officer of the
Indenture Trustee has actual knowledge.
(e) The Indenture Trustee will furnish to each Holder promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished to
the Indenture Trustee, to the extent that the same shall not have been
otherwise furnished to such Holder pursuant to this Indenture or to the extent
the Indenture Trustee does not reasonably believe that the same shall have
been furnished by the Lessee directly to such Holder.
Section 9.03. Certain Rights of the Indenture Trustee. Subject to
Section 9.02 hereof:
(a) the Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Owner Trustee
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof be herein
specifically prescribed) upon which the Indenture Trustee may rely to prove
or establish a matter set forth therein;
(c) the Indenture Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Indenture Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Indenture Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Indenture Event of Default
hereunder and after the curing or waiving of all Indenture Events of
Default, the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or
document unless requested in writing to do so by the Majority in Interest
of Certificate Holders; provided that, if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Indenture Trustee, not reasonably assured to the Indenture Trustee
by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Owner Trustee or,
if paid by the Indenture Trustee or any predecessor trustee, shall be
repaid by the Owner Trustee upon demand; and
(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by it hereunder.
Section 9.04. Indenture Trustee Not Responsible for Recitals,
Disposition of Certificates or Application of Proceeds Thereof. The Indenture
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates, except the Indenture Trustee's
certificates of authentication. The Indenture Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Certificates. The Indenture Trustee shall not be accountable for the use or
application by the Owner Trustee of any of the Certificates or of the proceeds
thereof.
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc. The Indenture Trustee or any agent of the Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Indenture
Trustee or such agent and may otherwise deal with the Owner Trustee and
receive, collect, hold and retain collections from the Owner Trustee with the
same rights it would have if it were not the Indenture Trustee or such agent.
Section 9.06. Moneys Held by Indenture Trustee. Subject to Sections
5.08 hereof and 14.04 hereof, all moneys received by the Indenture Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Neither
the Owner Trustee nor, subject to Section 5.08 hereof, the Indenture Trustee
nor any agent thereof shall be under any liability for interest on any moneys
received by it hereunder.
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc. Subject to Sections 9.02 and 9.03 hereof, whenever in the
administration of the trusts of this Indenture the Indenture Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting any action hereunder, such matter (unless
other evidence in respect thereof be specifically prescribed herein) may, in
the absence of bad faith on the part of the Indenture Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to
the Indenture Trustee, and such certificate, in the absence of bad faith on
the part of the Indenture Trustee, shall be full warrant to the Indenture
Trustee for any action taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
Section 9.08. Replacement Airframes and Replacement Engines. At any
time and from time to time any Airframe or Engine which has been subject to an
Event of Loss and may, or is required to, be replaced under Section 10.03,
11.03 or 11.04 of the Lease by a Replacement Airframe or Replacement Engine,
as the case may be, shall be replaced in accordance with the provisions of
this Section 9.08 and the provisions of said Sections of the Lease, the Owner
Trustee shall, from time to time, direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing such Airframe and/or Engine as appropriate from the Lien
of this Indenture and the Indenture Trustee shall execute and deliver such
instrument as aforesaid without recourse or warranty, but only upon receipt by
or deposit with the Indenture Trustee of the following:
(1) A written request from the Owner Trustee requesting such release
and specifically describing the Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or
other applicable registration information) and manufacturer's
serial number;
(ii) a description of the Replacement Airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Airframe the Owner Trustee
will be the legal owner of and have good and marketable title to such
Replacement Airframe free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease, that such Replacement
Airframe will on such date be in at least as good operating condition
and repair as required by the terms of the Lease, and that such
Replacement Airframe has been or, substantially concurrently with
such replacement, will be duly registered in the name of the Owner
Trustee under the Transportation Code or under the law then
applicable to the registration of the Airframe subject to the Event
of Loss and that an airworthiness certificate has been duly issued
under the Aviation Act (or such other applicable law) with respect to
such Replacement Airframe and that such registration and certificate
is, or will be, in full force and effect, and that the Lessee will
have the full right and authority to use such Replacement Airframe;
(iv) that the insurance required by Article 13 of the Lease is in
full force and effect with respect to such Replacement Airframe and
all premiums then due thereon have been paid in full;
(v) that the Replacement Airframe is of the same or an improved
make or model as the Airframe requested to be released from this
Indenture;
(vi) that the value of the Replacement Airframe as of the date of
such certificate is not less than the value of the Airframe
requested to be released (assuming such Airframe was in the
condition and repair required to be maintained under the Lease);
(vii) that no Event of Default has occurred and is continuing or
would result from the making and granting of the request for release
and the addition of a Replacement Airframe;
(viii) that the release of the Airframe subject to the Event of Loss
will not impair the security of the Indenture in contravention of any
of the provisions of this Indenture;
(ix) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Airframe and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x) that each of the conditions specified in Section 11.03 of the
Lease with respect to such Replacement Airframe has been satisfied.
B. With respect to the replacement of any Engine:
(i) a description of the Engine subject to the Event of Loss
including the manufacturer's serial number;
(ii) a description of the Replacement Engine including the
manufacturer's name, the engine model and serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Engine the Owner Trustee will
be the legal owner of such Replacement Engine free and clear of all
Liens except Liens permitted under Section 6.01 of the Lease, and
that such Replacement Engine will on such date be in at least as good
operating condition and repair as required by the terms of the Lease
and will otherwise conform to the requirements set forth in the
definition of "Replacement Engine";
(iv) that the value of the Replacement Engine as of the date of such
certificate is not less than the value of the Engine to be released
(assuming such Engine was in the condition and repair required to be
maintained under the Lease);
(v) that the release of the Engine subject to the Event of Loss will
not impair the security of the Indenture in contravention of any of
the provisions of this Indenture;
(vi) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Engine and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(vii) that each of the conditions specified in Section 10.03, 11.03
or 11.04 of the Lease with respect to such Replacement Engine has
been satisfied.
(3) The appropriate instruments (i) transferring to the Owner
Trustee title to the Replacement Airframe or Replacement Engine to be received
as consideration for the Airframe or Engine to be released and (ii) assigning
to the Owner Trustee the benefit of all manufacturer's and vendor's
warranties, if any, generally available with respect to such Replacement
Airframe or Replacement Engine, and an Indenture and Security Agreement
Supplement subjecting such Replacement Airframe or Replacement Engine to the
Trust Agreement and to the Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing satisfactory to the Indenture Trustee and the Owner Trustee
confirming the accuracy of the information set forth in clause (2)A.(vi) of
this Section 9.08.
(5) The opinion of Davis Polk & Wardwell, special counsel to the
Lessee, or other counsel reasonably satisfactory to the Indenture Trustee,
stating that:
(i) the certificates, opinions and other instruments and/or property
which have been or are therewith delivered to and deposited with the
Indenture Trustee conform to the requirements of this Indenture and the
Lease and, upon the basis of such application, the property so sold or
disposed of may be properly released from the Lien of this Indenture and
all conditions precedent herein provided for relating to such release have
been complied with; and
(ii) the Replacement Airframe or Replacement Engine has been validly
subjected to the Lien of this Indenture and covered by the Lease, the
instruments subjecting such Replacement Airframe or Replacement Engine to
the Lease and to the Lien of this Indenture, as the case may be, have been
duly filed for recordation pursuant to the Transportation Code or any other
law then applicable to the registration of the Aircraft, and no further
action, filing or recording of any document is necessary or advisable in
order to establish and perfect the title of the Owner Trustee to and the
Lien of this Indenture on such Replacement Airframe or Replacement Engine
and the Indenture Trustee would be entitled to the benefits of Section 1110
of the Bankruptcy Code with respect to such Replacement Airframe or
Replacement Engine, provided, that such opinion need not be to the effect
specified in the foregoing clause to the extent that the benefits of such
Section 1110 would not have been, by reason of a change in law or
governmental interpretation thereof after the date hereof, available to the
Indenture Trustee with respect to the Aircraft immediately prior to such
substitution had such Event of Loss not occurred.
Section 9.09. Indenture and Security Agreement Supplement for
Replacements. In the event of the substitution of a Replacement Airframe or a
Replacement Engine as contemplated by Section 10.03 or Article 11 of the
Lease, the Owner Trustee and the Indenture Trustee agree for the benefit of
the Holders and the Lessee, subject to fulfillment of the conditions precedent
and compliance by the Lessee with its obligations set forth in Section 10.03
or Article 11 of the Lease, to execute and deliver an Indenture and Security
Agreement Supplement as contemplated by Section 9.08(3) hereof and, provided
no Event of Default shall have occurred and be continuing, execute and deliver
to the Lessee an appropriate instrument releasing the Airframe or Engine being
replaced from the Lien of this Indenture.
Section 9.10. Effect of Replacement. In the event of the
substitution of a Replacement Airframe or a Replacement Engine as contemplated
by Section 10.01 or Article 11 of the Lease and Section 9.08 hereof, all
provisions of this Indenture relating to the Airframe or Engine or Engines
being replaced shall be applicable to such Replacement Airframe or Replacement
Engine or Engines with the same force and effect as if such Replacement
Airframe or Replacement Engine or Engines were the same Airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine or
Engines being replaced.
Section 9.11. Compensation. The Owner Trustee covenants and agrees
to pay, and the Indenture Trustee shall be entitled to receive, reasonable
compensation and payment or reimbursement for its reasonable advances,
expenses and disbursements (including the reasonable compensation and expenses
and disbursements of its counsel, agents and other persons not regularly in
its employ) in connection with its services rendered hereunder or in any way
relating to or arising out of the administration of the Trust Indenture Estate
and shall have a priority claim on the Trust Indenture Estate for the payment
of such compensation, advances, expenses and disbursements to the extent that
such compensation, advances, expenses and disbursements shall not be paid by
the Lessee, and shall have the right to use or apply any moneys held by it
hereunder in the Trust Indenture Estate toward such payments; provided that,
so long as the Lease is in effect, the Indenture Trustee shall not make any
claim for payment under this Section 9.11 against the Owner Trustee without
first making demand on the Lessee for payment of such claim. The Indenture
Trustee agrees that it shall have no right against any Holder, SSB or the
Owner Participant for any fee as compensation for its services as trustee
under this Indenture.
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing, and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee and, if expressly required herein, to the Owner Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
9.02 and 9.03 hereof) conclusive in favor of the Indenture Trustee and the
Owner Trustee, if made in the manner provided in this Article.
(b) For the purpose of determining the Holders entitled to vote or
consent to any direction, waiver or other action of such Holders under Section
7.10 or 7.11 hereof, the Lessee may set a record date for such vote or consent
by specifying such record date in an Officer's Certificate delivered to the
Indenture Trustee. Such record date shall be a date not more than 15 days
prior to the first solicitation of such vote or consent.
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates. Subject to Sections 9.02 and 9.03 hereof, the execution of any
instrument by a Holder or his agent or proxy may be proved in accordance with
such reasonable rules and regulations as may be prescribed by the Indenture
Trustee. The holding of Certificates shall be proved by the Register or by a
certificate of the Registrar.
Section 10.03. Holders to Be Treated as Owners. Prior to due
presentment for registration of transfer of any Certificate, the Owner
Trustee, the Indenture Trustee, any agent of the Owner Trustee or the
Indenture Trustee, the Paying Agent, if any, the Registrar and the Lessee
shall deem and treat the Person in whose name such Certificate shall be
registered upon the Register as the absolute owner of such Certificate
(whether or not such Certificate shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions of
this Indenture, interest on such Certificate and for all other purposes; and
neither the Owner Trustee nor the Indenture Trustee (nor any agent of the
Owner Trustee or the Indenture Trustee) nor the Paying Agent, if any, nor the
Registrar nor the Lessee shall be affected by any notice to the contrary. All
such payments so made to any such person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Certificate.
Section 10.04. Certificates Owned by Owner Trustee and the Lessee
Deemed Not Outstanding. In determining whether the Holders of the requisite
aggregate principal amount of Certificates have concurred in any direction,
consent or waiver under this Indenture, Certificates which are owned by the
Owner Trustee, the Owner Participant, SSB, the Lessee or by any Affiliate
thereof shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination; provided that for the purpose of determining
whether the Indenture Trustee shall be protected in relying on any such
direction, consent or waiver, only if a Responsible Officer of the Indenture
Trustee has actual knowledge that certain Certificates are so owned by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Owner Trustee, the Owner Participant, SSB or
the Lessee shall such Certificates be so disregarded; and provided further
that if all Certificates which would be deemed Outstanding in the absence of
the foregoing provision are owned by the Owner Trustee, SSB or the Owner
Participant or by any Affiliate thereof, then such Certificates shall be
deemed Outstanding for the purpose of any such determination. Certificates
so owned which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Owner Trustee, the Owner Participant, SSB 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, SSB
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,
SSB, or the Owner Participant are actually named in the Register. Upon
request of the Indenture Trustee, the Owner Trustee, the Owner Participant,
SSB and the Lessee shall furnish to the Indenture Trustee promptly an
Officer's Certificate listing and identifying all Certificates, if any, known
by the Owner Trustee, the Owner Participant, SSB or the Lessee to be owned or
held by or for the account of any of the above-described persons; and, subject
to Sections 9.02 and 9.03 hereof, the Indenture Trustee shall be entitled to
accept such Officer's Certificate as conclusive evidence of the facts set
forth therein and of the fact that all Certificates not listed therein are
outstanding for the purpose of any such determination.
Section 10.05. Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Indenture Trustee, as provided
in Section 10.01, of the taking of any action by the Holders of the percentage
in aggregate principal amount of the Certificates specified in this Indenture
in connection with such action, any Holder of a Certificate, the serial number
of which is shown by the evidence to be included among the serial numbers of
the Certificates the Holders of which have consented to such action, may, by
filing written notice at the Corporate Trust Department and upon proof of
holding as provided in this Article, revoke such action so far as concerns
such Certificate. Except as aforesaid, any such action taken by the Holder
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Certificate and of any Certificates issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Certificate or otherwise. Any action taken by
the Holders of the percentage in aggregate principal amount of the
Certificates specified in this Indenture in connection with such action shall
be conclusively binding upon the Owner Trustee, the Indenture Trustee and the
Holders of all the Certificates.
Section 10.06. ERISA. Any Person, other than the Subordination
Agent, who is acquiring the Certificates will be deemed to represent and
warrant that (i) no assets of an employee benefit plan subject to Title I of
ERISA or an individual retirement account or plan subject to Section 4975 of
the Code, or any trust established under any such plan or account, have been
used to acquire or hold any of the Certificates, or (ii) that one or more
administrative or statutory exemptions from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code applies to its
purchase and holding of the Certificates such that its purchase and holding of
the Certificates will not result in a non-exempt prohibited transaction under
Section 406 of ERISA and Section 4975 of the Code.
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
The Owner Trustee, not individually but solely in its capacity as
Owner Trustee under the Trust Agreement, hereby agrees, whether or not any of
the transactions contemplated hereby shall be consummated, to assume liability
for, and does hereby indemnify, protect, save and keep harmless the Indenture
Trustee, in its individual capacity, and its successors, assigns, agents and
servants solely from the Lessor's Estate, with respect to the claims of the
Indenture Trustee for payment or reimbursement under Section 9.11 hereof and
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on or
measured by any compensation received by the Indenture Trustee for its
services under this Indenture and any taxes excluded from the Lessee's
indemnity obligation under Section 8.01(b) of the Participation Agreement),
claims, actions, suits, costs, expenses or disbursements (including legal fees
and expenses) of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Indenture Trustee (whether or not also
agreed to be indemnified against by any other person under any other document)
in any way relating to or arising out of this Indenture, or any other
Indenture Documents or the enforcement of any of the terms of any thereof, or
in any way relating to or arising out of the manufacture, purchase,
acceptance, nonacceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent and other defects, whether
or not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration
of the Trust Indenture Estate or the action or inaction of the Indenture
Trustee hereunder, except only (a) in the case of willful misconduct or gross
negligence of the Indenture Trustee in the performance of its duties
hereunder, (b) as may result from the inaccuracy of any representation or
warranty of the Indenture Trustee in the Participation Agreement, (c) as
otherwise provided in Section 9.02(c) hereof or (d) as otherwise excluded by
the terms of Article 8 or Article 9 of the Participation Agreement from the
Lessee's general indemnity or general tax indemnity to the Indenture Trustee
under said Article; provided that so long as the Lease is in effect, the
Indenture Trustee shall not make any claim under this Article XI for any claim
or expense indemnified by the Lessee under the Participation Agreement without
first making demand on the Lessee for payment of such claim or expense. The
Indenture Trustee shall be entitled to indemnification, from the Trust
Indenture Estate, for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Article XI to the extent not reimbursed by the Lessee or others, but
without releasing any of them from their respective agreements of
reimbursement; and to secure the same the Indenture Trustee shall have a prior
Lien on the Trust Indenture Estate. The indemnities contained in this Article
XI shall survive the termination of this Indenture and the resignation or
removal of the Indenture Trustee. Upon payment in full by the Owner Trustee
of any indemnity pursuant to this Article XI, the Owner Trustee shall, so long
as no Indenture Event of Default shall have occurred and be continuing, be
subrogated to the rights of the Indenture Trustee, if any, in respect of the
matter as to which the indemnity was paid.
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee. In the case of any
appointment of a successor to the Owner Trustee pursuant to the Trust
Agreement or any merger, conversion, consolidation or sale of substantially
all of the corporate trust business of the Owner Trustee pursuant to the Trust
Agreement, the successor Owner Trustee shall give prompt written notice
thereof to the Indenture Trustee.
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor. (a) The Indenture Trustee or any successor thereto
may resign at any time without cause by giving at least 30 days' prior written
notice to the Owner Trustee, the Owner Participant, the Lessee and each
Holder, such resignation to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In addition, the Majority in
Interest of the Certificate Holders or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders may at any
time remove the Indenture Trustee without cause by an instrument in writing
delivered to the Lessee, the Owner Trustee, the Owner Participant, and the
Indenture Trustee, and the Indenture Trustee shall promptly notify each Holder
thereof of such action in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the case
of the resignation or removal of the Indenture Trustee, the Majority in
Interest of the Certificate Holders, or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders, may
appoint a successor Indenture Trustee by an instrument signed by such Holders.
If a successor Indenture Trustee shall not have been appointed within 30 days
after such notice of resignation or removal, the Indenture Trustee, the Owner
Trustee, the Lessee, the Owner Participant, or any Holder may apply to any
court of competent jurisdiction to appoint a successor Indenture Trustee to
act until such time, if any, as a successor shall have been appointed as
provided above. The successor Indenture Trustee so appointed by such court
shall immediately and without further act be superseded by any successor
Indenture Trustee appointed as provided above.
(b) In case at any time any of the following shall occur:
(i) the Indenture Trustee shall cease to be eligible in accordance
with the provisions of Section 12.03 hereof and shall fail to resign after
written request therefor by the Owner Trustee or by any Holder; or
(ii) the Indenture Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Indenture Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then the Owner Trustee may remove the Indenture Trustee and, with the consent
of the Lessee, appoint a successor trustee by written instrument, in
duplicate, executed by a Responsible Officer of the Owner Trustee, one copy of
which instrument shall be delivered to the Indenture Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of Section
7.13 hereof, any Holder who has been a bona fide Holder for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Indenture Trustee
and the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Indenture
Trustee and appoint a successor trustee, which removal and appointment shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 12.04 hereof. The successor Indenture Trustee so
appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as provided above
within one year from the date of appointment by such court.
Section 12.03. Persons Eligible for Appointment as Indenture
Trustee. There shall at all times be an Indenture Trustee hereunder which
shall be (i)(x) a bank or trust company organized and doing business under the
laws of the United States of America or any state or the District of Columbia
having a combined capital and surplus of at least $100,000,000 or (y) a bank
or trust company whose obligations hereunder are fully guaranteed by a direct
or indirect parent thereof having a combined capital and surplus of at least
$100,000,000 and (ii) a Citizen of the United States authorized under
applicable law to exercise corporate trust powers and subject to
supervision of examination by Federal, state or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Indenture Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Indenture Trustee shall resign immediately in the manner and with the
effect specified in Section 12.02 hereof.
Section 12.04. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 12.02 hereof shall execute
and deliver to the Owner Trustee, the Lessee, and to its predecessor trustee
an instrument accepting such appointment hereunder, in form and substance
reasonably satisfactory to the Owner Trustee, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as trustee herein; but, nevertheless, on
the written request of the Owner Trustee or of the successor trustee, upon
payment of its charges then unpaid, the trustee ceasing to act shall, subject
to Section 14.04 hereof, pay over to the successor trustee all moneys at the
time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Owner Trustee
shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Article XI hereof.
No successor trustee shall accept appointment as provided in this
Section 12.04 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 12.03 hereof.
Upon acceptance of appointment by a successor trustee as provided in
this Section 12.04, the successor trustee shall mail notice thereof by
first-class mail to the Holders at their last addresses as they shall appear
in the Register, and shall mail a copy of such notice to the Lessee and the
Owner Trustee. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 12.02
hereof.
Section 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation into which the Indenture
Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to
the corporate trust business of the Indenture Trustee, shall be the successor
to the Indenture Trustee hereunder, provided that, anything herein to the
contrary notwithstanding, such corporation shall be eligible under the
provisions of Section 12.03 hereof, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Indenture Trustee shall
succeed to the trusts created by this Indenture any of the Certificates shall
have been authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor
Indenture Trustee and deliver such Certificates so authenticated; and, in case
at that time any of the Certificates shall not have been authenticated, any
successor to the Indenture Trustee may authenticate such Certificates either
in the name of any predecessor hereunder or in the name of the successor
Indenture Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Certificates or in this Indenture provided
that the certificate of the Indenture Trustee shall have; provided, that the
right to adopt the certificate of authentication of any predecessor Indenture
Trustee or to authenticate Certificates in the name of any predecessor
Indenture Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
Section 12.06. Appointment of Separate Trustees. (a) At any
time or times, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Indenture Estate may at the
time be located or in which any action of the Indenture Trustee may be
required to be performed or taken, the Indenture Trustee, by an instrument
in writing signed by it, may appoint one or more individuals or
corporations to act as a separate trustee or separate trustees or co-
trustee, acting jointly with the Indenture Trustee, of all or any part of
the Trust Indenture Estate, to the full extent that local law makes it
necessary for such separate trustee or separate trustees or co-trustee
acting jointly with the Indenture Trustee to act.
(b) The Indenture Trustee and, at the request of the Indenture
Trustee, the Owner Trustee, shall execute, acknowledge and deliver all such
instruments as may be required by the legal requirements of any jurisdiction
or by any such separate trustee or separate trustees or co-trustee for the
purpose of more fully confirming such title, rights or duties to such separate
trustee or separate trustees or co-trustee. Upon the acceptance in writing of
such appointment by any such separate trustee or separate trustees or
co-trustee, it, he or they shall be vested with such title to the Trust
Indenture Estate or any part thereof, and with such rights, powers, duties and
obligations, as shall be specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee, or the Indenture Trustee and
such separate trustee or separate trustees or co-trustee jointly with the
Indenture Trustee subject to all the terms of this Indenture, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such separate
trustee or separate trustees or co-trustee, as the case may be. Any separate
trustee or separate trustees or co-trustee may, at any time by an instrument
in writing, constitute the Indenture Trustee its or his attorney-in-fact and
agent with full power and authority to do all acts and things and to exercise
all discretion on its or his behalf and in its or his name. In case any such
separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, the title to the Trust Indenture Estate and all assets,
property, rights, powers, duties and obligations and duties of such separate
trustee or co-trustee shall, so far as permitted by law, vest in and be
exercised by the Indenture Trustee, without the appointment of a successor to
such separate trustee or co-trustee unless and until a successor is appointed.
(c) All provisions of this Indenture which are for the benefit of
the Indenture Trustee (including without limitation Article XI hereof) shall
extend to and apply to each separate trustee or co-trustee appointed pursuant
to the foregoing provisions of this Section 12.06.
(d) Every additional trustee and separate trustee hereunder shall,
to the extent permitted by law, be appointed and act and the Indenture Trustee
shall act, subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Indenture Trustee in respect of the receipt, custody, investment and
payment of moneys shall be exercised solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed and
exercised or performed by the Indenture Trustee and such additional trustee
or trustees and separate trustee or trustees jointly except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
Indenture Estate in any such jurisdiction) shall be exercised and performed
by such additional trustee or trustees or separate trustee or trustees;
(iii) no power hereby given to, or exercisable by, any such
additional trustee or separate trustee shall be exercised hereunder by
such additional trustee or separate trustee except jointly with, or with
the consent of, the Indenture Trustee; and
(iv) no trustee hereunder shall be liable either personally or in its
capacity as such trustee, by reason of any act or omission of any other
trustee hereunder.
If at any time the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to any such law, the Indenture Trustee shall
execute and deliver an indenture supplemental hereto and all other instruments
and agreements necessary or proper to remove any additional trustee or
separate trustee.
(e) Any request, approval or consent in writing by the Indenture
Trustee to any additional trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate trustee, as the case may be, to
take such action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 12.06, the
powers of any additional trustee or separate trustee shall not exceed those of
the Indenture Trustee hereunder.
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders.
The Owner Trustee (when authorized by the Owner Participant) and the Indenture
Trustee, without consent of the Holders, may enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge any property or
assets to the Indenture Trustee as security for the Certificates;
(b) to evidence the succession of another corporation to the Owner
Trustee or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Owner
Trustee herein and in the Certificates;
(c) to add to the covenants of the Owner Trustee such further
covenants, restrictions, conditions or provisions as it and the Indenture
Trustee shall consider to be for the protection of the Holders, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Indenture
Event of Default permitting the enforcement of all or any of the several
remedies provided herein; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture
may provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Indenture Event of
Default or may limit the remedies available to the Indenture Trustee upon
such an Indenture Event of Default or may limit the right of not less than
the Majority in Interest of Certificate Holders to waive such an Indenture
Event of Default;
(d) to surrender any right or power conferred herein upon the Owner
Trustee or the Owner Participant;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Owner Trustee may deem necessary or desirable and which
shall not adversely affect the interests of the Holders;
(f) to correct or amplify the description of any property at any
time subject to the Lien of this Indenture or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the Lien of this Indenture or to subject Replacement Airframe or
Replacement Engines to the Lien of this Indenture in accordance with the
provisions hereof or with the Lease or to release from the Lien of this
Indenture property that has been substituted on or removed from the
Aircraft as contemplated in Section 3.07 hereof; provided that supplements
to this Indenture entered into for the purpose of subjecting Replacement
Airframe or Replacement Engines to the Lien of this Indenture need only be
executed by the Owner Trustee and the Indenture Trustee;
(g) to provide for the issuance under this Indenture of Certificates
in coupon form (including Certificates registrable as to principal only)
and to provide for exchangeability of such Certificates with Certificates
issued hereunder in fully registered form, and to make all appropriate
changes for such purpose;
(h) to effect the re-registration of the Aircraft pursuant to
Section 6.03(b) of the Participation Agreement; and
(i) to add, eliminate or change any provision hereunder so long as
such action shall not adversely affect the interests of the Holders.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be contained therein and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Indenture Trustee shall not be obligated to enter into any such supplemental
indenture which adversely affects the Indenture Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any such supplemental indenture may be executed without the consent of
the Holders of Outstanding Certificates, notwithstanding any of the provisions
of Section 13.02 hereof.
Section 13.02. Supplemental Indentures With Consent of Holders.
With the consent (evidenced as provided in Article X) of the Majority in
Interest of Certificate Holders, the Owner Trustee (when authorized by the
Owner Participant) and the Indenture Trustee may, from time to time and at any
time, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders; provided, however, that,
without the consent of each and every Holder and each Liquidity Provider, no
such amendment of or supplement to this Indenture or any indenture
supplemental hereto, or modification of the terms of, or consent under, any
thereof, shall (a) modify any of the provisions of Section 7.11 hereof or this
Section 13.02, (b) reduce the amount or extend the time of payment of any
amount owing or payable under any Certificate or reduce the interest payable
on any Certificate (except that only the consent of the Holder shall be
required for any decrease in any amounts of or the rate of interest payable on
such Certificate or any extension for the time of payment of any amount
payable under such Certificate), or alter or modify the provisions of Article
V hereof with respect to the order of priorities in which distributions
thereunder shall be made as among Holders of different Series of Certificates
or 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 Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental indenture complies with the applicable
provisions of this Indenture.
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures. Certificates authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may bear
a notation in form approved by the Indenture Trustee as to any matter provided
for by such supplemental indenture. If the Owner Trustee or the Indenture
Trustee shall so determine, new Certificates so modified as to conform, in the
opinion of the Owner Trustee and the Indenture Trustee, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Owner Trustee, authenticated by the Indenture Trustee and delivered in
exchange for the Outstanding Certificates.
Section 13.06. No Request Necessary for Lease Supplement or
Indenture and Security Agreement Supplement. Notwithstanding anything
contained in Section 13.02 hereof, no written request or consent of the
Indenture Trustee, any Holder or the Owner Participant pursuant to Section
13.02 hereof shall be required to enable the Owner Trustee to enter into
any supplement to the Lease with the Lessee in accordance with the terms
and conditions of the Lease to subject a Replacement Airframe or
Replacement Engine thereto or to execute and deliver an Indenture and
Security Agreement Supplement pursuant to the terms hereof.
Section 13.07. Notices to Liquidity Providers. Any request made to
any Holder for consent to any amendment, supplement or waiver pursuant to
Section 7.11, 8.01 or this Article XIII shall be promptly furnished by the
Indenture Trustee to each Liquidity Provider.
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination
of Indenture. If at any time after (a) the Owner Trustee shall have paid or
caused to be paid the principal of and interest on all the Certificates
outstanding hereunder, as and when the same shall have become due and payable,
or (b) the Owner Trustee shall have delivered to the Indenture Trustee for
cancellation all Certificates theretofore authenticated (other than any
Certificates which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.07 hereof) or (c) (i) all
such Certificates not theretofore delivered to the Indenture Trustee for
cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for prepayment
within one year under arrangements satisfactory to the Indenture Trustee for
the giving of notice of prepayment by the Indenture Trustee in the name and at
the expense of the Owner Trustee, and (ii) the Owner Trustee shall have
irrevocably deposited or caused to be deposited with the Indenture Trustee as
trust funds the entire amount in cash (other than moneys repaid by the
Indenture Trustee or any paying agent to the Owner Trustee in accordance with
Section 14.04 hereof) or Government obligations maturing as to principal and
interest in such amounts and at such times as will insure the availability of
cash sufficient to pay at maturity all such Certificates not theretofore
delivered to the Indenture Trustee for cancellation, including principal and
interest due or to become due to such date of maturity as the case may be, and
if, in any such case, the Owner Trustee shall also pay or cause to be paid all
other sums then payable hereunder by the Owner Trustee, then this Indenture
shall cease to be of further effect (except in the case of (c) above as to (A)
rights of registration of transfer and exchange, and the Owner Trustee's right
of optional prepayment pursuant to Section 6.02(a)(ii) hereof, (B)
substitution of mutilated, defaced, destroyed, lost or stolen Certificates,
(C) rights of Holders to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), (D) the rights, obligations, indemnities and immunities of the
Indenture Trustee hereunder and (E) the rights of the Holders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them), and the Indenture Trustee, on demand of the
Owner Trustee accompanied by an Officer's Certificate and an Opinion of
Counsel (covering such matters reasonably requested by, and in form and
substance reasonably satisfactory to, the Indenture Trustee) and at the cost
and expense of the Owner Trustee, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture. The Owner
Trustee agrees to reimburse and indemnify the Indenture Trustee for any costs
or expenses thereafter reasonably and properly incurred and to compensate the
Indenture Trustee for any services thereafter reasonably and properly rendered
by the Indenture Trustee in connection with this Indenture or the
Certificates.
Upon (or at any time after) payment in full to the Indenture Trustee,
as trust funds, of the principal of and interest on and Make-Whole Premium, if
any, and all other amounts due hereunder and under all Certificates and
provided that there shall then be no other amounts due to the Indenture
Trustee hereunder or under the Participation Agreement or otherwise secured
hereby, the Owner Trustee shall direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing the Aircraft from the Lien of this Indenture and
releasing the Indenture Documents from the assignment thereof hereunder, and
the Indenture Trustee shall execute and deliver such instrument as aforesaid
and, at the Owner Trustee's expense, will execute and deliver such other
instruments or documents as may be reasonably requested by the Owner Trustee
to give effect to such release; provided, however, that this Indenture and the
trusts created hereby shall terminate earlier and this Indenture shall be of
no further force or effect upon any sale or other final disposition by the
Indenture Trustee of all property forming a part of the Trust Indenture Estate
and the final distribution by the Indenture Trustee of all moneys or other
property or proceeds constituting part of the Trust Indenture Estate in
accordance with the terms hereof. Except as aforesaid otherwise provided,
this Indenture and the trusts created hereby shall continue in full force
and effect in accordance with the terms hereof.
Section 14.02. Application by Indenture Trustee of Funds Deposited
for Payment of Certificates. Subject to Section 14.04 hereof, all moneys
deposited with the Indenture Trustee pursuant to Section 14.01 hereof shall be
held in trust and applied by it to the prompt payment, either directly or
through any Paying Agent, to the Holders of the particular Certificates for
the payment or prepayment of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal,
interest and Make-Whole Premium, if any, but such money need not be segregated
from other funds except to the extent required by law.
Section 14.03. Repayment of Moneys Held by Paying Agent. Upon the
satisfaction and discharge of this Indenture all moneys then held by any
Paying Agent under the provisions of this Indenture shall, upon demand of the
Owner Trustee, be repaid to it or paid to the Indenture Trustee and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
Section 14.04. Transfer of Moneys Held by Indenture Trustee and
Paying Agent Unclaimed for Two Years and Eleven Months. Any moneys deposited
with or paid to the Indenture Trustee or any Paying Agent for the payment of
the principal of or interest or Make-Whole Premium on any Certificate and not
applied but remaining unclaimed for two years and eleven months after the date
upon which such principal, interest or Make-Whole Premium shall have become
due and payable, shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be paid to the
Owner Trustee (or, if the Trust Agreement shall no longer be in effect, to the
Owner Participant) by the Indenture Trustee or such Paying Agent and the
Holder of such Certificate, as a general unsecured creditor, shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Owner Trustee (or the
Owner Participant) for any payment which such Holder may be entitled to
collect, and all liability of the Indenture Trustee, or any Paying Agent with
respect to such moneys shall thereupon cease.
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting. Each of SSB (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 SSB (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, Holders and Liquidity Providers. Nothing in this
Indenture, whether express or implied, shall be construed to give to any
person other than SSB, the Owner Trustee, the Lessee, the Indenture Trustee,
as trustee and in its individual capacity, the Owner Participant, each
Liquidity Provider and the Holders any legal or equitable right, remedy or
claim under or in respect of this Indenture. Upon termination of this
Indenture pursuant to Article XIV hereof, the Indenture Trustee in connection
with the satisfaction of the Indenture shall return to the Owner Trustee all
property (and related documents and instruments) constituting or evidencing
the Trust Indenture Estate.
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease. Notwithstanding any of the provisions of this Indenture or the Trust
Agreement to the contrary, so long as no Event of Default shall have occurred
and be continuing, neither the Indenture Trustee nor the Owner Trustee will
take any affirmative acts that interfere with the peaceful and quiet
possession and enjoyment of the Aircraft by the Lessee.
Section 15.06. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Indenture to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy, and (a) if to the
Owner Trustee, addressed to it c/o State Street Bank and Trust Company, Two
International Place, 4th Floor, Boston, Massachusetts 02110 (telephone: (617)
664-5526, facsimile: (617) 664-5371), Attention: Corporate Trust Department
(with a copy to the Owner Participant at the address provided for notice
pursuant to Section 14.01 of the Participation Agreement), (b) if personally
delivered to the Indenture Trustee, addressed to it at its office at 79 South
Main Street, Salt Lake City, Utah 84111 (telephone: (801) 246-5630, facsimile:
(801) 246-5053), Attention: Corporate Trust Department or (c) if to the Owner
Participant, a Liquidity Provider or the Lessee, addressed to such party at
such address as such party shall have furnished by notice to the Owner Trustee
and the Indenture Trustee, or, until an address is so furnished, addressed to
the address of such party if any, set forth in Section 14.01 of the
Participation Agreement. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the
other parties to this Indenture.
Where this Indenture provides for notice to Holders, such notice
shall be sufficiently given (unless otherwise expressly provided herein) if in
writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at such Holder's last address as it appears in the Register. In any
case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Indenture Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Owner Trustee
and Holders when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient
giving of such notice.
Section 15.07. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Lessee or the Owner Trustee to the Indenture Trustee to take any action under
any of the provisions of this Indenture, the Lessee or the Owner Trustee, as
the case may be, shall furnish to the Indenture Trustee upon request (a) an
Officer's Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and
that the proposed action is in conformity with the requirements of this
Indenture, and (b) an Opinion of Counsel 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 SSB 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 SSB, upon the certificate, statement or
opinion of or representations by an officer or officers of the Lessee or SSB,
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
SSB or of counsel thereto may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant
or firm of accountants employed by the Lessee or the Owner Trustee, as the
case may be, unless such officer or counsel, as the case may be, knows that
the certificate or opinion or representations with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Indenture Trustee shall contain a statement that
such firm is independent.
Section 15.08. Severability. Any provision of this Indenture which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 15.09. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Indenture or the Certificates may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party or other person against whom enforcement of the change,
waiver, discharge or termination is sought; and any waiver of the terms hereof
or of any Certificate shall be effective only in the specific instance and for
the specific purpose given.
Section 15.10. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and permitted assigns of each, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of
such Holder. This Indenture and the Trust Indenture Estate shall not be
affected by any amendment or supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust Agreement, except that each
reference in this Indenture to the Trust Agreement shall mean the Trust
Agreement as amended and supplemented from time to time to the extent
permitted hereby and thereby.
Section 15.11. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for the convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 15.12. Normal Commercial Relations. Anything contained in
this Indenture to the contrary notwithstanding, the Owner Participant, the
Indenture Trustee and any Holder, or any bank or other affiliate of any such
party, may conduct any banking or other financial transactions, and have
banking or other commercial relationships, with the Lessee fully to the same
extent as if this Indenture were not in effect, including without limitation
the making of loans or other extensions of credit to the Lessee for any
purpose whatsoever, whether related to any of the transactions contemplated
hereby or otherwise.
Section 15.13. Governing Law; Counterparts. THIS INDENTURE AND
EACH CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. This Indenture may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed this 28th day of May, 1997 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.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By_____________________________________________
Name: Paul D. Allen
Title: Vice President
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By_____________________________________________
Name: Greg A. Hawley
Title: Vice President
Exhibit A
to
Trust Indenture and Security Agreement
Indenture and Security Agreement Supplement No. ___
Indenture and Security Agreement Supplement No. ___ (Federal Express
Corporation Trust No. N670FE) dated ________, ____, of STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as owner trustee
(herein called the "Owner Trustee") under the Trust Agreement dated as of May
1, 1997 (the "Trust Agreement") between State Street Bank and Trust Company of
Connecticut, National Association and the Owner Participant named therein.
W I T N E S S E T H :
WHEREAS, the Trust Agreement provides for the execution and delivery
of this Indenture and Security Agreement Supplement which shall particularly
describe the Aircraft and any Replacement Airframe or Replacement Engine
included in the property covered by the Trust Agreement.
WHEREAS, the Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N670FE) dated as of May 1, 1997 (the
"Indenture") between the Owner Trustee and First Security Bank, National
Association (herein called the "Indenture Trustee") provides for the
execution and delivery of an Indenture and Security Agreement Supplement
substantially in the form of this Indenture and Security Agreement
Supplement No. __, which Supplement shall particularly describe the
Aircraft included in the Trust Indenture Estate, and shall specifically
mortgage such Aircraft to the Indenture Trustee.
(1)WHEREAS, the Indenture relates to the Aircraft and the Engines
described in the following paragraph and a counterpart of the Indenture is
attached to and made a part of this Indenture and Security Agreement
Supplement No. 1, and this Indenture and Security Agreement Supplement No. 1,
together with such attachment, is being filed for recordation on or promptly
after the date of this Supplement No. 1 with the Federal Aviation
Administration as one document.
- --------------
(1)This recital is to be included only in the first Indenture Supplement.
(2)Whereas, the Indenture and Indenture and Security Agreement
Supplement No. ___ dated _________________, ______ (the Indenture being
attached to and made a part of such Indenture and Security Agreement
Supplement and filed therewith) have been duly recorded pursuant to Subtitle
VII of Title 49 of the United States Code, on ____________, _____, as one
document and have been assigned Conveyance No. _________.
- --------------
(2)This recital is to be included only in the first Indenture Supplement.
NOW, THEREFORE, this Supplement witnesseth, that, to secure the
prompt payment of the principal of and Make-Whole Premium, if any, and
interest on, and all other amounts due with respect to, all Outstanding
Certificates under the Indenture and all other amounts due hereunder and
the performance and observance by the Owner Trustee of all the agreements,
covenants and provisions for the benefit of the Holders contained in the
Indenture, in the Lease, in the Participation Agreement and the
Certificates, and the prompt payment of any and all amounts from time to
time owing under the Participation Agreement by the Owner Trustee, the
Owner Participant or the Lessee to the Holders and for the uses and
purposes and subject to the terms and provisions of the Indenture and the
Certificates, and in consideration of the premises and of the covenants
contained in the Indenture, and of the purchase of the Certificates by the
Holders, and of the sum of $1 paid to the Owner Trustee by the Indenture
Trustee at or before the delivery of the Indenture, the receipt of which is
hereby acknowledged, the Owner Trustee has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged, granted a security
interest in, and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge, grant a security interest in, and
confirm, unto the Indenture Trustee, its successors and assigns, in trust
for the equal and ratable security and benefit of the Holders, in the trust
created by the Indenture, and subject to all of the terms, conditions,
provisions and limitations set forth in the Indenture, a first priority
security interest in and mortgage lien on all estate, right, title and
interest of the Owner Trustee in, to and under the following described
property:
Airframe
One (1) Airframe identified as follows:
FAA Manufacturer's
Registration Serial
Manufacturer Model Number Number
- ------------ ----- ------------ ---------------
together with all appliances, equipment, instruments and accessories
(including, without limitation, radio and radar) from time to time belonging
thereto, owned by the Owner Trustee and installed in or appurtenant to said
aircraft.
AIRCRAFT ENGINES
Two (2) aircraft engines, each such engine having 750 or more rated takeoff
horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Serial
Manufacturer Model Number
- ------------ ----- --------------
together with all equipment and accessories belonging thereto, by whomsoever
manufactured, owned by the Owner Trustee and installed in or appurtenant to
said aircraft engines.
Together with all substitutions, replacements and renewals of the
property described above, and all property which shall hereafter become
physically attached to or incorporated in the property described above,
whether the same are now owned by the Owner Trustee or shall hereafter be
acquired by it.
As further security for the obligations referred to above and secured
by the Indenture and hereby, the Owner Trustee has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors and assigns, for the
security and benefit of the Holders, in the trust created by the Indenture,
and subject to all of the terms, conditions, provisions and limitations set
forth in the Indenture, all of the estate, right, title and interest of the
Owner Trustee in, to and under the Lease Supplement (other than Excepted
Payments, if any) covering the property described above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, for the benefit and security of
the Holders for the uses and purposes and subject to the terms and provisions
set forth in the Indenture.
This Supplement shall be construed as supplemental to the Indenture
and shall form a part thereof, and the Indenture is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplement is being delivered in the State of New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft/Engines referred to in this Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee and covered by all the terms and conditions of
the Trust Agreement, subject to the Lien of the Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this Supplement to
be duly executed as of the date first written above by one of its officers
thereunto duly authorized.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By_____________________________________________
Name: Paul D. Allen
Title: Vice President
Exhibit B
to
Trust Indenture and Security Agreement
[Form of Certificate]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD OR OFFERED FOR SALE IN CONTRAVENTION OF SAID ACT
No. ______ $_____________
EQUIPMENT TRUST CERTIFICATE
(Federal Express Corporation Trust No. N670FE)
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
(Federal Express Corporation Trust No. N670FE)
dated as of May 1, 1997
SERIES ___
Interest Rate Maturity
State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee (herein in such capacity called the "Owner
Trustee") under that certain Trust Agreement (Federal Express Corporation
Trust No. N670FE) dated as of May 1, 1997, between the Owner Participant named
therein and State Street Bank and Trust Company of Connecticut, National
Association (herein as such Trust Agreement may be amended or supplemented
from time to time called the "Trust Agreement"), hereby promises to pay to
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Subordination Agent, or its
registered assigns, the principal sum of ________________ _______________
Dollars, payable as set forth below for the Maturity specified above, in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest on the principal outstanding from time to time, semiannually on each
January 15 and July 15, on said principal sum in like coin or currency at the
rate per annum set forth above from the January 15 or the July 15, 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 January 15 or July 15 and before
the following January 15 or July 15, as the case may be, this Certificate
shall bear interest from such January 15 or July 15; provided that, if the
Owner Trustee shall default in the payment of interest due on such January
15 or July 15, then this Certificate shall bear interest from the next
preceding January 15 or July 15 to which interest on this Certificate has
been paid or duly provided for. The interest so payable on any January 15
or July 15 will, except as otherwise provided in the Indenture referred to
below, be paid to the person in whose name this Certificate is registered
at the close of business on the January 15 or July 15 preceding such
January 15 or July 15, 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 First Security Bank, National Association
(the "Indenture Trustee") maintained for such purpose in immediately available
funds prior to 10:30 A.M. (New York time) on the due date thereof and the
Indenture Trustee shall remit all such amounts received by it to the Holders
at such account or accounts at such financial institution or institutions as
the Holders shall have designated to the Indenture Trustee in writing, in
immediately available funds, such payment to be made if the payment was
received prior to 10:30 A.M. New York time by the Indenture Trustee on any
Business Day, by 12:00 noon New York time on such Business Day; otherwise, the
Indenture Trustee shall make payment promptly, but not later than 11:00 A.M.
New York time on the next succeeding Business Day; provided that, at the
option of the Indenture Trustee or its Paying Agent, interest may be paid by
mailing a check therefor payable to or upon the written order of the
registered holder entitled thereto at his last address as it appears on the
Register. If any amount payable under this Certificate, or under the
Indenture, falls due on a day that is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
State Street Bank and Trust Company of Connecticut, National
Association and First Security Bank, National Association are not acting
individually hereunder, but solely as Owner Trustee and Indenture Trustee,
respectively.
Any Person, other than the Subordination Agent, who is acquiring the
Certificates will be deemed to represent and warrant that (i) no assets of an
employee benefit plan subject to Title I of ERISA or an individual retirement
account or plan subject to Section 4975 of the Code, or any trust established
under any such plan or account, have been used to acquire or hold any of the
Certificates, or (ii) that one or more administrative or statutory exemptions
from the prohibited transaction rules under Section 406 of ERISA and Section
4975 of the Code applies to its purchase and holding of the Certificates such
that its purchase and holding of the Certificates will not result in a
non-exempt prohibited transaction under Section 406 of ERISA and Section 4975
of the Code.
This Certificate is one of a duly authorized issue of Certificates
issued and to be issued under the Trust Indenture and Security Agreement
(Federal Express Corporation Trust No. N670FE) dated as of May 1, 1997 (herein
as amended, supplemented or modified from time to time called the "Indenture")
between the Owner Trustee and the Indenture Trustee, designated as Equipment
Trust Certificates (Federal Express Corporation Trust No. N670FE) limited in
aggregate initial principal amount to $62,392,000 consisting of the
following aggregate principal amounts of Certificates with the interest rates
per annum and Maturities shown:
Initial
Aggregate
Principal
Series Maturity Amount Interest Rate
------ -------- --------- -------------
A January 15, 2017 $33,352,000 7.50%
B January 15, 2018 $12,507,000 7.52%
C January 15, 2014 $16,533,000 7.65%
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its
principal corporate trust office) for a more complete statement of the terms
and provisions thereof, including a statement of the properties conveyed,
pledged and assigned thereby, the nature and extent of the security, the
respective rights of the Owner Trustee, the Owner Participant, the Lessee, the
Indenture Trustee and the Holders, and the terms upon which the Certificates
are, and are to be, executed and delivered, to all of which terms and
conditions in the Indenture each Holder hereof agrees by its acceptance of
this Certificate.
Capitalized terms not otherwise defined herein shall have the
meanings given to them in the Indenture.
The principal amounts of the Certificates are payable as follows. The
Certificates are subject to redemption in part, pro rata (based on the face
amount thereof), in each case through mandatory sinking fund redemptions
providing for the redemption on the Sinking Fund Redemption Dates of the
aggregate principal amounts set forth below, together with interest accrued
thereon to the applicable Sinking Fund Redemption Date, but without Make-Whole
Premium.
Principal Amount
<TABLE>
<CAPTION>
Series A Certificates Series B Certificates Series C Certificates
Sinking Fund with a Maturity of with a Maturity of with a Maturity of
Redemption Date January 15, 2017 January 15, 2018 January 15, 2014
- --------------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C>
January 15, 1998 292,850 250,140 190,520
July 15, 1998 374,190 0 0
January 15, 1999 155,254 250,140 333,520
July 15, 1999 511,786 0 0
January 15, 2000 149,287 250,140 333,520
July 15, 2000 517,753 0 0
January 15, 2001 245,388 250,140 333,520
July 15, 2001 421,652 0 0
January 15, 2002 447,707 250,140 333,520
July 15, 2002 219,333 0 0
January 15, 2003 667,040 250,140 427,042
July 15, 2003 0 0 0
January 15, 2004 667,040 250,140 757,173
July 15, 2004 0 0 0
January 15, 2005 667,040 250,140 865,719
July 15, 2005 0 0 0
January 15, 2006 667,040 250,140 835,803
July 15, 2006 0 0 0
January 15, 2007 667,040 250,140 3,783,765
July 15, 2007 0 0 0
January 15, 2008 667,040 250,140 676,225
July 15, 2008 0 0 0
January 15, 2009 667,040 250,140 1,788,770
July 15, 2009 0 0 0
January 15, 2010 667,040 250,140 1,742,978
July 15, 2010 0 0 0
January 15, 2011 667,040 2,179,510 758,530
July 15, 2011 0 0 0
January 15, 2012 667,040 3,178,951 0
July 15, 2012 0 0 0
January 15, 2013 2,910,012 2,059,773 0
July 15, 2013 0 0 0
January 15, 2014 1,987,488 0 3,372,395
July 15, 2014 0 0 0
January 15, 2015 5,780,164 0 0
July 15, 2015 0 0 0
January 15, 2016 6,230,567 0 0
July 15, 2016 0 0 0
January 15, 2017 6,438,169 277,926 0
January 15, 2018 0 1,559,020 0
</TABLE>
Except as expressly provided in the Indenture, all payments of
principal, Make-Whole Premium, if any, and interest and other amounts to be
made to the Holder hereof by or at the behest of the Owner Trustee hereunder
or under the Indenture shall be made only from the income and proceeds from
the Lessor's Estate to the extent included in the Trust Indenture Estate and
only to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Lessor's Estate to the extent included in the Trust
Indenture Estate to enable the Indenture Trustee to make such distributions in
accordance with the terms of the Indenture; provided that under the Lease, the
Lessee is obligated to pay or cause to be paid, to the extent such payments
are not required to be made from the assets subject to the Lien of this
Indenture or the income and proceeds received by the Indenture Trustee
therefrom, any net loss arising from the investment of funds held by the
Indenture Trustee which but for an Event of Default would be payable to
Lessee, and each Holder hereof, by its acceptance of this Certificate, agrees
that it will (except as aforesaid) look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for distribution to the
Holder hereof as provided above and that neither the Owner Participant, the
Owner Trustee, State Street Bank and Trust Company of Connecticut, National
Association nor the Indenture Trustee is personally liable to the Holder
hereof for any amounts payable or any liability under this Certificate or
under the Indenture, except as expressly provided in the Indenture, in the
case of State Street Bank and Trust Company of Connecticut, National
Association, the Owner Trustee and the Indenture Trustee.
The Certificates are subject to prepayment in the following
circumstances at the price determined as set forth below.
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08 of
the Indenture replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and the Lessee shall not have revoked
such notice or effected an assumption of the Certificates as provided in
Section 2.12 of the Indenture).
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 of the Indenture.
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) of Indenture.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a Refinancing of the Certificates.
(vi) As contemplated by Section 2.16 of the Indenture and Section
3.05(b) of the Participation Agreement if the Delivery Date has not
occurred on or prior to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
In the case of a prepayment of the Certificates pursuant to clauses
(ii), (iv) and (v) above, the Lessee, in accordance with and subject to the
terms (including timing of notice) of Section 4.02(a) or 10.01 of the Lease or
Article 15 of the Participation Agreement, as the case may be, shall give
irrevocable (subject to Section 6.02(c) of the Indenture) written notice to
the Owner Trustee and the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Owner Trustee is
directed to prepay the Certificates. In the case of a prepayment pursuant to
clause (i) above, the Certificates shall be prepaid on the Loss Payment Date
(as defined in Section 11.02 of the Lease). In the case of a prepayment
pursuant to clause (iii) above, the Certificates shall be prepaid on the date
designated in the notice of prepayment required by Section 8.02 of the
Indenture. In the case of a prepayment of the Certificates pursuant to
clauses (ii) and (iv) above, the Certificates shall be prepaid in full on the
Termination Date. In the case of a prepayment of the Certificates pursuant to
clause (v) above, the Certificates shall be prepaid on the effective date of
the Refinancing. In the case of a prepayment of the Certificates pursuant to
clause (vi) above, the Certificates shall be prepaid on the 15th day following
the Cut-Off Date. In the case of a prepayment of the Certificates pursuant to
clause (vii) above, the Certificates shall be prepaid on the date designated
in the notice referred to therein. The day on which the Certificates are to
be prepaid is herein referred to as the "Prepayment Date". On or prior to the
Prepayment Date, immediately available funds shall be deposited with the
Indenture Trustee in an amount in respect of the Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section
6.02 of the Indenture on or after the applicable Premium Termination Date,
or (ii) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (i), (iii) (if clause (i) of the first
sentence of Section 8.02(a) of the Indenture is applicable) or (vi) above,
the sum of (A) the aggregate principal amount of such Certificates then
Outstanding, (B) accrued interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due the Indenture Trustee under the
Indenture or under the Participation Agreement or the Lease, but excluding
any Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (ii), (iii) (if clause (ii) of the
first sentence of Section 8.02(a) of the Indenture is applicable), (iv),
(v) or (vii) above, the sum of the amounts specified in clauses (A), (B)
and (C) of the preceding clause (1) plus any Make-Whole Premium payable in
respect of all Certificates with respect to which the Premium Termination
Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
If, in accordance with and subject to the satisfaction of the
conditions set forth in Section 7.11 of the Participation Agreement, the
Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall (except for prior acts) be released
and discharged from any further obligations hereunder and under the
Certificates and all other Operative Agreements (except any obligations that
have accrued prior to such assumption).
If an Indenture Event of Default under the Indenture shall occur and
be continuing, the principal of the Certificates may be declared due and
payable in the manner and with the effect provided in the Indenture. The
Indenture provides that in certain events such declaration and its
consequences may be waived the Majority in Interest of Holders. Any such
consent or waiver shall be conclusive and binding upon the Holder of this
Certificate and upon all future Holders and owners of this Certificate and any
Certificate that may be issued in exchange or substitution therefor,
whether or not any notation thereof is made upon this Certificate or such
other Certificates. Moreover, if, and only if, an Event of Default shall
occur, the Indenture Trustee may declare the Lease to be in default, and
may, to the exclusion of the Owner Trustee, exercise one or more of the
remedies of the Owner Trustee provided in the Lease.
The Owner Trustee or the Owner Participant may cure a default by the
Lessee under the Lease arising from the failure of the Lessee to make any
Basic Rent payments under the Lease, but the Owner Trustee and the Owner
Participant, collectively, may not cure more than three consecutive such
failures or more than six such failures in total. The Owner Trustee or the
Owner Participant may cure any other default by the Lessee in the performance
of its obligations under the Lease.
(A) If an Event of Default shall have occurred and be continuing for
more than 180 days or the Certificates shall have been accelerated or (B) an
Event of Default shall have occurred and be continuing for not more than 180
days and the Certificates shall not have been accelerated, the Owner
Participant (or the Owner Trustee on behalf of the Owner Participant) may:
(1) direct the Owner Trustee to cause the prepayment of all the
Outstanding Certificates by notifying the Indenture Trustee of such
election and depositing the sum of amounts contemplated by paragraph
"first" under Section 5.03 of the Indenture and the aggregate
Prepayment Price of all such Certificates with the Indenture Trustee
for distribution to the Holders; or
(2) purchase all of the Outstanding Certificates by paying to the
Indenture Trustee an amount equal to the aggregate unpaid principal
amount of all Outstanding Certificates, plus accrued interest on such
amount to the date of purchase and if such purchase occurs prior to
the Premium Termination Date for such Outstanding Certificate (in the
case of a purchase pursuant to clause (ii) of the first sentence of
Section 8.02(a) of the Indenture but not in the case of clause (i) of
Section 8.02(a) of the Indenture) any Make-Whole Premium applicable
to each Outstanding Certificate, plus all other sums due any Holder
or the Indenture Trustee under the Indenture, the Participation
Agreement or the Lease.
The right of the Holder hereof to institute an action for any remedy
under the Indenture is subject to certain restrictions specified in the
Indenture, except that the right of the Holder of this Certificate to receive
payment of the principal of and interest and Make-Whole Premium, if any, on
this Certificate on or after the respective due dates, or to institute suit
for the enforcement of any such payment, shall not be impaired or affected
without the consent of such Holder.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 and integral multiples thereof. So long as
any of the Certificates remain Outstanding, the Indenture Trustee will
maintain an office or agency where the Certificates may be presented for
payment and a facility or agency in New York, New York where the Certificates
may be presented for registration of transfer and for exchange as provided in
the Indenture. As provided in the Indenture and subject to certain
limitations therein, this Certificate is transferable, and upon surrender of
this Certificate for registration of transfer at the principal corporate trust
office of the Indenture Trustee, or at the office or agency maintained for
such purposes, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Indenture
Trustee duly executed by, the Holder or his attorney duly authorized in
writing, one or more new Certificates of the same Series and 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 Series and Maturity and interest rate and
of authorized denominations, as requested by the Holder surrendering the same,
upon presentation thereof for such purpose at the principal corporate trust
office of the Indenture Trustee, or at an office or agency maintained for such
purpose.
No service charge shall be levied for any such registration of
transfer or exchange, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to the due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, any agent of the Owner
Trustee or the Indenture Trustee, the Paying Agent, if any, the Registrar and
the Lessee shall deem and treat the person in whose name this Certificate is
registered as the absolute owner hereof for all purposes whether or not this
Certificate is overdue, and neither the Owner Trustee, the Indenture Trustee
(nor any agent of the Owner Trustee or the Indenture Trustee), nor the Paying
Agent, if any, the Registrar nor the Lessee shall be affected by notice to the
contrary.
The indebtedness evidenced by this Certificate is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of the Secured Obligations (as defined in
the Indenture) in respect of [Series A Certificate](1), [Series A and Series B
Certificates](2) and this Certificate is issued subject to such provisions.
The Holder of this Certificate, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Indenture Trustee
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in the Indenture and (c) appoints
the Indenture Trustee such Holder's attorney-in-fact for such purpose.(*)
- --------------
(1) To be inserted in the case of a Series B Certificate.
(2) To be inserted in the case of a Series C Certificate.
(*) To be inserted for each Certificate other than any Series A
Certificate.
As provided in the Indenture, the Indenture and the Certificates
shall be construed in accordance with and governed by the laws of the State of
New York.
This Certificate shall not be secured by or be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose unless
authenticated by the Indenture Trustee as evidenced by the manual signature of
one of its authorized officers on the certificate below.
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Trust
Certificate (Federal Express Corporation Trust No. N670FE) to be duly executed
in its corporate name by its officer thereunto duly authorized.
Dated: May ___, 1997 STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Owner Trustee
By _____________________________________________
Name: Paul D. Allen
Title: Vice President
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust Certificates (Federal Express
Corporation Trust No. N670FE) referred to in the within mentioned Indenture.
Dated: May ___, 1997 FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By ____________________________________
Name: Greg A. Hawley
Title: Vice President
SCHEDULE I
[Reserved]
SCHEDULE II
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N670FE)
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement,
the Series Supplements, the Intercreditor Agreement and the Liquidity
Facilities) referred to below, unless otherwise defined in an Operative
Agreement or the context thereof shall otherwise require. In the case of any
conflict between the provisions of this Schedule and the provisions of any
Operative Agreement, the provisions of such Operative Agreement shall control
the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Additional Insured. As defined in Article 13 of the Lease.
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
located in the United States succeeding to the functions of any of the
foregoing.
Affidavits. The affidavits of citizenship of the Owner Trustee and
the Owner Participant.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment to be 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 to be
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 and
actual state, local and foreign income taxes.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee as
provided in the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe thereunder) together with two Engines
(whether either is an initial Engine or a 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 Aircraft shall mean the Airbus A300F4-605R airframe bearing FAA
Registration Number N670FE and Manufacturer's serial number 777, together with
two General Electric CF6-80C2-A5F engines.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number initially and manufacturer's serial
number specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any Replacement Airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on or prior to the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, each Liquidity Provider and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N670FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Ancillary Agreement II. The Ancillary Agreement II (Federal Express
Corporation Trust No. N670FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Application. The application for registration of the Aircraft with
the FAA in the name of the Owner Trustee.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with an abbreviated report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
Assignment and Assumption Agreement. Any agreement delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Average Life Date. For any Certificate, the date which follows the
prepayment date by a period equal to the Remaining Weighted Average Life of
such Certificate.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France.
AVSA Consent and Agreement. The Consent and Agreement dated as of
May 1, 1997, executed by AVSA.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Bankruptcy Default. An event specified in Section 16.01(e), (f) or
(g) of the Lease which either does or, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Delivery Date and ending at the end of the day on September 2, 2020, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Memphis, Tennessee and the city in the
United States in which the office or agency is maintained by the Pass Through
Trustee for the payment of the Pass Through Certificates, and after the Lien
of the Indenture is discharged, Boston, Massachusetts.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N670FE), 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 either of which would change or would allow a change in
the tax assumptions or structure upon which the lease economics were based,
provided that the Owner Participant or the Lessee has notified the other party
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 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Class A Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Class B Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Collateral Account Control Agreement. The Collateral Account Control
Agreement dated as of May 1, 1997 among State Street Bank and Trust Company,
the Indenture Trustee and the Owner Trustee.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of May 1,
1997 executed by the Manufacturer.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 750 Main Street, Hartford, Connecticut
06103, Attention: Corporation Trust Administration, or such other office at
which the Owner Trustee's corporate trust business shall be administered which
the Owner Trustee shall have specified by notice in writing to the Lessee, the
Owner Participant and the Indenture Trustee.
Corporate Trust Department. The Corporate Trust Department office of
the Indenture Trustee located at 79 South Main Street, Salt Lake City, Utah
84111, Attention: Corporate Trust Department, or such other office at which
the Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to the Lessee,
the Owner Participant and the Owner Trustee.
CRAF Program. Has the meaning specified in Section 7.01(f) of the
Lease.
Cut-Off Date. September 1, 1997.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
Default. Any event or condition which, with the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
Delivery Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
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 has a combined
capital and surplus of at least $100,000,000 and a rating of A or better from
the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Section 7.02(a)(vii), 10.02(c), 10.03, 11.03, 11.04 or 12.02 of
the Lease, together with all Parts related thereto. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the Lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, both Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1997, executed
by the Engine Manufacturer.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N670FE), dated as of May 1, 1997 between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. As defined in Section 8.01(b)(xii) of the Participation
Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by Lessee for any reason whatsoever;
(ii) any damage to such property which results in an insurance settlement with
respect to such property on the basis of a total loss, or constructive or
compromised total loss; (iii) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the Government, any foreign
government or purported government or any agency or instrumentality thereof,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, for a period in excess of 180 days (or such
shorter period ending on the earlier of the expiration of the Term or on the
date on which an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss shall occur)
or (B) by the Government for a period extending beyond the Term; and (iv) as a
result of any law, rule, regulation, order or other action by the Aeronautics
Authority or other governmental body having jurisdiction, the use of the
Aircraft or Airframe in the normal course of air transportation of cargo shall
have been prohibited by virtue of a condition affecting all Airbus A300-600
series aircraft equipped with engines of the same make and model as the
Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period, shall be diligently
carrying forward all steps which are necessary or desirable to permit the
normal use of the Aircraft or Airframe or, in any event, if such use of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if any Event of Loss occurs with respect to the Airframe.
Excepted Payments. Collectively, (i) indemnity, expense,
reimbursement or other payments paid or payable by the Lessee in respect of
the Owner Participant, the Owner Trustee in its individual capacity or any of
their respective successors, permitted assigns, directors, officers,
employees, servants and agents or Affiliates, pursuant to the Participation
Agreement or any other Operative Agreement or any indemnity hereafter granted
to the Owner Participant or the Owner Trustee in its individual capacity
pursuant to the Lease or the Participation Agreement, (ii) proceeds of public
liability insurance (or government indemnities in lieu thereof) in respect of
the Aircraft payable as a result of insurance claims paid for the benefit of,
or losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Article 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) any purchase price paid to the
Owner Participant for its interest in the Trust Estate pursuant to Section
7.03(d) of the Participation Agreement, (vi) subject to Section 3.05 of the
Lease, payments constituting increases in Basic Rent attributable to payments
arising pursuant to Section 5 of the Tax Indemnity Agreement, (vii) any
payments in respect of interest to the extent attributable to payments
referred to in clauses (i) through (vi) above and (viii) any right to demand,
collect or otherwise receive and enforce the payment of any amount described
in clauses (i) through (v) and (vii) above (except with respect to interest
attributable to payments referred to in clause (vi) above).
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. 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 and Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell, assuming the Aircraft (or other property) is unencumbered
by the Lease. In such determination, except for purposes of Section 17.01 of
the Lease (when it shall be determined based upon the actual condition and
location of the Aircraft), 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 and Fair Market Value shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Final Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Fixed Renewal Rent. Semi-annual payments of rent during the Fixed
Renewal Term equal to the lesser of (i) Fair Market Rental as determined as of
the commencement of such Fixed Renewal Term and (ii) 50% of the average actual
semi-annual Basic Rent payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
FPO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
French Pledge Agreement. The French Pledge Agreement dated as of May
1, 1997 between the Owner Trustee and the Indenture Trustee.
FSB. First Security Bank, National Association, a national banking
association.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of SSB, in its individual capacity and as Owner
Trustee and Lessor, the Subordination Agent, in its individual capacity and in
its capacity as Subordination Agent, each Liquidity Provider, the Owner
Participant, the Indenture Trustee, in its individual capacity and as trustee,
the Owner Participant Guarantor and any successor (including any trustee which
may succeed to the Lessor's interest under the Lease), Affiliate, assign,
officer, director, employee, agent and servant of any of the foregoing, the
Lessor's Estate and the Trust Indenture Estate. Neither the Pass Through
Trustee nor any holder of a Pass Through Certificate shall be deemed to be an
Indemnitee.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N670FE), dated as of May 1, 1997, between the
Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N670FE) to be dated the Delivery Date, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
Indenture Trustee's Liens. Any Lien against, on or with respect to
the Aircraft, the Lessor's Estate or the Trust Indenture Estate or any part
thereof 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, (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 or (iii) Taxes imposed against
the Indenture Trustee in its individual capacity in respect of which the Lessee
has not indemnified (and is not obligated to indemnify) the Indenture Trustee
in such capacity.
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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Intercreditor Agreement. The Intercreditor Agreement dated as of May
1, 1997, among the Pass Through Trustee, the Class A Liquidity Provider, the
Class B Liquidity Provider and the Subordination Agent.
Interest Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N670FE) dated as of May 1, 1997, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, including,
without limitation, supplementation by one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N670FE) to be dated the Delivery Date, substantially in
the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA Bill
of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), any Ancillary Agreement, the GTA, the
Engine Warranty Assignment, the Engine Consent, 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 in its individual
capacity or the Owner Participant) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity, or to any of their respective directors, officers,
employees and agents pursuant to Articles 8 and 9 of the Participation
Agreement), and all other property of the Owner Trustee purportedly subjected
to the Lien of the Indenture by the Granting Clause thereof; provided that in
no event shall "Lessor's Estate" include any Excepted Payment.
Lessor's Liens. Liens against, on or with respect to the Aircraft,
the Lessor's Estate or the Trust Indenture Estate or any part thereof, title
thereto or any interest therein arising as a result of (i) claims against the
Lessor, in its individual capacity or as Owner Trustee, or the Owner
Participant, in each case not related to the transactions contemplated by the
Operative Agreements, (ii) acts or omissions of the Lessor in its individual
capacity or as Owner Trustee, and, in the case of the Lessor in its individual
capacity, arising from its gross negligence or willful misconduct or expressly
prohibited under the Operative Agreements and any act or omission of the Owner
Participant which is in violation of any of the terms of the Operative
Agreements, (iii) Taxes or Expenses imposed against the Lessor, in its
individual capacity or as Owner Trustee, Owner Participant, Lessor's Estate or
the trust created by the Trust Agreement which are not required to be
indemnified against by the Lessee pursuant to the Participation Agreement by
reason of Section 8.01(b) or 9.01(b) thereof and which are not required to be
indemnified against by the Lessee pursuant to the Tax Indemnity Agreement, or
(iv) claims against the Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner Participant of its interests in
the Aircraft other than a transfer of the Aircraft pursuant to Section 4.02(a)
or Article 10 or 11 of the Lease and other than a transfer pursuant to the
exercise of the remedies set forth in Article 17 of the Lease.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Liquidity Facility. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Liquidity Provider. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
Loss Payee. Has the meaning specified in Section 13.02(b)(i) of the
Lease.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% of the aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding for
purposes of this definition any Certificates held by (i) the Owner Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the day before the
applicable Prepayment Date (or date of purchase, as the case may be) which an
Independent Investment Banker determines to be equal to the excess, if any, of
(i) the present value of the remaining scheduled payments of such principal
amount or portion thereof and interest thereon (excluding interest accrued
from the immediately preceding Payment Date to such Prepayment Date or date of
purchase, as the case may be) to the Maturity of such Certificate in
accordance with generally accepted financial practices assuming a 360-day year
consisting of twelve 30-day months at a discount rate equal to the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
outstanding principal amount of such Certificate plus accrued interest.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
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 equal to the Debt Rate per annum compounded semi-annually.
Non-U.S. Person. Any Person other than a U.S. Person.
Obsolete Parts. Parts which are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, the Owner Trustee Guaranty,
if any, any Ancillary Agreement entered into by or with the written consent of
the Indenture Trustee, which by its terms is an Operative Agreement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the Engine Consent, the Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Account Control Agreement and any Assignment and Assumption
Agreement.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Outstanding. When used with respect to Certificates, as of the date
of determination and subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and delivered under the
Indenture, with the exception of the following:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money in the necessary amount
has been theretofore deposited with the Indenture Trustee in trust
for the Holders of such Certificates pursuant to Section 14.01 of the
Indenture; provided, that if such Certificates are to be prepaid,
notice of such prepayment has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Indenture Trustee
has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to Article II
of the Indenture.
Owner Participant. The trustor originally named in the Trust
Agreement and any successor thereto, and any Person to which the Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Guarantor. Philip Morris Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Certificate Closing Date by the Owner Participant Guarantor in favor of the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
and any guaranty delivered in compliance with Section 7.03(d) of the
Participation Agreement.
Owner Trustee. SSB, not in its individual capacity except as
otherwise expressly stated, but solely as Owner Trustee under the Trust
Agreement.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the 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 the case may be, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N670FE), dated as of May 1, 1997, among the Lessee, the
Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee, the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee and the Subordination Agent not in its
individual capacity except as otherwise expressly provided therein, but solely
as subordination agent.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine or title to which
remains vested in the Lessor pursuant to Article 8 of the Lease.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
May 1, 1997 between the Lessee and the Pass Through Trustee.
Pass Through Certificates. Any of the Pass Through Certificates,
1997-1-A, the Pass Through Certificates, 1997-1-B or the Pass Through
Certificates, 1997-1-C, in each case as issued by the related Pass Through
Trust; and "Pass Through Certificates" means all of the Pass Through
Certificates issued by each of the Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Corporation 1997-1 Pass
Through Trust Class A, Federal Express Corporation 1997-1 Pass Through Trust
Class B and Federal Express Corporation 1997-1 Pass Through Trust Class C, in
each case formed pursuant to the related Series Supplement in accordance with
the Pass Through Agreement; and "Pass Through Trusts" means all of such Pass
Through Trusts.
Pass Through Trustee. First Security Bank, National Association, a
national banking association, in its capacity as Pass Through Trustee under
the Pass Through Agreement and each Pass Through Trust.
Past Due Rate. In respect of (A) any amount payable to the Owner
Participant or the Owner Trustee a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid
in full equal to 2% plus the Debt Rate and (B) any principal of or interest on
any Certificate or any other amount payable under the Indenture, any
Certificate or any other Operative Agreement that is not paid when due
(whether at Maturity, by acceleration, by optional or mandatory prepayment or
otherwise) to any Holder, the Indenture Trustee or the Pass Through Trustee, a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to (i) in the
case of any such amount payable to the Holder of any Certificate, 2% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. Each January 15 and July 15 commencing on July 15,
1997.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local,
foreign or any agency, instrumentality, division or body thereof).
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
December 27, 2011, with respect to the Series B Certificates, February 5, 2010
and with respect to the Series C Certificates, March 22, 2007.
Prepayment Date. Has the meaning specified in Section 6.02(b) of the
Indenture.
Prepayment Price. Has the meaning specified in Section 6.02(b) of the
Indenture.
Principal Amount. With respect to a Certificate means the stated
original principal amount of such Certificate and, with respect to all
Certificates, means the aggregate stated original principal amounts of all
Certificates.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
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 Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N670FE), dated as of May 1, 1997 between
the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement II.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), December 31 for January 15
Payment Dates and June 30 for July 15 Payment Dates, whether or not such date
is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Register. Has the meaning set forth in Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N671FE, N672FE,
N673FE, N674FE, N583FE and N584FE, each dated as of May 1, 1997, between the
Owner Trustee and the Indenture Trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N581FE, dated as of May 1,
1997, between Wilmington Trust Company, as owner trustee and the Indenture
Trustee, and the Trust Indenture and Security Agreement for Federal Express
Corporation Trust No. N587FE, dated as of December 1, 1996, as amended and
restated as of May 1, 1997, between Wilmington Trust Company, as owner trustee
and the Indenture Trustee.
Remaining Weighted Average Life. On a given date with respect to any
Certificate the number of days equal to the quotient obtained by dividing (i)
the sum of each of the products obtained by multiplying (a) the amount of each
then remaining scheduled payment of principal of such Certificate by (b) the
number of days from and including such prepayment date to but excluding the
dates on which each such payment of principal is scheduled to be made; by (ii)
the then outstanding principal amount of such Certificate.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. One or more terms with respect to which the Lessee has
exercised its option to renew the Lease pursuant to Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. September 2, 2020 and each January 15 and July 15
commencing on July 15, 1997.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Aircraft. Any aircraft substituted for the Aircraft
pursuant to Section 11.03(a) of the Lease.
Replacement Airframe. Has the meaning set forth in Section 11.03 of
the Lease.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) of equal or greater value,
airworthiness, remaining useful life and utility as the Engine being replaced,
together with all Parts relating to such engine; provided, however, that if
such replacement engine is not a General Electric CF6-80C2-A5F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement in which case the definition of Responsible
Officer set forth in Section 3.10 of the Trust Agreement is applicable) or the
Indenture Trustee, any officer in its Corporate Trust Administration, as the
case may be, designated by such Person to perform obligations under the
Operative Agreements, and with respect to any other party, any corporate
officer or (except in the case of the Owner Participant) other employee of a
party who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Secured Obligations. Has the meaning specified in the Granting
Clause of the Indenture.
Securities Act. The Securities Act of 1933, as amended.
Series "A" or "Series A Certificates". Certificates issued and
designated as "Series A" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series A".
Series "B" or "Series B Certificates". Certificates issued and
designated as "Series B" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series B".
Series "C" or "Series C Certificates". Certificates issued and
designated as "Series C" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series C".
Series Supplement or Series Supplements. The Series Supplement
1997-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1997-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1997-1-C to be
executed and delivered by the Lessee and the Pass Through Trustee.
Sinking Fund Redemption Date. Has the meaning specified in Section
6.06 of the Indenture.
Sinking Fund Redemption Price. Has the meaning specified in Section
6.06 of the Indenture.
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Specified Investments. 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 S&P and Moody's,
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) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following
the date of such investment; (d) overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers; or
(e) 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 or 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.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association.
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 Factor" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with so much of the arrears portion of Basic Rent due and owing
through the date of payment of Stipulated Loss Value as does not constitute an
Excepted Payment, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment. Subject to the immediately
preceding sentence, it is understood and agreed that the amounts set forth on
Schedule III of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals and
credits of unearned Basic Rent through such date and, accordingly, no further
accrual or credit shall be required through such date whenever Stipulated Loss
Value is to be calculated with reference to any such date; provided that if
amounts in respect of Stipulated Loss Value are payable under the Operative
Agreements after the Stipulated Loss Determination Date in respect of which
such Stipulated Loss Value was determined, the Lessor shall be compensated
during the period from the Stipulated Loss Determination Date to such payment
date in accordance with the provisions of the Operative Agreements.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease.
Subordination Agent. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Subordination Agent.
Supplemental Rent. (a) All amounts, liabilities and obligations
which the Lessee assumes or agrees to perform or pay under the Lease or under
the Participation Agreement or Tax Indemnity Agreement or any Ancillary
Agreement or any other Operative Agreement to the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, FPO Price and amounts calculated by reference to Termination Value, any
amounts of Make-Whole Premium payable under the Indenture to the extent
provided in Section 3.03 of the Lease, and all amounts required to be paid by
Lessee under the agreements, covenants and indemnities contained in the Lease
or in the Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Basic Rent and (b) all amounts that the
Owner Trustee is obligated to pay in accordance with clause (b) of the last
paragraph of Section 2.04 of the Indenture.
Tax. Has the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N670FE), dated as of May 1, 1997, between the
Lessee and the Owner Participant.
Term. 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 December 31, 2004 in the case of Article 10 of the Lease, and in
the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling
on January 15, 2016, (ii) Section 4.02(a)(D) or (E) of the Lease, a Rent
Payment Date that is on or after the seventh anniversary of the Delivery Date
and (iii) Section 4.02(a)(F) of the Lease, the last day of the Basic Term.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent through such date and,
accordingly, no further accrual or credit shall be required through such date
whenever Termination Value is to be calculated with reference to any such
date; provided that if amounts in respect of Termination Value are payable
under the Operative Agreements after the Termination Date in respect of which
such Termination Value was determined, the Lessor shall be compensated during
the period from the Termination Date to such payment date in accordance with
the provisions of the Operative Agreements.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code, as amended
and in effect on the date of the Lease or as subsequently amended, or any
successor or substituted legislation at the time in effect and applicable, and
the regulations promulgated pursuant thereto.
Treasury Yield. At the time of determination with respect to any
Certificate, the interest rate (expressed as a semi-annual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semi-annual
yield to maturity for United States Treasury securities maturing on the
Average Life Date on such Certificate and trading in the public securities
markets either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in public securities markets, (i) one maturing as close as possible to,
but earlier than, the Average Life Date of such Certificate and (ii) the other
maturing as close as possible to, but later than, the Average Life Date of
such Certificate. In each case as published in the most recent H.15(519) or,
if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Certificate is reported on the most
recent H.15 (519), such weekly average yield to maturity as published in such
H.15(919). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Premium
will be the third Business Day prior to the applicable prepayment date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable prepayment date.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N670FE), dated as of May 1, 1997, between the Owner Participant and
the Owner Trustee in its individual capacity.
Trust Estate. The Lessor's Estate.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. Morgan Stanley & Co. Incorporated, First Chicago
Capital Markets, Inc., Goldman, Sachs & Co. and J.P. Morgan & Co.
Underwriting Agreement. The Underwriting Agreement dated May 22, 1997
among the Lessee and the Underwriters.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust No. N671FE)
Dated as of May 1, 1997
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 778, REGISTRATION NO. N671FE
==============================================================================
TABLE OF CONTENTS
Page
Initial Recitals......................................................... 1
Granting Clause.......................................................... 2
Habendum Clause.......................................................... 6
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................. 8
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.............. 8
Section 2.02. Execution of Certificates................................ 9
Section 2.03. Certificate of Authentication............................ 9
Section 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest.......................... 9
Section 2.05. Payments from Trust Indenture Estate Only................ 12
Section 2.06. Registration, Transfer and Exchange...................... 13
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates............................................. 14
Section 2.08. Cancellation of Certificates; Destruction Thereof........ 15
Section 2.09. Temporary Certificates................................... 15
Section 2.10. Termination of Interest in Trust Indenture Estate........ 16
Section 2.11. Certificates in Respect of Replacement Aircraft.......... 16
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements..................................... 16
Section 2.13. Establishment of Collateral Account...................... 16
Section 2.14. Investment of Funds on Deposit in the Collateral Account. 17
Section 2.15. Release of Debt Portion and Lien on the Collateral Account
and the Liquid Collateral on Delivery Date............... 18
Section 2.16. Cut-Off Date............................................. 19
Section 2.17. Subordination............................................ 19
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.... 19
Section 3.02. Offices for Payments, etc................................ 20
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee.................................................. 20
Section 3.04. Paying Agents............................................ 20
Section 3.05. Covenants of SSB and the Owner Trustee................... 21
Section 3.06. [Reserved]............................................... 21
Section 3.07. Disposal of Trust Indenture Estate....................... 22
Section 3.08. No Representations or Warranties as to Aircraft or
Documents................................................ 22
Section 3.09. Further Assurances; Financing Statements................. 22
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates.................. 23
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution.................................. 23
Section 5.02. Event of Loss and Replacement; Prepayment................ 24
Section 5.03. Payment After Indenture Event of Default, etc............ 25
Section 5.04. Certain Payments......................................... 27
Section 5.05. Other Payments........................................... 28
Section 5.06. Payments to Owner Trustee................................ 28
Section 5.07. Application of Payments.................................. 28
Section 5.08. Investment of Amounts Held by Indenture Trustee.......... 29
Section 5.09. Withholding Taxes........................................ 30
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity.......................... 30
Section 6.02. Prepayment of Certificates............................... 30
Section 6.03. Notice of Prepayment to Holders.......................... 32
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price.................................................... 33
Section 6.05. Certificates Payable on Prepayment Date.................. 33
Section 6.06. Mandatory Sinking Fund Redemption........................ 33
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default............................... 35
Section 7.02. Remedies................................................. 38
Section 7.03. Return of Aircraft, etc.................................. 40
Section 7.04. Indenture Trustee May Prove Debt......................... 42
Section 7.05. Remedies Cumulative...................................... 44
Section 7.06. Suits for Enforcement.................................... 44
Section 7.07. Discontinuance of Proceedings............................ 45
Section 7.08. Limitations on Suits by Holders.......................... 45
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute
Certain Suits............................................ 45
Section 7.10. Control by Holders....................................... 46
Section 7.11. Waiver of Past Indenture Default......................... 46
Section 7.12. Notice of Indenture Default.............................. 47
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.... 47
Section 8.02. Owner Participant's Right to Elect to Prepay or Purchase the
Certificates............................................. 50
Section 8.03. Certain Rights of Owner Participant...................... 52
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts..................................... 53
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an
Indenture Event of Default............................... 54
Section 9.03. Certain Rights of the Indenture Trustee.................. 56
Section 9.04. Indenture Trustee Not Responsible for Recitals, Disposition
of Certificates or Application of Proceeds Thereof....... 57
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc......................................... 57
Section 9.06. Moneys Held by Indenture Trustee......................... 57
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc......................................... 57
Section 9.08. Replacement Airframes and Replacement Engines............ 58
Section 9.09. Indenture and Security Agreement Supplement for
Replacements............................................. 61
Section 9.10. Effect of Replacement.................................... 61
Section 9.11. Compensation............................................. 61
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders..................... 62
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates............................................ 62
Section 10.03. Holders to Be Treated as Owners......................... 63
Section 10.04. Certificates Owned by Owner Trustee and the Lessee Deemed
Not Outstanding......................................... 63
Section 10.05. Right of Revocation of Action Taken..................... 64
Section 10.06. ERISA................................................... 64
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee....................... 66
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor................................ 66
Section 12.03. Persons Eligible for Appointment as Indenture Trustee... 67
Section 12.04. Acceptance of Appointment by Successor Trustee.......... 67
Section 12.05. Merger, Conversion, Consolidation or Succession to Business
of Indenture Trustee.................................... 68
Section 12.06. Appointment of Separate Trustees........................ 69
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders...... 71
Section 13.02. Supplemental Indentures With Consent of Holders......... 72
Section 13.03. Effect of Supplemental Indenture........................ 74
Section 13.04. Documents to Be Given to Indenture Trustee.............. 74
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures.............................................. 74
Section 13.06. No Request Necessary for Lease Supplement or Indenture and
Security Agreement Supplement........................... 74
Section 13.07. Notices to Liquidity Providers.......................... 74
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture............................................... 75
Section 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates................................. 76
Section 14.03. Repayment of Moneys Held by Paying Agent................ 76
Section 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven Months......... 76
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting................................ 77
Section 15.02. No Legal Title to Trust Indenture Estate in Holders..... 77
Section 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding................................................. 77
Section 15.04. Indenture for Benefit of Owner Trustee, Indenture Trustee,
Owner Participant, Holders and Liquidity Providers...... 77
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease................................................... 78
Section 15.06. Notices................................................. 78
Section 15.07. Officer's Certificates and Opinions of Counsel; Statements
to Be Contained Therein................................. 79
Section 15.08. Severability............................................ 80
Section 15.09. No Oral Modifications or Continuing Waivers............. 80
Section 15.10. Successors and Assigns.................................. 80
Section 15.11. Headings................................................ 80
Section 15.12. Normal Commercial Relations............................. 80
Section 15.13. Governing Law; Counterparts............................. 80
Exhibit A -- Form of Indenture and Security Agreement Supplement
Exhibit B -- Form of Certificate
Schedule I -- [Reserved]
Schedule II -- Definitions
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N671FE)
TRUST INDENTURE AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION
TRUST NO. N671FE) dated as of May 1, 1997 (the "Indenture"), between STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, except as otherwise
specifically set forth herein (when acting in such individual capacity,
"SSB"), but solely as owner trustee (the "Owner Trustee") under the Trust
Agreement, as defined herein, and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, as Indenture Trustee hereunder (the "Indenture
Trustee").
W I T N E S S E T H:
-------------------
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and SSB have, immediately prior to the
execution and delivery of this Indenture, entered into a Trust Agreement
(Federal Express Corporation Trust No. N671FE) dated as of the date hereof (as
amended or otherwise modified from time to time in accordance with the
provisions thereof and of the Participation Agreement, the "Trust Agreement"),
whereby, among other things, SSB has declared a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Lien of this
Indenture for the use and benefit of, and with the priority of payment to, the
holders of the Certificates issued hereunder, and the Owner Trustee is
authorized and directed to execute and deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture, among other
things (i) to provide for the issuance by the Owner Trustee of Certificates as
provided in the Participation Agreement, and (ii) to provide for the
assignment, mortgage and pledge by the Owner Trustee to the Indenture Trustee,
as part of the Trust Indenture Estate hereunder of the Owner Trustee's right,
title and interest in the Liquid Collateral and after the Delivery Date for
the assignment, mortgage and pledge by the Owner Trustee to the Indenture
Trustee, as part of the Trust Indenture Estate hereunder, of among other
things, certain of the Owner Trustee's estate, right, title and interest in
and to the Aircraft and the Indenture Documents and certain payments and other
amounts (other than Excepted Payments) received hereunder or thereunder in
accordance with the terms hereof, as security for, among other things, the
Owner Trustee's obligations to the Certificate Holders and for the benefit and
security of such Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee, and authenticated, issued and delivered
hereunder, the valid obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of the Owner Trustee, enforceable in accordance
with its terms, have been done and performed and have happened.
NOW, THEREFORE, the parties agree as follows:
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual promises contained
herein and to secure (i) the prompt payment of the principal of and Make-Whole
Premium, if any, and interest on, and all other amounts due with respect to,
all the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of the Certificates, and the
prompt payment of any and all amounts from time to time owing under the
Participation Agreement by the Owner Trustee, the Owner Participant or the
Lessee to the Holders (collectively the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions of this Indenture, and in
consideration of the premises and of the covenants in this Indenture and in the
Certificates and of the purchase of the Certificates by their Holders, and of
the sum of $1 paid to the Owner Trustee by the Indenture Trustee at or before
the delivery of this Indenture, the receipt and sufficiency of which is hereby
acknowledged, the Owner Trustee has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged, granted a first priority security
interest in and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and grant a first priority security
interest in and confirm to the Indenture Trustee, its successors and assigns,
in trust for the equal and ratable security and benefit of the Holders from
time to time of the Certificates, a first priority security interest in and
first mortgage Lien on all estate, right, title and interest of the Owner
Trustee in, to and under the following described property, rights and
privileges other than Excepted Payments, which collectively, excluding
Excepted Payments but including all property specifically subjected to the
Lien of this Indenture by the terms hereof, by any Indenture and Security
Agreement Supplement or any mortgage supplemental to this Indenture, are
included within the Trust Indenture Estate, subject always to the rights
granted to the Owner Trustee or the Owner Participant hereunder and to the
other terms and conditions of this Indenture:
(1) The Airframe, as the same is more particularly described in the
Indenture and Security Agreement Supplement and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture; the Engines,
as the same are more particularly described in the Indenture and Security
Agreement Supplement, whether or not such Engines shall be installed in or
attached to the Airframe or any other airframe, and any Replacement Engine
therefor; and all Parts in respect of the Airframe and the Engines and all
records, logs and other documents at any time maintained with respect to the
foregoing property;
(2) The Lease and all Rent thereunder, including, without limitation,
all amounts of Basic Rent and Supplemental Rent, and payments of any kind
thereunder and including all rights of the Owner Trustee to execute any
election or option or to give or receive any notice, consent, waiver or
approval under or in respect of the Lease or to accept any surrender of the
Aircraft or any part thereof as well as any rights, powers or remedies on the
part of the Owner Trustee, whether arising under the Lease or by statute or at
law or in equity or otherwise arising out of any Event of Default;
(3) The Purchase Agreement, the Purchase Agreement Assignment, the
AVSA Consent and Agreement, the Consent and Agreement, the Consent and
Guaranty, the GTA, the Engine Warranty Assignment and the Engine Consent,
AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty,
the Ancillary Agreements and the Participation Agreement (to the extent of
amounts payable to the Owner Trustee thereunder) (collectively, and together
with the Lease, the Trust Agreement and the Certificates, the "Indenture
Documents"), including all rights of the Owner Trustee to execute any election
or option or to give or receive any notice, consent, waiver or approval under
or in respect of any of the foregoing documents and instruments;
(4) All the tolls, rents, issues, profits, products, revenues and
other income (including sales proceeds) of the property subjected or required
to be subjected to the Lien of this Indenture, and all of the estate, right,
title and interest of the Owner Trustee in and to the same and every part of
said property;
(5) The Collateral Account, the Liquid Collateral and all other
moneys and securities (including Permitted Investments) now or hereafter paid
or deposited or required to be paid or deposited to or with the Indenture
Trustee by or for the account of the Owner Trustee pursuant to any term of any
Operative Agreement, except the Tax Indemnity Agreement, and held or required
to be held by the Indenture Trustee hereunder;
(6) All requisition proceeds with respect to the Aircraft or any part
thereof (to the extent of the Owner Trustee's interest therein pursuant to the
terms of the Lease) and all insurance proceeds with respect to the Aircraft or
any part thereof from insurance required to be maintained by the Lessee under
Article 13 of the Lease, but excluding any insurance maintained by the Lessee
and not required under Article 13 of the Lease; and
(7) All proceeds of the foregoing.
EXCLUDING, HOWEVER, from the foregoing grant of the Lien and security
interest of this Indenture and from the Trust Indenture Estate, (i) 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 all rights
to collect and enforce Excepted Payments and (ii) rights granted to or
retained by the Owner Trustee or the Owner Participant hereunder and SUBJECT
TO the following provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, the Owner Trustee and the Owner Participant shall at all times
retain the right, to the exclusion of the Indenture Trustee, (A) to Excepted
Payments and to commence an action at law to obtain or otherwise demand, sue
for or receive and enforce the payment of such Excepted Payments, (B) to
exercise any election or option or make any decision or determination or to
give or receive any notice (including notice of Default), consent, waiver or
approval in respect of any such Excepted Payment, (C) to adjust (and make any
decision or determination or give any notice or consent with respect to) Basic
Rent and the percentages relating to Stipulated Loss Value and Termination
Value and the FPO Price as provided in Section 3.04 of the Lease and Section
15.01 of the Participation Agreement, (D) to exercise any election or option to
make any decision or determination, or to give or receive any notice, consent,
waiver or approval, or to take any other action in respect of, but in each
case only to the extent relating to, Excepted Payments (except for, in respect
of any portion of Basic Rent constituting an Excepted Payment, any action
changing the manner by which such Basic Rent is to be paid), (E) to retain the
rights of the "Lessor" with respect to solicitations of bids, and the election
to retain the Aircraft pursuant to Article 10 of the Lease, (F) to retain the
right of "Lessor" to determine the Fair Market Rental or Fair Market Value
pursuant to Article 4 of the Lease, (G) to exercise all other 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 or purchase options, (H) to retain all rights
with respect to insurance maintained for its own account which Section 13.05
of the Lease specifically confers on the "Lessor", (I) to approve appraisers,
lawyers and other professionals and receive notices, certificates, reports,
filings, opinions and other documents, in each case with respect to matters
relating to the Owner Participant's tax position, (J) to approve any
accountants to be used in the verification of any Rent adjustment, and (K) to
exercise, to the extent necessary to enable it to exercise its rights under
Section 8.03 hereof, the rights of the "Lessor" under Section 17.04 of the
Lease;
(ii) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have the
rights separately but not to the exclusion of the other (agreement of both
required in the case of clause (E) below), (A) to receive from the Lessee all
notices, certificates, reports, filings, opinions of counsel, copies of all
documents and all information which the Lessee is permitted or required to
give or furnish to the "Lessor" pursuant to the Lease or to the Owner Trustee
pursuant to any other Operative Agreement, (B) to exercise inspection rights
pursuant to Section 14.01 of the Lease (provided that if an Indenture Event of
Default shall be continuing, no inspection right of the Owner Trustee shall
interfere with the efforts of the Indenture Trustee to exercise remedies under
the Lease or this Indenture), (C) to maintain separate insurance pursuant to
Section 13.05 of the Lease and to retain all rights with respect to such
insurance maintained for its own account, (D) to give any notice of default
under Section 16.01 of the Lease and (E) the right to consent to changes to
the list of countries on Schedule III to the Participation Agreement;
(iii) subject to the last sentence of this clause (a), (A) so long as
no Indenture Event of Default not constituting an Event of Default shall have
occurred and be continuing (but subject to the provisions of Section 8.01
hereof), the Owner Trustee shall retain the right, to the exclusion of the
Indenture Trustee (or, if an Indenture Event of Default that is also an Event
of Default shall have occurred and be continuing, acting jointly with and not
to the exclusion of the Indenture Trustee), to exercise all rights, elections
and options of the Lessor in connection with the return of the Aircraft under
Article 12 of the Lease (but not Article 17 thereof, it being understood that
the Indenture Trustee shall have the exclusive right to exercise remedies
pursuant to such Article 17, including in respect of any related return of the
Aircraft pursuant to Article 12 of the Lease), including the right to approve
as satisfactory any accountants, engineers, appraisers or counsel to render
services for or issue appraisals, reports, certificates or opinions to the
Owner Trustee and to exercise all rights, elections and options of the Lessor
in connection with the return of the Aircraft pursuant to the express
provisions of the Operative Agreements, and (B) so long as no Indenture Event
of Default not constituting an Event of Default shall have occurred and be
continuing (but subject to the provisions of Section 8.01 hereof), the Owner
Trustee shall retain the right, jointly with the Indenture Trustee (agreement
of both not being required), to further assurances and financial information
from the Lessee pursuant to Section 19.01 of the Lease (other than the right
to receive any funds to be delivered to the "Lessor" under the Lease (except
funds delivered with respect to Excepted Payments) and under the Purchase
Agreement;
(iv) subject to the last sentence of this clause (a), at all times
the Owner Trustee shall have the right as Lessor, but not to the exclusion of
the Indenture Trustee, to seek specific performance of the covenants of the
Lessee under the Lease relating to the protection, insurance, maintenance,
possession and use of the Aircraft; and
(v) at all times the Owner Trustee and the Owner Participant shall
have the rights granted to them under Articles VI, VIII and X and Section 7.02
hereof.
Notwithstanding the foregoing, but subject always to the provisions of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) (other than
with respect to Excepted Payments) declare the Lease to be in default under
Article 17 thereof or any statute (including, without limitation, Article 2-A
of the Uniform Commercial Code) and (B) subject only to the provisions of this
Indenture, (other than in connection with Excepted Payments) exercise the
remedies set forth in such Article 17 of the Lease any statute (including
without limitation Article 2-A of the Uniform Commercial Code), at law and in
Article 7 hereof.
(b) The foregoing provisions in paragraph (a) above shall be equally
applicable to all rights of the Indenture Trustee in respect of Ancillary
Agreement I and Ancillary Agreement II, whether such rights are granted
directly to the Indenture Trustee under such agreements or are granted under
the Granting Clause of this Indenture.
(c) The leasehold interest granted to the Lessee by the Lease shall
not be subject to the security interest granted by this Indenture, and nothing
in this Indenture shall affect the rights of the Lessee under the Lease so
long as no Event of Default has occurred and is continuing.
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 and the
rights of the Owner Trustee and the Owner Participant under this Indenture.
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Documents to perform all of the obligations assumed by it under any
of those documents, all in accordance with and pursuant to the terms and
provisions of those documents, and the Indenture Trustee and the Holders of
the Certificates shall have no obligation or liability under the Indenture
Documents by reason of or arising out of the assignment under this Indenture,
nor shall the Indenture Trustee or the Holders of the Certificates be required
or obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Documents or, except as expressly
provided in this Indenture, to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or present or file
any claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
Effective upon the occurrence and continuance of an Indenture Event of
Default, the Owner Trustee hereby constitutes the Indenture Trustee the true
and lawful attorney of the Owner Trustee, irrevocably, with full power (in the
name of the Owner Trustee or otherwise), subject to the terms and conditions
of this Indenture, to ask, require, demand, receive, compound and give
acquittance for any and all Basic Rent, Supplemental Rent payable to the Owner
Trustee, Stipulated Loss Value and Termination Value payments, insurance
proceeds and any and all moneys and claims for moneys due and to become due
under or arising out of the Lease (subject to Section 8.01 hereof) or the
other Indenture Documents (other than Excepted Payments), to endorse any
checks or other instruments or orders in connection with the same and to file
any claims, take any action or institute any proceeding which the Indenture
Trustee may deem to be necessary or advisable in the premises.
Under the Lease the Lessee is directed to make all payments of Rent
(other than Excepted Payments not constituting Basic Rent) payable to the
Owner Trustee and all other amounts (other than Excepted Payments not
constituting Basic Rent) 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 not constituting Basic Rent.
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, at the
expense of the Lessee, promptly and duly execute and deliver or cause to be
duly executed and delivered any and all such further instruments and documents
as the Indenture Trustee may reasonably deem desirable in obtaining the full
benefits of the assignment hereunder and of the rights and powers herein
granted; provided, however, that the Owner Trustee shall have no obligation to
execute and deliver or cause to be executed or delivered to the Indenture
Trustee any such instrument or document if such execution and delivery would
result in the imposition of additional liabilities on the Owner Trustee or the
Owner Participant or would result in a burden on the Owner Participant's
business activities, unless the Owner Trustee or the Owner Participant, as the
case may be, is indemnified to its reasonable satisfaction against any losses,
liabilities and expenses incurred in connection with such execution and
delivery.
The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect and shall not have been terminated pursuant
to Section 14.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except in
respect of Excepted Payments or otherwise as provided in or permitted by this
Indenture, enter into an agreement amending or supplementing any of the
Indenture Documents, settle or compromise any claim (other than claims in
respect of Excepted Payments) against the Lessee arising under any of the
Indenture Documents, or 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.
Concurrently with the delivery of this Indenture, the Owner Trustee
has delivered to the Indenture Trustee executed counterparts of the Trust
Agreement and the chattel paper original counterpart of the Lease.
It is hereby further covenanted and agreed by and between the parties
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise requires,
capitalized terms utilized herein shall have the meanings set forth in
Schedule II hereto for all purposes of this Indenture and shall be equally
applicable to both the singular and plural forms of the terms defined.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.
Forthwith upon the execution and delivery of this Indenture, and from time to
time thereafter, Certificates in an aggregate principal amount not in excess
of the amount specified in Section 2.04 hereof (except as otherwise provided
in Sections 2.06 and 2.07 hereof) shall be executed by the Owner Trustee and
delivered to the Indenture Trustee for authentication, and the Indenture
Trustee shall thereupon authenticate and deliver said Certificates to or upon
the oral or written order of the Owner Trustee, signed, if written, by an
authorized officer of the Owner Trustee, without any further action by the
Owner Trustee.
Section 2.02. Execution of Certificates. The Certificates shall be
signed on behalf of the Owner Trustee by an authorized officer of SSB. 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 SSB 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 SSB, 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 SSB; 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 SSB, although
at the date of the execution and delivery of this Indenture any such person
was not such an officer. Certificates bearing the facsimile signatures of
individuals who were authorized officers of SSB 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 (subject
to Section 15.01(d) of the Participation Agreement) 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 Certificate Closing Date, shall be issued
in three separate series consisting of Series A, Series B and Series C and
shall be issued in the Maturities and principal amounts, and shall bear
interest at the rates per annum, specified in the form of Certificate set forth
in Exhibit B.
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Certificates are admitted to trading, or to
conform to general usage.
Each Certificate shall bear interest from the date of original
issuance thereof or from the most recent date to which interest has been paid
and duly provided for, as the case may be, which shall be payable on the dates
specified on the face of the form of Certificate set forth in Exhibit B hereto
until the principal thereof is paid. Interest shall be calculated on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding the preceding paragraph, each Certificate shall bear
interest at the Past Due Rate on any principal, interest and any other amount
payable hereunder or under such Certificate, which shall not be paid in full
when due (whether at stated maturity, by acceleration, by mandatory prepayment
or otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full, payable from time to time on
demand of the Indenture Trustee.
The principal of, and Make-Whole Premium, if any, and interest on, the
Certificates shall be payable at the Corporate Trust Department of the
Indenture Trustee or at any office or agency maintained for such purpose
pursuant to Section 3.02 hereof in immediately available funds prior to 10:30
A.M. (New York time) on the due date thereof and the Indenture Trustee shall
remit all such amounts received by it to the Holders at such account or
accounts at such financial institution or institutions as the Holders shall
have designated to the Indenture Trustee in writing, in immediately available
funds, such payment to be made if the payment was received prior to 10:30 A.M.
New York time by the Indenture Trustee on any Business Day, by 12:00 noon New
York time on such Business Day; otherwise, the Indenture Trustee shall make
payment promptly, but not later than 11:00 A.M. New York time on the next
succeeding Business Day; provided, however, that interest may be payable at the
option of the Indenture Trustee or its Paying Agent, as defined in Section
3.04, by mailing checks for such interest payable to or upon the written order
of the Holders entitled thereto as they shall appear on the Register. If any
amount payable under the Certificates, or under this Indenture, falls due on a
day that is not a Business Day, then such sum shall be payable on the next
succeeding Business Day, without (provided that payment is made on such next
succeeding Business Day) additional interest thereon for the period of such
extension.
The Holder at the close of business on any Record Date with respect
to any Payment Date shall be entitled to receive the interest if any payable
on such Payment Date notwithstanding any transfer or exchange of such
Certificate subsequent to the Record Date and prior to such Payment Date,
except if and to the extent the Owner Trustee shall default in the payment of
the interest due on such Payment Date, in which case such defaulted interest
shall be paid to the Holder at the close of business on a subsequent Record
Date (which shall be not less than five (5) or more than fifteen (15) Business
Days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Owner Trustee to the Holders not
less than fifteen (15) days preceding such subsequent Record Date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 5.04 hereof (a) any and all indemnity
amounts received by the Owner Trustee which are payable by the Lessee to (i)
the Indenture Trustee in its individual capacity, (ii) the Subordination Agent
or (iii) each Liquidity Provider, in each case pursuant to Article 8 or 9 of
the Participation Agreement (it being acknowledged that the Lessee has been
instructed to pay such amounts to the Person or Persons entitled thereto) and
(b) the Owner Trustee's pro rata share of all amounts owed to each Liquidity
Provider by the Subordination Agent under each Liquidity Facility other than
amounts due as (i) repayments of the principal of advances thereunder, and (ii)
interest on Interest Drawings and Final Drawings except to the extent included
in Net Interest and Related Charges. As used in this Section, the Owner
Trustee's pro rata share means as of any time:
(A) with respect to all amounts other than Net Interest and
Related Charges, a fraction the numerator of which is the aggregate
principal balance then outstanding of the Certificates issued under
this Indenture (other than the Series C Certificates) and the
denominator of which is the aggregate principal balance of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates), plus
(B) with respect to all Net Interest and Related Charges (x)
if there exists a Payment Default under any Certificate issued under
this Indenture a fraction, the numerator of which is the aggregate
principal balance then outstanding of Certificates issued under this
Indenture (other than the Series C Certificates) and the denominator
of which is the aggregate principal balance then outstanding of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates) under which there exists a
Payment Default or (y) at all other times, zero.
As used in this Section, "Net Interest and Related Charges" means the sum of
(i) the amount, if any, by which interest payable to each Liquidity Provider
on any Interest Drawing and/or Final Drawing exceeds the amount which would be
payable if such drawings bore interest at the weighted average Past Due Rate
applicable to amounts in default on all Certificates plus (ii) any amounts
payable under Section 3.01, Section 3.02, Section 3.03, Section 3.09 or
Section 7.07 of each Liquidity Facility (or similar provisions of any
replacement Liquidity Facility) which result from any Interest Drawing or
Final Drawing. As used in this Section, a Payment Default when used in
connection with a Certificate issued hereunder or a Certificate issued under
any Related Indenture means a default in the payment of principal thereof or
interest thereon (which default has not been cured), other than solely because
of acceleration.
Section 2.05. Payments from Trust Indenture Estate Only. All
payments to be made by the Owner Trustee under this Indenture shall be made
only from the income and the proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate and from any other amounts of the type
described in Section 5.01 hereof (but only to the extent actually received by
the Indenture Trustee) and only to the extent that the Owner Trustee shall
have sufficient income or proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate (and such other amounts) to enable the
Indenture Trustee to make distributions of the amounts due in respect of the
Certificates in accordance with the terms hereof and thereof. Each Holder by
its acceptance of a Certificate agrees that it will look solely to the income
and proceeds from the Trust Indenture Estate (and such other amounts of the
type described in Section 5.01 hereof but only to the extent actually received
by the Indenture Trustee) to the extent available for distribution to it as
provided herein and that neither the Owner Participant, the Owner Trustee, SSB
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 SSB, the Owner Trustee or the Indenture
Trustee.
SSB 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 SSB's gross negligence or willful misconduct, or as
otherwise expressly provided herein or in the Participation Agreement.
If (1) all or any part of the Lessor's Estate becomes the property of
a debtor subject to the reorganization provisions of the Bankruptcy Code, (2)
pursuant to such reorganization provisions the Owner Participant is required,
by reason of the Owner Participant being held to have recourse liability to
the debtor or the trustee of the debtor directly or indirectly, to make
payment on account of any amount payable as principal of or interest,
Make-Whole Premium or other amounts payable on the Certificates, and (3) the
Indenture Trustee actually receives any Recourse Amount which reflects any
payment by the Owner Participant on account of (2) above, then the Indenture
Trustee shall promptly refund to the Owner Participant such Recourse Amount.
Nothing contained in this paragraph shall prevent the Indenture Trustee from
enforcing any personal recourse obligation (and retaining the proceeds
thereof) of the Owner Participant under the Participation Agreement, or from
retaining any amount paid by the Owner Participant under Sections 5.01, 8.02
and 8.03 hereof.
Section 2.06. Registration, Transfer and Exchange. The Indenture
Trustee will keep, on behalf of the Owner Trustee, at each office or agency to
be maintained for the purpose as provided in Section 3.02 hereof a Register or
Registers on which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Certificates
as provided in this Article. Such Register shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable period of time.
Upon due presentation for registration of transfer of any Certificate
at any such office or agency, the Owner Trustee shall execute and the
Indenture Trustee shall authenticate and deliver in the name of the transferee
or transferees a new Certificate or Certificates of the same Series and
Maturity, principal amount and interest rate and in authorized denominations
for an equal aggregate principal amount; provided, that such Certificate being
transferred shall be cancelled in accordance with Section 2.08 hereof
simultaneously with the issuance of the new Certificate.
Any Certificate or Certificates may be exchanged for a Certificate or
Certificates of the same Series and Maturity and interest rate but in other
authorized denominations, in an equal aggregate principal amount.
Certificates to be exchanged shall be surrendered at any office or agency to
be maintained by the Indenture Trustee for the purpose as provided in Section
3.02 hereof, and the Owner Trustee shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor the Certificate or
Certificates which the Holder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously or previously outstanding.
All Certificates presented for registration of transfer, exchange,
prepayment or payment shall (if so required by the Owner Trustee or the
Indenture Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Owner
Trustee and the Indenture Trustee duly executed by the Holder or its attorney
duly authorized in writing and (except in the case of transfers pursuant to
Section 15.01 of the Participation Agreement) the Indenture Trustee may
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act.
The Indenture Trustee may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of Certificates. No
service charge shall be levied for any such transaction.
The Indenture Trustee shall not be required to exchange or register a
transfer of any Certificates (a) for a period of fifteen (15) days immediately
preceding the first mailing of notice of prepayment of such Certificates or
(b) with respect to which notice of prepayment has been given pursuant to
Section 6.03 hereof and such notice has not been revoked.
All Certificates issued upon any transfer or exchange of Certificates
shall be valid obligations of the Owner Trustee, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the
Certificates surrendered upon such transfer or exchange.
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates. In case any temporary or definitive Certificate shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Owner
Trustee in its discretion may execute, and upon the oral or written request of
any officer of SSB, the Indenture Trustee shall authenticate and deliver, a
new Certificate of like Maturity, principal amount and interest rate as the
Certificate being replaced, bearing a number not contemporaneously or
previously outstanding, in exchange and substitution for the mutilated or
defaced Certificate, or in lieu of and substitution for the Certificate so
apparently destroyed, lost or stolen. In the case of any Certificate so
apparently destroyed, lost or stolen, the applicant for a substitute
Certificate shall furnish to the Owner Trustee and to the Indenture Trustee
such security or indemnity as may be required by them to indemnify and defend
and to hold each of them harmless and evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Upon the issuance of any substitute Certificate, the Owner Trustee or
the Indenture Trustee may require payment from the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses incurred in connection therewith.
In case any Certificate which has matured or is about to mature, or has been
called for prepayment in full, shall become mutilated or defaced or be
apparently destroyed, lost or stolen, the Owner Trustee may, instead of
issuing a substitute Certificate, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated or defaced
Certificate), if the applicant of any Certificate so apparently destroyed,
lost or stolen, for such payment shall furnish to the Owner Trustee and to the
Indenture Trustee such security or indemnity as any of them may require to
hold each of them harmless and the applicant shall also furnish to the Owner
Trustee and the Indenture Trustee evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Every substitute Certificate issued pursuant to the provisions of
this Section by virtue of the fact that any Certificate is apparently
destroyed, lost or stolen shall constitute an original additional contractual
obligation of the Owner Trustee, whether or not the apparently destroyed, lost
or stolen Certificate shall be enforceable at any time by anyone and shall be
entitled to all the security and benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and proportionately
with any and all other Certificates duly authenticated and delivered
hereunder. All Certificates shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced, or
apparently destroyed, lost or stolen Certificates and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
Section 2.08. Cancellation of Certificates; Destruction Thereof. All
Certificates surrendered for payment, prepayment, registration of transfer or
exchange, if surrendered to the Owner Trustee or any agent of the Owner
Trustee or the Indenture Trustee, shall be delivered to the Indenture Trustee
for cancellation or, if surrendered to the Indenture Trustee, shall be
cancelled by it; and no Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Indenture
Trustee shall destroy cancelled Certificates held by it and deliver a
certificate of destruction to the Owner Trustee. If the Owner Trustee shall
acquire any of the Certificates, such acquisition shall not operate as a
prepayment or satisfaction of the indebtedness represented by such
Certificates unless and until the same are delivered to the Indenture Trustee
for cancellation.
Section 2.09. Temporary Certificates. Pending the preparation of
definitive Certificates, the Owner Trustee may execute and, upon the oral or
written request of an officer of SSB, the Indenture Trustee shall authenticate
and deliver temporary Certificates (printed, lithographed, typewritten or
otherwise reproduced, in each case in form satisfactory to the Indenture
Trustee). Temporary Certificates shall be issuable as registered Certificates
without coupons, of any authorized denomination, and substantially in the form
of the definitive Certificates but with such omissions, insertions and
variations as may be appropriate for temporary Certificates, all as may be
determined by the Owner Trustee with the concurrence of the Indenture Trustee.
Temporary Certificates may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Certificate shall be
executed by the Owner Trustee and, upon the oral or written request of an
authorized officer of the Owner Trustee, be authenticated by the Indenture
Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Certificates. Without unreasonable delay
the Owner Trustee shall execute and shall furnish definitive Certificates and
thereupon temporary Certificates shall be surrendered in exchange therefor
without charge at any office or agency to be maintained by the Indenture
Trustee for the purpose pursuant to Section 3.02 hereof, and, upon the oral
or written request of an authorized officer of the Owner Trustee, the
Indenture Trustee shall authenticate and deliver in exchange for such
temporary Certificates an equal aggregate principal amount of definitive
Certificates of the same Series and 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 and under the other Operative Agreements shall have been paid in
full.
Section 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture and Security Agreement Supplement
covering a Replacement Airframe and/or Replacement Engine, as provided in
Section 9.09 hereof, each Certificate shall be deemed to have been issued in
connection with such Replacement Airframe and/or Replacement Engine and each
Certificate issued thereafter upon a transfer or exchange of, or as a
replacement for, a Certificate, shall be designated as having been issued in
connection with such Replacement Airframe and/or Replacement Engine, but
without any other change therein except as provided for in this Article II.
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements. If, in accordance with and subject to the satisfaction
of the conditions set forth in Section 7.11 of the Participation Agreement,
the Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall be released and discharged from any
further obligations hereunder and under the
Certificates and all other Operative Agreements (except for any recourse
obligations of the Owner Participant or the Owner Trustee in its individual
capacity with respect to matters arising out of events occurring prior to such
assumption).
Section 2.13. Establishment of Collateral Account. (a) The
Indenture Trustee shall, pursuant to the Collateral Account Control Agreement,
establish, or cause to be established, with State Street Bank and Trust
Company, who shall represent and warrant that it is a financial intermediary
(as defined in Section 8-313(4) of the Connecticut Uniform Commercial Code),
in its name as secured party hereunder an Eligible Deposit Account entitled
"First Security Bank, National Association, as secured party under the Trust
Indenture and Security Agreement (Federal Express Corporation Trust No.
N671FE) dated as of May 1, 1997, 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) The Collateral Account Control Agreement shall require State
Street Bank and Trust Company to send confirmation to the Indenture Trustee
and the Lessee that it has credited the Specified Investments to the
Collateral Account and to make appropriate entries on its books identifying
the Specified Investments as pledged to the Indenture Trustee.
Section 2.14. Investment of Funds on Deposit in the Collateral
Account. (a) Funds deposited in the Collateral Account shall be invested and
reinvested by the Indenture Trustee, subject to Section 17.02 of the
Participation Agreement, at the risk of the Owner Trustee, in Specified
Investments selected by the Lessee and approved by the Indenture Trustee for
the account of the Owner Trustee in accordance with Section 2.14(b) below;
provided, however, that if Specified Investments meeting the requirements of
Section 2.14(b) are not available on any day on which funds are to be invested
as contemplated by the preceding provisions of this Section 2.14(a), the
Indenture Trustee may leave such funds in the Collateral Account 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 and approved by the Indenture Trustee for the account of the Owner
Trustee which mature on or prior to June 20, 1997. 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 referred to in the
preceding sentence may be invested in Specified Investments which mature
within 14 days after the rescheduled Delivery Date. If no Delivery Date
occurs, then any Specified Investment shall mature no later than the 15th day
after the Cut-Off Date.
(c) If for any reason the Indenture Trustee shall be required to
make any distributions of the Liquid Collateral prior to the maturity date of
any Specified Investment, the Indenture Trustee shall cause the same to be
sold in accordance with standard commercial practices, and the Lessee, for the
account of the Owner Trustee, shall forthwith compensate the Indenture Trustee
for any Losses as provided in Section 17.02(a) of the Participation Agreement.
(d) Pursuant to Section 17.02(b) of the Participation Agreement,
interest payable on the Certificates during the period in which funds are on
deposit in the Collateral Account shall be paid by the Lessee.
Section 2.15. Release of Debt Portion and Lien on the Collateral
Account and the Liquid Collateral on Delivery Date. (a) 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, subject to the proviso to Section 3.02(a) of the Participation
Agreement, 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.
Subject to the proviso to Section 3.02(a) of the Participation Agreement, such
amount so released, together with the amount of any Losses received from the
Lessee pursuant to Section 17.02(a) of the Participation Agreement, shall be
used to finance a portion of the Purchase Price payable by (x) the Owner
Trustee as contemplated by Section 3.02(a) of the Participation Agreement or
(y) if 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.
(b) The Lien of this Indenture on the Collateral Account and the
Liquid Collateral shall terminate on the Delivery Date following the transfer
of amounts described in Section 3.02(a) of the Participation Agreement.
Section 2.16. Cut-Off Date. In the case of a prepayment under
Section 6.02(a)(vi) hereof, the Indenture Trustee shall release from the
Collateral Account all amounts held in the Collateral Account on such date.
Such amount so released, together with the amount of any Losses received from
the Lessee pursuant to Sections 17.02(a) and 17.02(c) of the Participation
Agreement, shall be applied to pay amounts due under Section 6.02(b)(1) hereof
on the 15th day following 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.
Section 2.17. Subordination. (a) The Owner Trustee and, by
acceptance of its Certificates of any Series, each Holder of such Series,
hereby agree that no payment or distribution shall be made on or in respect of
the Secured Obligations owed to such Certificate Holder of such Series,
including any payment or distribution of cash, property or securities after
the commencement of a proceeding of the type referred to in clause (v), (vi)
or (vii) of Section 7.01 hereof, except as expressly provided in Article V
hereof.
(b) By the acceptance of its Certificates of any Series
(other than Series A), each Holder of such Series agrees that in the event
that such Holder, in its capacity as a Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series which it is
not entitled to received under this Section 2.17 or Article V hereof, it will
hold any amount so received in trust for the Senior Holder (as defined in
Section 2.17(c) hereof) and will forthwith turn over such payment to the
Indenture Trustee in the form received to be applied as provided in Article V
hereof.
(c) As used in this Section 2.17, the term "Senior Holder"
shall mean, (i) the Holders of Series A Certificates until the Secured
Obligations in respect of Series A Certificates have been paid in full, (ii)
after the Secured Obligations in respect of Series A Certificates have been
paid in full, the Holders of Series B Certificates until the Secured
Obligations in respect of Series B Certificates have been paid in full and
(iii) after the Secured Obligations in respect of Series B Certificates have
been paid in full, the Holders of Series C Certificates until the Secured
Obligations in respect of Series C Certificates have been paid in full.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.
The Owner Trustee covenants and agrees that it will, subject to Section 2.05
hereof, duly and punctually pay or cause to be paid the principal of, and
interest and Make-Whole Premium, if any, and all other amounts due on, each of
the Certificates and under this Indenture at the place or places, at the
respective times and in the manner provided in this Indenture and in the
Certificates.
Principal and interest and other amounts due hereunder or under the
Certificates shall be payable in dollars on the due date thereof, to the
Indenture Trustee at the Corporate Trust Department (or such other account at
such other financial institution as the Indenture Trustee may designate for
the purpose). If any amount payable under the Certificates or under this
Indenture falls due on a day which is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
Section 3.02. Offices for Payments, etc. So long as any of the
Certificates remain outstanding, the Indenture Trustee will maintain the
following: (a) an office or agency where the Certificates may be presented
for payment and (b) a facility or agency in New York, New York where the
Certificates may be presented for registration of transfer and for exchange
and for prepayment as provided in this Indenture (the "Registrar"). The
Registrar shall keep a register (the "Register") with respect to the
Certificates and their transfer and exchange. The Indenture Trustee may
appoint one or more co-registrars ("Co-Registrars") for the Certificates and
may terminate any such appointment at any time upon written notice. The term
"Registrar" includes any Co-Registrar.
The Indenture Trustee shall initially act as Registrar.
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee. The Owner Trustee, whenever necessary to avoid or fill a vacancy in
the office of Indenture Trustee, will, with the consent of the Lessee,
appoint, in the manner provided in Section 12.02 hereof, an Indenture Trustee,
so that there shall at all times be an Indenture Trustee hereunder.
Section 3.04. Paying Agents. Whenever the Indenture Trustee in its
sole discretion shall appoint a paying agent (the "Paying Agent"), it will
cause the Paying Agent to execute and deliver an instrument in which the
Paying Agent shall agree with the Indenture Trustee, subject to the provisions
of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of, and interest and Make-Whole Premium, if any,
on the Certificates (whether such sums have been paid to it by the
Indenture Trustee or the Owner Trustee) in trust for the benefit of the
Holders or of the Indenture Trustee, and
(b) that it will give the Indenture Trustee notice of any failure by
the Owner Trustee to make any payment of the principal of or interest or
Make-Whole Premium, if any, on the Certificates when the same shall be due
and payable.
Anything in this Section to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section are subject to
the provisions of Sections 14.03 and 14.04 hereof.
Section 3.05. Covenants of SSB and the Owner Trustee.
(a) SSB hereby covenants and agrees to perform its covenants set
forth in Sections 7.04(b) and 7.04(c) of the Participation Agreement.
(b) The Owner Trustee hereby covenants and agrees as follows:
(i) in the event a Responsible Officer of the Owner Trustee shall have
actual knowledge of an Indenture Event of Default, an Indenture Default or
an Event of Loss, the Owner Trustee will give prompt written notice of such
Indenture Event of Default, Indenture Default or Event of Loss to the
Indenture Trustee, the Lessee and the Owner Participant;
(ii) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to the Owner Trustee under the Lease, including,
without limitation, a copy of each report or notice from an insurer or an
insurance broker received pursuant to Article 13 of the Lease, to the
extent that the same shall not have been furnished to the Indenture Trustee;
(iii) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to the Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Indenture Documents; and
(iv) except as contemplated by the Operative Agreements, the Owner
Trustee will not contract for, create, incur or assume any debt, and will
not guarantee (directly or indirectly or by an instrument having the effect
of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise take action to
become contingently liable, directly or indirectly, in connection with the
debt of any other Person.
Section 3.06. [Reserved]
Section 3.07. Disposal of Trust Indenture Estate. At any time and
from time to time any part of the Trust Indenture Estate may be sold or
disposed of in accordance with the provisions of this Indenture and the Lease.
The Indenture Trustee shall, from time to time, release any part of the Trust
Indenture Estate so sold or disposed of or as to which an Event of Loss has
occurred or as to which the Lease has been terminated from the Lien of this
Indenture. In addition, to the extent that such property constitutes an
Airframe or Engine, the further requirements of Section 9.08 hereof shall be
complied with.
Section 3.08. No Representations or Warranties as to Aircraft or
Documents. NEITHER THE INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR SSB NOR
THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, WORKMANSHIP,
VALUE, CONDITION, DESIGN, COMPLIANCE WITH SPECIFICATIONS, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR USE OR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE
WHATSOEVER, except that SSB warrants that on the Delivery Date (a) the Owner
Trustee shall have received whatever title was conveyed to it by AVSA, and (b)
the Aircraft shall be free and clear of Lessor's Liens attributable to SSB.
Neither SSB, 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 SSB and the Indenture Trustee made under this Indenture or in
the Participation Agreement or of the Owner Participant made under 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, at the expense of the Lessee, the Owner Trustee shall promptly and
duly execute and deliver any and all such further instruments and documents as
may be specified in such request and as are necessary or advisable to perfect,
preserve or protect the Liens and assignments created or intended to be
created hereby, or to obtain for the Indenture Trustee the full benefit of the
specific rights and powers granted herein, including, without limitation, the
execution and delivery of Uniform Commercial Code financing statements and
continuation statements with respect thereto, or similar instruments relating
to the perfection of the Liens or assignments created or intended to be created
hereby.
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates. (a) The
Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Indenture Trustee is not the Registrar, the Registrar
shall furnish to the Indenture Trustee semi-annually not more than ten (10)
days after each Record Date, as of such Record Date, or at such other times as
the Indenture Trustee may request in writing, a list, in such form and as of
such date as the Indenture Trustee may reasonably require, containing all the
information in the possession or control of the Registrar as to the names and
addresses of the Holders and the amounts and Maturities of the Certificates
held by such Holders.
(b) Ownership of the Certificates shall be proved by the Register
kept by the Registrar.
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution. Except as otherwise provided
in Section 5.03 hereof, each installment of Basic Rent, any payment of
interest on overdue installments of Basic Rent, any payment received by the
Indenture Trustee pursuant to Section 8.03(a) hereof and any payment received
by the Indenture Trustee pursuant to Section 17.02(b) or 17.02(c) of the
Participation Agreement shall be distributed by the Indenture Trustee no later
than the time herein provided in the following order of priority:
first, (i) 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 Amount and interest and other amounts (as
well as any interest on any overdue Principal Amount and, to the
extent permitted by applicable law, on any overdue interest and
any other overdue amounts) then due under all Series A
Certificates shall be distributed to the Holders of Series A
Certificates ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments then
due under each Series A Certificate bears to the aggregate amount
of the payments then due under all Series A Certificates;
(ii) after giving effect to paragraph (i) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series B Certificates shall be
distributed to the Holders of Series B Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series B
Certificate bears to the aggregate amount of the payments then due
under all Series B Certificates; and
(iii) after giving effect to paragraph (ii) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series C Certificates shall be
distributed to the Holders of Series C Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series C
Certificate bears to the aggregate amount of the payments then due
under all Series C Certificates; and
second, the balance if any of such installment or payment remaining
thereafter shall be distributed to the Owner Trustee, or as the
Owner Trustee may request, for distribution pursuant to the Trust
Agreement.
Section 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft (including pursuant to Section 11.03(e) of the Lease, but, in the
case of said Section 11.03(e), subject to the time limits specified therein)
or as the result of, or in connection with any event under the Lease giving
rise to, a prepayment pursuant to Section 6.02 hereof, shall be promptly
distributed by the Indenture Trustee in the following order of priority:
first, to reimburse the Indenture Trustee for any costs or expenses
reasonably incurred in connection with such prepayment,
second, (i) to pay the amounts specified in paragraph (i) of clause
"second" of Section 5.03 hereof then due and payable in respect
of the Series A Certificates;
(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "second" of Section
5.03 hereof then due and payable in respect of the Series B
Certificates; and
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "second" of
Section 5.03 hereof then due and payable in respect of the Series
C Certificates;
provided that payments pursuant to this clause "second" shall be
made without the payment of Make-Whole Premium except in the
particular circumstances provided in Section 6.02(b) 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 Article 11 or
13 of the Lease as the result of loss or damage not constituting an Event of
Loss (x) with respect to the Aircraft, or as a result of such loss or damage
constituting an Event of Loss if and to the extent that such amounts would at
the time be required to be paid to the Lessee pursuant to said Article 11 or
13 but for the fact that a Payment Default, Bankruptcy Default or an Event of
Default shall have occurred and be continuing or (y) are pledged to the Lessor
as security in connection with an Event of Loss in accordance with Section
11.03(e) of the Lease, shall be held by the Indenture Trustee as security for
the obligations of the Lessee under the Lease and the Participation Agreement
and shall be invested in accordance with the terms of Section 5.08 hereof and
at such time as the conditions for payment to the Lessee specified in said
Article 11 or 13, as the case may be, shall be fulfilled and there shall not
be continuing any Payment Default, Bankruptcy Default or Event of Default,
such amount, and the proceeds of any investment thereof, shall, to the extent
not theretofore applied, be paid to the Lessee to the extent provided in the
Lease.
Section 5.03. Payment After Indenture Event of Default, etc. Except
as otherwise provided in Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof,
all payments (other than Excepted Payments) received and all amounts held or
realized by the Indenture Trustee 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 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 or the Holders in the
protection, exercise or enforcement of any right, power or remedy
or any damages sustained by the Indenture Trustee or the Holders,
liquidated or otherwise, upon such Indenture Event of Default)
shall be applied by the Indenture Trustee as between itself and
the Holders in reimbursement of such expenses;
second, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of
all Series A Certificates, and the accrued but unpaid interest
and other amounts due thereon and all other Secured Obligations
(other than Make-Whole Premium) in respect of the Series A
Certificates to the date of distribution, shall be distributed to
the Holders of Series A Certificates, and in case the aggregate
amount so to be distributed shall be insufficient to pay in full
as aforesaid, then ratably, without priority of one over the
other, in the proportion that the aggregate unpaid Principal
Amount of all Series A Certificates held by each holder plus the
accrued but unpaid interest and other amounts due hereunder or
thereunder (other than Make-Whole Premium) to the date of
distribution, bears to the aggregate unpaid Principal Amount of
all Series A Certificates held by all such holders plus the
accrued but unpaid interest and other amounts due thereon (other
than Make-Whole Premium) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series B
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series B Certificates to
the date of distribution, shall be distributed to the Holders of
Series B Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series B Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series B
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution; and
(iii) after giving effect to paragraph (ii) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series C
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series C Certificates to
the date of distribution, shall be distributed to the Holders of
Series C Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series C Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series C
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution;
(it being understood that amounts payable under this clause
"second" 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
in respect of (i) the Indenture Trustee in its individual capacity, (ii) the
Subordination Agent, (iii) each Liquidity Provider, and (iv) the Pass Through
Trustee, in each case whether pursuant to Article 8 or 9 of the Participation
Agreement or as Supplemental Rent, directly to the Person (which may include
the Indenture Trustee) entitled thereto. Any payment received by the
Indenture Trustee under clause (b) of the last paragraph of Section 2.04 shall
be distributed to the Subordination Agent to be distributed in accordance with
the terms of the Intercreditor Agreement.
(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 Article 9 of the Lease) shall be distributed by the Indenture
Trustee (a) to the extent received or realized at any time prior to the
payment in full of all obligations to the Holders, in the order of priority
specified in Section 5.01 hereof, and (b) to the extent received or realized
at any time after payment in full of all obligations to the Holders, in the
following order of priority:
first, in the manner provided in clause "first" of Section 5.03 hereof
and
second, in the manner provided in clause "third" of Section 5.03 hereof.
Section 5.06. Payments to Owner Trustee. Any amounts distributed
hereunder by the Indenture Trustee to the Owner Trustee shall be paid to the
Owner Trustee by wire transfer of immediately available funds of the type
received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be designated by notice from the
Owner Trustee to the Indenture Trustee from time to time. The Owner Trustee
hereby notifies the Indenture Trustee that unless and until the Indenture
Trustee receives notice to the contrary from the Owner Trustee, all amounts to
be distributed to the Owner Trustee hereunder for distribution in accordance
with the Trust Agreement shall be distributed by wire transfer of immediately
available funds of the type received by the Indenture Trustee to such account
of the Owner Participant as may be specified pursuant to Section 2.06 of the
Trust Agreement.
Section 5.07. Application of Payments. Each payment of principal of
and interest or other amounts due on each Certificate shall, except as
otherwise provided herein, be applied,
first, to the payment of interest on such Certificate due and payable to
the date of such payment, as provided in such Certificate, as
well as any interest on overdue principal and Make-Whole Premium,
if any, and, to the extent permitted by law, interest and other
amounts due thereunder,
second, to the payment of any other amount (other than the principal of
such Certificate) due hereunder to the Holder of such Certificate
or under such Certificate,
third, to the payment of the principal of such Certificate if then due
hereunder or under such Certificate and
fourth, the balance, if any remaining thereafter, to the payment of the
principal of such Certificate remaining unpaid (provided that
such Certificate shall not be subject to prepayment without the
consent of the affected Holder except as permitted by Sections
6.02, 6.06 and 8.02 hereof); provided that, solely for the
purpose of determining whether an Indenture Event of Default
shall have occurred and be continuing, each such payment shall be
deemed applied in the following order of priority: first, in the
manner provided in clause "first" above, second, in the manner
provided in clause "third" above, third, in the manner provided
in clause "second" above and fourth, in the manner provided in
clause "fourth" above.
Section 5.08. Investment of Amounts Held by Indenture Trustee.
Amounts held by the Indenture Trustee pursuant to Section 5.02(b) hereof or
pursuant to any provision of any Indenture Document providing for investment
by the Indenture Trustee of sums pursuant to Section 23.01 of the Lease or
this Section 5.08 shall be invested by the Indenture Trustee from time to time
in securities selected by (i) so long as no Event of Default shall have
occurred and be continuing, the Lessee (and in the absence of written
direction by the Lessee, the Indenture Trustee shall invest such monies in
direct obligations of the United States of America) or (ii) so long as an
Event of Default shall have occurred and be continuing, the Indenture Trustee
and in each case shall be of the type listed in clauses (i) through (iv) of
Section 23.01 of the Lease. Unless otherwise expressly provided in this
Indenture, any income realized as a result of any such investment, net of the
Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Lessee shall be responsible for and will
promptly pay to the Indenture Trustee or the Lessor, as the case may be, on
demand, the amount of any loss realized as the result of any such investment
(together with any fees, commissions and other costs and expenses, if any,
incurred by the Indenture Trustee or the Lessor in connection with such
investment), such amount to be disposed of in accordance with the terms hereof
or the Lease, as the case may be. The Indenture Trustee shall not be liable
for any loss resulting from any investment made by it or any investment sold
by it under this Indenture in accordance with instructions from the Lessee
other than by reason of its willful misconduct or gross negligence, and any
such investment may be sold (without regard to its maturity) by the Indenture
Trustee without instructions whenever the Indenture Trustee reasonably
believes such sale is necessary to make a distribution required by this
Indenture.
Unless otherwise confirmed in writing, an account statement delivered
by the Indenture Trustee to the Owner Trustee (with a copy to the Lessee)
shall be deemed written confirmation by the Owner Trustee that the investment
transactions identified therein accurately reflect the investment directions
given to the Indenture Trustee by or on behalf of the Lessee, unless the
Lessee notifies the Indenture Trustee in writing to the contrary within 30
days of the date of receipt of such statement.
Section 5.09. Withholding Taxes. The Indenture Trustee shall
withhold any Taxes required to be withheld, except to the extent that the
Holder has furnished evidence satisfactory to the Indenture Trustee of any
exemption from withholding claimed by such Holder and under no circumstances
shall the failure of any such Holder to receive any amounts so withheld
constitute an Indenture Event of Default. Notwithstanding any provision to
the contrary in Sections 5.01 through 5.05 hereof and subject to Article 8 of
the Participation Agreement, if the Lessee is required to pay any such Tax, or
any interest or penalty thereon, or to indemnify the Owner Participant or the
Owner Trustee with respect thereto pursuant to Section 8.01(c) of the
Participation Agreement, the Lessee shall be entitled to receive any payments
otherwise distributable to the Holder of any Certificate who was subject to
such Tax pursuant to Sections 5.01 to 5.05 hereof until the amounts the Lessee
shall have so paid in respect of any such Tax shall have been recovered in
full by the Lessee.
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity. Except as provided
in Sections 6.02, 6.06 and 8.02 hereof, the Certificates may not be prepaid
prior to their respective Maturities.
Section 6.02. Prepayment of Certificates. (a) The Outstanding
Certificates shall be prepaid in full (and not in part):
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08
hereof replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and Section 2.12 hereof shall not be
applicable in connection with such purchase), but subject to Section
6.02(c) below.
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 hereof (unless such notice is revoked in
accordance with such Section).
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) below.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a refinancing of the Certificates, but subject to Section
6.02(c) below.
(vi) As contemplated by Section 2.16 hereof and Section 3.05(b) of the
Participation Agreement if the Delivery Date has not occurred on or prior
to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject to the terms of Section
4.02(a) or 10.01 of the Lease or Article 15 of the Participation Agreement, as
the case may be, shall give irrevocable (subject to Section 6.02(c) hereof)
written notice to the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Certificates shall be
prepaid. In the case of a prepayment of the Certificates pursuant to Section
6.02(a)(i) above, the Certificates shall be prepaid in full on the Loss
Payment Date as defined in Section 11.02 of the Lease. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(iii) above, the
Certificates shall be prepaid in full on the date so designated in the notice
referred to in Section 8.02 hereof. In the case of a prepayment of the
Certificates pursuant to Section 6.02(a)(ii) or (iv) above, the Certificates
shall be prepaid in full on the Termination Date. In the case of a prepayment
of the Certificates pursuant to Section 6.02(a)(v) above, the Certificates
shall be prepaid on the effective date of the Refinancing. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(vi) above, the
Certificates shall be prepaid on the 15th day following the Cut-Off Date. In
the case of a prepayment of the Certificates pursuant to Section 6.02(a)(vii)
above, the Certificates shall be prepaid on the date designated in the notice
referred to therein. The day on which the Certificates are to be prepaid
pursuant to this Section 6.01(b) is herein referred to as the "Prepayment
Date".
On or prior to the Prepayment Date, immediately available funds shall
be deposited with the Indenture Trustee in an amount in respect of the
Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section 6.02
hereof on or after the applicable Premium Termination Date, or (ii) if such
prepayment is made prior to the applicable Premium Termination Date
pursuant to Section 6.02(a)(i), 6.02(a)(iii) (if clause (i) of the first
sentence of Section 8.02(a) hereof is applicable) or 6.02(a)(vi) above, the
sum of (A) the aggregate principal amount of such Certificates then
Outstanding, (B) accrued interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due the Indenture Trustee hereunder
or under the Participation Agreement or the Lease, but excluding any
Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to Section 6.02(a)(ii), 6.02(a)(iii) (if clause
(ii) of the first sentence of Section 8.02(a) hereof is applicable),
6.02(a)(iv), 6.02(a)(v) or 6.02(a)(vii) above, the sum of the amounts
specified in clauses (A), (B) and (C) of the preceding clause (1) plus any
Make-Whole Premium payable in respect of all Certificates with respect to
which the Premium Termination Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
(c) If, pursuant to the last paragraph of Section 10.01(f) of the
Lease, no Termination Date shall occur, or if, pursuant to Section 4.02(a) of
the Lease, the Lessee revokes its notice of election to purchase, or if no
refinancing shall occur pursuant to Section 15.01 of the Participation
Agreement, the Lessee shall give notice thereof to the Indenture Trustee, and
the prepayment proposed to be effected in respect thereof shall not occur.
Section 6.03. Notice of Prepayment to Holders. In order to effect
any prepayment set forth in Section 6.02(a) hereof, the Indenture Trustee
shall give prompt notice by first class mail of prepayment to each Holder of
an Outstanding Certificate. Any notice of prepayment given by the Owner
Trustee may be revoked by the Owner Trustee at any time on or before the
Prepayment Date by prompt notice to the Holders except as otherwise provided
in the Lease or the Participation Agreement.
All notices of prepayment shall state:
(1) the Prepayment Date,
(2) the applicable basis for determining the Prepayment Price,
(3) that on the Prepayment Date, subject to the provisions hereof,
the Prepayment Price will become due and payable, and that interest
on the Certificates shall cease to accrue on and after such
Prepayment Date, and
(4) the place or places where such Certificates are to be
surrendered for payment.
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price. On the Prepayment Date or the Sinking Fund Redemption Date (as defined
in Section 6.06 hereof), the Owner Trustee shall, to the extent an amount
equal to the Prepayment Price or the Sinking Fund Redemption Price (as defined
in Section 6.06 hereof), as the case may be, shall not then be held in cash or
Permitted Investments (marked-to-market net of all costs and expenses of
liquidation thereof) by the Indenture Trustee in immediately available funds
and deposited for the purpose, pay to the Indenture Trustee an amount equal to
the difference between (a) the amount then so held and (b) the Prepayment
Price or the Sinking Fund Redemption Price, as the case may be. If there
shall so be on deposit and/or deposited the applicable Prepayment Price or
Sinking Fund Redemption Price on or prior to a Prepayment Date or Sinking Fund
Redemption Date, interest shall cease to accrue in respect of all or, in the
case of a mandatory sinking fund redemption, the relevant portion being
prepaid of, the Outstanding Certificates on and after such Prepayment Date or
such Sinking Fund Redemption Date.
Section 6.05. Certificates Payable on Prepayment Date. On the
Prepayment Date, the Outstanding Certificates shall (except (A) if the Owner
Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise provided
in the Lease) become due and payable and from and after such Prepayment Date
(unless there shall be a default in the payment of the Prepayment Price) such
Certificates shall cease to bear interest. Upon surrender by any Holder of
its Certificate for prepayment in accordance with said notice, such Holder
shall be paid the principal amount of its Certificate then outstanding, accrued
interest thereon to the Prepayment Date, all other sums due to such Holder
hereunder, under the Participation Agreement or the Lease, plus, if a
Make-Whole Premium is payable pursuant to Section 6.02(b) hereof, the
Make-Whole Premium in respect of such Certificate.
If any Certificate called for prepayment shall not be so paid upon
surrender thereof for prepayment, the principal shall, until paid, continue to
bear interest from the Prepayment Date at the interest rate applicable to such
Certificate.
Section 6.06. Mandatory Sinking Fund Redemption. The Certificates
shall be subject to partial redemption, at the aggregate principal amount set
forth for the Certificates of the respective Series and Maturity, on a pro
rata basis, on each date specified in this Section (a "Sinking Fund Redemption
Date") for such payment on the Certificates of such Series and Maturity. The
Owner Trustee shall deposit funds sufficient to pay the Sinking Fund
Redemption Price with the Indenture Trustee as provided in Section 6.04
hereof. The Indenture Trustee shall pay from the amounts so deposited on each
applicable Sinking Fund Redemption Date to the Certificates of each Series in
the order of priority set forth in clause "first" of Section 5.01 and among the
Holders of the Certificates of each Series then Outstanding on a pro rata
basis the aggregate principal amount set forth below, together with accrued
interest to such Sinking Fund Redemption Date, but without Make-Whole Premium
(the "Sinking Fund Redemption Price"):
Principal Amount
Series A Series B Series C
Certificates Certificates Certificates
Sinking Fund with a Maturity of with a Maturity of with a Maturity of
Redemption Date January 15, 2017 January 15, 2018 January 15, 2014
- ---------------- ------------------ ------------------ ------------------
July 15, 1997 0 0 0
January 15, 1998 251,178 250,140 115,520
July 15, 1998 415,862 0 0
January 15, 1999 131,798 250,140 333,520
July 15, 1999 535,242 0 0
January 15, 2000 121,651 250,140 333,520
July 15, 2000 545,389 0 0
January 15, 2001 213,402 250,140 333,520
July 15, 2001 453,638 0 0
January 15, 2002 411,194 250,140 333,520
July 15, 2002 255,846 0 0
January 15, 2003 667,040 250,140 385,819
July 15, 2003 0 0 0
January 15, 2004 667,040 250,140 754,137
July 15, 2004 0 0 0
January 15, 2005 667,040 250,140 859,087
July 15, 2005 0 0 0
January 15, 2006 667,040 250,140 829,358
July 15, 2006 0 0 0
January 15, 2007 667,040 250,140 3,774,211
July 15, 2007 0 0 0
January 15, 2008 667,040 250,140 670,131
July 15, 2008 0 0 0
January 15, 2009 667,040 250,140 1,727,695
July 15, 2009 0 0 0
January 15, 2010 667,040 250,140 1,745,042
July 15, 2010 0 0 0
January 15, 2011 667,040 2,755,586 169,963
July 15, 2011 0 0 0
January 15, 2012 667,040 3,067,959 0
July 15, 2012 0 0 0
January 15, 2013 3,511,558 1,433,450 0
July 15, 2013 0 0 0
January 15, 2014 1,240,715 0 4,092,957
July 15, 2014 0 0 0
January 15, 2015 5,752,472 0 0
July 15, 2015 0 0 0
January 15, 2016 6,200,717 0 0
July 15, 2016 0 0 0
January 15, 2017 6,640,938 42,957 0
January 15, 2018 0 1,955,228 0
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default. "Indenture Event of
Default" means any of the following events (whatever the reason for such
Indenture Event of Default and whether it shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) any Event of Default specified in Article 16 of the Lease (other
than an Event of Default arising solely as the result of the failure to
make an Excepted Payment unless the Owner Participant shall notify the
Indenture Trustee in writing that such failure shall constitute an
Indenture Event of Default); or
(ii) the failure of the Owner Trustee other than by reason of a
Default or an Event of Default (i) to pay principal, interest or Make-Whole
Premium, if any, on any Certificate when due, and such failure shall have
continued unremedied for ten (10) Business Days after the date when due or
(ii) to pay any other amounts hereunder or under the Certificates when due
and such failure shall have continued unremedied for a period of thirty
(30) days after the Owner Trustee and the Owner Participant shall receive
written demand therefor from the Indenture Trustee or by the Holders of not
less than 25% in aggregate principal amount of Outstanding Certificates; or
(iii) (A) any representation or warranty made by SSB, the Owner
Trustee, the Owner Participant or the Owner Participant Guarantor or any
Owner Trustee Guarantor, in any Operative Agreement or in any certificate of
SSB, the Owner Trustee, the Owner Participant, or the Owner Participant
Guarantor furnished to the Indenture Trustee or any Holder in connection
herewith or therewith or pursuant hereto or thereto shall prove to have been
incorrect when made and was and remains in any respect material to the
Holders and if such misrepresentation is capable of being corrected as of a
subsequent date and if such correction is being sought diligently, and such
misrepresentation shall not have been corrected within 30 days following
notice thereof identified as a "Notice of Indenture Event of Default" being
given to the Owner Trustee and the Owner Participant by the Indenture
Trustee or by a Majority in Interest of Holders; or
(B) any (x) covenant made by the Owner Trustee in the fifth paragraph
following the Habendum Clause hereof or Section 3.05(b)(iii) hereof or
Section 7.02(b) or 7.12 of the Participation Agreement shall be breached in
any respect, (y) covenant made by the Owner Participant in Section 7.02(c)
or the last sentence of Section 7.13 of the Participation Agreement shall
be breached in any respect or (z) other covenant made by the Owner Trustee,
in its individual capacity or as Owner Trustee, or by any Owner Trustee
Guarantor, or by the Owner Participant or the Owner Participant Guarantor
in any Operative Agreement shall be breached in any respect and such breach
shall remain unremedied for a period of thirty (30) days after there has
been given to the Owner Trustee and the Owner Participant by the Indenture
Trustee or by Certificate Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates a written notice identified as
a "Notice of Indenture Event of Default" specifying such breach and
requiring it to be remedied; or
(iv) the Owner Trustee, the Lessor's Estate, any Owner Trustee
Guarantor, the Owner Participant or the Owner Participant Guarantor shall
file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(v) an order for relief shall be entered in respect of the Owner
Trustee or any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate by a court having jurisdiction
in the premises in an involuntary case under the federal bankruptcy laws as
now or hereafter in effect; or the Owner Trustee or any Owner Trustee
Guarantor or the Owner Participant or the Owner Participant Guarantor or
the Lessor's Estate shall file any answer admitting or not contesting the
material allegations of a petition filed against the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate in any proceeding referred to in clause
(vi) below or seek or consent or acquiesce in the appointment of any
trustee, custodian, receiver or liquidator of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, or of all or any
substantial part of its properties; or
(vi) without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered constituting an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or if any such petition shall be filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or the Owner Participant Guarantor or the Lessor's Estate, as
the case may be, and such petition shall not be dismissed within 60 days,
or if, without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered appointing a trustee, custodian, receiver or liquidator of the
Owner Trustee or any Owner Trustee Guarantor or the Owner Participant or
the Owner Participant Guarantor or the Lessor's Estate, as the case may be,
or of all or any substantial part of the properties of the Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate, as the case may be, and such
order shall not be dismissed within 60 days; or
(vii) any Owner Trustee Guaranty or the Owner Participant Guaranty
shall cease to be a valid and enforceable obligation of any Owner Trustee
Guarantor or the Owner Participant Guarantor, as the case may be, or
otherwise shall not be in full force and effect.
Section 7.02. Remedies. (a) If an Indenture Event of Default shall
have occurred and be continuing and so long as the same shall be continuing
unremedied, then and in every such case, the Indenture Trustee may, and when
required by the provisions of Article IX or Section 7.02(c) hereof, shall (i)
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article VII and (ii) in the event such Indenture
Event of Default is an Indenture Event of Default referred to in clause (i) of
Section 7.01 hereof, exercise any and all of the remedies pursuant to Article
17 of the Lease; provided that without the consent of the Owner Trustee and
the Owner Participant such exercise of remedies shall not occur until after
the latest date on which the Owner Trustee may cure the related Event of
Default pursuant to Section 8.03 hereof. The Indenture Trustee may (subject
to the provisions of the next succeeding paragraph) 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 (subject to the provisions of the next
succeeding paragraph) exercise any other right or remedy in lieu of or in
addition to the foregoing that may be available to it under applicable law, or
proceed by appropriate court action to enforce the terms hereof, of the Lease,
or both, or to rescind the Lease. Without limiting any of the foregoing, it
is understood and agreed that the Indenture Trustee may exercise any right of
sale of the Aircraft available to it, even though it shall not have taken
possession of the Aircraft and shall not have possession thereof at the time
of such sale.
Notwithstanding the foregoing, it is understood and agreed that if the
Indenture Trustee shall proceed to foreclose the Lien of this Indenture, it
shall substantially simultaneously therewith, to the extent the Indenture
Trustee is then entitled to do so hereunder and under the Lease, and is not
then stayed or otherwise prevented from doing so, proceed (to the extent it
has not already done so) to declare the Lease in default and commence the
exercise in good faith of one or more of the significant remedies under
Article 17 of the Lease (as the Indenture Trustee determines in its sole
discretion) for the purpose of recovering the Aircraft. It is further
understood and agreed that if the Indenture Trustee is unable to exercise one
or more remedies under Article 17 of the Lease because of any stay or
operation of law or otherwise, the Indenture Trustee shall not be entitled to
foreclose the Lien of this Indenture (A) until the earlier of (i) 60 days from
the date of any such stay or applicable order under Section 1110 of the
Bankruptcy Code plus any extension consented to by the Indenture Trustee or
the Holders of Certificates of such period as permitted under Section 1110(b)
of the Bankruptcy Code and (ii) the date of actual repossession of the
Aircraft by the Indenture Trustee or (B) if the Lessee has agreed to perform
or assume the Lease pursuant to Section 365 or 1110 of the Bankruptcy Code and
no Event of Default (other than as specified in Section 16.01(e), (f) or (g)
of the Lease, or other Event of Default in respect of which the 30-day period
referred to in clause (a)(1)(B)(ii)(I) of Section 1110 of the Bankruptcy Code
shall not yet have expired) shall be continuing. For the avoidance of doubt,
it is expressly understood and agreed that except as aforesaid the
above-described inability of the Indenture Trustee to exercise any right or
remedy under the Lease shall in no event and under no circumstances prevent
the Indenture Trustee from exercising all of its rights, powers and remedies
under this Indenture, including, without limitation, this Article VII. The
Indenture Trustee further agrees that notice of intent to foreclose shall be
given to the Owner Trustee at the earlier of the commencement of any
proceeding or at least 30 days prior to the consummation of foreclosure of the
Lien of this Indenture.
(b) If an Indenture Event of Default under clause (iv), (v) or (vi)
of Section 7.01 hereof shall occur and be continuing, the unpaid principal of
all Outstanding Certificates, together with interest accrued but unpaid
thereon and all other amounts due thereunder, but without Make-Whole Premium,
shall immediately become due and payable, without presentment, demand, protest
or notice, all of which are hereby waived.
(c) If any Indenture Event of Default not described in the preceding
paragraph (b) shall have occurred and be continuing, then and in every such
case, the Indenture Trustee may on its own accord or at the direction of
Holders of not less than 25% in aggregate principal amount of Outstanding
Certificates, at any time, by written notice to the Owner Trustee, the Owner
Participant and the Lessee, declare the principal of all the Certificates to
be due and payable, whereupon the unpaid principal amount of all Outstanding
Certificates, together with accrued interest thereon and all other amounts due
thereunder, but without Make-Whole Premium, shall immediately become due and
payable without presentment, demand, protest or other notice, all of which are
hereby waived. At any time after such declaration and prior to the sale or
disposition of the Trust Indenture Estate, however, the Holders of not less
than 50% in aggregate principal amount of Outstanding Certificates, by notice
to the Indenture Trustee, the Owner Trustee and the Lessee, may rescind such
declaration, whether made by the Indenture Trustee on its own accord or as
directed, if (x) there has been paid or deposited with the Indenture Trustee a
sum sufficient to pay all overdue installments of interest on all Certificates
(together, to the extent permitted by law, with interest on such overdue
installments of interest), the principal on any Certificates that has become
due otherwise than by such declaration of acceleration, all sums paid or
advanced by the Indenture Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel, or (y) all Indenture Events of Default (other than the nonpayment of
principal that has become due solely because of such acceleration) have been
either cured or waived as provided in Section 7.11 hereof. No such rescission
shall affect any subsequent default or impair any right consequent thereon.
(d) Each Holder shall be entitled at any sale to 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 (but
only to the extent that an amount equal to such purchase price would have been
paid to such Holder pursuant to Article V hereof if such purchase price were
paid in cash and the foregoing provisions of this subsection (d) were not
given effect).
Section 7.03. Return of Aircraft, etc. Subject to Section 7.02
hereof: (a) If an Indenture Event of Default shall have occurred and be
continuing, at the request of the Indenture Trustee, the Owner Trustee shall
promptly execute and deliver to the Indenture Trustee such documents as the
Indenture Trustee may deem necessary or advisable to enable the Indenture
Trustee or an agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify,
to obtain possession of all or any part of the Trust Indenture Estate to which
the Indenture Trustee shall at the time be entitled under this Indenture.
Subject to the foregoing, if the Owner Trustee shall for any reason fail to
execute and deliver such documents after such request by the Indenture
Trustee, the Indenture Trustee may pursue all or part of such Trust Indenture
Estate wherever it may be found and enter any of the premises of the Lessee or
the Owner Trustee wherever such Trust Indenture Estate may be or be supposed
to be and search for such Trust Indenture Estate and take possession of and
remove such Trust Indenture Estate. All expenses of pursuing, searching for
and taking such Trust Indenture Estate shall, until paid, be secured by the
Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Trust Indenture Estate, make all such
expenditures for maintenance, insurance and repairs to and of such Trust
Indenture Estate, as the Indenture Trustee may reasonably deem proper. In
each case subject to Section 7.02 hereof, the Indenture Trustee shall have the
right to maintain, use, operate, store, lease, control or manage the Trust
Indenture Estate and to carry on the business and to exercise all rights and
powers of the Owner Participant and the Owner Trustee relating to the Trust
Indenture Estate, as the Indenture Trustee may reasonably deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, insurance, use, operation, storage, leasing, control, management
or disposition of all or any part of the Trust Indenture Estate as the
Indenture Trustee may determine. Further, the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Trust Indenture Estate
other than Excepted Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
under this Indenture. Such tolls, rents (including Rent), revenues, issues,
income, products and profits shall be applied to pay the expenses of the use,
operation, storage, leasing, control, management, or disposition of the Trust
Indenture Estate, and of all maintenance and repairs, and to make all payments
which the Indenture Trustee may be required or may reasonably elect to make
for any taxes, assessments, insurance or other proper charges upon the Trust
Indenture Estate (including the employment of engineers and accountants to
examine, inspect and make reports upon the properties and books and records of
the Owner Trustee and the Lessee), and all other payments which the Indenture
Trustee may be required or authorized to make under any provision of this
Indenture, as well as just and reasonable compensation for the services of the
Indenture Trustee and of all persons properly engaged and employed for such
purposes by the Indenture Trustee; provided, that any excess amounts shall be
promptly distributed in accordance with Section 5.03 hereof.
(c) Subject to Section 7.02 hereof, if an Indenture Event of
Default shall have occurred and be continuing and the Indenture Trustee shall
be entitled to exercise remedies hereunder, and subject to Article VIII
hereof, the Indenture Trustee, either with or without taking possession, and
either before or after taking possession, and without instituting any legal
proceedings whatsoever, may sell, assign, transfer and deliver the whole or,
from time to time, to the extent permitted by law, any part of the Trust
Indenture Estate, or any part thereof, or interest therein, at any private
sale or public auction to the highest bidder, with or without demand,
advertisement or notice, except that in respect of any private sale 30 days
prior written notice by registered mail to the Owner Trustee and the Owner
Participant will be provided, for cash or, with the consent of the Owner
Trustee and the Owner Participant, credit or for other property, for immediate
or future delivery, and for such price or prices and on such terms as the
Indenture Trustee in exercising reasonable commercial discretion may
determine; provided, that any such action shall be at the time lawful and that
all mandatory legal requirements shall be complied with. Any notice required
pursuant to the terms hereof in the case of a public sale, shall state the
time and place fixed for such sale. Any such public sale shall be held at
such time or times within ordinary business hours as the Indenture Trustee
shall fix in the notice of such sale. At any such sale, the Trust Indenture
Estate may be sold in one lot as an entirety or in separate lots. The
Indenture Trustee shall not be obligated to make any sale pursuant to such
notice. The Indenture Trustee may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for such sale, and any such sale may
be made at any time or place to which the same may be so adjourned without
further notice or publication. The Indenture Trustee may exercise such right
of sale without possession or production of the Certificates or proof of
ownership thereof, and as representative of the Holders may exercise such
right without notice to the Holders or without including the Holders as
parties to any suit or proceedings relating to the foreclosure of any part of
the Trust Indenture Estate. The Owner Trustee shall execute any and all such
bills of sale, assignments and other documents, and perform and do all other
acts and things requested by the Indenture Trustee in order to permit
consummation of any sale of the Trust Indenture Estate in accordance with this
Section 7.03(c) and to effectuate the transfer or conveyance referred to in
the first sentence of this Section 7.03(c). Notwithstanding any other
provision of this Indenture, the Indenture Trustee shall not sell the Trust
Indenture Estate or any part thereof unless the Certificates shall have been
accelerated.
(d) To the extent permitted by applicable law, and subject to
Section 7.02 hereof, 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 of 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) 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.
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 Sections 7.02 and 7.03(c) hereof.
In case there shall be pending proceedings relative to the Owner
Trustee under the Bankruptcy Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Owner Trustee or its property, or in case of any other comparable judicial
proceedings relative to the Owner Trustee, or to the creditors or property of
the Owner Trustee, the Indenture Trustee, irrespective of whether the
principal of the Certificates shall then be due and payable as therein or
herein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal, interest and other amounts owing and unpaid in respect of the
Certificates or hereunder, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of the Holders allowed in any judicial
proceedings relative to the Owner Trustee or to the creditors or property of
the Owner Trustee,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Indenture Trustee on their
behalf;
and any trustee, receiver, or liquidator, custodian or other similar official
is hereby authorized by each of the Holders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to the Holders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or willful misconduct.
Nothing contained herein shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Certificates or the rights of any Holder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any Holder
in any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
All rights of action and rights to assert claims under this
Indenture, or under any of the Certificates, may be enforced by the Indenture
Trustee without the possession of such Certificates on any trial or other
proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders, as provided herein.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Certificates, and it shall not be
necessary to make any Holders parties to such proceedings.
Section 7.05. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee in this Indenture shall be cumulative
and shall be in addition to every other right, power and remedy specifically
given herein or now or hereafter existing at law, in equity or by statute, and
each and every right, power and remedy whether specifically given herein or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Indenture Trustee or the Holders, and
the exercise or the beginning of the exercise of any power or remedy shall not
be construed to be a waiver of the right to exercise at the same time or later
any other right, power or remedy. No delay or omission by the Indenture
Trustee or of any Holder in the exercise of any right, remedy or power or in
the pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Trustee or
the Lessee or to be an acquiescence in any such default.
Section 7.06. Suits for Enforcement. If an Indenture Event of
Default has occurred, has not been waived and is continuing, the Indenture
Trustee may in its discretion and subject to its rights of appropriate
indemnification under Sections 7.08 and 9.03 and Article XI hereof proceed to
protect and enforce its rights and rights of the Holders by such appropriate
judicial proceedings as the Indenture Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture or to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture or by
law; provided, that any sale of any portion of the Trust Indenture Estate
shall be done in accordance with Sections 7.02 and 7.03(c) hereof.
Section 7.07. Discontinuance of Proceedings. In case the Indenture
Trustee or any Holder shall have instituted any proceeding to enforce any
right, power or remedy under this Indenture by foreclosure, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Indenture Trustee or
such Holder, then the Owner Trustee, the Indenture Trustee, the Owner
Participant, the Holders and the Lessee shall, subject to any binding
determination in such proceeding, be restored to their former positions and
rights under this Indenture with respect to the Trust Indenture Estate, and all
rights, remedies and powers of the Indenture Trustee and the Holders shall
continue as if no such proceeding had been instituted.
Section 7.08. Limitations on Suits by Holders. No Holder of any
Certificate shall have any right by virtue or by availing of any provision of
this Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Indenture Trustee written notice that an
Indenture Event of Default shall then have occurred and be continuing, as
hereinbefore provided, and the Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates shall have made written request
upon the Indenture Trustee to institute such action or proceedings in its own
name as trustee hereunder and shall have offered to the Indenture Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Indenture Trustee for 60
days after its receipt of such notice, request and offer of indemnity shall
have failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Indenture
Trustee pursuant to Section 7.10 hereof; it being understood and intended, and
being expressly covenanted by the Holder of each Certificate with every other
Holder of each other Certificate and the Indenture Trustee, that no one or
more Holders shall have any right in any manner whatever to affect, disturb or
prejudice the rights of any other Holder or the Lien of this Indenture or any
part of the Trust Indenture Estate or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under this
Indenture, except in the manner provided herein and for the equal, ratable and
common benefit of all Holders. For the protection and enforcement of the
provisions of this Section, each and every Holder and the Indenture Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute Certain Suits.
Notwithstanding any other provision in this Indenture and any provision of any
Certificate, the right of any Holder to receive payment of the principal of
and interest and Make-Whole Premium, if any, on such Certificate on or after
the respective due dates and in the manner expressed in such Certificate, or,
subject to Section 7.08 hereof, to institute suit for the enforcement of any
such payment on or after such respective dates as provided herein, shall not
be impaired or affected without the consent of such Holder.
Section 7.10. Control by Holders. The Majority in Interest of
Certificate Holders shall have the right to direct the Indenture Trustee as to
the time, method, and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power conferred
on the Indenture Trustee by this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture and the Indenture Trustee shall have received, to the extent
provided in Sections 7.08 and 9.03 and Article XI hereof, such reasonable
indemnification as it may require against the costs, expenses and liabilities
to be incurred by the Indenture Trustee; and provided further that (subject to
the provisions of Section 9.02 hereof) the Indenture Trustee shall have the
right to decline to follow any such direction if the Indenture Trustee, being
advised by counsel, shall determine that the action or proceeding so directed
may not lawfully be taken or if the Indenture Trustee in good faith by its
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers of the Indenture Trustee shall determine that the
action or proceedings so directed would involve the Indenture Trustee in
personal liability or if the Indenture Trustee in good faith shall so
determine that the actions or forebearances specified in or pursuant to such
direction shall be unduly prejudicial to the interests of Holders not joining
in the giving of said direction, it being understood that (subject to Section
9.02 hereof) the Indenture Trustee shall have no duty to ascertain whether or
not such actions or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Indenture
Trustee in its discretion to take any action deemed proper by the Indenture
Trustee and which is not inconsistent with the direction by the Majority in
Interest of Certificate Holders.
Section 7.11. Waiver of Past Indenture Default. Upon written
instructions from the Majority in Interest of Certificate Holders, the
Indenture Trustee shall waive any past Indenture Default and its consequences
and upon any such waiver such Indenture Default shall cease to exist and any
Indenture Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Indenture Default or impair any right consequent
thereon; provided, however, that in the absence of written instructions from
all Holders and each Liquidity Provider, the Indenture Trustee shall not waive
any Indenture Default (a) in the payment of the principal of or Make-Whole
Premium, if any, or interest on, or other amounts due under, any Certificate
then Outstanding, or (b) in respect of a covenant or provision of this
Indenture which, under Article XIII hereof, cannot be modified or amended
without the consent of each Holder.
Section 7.12. Notice of Indenture Default. The Indenture Trustee
shall transmit to the Owner Trustee, the Holders and to the Owner Participant
notice of any Indenture Defaults actually known to a Responsible Officer of
the Indenture Trustee, such notice to be transmitted by mail to the Holders
within 90 days, and to the Owner Trustee and the Owner Participant promptly
after the occurrence thereof, unless such Indenture Default shall have been
cured before the giving of such notice; provided that except in the case of a
default in the payment of the principal of or interest on any Certificate,
under no circumstances shall the Indenture Trustee give such notice to the
Holders until the expiration of a period of 60 days from the occurrence of such
Indenture Default; and provided further that, except in the case of default in
the payment of the principal of or interest on or any other amount due under
any of the Certificates, the Indenture Trustee shall be protected in
withholding such notice to the Holders if and so long as the board of
directors, the executive committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Indenture Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.
(a) Subject to Section 13.01 hereof and the provisions of paragraph (a)
immediately following the Granting Clause hereof, without the consent of a
Majority in Interest of Certificate Holders, the respective parties to the
Indenture Documents may not modify, amend or supplement any of said
agreements, or give any consent, waiver, authorization or approval thereunder,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner the
rights of the respective parties thereunder; provided, however, that the
actions specified in subsection (b) of this Section 8.01 may be taken without
the consent of the Indenture Trustee or any Holder.
(b) Subject to the provisions of subsection (c) of this Section
8.01, the Lessor and the respective parties to the Indenture Documents, at any
time and from time to time, without the consent of the Indenture Trustee or of
any Holder, may:
(1) so long as no Indenture Event of Default shall have occurred and
be continuing, modify, amend or supplement the Lease, or give any waiver
with respect thereto, except that without compliance with subsection (a) of
this Section 8.01 the parties to the Lease shall not modify, amend or
supplement, or give any waiver for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions thereof or
of modifying in any manner the rights of the respective parties thereunder,
with respect to the following provisions of the Lease as in effect on the
effective date hereof: Article 2 (except in respect of the Term, if the
result thereof would not be to shorten the Term of the Lease to a period
shorter than the period ending with the Maturity of any Certificate),
Section 3.03 (except to the extent such Section relates to amounts payable
(whether directly or pursuant to this Indenture) to Persons other than
Holders, each Liquidity Provider, the Subordination Agent and the Indenture
Trustee in its individual capacity), Section 3.05, Section 3.06 (except
insofar as it relates to the address or account information of the Owner
Trustee or the Indenture Trustee) (other than as such Sections 3.03, 3.05
and 3.06 may be amended pursuant to Section 3.04 of the Lease as in effect
on the effective date hereof), Section 5.01, Article 6, Article 10 (except
that further restrictions may be imposed on the Lessee), Article 11 (except
that additional requirements may be imposed on the Lessee), Article 13
(except for Section 13.05 and except that additional insurance requirements
may be imposed on the Lessee), Article 14 (except in order to increase the
Lessee's liabilities or enhance the Lessor's rights thereunder), Article 15
(except in the case of an assignment by the Lessor in circumstances where
the Aircraft shall remain registrable under the Federal Aviation Act),
Section 16.01 (except to impose additional or more stringent Events of
Default), Article 17 (except to impose additional remedies), Section 19.01
(except to impose additional requirements on the Lessee), Section 20.01,
Article 22, Section 23.01, Section 26.03 and any definition of terms used
in the Lease, to the extent that any modification of such definition would
result in a modification of the Lease not permitted pursuant to this
subsection (b); provided that the parties to the Lease may take any such
action without the consent of the Indenture Trustee or any Holder to the
extent such action relates to the payment of amounts constituting, or the
Owner Trustee's, the Owner Participant's or the Lessee's rights or
obligations with respect to, Excepted Payments (other than the place, time
and manner of payment of any portion of Basic Rent constituting an Excepted
Payment);
(2) modify, amend or supplement the Trust Agreement and any other
Indenture Document (other than the Lease and the Participation Agreement),
or give any consent, waiver, authorization or approval with respect
thereto, in each case only to the extent any such action shall not
materially adversely impact the interests of the Holders;
(3) modify, amend or supplement the Participation Agreement, or give
any consent, waiver, authorization or approval with respect thereto, except
that without compliance with subsection (a) of this Section 8.01 the
parties to the Participation Agreement shall not modify, amend or
supplement, or give any consent, waiver, authorization or approval for the
purpose of adding provisions to or changing in any manner or eliminating
any of the provisions thereof or of modifying in any manner the rights of
the respective parties thereunder, with respect to the following provisions
of the Participation Agreement as in effect on the effective date hereof:
Article 6 and Section 10.01(b) (insofar as such Article 6 and Section
10.01(b) relate to the Indenture Trustee, the Pass Through Trustee and the
Holders), Article 7 and Sections 3.05, 15.01, 17.02 and 17.11 and Articles
8 and 9 (insofar as such Articles relate to the Indenture Trustee; it being
understood that only the Indenture Trustee's consent in respect thereof
need be obtained) and any definition of terms used in the Participation
Agreement, to the extent that any modification of such definition would
result in a modification of the Participation Agreement not permitted
pursuant to this subsection (b); and
(4) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided the
making of any such other provision shall not adversely affect the interests
of the Holders.
(c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease or the Participation
Agreement, whether effected pursuant to subsection (a) or pursuant to
subsection (b) of this Section 8.01 and anything in such subsections or
elsewhere in this Indenture to the contrary notwithstanding, shall, without
the consent of the Holder of each Outstanding Certificate affected thereby,
and each Liquidity Provider,
(1) modify, amend or supplement the Lease in such a way as to extend
the time of payment of Basic Rent or Stipulated Loss Value or Supplemental
Rent payable to the Holders or any Liquidity Provider or any other amounts
payable for the account of the Holders or any Liquidity Provider (subject
in any event to Section 3.05 of the Lease) upon the occurrence of an Event
of Loss or Termination Value and any other amounts payable for the account
of the Holders (subject in any event to Section 3.05 of the Lease) upon
termination of the Lease with respect to the Aircraft payable under, or as
provided in, the Lease as in effect on the effective date hereof, or reduce
the amount of any installment of Basic Rent or Supplemental Rent so that
the same is less than the payment of principal of, and interest on the
Certificates and Make-Whole Premium, if any, and amounts due to each
Liquidity Provider, as the case may be, to be made from such installment of
Basic Rent or Supplemental Rent, or reduce the aggregate amount of
Stipulated Loss Value, or any other amounts payable under, or as provided
in, the Lease as in effect on the effective date hereof upon the occurrence
of an Event of Loss so that the same is less than the accrued interest on
and the principal as of the Loss Payment Date, of the Certificates at the
time Outstanding or reduce the amount of Termination Value and any other
amounts payable under, or as provided in, the Lease as in effect on the
effective date hereof upon termination of the Lease with respect to the
Aircraft so that the same is less than the accrued interest on and
principal as of the Lease Termination Date and Make-Whole Premium, if any,
of Certificates at the time Outstanding, or
(2) modify, amend or supplement the Lease in such a way as to, or
consent to any assignment of the Lease or give any consent, waiver,
authorization or approval which would, release the Lessee from its absolute
and unconditional obligations in respect of payment of Basic Rent or
Supplemental Rent, or Stipulated Loss Value and any other amounts payable
for the account of the Holders (subject in any event to Section 3.05 of the
Lease) upon the occurrence of an Event of Loss, or Termination Value and
any other amounts payable for the account of the Holders (subject in any
event to Section 3.05 of the Lease) with respect to the Aircraft, payable
under, or as provided in, the Lease as in effect on the effective date
hereof, except for any such assignment pursuant to Section 2.12 hereof, and
except as provided in the Lease as in effect on the effective date hereof.
(d) At all times so long as this Indenture is in effect, the consent
of the Owner Trustee (at the direction of the Owner Participant) shall be
required in order (i) to amend, modify or supplement the Lease or any other
Operative Document to which the Owner Trustee is a party or to waive
compliance by the Lessee with any of its obligations thereunder and (ii) to
grant any consent requested under the Lease.
Notwithstanding the foregoing, but subject always to the provision of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Article 17 (other than with respect to Excepted
Payments) thereof and (B) subject only to the provisions of this Indenture,
exercise the remedies set forth in such Article 17 of the Lease (other than in
connection with Excepted Payments) and in Article 7 hereof.
Nothing in this Indenture shall be deemed to prohibit the Owner
Participant or the Owner Trustee from making demand on the Lessee for, or from
commencing an action at law to obtain the payment of, or from receiving
payment of, any Excepted Payment; provided, however, that if the Owner Trustee
is proceeding under the Lease, the Owner Trustee shall proceed pursuant to
Section 17.01(a)(v), and only Section 17.01(a)(v), of the Lease.
Section 8.02. Owner Participant's Right to Elect to Prepay or
Purchase the Certificates. (a) If (i) an Event of Default shall have occurred
and be continuing for more than 180 days or the Certificates shall have become
due and payable pursuant to Section 7.02(b) or (c) hereof or (ii) an Event of
Default shall have occurred and be continuing for not more than 180 days and
the Certificates shall not have become due and payable pursuant to Section
7.02(b) or (c) hereof, the Owner Participant (or the Owner Trustee on behalf
of the Owner Participant) may, but shall be under no obligation to, do either
of the following:
(1) direct the Owner Trustee to cause the prepayment of all, but not
less than all, of the Certificates then Outstanding by notifying the
Indenture Trustee of such election, which notice in order to be effective
shall state that it is irrevocable (except as provided below) and shall
designate a Prepayment Date which shall be a Business Day which shall be
not less than 15 days after the date of such notice on which the Owner
Trustee shall, in the manner provided for in Section 6.04 hereof, deposit
the sum of amounts contemplated by paragraph "first" under Section 5.03 and
the aggregate Prepayment Price (determined in accordance with Section
6.02(b) hereof) of all such Certificates with the Indenture Trustee. If
such payment by the Owner Trustee to the Indenture Trustee is made, the
Certificates shall cease to accrue interest from and after the Prepayment
Date, and after distribution of such payment to the Holders, the Indenture
Trustee shall release the Trust Indenture Estate from the Lien of this
Indenture; or
(2) purchase all, but not less than all, of the Outstanding
Certificates by notifying the Indenture Trustee of such election, which
notice in order to be effective shall state that it is irrevocable (except
as provided below) and shall designate a date which shall be a Business Day
which shall be not less than 15 days after the date of such notice on which
the Owner Trustee shall pay to the Indenture Trustee an amount equal to the
aggregate unpaid principal amount of all Outstanding Certificates, together
with accrued interest on such amount to the date of purchase, the aggregate
amount of any Make-Whole Premium applicable to each Outstanding Certificate
(if such purchase occurs prior to the Premium Termination Date for such
Outstanding Certificate) in the case of a purchase pursuant to clause
(a)(ii) above (but not if such purchase is pursuant to clause (a)(i)
above), plus all other sums due any Holder or the Indenture Trustee
hereunder or under the Participation Agreement or the Lease. Upon receipt
by the Indenture Trustee of such amount, each Holder will be deemed,
whether or not Certificates shall have been delivered to the Indenture
Trustee on such date, to have thereupon sold, assigned, transferred and
conveyed (and shall promptly take such actions as the Owner Participant
shall reasonably request to evidence such sale, assignment, transfer and
conveyance) to the Owner Participant (without recourse or warranty of any
kind except for its own acts), all of the right, title and interest of such
Holder in and to the Trust Indenture Estate and this Indenture and all
Certificates held by such Holder and the former Holders shall not be
entitled to receive any interest on the principal amount of such
Certificates after the purchase date, and the Owner Participant shall be
deemed to have assumed (and shall promptly take such actions as any Holder
shall reasonably request to evidence such assumption) all of such Holder's
obligations under the Participation Agreement and this Indenture arising
subsequent to such sale. If the Owner Trustee shall so request, such
Holder will comply with all the provisions of Section 2.06 of this
Indenture to enable new Certificates to be issued to the Owner Participant
in such authorized denominations as the Owner Participant shall request.
All charges and expenses required pursuant to Section 2.06 hereof in
connection with the issuance of any such new Certificates shall be borne by
the Owner Participant.
(b) From and after the deposit by the Owner Trustee of the applicable
Prepayment Price or purchase price with the Indenture Trustee pursuant to
Section 8.02(a) hereof, the Owner Trustee shall be entitled to exercise all
remedies of the Indenture Trustee under Article VII hereof as well as of the
Lessor under the Lease.
(c) Any election to prepay or purchase the Certificates under this
Section 8.02 shall be irrevocable, provided that if on the specified date for
prepayment or purchase, the Event of Default giving rise to such election
shall no longer be continuing under the Lease such election shall be deemed to
be automatically withdrawn.
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 date
which is 15 Business Days after the Owner Participant's receipt of written
notice of such Event of Default all principal and interest on the Certificates
then due (as well as any interest on overdue principal and (to the extent
permitted by applicable law) interest), but not including any principal or
interest becoming due on account of such Event of Default, then the failure of
the Lessee to make the payment of such installment of Basic Rent or of
interest on account of such installment's being overdue shall not constitute
or result in an Indenture Event of Default under this Indenture and any
declaration based solely on the same shall be deemed to be automatically
rescinded. Nothing contained in the preceding sentence shall be deemed to
entitle the Owner Trustee to exercise any rights and powers or pursue any
remedies pursuant to Article 17 of the Lease or otherwise except as set forth
in this Indenture, and except that the Owner Trustee or the Owner Participant
may attempt to recover any amount paid by it or them under this Indenture by
demanding of the Lessee payment of such amount, or by commencing an action at
law or equity 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 be subrogated on
an unsecured basis to all the rights of the Indenture Trustee under the Lease
in respect of the payment giving rise to such Event of Default, and any right
to any interest in respect of the same, and shall be entitled to any payment
of Basic Rent (or interest thereon) actually made by the Lessee in respect of
such cured payment upon receipt by the Indenture Trustee; provided that no such
amount shall be paid to the Owner Trustee or the Owner Participant until all
amounts then due and payable to each Certificate Holder hereunder and
thereunder shall have been paid in full and no Indenture Event of Default
shall have occurred and be continuing. Notwithstanding anything in this
Indenture or the Lease to the contrary, the Owner Participant and the Owner
Trustee collectively, shall not be entitled to cure more than six (6) Events
of Default (no more than three (3) of which may be consecutive) occasioned by
defaults in the payment of Basic Rent.
(b) If (A) there shall occur an Event of Default under the Lease for
any reason other than the Lessee's failure to make any payment of an
installment of Basic Rent and (B) the Owner Trustee shall have taken or caused
to be taken such action necessary to cure and shall have cured such Event of
Default prior to the date which is 15 Business Days after the Owner
Participant's receipt of the written notice of such Event of Default, then
the failure of the Lessee to perform such covenant, condition or agreement,
the observance or performance of which was accomplished by the Owner Trustee
hereunder shall not constitute or result in an Indenture Event of Default under
this Indenture and any declaration based solely on the same shall be deemed to
be automatically rescinded. Nothing contained in the preceding sentence shall
be deemed to entitle the Owner Trustee or the Owner Participant to exercise
any rights and powers or pursue any remedies pursuant to Article 17 of the
Lease or otherwise except as set forth in this Indenture, and except that the
Owner Trustee or the Owner Participant may attempt to recover any amount paid
by it or them in effecting such cure by demanding of the Lessee payment of
such amount, plus any interest due, or by commencing an action at law or in
equity against the Lessee for the payment of such amount or taking appropriate
action in a pending action at law or in equity against the Lessee pursuant to
Section 17.01(a)(v), but only said Section 17.01(a)(v), of the Lease. Upon
curing any such Event of Default pursuant to this Section 8.03(b), the Owner
Trustee or the Owner Participant, as the case may be, shall be subrogated to
all the rights of the Indenture Trustee under the Lease in respect of the
payment, agreement or covenant giving rise to such Event of Default, and any
right to any interest in respect of the same, and shall be entitled to any
payment or other performance upon receipt by the Indenture Trustee; provided
that no such amount shall be paid to the Owner Trustee or the Owner
Participant until all amounts then due and payable to each Certificate Holder
hereunder and thereunder shall have been paid in full and no Indenture Event
of Default shall have occurred and be continuing.
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts. The Indenture Trustee in its
individual capacity hereby accepts the trusts imposed upon it by this
Indenture, and covenants and agrees to perform the same as expressed herein
and agrees to receive and disburse all moneys constituting part of the Trust
Indenture Estate in accordance with the terms hereof.
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an Indenture Event of Default.
(a) The Indenture Trustee, prior to the occurrence of an Indenture Event of
Default and after the curing or waiving of all Indenture Events of Default
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. So long as an
Indenture Event of Default has occurred and has not been cured or waived, the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs. No provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Indenture Event of Default and
after the curing or waiving of all Indenture Events of Default which may have
occurred:
(x) the duties and obligations of the Indenture Trustee shall be
determined solely by the express provisions of this Indenture, and the
Indenture Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read in to this Indenture against
the Indenture Trustee; and
(y) in the absence of bad faith on the part of the Indenture
Trustee, the Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; but in the case of any such
statements, certificate or opinions which by any provision hereof are
specifically required to be furnished to the Indenture Trustee, the Indenture
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible Officers
of the Indenture Trustee, unless it shall be proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action taken or not taken by it in good faith in accordance with the direction
of the Holders of not less than a majority in aggregate principal amount of
Outstanding Certificates relating to the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred upon the Indenture Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Indenture Trustee shall have determined
in good faith that the repayment of such funds or adequate indemnity against
such liability is not reasonably assured to it.
The Indenture Trustee agrees that it will execute and the Owner
Trustee agrees that it will, at the expense of the Lessee, file or cause to be
filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Trust Indenture
Estate as may be specified from time to time in written instructions of the
Holders of not less than 25% in aggregate principal amount of Certificates
(which instructions may, by their terms, be operative only at a future date
and which shall be accompanied by the execution form of such continuation
statement so to be filed); provided that, notwithstanding the foregoing, the
Indenture Trustee may execute and file or cause to be filed any financing
statement which it from time to time deems appropriate.
(b) If any Event of Default shall have occurred and be continuing
and, after the latest date on which the Owner Trustee may cure such Event of
Default pursuant to Section 8.03 hereof, on request of the Holders of not less
than 25% in aggregate principal amount of Outstanding Certificates and subject
to indemnification, to the extent provided in Sections 7.08 and 9.03 and
Article XI hereof, as it may require against the costs, expenses and
liabilities to be incurred, the Indenture Trustee shall exercise such remedies
under Article 17 of the Lease as shall be specified in such request.
(c) The Indenture Trustee agrees that it will, in its individual
capacity and at its own cost and expense (but without any right of indemnity
in respect of any such cost or expense under Article XI hereof) promptly take
such action as may be necessary duly to discharge all Indenture Trustee's
Liens on any part of the Trust Indenture Estate.
(d) The Indenture Trustee will execute and deliver to the Lessee for
filing in accordance with Article 18 of the Lease any properly presented
document, instrument or financing or continuation statement specified in any
opinion delivered pursuant to Section 6.03(e) of the Participation Agreement.
The Indenture Trustee may rely on the act of presentation of any such
document, instrument, financing or continuation statement as evidencing the
fact that it is properly prepared and presented, provided that the Indenture
Trustee shall promptly correct any error in any such document, instrument,
financing or continuation statement of which a Responsible Officer of the
Indenture Trustee has actual knowledge.
(e) The Indenture Trustee will furnish to each Holder promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished to
the Indenture Trustee, to the extent that the same shall not have been
otherwise furnished to such Holder pursuant to this Indenture or to the extent
the Indenture Trustee does not reasonably believe that the same shall have
been furnished by the Lessee directly to such Holder.
Section 9.03. Certain Rights of the Indenture Trustee. Subject to
Section 9.02 hereof:
(a) the Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Owner Trustee
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof be herein
specifically prescribed) upon which the Indenture Trustee may rely to prove
or establish a matter set forth therein;
(c) the Indenture Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Indenture Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Indenture Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Indenture Event of Default
hereunder and after the curing or waiving of all Indenture Events of
Default, the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or
document unless requested in writing to do so by the Majority in Interest
of Certificate Holders; provided that, if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Indenture Trustee, not reasonably assured to the Indenture Trustee
by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Owner Trustee or,
if paid by the Indenture Trustee or any predecessor trustee, shall be
repaid by the Owner Trustee upon demand; and
(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by it hereunder.
Section 9.04. Indenture Trustee Not Responsible for Recitals,
Disposition of Certificates or Application of Proceeds Thereof. The Indenture
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates, except the Indenture Trustee's
certificates of authentication. The Indenture Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Certificates. The Indenture Trustee shall not be accountable for the use or
application by the Owner Trustee of any of the Certificates or of the proceeds
thereof.
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc. The Indenture Trustee or any agent of the Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Indenture
Trustee or such agent and may otherwise deal with the Owner Trustee and
receive, collect, hold and retain collections from the Owner Trustee with the
same rights it would have if it were not the Indenture Trustee or such agent.
Section 9.06. Moneys Held by Indenture Trustee. Subject to Sections
5.08 hereof and 14.04 hereof, all moneys received by the Indenture Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Neither
the Owner Trustee nor, subject to Section 5.08 hereof, the Indenture Trustee
nor any agent thereof shall be under any liability for interest on any moneys
received by it hereunder.
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc. Subject to Sections 9.02 and 9.03 hereof, whenever in the
administration of the trusts of this Indenture the Indenture Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting any action hereunder, such matter (unless
other evidence in respect thereof be specifically prescribed herein) may, in
the absence of bad faith on the part of the Indenture Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to
the Indenture Trustee, and such certificate, in the absence of bad faith on
the part of the Indenture Trustee, shall be full warrant to the Indenture
Trustee for any action taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
Section 9.08. Replacement Airframes and Replacement Engines. At any
time and from time to time any Airframe or Engine which has been subject to an
Event of Loss and may, or is required to, be replaced under Section 10.03,
11.03 or 11.04 of the Lease by a Replacement Airframe or Replacement Engine,
as the case may be, shall be replaced in accordance with the provisions of
this Section 9.08 and the provisions of said Sections of the Lease, the Owner
Trustee shall, from time to time, direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing such Airframe and/or Engine as appropriate from the Lien
of this Indenture and the Indenture Trustee shall execute and deliver such
instrument as aforesaid without recourse or warranty, but only upon receipt by
or deposit with the Indenture Trustee of the following:
(1) A written request from the Owner Trustee requesting such release
and specifically describing the Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or other
applicable registration information) and manufacturer's serial number;
(ii) a description of the Replacement Airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Airframe the Owner Trustee
will be the legal owner of and have good and marketable title to such
Replacement Airframe free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease, that such Replacement
Airframe will on such date be in at least as good operating condition
and repair as required by the terms of the Lease, and that such
Replacement Airframe has been or, substantially concurrently with
such replacement, will be duly registered in the name of the Owner
Trustee under the Transportation Code or under the law then
applicable to the registration of the Airframe subject to the Event
of Loss and that an airworthiness certificate has been duly issued
under the Aviation Act (or such other applicable law) with respect to
such Replacement Airframe and that such registration and certificate
is, or will be, in full force and effect, and that the Lessee will
have the full right and authority to use such Replacement Airframe;
(iv) that the insurance required by Article 13 of the Lease is in
full force and effect with respect to such Replacement Airframe and
all premiums then due thereon have been paid in full;
(v) that the Replacement Airframe is of the same or an improved make
or model as the Airframe requested to be released from this Indenture;
(vi) that the value of the Replacement Airframe as of the date of such
certificate is not less than the value of the Airframe requested to
be released (assuming such Airframe was in the condition and repair
required to be maintained under the Lease);
(vii) that no Event of Default has occurred and is continuing or
would result from the making and granting of the request for release
and the addition of a Replacement Airframe;
(viii) that the release of the Airframe subject to the Event of Loss
will not impair the security of the Indenture in contravention of any
of the provisions of this Indenture;
(ix) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Airframe and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x) that each of the conditions specified in Section 11.03 of the
Lease with respect to such Replacement Airframe has been satisfied.
B. With respect to the replacement of any Engine:
(i) a description of the Engine subject to the Event of Loss
including the manufacturer's serial number;
(ii) a description of the Replacement Engine including the
manufacturer's name, the engine model and serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Engine the Owner Trustee will
be the legal owner of such Replacement Engine free and clear of all
Liens except Liens permitted under Section 6.01 of the Lease, and
that such Replacement Engine will on such date be in at least as good
operating condition and repair as required by the terms of the Lease
and will otherwise conform to the requirements set forth in the
definition of "Replacement Engine";
(iv) that the value of the Replacement Engine as of the date of such
certificate is not less than the value of the Engine to be released
(assuming such Engine was in the condition and repair required to be
maintained under the Lease);
(v) that the release of the Engine subject to the Event of Loss will
not impair the security of the Indenture in contravention of any of
the provisions of this Indenture;
(vi) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Engine and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(vii) that each of the conditions specified in Section 10.03, 11.03
or 11.04 of the Lease with respect to such Replacement Engine has
been satisfied.
(3) The appropriate instruments (i) transferring to the Owner
Trustee title to the Replacement Airframe or Replacement Engine to be received
as consideration for the Airframe or Engine to be released and (ii) assigning
to the Owner Trustee the benefit of all manufacturer's and vendor's
warranties, if any, generally available with respect to such Replacement
Airframe or Replacement Engine, and an Indenture and Security Agreement
Supplement subjecting such Replacement Airframe or Replacement Engine to the
Trust Agreement and to the Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing satisfactory to the Indenture Trustee and the Owner Trustee
confirming the accuracy of the information set forth in clause (2)A.(vi) of
this Section 9.08.
(5) The opinion of Davis Polk & Wardwell, special counsel to the
Lessee, or other counsel reasonably satisfactory to the Indenture Trustee,
stating that:
(i) the certificates, opinions and other instruments and/or property
which have been or are therewith delivered to and deposited with the
Indenture Trustee conform to the requirements of this Indenture and the
Lease and, upon the basis of such application, the property so sold or
disposed of may be properly released from the Lien of this Indenture and
all conditions precedent herein provided for relating to such release have
been complied with; and
(ii) the Replacement Airframe or Replacement Engine has been validly
subjected to the Lien of this Indenture and covered by the Lease, the
instruments subjecting such Replacement Airframe or Replacement Engine to
the Lease and to the Lien of this Indenture, as the case may be, have been
duly filed for recordation pursuant to the Transportation Code or any other
law then applicable to the registration of the Aircraft, and no further
action, filing or recording of any document is necessary or advisable in
order to establish and perfect the title of the Owner Trustee to and the
Lien of this Indenture on such Replacement Airframe or Replacement Engine
and the Indenture Trustee would be entitled to the benefits of Section 1110
of the Bankruptcy Code with respect to such Replacement Airframe or
Replacement Engine, provided, that such opinion need not be to the effect
specified in the foregoing clause to the extent that the benefits of such
Section 1110 would not have been, by reason of a change in law or
governmental interpretation thereof after the date hereof, available to the
Indenture Trustee with respect to the Aircraft immediately prior to such
substitution had such Event of Loss not occurred.
Section 9.09. Indenture and Security Agreement Supplement for
Replacements. In the event of the substitution of a Replacement Airframe or a
Replacement Engine as contemplated by Section 10.03 or Article 11 of the
Lease, the Owner Trustee and the Indenture Trustee agree for the benefit of
the Holders and the Lessee, subject to fulfillment of the conditions precedent
and compliance by the Lessee with its obligations set forth in Section 10.03
or Article 11 of the Lease, to execute and deliver an Indenture and Security
Agreement Supplement as contemplated by Section 9.08(3) hereof and, provided
no Event of Default shall have occurred and be continuing, execute and deliver
to the Lessee an appropriate instrument releasing the Airframe or Engine being
replaced from the Lien of this Indenture.
Section 9.10. Effect of Replacement. In the event of the
substitution of a Replacement Airframe or a Replacement Engine as contemplated
by Section 10.01 or Article 11 of the Lease and Section 9.08 hereof, all
provisions of this Indenture relating to the Airframe or Engine or Engines
being replaced shall be applicable to such Replacement Airframe or Replacement
Engine or Engines with the same force and effect as if such Replacement
Airframe or Replacement Engine or Engines were the same Airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine or
Engines being replaced.
Section 9.11. Compensation. The Owner Trustee covenants and agrees
to pay, and the Indenture Trustee shall be entitled to receive, reasonable
compensation and payment or reimbursement for its reasonable advances,
expenses and disbursements (including the reasonable compensation and expenses
and disbursements of its counsel, agents and other persons not regularly in
its employ) in connection with its services rendered hereunder or in any way
relating to or arising out of the administration of the Trust Indenture Estate
and shall have a priority claim on the Trust Indenture Estate for the payment
of such compensation, advances, expenses and disbursements to the extent that
such compensation, advances, expenses and disbursements shall not be paid by
the Lessee, and shall have the right to use or apply any moneys held by it
hereunder in the Trust Indenture Estate toward such payments; provided that,
so long as the Lease is in effect, the Indenture Trustee shall not make any
claim for payment under this Section 9.11 against the Owner Trustee without
first making demand on the Lessee for payment of such claim. The Indenture
Trustee agrees that it shall have no right against any Holder, SSB or the
Owner Participant for any fee as compensation for its services as trustee
under this Indenture.
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing, and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee and, if expressly required herein, to the Owner Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
9.02 and 9.03 hereof) conclusive in favor of the Indenture Trustee and the
Owner Trustee, if made in the manner provided in this Article.
(b) For the purpose of determining the Holders entitled to vote or
consent to any direction, waiver or other action of such Holders under Section
7.10 or 7.11 hereof, the Lessee may set a record date for such vote or consent
by specifying such record date in an Officer's Certificate delivered to the
Indenture Trustee. Such record date shall be a date not more than 15 days
prior to the first solicitation of such vote or consent.
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates. Subject to Sections 9.02 and 9.03 hereof, the execution of any
instrument by a Holder or his agent or proxy may be proved in accordance with
such reasonable rules and regulations as may be prescribed by the Indenture
Trustee. The holding of Certificates shall be proved by the Register or by a
certificate of the Registrar.
Section 10.03. Holders to Be Treated as Owners. Prior to due
presentment for registration of transfer of any Certificate, the Owner
Trustee, the Indenture Trustee, any agent of the Owner Trustee or the
Indenture Trustee, the Paying Agent, if any, the Registrar and the Lessee
shall deem and treat the Person in whose name such Certificate shall be
registered upon the Register as the absolute owner of such Certificate
(whether or not such Certificate shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions of
this Indenture, interest on such Certificate and for all other purposes; and
neither the Owner Trustee nor the Indenture Trustee (nor any agent of the
Owner Trustee or the Indenture Trustee) nor the Paying Agent, if any, nor the
Registrar nor the Lessee shall be affected by any notice to the contrary. All
such payments so made to any such person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Certificate.
Section 10.04. Certificates Owned by Owner Trustee and the Lessee
Deemed Not Outstanding. In determining whether the Holders of the requisite
aggregate principal amount of Certificates have concurred in any direction,
consent or waiver under this Indenture, Certificates which are owned by the
Owner Trustee, the Owner Participant, SSB, the Lessee or by any Affiliate
thereof shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination; provided that for the purpose of determining
whether the Indenture Trustee shall be protected in relying on any such
direction, consent or waiver, only if a Responsible Officer of the Indenture
Trustee has actual knowledge that certain Certificates are so owned by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Owner Trustee, the Owner Participant, SSB or
the Lessee shall such Certificates be so disregarded; and provided further
that if all Certificates which would be deemed Outstanding in the absence of
the foregoing provision are owned by the Owner Trustee, SSB or the Owner
Participant or by any Affiliate thereof, then such Certificates shall be
deemed Outstanding for the purpose of any such determination. Certificates
so owned which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Owner Trustee, the Owner Participant, SSB 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, SSB
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,
SSB, or the Owner Participant are actually named in the Register. Upon
request of the Indenture Trustee, the Owner Trustee, the Owner Participant,
SSB and the Lessee shall furnish to the Indenture Trustee promptly an
Officer's Certificate listing and identifying all Certificates, if any, known
by the Owner Trustee, the Owner Participant, SSB or the Lessee to be owned or
held by or for the account of any of the above-described persons; and, subject
to Sections 9.02 and 9.03 hereof, the Indenture Trustee shall be entitled to
accept such Officer's Certificate as conclusive evidence of the facts set
forth therein and of the fact that all Certificates not listed therein are
outstanding for the purpose of any such determination.
Section 10.05. Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Indenture Trustee, as provided
in Section 10.01, of the taking of any action by the Holders of the percentage
in aggregate principal amount of the Certificates specified in this Indenture
in connection with such action, any Holder of a Certificate, the serial number
of which is shown by the evidence to be included among the serial numbers of
the Certificates the Holders of which have consented to such action, may, by
filing written notice at the Corporate Trust Department and upon proof of
holding as provided in this Article, revoke such action so far as concerns
such Certificate. Except as aforesaid, any such action taken by the Holder
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Certificate and of any Certificates issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Certificate or otherwise. Any action taken by
the Holders of the percentage in aggregate principal amount of the
Certificates specified in this Indenture in connection with such action shall
be conclusively binding upon the Owner Trustee, the Indenture Trustee and the
Holders of all the Certificates.
Section 10.06. ERISA. Any Person, other than the Subordination
Agent, who is acquiring the Certificates will be deemed to represent and
warrant that (i) no assets of an employee benefit plan subject to Title I of
ERISA or an individual retirement account or plan subject to Section 4975 of
the Code, or any trust established under any such plan or account, have been
used to acquire or hold any of the Certificates, or (ii) that one or more
administrative or statutory exemptions from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code applies to its
purchase and holding of the Certificates such that its purchase and holding of
the Certificates will not result in a non-exempt prohibited transaction under
Section 406 of ERISA and Section 4975 of the Code.
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
The Owner Trustee, not individually but solely in its capacity as
Owner Trustee under the Trust Agreement, hereby agrees, whether or not any of
the transactions contemplated hereby shall be consummated, to assume liability
for, and does hereby indemnify, protect, save and keep harmless the Indenture
Trustee, in its individual capacity, and its successors, assigns, agents and
servants solely from the Lessor's Estate, with respect to the claims of the
Indenture Trustee for payment or reimbursement under Section 9.11 hereof and
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on or
measured by any compensation received by the Indenture Trustee for its
services under this Indenture and any taxes excluded from the Lessee's
indemnity obligation under Section 8.01(b) of the Participation Agreement),
claims, actions, suits, costs, expenses or disbursements (including legal fees
and expenses) of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Indenture Trustee (whether or not also
agreed to be indemnified against by any other person under any other document)
in any way relating to or arising out of this Indenture, or any other
Indenture Documents or the enforcement of any of the terms of any thereof, or
in any way relating to or arising out of the manufacture, purchase,
acceptance, nonacceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent and other defects, whether
or not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration
of the Trust Indenture Estate or the action or inaction of the Indenture
Trustee hereunder, except only (a) in the case of willful misconduct or gross
negligence of the Indenture Trustee in the performance of its duties
hereunder, (b) as may result from the inaccuracy of any representation or
warranty of the Indenture Trustee in the Participation Agreement, (c) as
otherwise provided in Section 9.02(c) hereof or (d) as otherwise excluded by
the terms of Article 8 or Article 9 of the Participation Agreement from the
Lessee's general indemnity or general tax indemnity to the Indenture Trustee
under said Article; provided that so long as the Lease is in effect, the
Indenture Trustee shall not make any claim under this Article XI for any claim
or expense indemnified by the Lessee under the Participation Agreement without
first making demand on the Lessee for payment of such claim or expense. The
Indenture Trustee shall be entitled to indemnification, from the Trust
Indenture Estate, for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Article XI to the extent not reimbursed by the Lessee or others, but
without releasing any of them from their respective agreements of
reimbursement; and to secure the same the Indenture Trustee shall have a prior
Lien on the Trust Indenture Estate. The indemnities contained in this Article
XI shall survive the termination of this Indenture and the resignation or
removal of the Indenture Trustee. Upon payment in full by the Owner Trustee
of any indemnity pursuant to this Article XI, the Owner Trustee shall, so long
as no Indenture Event of Default shall have occurred and be continuing, be
subrogated to the rights of the Indenture Trustee, if any, in respect of the
matter as to which the indemnity was paid.
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee. In the case of any
appointment of a successor to the Owner Trustee pursuant to the Trust
Agreement or any merger, conversion, consolidation or sale of substantially
all of the corporate trust business of the Owner Trustee pursuant to the Trust
Agreement, the successor Owner Trustee shall give prompt written notice
thereof to the Indenture Trustee.
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor. (a) The Indenture Trustee or any successor thereto
may resign at any time without cause by giving at least 30 days' prior written
notice to the Owner Trustee, the Owner Participant, the Lessee and each
Holder, such resignation to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In addition, the Majority in
Interest of the Certificate Holders or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders may at any
time remove the Indenture Trustee without cause by an instrument in writing
delivered to the Lessee, the Owner Trustee, the Owner Participant, and the
Indenture Trustee, and the Indenture Trustee shall promptly notify each Holder
thereof of such action in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the case
of the resignation or removal of the Indenture Trustee, the Majority in
Interest of the Certificate Holders, or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders, may
appoint a successor Indenture Trustee by an instrument signed by such Holders.
If a successor Indenture Trustee shall not have been appointed within 30 days
after such notice of resignation or removal, the Indenture Trustee, the Owner
Trustee, the Lessee, the Owner Participant, or any Holder may apply to any
court of competent jurisdiction to appoint a successor Indenture Trustee to
act until such time, if any, as a successor shall have been appointed as
provided above. The successor Indenture Trustee so appointed by such court
shall immediately and without further act be superseded by any successor
Indenture Trustee appointed as provided above.
(b) In case at any time any of the following shall occur:
(i) the Indenture Trustee shall cease to be eligible in accordance
with the provisions of Section 12.03 hereof and shall fail to resign after
written request therefor by the Owner Trustee or by any Holder; or
(ii) the Indenture Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Indenture Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then the Owner Trustee may remove the Indenture Trustee and, with the consent
of the Lessee, appoint a successor trustee by written instrument, in
duplicate, executed by a Responsible Officer of the Owner Trustee, one copy of
which instrument shall be delivered to the Indenture Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of Section
7.13 hereof, any Holder who has been a bona fide Holder for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Indenture Trustee
and the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Indenture
Trustee and appoint a successor trustee, which removal and appointment shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 12.04 hereof. The successor Indenture Trustee so
appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as provided above
within one year from the date of appointment by such court.
Section 12.03. Persons Eligible for Appointment as Indenture
Trustee. There shall at all times be an Indenture Trustee hereunder which
shall be (i)(x) a bank or trust company organized and doing business under the
laws of the United States of America or any state or the District of Columbia
having a combined capital and surplus of at least $100,000,000 or (y) a bank
or trust company whose obligations hereunder are fully guaranteed by a direct
or indirect parent thereof having a combined capital and surplus of at least
$100,000,000 and (ii) a Citizen of the United States authorized under
applicable law to exercise corporate trust powers and subject to supervision of
examination by Federal, state or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Indenture Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Indenture Trustee shall resign immediately in
the manner and with the effect specified in Section 12.02 hereof.
Section 12.04. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 12.02 hereof shall execute
and deliver to the Owner Trustee, the Lessee, and to its predecessor trustee
an instrument accepting such appointment hereunder, in form and substance
reasonably satisfactory to the Owner Trustee, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as trustee herein; but, nevertheless, on
the written request of the Owner Trustee or of the successor trustee, upon
payment of its charges then unpaid, the trustee ceasing to act shall, subject
to Section 14.04 hereof, pay over to the successor trustee all moneys at the
time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Owner Trustee
shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Article XI hereof.
No successor trustee shall accept appointment as provided in this
Section 12.04 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 12.03 hereof.
Upon acceptance of appointment by a successor trustee as provided in
this Section 12.04, the successor trustee shall mail notice thereof by
first-class mail to the Holders at their last addresses as they shall appear
in the Register, and shall mail a copy of such notice to the Lessee and the
Owner Trustee. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 12.02
hereof.
Section 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation into which the Indenture
Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to
the corporate trust business of the Indenture Trustee, shall be the successor
to the Indenture Trustee hereunder, provided that, anything herein to the
contrary notwithstanding, such corporation shall be eligible under the
provisions of Section 12.03 hereof, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Indenture Trustee shall
succeed to the trusts created by this Indenture any of the Certificates shall
have been authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor
Indenture Trustee and deliver such Certificates so authenticated; and, in case
at that time any of the Certificates shall not have been authenticated, any
successor to the Indenture Trustee may authenticate such Certificates either
in the name of any predecessor hereunder or in the name of the successor
Indenture Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Certificates or in this Indenture provided
that the certificate of the Indenture Trustee shall have; provided, that the
right to adopt the certificate of authentication of any predecessor Indenture
Trustee or to authenticate Certificates in the name of any predecessor
Indenture Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
Section 12.06. Appointment of Separate Trustees. (a) At any time or
times, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Indenture Estate may at the time be located or
in which any action of the Indenture Trustee may be required to be performed
or taken, the Indenture Trustee, by an instrument in writing signed by it, may
appoint one or more individuals or corporations to act as a separate trustee
or separate trustees or co-trustee, acting jointly with the Indenture Trustee,
of all or any part of the Trust Indenture Estate, to the full extent that
local law makes it necessary for such separate trustee or separate trustees or
co-trustee acting jointly with the Indenture Trustee to act.
(b) The Indenture Trustee and, at the request of the Indenture
Trustee, the Owner Trustee, shall execute, acknowledge and deliver all such
instruments as may be required by the legal requirements of any jurisdiction
or by any such separate trustee or separate trustees or co-trustee for the
purpose of more fully confirming such title, rights or duties to such separate
trustee or separate trustees or co-trustee. Upon the acceptance in writing of
such appointment by any such separate trustee or separate trustees or
co-trustee, it, he or they shall be vested with such title to the Trust
Indenture Estate or any part thereof, and with such rights, powers, duties and
obligations, as shall be specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee, or the Indenture Trustee and
such separate trustee or separate trustees or co-trustee jointly with the
Indenture Trustee subject to all the terms of this Indenture, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such separate
trustee or separate trustees or co-trustee, as the case may be. Any separate
trustee or separate trustees or co-trustee may, at any time by an instrument
in writing, constitute the Indenture Trustee its or his attorney-in-fact and
agent with full power and authority to do all acts and things and to exercise
all discretion on its or his behalf and in its or his name. In case any such
separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, the title to the Trust Indenture Estate and all assets,
property, rights, powers, duties and obligations and duties of such separate
trustee or co-trustee shall, so far as permitted by law, vest in and be
exercised by the Indenture Trustee, without the appointment of a successor to
such separate trustee or co-trustee unless and until a successor is appointed.
(c) All provisions of this Indenture which are for the benefit of
the Indenture Trustee (including without limitation Article XI hereof) shall
extend to and apply to each separate trustee or co-trustee appointed pursuant
to the foregoing provisions of this Section 12.06.
(d) Every additional trustee and separate trustee hereunder shall,
to the extent permitted by law, be appointed and act and the Indenture Trustee
shall act, subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Indenture Trustee in respect of the receipt, custody, investment and
payment of moneys shall be exercised solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed and
exercised or performed by the Indenture Trustee and such additional trustee
or trustees and separate trustee or trustees jointly except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
Indenture Estate in any such jurisdiction) shall be exercised and performed
by such additional trustee or trustees or separate trustee or trustees;
(iii) no power hereby given to, or exercisable by, any such additional
trustee or separate trustee shall be exercised hereunder by such additional
trustee or separate trustee except jointly with, or with the consent of,
the Indenture Trustee; and
(iv) no trustee hereunder shall be liable either personally or in its
capacity as such trustee, by reason of any act or omission of any other
trustee hereunder.
If at any time the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to any such law, the Indenture Trustee shall
execute and deliver an indenture supplemental hereto and all other instruments
and agreements necessary or proper to remove any additional trustee or
separate trustee.
(e) Any request, approval or consent in writing by the Indenture
Trustee to any additional trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate trustee, as the case may be, to
take such action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 12.06, the
powers of any additional trustee or separate trustee shall not exceed those of
the Indenture Trustee hereunder.
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders.
The Owner Trustee (when authorized by the Owner Participant) and the Indenture
Trustee, without consent of the Holders, may enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge any property or
assets to the Indenture Trustee as security for the Certificates;
(b) to evidence the succession of another corporation to the Owner
Trustee or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Owner
Trustee herein and in the Certificates;
(c) to add to the covenants of the Owner Trustee such further
covenants, restrictions, conditions or provisions as it and the Indenture
Trustee shall consider to be for the protection of the Holders, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Indenture
Event of Default permitting the enforcement of all or any of the several
remedies provided herein; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture
may provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Indenture Event of
Default or may limit the remedies available to the Indenture Trustee upon
such an Indenture Event of Default or may limit the right of not less than
the Majority in Interest of Certificate Holders to waive such an Indenture
Event of Default;
(d) to surrender any right or power conferred herein upon the Owner
Trustee or the Owner Participant;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Owner Trustee may deem necessary or desirable and which
shall not adversely affect the interests of the Holders;
(f) to correct or amplify the description of any property at any
time subject to the Lien of this Indenture or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the Lien of this Indenture or to subject Replacement Airframe or
Replacement Engines to the Lien of this Indenture in accordance with the
provisions hereof or with the Lease or to release from the Lien of this
Indenture property that has been substituted on or removed from the
Aircraft as contemplated in Section 3.07 hereof; provided that supplements
to this Indenture entered into for the purpose of subjecting Replacement
Airframe or Replacement Engines to the Lien of this Indenture need only be
executed by the Owner Trustee and the Indenture Trustee;
(g) to provide for the issuance under this Indenture of Certificates
in coupon form (including Certificates registrable as to principal only)
and to provide for exchangeability of such Certificates with Certificates
issued hereunder in fully registered form, and to make all appropriate
changes for such purpose;
(h) to effect the re-registration of the Aircraft pursuant to
Section 6.03(b) of the Participation Agreement; and
(i) to add, eliminate or change any provision hereunder so long as
such action shall not adversely affect the interests of the Holders.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be contained therein and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Indenture Trustee shall not be obligated to enter into any such supplemental
indenture which adversely affects the Indenture Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any such supplemental indenture may be executed without the consent of
the Holders of Outstanding Certificates, notwithstanding any of the provisions
of Section 13.02 hereof.
Section 13.02. Supplemental Indentures With Consent of Holders.
With the consent (evidenced as provided in Article X) of the Majority in
Interest of Certificate Holders, the Owner Trustee (when authorized by the
Owner Participant) and the Indenture Trustee may, from time to time and at any
time, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders; provided, however, that,
without the consent of each and every Holder and each Liquidity Provider, no
such amendment of or supplement to this Indenture or any indenture
supplemental hereto, or modification of the terms of, or consent under, any
thereof, shall (a) modify any of the provisions of Section 7.11 hereof or this
Section 13.02, (b) reduce the amount or extend the time of payment of any
amount owing or payable under any Certificate or reduce the interest payable
on any Certificate (except that only the consent of the Holder shall be
required for any decrease in any amounts of or the rate of interest payable on
such Certificate or any extension for the time of payment of any amount
payable under such Certificate), or alter or modify the provisions of Article
V hereof with respect to the order of priorities in which distributions
thereunder shall be made as among Holders of different Series of Certificates
or 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 Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental indenture complies with the applicable
provisions of this Indenture.
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures. Certificates authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may bear
a notation in form approved by the Indenture Trustee as to any matter provided
for by such supplemental indenture. If the Owner Trustee or the Indenture
Trustee shall so determine, new Certificates so modified as to conform, in the
opinion of the Owner Trustee and the Indenture Trustee, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Owner Trustee, authenticated by the Indenture Trustee and delivered in
exchange for the Outstanding Certificates.
Section 13.06. No Request Necessary for Lease Supplement or Indenture
and Security Agreement Supplement. Notwithstanding anything contained in
Section 13.02 hereof, no written request or consent of the Indenture Trustee,
any Holder or the Owner Participant pursuant to Section 13.02 hereof shall be
required to enable the Owner Trustee to enter into any supplement to the Lease
with the Lessee in accordance with the terms and conditions of the Lease to
subject a Replacement Airframe or Replacement Engine thereto or to execute and
deliver an Indenture and Security Agreement Supplement pursuant to the terms
hereof.
Section 13.07. Notices to Liquidity Providers. Any request made to
any Holder for consent to any amendment, supplement or waiver pursuant to
Section 7.11, 8.01 or this Article XIII shall be promptly furnished by the
Indenture Trustee to each Liquidity Provider.
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination
of Indenture. If at any time after (a) the Owner Trustee shall have paid or
caused to be paid the principal of and interest on all the Certificates
outstanding hereunder, as and when the same shall have become due and payable,
or (b) the Owner Trustee shall have delivered to the Indenture Trustee for
cancellation all Certificates theretofore authenticated (other than any
Certificates which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.07 hereof) or (c) (i) all
such Certificates not theretofore delivered to the Indenture Trustee for
cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for prepayment
within one year under arrangements satisfactory to the Indenture Trustee for
the giving of notice of prepayment by the Indenture Trustee in the name and at
the expense of the Owner Trustee, and (ii) the Owner Trustee shall have
irrevocably deposited or caused to be deposited with the Indenture Trustee as
trust funds the entire amount in cash (other than moneys repaid by the
Indenture Trustee or any paying agent to the Owner Trustee in accordance with
Section 14.04 hereof) or Government obligations maturing as to principal and
interest in such amounts and at such times as will insure the availability of
cash sufficient to pay at maturity all such Certificates not theretofore
delivered to the Indenture Trustee for cancellation, including principal and
interest due or to become due to such date of maturity as the case may be, and
if, in any such case, the Owner Trustee shall also pay or cause to be paid all
other sums then payable hereunder by the Owner Trustee, then this Indenture
shall cease to be of further effect (except in the case of (c) above as to (A)
rights of registration of transfer and exchange, and the Owner Trustee's right
of optional prepayment pursuant to Section 6.02(a)(ii) hereof, (B)
substitution of mutilated, defaced, destroyed, lost or stolen Certificates,
(C) rights of Holders to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), (D) the rights, obligations, indemnities and immunities of the
Indenture Trustee hereunder and (E) the rights of the Holders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them), and the Indenture Trustee, on demand of the
Owner Trustee accompanied by an Officer's Certificate and an Opinion of
Counsel (covering such matters reasonably requested by, and in form and
substance reasonably satisfactory to, the Indenture Trustee) and at the cost
and expense of the Owner Trustee, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture. The Owner
Trustee agrees to reimburse and indemnify the Indenture Trustee for any costs
or expenses thereafter reasonably and properly incurred and to compensate the
Indenture Trustee for any services thereafter reasonably and properly rendered
by the Indenture Trustee in connection with this Indenture or the
Certificates.
Upon (or at any time after) payment in full to the Indenture Trustee,
as trust funds, of the principal of and interest on and Make-Whole Premium, if
any, and all other amounts due hereunder and under all Certificates and
provided that there shall then be no other amounts due to the Indenture
Trustee hereunder or under the Participation Agreement or otherwise secured
hereby, the Owner Trustee shall direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing the Aircraft from the Lien of this Indenture and
releasing the Indenture Documents from the assignment thereof hereunder, and
the Indenture Trustee shall execute and deliver such instrument as aforesaid
and, at the Owner Trustee's expense, will execute and deliver such other
instruments or documents as may be reasonably requested by the Owner Trustee
to give effect to such release; provided, however, that this Indenture and the
trusts created hereby shall terminate earlier and this Indenture shall be of
no further force or effect upon any sale or other final disposition by the
Indenture Trustee of all property forming a part of the Trust Indenture Estate
and the final distribution by the Indenture Trustee of all moneys or other
property or proceeds constituting part of the Trust Indenture Estate in
accordance with the terms hereof. Except as aforesaid otherwise provided, this
Indenture and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof.
Section 14.02. Application by Indenture Trustee of Funds Deposited
for Payment of Certificates. Subject to Section 14.04 hereof, all moneys
deposited with the Indenture Trustee pursuant to Section 14.01 hereof shall be
held in trust and applied by it to the prompt payment, either directly or
through any Paying Agent, to the Holders of the particular Certificates for
the payment or prepayment of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal,
interest and Make-Whole Premium, if any, but such money need not be segregated
from other funds except to the extent required by law.
Section 14.03. Repayment of Moneys Held by Paying Agent. Upon the
satisfaction and discharge of this Indenture all moneys then held by any
Paying Agent under the provisions of this Indenture shall, upon demand of the
Owner Trustee, be repaid to it or paid to the Indenture Trustee and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
Section 14.04. Transfer of Moneys Held by Indenture Trustee and
Paying Agent Unclaimed for Two Years and Eleven Months. Any moneys deposited
with or paid to the Indenture Trustee or any Paying Agent for the payment of
the principal of or interest or Make-Whole Premium on any Certificate and not
applied but remaining unclaimed for two years and eleven months after the date
upon which such principal, interest or Make-Whole Premium shall have become
due and payable, shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be paid to the
Owner Trustee (or, if the Trust Agreement shall no longer be in effect, to the
Owner Participant) by the Indenture Trustee or such Paying Agent and the
Holder of such Certificate, as a general unsecured creditor, shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Owner Trustee (or the
Owner Participant) for any payment which such Holder may be entitled to
collect, and all liability of the Indenture Trustee, or any Paying Agent with
respect to such moneys shall thereupon cease.
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting. Each of SSB (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 SSB (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, Holders and Liquidity Providers. Nothing in this
Indenture, whether express or implied, shall be construed to give to any
person other than SSB, the Owner Trustee, the Lessee, the Indenture Trustee,
as trustee and in its individual capacity, the Owner Participant, each
Liquidity Provider and the Holders any legal or equitable right, remedy or
claim under or in respect of this Indenture. Upon termination of this
Indenture pursuant to Article XIV hereof, the Indenture Trustee in connection
with the satisfaction of the Indenture shall return to the Owner Trustee all
property (and related documents and instruments) constituting or evidencing
the Trust Indenture Estate.
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease. Notwithstanding any of the provisions of this Indenture or the Trust
Agreement to the contrary, so long as no Event of Default shall have occurred
and be continuing, neither the Indenture Trustee nor the Owner Trustee will
take any affirmative acts that interfere with the peaceful and quiet
possession and enjoyment of the Aircraft by the Lessee.
Section 15.06. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Indenture to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy, and (a) if to the
Owner Trustee, addressed to it c/o State Street Bank and Trust Company, Two
International Place, 4th Floor, Boston, Massachusetts 02110 (telephone: (617)
664-5526, facsimile: (617) 664-5371), Attention: Corporate Trust Department
(with a copy to the Owner Participant at the address provided for notice
pursuant to Section 14.01 of the Participation Agreement), (b) if personally
delivered to the Indenture Trustee, addressed to it at its office at 79 South
Main Street, Salt Lake City, Utah 84111 (telephone: (801) 246-5630, facsimile:
(801) 246-5053), Attention: Corporate Trust Department or (c) if to the Owner
Participant, a Liquidity Provider or the Lessee, addressed to such party at
such address as such party shall have furnished by notice to the Owner Trustee
and the Indenture Trustee, or, until an address is so furnished, addressed to
the address of such party if any, set forth in Section 14.01 of the
Participation Agreement. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the
other parties to this Indenture.
Where this Indenture provides for notice to Holders, such notice
shall be sufficiently given (unless otherwise expressly provided herein) if in
writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at such Holder's last address as it appears in the Register. In any
case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Indenture Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Owner Trustee
and Holders when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient
giving of such notice.
Section 15.07. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Lessee or the Owner Trustee to the Indenture Trustee to take any action under
any of the provisions of this Indenture, the Lessee or the Owner Trustee, as
the case may be, shall furnish to the Indenture Trustee upon request (a) an
Officer's Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and
that the proposed action is in conformity with the requirements of this
Indenture, and (b) an Opinion of Counsel 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 SSB 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 SSB, upon the certificate, statement or
opinion of or representations by an officer or officers of the Lessee or SSB,
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
SSB or of counsel thereto may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant
or firm of accountants employed by the Lessee or the Owner Trustee, as the
case may be, unless such officer or counsel, as the case may be, knows that
the certificate or opinion or representations with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Indenture Trustee shall contain a statement that
such firm is independent.
Section 15.08. Severability. Any provision of this Indenture which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 15.09. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Indenture or the Certificates may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party or other person against whom enforcement of the change,
waiver, discharge or termination is sought; and any waiver of the terms hereof
or of any Certificate shall be effective only in the specific instance and for
the specific purpose given.
Section 15.10. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and permitted assigns of each, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of
such Holder. This Indenture and the Trust Indenture Estate shall not be
affected by any amendment or supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust Agreement, except that each
reference in this Indenture to the Trust Agreement shall mean the Trust
Agreement as amended and supplemented from time to time to the extent
permitted hereby and thereby.
Section 15.11. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for the convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 15.12. Normal Commercial Relations. Anything contained in
this Indenture to the contrary notwithstanding, the Owner Participant, the
Indenture Trustee and any Holder, or any bank or other affiliate of any such
party, may conduct any banking or other financial transactions, and have
banking or other commercial relationships, with the Lessee fully to the same
extent as if this Indenture were not in effect, including without limitation
the making of loans or other extensions of credit to the Lessee for any
purpose whatsoever, whether related to any of the transactions contemplated
hereby or otherwise.
Section 15.13. Governing Law; Counterparts. THIS INDENTURE AND
EACH CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. This Indenture may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed this 28th day of May, 1997 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.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By
------------------------------------
Name: Greg A. Hawley
Title: Vice President
Exhibit A
to
Trust Indenture and Security Agreement
Indenture and Security Agreement Supplement No. ___
Indenture and Security Agreement Supplement No. ___ (Federal Express
Corporation Trust No. N671FE) dated ________, ____, of STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as owner trustee
(herein called the "Owner Trustee") under the Trust Agreement dated as of May
1, 1997 (the "Trust Agreement") between State Street Bank and Trust Company of
Connecticut, National Association and the Owner Participant named therein.
W I T N E S S E T H :
-------------------
WHEREAS, the Trust Agreement provides for the execution and delivery
of this Indenture and Security Agreement Supplement which shall particularly
describe the Aircraft and any Replacement Airframe or Replacement Engine
included in the property covered by the Trust Agreement.
WHEREAS, the Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N671FE) dated as of May 1, 1997 (the "Indenture") between
the Owner Trustee and First Security Bank, National Association (herein called
the "Indenture Trustee") provides for the execution and delivery of an
Indenture and Security Agreement Supplement substantially in the form of this
Indenture and Security Agreement Supplement No. __, which Supplement shall
particularly describe the Aircraft included in the Trust Indenture Estate, and
shall specifically mortgage such Aircraft to the Indenture Trustee.
(1)WHEREAS, the Indenture relates to the Aircraft and the Engines
described in the following paragraph and a counterpart of the Indenture is
attached to and made a part of this Indenture and Security Agreement
Supplement No. 1, and this Indenture and Security Agreement Supplement No. 1,
together with such attachment, is being filed for recordation on or promptly
after the date of this Supplement No. 1 with the Federal Aviation
Administration as one document.
- ------------
(1) This recital is to be included only in the first Indenture Supplement.
(2)Whereas, the Indenture and Indenture and Security Agreement
Supplement No. ___ dated _________________, ______ (the Indenture being
attached to and made a part of such Indenture and Security Agreement
Supplement and filed therewith) have been duly recorded pursuant to Subtitle
VII of Title 49 of the United States Code, on ____________, _____, as one
document and have been assigned Conveyance No. _________.
- ------------
(2) This recital is not to be included in the first Indenture Supplement.
NOW, THEREFORE, this Supplement witnesseth, that, to secure the prompt
payment of the principal of and Make-Whole Premium, if any, and interest on,
and all other amounts due with respect to, all Outstanding Certificates under
the Indenture and all other amounts due hereunder and the performance and
observance by the Owner Trustee of all the agreements, covenants and
provisions for the benefit of the Holders contained in the Indenture, in the
Lease, in the Participation Agreement and the Certificates, and the prompt
payment of any and all amounts from time to time owing under the Participation
Agreement by the Owner Trustee, the Owner Participant or the Lessee to the
Holders and for the uses and purposes and subject to the terms and provisions
of the Indenture and the Certificates, and in consideration of the premises
and of the covenants contained in the Indenture, and of the purchase of the
Certificates by the Holders, and of the sum of $1 paid to the Owner Trustee by
the Indenture Trustee at or before the delivery of the Indenture, the receipt
of which is hereby acknowledged, the Owner Trustee has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged, granted a security
interest in, and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge, grant a security interest in, and confirm,
unto the Indenture Trustee, its successors and assigns, in trust for the equal
and ratable security and benefit of the Holders, in the trust created by the
Indenture, and subject to all of the terms, conditions, provisions and
limitations set forth in the Indenture, a first priority security interest in
and mortgage lien on all estate, right, title and interest of the Owner Trustee
in, to and under the following described property:
Airframe
One (1) Airframe identified as follows:
FAA Manufacturer's
Registration Serial
Manufacturer Model Number Number
- ------------ ----- ------------ --------------
together with all appliances, equipment, instruments and accessories
(including, without limitation, radio and radar) from time to time belonging
thereto, owned by the Owner Trustee and installed in or appurtenant to said
aircraft.
AIRCRAFT ENGINES
Two (2) aircraft engines, each such engine having 750 or more rated takeoff
horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Serial
Manufacturer Model Number
- ------------ ----- --------------
together with all equipment and accessories belonging thereto, by whomsoever
manufactured, owned by the Owner Trustee and installed in or appurtenant to
said aircraft engines.
Together with all substitutions, replacements and renewals of the
property described above, and all property which shall hereafter become
physically attached to or incorporated in the property described above,
whether the same are now owned by the Owner Trustee or shall hereafter be
acquired by it.
As further security for the obligations referred to above and secured
by the Indenture and hereby, the Owner Trustee has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors and assigns, for the
security and benefit of the Holders, in the trust created by the Indenture,
and subject to all of the terms, conditions, provisions and limitations set
forth in the Indenture, all of the estate, right, title and interest of the
Owner Trustee in, to and under the Lease Supplement (other than Excepted
Payments, if any) covering the property described above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, for the benefit and security of
the Holders for the uses and purposes and subject to the terms and provisions
set forth in the Indenture.
This Supplement shall be construed as supplemental to the Indenture
and shall form a part thereof, and the Indenture is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplement is being delivered in the State of New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft/Engines referred to in this Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee and covered by all the terms and conditions of
the Trust Agreement, subject to the Lien of the Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this Supplement to
be duly executed as of the date first written above by one of its officers
thereunto duly authorized.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
Exhibit B
to
Trust Indenture and Security Agreement
[Form of Certificate]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD OR OFFERED FOR SALE IN CONTRAVENTION OF SAID ACT
No. ______ $_____________
EQUIPMENT TRUST CERTIFICATE
(Federal Express Corporation Trust No. N671FE)
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
(Federal Express Corporation Trust No. N671FE)
dated as of May 1, 1997
SERIES ___
Interest Rate Maturity
- ------------- --------
State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee (herein in such capacity called the "Owner
Trustee") under that certain Trust Agreement (Federal Express Corporation
Trust No. N671FE) dated as of May 1, 1997, between the Owner Participant named
therein and State Street Bank and Trust Company of Connecticut, National
Association (herein as such Trust Agreement may be amended or supplemented
from time to time called the "Trust Agreement"), hereby promises to pay to
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Subordination Agent, or its
registered assigns, the principal sum of ________________ _______________
Dollars, payable as set forth below for the Maturity specified above, in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest on the principal outstanding from time to time, semiannually on each
January 15 and July 15, on said principal sum in like coin or currency at the
rate per annum set forth above from the January 15 or the July 15, 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 January 15 or July 15 and before the
following January 15 or July 15, as the case may be, this Certificate shall
bear interest from such January 15 or July 15; provided that, if the Owner
Trustee shall default in the payment of interest due on such January 15 or
July 15, then this Certificate shall bear interest from the next preceding
January 15 or July 15 to which interest on this Certificate has been paid or
duly provided for. The interest so payable on any January 15 or July 15 will,
except as otherwise provided in the Indenture referred to below, be paid to
the person in whose name this Certificate is registered at the close of
business on the January 15 or July 15 preceding such January 15 or July 15,
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 First Security Bank, National Association
(the "Indenture Trustee") maintained for such purpose in immediately available
funds prior to 10:30 A.M. (New York time) on the due date thereof and the
Indenture Trustee shall remit all such amounts received by it to the Holders
at such account or accounts at such financial institution or institutions as
the Holders shall have designated to the Indenture Trustee in writing, in
immediately available funds, such payment to be made if the payment was
received prior to 10:30 A.M. New York time by the Indenture Trustee on any
Business Day, by 12:00 noon New York time on such Business Day; otherwise, the
Indenture Trustee shall make payment promptly, but not later than 11:00 A.M.
New York time on the next succeeding Business Day; provided that, at the
option of the Indenture Trustee or its Paying Agent, interest may be paid by
mailing a check therefor payable to or upon the written order of the
registered holder entitled thereto at his last address as it appears on the
Register. If any amount payable under this Certificate, or under the
Indenture, falls due on a day that is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
State Street Bank and Trust Company of Connecticut, National
Association and First Security Bank, National Association are not acting
individually hereunder, but solely as Owner Trustee and Indenture Trustee,
respectively.
Any Person, other than the Subordination Agent, who is acquiring the
Certificates will be deemed to represent and warrant that (i) no assets of an
employee benefit plan subject to Title I of ERISA or an individual retirement
account or plan subject to Section 4975 of the Code, or any trust established
under any such plan or account, have been used to acquire or hold any of the
Certificates, or (ii) that one or more administrative or statutory exemptions
from the prohibited transaction rules under Section 406 of ERISA and Section
4975 of the Code applies to its purchase and holding of the Certificates such
that its purchase and holding of the Certificates will not result in a
non-exempt prohibited transaction under Section 406 of ERISA and Section 4975
of the Code.
This Certificate is one of a duly authorized issue of Certificates
issued and to be issued under the Trust Indenture and Security Agreement
(Federal Express Corporation Trust No. N671FE) dated as of May 1, 1997 (herein
as amended, supplemented or modified from time to time called the "Indenture")
between the Owner Trustee and the Indenture Trustee, designated as Equipment
Trust Certificates (Federal Express Corporation Trust No. N671FE) limited in
aggregate initial principal amount to $62,317,000 consisting of the following
aggregate principal amounts of Certificates with the interest rates per annum
and Maturities shown:
Initial
Aggregate
Principal
Series Maturity Amount Interest Rate
------ -------- ----------- -------------
A January 15, 2017 $33,352,000 7.50%
B January 15, 2018 $12,507,000 7.52%
C January 15, 2014 $16,458,000 7.65%
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its
principal corporate trust office) for a more complete statement of the terms
and provisions thereof, including a statement of the properties conveyed,
pledged and assigned thereby, the nature and extent of the security, the
respective rights of the Owner Trustee, the Owner Participant, the Lessee, the
Indenture Trustee and the Holders, and the terms upon which the Certificates
are, and are to be, executed and delivered, to all of which terms and
conditions in the Indenture each Holder hereof agrees by its acceptance of
this Certificate.
Capitalized terms not otherwise defined herein shall have the
meanings given to them in the Indenture.
The principal amounts of the Certificates are payable as follows. The
Certificates are subject to redemption in part, pro rata (based on the face
amount thereof), in each case through mandatory sinking fund redemptions
providing for the redemption on the Sinking Fund Redemption Dates of the
aggregate principal amounts set forth below, together with interest accrued
thereon to the applicable Sinking Fund Redemption Date, but without Make-Whole
Premium.
Principal Amount
Series A Series B Series C
Certificates Certificates Certificates
Sinking Fund with a Maturity of with a Maturity of with a Maturity of
Redemption Date January 15, 2017 January 15, 2018 January 15, 2014
- ---------------- ------------------ ------------------ ------------------
July 15, 1997 0 0 0
January 15, 1998 251,178 250,140 115,520
July 15, 1998 415,862 0 0
January 15, 1999 131,798 250,140 333,520
July 15, 1999 535,242 0 0
January 15, 2000 121,651 250,140 333,520
July 15, 2000 545,389 0 0
January 15, 2001 213,402 250,140 333,520
July 15, 2001 453,638 0 0
January 15, 2002 411,194 250,140 333,520
July 15, 2002 255,846 0 0
January 15, 2003 667,040 250,140 385,819
July 15, 2003 0 0 0
January 15, 2004 667,040 250,140 754,137
July 15, 2004 0 0 0
January 15, 2005 667,040 250,140 859,087
July 15, 2005 0 0 0
January 15, 2006 667,040 250,140 829,358
July 15, 2006 0 0 0
January 15, 2007 667,040 250,140 3,774,211
July 15, 2007 0 0 0
January 15, 2008 667,040 250,140 670,131
July 15, 2008 0 0 0
January 15, 2009 667,040 250,140 1,727,695
July 15, 2009 0 0 0
January 15, 2010 667,040 250,140 1,745,042
July 15, 2010 0 0 0
January 15, 2011 667,040 2,755,586 169,963
July 15, 2011 0 0 0
January 15, 2012 667,040 3,067,959 0
July 15, 2012 0 0 0
January 15, 2013 3,511,558 1,433,450 0
July 15, 2013 0 0 0
January 15, 2014 1,240,715 0 4,092,957
July 15, 2014 0 0 0
January 15, 2015 5,752,472 0 0
July 15, 2015 0 0 0
January 15, 2016 6,200,717 0 0
July 15, 2016 0 0 0
January 15, 2017 6,640,938 42,957 0
January 15, 2018 0 1,955,228 0
Except as expressly provided in the Indenture, all payments of
principal, Make-Whole Premium, if any, and interest and other amounts to be
made to the Holder hereof by or at the behest of the Owner Trustee hereunder
or under the Indenture shall be made only from the income and proceeds from
the Lessor's Estate to the extent included in the Trust Indenture Estate and
only to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Lessor's Estate to the extent included in the Trust
Indenture Estate to enable the Indenture Trustee to make such distributions in
accordance with the terms of the Indenture; provided that under the Lease, the
Lessee is obligated to pay or cause to be paid, to the extent such payments
are not required to be made from the assets subject to the Lien of this
Indenture or the income and proceeds received by the Indenture Trustee
therefrom, any net loss arising from the investment of funds held by the
Indenture Trustee which but for an Event of Default would be payable to
Lessee, and each Holder hereof, by its acceptance of this Certificate, agrees
that it will (except as aforesaid) look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for distribution to the
Holder hereof as provided above and that neither the Owner Participant, the
Owner Trustee, State Street Bank and Trust Company of Connecticut, National
Association nor the Indenture Trustee is personally liable to the Holder
hereof for any amounts payable or any liability under this Certificate or
under the Indenture, except as expressly provided in the Indenture, in the
case of State Street Bank and Trust Company of Connecticut, National
Association, the Owner Trustee and the Indenture Trustee.
The Certificates are subject to prepayment in the following
circumstances at the price determined as set forth below.
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08 of
the Indenture replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and the Lessee shall not have revoked
such notice or effected an assumption of the Certificates as provided in
Section 2.12 of the Indenture).
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 of the Indenture.
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) of Indenture.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a Refinancing of the Certificates.
(vi) As contemplated by Section 2.16 of the Indenture and Section
3.05(b) of the Participation Agreement if the Delivery Date has not
occurred on or prior to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
In the case of a prepayment of the Certificates pursuant to clauses
(ii), (iv) and (v) above, the Lessee, in accordance with and subject to the
terms (including timing of notice) of Section 4.02(a) or 10.01 of the Lease or
Article 15 of the Participation Agreement, as the case may be, shall give
irrevocable (subject to Section 6.02(c) of the Indenture) written notice to
the Owner Trustee and the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Owner Trustee is
directed to prepay the Certificates. In the case of a prepayment pursuant to
clause (i) above, the Certificates shall be prepaid on the Loss Payment Date
(as defined in Section 11.02 of the Lease). In the case of a prepayment
pursuant to clause (iii) above, the Certificates shall be prepaid on the date
designated in the notice of prepayment required by Section 8.02 of the
Indenture. In the case of a prepayment of the Certificates pursuant to
clauses (ii) and (iv) above, the Certificates shall be prepaid in full on the
Termination Date. In the case of a prepayment of the Certificates pursuant to
clause (v) above, the Certificates shall be prepaid on the effective date of
the Refinancing. In the case of a prepayment of the Certificates pursuant to
clause (vi) above, the Certificates shall be prepaid on the 15th day following
the Cut-Off Date. In the case of a prepayment of the Certificates pursuant to
clause (vii) above, the Certificates shall be prepaid on the date designated
in the notice referred to therein. The day on which the Certificates are to
be prepaid is herein referred to as the "Prepayment Date". On or prior to the
Prepayment Date, immediately available funds shall be deposited with the
Indenture Trustee in an amount in respect of the Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section
6.02 of the Indenture on or after the applicable Premium Termination Date,
or (ii) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (i), (iii) (if clause (i) of the first
sentence of Section 8.02(a) of the Indenture is applicable) or (vi) above,
the sum of (A) the aggregate principal amount of such Certificates then
Outstanding, (B) accrued interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due the Indenture Trustee under the
Indenture or under the Participation Agreement or the Lease, but excluding
any Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (ii), (iii) (if clause (ii) of the
first sentence of Section 8.02(a) of the Indenture is applicable), (iv),
(v) or (vii) above, the sum of the amounts specified in clauses (A), (B)
and (C) of the preceding clause (1) plus any Make-Whole Premium payable in
respect of all Certificates with respect to which the Premium Termination
Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
If, in accordance with and subject to the satisfaction of the
conditions set forth in Section 7.11 of the Participation Agreement, the
Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall (except for prior acts) be released
and discharged from any further obligations hereunder and under the
Certificates and all other Operative Agreements (except any obligations that
have accrued prior to such assumption).
If an Indenture Event of Default under the Indenture shall occur and
be continuing, the principal of the Certificates may be declared due and
payable in the manner and with the effect provided in the Indenture. The
Indenture provides that in certain events such declaration and its
consequences may be waived the Majority in Interest of Holders. Any such
consent or waiver shall be conclusive and binding upon the Holder of this
Certificate and upon all future Holders and owners of this Certificate and any
Certificate that may be issued in exchange or substitution therefor, whether or
not any notation thereof is made upon this Certificate or such other
Certificates. Moreover, if, and only if, an Event of Default shall occur, the
Indenture Trustee may declare the Lease to be in default, and may, to the
exclusion of the Owner Trustee, exercise one or more of the remedies of the
Owner Trustee provided in the Lease.
The Owner Trustee or the Owner Participant may cure a default by the
Lessee under the Lease arising from the failure of the Lessee to make any
Basic Rent payments under the Lease, but the Owner Trustee and the Owner
Participant, collectively, may not cure more than three consecutive such
failures or more than six such failures in total. The Owner Trustee or the
Owner Participant may cure any other default by the Lessee in the performance
of its obligations under the Lease.
(A) If an Event of Default shall have occurred and be continuing for
more than 180 days or the Certificates shall have been accelerated or (B) an
Event of Default shall have occurred and be continuing for not more than 180
days and the Certificates shall not have been accelerated, the Owner
Participant (or the Owner Trustee on behalf of the Owner Participant) may:
(1) direct the Owner Trustee to cause the prepayment of all the
Outstanding Certificates by notifying the Indenture Trustee of such
election and depositing the sum of amounts contemplated by paragraph
"first" under Section 5.03 of the Indenture and the aggregate
Prepayment Price of all such Certificates with the Indenture Trustee
for distribution to the Holders; or
(2) purchase all of the Outstanding Certificates by paying to the
Indenture Trustee an amount equal to the aggregate unpaid principal
amount of all Outstanding Certificates, plus accrued interest on such
amount to the date of purchase and if such purchase occurs prior to
the Premium Termination Date for such Outstanding Certificate (in the
case of a purchase pursuant to clause (ii) of the first sentence of
Section 8.02(a) of the Indenture but not in the case of clause (i) of
Section 8.02(a) of the Indenture) any Make-Whole Premium applicable
to each Outstanding Certificate, plus all other sums due any Holder
or the Indenture Trustee under the Indenture, the Participation
Agreement or the Lease.
The right of the Holder hereof to institute an action for any remedy
under the Indenture is subject to certain restrictions specified in the
Indenture, except that the right of the Holder of this Certificate to receive
payment of the principal of and interest and Make-Whole Premium, if any, on
this Certificate on or after the respective due dates, or to institute suit
for the enforcement of any such payment, shall not be impaired or affected
without the consent of such Holder.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 and integral multiples thereof. So long as
any of the Certificates remain Outstanding, the Indenture Trustee will
maintain an office or agency where the Certificates may be presented for
payment and a facility or agency in New York, New York where the Certificates
may be presented for registration of transfer and for exchange as provided in
the Indenture. As provided in the Indenture and subject to certain
limitations therein, this Certificate is transferable, and upon surrender of
this Certificate for registration of transfer at the principal corporate trust
office of the Indenture Trustee, or at the office or agency maintained for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Indenture Trustee duly
executed by, the Holder or his attorney duly authorized in writing, one or
more new Certificates of the same Series and 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 Series and Maturity and interest rate and
of authorized denominations, as requested by the Holder surrendering the same,
upon presentation thereof for such purpose at the principal corporate trust
office of the Indenture Trustee, or at an office or agency maintained for such
purpose.
No service charge shall be levied for any such registration of
transfer or exchange, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to the due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, any agent of the Owner
Trustee or the Indenture Trustee, the Paying Agent, if any, the Registrar and
the Lessee shall deem and treat the person in whose name this Certificate is
registered as the absolute owner hereof for all purposes whether or not this
Certificate is overdue, and neither the Owner Trustee, the Indenture Trustee
(nor any agent of the Owner Trustee or the Indenture Trustee), nor the Paying
Agent, if any, the Registrar nor the Lessee shall be affected by notice to the
contrary.
The indebtedness evidenced by this Certificate is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of the Secured Obligations (as defined in
the Indenture) in respect of [Series A Certificate](1), [Series A and Series B
Certificates](2) and this Certificate is issued subject to such provisions.
The Holder of this Certificate, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Indenture Trustee
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in the Indenture and (c) appoints
the Indenture Trustee such Holder's attorney-in-fact for such purpose.(*)
- ------------
(1) To be inserted in the case of a Series B Certificate.
(2) To be inserted in the case of a Series C Certificate.
(*) To be inserted for each Certificate other than any Series A Certificate.
As provided in the Indenture, the Indenture and the Certificates
shall be construed in accordance with and governed by the laws of the State of
New York.
This Certificate shall not be secured by or be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose unless
authenticated by the Indenture Trustee as evidenced by the manual signature of
one of its authorized officers on the certificate below.
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Trust
Certificate (Federal Express Corporation Trust No. N671FE) to be duly executed
in its corporate name by its officer thereunto duly authorized.
Dated: May ___, 1997 STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust Certificates (Federal Express
Corporation Trust No. N671FE) referred to in the within mentioned Indenture.
Dated: May ___, 1997 FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By
------------------------------------
Name: Greg A. Hawley
Title: Vice President
SCHEDULE I
[Reserved]
SCHEDULE II
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N671FE)
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement,
the Series Supplements, the Intercreditor Agreement and the Liquidity
Facilities) referred to below, unless otherwise defined in an Operative
Agreement or the context thereof shall otherwise require. In the case of any
conflict between the provisions of this Schedule and the provisions of any
Operative Agreement, the provisions of such Operative Agreement shall control
the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Additional Insured. As defined in Article 13 of the Lease.
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
located in the United States succeeding to the functions of any of the
foregoing.
Affidavits. The affidavits of citizenship of the Owner Trustee and
the Owner Participant.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment to be 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 to be
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 and
actual state, local and foreign income taxes.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee as
provided in the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe thereunder) together with two Engines
(whether either is an initial Engine or a 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 Aircraft shall mean the Airbus A300F4-605R airframe bearing FAA
Registration Number N671FE and Manufacturer's serial number 778, together with
two General Electric CF6-80C2-A5F engines.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number initially and manufacturer's serial
number specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any Replacement Airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on or prior to the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, each Liquidity Provider and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N671FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Ancillary Agreement II. The Ancillary Agreement II (Federal Express
Corporation Trust No. N671FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Application. The application for registration of the Aircraft with
the FAA in the name of the Owner Trustee.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with an abbreviated report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
Assignment and Assumption Agreement. Any agreement delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Average Life Date. For any Certificate, the date which follows the
prepayment date by a period equal to the Remaining Weighted Average Life of
such Certificate.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France.
AVSA Consent and Agreement. The Consent and Agreement dated as of
May 1, 1997, executed by AVSA.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Bankruptcy Default. An event specified in Section 16.01(e), (f) or
(g) of the Lease which either does or, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Delivery Date and ending at the end of the day on September 20, 2020, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Memphis, Tennessee and the city in the
United States in which the office or agency is maintained by the Pass Through
Trustee for the payment of the Pass Through Certificates, and after the Lien
of the Indenture is discharged, Boston, Massachusetts.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N671FE), 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 either of which would change or would allow a change in
the tax assumptions or structure upon which the lease economics were based,
provided that the Owner Participant or the Lessee has notified the other party
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 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Class A Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Class B Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Collateral Account Control Agreement. The Collateral Account Control
Agreement dated as of May 1, 1997 among State Street Bank and Trust Company,
the Indenture Trustee and the Owner Trustee.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of May 1,
1997 executed by the Manufacturer.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 750 Main Street, Hartford, Connecticut
06103, Attention: Corporation Trust Administration, or such other office at
which the Owner Trustee's corporate trust business shall be administered which
the Owner Trustee shall have specified by notice in writing to the Lessee, the
Owner Participant and the Indenture Trustee.
Corporate Trust Department. The Corporate Trust Department office of
the Indenture Trustee located at 79 South Main Street, Salt Lake City, Utah
84111, Attention: Corporate Trust Department, or such other office at which
the Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to the Lessee,
the Owner Participant and the Owner Trustee.
CRAF Program. Has the meaning specified in Section 7.01(f) of the
Lease.
Cut-Off Date. September 18, 1997.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
Default. Any event or condition which, with the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
Delivery Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
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 has a combined
capital and surplus of at least $100,000,000 and a rating of A or better from
the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Section 7.02(a)(vii), 10.02(c), 10.03, 11.03, 11.04 or 12.02 of
the Lease, together with all Parts related thereto. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the Lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, both Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1997, executed
by the Engine Manufacturer.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N671FE), dated as of May 1, 1997 between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. As defined in Section 8.01(b)(xii) of the Participation
Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by Lessee for any reason whatsoever;
(ii) any damage to such property which results in an insurance settlement with
respect to such property on the basis of a total loss, or constructive or
compromised total loss; (iii) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the Government, any foreign
government or purported government or any agency or instrumentality thereof,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, for a period in excess of 180 days (or such
shorter period ending on the earlier of the expiration of the Term or on the
date on which an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss shall occur)
or (B) by the Government for a period extending beyond the Term; and (iv) as a
result of any law, rule, regulation, order or other action by the Aeronautics
Authority or other governmental body having jurisdiction, the use of the
Aircraft or Airframe in the normal course of air transportation of cargo shall
have been prohibited by virtue of a condition affecting all Airbus A300-600
series aircraft equipped with engines of the same make and model as the
Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period, shall be diligently
carrying forward all steps which are necessary or desirable to permit the
normal use of the Aircraft or Airframe or, in any event, if such use of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if any Event of Loss occurs with respect to the Airframe.
Excepted Payments. Collectively, (i) indemnity, expense,
reimbursement or other payments paid or payable by the Lessee in respect of
the Owner Participant, the Owner Trustee in its individual capacity or any of
their respective successors, permitted assigns, directors, officers,
employees, servants and agents or Affiliates, pursuant to the Participation
Agreement or any other Operative Agreement or any indemnity hereafter granted
to the Owner Participant or the Owner Trustee in its individual capacity
pursuant to the Lease or the Participation Agreement, (ii) proceeds of public
liability insurance (or government indemnities in lieu thereof) in respect of
the Aircraft payable as a result of insurance claims paid for the benefit of,
or losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Article 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) any purchase price paid to the
Owner Participant for its interest in the Trust Estate pursuant to Section
7.03(d) of the Participation Agreement, (vi) subject to Section 3.05 of the
Lease, payments constituting increases in Basic Rent attributable to payments
arising pursuant to Section 5 of the Tax Indemnity Agreement, (vii) any
payments in respect of interest to the extent attributable to payments
referred to in clauses (i) through (vi) above and (viii) any right to demand,
collect or otherwise receive and enforce the payment of any amount described
in clauses (i) through (v) and (vii) above (except with respect to interest
attributable to payments referred to in clause (vi) above).
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. 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 and Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell, assuming the Aircraft (or other property) is unencumbered
by the Lease. In such determination, except for purposes of Section 17.01 of
the Lease (when it shall be determined based upon the actual condition and
location of the Aircraft), 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 and Fair Market Value shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Final Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Fixed Renewal Rent. Semi-annual payments of rent during the Fixed
Renewal Term equal to the lesser of (i) Fair Market Rental as determined as of
the commencement of such Fixed Renewal Term and (ii) 50% of the average actual
semi-annual Basic Rent payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
FPO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
French Pledge Agreement. The French Pledge Agreement dated as of May
1, 1997 between the Owner Trustee and the Indenture Trustee.
FSB. First Security Bank, National Association, a national banking
association.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of SSB, in its individual capacity and as Owner
Trustee and Lessor, the Subordination Agent, in its individual capacity and in
its capacity as Subordination Agent, each Liquidity Provider, the Owner
Participant, the Indenture Trustee, in its individual capacity and as trustee,
the Owner Participant Guarantor and any successor (including any trustee which
may succeed to the Lessor's interest under the Lease), Affiliate, assign,
officer, director, employee, agent and servant of any of the foregoing, the
Lessor's Estate and the Trust Indenture Estate. Neither the Pass Through
Trustee nor any holder of a Pass Through Certificate shall be deemed to be an
Indemnitee.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N671FE), dated as of May 1, 1997, between the
Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N671FE) to be dated the Delivery Date, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
Indenture Trustee's Liens. Any Lien against, on or with respect to
the Aircraft, the Lessor's Estate or the Trust Indenture Estate or any part
thereof 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, (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 or (iii) Taxes imposed against
the Indenture Trustee in its individual capacity in respect of which the Lessee
has not indemnified (and is not obligated to indemnify) the Indenture Trustee
in such capacity.
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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Intercreditor Agreement. The Intercreditor Agreement dated as of May
1, 1997, among the Pass Through Trustee, the Class A Liquidity Provider, the
Class B Liquidity Provider and the Subordination Agent.
Interest Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N671FE) dated as of May 1, 1997, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, including,
without limitation, supplementation by one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N671FE) to be dated the Delivery Date, substantially in
the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA Bill
of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), any Ancillary Agreement, the GTA, the
Engine Warranty Assignment, the Engine Consent, 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 in its individual
capacity or the Owner Participant) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity, or to any of their respective directors, officers,
employees and agents pursuant to Articles 8 and 9 of the Participation
Agreement), and all other property of the Owner Trustee purportedly subjected
to the Lien of the Indenture by the Granting Clause thereof; provided that in
no event shall "Lessor's Estate" include any Excepted Payment.
Lessor's Liens. Liens against, on or with respect to the Aircraft,
the Lessor's Estate or the Trust Indenture Estate or any part thereof, title
thereto or any interest therein arising as a result of (i) claims against the
Lessor, in its individual capacity or as Owner Trustee, or the Owner
Participant, in each case not related to the transactions contemplated by the
Operative Agreements, (ii) acts or omissions of the Lessor in its individual
capacity or as Owner Trustee, and, in the case of the Lessor in its individual
capacity, arising from its gross negligence or willful misconduct or expressly
prohibited under the Operative Agreements and any act or omission of the Owner
Participant which is in violation of any of the terms of the Operative
Agreements, (iii) Taxes or Expenses imposed against the Lessor, in its
individual capacity or as Owner Trustee, Owner Participant, Lessor's Estate or
the trust created by the Trust Agreement which are not required to be
indemnified against by the Lessee pursuant to the Participation Agreement by
reason of Section 8.01(b) or 9.01(b) thereof and which are not required to be
indemnified against by the Lessee pursuant to the Tax Indemnity Agreement, or
(iv) claims against the Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner Participant of its interests in
the Aircraft other than a transfer of the Aircraft pursuant to Section 4.02(a)
or Article 10 or 11 of the Lease and other than a transfer pursuant to the
exercise of the remedies set forth in Article 17 of the Lease.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Liquidity Facility. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Liquidity Provider. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
Loss Payee. Has the meaning specified in Section 13.02(b)(i) of the
Lease.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% of the aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding for
purposes of this definition any Certificates held by (i) the Owner Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the day before the
applicable Prepayment Date (or date of purchase, as the case may be) which an
Independent Investment Banker determines to be equal to the excess, if any, of
(i) the present value of the remaining scheduled payments of such principal
amount or portion thereof and interest thereon (excluding interest accrued
from the immediately preceding Payment Date to such Prepayment Date or date of
purchase, as the case may be) to the Maturity of such Certificate in
accordance with generally accepted financial practices assuming a 360-day year
consisting of twelve 30-day months at a discount rate equal to the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
outstanding principal amount of such Certificate plus accrued interest.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
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 equal to the Debt Rate per annum compounded semi-annually.
Non-U.S. Person. Any Person other than a U.S. Person.
Obsolete Parts. Parts which are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, the Owner Trustee Guaranty,
if any, any Ancillary Agreement entered into by or with the written consent of
the Indenture Trustee, which by its terms is an Operative Agreement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the Engine Consent, the Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Account Control Agreement and any Assignment and Assumption
Agreement.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Outstanding. When used with respect to Certificates, as of the date
of determination and subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and delivered under the
Indenture, with the exception of the following:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money in the necessary amount
has been theretofore deposited with the Indenture Trustee in trust
for the Holders of such Certificates pursuant to Section 14.01 of the
Indenture; provided, that if such Certificates are to be prepaid,
notice of such prepayment has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Indenture Trustee
has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to Article II
of the Indenture.
Owner Participant. The trustor originally named in the Trust
Agreement and any successor thereto, and any Person to which the Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Guarantor. Philip Morris Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Certificate Closing Date by the Owner Participant Guarantor in favor of the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
and any guaranty delivered in compliance with Section 7.03(d) of the
Participation Agreement.
Owner Trustee. SSB, not in its individual capacity except as
otherwise expressly stated, but solely as Owner Trustee under the Trust
Agreement.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the 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 the case may be, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N671FE), dated as of May 1, 1997, among the Lessee, the
Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee, the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee and the Subordination Agent not in its
individual capacity except as otherwise expressly provided therein, but solely
as subordination agent.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine or title to which
remains vested in the Lessor pursuant to Article 8 of the Lease.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
May 1, 1997 between the Lessee and the Pass Through Trustee.
Pass Through Certificates. Any of the Pass Through Certificates,
1997-1-A, the Pass Through Certificates, 1997-1-B or the Pass Through
Certificates, 1997-1-C, in each case as issued by the related Pass Through
Trust; and "Pass Through Certificates" means all of the Pass Through
Certificates issued by each of the Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Corporation 1997-1 Pass
Through Trust Class A, Federal Express Corporation 1997-1 Pass Through Trust
Class B and Federal Express Corporation 1997-1 Pass Through Trust Class C, in
each case formed pursuant to the related Series Supplement in accordance with
the Pass Through Agreement; and "Pass Through Trusts" means all of such Pass
Through Trusts.
Pass Through Trustee. First Security Bank, National Association, a
national banking association, in its capacity as Pass Through Trustee under
the Pass Through Agreement and each Pass Through Trust.
Past Due Rate. In respect of (A) any amount payable to the Owner
Participant or the Owner Trustee a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid
in full equal to 2% plus the Debt Rate and (B) any principal of or interest on
any Certificate or any other amount payable under the Indenture, any
Certificate or any other Operative Agreement that is not paid when due
(whether at Maturity, by acceleration, by optional or mandatory prepayment or
otherwise) to any Holder, the Indenture Trustee or the Pass Through Trustee, a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to (i) in the
case of any such amount payable to the Holder of any Certificate, 2% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. Each January 15 and July 15 commencing on July 15,
1997.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local,
foreign or any agency, instrumentality, division or body thereof).
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
December 27, 2011, with respect to the Series B Certificates, February 5, 2010
and with respect to the Series C Certificates, March 22, 2007.
Prepayment Date. Has the meaning specified in Section 6.02(b) of the
Indenture.
Prepayment Price. Has the meaning specified in Section 6.02(b) of the
Indenture.
Principal Amount. With respect to a Certificate means the stated
original principal amount of such Certificate and, with respect to all
Certificates, means the aggregate stated original principal amounts of all
Certificates.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
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 Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N671FE), dated as of May 1, 1997 between
the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement II.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), December 31 for January 15
Payment Dates and June 30 for July 15 Payment Dates, whether or not such date
is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Register. Has the meaning set forth in Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N670FE, N672FE,
N673FE, N674FE, N583FE and N584FE, each dated as of May 1, 1997, between the
Owner Trustee and the Indenture Trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N581FE, dated as of May 1,
1997, between Wilmington Trust Company, as owner trustee and the Indenture
Trustee, and the Trust Indenture and Security Agreement for Federal Express
Corporation Trust No. N587FE, dated as of December 1, 1996, as amended and
restated as of May 1, 1997, between Wilmington Trust Company, as owner trustee
and the Indenture Trustee.
Remaining Weighted Average Life. On a given date with respect to any
Certificate the number of days equal to the quotient obtained by dividing (i)
the sum of each of the products obtained by multiplying (a) the amount of each
then remaining scheduled payment of principal of such Certificate by (b) the
number of days from and including such prepayment date to but excluding the
dates on which each such payment of principal is scheduled to be made; by (ii)
the then outstanding principal amount of such Certificate.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. One or more terms with respect to which the Lessee has
exercised its option to renew the Lease pursuant to Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. September 20, 2020 and each January 15 and July 15
commencing on July 15, 1997.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Aircraft. Any aircraft substituted for the Aircraft
pursuant to Section 11.03(a) of the Lease.
Replacement Airframe. Has the meaning set forth in Section 11.03 of
the Lease.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) of equal or greater value,
airworthiness, remaining useful life and utility as the Engine being replaced,
together with all Parts relating to such engine; provided, however, that if
such replacement engine is not a General Electric CF6-80C2-A5F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement in which case the definition of Responsible
Officer set forth in Section 3.10 of the Trust Agreement is applicable) or the
Indenture Trustee, any officer in its Corporate Trust Administration, as the
case may be, designated by such Person to perform obligations under the
Operative Agreements, and with respect to any other party, any corporate
officer or (except in the case of the Owner Participant) other employee of a
party who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Secured Obligations. Has the meaning specified in the Granting
Clause of the Indenture.
Securities Act. The Securities Act of 1933, as amended.
Series "A" or "Series A Certificates". Certificates issued and
designated as "Series A" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series A".
Series "B" or "Series B Certificates". Certificates issued and
designated as "Series B" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series B".
Series "C" or "Series C Certificates". Certificates issued and
designated as "Series C" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series C".
Series Supplement or Series Supplements. The Series Supplement
1997-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1997-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1997-1-C to be
executed and delivered by the Lessee and the Pass Through Trustee.
Sinking Fund Redemption Date. Has the meaning specified in Section
6.06 of the Indenture.
Sinking Fund Redemption Price. Has the meaning specified in Section
6.06 of the Indenture.
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Specified Investments. 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 S&P and Moody's,
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) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following
the date of such investment; (d) overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers; or
(e) 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 or 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.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association.
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 Factor" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with so much of the arrears portion of Basic Rent due and owing
through the date of payment of Stipulated Loss Value as does not constitute an
Excepted Payment, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment. Subject to the immediately
preceding sentence, it is understood and agreed that the amounts set forth on
Schedule III of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals and
credits of unearned Basic Rent through such date and, accordingly, no further
accrual or credit shall be required through such date whenever Stipulated Loss
Value is to be calculated with reference to any such date; provided that if
amounts in respect of Stipulated Loss Value are payable under the Operative
Agreements after the Stipulated Loss Determination Date in respect of which
such Stipulated Loss Value was determined, the Lessor shall be compensated
during the period from the Stipulated Loss Determination Date to such payment
date in accordance with the provisions of the Operative Agreements.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease.
Subordination Agent. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Subordination Agent.
Supplemental Rent. (a) All amounts, liabilities and obligations
which the Lessee assumes or agrees to perform or pay under the Lease or under
the Participation Agreement or Tax Indemnity Agreement or any Ancillary
Agreement or any other Operative Agreement to the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, FPO Price and amounts calculated by reference to Termination Value, any
amounts of Make-Whole Premium payable under the Indenture to the extent
provided in Section 3.03 of the Lease, and all amounts required to be paid by
Lessee under the agreements, covenants and indemnities contained in the Lease
or in the Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Basic Rent and (b) all amounts that the
Owner Trustee is obligated to pay in accordance with clause (b) of the last
paragraph of Section 2.04 of the Indenture.
Tax. Has the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N671FE), dated as of May 1, 1997, between the
Lessee and the Owner Participant.
Term. 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 December 31, 2004 in the case of Article 10 of the Lease, and in
the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling
on July 15, 2015, (ii) Section 4.02(a)(D) or (E) of the Lease, a Rent
Payment Date that is on or after the seventh anniversary of the Delivery Date
and (iii) Section 4.02(a)(F) of the Lease, the last day of the Basic Term.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent through such date and,
accordingly, no further accrual or credit shall be required through such date
whenever Termination Value is to be calculated with reference to any such
date; provided that if amounts in respect of Termination Value are payable
under the Operative Agreements after the Termination Date in respect of which
such Termination Value was determined, the Lessor shall be compensated during
the period from the Termination Date to such payment date in accordance with
the provisions of the Operative Agreements.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code, as amended
and in effect on the date of the Lease or as subsequently amended, or any
successor or substituted legislation at the time in effect and applicable, and
the regulations promulgated pursuant thereto.
Treasury Yield. At the time of determination with respect to any
Certificate, the interest rate (expressed as a semi-annual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semi-annual
yield to maturity for United States Treasury securities maturing on the
Average Life Date on such Certificate and trading in the public securities
markets either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in public securities markets, (i) one maturing as close as possible to,
but earlier than, the Average Life Date of such Certificate and (ii) the other
maturing as close as possible to, but later than, the Average Life Date of
such Certificate. In each case as published in the most recent H.15(519) or,
if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Certificate is reported on the most
recent H.15 (519), such weekly average yield to maturity as published in such
H.15(919). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Premium
will be the third Business Day prior to the applicable prepayment date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable prepayment date.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N671FE), dated as of May 1, 1997, between the Owner Participant and
the Owner Trustee in its individual capacity.
Trust Estate. The Lessor's Estate.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. Morgan Stanley & Co. Incorporated, First Chicago
Capital Markets, Inc., Goldman, Sachs & Co. and J.P. Morgan & Co.
Underwriting Agreement. The Underwriting Agreement dated May 22, 1997
among the Lessee and the Underwriters.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
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TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust No. N672FE)
Dated as of May 1, 1997
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 779, REGISTRATION NO. N672FE
==============================================================================
TABLE OF CONTENTS
Page
Initial Recitals......................................................... 1
Granting Clause.......................................................... 2
Habendum Clause.......................................................... 6
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................. 8
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.............. 8
Section 2.02. Execution of Certificates................................ 9
Section 2.03. Certificate of Authentication............................ 9
Section 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest.......................... 9
Section 2.05. Payments from Trust Indenture Estate Only................ 12
Section 2.06. Registration, Transfer and Exchange...................... 13
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates............................................. 14
Section 2.08. Cancellation of Certificates; Destruction Thereof........ 15
Section 2.09. Temporary Certificates................................... 15
Section 2.10. Termination of Interest in Trust Indenture Estate........ 16
Section 2.11. Certificates in Respect of Replacement Aircraft.......... 16
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements..................................... 16
Section 2.13. Establishment of Collateral Account...................... 16
Section 2.14. Investment of Funds on Deposit in the Collateral Account. 17
Section 2.15. Release of Debt Portion and Lien on the Collateral Account
and the Liquid Collateral on Delivery Date............... 18
Section 2.16. Cut-Off Date............................................. 19
Section 2.17. Subordination............................................ 19
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.... 19
Section 3.02. Offices for Payments, etc................................ 20
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee.................................................. 20
Section 3.04. Paying Agents............................................ 20
Section 3.05. Covenants of SSB and the Owner Trustee................... 21
Section 3.06. [Reserved]............................................... 21
Section 3.07. Disposal of Trust Indenture Estate....................... 22
Section 3.08. No Representations or Warranties as to Aircraft or
Documents................................................ 22
Section 3.09. Further Assurances; Financing Statements................. 22
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates.................. 23
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution.................................. 23
Section 5.02. Event of Loss and Replacement; Prepayment................ 24
Section 5.03. Payment After Indenture Event of Default, etc............ 25
Section 5.04. Certain Payments......................................... 27
Section 5.05. Other Payments........................................... 28
Section 5.06. Payments to Owner Trustee................................ 28
Section 5.07. Application of Payments.................................. 28
Section 5.08. Investment of Amounts Held by Indenture Trustee.......... 29
Section 5.09. Withholding Taxes........................................ 30
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity.......................... 30
Section 6.02. Prepayment of Certificates............................... 30
Section 6.03. Notice of Prepayment to Holders.......................... 32
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price.................................................... 33
Section 6.05. Certificates Payable on Prepayment Date.................. 33
Section 6.06. Mandatory Sinking Fund Redemption........................ 33
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default............................... 35
Section 7.02. Remedies................................................. 38
Section 7.03. Return of Aircraft, etc.................................. 40
Section 7.04. Indenture Trustee May Prove Debt......................... 42
Section 7.05. Remedies Cumulative...................................... 44
Section 7.06. Suits for Enforcement.................................... 44
Section 7.07. Discontinuance of Proceedings............................ 45
Section 7.08. Limitations on Suits by Holders.......................... 45
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute
Certain Suits............................................ 45
Section 7.10. Control by Holders....................................... 46
Section 7.11. Waiver of Past Indenture Default......................... 46
Section 7.12. Notice of Indenture Default.............................. 47
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.... 47
Section 8.02. Owner Participant's Right to Elect to Prepay or Purchase the
Certificates............................................. 50
Section 8.03. Certain Rights of Owner Participant...................... 52
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts..................................... 53
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an
Indenture Event of Default............................... 54
Section 9.03. Certain Rights of the Indenture Trustee.................. 56
Section 9.04. Indenture Trustee Not Responsible for Recitals, Disposition
of Certificates or Application of Proceeds Thereof....... 57
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc......................................... 57
Section 9.06. Moneys Held by Indenture Trustee......................... 57
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc......................................... 57
Section 9.08. Replacement Airframes and Replacement Engines............ 58
Section 9.09. Indenture and Security Agreement Supplement for
Replacements............................................. 61
Section 9.10. Effect of Replacement.................................... 61
Section 9.11. Compensation............................................. 61
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders..................... 62
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates............................................ 62
Section 10.03. Holders to Be Treated as Owners......................... 63
Section 10.04. Certificates Owned by Owner Trustee and the Lessee Deemed
Not Outstanding......................................... 63
Section 10.05. Right of Revocation of Action Taken..................... 64
Section 10.06. ERISA................................................... 64
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee....................... 66
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor................................ 66
Section 12.03. Persons Eligible for Appointment as Indenture Trustee... 67
Section 12.04. Acceptance of Appointment by Successor Trustee.......... 67
Section 12.05. Merger, Conversion, Consolidation or Succession to Business
of Indenture Trustee.................................... 68
Section 12.06. Appointment of Separate Trustees........................ 69
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders...... 71
Section 13.02. Supplemental Indentures With Consent of Holders......... 72
Section 13.03. Effect of Supplemental Indenture........................ 74
Section 13.04. Documents to Be Given to Indenture Trustee.............. 74
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures.............................................. 74
Section 13.06. No Request Necessary for Lease Supplement or Indenture and
Security Agreement Supplement........................... 74
Section 13.07. Notices to Liquidity Providers.......................... 74
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture............................................... 75
Section 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates................................. 76
Section 14.03. Repayment of Moneys Held by Paying Agent................ 76
Section 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven Months......... 76
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting................................ 77
Section 15.02. No Legal Title to Trust Indenture Estate in Holders..... 77
Section 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding................................................. 77
Section 15.04. Indenture for Benefit of Owner Trustee, Indenture Trustee,
Owner Participant, Holders and Liquidity Providers...... 77
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease................................................... 78
Section 15.06. Notices................................................. 78
Section 15.07. Officer's Certificates and Opinions of Counsel; Statements
to Be Contained Therein................................. 79
Section 15.08. Severability............................................ 80
Section 15.09. No Oral Modifications or Continuing Waivers............. 80
Section 15.10. Successors and Assigns.................................. 80
Section 15.11. Headings................................................ 80
Section 15.12. Normal Commercial Relations............................. 80
Section 15.13. Governing Law; Counterparts............................. 80
Exhibit A -- Form of Indenture and Security Agreement Supplement
Exhibit B -- Form of Certificate
Schedule I -- [Reserved]
Schedule II -- Definitions
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N672FE)
TRUST INDENTURE AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION
TRUST NO. N672FE) dated as of May 1, 1997 (the "Indenture"), between STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, except as otherwise
specifically set forth herein (when acting in such individual capacity,
"SSB"), but solely as owner trustee (the "Owner Trustee") under the Trust
Agreement, as defined herein, and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, as Indenture Trustee hereunder (the "Indenture
Trustee").
W I T N E S S E T H:
-------------------
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and SSB have, immediately prior to the
execution and delivery of this Indenture, entered into a Trust Agreement
(Federal Express Corporation Trust No. N672FE) dated as of the date hereof (as
amended or otherwise modified from time to time in accordance with the
provisions thereof and of the Participation Agreement, the "Trust Agreement"),
whereby, among other things, SSB has declared a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Lien of this
Indenture for the use and benefit of, and with the priority of payment to, the
holders of the Certificates issued hereunder, and the Owner Trustee is
authorized and directed to execute and deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture, among other
things (i) to provide for the issuance by the Owner Trustee of Certificates as
provided in the Participation Agreement, and (ii) to provide for the
assignment, mortgage and pledge by the Owner Trustee to the Indenture Trustee,
as part of the Trust Indenture Estate hereunder of the Owner Trustee's right,
title and interest in the Liquid Collateral and after the Delivery Date for
the assignment, mortgage and pledge by the Owner Trustee to the Indenture
Trustee, as part of the Trust Indenture Estate hereunder, of among other
things, certain of the Owner Trustee's estate, right, title and interest in
and to the Aircraft and the Indenture Documents and certain payments and other
amounts (other than Excepted Payments) received hereunder or thereunder in
accordance with the terms hereof, as security for, among other things, the
Owner Trustee's obligations to the Certificate Holders and for the benefit and
security of such Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee, and authenticated, issued and delivered
hereunder, the valid obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of the Owner Trustee, enforceable in accordance
with its terms, have been done and performed and have happened.
NOW, THEREFORE, the parties agree as follows:
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual promises contained
herein and to secure (i) the prompt payment of the principal of and Make-Whole
Premium, if any, and interest on, and all other amounts due with respect to,
all the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of the Certificates, and the
prompt payment of any and all amounts from time to time owing under the
Participation Agreement by the Owner Trustee, the Owner Participant or the
Lessee to the Holders (collectively the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions of this Indenture, and in
consideration of the premises and of the covenants in this Indenture and in the
Certificates and of the purchase of the Certificates by their Holders, and of
the sum of $1 paid to the Owner Trustee by the Indenture Trustee at or before
the delivery of this Indenture, the receipt and sufficiency of which is hereby
acknowledged, the Owner Trustee has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged, granted a first priority security
interest in and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and grant a first priority security
interest in and confirm to the Indenture Trustee, its successors and assigns,
in trust for the equal and ratable security and benefit of the Holders from
time to time of the Certificates, a first priority security interest in and
first mortgage Lien on all estate, right, title and interest of the Owner
Trustee in, to and under the following described property, rights and
privileges other than Excepted Payments, which collectively, excluding
Excepted Payments but including all property specifically subjected to the
Lien of this Indenture by the terms hereof, by any Indenture and Security
Agreement Supplement or any mortgage supplemental to this Indenture, are
included within the Trust Indenture Estate, subject always to the rights
granted to the Owner Trustee or the Owner Participant hereunder and to the
other terms and conditions of this Indenture:
(1) The Airframe, as the same is more particularly described in the
Indenture and Security Agreement Supplement and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture; the Engines,
as the same are more particularly described in the Indenture and Security
Agreement Supplement, whether or not such Engines shall be installed in or
attached to the Airframe or any other airframe, and any Replacement Engine
therefor; and all Parts in respect of the Airframe and the Engines and all
records, logs and other documents at any time maintained with respect to the
foregoing property;
(2) The Lease and all Rent thereunder, including, without limitation,
all amounts of Basic Rent and Supplemental Rent, and payments of any kind
thereunder and including all rights of the Owner Trustee to execute any
election or option or to give or receive any notice, consent, waiver or
approval under or in respect of the Lease or to accept any surrender of the
Aircraft or any part thereof as well as any rights, powers or remedies on the
part of the Owner Trustee, whether arising under the Lease or by statute or at
law or in equity or otherwise arising out of any Event of Default;
(3) The Purchase Agreement, the Purchase Agreement Assignment, the
AVSA Consent and Agreement, the Consent and Agreement, the Consent and
Guaranty, the GTA, the Engine Warranty Assignment and the Engine Consent,
AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty,
the Ancillary Agreements and the Participation Agreement (to the extent of
amounts payable to the Owner Trustee thereunder) (collectively, and together
with the Lease, the Trust Agreement and the Certificates, the "Indenture
Documents"), including all rights of the Owner Trustee to execute any election
or option or to give or receive any notice, consent, waiver or approval under
or in respect of any of the foregoing documents and instruments;
(4) All the tolls, rents, issues, profits, products, revenues and
other income (including sales proceeds) of the property subjected or required
to be subjected to the Lien of this Indenture, and all of the estate, right,
title and interest of the Owner Trustee in and to the same and every part of
said property;
(5) The Collateral Account, the Liquid Collateral and all other
moneys and securities (including Permitted Investments) now or hereafter paid
or deposited or required to be paid or deposited to or with the Indenture
Trustee by or for the account of the Owner Trustee pursuant to any term of any
Operative Agreement, except the Tax Indemnity Agreement, and held or required
to be held by the Indenture Trustee hereunder;
(6) All requisition proceeds with respect to the Aircraft or any part
thereof (to the extent of the Owner Trustee's interest therein pursuant to the
terms of the Lease) and all insurance proceeds with respect to the Aircraft or
any part thereof from insurance required to be maintained by the Lessee under
Article 13 of the Lease, but excluding any insurance maintained by the Lessee
and not required under Article 13 of the Lease; and
(7) All proceeds of the foregoing.
EXCLUDING, HOWEVER, from the foregoing grant of the Lien and security
interest of this Indenture and from the Trust Indenture Estate, (i) 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 all rights
to collect and enforce Excepted Payments and (ii) rights granted to or
retained by the Owner Trustee or the Owner Participant hereunder and SUBJECT
TO the following provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, the Owner Trustee and the Owner Participant shall at all times
retain the right, to the exclusion of the Indenture Trustee, (A) to Excepted
Payments and to commence an action at law to obtain or otherwise demand, sue
for or receive and enforce the payment of such Excepted Payments, (B) to
exercise any election or option or make any decision or determination or to
give or receive any notice (including notice of Default), consent, waiver or
approval in respect of any such Excepted Payment, (C) to adjust (and make any
decision or determination or give any notice or consent with respect to) Basic
Rent and the percentages relating to Stipulated Loss Value and Termination
Value and the FPO Price as provided in Section 3.04 of the Lease and Section
15.01 of the Participation Agreement, (D) to exercise any election or option to
make any decision or determination, or to give or receive any notice, consent,
waiver or approval, or to take any other action in respect of, but in each
case only to the extent relating to, Excepted Payments (except for, in respect
of any portion of Basic Rent constituting an Excepted Payment, any action
changing the manner by which such Basic Rent is to be paid), (E) to retain the
rights of the "Lessor" with respect to solicitations of bids, and the election
to retain the Aircraft pursuant to Article 10 of the Lease, (F) to retain the
right of "Lessor" to determine the Fair Market Rental or Fair Market Value
pursuant to Article 4 of the Lease, (G) to exercise all other 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 or purchase options, (H) to retain all rights
with respect to insurance maintained for its own account which Section 13.05
of the Lease specifically confers on the "Lessor", (I) to approve appraisers,
lawyers and other professionals and receive notices, certificates, reports,
filings, opinions and other documents, in each case with respect to matters
relating to the Owner Participant's tax position, (J) to approve any
accountants to be used in the verification of any Rent adjustment, and (K) to
exercise, to the extent necessary to enable it to exercise its rights under
Section 8.03 hereof, the rights of the "Lessor" under Section 17.04 of the
Lease;
(ii) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have the
rights separately but not to the exclusion of the other (agreement of both
required in the case of clause (E) below), (A) to receive from the Lessee all
notices, certificates, reports, filings, opinions of counsel, copies of all
documents and all information which the Lessee is permitted or required to
give or furnish to the "Lessor" pursuant to the Lease or to the Owner Trustee
pursuant to any other Operative Agreement, (B) to exercise inspection rights
pursuant to Section 14.01 of the Lease (provided that if an Indenture Event of
Default shall be continuing, no inspection right of the Owner Trustee shall
interfere with the efforts of the Indenture Trustee to exercise remedies under
the Lease or this Indenture), (C) to maintain separate insurance pursuant to
Section 13.05 of the Lease and to retain all rights with respect to such
insurance maintained for its own account, (D) to give any notice of default
under Section 16.01 of the Lease and (E) the right to consent to changes to
the list of countries on Schedule III to the Participation Agreement;
(iii) subject to the last sentence of this clause (a), (A) so long as
no Indenture Event of Default not constituting an Event of Default shall have
occurred and be continuing (but subject to the provisions of Section 8.01
hereof), the Owner Trustee shall retain the right, to the exclusion of the
Indenture Trustee (or, if an Indenture Event of Default that is also an Event
of Default shall have occurred and be continuing, acting jointly with and not
to the exclusion of the Indenture Trustee), to exercise all rights, elections
and options of the Lessor in connection with the return of the Aircraft under
Article 12 of the Lease (but not Article 17 thereof, it being understood that
the Indenture Trustee shall have the exclusive right to exercise remedies
pursuant to such Article 17, including in respect of any related return of the
Aircraft pursuant to Article 12 of the Lease), including the right to approve
as satisfactory any accountants, engineers, appraisers or counsel to render
services for or issue appraisals, reports, certificates or opinions to the
Owner Trustee and to exercise all rights, elections and options of the Lessor
in connection with the return of the Aircraft pursuant to the express
provisions of the Operative Agreements, and (B) so long as no Indenture Event
of Default not constituting an Event of Default shall have occurred and be
continuing (but subject to the provisions of Section 8.01 hereof), the Owner
Trustee shall retain the right, jointly with the Indenture Trustee (agreement
of both not being required), to further assurances and financial information
from the Lessee pursuant to Section 19.01 of the Lease (other than the right
to receive any funds to be delivered to the "Lessor" under the Lease (except
funds delivered with respect to Excepted Payments) and under the Purchase
Agreement;
(iv) subject to the last sentence of this clause (a), at all times
the Owner Trustee shall have the right as Lessor, but not to the exclusion of
the Indenture Trustee, to seek specific performance of the covenants of the
Lessee under the Lease relating to the protection, insurance, maintenance,
possession and use of the Aircraft; and
(v) at all times the Owner Trustee and the Owner Participant shall
have the rights granted to them under Articles VI, VIII and X and Section 7.02
hereof.
Notwithstanding the foregoing, but subject always to the provisions of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) (other than
with respect to Excepted Payments) declare the Lease to be in default under
Article 17 thereof or any statute (including, without limitation, Article 2-A
of the Uniform Commercial Code) and (B) subject only to the provisions of this
Indenture, (other than in connection with Excepted Payments) exercise the
remedies set forth in such Article 17 of the Lease any statute (including
without limitation Article 2-A of the Uniform Commercial Code), at law and in
Article 7 hereof.
(b) The foregoing provisions in paragraph (a) above shall be equally
applicable to all rights of the Indenture Trustee in respect of Ancillary
Agreement I and Ancillary Agreement II, whether such rights are granted
directly to the Indenture Trustee under such agreements or are granted under
the Granting Clause of this Indenture.
(c) The leasehold interest granted to the Lessee by the Lease shall
not be subject to the security interest granted by this Indenture, and nothing
in this Indenture shall affect the rights of the Lessee under the Lease so
long as no Event of Default has occurred and is continuing.
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 and the
rights of the Owner Trustee and the Owner Participant under this Indenture.
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Documents to perform all of the obligations assumed by it under any
of those documents, all in accordance with and pursuant to the terms and
provisions of those documents, and the Indenture Trustee and the Holders of
the Certificates shall have no obligation or liability under the Indenture
Documents by reason of or arising out of the assignment under this Indenture,
nor shall the Indenture Trustee or the Holders of the Certificates be required
or obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Documents or, except as expressly
provided in this Indenture, to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or present or file
any claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
Effective upon the occurrence and continuance of an Indenture Event of
Default, the Owner Trustee hereby constitutes the Indenture Trustee the true
and lawful attorney of the Owner Trustee, irrevocably, with full power (in the
name of the Owner Trustee or otherwise), subject to the terms and conditions
of this Indenture, to ask, require, demand, receive, compound and give
acquittance for any and all Basic Rent, Supplemental Rent payable to the Owner
Trustee, Stipulated Loss Value and Termination Value payments, insurance
proceeds and any and all moneys and claims for moneys due and to become due
under or arising out of the Lease (subject to Section 8.01 hereof) or the
other Indenture Documents (other than Excepted Payments), to endorse any
checks or other instruments or orders in connection with the same and to file
any claims, take any action or institute any proceeding which the Indenture
Trustee may deem to be necessary or advisable in the premises.
Under the Lease the Lessee is directed to make all payments of Rent
(other than Excepted Payments not constituting Basic Rent) payable to the
Owner Trustee and all other amounts (other than Excepted Payments not
constituting Basic Rent) 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 not constituting Basic Rent.
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, at the
expense of the Lessee, promptly and duly execute and deliver or cause to be
duly executed and delivered any and all such further instruments and documents
as the Indenture Trustee may reasonably deem desirable in obtaining the full
benefits of the assignment hereunder and of the rights and powers herein
granted; provided, however, that the Owner Trustee shall have no obligation to
execute and deliver or cause to be executed or delivered to the Indenture
Trustee any such instrument or document if such execution and delivery would
result in the imposition of additional liabilities on the Owner Trustee or the
Owner Participant or would result in a burden on the Owner Participant's
business activities, unless the Owner Trustee or the Owner Participant, as the
case may be, is indemnified to its reasonable satisfaction against any losses,
liabilities and expenses incurred in connection with such execution and
delivery.
The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect and shall not have been terminated pursuant
to Section 14.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except in
respect of Excepted Payments or otherwise as provided in or permitted by this
Indenture, enter into an agreement amending or supplementing any of the
Indenture Documents, settle or compromise any claim (other than claims in
respect of Excepted Payments) against the Lessee arising under any of the
Indenture Documents, or 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.
Concurrently with the delivery of this Indenture, the Owner Trustee
has delivered to the Indenture Trustee executed counterparts of the Trust
Agreement and the chattel paper original counterpart of the Lease.
It is hereby further covenanted and agreed by and between the parties
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise requires,
capitalized terms utilized herein shall have the meanings set forth in
Schedule II hereto for all purposes of this Indenture and shall be equally
applicable to both the singular and plural forms of the terms defined.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.
Forthwith upon the execution and delivery of this Indenture, and from time to
time thereafter, Certificates in an aggregate principal amount not in excess
of the amount specified in Section 2.04 hereof (except as otherwise provided
in Sections 2.06 and 2.07 hereof) shall be executed by the Owner Trustee and
delivered to the Indenture Trustee for authentication, and the Indenture
Trustee shall thereupon authenticate and deliver said Certificates to or upon
the oral or written order of the Owner Trustee, signed, if written, by an
authorized officer of the Owner Trustee, without any further action by the
Owner Trustee.
Section 2.02. Execution of Certificates. The Certificates shall be
signed on behalf of the Owner Trustee by an authorized officer of SSB. 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 SSB 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 SSB, 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 SSB; 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 SSB, although
at the date of the execution and delivery of this Indenture any such person
was not such an officer. Certificates bearing the facsimile signatures of
individuals who were authorized officers of SSB 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 (subject
to Section 15.01(d) of the Participation Agreement) 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 Certificate Closing Date, shall be issued
in three separate series consisting of Series A, Series B and Series C and
shall be issued in the Maturities and principal amounts, and shall bear
interest at the rates per annum, specified in the form of Certificate set forth
in Exhibit B.
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Certificates are admitted to trading, or to
conform to general usage.
Each Certificate shall bear interest from the date of original
issuance thereof or from the most recent date to which interest has been paid
and duly provided for, as the case may be, which shall be payable on the dates
specified on the face of the form of Certificate set forth in Exhibit B hereto
until the principal thereof is paid. Interest shall be calculated on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding the preceding paragraph, each Certificate shall bear
interest at the Past Due Rate on any principal, interest and any other amount
payable hereunder or under such Certificate, which shall not be paid in full
when due (whether at stated maturity, by acceleration, by mandatory prepayment
or otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full, payable from time to time on
demand of the Indenture Trustee.
The principal of, and Make-Whole Premium, if any, and interest on, the
Certificates shall be payable at the Corporate Trust Department of the
Indenture Trustee or at any office or agency maintained for such purpose
pursuant to Section 3.02 hereof in immediately available funds prior to 10:30
A.M. (New York time) on the due date thereof and the Indenture Trustee shall
remit all such amounts received by it to the Holders at such account or
accounts at such financial institution or institutions as the Holders shall
have designated to the Indenture Trustee in writing, in immediately available
funds, such payment to be made if the payment was received prior to 10:30 A.M.
New York time by the Indenture Trustee on any Business Day, by 12:00 noon New
York time on such Business Day; otherwise, the Indenture Trustee shall make
payment promptly, but not later than 11:00 A.M. New York time on the next
succeeding Business Day; provided, however, that interest may be payable at the
option of the Indenture Trustee or its Paying Agent, as defined in Section
3.04, by mailing checks for such interest payable to or upon the written order
of the Holders entitled thereto as they shall appear on the Register. If any
amount payable under the Certificates, or under this Indenture, falls due on a
day that is not a Business Day, then such sum shall be payable on the next
succeeding Business Day, without (provided that payment is made on such next
succeeding Business Day) additional interest thereon for the period of such
extension.
The Holder at the close of business on any Record Date with respect
to any Payment Date shall be entitled to receive the interest if any payable
on such Payment Date notwithstanding any transfer or exchange of such
Certificate subsequent to the Record Date and prior to such Payment Date,
except if and to the extent the Owner Trustee shall default in the payment of
the interest due on such Payment Date, in which case such defaulted interest
shall be paid to the Holder at the close of business on a subsequent Record
Date (which shall be not less than five (5) or more than fifteen (15) Business
Days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Owner Trustee to the Holders not
less than fifteen (15) days preceding such subsequent Record Date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 5.04 hereof (a) any and all indemnity
amounts received by the Owner Trustee which are payable by the Lessee to (i)
the Indenture Trustee in its individual capacity, (ii) the Subordination Agent
or (iii) each Liquidity Provider, in each case pursuant to Article 8 or 9 of
the Participation Agreement (it being acknowledged that the Lessee has been
instructed to pay such amounts to the Person or Persons entitled thereto) and
(b) the Owner Trustee's pro rata share of all amounts owed to each Liquidity
Provider by the Subordination Agent under each Liquidity Facility other than
amounts due as (i) repayments of the principal of advances thereunder, and (ii)
interest on Interest Drawings and Final Drawings except to the extent included
in Net Interest and Related Charges. As used in this Section, the Owner
Trustee's pro rata share means as of any time:
(A) with respect to all amounts other than Net Interest and
Related Charges, a fraction the numerator of which is the aggregate
principal balance then outstanding of the Certificates issued under
this Indenture (other than the Series C Certificates) and the
denominator of which is the aggregate principal balance of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates), plus
(B) with respect to all Net Interest and Related Charges (x)
if there exists a Payment Default under any Certificate issued under
this Indenture a fraction, the numerator of which is the aggregate
principal balance then outstanding of Certificates issued under this
Indenture (other than the Series C Certificates) and the denominator
of which is the aggregate principal balance then outstanding of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates) under which there exists a
Payment Default or (y) at all other times, zero.
As used in this Section, "Net Interest and Related Charges" means the sum of
(i) the amount, if any, by which interest payable to each Liquidity Provider
on any Interest Drawing and/or Final Drawing exceeds the amount which would be
payable if such drawings bore interest at the weighted average Past Due Rate
applicable to amounts in default on all Certificates plus (ii) any amounts
payable under Section 3.01, Section 3.02, Section 3.03, Section 3.09 or
Section 7.07 of each Liquidity Facility (or similar provisions of any
replacement Liquidity Facility) which result from any Interest Drawing or
Final Drawing. As used in this Section, a Payment Default when used in
connection with a Certificate issued hereunder or a Certificate issued under
any Related Indenture means a default in the payment of principal thereof or
interest thereon (which default has not been cured), other than solely because
of acceleration.
Section 2.05. Payments from Trust Indenture Estate Only. All
payments to be made by the Owner Trustee under this Indenture shall be made
only from the income and the proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate and from any other amounts of the type
described in Section 5.01 hereof (but only to the extent actually received by
the Indenture Trustee) and only to the extent that the Owner Trustee shall
have sufficient income or proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate (and such other amounts) to enable the
Indenture Trustee to make distributions of the amounts due in respect of the
Certificates in accordance with the terms hereof and thereof. Each Holder by
its acceptance of a Certificate agrees that it will look solely to the income
and proceeds from the Trust Indenture Estate (and such other amounts of the
type described in Section 5.01 hereof but only to the extent actually received
by the Indenture Trustee) to the extent available for distribution to it as
provided herein and that neither the Owner Participant, the Owner Trustee, SSB
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 SSB, the Owner Trustee or the Indenture
Trustee.
SSB 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 SSB's gross negligence or willful misconduct, or as
otherwise expressly provided herein or in the Participation Agreement.
If (1) all or any part of the Lessor's Estate becomes the property of
a debtor subject to the reorganization provisions of the Bankruptcy Code, (2)
pursuant to such reorganization provisions the Owner Participant is required,
by reason of the Owner Participant being held to have recourse liability to
the debtor or the trustee of the debtor directly or indirectly, to make
payment on account of any amount payable as principal of or interest,
Make-Whole Premium or other amounts payable on the Certificates, and (3) the
Indenture Trustee actually receives any Recourse Amount which reflects any
payment by the Owner Participant on account of (2) above, then the Indenture
Trustee shall promptly refund to the Owner Participant such Recourse Amount.
Nothing contained in this paragraph shall prevent the Indenture Trustee from
enforcing any personal recourse obligation (and retaining the proceeds
thereof) of the Owner Participant under the Participation Agreement, or from
retaining any amount paid by the Owner Participant under Sections 5.01, 8.02
and 8.03 hereof.
Section 2.06. Registration, Transfer and Exchange. The Indenture
Trustee will keep, on behalf of the Owner Trustee, at each office or agency to
be maintained for the purpose as provided in Section 3.02 hereof a Register or
Registers on which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Certificates
as provided in this Article. Such Register shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable period of time.
Upon due presentation for registration of transfer of any Certificate
at any such office or agency, the Owner Trustee shall execute and the
Indenture Trustee shall authenticate and deliver in the name of the transferee
or transferees a new Certificate or Certificates of the same Series and
Maturity, principal amount and interest rate and in authorized denominations
for an equal aggregate principal amount; provided, that such Certificate being
transferred shall be cancelled in accordance with Section 2.08 hereof
simultaneously with the issuance of the new Certificate.
Any Certificate or Certificates may be exchanged for a Certificate or
Certificates of the same Series and Maturity and interest rate but in other
authorized denominations, in an equal aggregate principal amount.
Certificates to be exchanged shall be surrendered at any office or agency to
be maintained by the Indenture Trustee for the purpose as provided in Section
3.02 hereof, and the Owner Trustee shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor the Certificate or
Certificates which the Holder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously or previously outstanding.
All Certificates presented for registration of transfer, exchange,
prepayment or payment shall (if so required by the Owner Trustee or the
Indenture Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Owner
Trustee and the Indenture Trustee duly executed by the Holder or its attorney
duly authorized in writing and (except in the case of transfers pursuant to
Section 15.01 of the Participation Agreement) the Indenture Trustee may
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act.
The Indenture Trustee may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of Certificates. No
service charge shall be levied for any such transaction.
The Indenture Trustee shall not be required to exchange or register a
transfer of any Certificates (a) for a period of fifteen (15) days immediately
preceding the first mailing of notice of prepayment of such Certificates or
(b) with respect to which notice of prepayment has been given pursuant to
Section 6.03 hereof and such notice has not been revoked.
All Certificates issued upon any transfer or exchange of Certificates
shall be valid obligations of the Owner Trustee, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the
Certificates surrendered upon such transfer or exchange.
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates. In case any temporary or definitive Certificate shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Owner
Trustee in its discretion may execute, and upon the oral or written request of
any officer of SSB, the Indenture Trustee shall authenticate and deliver, a
new Certificate of like Maturity, principal amount and interest rate as the
Certificate being replaced, bearing a number not contemporaneously or
previously outstanding, in exchange and substitution for the mutilated or
defaced Certificate, or in lieu of and substitution for the Certificate so
apparently destroyed, lost or stolen. In the case of any Certificate so
apparently destroyed, lost or stolen, the applicant for a substitute
Certificate shall furnish to the Owner Trustee and to the Indenture Trustee
such security or indemnity as may be required by them to indemnify and defend
and to hold each of them harmless and evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Upon the issuance of any substitute Certificate, the Owner Trustee or
the Indenture Trustee may require payment from the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses incurred in connection therewith.
In case any Certificate which has matured or is about to mature, or has been
called for prepayment in full, shall become mutilated or defaced or be
apparently destroyed, lost or stolen, the Owner Trustee may, instead of
issuing a substitute Certificate, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated or defaced
Certificate), if the applicant of any Certificate so apparently destroyed,
lost or stolen, for such payment shall furnish to the Owner Trustee and to the
Indenture Trustee such security or indemnity as any of them may require to
hold each of them harmless and the applicant shall also furnish to the Owner
Trustee and the Indenture Trustee evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Every substitute Certificate issued pursuant to the provisions of
this Section by virtue of the fact that any Certificate is apparently
destroyed, lost or stolen shall constitute an original additional contractual
obligation of the Owner Trustee, whether or not the apparently destroyed, lost
or stolen Certificate shall be enforceable at any time by anyone and shall be
entitled to all the security and benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and proportionately
with any and all other Certificates duly authenticated and delivered
hereunder. All Certificates shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced, or
apparently destroyed, lost or stolen Certificates and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
Section 2.08. Cancellation of Certificates; Destruction Thereof. All
Certificates surrendered for payment, prepayment, registration of transfer or
exchange, if surrendered to the Owner Trustee or any agent of the Owner
Trustee or the Indenture Trustee, shall be delivered to the Indenture Trustee
for cancellation or, if surrendered to the Indenture Trustee, shall be
cancelled by it; and no Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Indenture
Trustee shall destroy cancelled Certificates held by it and deliver a
certificate of destruction to the Owner Trustee. If the Owner Trustee shall
acquire any of the Certificates, such acquisition shall not operate as a
prepayment or satisfaction of the indebtedness represented by such
Certificates unless and until the same are delivered to the Indenture Trustee
for cancellation.
Section 2.09. Temporary Certificates. Pending the preparation of
definitive Certificates, the Owner Trustee may execute and, upon the oral or
written request of an officer of SSB, the Indenture Trustee shall authenticate
and deliver temporary Certificates (printed, lithographed, typewritten or
otherwise reproduced, in each case in form satisfactory to the Indenture
Trustee). Temporary Certificates shall be issuable as registered Certificates
without coupons, of any authorized denomination, and substantially in the form
of the definitive Certificates but with such omissions, insertions and
variations as may be appropriate for temporary Certificates, all as may be
determined by the Owner Trustee with the concurrence of the Indenture Trustee.
Temporary Certificates may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Certificate shall be
executed by the Owner Trustee and, upon the oral or written request of an
authorized officer of the Owner Trustee, be authenticated by the Indenture
Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Certificates. Without unreasonable delay
the Owner Trustee shall execute and shall furnish definitive Certificates and
thereupon temporary Certificates shall be surrendered in exchange therefor
without charge at any office or agency to be maintained by the Indenture
Trustee for the purpose pursuant to Section 3.02 hereof, and, upon the oral
or written request of an authorized officer of the Owner Trustee, the
Indenture Trustee shall authenticate and deliver in exchange for such
temporary Certificates an equal aggregate principal amount of definitive
Certificates of the same Series and 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 and under the other Operative Agreements shall have been paid in
full.
Section 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture and Security Agreement Supplement
covering a Replacement Airframe and/or Replacement Engine, as provided in
Section 9.09 hereof, each Certificate shall be deemed to have been issued in
connection with such Replacement Airframe and/or Replacement Engine and each
Certificate issued thereafter upon a transfer or exchange of, or as a
replacement for, a Certificate, shall be designated as having been issued in
connection with such Replacement Airframe and/or Replacement Engine, but
without any other change therein except as provided for in this Article II.
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements. If, in accordance with and subject to the satisfaction
of the conditions set forth in Section 7.11 of the Participation Agreement,
the Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall be released and discharged from any
further obligations hereunder and under the
Certificates and all other Operative Agreements (except for any recourse
obligations of the Owner Participant or the Owner Trustee in its individual
capacity with respect to matters arising out of events occurring prior to such
assumption).
Section 2.13. Establishment of Collateral Account. (a) The
Indenture Trustee shall, pursuant to the Collateral Account Control Agreement,
establish, or cause to be established, with State Street Bank and Trust
Company, who shall represent and warrant that it is a financial intermediary
(as defined in Section 8-313(4) of the Connecticut Uniform Commercial Code),
in its name as secured party hereunder an Eligible Deposit Account entitled
"First Security Bank, National Association, as secured party under the Trust
Indenture and Security Agreement (Federal Express Corporation Trust No.
N672FE) dated as of May 1, 1997, 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) The Collateral Account Control Agreement shall require State
Street Bank and Trust Company to send confirmation to the Indenture Trustee
and the Lessee that it has credited the Specified Investments to the
Collateral Account and to make appropriate entries on its books identifying
the Specified Investments as pledged to the Indenture Trustee.
Section 2.14. Investment of Funds on Deposit in the Collateral
Account. (a) Funds deposited in the Collateral Account shall be invested and
reinvested by the Indenture Trustee, subject to Section 17.02 of the
Participation Agreement, at the risk of the Owner Trustee, in Specified
Investments selected by the Lessee and approved by the Indenture Trustee for
the account of the Owner Trustee in accordance with Section 2.14(b) below;
provided, however, that if Specified Investments meeting the requirements of
Section 2.14(b) are not available on any day on which funds are to be invested
as contemplated by the preceding provisions of this Section 2.14(a), the
Indenture Trustee may leave such funds in the Collateral Account 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 and approved by the Indenture Trustee for the account of the Owner
Trustee which mature on or prior to August 19, 1997. 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 referred to in the
preceding sentence may be invested in Specified Investments which mature
within 14 days after the rescheduled Delivery Date. If no Delivery Date
occurs, then any Specified Investment shall mature no later than the 15th day
after the Cut-Off Date.
(c) If for any reason the Indenture Trustee shall be required to
make any distributions of the Liquid Collateral prior to the maturity date of
any Specified Investment, the Indenture Trustee shall cause the same to be
sold in accordance with standard commercial practices, and the Lessee, for the
account of the Owner Trustee, shall forthwith compensate the Indenture Trustee
for any Losses as provided in Section 17.02(a) of the Participation Agreement.
(d) Pursuant to Section 17.02(b) of the Participation Agreement,
interest payable on the Certificates during the period in which funds are on
deposit in the Collateral Account shall be paid by the Lessee.
Section 2.15. Release of Debt Portion and Lien on the Collateral
Account and the Liquid Collateral on Delivery Date. (a) 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, subject to the proviso to Section 3.02(a) of the Participation
Agreement, 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.
Subject to the proviso to Section 3.02(a) of the Participation Agreement, such
amount so released, together with the amount of any Losses received from the
Lessee pursuant to Section 17.02(a) of the Participation Agreement, shall be
used to finance a portion of the Purchase Price payable by (x) the Owner
Trustee as contemplated by Section 3.02(a) of the Participation Agreement or
(y) if 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.
(b) The Lien of this Indenture on the Collateral Account and the
Liquid Collateral shall terminate on the Delivery Date following the transfer
of amounts described in Section 3.02(a) of the Participation Agreement.
Section 2.16. Cut-Off Date. In the case of a prepayment under
Section 6.02(a)(vi) hereof, the Indenture Trustee shall release from the
Collateral Account all amounts held in the Collateral Account on such date.
Such amount so released, together with the amount of any Losses received from
the Lessee pursuant to Sections 17.02(a) and 17.02(c) of the Participation
Agreement, shall be applied to pay amounts due under Section 6.02(b)(1) hereof
on the 15th day following 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.
Section 2.17. Subordination. (a) The Owner Trustee and, by
acceptance of its Certificates of any Series, each Holder of such Series,
hereby agree that no payment or distribution shall be made on or in respect of
the Secured Obligations owed to such Certificate Holder of such Series,
including any payment or distribution of cash, property or securities after
the commencement of a proceeding of the type referred to in clause (v), (vi)
or (vii) of Section 7.01 hereof, except as expressly provided in Article V
hereof.
(b) By the acceptance of its Certificates of any Series
(other than Series A), each Holder of such Series agrees that in the event
that such Holder, in its capacity as a Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series which it is
not entitled to received under this Section 2.17 or Article V hereof, it will
hold any amount so received in trust for the Senior Holder (as defined in
Section 2.17(c) hereof) and will forthwith turn over such payment to the
Indenture Trustee in the form received to be applied as provided in Article V
hereof.
(c) As used in this Section 2.17, the term "Senior Holder"
shall mean, (i) the Holders of Series A Certificates until the Secured
Obligations in respect of Series A Certificates have been paid in full, (ii)
after the Secured Obligations in respect of Series A Certificates have been
paid in full, the Holders of Series B Certificates until the Secured
Obligations in respect of Series B Certificates have been paid in full and
(iii) after the Secured Obligations in respect of Series B Certificates have
been paid in full, the Holders of Series C Certificates until the Secured
Obligations in respect of Series C Certificates have been paid in full.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.
The Owner Trustee covenants and agrees that it will, subject to Section 2.05
hereof, duly and punctually pay or cause to be paid the principal of, and
interest and Make-Whole Premium, if any, and all other amounts due on, each of
the Certificates and under this Indenture at the place or places, at the
respective times and in the manner provided in this Indenture and in the
Certificates.
Principal and interest and other amounts due hereunder or under the
Certificates shall be payable in dollars on the due date thereof, to the
Indenture Trustee at the Corporate Trust Department (or such other account at
such other financial institution as the Indenture Trustee may designate for
the purpose). If any amount payable under the Certificates or under this
Indenture falls due on a day which is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
Section 3.02. Offices for Payments, etc. So long as any of the
Certificates remain outstanding, the Indenture Trustee will maintain the
following: (a) an office or agency where the Certificates may be presented
for payment and (b) a facility or agency in New York, New York where the
Certificates may be presented for registration of transfer and for exchange
and for prepayment as provided in this Indenture (the "Registrar"). The
Registrar shall keep a register (the "Register") with respect to the
Certificates and their transfer and exchange. The Indenture Trustee may
appoint one or more co-registrars ("Co-Registrars") for the Certificates and
may terminate any such appointment at any time upon written notice. The term
"Registrar" includes any Co-Registrar.
The Indenture Trustee shall initially act as Registrar.
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee. The Owner Trustee, whenever necessary to avoid or fill a vacancy in
the office of Indenture Trustee, will, with the consent of the Lessee,
appoint, in the manner provided in Section 12.02 hereof, an Indenture Trustee,
so that there shall at all times be an Indenture Trustee hereunder.
Section 3.04. Paying Agents. Whenever the Indenture Trustee in its
sole discretion shall appoint a paying agent (the "Paying Agent"), it will
cause the Paying Agent to execute and deliver an instrument in which the
Paying Agent shall agree with the Indenture Trustee, subject to the provisions
of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of, and interest and Make-Whole Premium, if any,
on the Certificates (whether such sums have been paid to it by the
Indenture Trustee or the Owner Trustee) in trust for the benefit of the
Holders or of the Indenture Trustee, and
(b) that it will give the Indenture Trustee notice of any failure by
the Owner Trustee to make any payment of the principal of or interest or
Make-Whole Premium, if any, on the Certificates when the same shall be due
and payable.
Anything in this Section to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section are subject to
the provisions of Sections 14.03 and 14.04 hereof.
Section 3.05. Covenants of SSB and the Owner Trustee.
(a) SSB hereby covenants and agrees to perform its covenants set
forth in Sections 7.04(b) and 7.04(c) of the Participation Agreement.
(b) The Owner Trustee hereby covenants and agrees as follows:
(i) in the event a Responsible Officer of the Owner Trustee shall have
actual knowledge of an Indenture Event of Default, an Indenture Default or
an Event of Loss, the Owner Trustee will give prompt written notice of such
Indenture Event of Default, Indenture Default or Event of Loss to the
Indenture Trustee, the Lessee and the Owner Participant;
(ii) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to the Owner Trustee under the Lease, including,
without limitation, a copy of each report or notice from an insurer or an
insurance broker received pursuant to Article 13 of the Lease, to the
extent that the same shall not have been furnished to the Indenture Trustee;
(iii) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to the Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Indenture Documents; and
(iv) except as contemplated by the Operative Agreements, the Owner
Trustee will not contract for, create, incur or assume any debt, and will
not guarantee (directly or indirectly or by an instrument having the effect
of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise take action to
become contingently liable, directly or indirectly, in connection with the
debt of any other Person.
Section 3.06. [Reserved]
Section 3.07. Disposal of Trust Indenture Estate. At any time and
from time to time any part of the Trust Indenture Estate may be sold or
disposed of in accordance with the provisions of this Indenture and the Lease.
The Indenture Trustee shall, from time to time, release any part of the Trust
Indenture Estate so sold or disposed of or as to which an Event of Loss has
occurred or as to which the Lease has been terminated from the Lien of this
Indenture. In addition, to the extent that such property constitutes an
Airframe or Engine, the further requirements of Section 9.08 hereof shall be
complied with.
Section 3.08. No Representations or Warranties as to Aircraft or
Documents. NEITHER THE INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR SSB NOR
THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, WORKMANSHIP,
VALUE, CONDITION, DESIGN, COMPLIANCE WITH SPECIFICATIONS, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR USE OR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE
WHATSOEVER, except that SSB warrants that on the Delivery Date (a) the Owner
Trustee shall have received whatever title was conveyed to it by AVSA, and (b)
the Aircraft shall be free and clear of Lessor's Liens attributable to SSB.
Neither SSB, 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 SSB and the Indenture Trustee made under this Indenture or in
the Participation Agreement or of the Owner Participant made under 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, at the expense of the Lessee, the Owner Trustee shall promptly and
duly execute and deliver any and all such further instruments and documents as
may be specified in such request and as are necessary or advisable to perfect,
preserve or protect the Liens and assignments created or intended to be
created hereby, or to obtain for the Indenture Trustee the full benefit of the
specific rights and powers granted herein, including, without limitation, the
execution and delivery of Uniform Commercial Code financing statements and
continuation statements with respect thereto, or similar instruments relating
to the perfection of the Liens or assignments created or intended to be created
hereby.
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates. (a) The
Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Indenture Trustee is not the Registrar, the Registrar
shall furnish to the Indenture Trustee semi-annually not more than ten (10)
days after each Record Date, as of such Record Date, or at such other times as
the Indenture Trustee may request in writing, a list, in such form and as of
such date as the Indenture Trustee may reasonably require, containing all the
information in the possession or control of the Registrar as to the names and
addresses of the Holders and the amounts and Maturities of the Certificates
held by such Holders.
(b) Ownership of the Certificates shall be proved by the Register
kept by the Registrar.
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution. Except as otherwise provided
in Section 5.03 hereof, each installment of Basic Rent, any payment of
interest on overdue installments of Basic Rent, any payment received by the
Indenture Trustee pursuant to Section 8.03(a) hereof and any payment received
by the Indenture Trustee pursuant to Section 17.02(b) or 17.02(c) of the
Participation Agreement shall be distributed by the Indenture Trustee no later
than the time herein provided in the following order of priority:
first, (i) 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 Amount and interest and other amounts (as
well as any interest on any overdue Principal Amount and, to the
extent permitted by applicable law, on any overdue interest and
any other overdue amounts) then due under all Series A
Certificates shall be distributed to the Holders of Series A
Certificates ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments then
due under each Series A Certificate bears to the aggregate amount
of the payments then due under all Series A Certificates;
(ii) after giving effect to paragraph (i) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series B Certificates shall be
distributed to the Holders of Series B Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series B
Certificate bears to the aggregate amount of the payments then due
under all Series B Certificates; and
(iii) after giving effect to paragraph (ii) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series C Certificates shall be
distributed to the Holders of Series C Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series C
Certificate bears to the aggregate amount of the payments then due
under all Series C Certificates; and
second, the balance if any of such installment or payment remaining
thereafter shall be distributed to the Owner Trustee, or as the
Owner Trustee may request, for distribution pursuant to the Trust
Agreement.
Section 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft (including pursuant to Section 11.03(e) of the Lease, but, in the
case of said Section 11.03(e), subject to the time limits specified therein)
or as the result of, or in connection with any event under the Lease giving
rise to, a prepayment pursuant to Section 6.02 hereof, shall be promptly
distributed by the Indenture Trustee in the following order of priority:
first, to reimburse the Indenture Trustee for any costs or expenses
reasonably incurred in connection with such prepayment,
second, (i) to pay the amounts specified in paragraph (i) of clause
"second" of Section 5.03 hereof then due and payable in respect
of the Series A Certificates;
(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "second" of Section
5.03 hereof then due and payable in respect of the Series B
Certificates; and
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "second" of
Section 5.03 hereof then due and payable in respect of the Series
C Certificates;
provided that payments pursuant to this clause "second" shall be
made without the payment of Make-Whole Premium except in the
particular circumstances provided in Section 6.02(b) 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 Article 11 or
13 of the Lease as the result of loss or damage not constituting an Event of
Loss (x) with respect to the Aircraft, or as a result of such loss or damage
constituting an Event of Loss if and to the extent that such amounts would at
the time be required to be paid to the Lessee pursuant to said Article 11 or
13 but for the fact that a Payment Default, Bankruptcy Default or an Event of
Default shall have occurred and be continuing or (y) are pledged to the Lessor
as security in connection with an Event of Loss in accordance with Section
11.03(e) of the Lease, shall be held by the Indenture Trustee as security for
the obligations of the Lessee under the Lease and the Participation Agreement
and shall be invested in accordance with the terms of Section 5.08 hereof and
at such time as the conditions for payment to the Lessee specified in said
Article 11 or 13, as the case may be, shall be fulfilled and there shall not
be continuing any Payment Default, Bankruptcy Default or Event of Default,
such amount, and the proceeds of any investment thereof, shall, to the extent
not theretofore applied, be paid to the Lessee to the extent provided in the
Lease.
Section 5.03. Payment After Indenture Event of Default, etc. Except
as otherwise provided in Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof,
all payments (other than Excepted Payments) received and all amounts held or
realized by the Indenture Trustee 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 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 or the Holders in the
protection, exercise or enforcement of any right, power or remedy
or any damages sustained by the Indenture Trustee or the Holders,
liquidated or otherwise, upon such Indenture Event of Default)
shall be applied by the Indenture Trustee as between itself and
the Holders in reimbursement of such expenses;
second, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of
all Series A Certificates, and the accrued but unpaid interest
and other amounts due thereon and all other Secured Obligations
(other than Make-Whole Premium) in respect of the Series A
Certificates to the date of distribution, shall be distributed to
the Holders of Series A Certificates, and in case the aggregate
amount so to be distributed shall be insufficient to pay in full
as aforesaid, then ratably, without priority of one over the
other, in the proportion that the aggregate unpaid Principal
Amount of all Series A Certificates held by each holder plus the
accrued but unpaid interest and other amounts due hereunder or
thereunder (other than Make-Whole Premium) to the date of
distribution, bears to the aggregate unpaid Principal Amount of
all Series A Certificates held by all such holders plus the
accrued but unpaid interest and other amounts due thereon (other
than Make-Whole Premium) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series B
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series B Certificates to
the date of distribution, shall be distributed to the Holders of
Series B Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series B Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series B
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution; and
(iii) after giving effect to paragraph (ii) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series C
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series C Certificates to
the date of distribution, shall be distributed to the Holders of
Series C Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series C Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series C
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution;
(it being understood that amounts payable under this clause
"second" 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
in respect of (i) the Indenture Trustee in its individual capacity, (ii) the
Subordination Agent, (iii) each Liquidity Provider, and (iv) the Pass Through
Trustee, in each case whether pursuant to Article 8 or 9 of the Participation
Agreement or as Supplemental Rent, directly to the Person (which may include
the Indenture Trustee) entitled thereto. Any payment received by the
Indenture Trustee under clause (b) of the last paragraph of Section 2.04 shall
be distributed to the Subordination Agent to be distributed in accordance with
the terms of the Intercreditor Agreement.
(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 Article 9 of the Lease) shall be distributed by the Indenture
Trustee (a) to the extent received or realized at any time prior to the
payment in full of all obligations to the Holders, in the order of priority
specified in Section 5.01 hereof, and (b) to the extent received or realized
at any time after payment in full of all obligations to the Holders, in the
following order of priority:
first, in the manner provided in clause "first" of Section 5.03 hereof
and
second, in the manner provided in clause "third" of Section 5.03 hereof.
Section 5.06. Payments to Owner Trustee. Any amounts distributed
hereunder by the Indenture Trustee to the Owner Trustee shall be paid to the
Owner Trustee by wire transfer of immediately available funds of the type
received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be designated by notice from the
Owner Trustee to the Indenture Trustee from time to time. The Owner Trustee
hereby notifies the Indenture Trustee that unless and until the Indenture
Trustee receives notice to the contrary from the Owner Trustee, all amounts to
be distributed to the Owner Trustee hereunder for distribution in accordance
with the Trust Agreement shall be distributed by wire transfer of immediately
available funds of the type received by the Indenture Trustee to such account
of the Owner Participant as may be specified pursuant to Section 2.06 of the
Trust Agreement.
Section 5.07. Application of Payments. Each payment of principal of
and interest or other amounts due on each Certificate shall, except as
otherwise provided herein, be applied,
first, to the payment of interest on such Certificate due and payable to
the date of such payment, as provided in such Certificate, as
well as any interest on overdue principal and Make-Whole Premium,
if any, and, to the extent permitted by law, interest and other
amounts due thereunder,
second, to the payment of any other amount (other than the principal of
such Certificate) due hereunder to the Holder of such Certificate
or under such Certificate,
third, to the payment of the principal of such Certificate if then due
hereunder or under such Certificate and
fourth, the balance, if any remaining thereafter, to the payment of the
principal of such Certificate remaining unpaid (provided that
such Certificate shall not be subject to prepayment without the
consent of the affected Holder except as permitted by Sections
6.02, 6.06 and 8.02 hereof); provided that, solely for the
purpose of determining whether an Indenture Event of Default
shall have occurred and be continuing, each such payment shall be
deemed applied in the following order of priority: first, in the
manner provided in clause "first" above, second, in the manner
provided in clause "third" above, third, in the manner provided
in clause "second" above and fourth, in the manner provided in
clause "fourth" above.
Section 5.08. Investment of Amounts Held by Indenture Trustee.
Amounts held by the Indenture Trustee pursuant to Section 5.02(b) hereof or
pursuant to any provision of any Indenture Document providing for investment
by the Indenture Trustee of sums pursuant to Section 23.01 of the Lease or
this Section 5.08 shall be invested by the Indenture Trustee from time to time
in securities selected by (i) so long as no Event of Default shall have
occurred and be continuing, the Lessee (and in the absence of written
direction by the Lessee, the Indenture Trustee shall invest such monies in
direct obligations of the United States of America) or (ii) so long as an
Event of Default shall have occurred and be continuing, the Indenture Trustee
and in each case shall be of the type listed in clauses (i) through (iv) of
Section 23.01 of the Lease. Unless otherwise expressly provided in this
Indenture, any income realized as a result of any such investment, net of the
Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Lessee shall be responsible for and will
promptly pay to the Indenture Trustee or the Lessor, as the case may be, on
demand, the amount of any loss realized as the result of any such investment
(together with any fees, commissions and other costs and expenses, if any,
incurred by the Indenture Trustee or the Lessor in connection with such
investment), such amount to be disposed of in accordance with the terms hereof
or the Lease, as the case may be. The Indenture Trustee shall not be liable
for any loss resulting from any investment made by it or any investment sold
by it under this Indenture in accordance with instructions from the Lessee
other than by reason of its willful misconduct or gross negligence, and any
such investment may be sold (without regard to its maturity) by the Indenture
Trustee without instructions whenever the Indenture Trustee reasonably
believes such sale is necessary to make a distribution required by this
Indenture.
Unless otherwise confirmed in writing, an account statement delivered
by the Indenture Trustee to the Owner Trustee (with a copy to the Lessee)
shall be deemed written confirmation by the Owner Trustee that the investment
transactions identified therein accurately reflect the investment directions
given to the Indenture Trustee by or on behalf of the Lessee, unless the
Lessee notifies the Indenture Trustee in writing to the contrary within 30
days of the date of receipt of such statement.
Section 5.09. Withholding Taxes. The Indenture Trustee shall
withhold any Taxes required to be withheld, except to the extent that the
Holder has furnished evidence satisfactory to the Indenture Trustee of any
exemption from withholding claimed by such Holder and under no circumstances
shall the failure of any such Holder to receive any amounts so withheld
constitute an Indenture Event of Default. Notwithstanding any provision to
the contrary in Sections 5.01 through 5.05 hereof and subject to Article 8 of
the Participation Agreement, if the Lessee is required to pay any such Tax, or
any interest or penalty thereon, or to indemnify the Owner Participant or the
Owner Trustee with respect thereto pursuant to Section 8.01(c) of the
Participation Agreement, the Lessee shall be entitled to receive any payments
otherwise distributable to the Holder of any Certificate who was subject to
such Tax pursuant to Sections 5.01 to 5.05 hereof until the amounts the Lessee
shall have so paid in respect of any such Tax shall have been recovered in
full by the Lessee.
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity. Except as provided
in Sections 6.02, 6.06 and 8.02 hereof, the Certificates may not be prepaid
prior to their respective Maturities.
Section 6.02. Prepayment of Certificates. (a) The Outstanding
Certificates shall be prepaid in full (and not in part):
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08
hereof replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and Section 2.12 hereof shall not be
applicable in connection with such purchase), but subject to Section
6.02(c) below.
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 hereof (unless such notice is revoked in
accordance with such Section).
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) below.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a refinancing of the Certificates, but subject to Section
6.02(c) below.
(vi) As contemplated by Section 2.16 hereof and Section 3.05(b) of the
Participation Agreement if the Delivery Date has not occurred on or prior
to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject to the terms of Section
4.02(a) or 10.01 of the Lease or Article 15 of the Participation Agreement, as
the case may be, shall give irrevocable (subject to Section 6.02(c) hereof)
written notice to the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Certificates shall be
prepaid. In the case of a prepayment of the Certificates pursuant to Section
6.02(a)(i) above, the Certificates shall be prepaid in full on the Loss
Payment Date as defined in Section 11.02 of the Lease. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(iii) above, the
Certificates shall be prepaid in full on the date so designated in the notice
referred to in Section 8.02 hereof. In the case of a prepayment of the
Certificates pursuant to Section 6.02(a)(ii) or (iv) above, the Certificates
shall be prepaid in full on the Termination Date. In the case of a prepayment
of the Certificates pursuant to Section 6.02(a)(v) above, the Certificates
shall be prepaid on the effective date of the Refinancing. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(vi) above, the
Certificates shall be prepaid on the 15th day following the Cut-Off Date. In
the case of a prepayment of the Certificates pursuant to Section 6.02(a)(vii)
above, the Certificates shall be prepaid on the date designated in the notice
referred to therein. The day on which the Certificates are to be prepaid
pursuant to this Section 6.01(b) is herein referred to as the "Prepayment
Date".
On or prior to the Prepayment Date, immediately available funds shall
be deposited with the Indenture Trustee in an amount in respect of the
Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section 6.02
hereof on or after the applicable Premium Termination Date, or (ii) if such
prepayment is made prior to the applicable Premium Termination Date
pursuant to Section 6.02(a)(i), 6.02(a)(iii) (if clause (i) of the first
sentence of Section 8.02(a) hereof is applicable) or 6.02(a)(vi) above, the
sum of (A) the aggregate principal amount of such Certificates then
Outstanding, (B) accrued interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due the Indenture Trustee hereunder
or under the Participation Agreement or the Lease, but excluding any
Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to Section 6.02(a)(ii), 6.02(a)(iii) (if clause
(ii) of the first sentence of Section 8.02(a) hereof is applicable),
6.02(a)(iv), 6.02(a)(v) or 6.02(a)(vii) above, the sum of the amounts
specified in clauses (A), (B) and (C) of the preceding clause (1) plus any
Make-Whole Premium payable in respect of all Certificates with respect to
which the Premium Termination Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
(c) If, pursuant to the last paragraph of Section 10.01(f) of the
Lease, no Termination Date shall occur, or if, pursuant to Section 4.02(a) of
the Lease, the Lessee revokes its notice of election to purchase, or if no
refinancing shall occur pursuant to Section 15.01 of the Participation
Agreement, the Lessee shall give notice thereof to the Indenture Trustee, and
the prepayment proposed to be effected in respect thereof shall not occur.
Section 6.03. Notice of Prepayment to Holders. In order to effect
any prepayment set forth in Section 6.02(a) hereof, the Indenture Trustee
shall give prompt notice by first class mail of prepayment to each Holder of
an Outstanding Certificate. Any notice of prepayment given by the Owner
Trustee may be revoked by the Owner Trustee at any time on or before the
Prepayment Date by prompt notice to the Holders except as otherwise provided
in the Lease or the Participation Agreement.
All notices of prepayment shall state:
(1) the Prepayment Date,
(2) the applicable basis for determining the Prepayment Price,
(3) that on the Prepayment Date, subject to the provisions hereof,
the Prepayment Price will become due and payable, and that interest
on the Certificates shall cease to accrue on and after such
Prepayment Date, and
(4) the place or places where such Certificates are to be
surrendered for payment.
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price. On the Prepayment Date or the Sinking Fund Redemption Date (as defined
in Section 6.06 hereof), the Owner Trustee shall, to the extent an amount
equal to the Prepayment Price or the Sinking Fund Redemption Price (as defined
in Section 6.06 hereof), as the case may be, shall not then be held in cash or
Permitted Investments (marked-to-market net of all costs and expenses of
liquidation thereof) by the Indenture Trustee in immediately available funds
and deposited for the purpose, pay to the Indenture Trustee an amount equal to
the difference between (a) the amount then so held and (b) the Prepayment
Price or the Sinking Fund Redemption Price, as the case may be. If there
shall so be on deposit and/or deposited the applicable Prepayment Price or
Sinking Fund Redemption Price on or prior to a Prepayment Date or Sinking Fund
Redemption Date, interest shall cease to accrue in respect of all or, in the
case of a mandatory sinking fund redemption, the relevant portion being
prepaid of, the Outstanding Certificates on and after such Prepayment Date or
such Sinking Fund Redemption Date.
Section 6.05. Certificates Payable on Prepayment Date. On the
Prepayment Date, the Outstanding Certificates shall (except (A) if the Owner
Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise provided
in the Lease) become due and payable and from and after such Prepayment Date
(unless there shall be a default in the payment of the Prepayment Price) such
Certificates shall cease to bear interest. Upon surrender by any Holder of
its Certificate for prepayment in accordance with said notice, such Holder
shall be paid the principal amount of its Certificate then outstanding, accrued
interest thereon to the Prepayment Date, all other sums due to such Holder
hereunder, under the Participation Agreement or the Lease, plus, if a
Make-Whole Premium is payable pursuant to Section 6.02(b) hereof, the
Make-Whole Premium in respect of such Certificate.
If any Certificate called for prepayment shall not be so paid upon
surrender thereof for prepayment, the principal shall, until paid, continue to
bear interest from the Prepayment Date at the interest rate applicable to such
Certificate.
Section 6.06. Mandatory Sinking Fund Redemption. The Certificates
shall be subject to partial redemption, at the aggregate principal amount set
forth for the Certificates of the respective Series and Maturity, on a pro
rata basis, on each date specified in this Section (a "Sinking Fund Redemption
Date") for such payment on the Certificates of such Series and Maturity. The
Owner Trustee shall deposit funds sufficient to pay the Sinking Fund
Redemption Price with the Indenture Trustee as provided in Section 6.04
hereof. The Indenture Trustee shall pay from the amounts so deposited on each
applicable Sinking Fund Redemption Date to the Certificates of each Series in
the order of priority set forth in clause "first" of Section 5.01 and among the
Holders of the Certificates of each Series then Outstanding on a pro rata
basis the aggregate principal amount set forth below, together with accrued
interest to such Sinking Fund Redemption Date, but without Make-Whole Premium
(the "Sinking Fund Redemption Price"):
Principal Amount
Series A Series B Series C
Certificates Certificates Certificates
Sinking Fund with a Maturity of with a Maturity of with a Maturity of
Redemption Date January 15, 2018 January 15, 2018 January 15, 2014
- ---------------- ------------------ ------------------ ------------------
July 15, 1997 0 0 0
January 15, 1998 192,704 250,055 0
July 15, 1998 474,776 0 0
January 15, 1999 350,565 250,305 75,480
July 15, 1999 316,915 0 0
January 15, 2000 339,643 250,305 333,740
July 15, 2000 327,837 0 0
January 15, 2001 408,040 250,305 333,740
July 15, 2001 259,440 0 0
January 15, 2002 581,596 250,305 333,740
July 15, 2002 85,884 0 0
January 15, 2003 667,480 250,305 530,847
July 15, 2003 0 0 0
January 15, 2004 667,480 250,305 721,692
July 15, 2004 0 0 0
January 15, 2005 667,480 250,305 839,540
July 15, 2005 0 0 0
January 15, 2006 667,480 250,305 808,994
July 15, 2006 0 0 0
January 15, 2007 667,480 250,305 3,739,396
July 15, 2007 0 0 0
January 15, 2008 667,480 250,305 652,598
July 15, 2008 0 0 0
January 15, 2009 667,480 250,305 1,528,250
July 15, 2009 0 0 0
January 15, 2010 667,480 336,300 1,665,821
July 15, 2010 0 0 0
January 15, 2011 667,480 2,884,537 0
July 15, 2011 0 0 0
January 15, 2012 667,480 3,168,600 0
July 15, 2012 0 0 0
January 15, 2013 3,890,457 1,009,716 0
July 15, 2013 0 0 0
January 15, 2014 754,478 0 4,531,162
July 15, 2014 0 0 0
January 15, 2015 5,701,038 0 0
July 15, 2015 0 0 0
January 15, 2016 6,145,275 0 0
July 15, 2016 0 0 0
January 15, 2017 6,624,128 0 0
July 15, 2017 0 0 0
January 15, 2018 246,424 2,112,437 0
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default. "Indenture Event of
Default" means any of the following events (whatever the reason for such
Indenture Event of Default and whether it shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) any Event of Default specified in Article 16 of the Lease (other
than an Event of Default arising solely as the result of the failure to
make an Excepted Payment unless the Owner Participant shall notify the
Indenture Trustee in writing that such failure shall constitute an
Indenture Event of Default); or
(ii) the failure of the Owner Trustee other than by reason of a
Default or an Event of Default (i) to pay principal, interest or Make-Whole
Premium, if any, on any Certificate when due, and such failure shall have
continued unremedied for ten (10) Business Days after the date when due or
(ii) to pay any other amounts hereunder or under the Certificates when due
and such failure shall have continued unremedied for a period of thirty
(30) days after the Owner Trustee and the Owner Participant shall receive
written demand therefor from the Indenture Trustee or by the Holders of not
less than 25% in aggregate principal amount of Outstanding Certificates; or
(iii) (A) any representation or warranty made by SSB, the Owner
Trustee, the Owner Participant or the Owner Participant Guarantor or any
Owner Trustee Guarantor, in any Operative Agreement or in any certificate of
SSB, the Owner Trustee, the Owner Participant, or the Owner Participant
Guarantor furnished to the Indenture Trustee or any Holder in connection
herewith or therewith or pursuant hereto or thereto shall prove to have been
incorrect when made and was and remains in any respect material to the
Holders and if such misrepresentation is capable of being corrected as of a
subsequent date and if such correction is being sought diligently, and such
misrepresentation shall not have been corrected within 30 days following
notice thereof identified as a "Notice of Indenture Event of Default" being
given to the Owner Trustee and the Owner Participant by the Indenture
Trustee or by a Majority in Interest of Holders; or
(B) any (x) covenant made by the Owner Trustee in the fifth paragraph
following the Habendum Clause hereof or Section 3.05(b)(iii) hereof or
Section 7.02(b) or 7.12 of the Participation Agreement shall be breached in
any respect, (y) covenant made by the Owner Participant in Section 7.02(c)
or the last sentence of Section 7.13 of the Participation Agreement shall
be breached in any respect or (z) other covenant made by the Owner Trustee,
in its individual capacity or as Owner Trustee, or by any Owner Trustee
Guarantor, or by the Owner Participant or the Owner Participant Guarantor
in any Operative Agreement shall be breached in any respect and such breach
shall remain unremedied for a period of thirty (30) days after there has
been given to the Owner Trustee and the Owner Participant by the Indenture
Trustee or by Certificate Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates a written notice identified as
a "Notice of Indenture Event of Default" specifying such breach and
requiring it to be remedied; or
(iv) the Owner Trustee, the Lessor's Estate, any Owner Trustee
Guarantor, the Owner Participant or the Owner Participant Guarantor shall
file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(v) an order for relief shall be entered in respect of the Owner
Trustee or any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate by a court having jurisdiction
in the premises in an involuntary case under the federal bankruptcy laws as
now or hereafter in effect; or the Owner Trustee or any Owner Trustee
Guarantor or the Owner Participant or the Owner Participant Guarantor or
the Lessor's Estate shall file any answer admitting or not contesting the
material allegations of a petition filed against the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate in any proceeding referred to in clause
(vi) below or seek or consent or acquiesce in the appointment of any
trustee, custodian, receiver or liquidator of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, or of all or any
substantial part of its properties; or
(vi) without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered constituting an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or if any such petition shall be filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or the Owner Participant Guarantor or the Lessor's Estate, as
the case may be, and such petition shall not be dismissed within 60 days,
or if, without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered appointing a trustee, custodian, receiver or liquidator of the
Owner Trustee or any Owner Trustee Guarantor or the Owner Participant or
the Owner Participant Guarantor or the Lessor's Estate, as the case may be,
or of all or any substantial part of the properties of the Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate, as the case may be, and such
order shall not be dismissed within 60 days; or
(vii) any Owner Trustee Guaranty or the Owner Participant Guaranty
shall cease to be a valid and enforceable obligation of any Owner Trustee
Guarantor or the Owner Participant Guarantor, as the case may be, or
otherwise shall not be in full force and effect.
Section 7.02. Remedies. (a) If an Indenture Event of Default shall
have occurred and be continuing and so long as the same shall be continuing
unremedied, then and in every such case, the Indenture Trustee may, and when
required by the provisions of Article IX or Section 7.02(c) hereof, shall (i)
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article VII and (ii) in the event such Indenture
Event of Default is an Indenture Event of Default referred to in clause (i) of
Section 7.01 hereof, exercise any and all of the remedies pursuant to Article
17 of the Lease; provided that without the consent of the Owner Trustee and
the Owner Participant such exercise of remedies shall not occur until after
the latest date on which the Owner Trustee may cure the related Event of
Default pursuant to Section 8.03 hereof. The Indenture Trustee may (subject
to the provisions of the next succeeding paragraph) 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 (subject to the provisions of the next
succeeding paragraph) exercise any other right or remedy in lieu of or in
addition to the foregoing that may be available to it under applicable law, or
proceed by appropriate court action to enforce the terms hereof, of the Lease,
or both, or to rescind the Lease. Without limiting any of the foregoing, it
is understood and agreed that the Indenture Trustee may exercise any right of
sale of the Aircraft available to it, even though it shall not have taken
possession of the Aircraft and shall not have possession thereof at the time
of such sale.
Notwithstanding the foregoing, it is understood and agreed that if the
Indenture Trustee shall proceed to foreclose the Lien of this Indenture, it
shall substantially simultaneously therewith, to the extent the Indenture
Trustee is then entitled to do so hereunder and under the Lease, and is not
then stayed or otherwise prevented from doing so, proceed (to the extent it
has not already done so) to declare the Lease in default and commence the
exercise in good faith of one or more of the significant remedies under
Article 17 of the Lease (as the Indenture Trustee determines in its sole
discretion) for the purpose of recovering the Aircraft. It is further
understood and agreed that if the Indenture Trustee is unable to exercise one
or more remedies under Article 17 of the Lease because of any stay or
operation of law or otherwise, the Indenture Trustee shall not be entitled to
foreclose the Lien of this Indenture (A) until the earlier of (i) 60 days from
the date of any such stay or applicable order under Section 1110 of the
Bankruptcy Code plus any extension consented to by the Indenture Trustee or
the Holders of Certificates of such period as permitted under Section 1110(b)
of the Bankruptcy Code and (ii) the date of actual repossession of the
Aircraft by the Indenture Trustee or (B) if the Lessee has agreed to perform
or assume the Lease pursuant to Section 365 or 1110 of the Bankruptcy Code and
no Event of Default (other than as specified in Section 16.01(e), (f) or (g)
of the Lease, or other Event of Default in respect of which the 30-day period
referred to in clause (a)(1)(B)(ii)(I) of Section 1110 of the Bankruptcy Code
shall not yet have expired) shall be continuing. For the avoidance of doubt,
it is expressly understood and agreed that except as aforesaid the
above-described inability of the Indenture Trustee to exercise any right or
remedy under the Lease shall in no event and under no circumstances prevent
the Indenture Trustee from exercising all of its rights, powers and remedies
under this Indenture, including, without limitation, this Article VII. The
Indenture Trustee further agrees that notice of intent to foreclose shall be
given to the Owner Trustee at the earlier of the commencement of any
proceeding or at least 30 days prior to the consummation of foreclosure of the
Lien of this Indenture.
(b) If an Indenture Event of Default under clause (iv), (v) or (vi)
of Section 7.01 hereof shall occur and be continuing, the unpaid principal of
all Outstanding Certificates, together with interest accrued but unpaid
thereon and all other amounts due thereunder, but without Make-Whole Premium,
shall immediately become due and payable, without presentment, demand, protest
or notice, all of which are hereby waived.
(c) If any Indenture Event of Default not described in the preceding
paragraph (b) shall have occurred and be continuing, then and in every such
case, the Indenture Trustee may on its own accord or at the direction of
Holders of not less than 25% in aggregate principal amount of Outstanding
Certificates, at any time, by written notice to the Owner Trustee, the Owner
Participant and the Lessee, declare the principal of all the Certificates to
be due and payable, whereupon the unpaid principal amount of all Outstanding
Certificates, together with accrued interest thereon and all other amounts due
thereunder, but without Make-Whole Premium, shall immediately become due and
payable without presentment, demand, protest or other notice, all of which are
hereby waived. At any time after such declaration and prior to the sale or
disposition of the Trust Indenture Estate, however, the Holders of not less
than 50% in aggregate principal amount of Outstanding Certificates, by notice
to the Indenture Trustee, the Owner Trustee and the Lessee, may rescind such
declaration, whether made by the Indenture Trustee on its own accord or as
directed, if (x) there has been paid or deposited with the Indenture Trustee a
sum sufficient to pay all overdue installments of interest on all Certificates
(together, to the extent permitted by law, with interest on such overdue
installments of interest), the principal on any Certificates that has become
due otherwise than by such declaration of acceleration, all sums paid or
advanced by the Indenture Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel, or (y) all Indenture Events of Default (other than the nonpayment of
principal that has become due solely because of such acceleration) have been
either cured or waived as provided in Section 7.11 hereof. No such rescission
shall affect any subsequent default or impair any right consequent thereon.
(d) Each Holder shall be entitled at any sale to 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 (but
only to the extent that an amount equal to such purchase price would have been
paid to such Holder pursuant to Article V hereof if such purchase price were
paid in cash and the foregoing provisions of this subsection (d) were not
given effect).
Section 7.03. Return of Aircraft, etc. Subject to Section 7.02
hereof: (a) If an Indenture Event of Default shall have occurred and be
continuing, at the request of the Indenture Trustee, the Owner Trustee shall
promptly execute and deliver to the Indenture Trustee such documents as the
Indenture Trustee may deem necessary or advisable to enable the Indenture
Trustee or an agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify,
to obtain possession of all or any part of the Trust Indenture Estate to which
the Indenture Trustee shall at the time be entitled under this Indenture.
Subject to the foregoing, if the Owner Trustee shall for any reason fail to
execute and deliver such documents after such request by the Indenture
Trustee, the Indenture Trustee may pursue all or part of such Trust Indenture
Estate wherever it may be found and enter any of the premises of the Lessee or
the Owner Trustee wherever such Trust Indenture Estate may be or be supposed
to be and search for such Trust Indenture Estate and take possession of and
remove such Trust Indenture Estate. All expenses of pursuing, searching for
and taking such Trust Indenture Estate shall, until paid, be secured by the
Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Trust Indenture Estate, make all such
expenditures for maintenance, insurance and repairs to and of such Trust
Indenture Estate, as the Indenture Trustee may reasonably deem proper. In
each case subject to Section 7.02 hereof, the Indenture Trustee shall have the
right to maintain, use, operate, store, lease, control or manage the Trust
Indenture Estate and to carry on the business and to exercise all rights and
powers of the Owner Participant and the Owner Trustee relating to the Trust
Indenture Estate, as the Indenture Trustee may reasonably deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, insurance, use, operation, storage, leasing, control, management
or disposition of all or any part of the Trust Indenture Estate as the
Indenture Trustee may determine. Further, the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Trust Indenture Estate
other than Excepted Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
under this Indenture. Such tolls, rents (including Rent), revenues, issues,
income, products and profits shall be applied to pay the expenses of the use,
operation, storage, leasing, control, management, or disposition of the Trust
Indenture Estate, and of all maintenance and repairs, and to make all payments
which the Indenture Trustee may be required or may reasonably elect to make
for any taxes, assessments, insurance or other proper charges upon the Trust
Indenture Estate (including the employment of engineers and accountants to
examine, inspect and make reports upon the properties and books and records of
the Owner Trustee and the Lessee), and all other payments which the Indenture
Trustee may be required or authorized to make under any provision of this
Indenture, as well as just and reasonable compensation for the services of the
Indenture Trustee and of all persons properly engaged and employed for such
purposes by the Indenture Trustee; provided, that any excess amounts shall be
promptly distributed in accordance with Section 5.03 hereof.
(c) Subject to Section 7.02 hereof, if an Indenture Event of
Default shall have occurred and be continuing and the Indenture Trustee shall
be entitled to exercise remedies hereunder, and subject to Article VIII
hereof, the Indenture Trustee, either with or without taking possession, and
either before or after taking possession, and without instituting any legal
proceedings whatsoever, may sell, assign, transfer and deliver the whole or,
from time to time, to the extent permitted by law, any part of the Trust
Indenture Estate, or any part thereof, or interest therein, at any private
sale or public auction to the highest bidder, with or without demand,
advertisement or notice, except that in respect of any private sale 30 days
prior written notice by registered mail to the Owner Trustee and the Owner
Participant will be provided, for cash or, with the consent of the Owner
Trustee and the Owner Participant, credit or for other property, for immediate
or future delivery, and for such price or prices and on such terms as the
Indenture Trustee in exercising reasonable commercial discretion may
determine; provided, that any such action shall be at the time lawful and that
all mandatory legal requirements shall be complied with. Any notice required
pursuant to the terms hereof in the case of a public sale, shall state the
time and place fixed for such sale. Any such public sale shall be held at
such time or times within ordinary business hours as the Indenture Trustee
shall fix in the notice of such sale. At any such sale, the Trust Indenture
Estate may be sold in one lot as an entirety or in separate lots. The
Indenture Trustee shall not be obligated to make any sale pursuant to such
notice. The Indenture Trustee may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for such sale, and any such sale may
be made at any time or place to which the same may be so adjourned without
further notice or publication. The Indenture Trustee may exercise such right
of sale without possession or production of the Certificates or proof of
ownership thereof, and as representative of the Holders may exercise such
right without notice to the Holders or without including the Holders as
parties to any suit or proceedings relating to the foreclosure of any part of
the Trust Indenture Estate. The Owner Trustee shall execute any and all such
bills of sale, assignments and other documents, and perform and do all other
acts and things requested by the Indenture Trustee in order to permit
consummation of any sale of the Trust Indenture Estate in accordance with this
Section 7.03(c) and to effectuate the transfer or conveyance referred to in
the first sentence of this Section 7.03(c). Notwithstanding any other
provision of this Indenture, the Indenture Trustee shall not sell the Trust
Indenture Estate or any part thereof unless the Certificates shall have been
accelerated.
(d) To the extent permitted by applicable law, and subject to
Section 7.02 hereof, 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 of 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) 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.
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 Sections 7.02 and 7.03(c) hereof.
In case there shall be pending proceedings relative to the Owner
Trustee under the Bankruptcy Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Owner Trustee or its property, or in case of any other comparable judicial
proceedings relative to the Owner Trustee, or to the creditors or property of
the Owner Trustee, the Indenture Trustee, irrespective of whether the
principal of the Certificates shall then be due and payable as therein or
herein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal, interest and other amounts owing and unpaid in respect of the
Certificates or hereunder, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of the Holders allowed in any judicial
proceedings relative to the Owner Trustee or to the creditors or property of
the Owner Trustee,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Indenture Trustee on their
behalf;
and any trustee, receiver, or liquidator, custodian or other similar official
is hereby authorized by each of the Holders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to the Holders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or willful misconduct.
Nothing contained herein shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Certificates or the rights of any Holder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any Holder
in any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
All rights of action and rights to assert claims under this
Indenture, or under any of the Certificates, may be enforced by the Indenture
Trustee without the possession of such Certificates on any trial or other
proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders, as provided herein.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Certificates, and it shall not be
necessary to make any Holders parties to such proceedings.
Section 7.05. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee in this Indenture shall be cumulative
and shall be in addition to every other right, power and remedy specifically
given herein or now or hereafter existing at law, in equity or by statute, and
each and every right, power and remedy whether specifically given herein or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Indenture Trustee or the Holders, and
the exercise or the beginning of the exercise of any power or remedy shall not
be construed to be a waiver of the right to exercise at the same time or later
any other right, power or remedy. No delay or omission by the Indenture
Trustee or of any Holder in the exercise of any right, remedy or power or in
the pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Trustee or
the Lessee or to be an acquiescence in any such default.
Section 7.06. Suits for Enforcement. If an Indenture Event of
Default has occurred, has not been waived and is continuing, the Indenture
Trustee may in its discretion and subject to its rights of appropriate
indemnification under Sections 7.08 and 9.03 and Article XI hereof proceed to
protect and enforce its rights and rights of the Holders by such appropriate
judicial proceedings as the Indenture Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture or to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture or by
law; provided, that any sale of any portion of the Trust Indenture Estate
shall be done in accordance with Sections 7.02 and 7.03(c) hereof.
Section 7.07. Discontinuance of Proceedings. In case the Indenture
Trustee or any Holder shall have instituted any proceeding to enforce any
right, power or remedy under this Indenture by foreclosure, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Indenture Trustee or
such Holder, then the Owner Trustee, the Indenture Trustee, the Owner
Participant, the Holders and the Lessee shall, subject to any binding
determination in such proceeding, be restored to their former positions and
rights under this Indenture with respect to the Trust Indenture Estate, and all
rights, remedies and powers of the Indenture Trustee and the Holders shall
continue as if no such proceeding had been instituted.
Section 7.08. Limitations on Suits by Holders. No Holder of any
Certificate shall have any right by virtue or by availing of any provision of
this Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Indenture Trustee written notice that an
Indenture Event of Default shall then have occurred and be continuing, as
hereinbefore provided, and the Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates shall have made written request
upon the Indenture Trustee to institute such action or proceedings in its own
name as trustee hereunder and shall have offered to the Indenture Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Indenture Trustee for 60
days after its receipt of such notice, request and offer of indemnity shall
have failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Indenture
Trustee pursuant to Section 7.10 hereof; it being understood and intended, and
being expressly covenanted by the Holder of each Certificate with every other
Holder of each other Certificate and the Indenture Trustee, that no one or
more Holders shall have any right in any manner whatever to affect, disturb or
prejudice the rights of any other Holder or the Lien of this Indenture or any
part of the Trust Indenture Estate or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under this
Indenture, except in the manner provided herein and for the equal, ratable and
common benefit of all Holders. For the protection and enforcement of the
provisions of this Section, each and every Holder and the Indenture Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute Certain Suits.
Notwithstanding any other provision in this Indenture and any provision of any
Certificate, the right of any Holder to receive payment of the principal of
and interest and Make-Whole Premium, if any, on such Certificate on or after
the respective due dates and in the manner expressed in such Certificate, or,
subject to Section 7.08 hereof, to institute suit for the enforcement of any
such payment on or after such respective dates as provided herein, shall not
be impaired or affected without the consent of such Holder.
Section 7.10. Control by Holders. The Majority in Interest of
Certificate Holders shall have the right to direct the Indenture Trustee as to
the time, method, and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power conferred
on the Indenture Trustee by this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture and the Indenture Trustee shall have received, to the extent
provided in Sections 7.08 and 9.03 and Article XI hereof, such reasonable
indemnification as it may require against the costs, expenses and liabilities
to be incurred by the Indenture Trustee; and provided further that (subject to
the provisions of Section 9.02 hereof) the Indenture Trustee shall have the
right to decline to follow any such direction if the Indenture Trustee, being
advised by counsel, shall determine that the action or proceeding so directed
may not lawfully be taken or if the Indenture Trustee in good faith by its
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers of the Indenture Trustee shall determine that the
action or proceedings so directed would involve the Indenture Trustee in
personal liability or if the Indenture Trustee in good faith shall so
determine that the actions or forebearances specified in or pursuant to such
direction shall be unduly prejudicial to the interests of Holders not joining
in the giving of said direction, it being understood that (subject to Section
9.02 hereof) the Indenture Trustee shall have no duty to ascertain whether or
not such actions or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Indenture
Trustee in its discretion to take any action deemed proper by the Indenture
Trustee and which is not inconsistent with the direction by the Majority in
Interest of Certificate Holders.
Section 7.11. Waiver of Past Indenture Default. Upon written
instructions from the Majority in Interest of Certificate Holders, the
Indenture Trustee shall waive any past Indenture Default and its consequences
and upon any such waiver such Indenture Default shall cease to exist and any
Indenture Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Indenture Default or impair any right consequent
thereon; provided, however, that in the absence of written instructions from
all Holders and each Liquidity Provider, the Indenture Trustee shall not waive
any Indenture Default (a) in the payment of the principal of or Make-Whole
Premium, if any, or interest on, or other amounts due under, any Certificate
then Outstanding, or (b) in respect of a covenant or provision of this
Indenture which, under Article XIII hereof, cannot be modified or amended
without the consent of each Holder.
Section 7.12. Notice of Indenture Default. The Indenture Trustee
shall transmit to the Owner Trustee, the Holders and to the Owner Participant
notice of any Indenture Defaults actually known to a Responsible Officer of
the Indenture Trustee, such notice to be transmitted by mail to the Holders
within 90 days, and to the Owner Trustee and the Owner Participant promptly
after the occurrence thereof, unless such Indenture Default shall have been
cured before the giving of such notice; provided that except in the case of a
default in the payment of the principal of or interest on any Certificate,
under no circumstances shall the Indenture Trustee give such notice to the
Holders until the expiration of a period of 60 days from the occurrence of such
Indenture Default; and provided further that, except in the case of default in
the payment of the principal of or interest on or any other amount due under
any of the Certificates, the Indenture Trustee shall be protected in
withholding such notice to the Holders if and so long as the board of
directors, the executive committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Indenture Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.
(a) Subject to Section 13.01 hereof and the provisions of paragraph (a)
immediately following the Granting Clause hereof, without the consent of a
Majority in Interest of Certificate Holders, the respective parties to the
Indenture Documents may not modify, amend or supplement any of said
agreements, or give any consent, waiver, authorization or approval thereunder,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner the
rights of the respective parties thereunder; provided, however, that the
actions specified in subsection (b) of this Section 8.01 may be taken without
the consent of the Indenture Trustee or any Holder.
(b) Subject to the provisions of subsection (c) of this Section
8.01, the Lessor and the respective parties to the Indenture Documents, at any
time and from time to time, without the consent of the Indenture Trustee or of
any Holder, may:
(1) so long as no Indenture Event of Default shall have occurred and
be continuing, modify, amend or supplement the Lease, or give any waiver
with respect thereto, except that without compliance with subsection (a) of
this Section 8.01 the parties to the Lease shall not modify, amend or
supplement, or give any waiver for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions thereof or
of modifying in any manner the rights of the respective parties thereunder,
with respect to the following provisions of the Lease as in effect on the
effective date hereof: Article 2 (except in respect of the Term, if the
result thereof would not be to shorten the Term of the Lease to a period
shorter than the period ending with the Maturity of any Certificate),
Section 3.03 (except to the extent such Section relates to amounts payable
(whether directly or pursuant to this Indenture) to Persons other than
Holders, each Liquidity Provider, the Subordination Agent and the Indenture
Trustee in its individual capacity), Section 3.05, Section 3.06 (except
insofar as it relates to the address or account information of the Owner
Trustee or the Indenture Trustee) (other than as such Sections 3.03, 3.05
and 3.06 may be amended pursuant to Section 3.04 of the Lease as in effect
on the effective date hereof), Section 5.01, Article 6, Article 10 (except
that further restrictions may be imposed on the Lessee), Article 11 (except
that additional requirements may be imposed on the Lessee), Article 13
(except for Section 13.05 and except that additional insurance requirements
may be imposed on the Lessee), Article 14 (except in order to increase the
Lessee's liabilities or enhance the Lessor's rights thereunder), Article 15
(except in the case of an assignment by the Lessor in circumstances where
the Aircraft shall remain registrable under the Federal Aviation Act),
Section 16.01 (except to impose additional or more stringent Events of
Default), Article 17 (except to impose additional remedies), Section 19.01
(except to impose additional requirements on the Lessee), Section 20.01,
Article 22, Section 23.01, Section 26.03 and any definition of terms used
in the Lease, to the extent that any modification of such definition would
result in a modification of the Lease not permitted pursuant to this
subsection (b); provided that the parties to the Lease may take any such
action without the consent of the Indenture Trustee or any Holder to the
extent such action relates to the payment of amounts constituting, or the
Owner Trustee's, the Owner Participant's or the Lessee's rights or
obligations with respect to, Excepted Payments (other than the place, time
and manner of payment of any portion of Basic Rent constituting an Excepted
Payment);
(2) modify, amend or supplement the Trust Agreement and any other
Indenture Document (other than the Lease and the Participation Agreement),
or give any consent, waiver, authorization or approval with respect
thereto, in each case only to the extent any such action shall not
materially adversely impact the interests of the Holders;
(3) modify, amend or supplement the Participation Agreement, or give
any consent, waiver, authorization or approval with respect thereto, except
that without compliance with subsection (a) of this Section 8.01 the
parties to the Participation Agreement shall not modify, amend or
supplement, or give any consent, waiver, authorization or approval for the
purpose of adding provisions to or changing in any manner or eliminating
any of the provisions thereof or of modifying in any manner the rights of
the respective parties thereunder, with respect to the following provisions
of the Participation Agreement as in effect on the effective date hereof:
Article 6 and Section 10.01(b) (insofar as such Article 6 and Section
10.01(b) relate to the Indenture Trustee, the Pass Through Trustee and the
Holders), Article 7 and Sections 3.05, 15.01, 17.02 and 17.11 and Articles
8 and 9 (insofar as such Articles relate to the Indenture Trustee; it being
understood that only the Indenture Trustee's consent in respect thereof
need be obtained) and any definition of terms used in the Participation
Agreement, to the extent that any modification of such definition would
result in a modification of the Participation Agreement not permitted
pursuant to this subsection (b); and
(4) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided the
making of any such other provision shall not adversely affect the interests
of the Holders.
(c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease or the Participation
Agreement, whether effected pursuant to subsection (a) or pursuant to
subsection (b) of this Section 8.01 and anything in such subsections or
elsewhere in this Indenture to the contrary notwithstanding, shall, without
the consent of the Holder of each Outstanding Certificate affected thereby,
and each Liquidity Provider,
(1) modify, amend or supplement the Lease in such a way as to extend
the time of payment of Basic Rent or Stipulated Loss Value or Supplemental
Rent payable to the Holders or any Liquidity Provider or any other amounts
payable for the account of the Holders or any Liquidity Provider (subject
in any event to Section 3.05 of the Lease) upon the occurrence of an Event
of Loss or Termination Value and any other amounts payable for the account
of the Holders (subject in any event to Section 3.05 of the Lease) upon
termination of the Lease with respect to the Aircraft payable under, or as
provided in, the Lease as in effect on the effective date hereof, or reduce
the amount of any installment of Basic Rent or Supplemental Rent so that
the same is less than the payment of principal of, and interest on the
Certificates and Make-Whole Premium, if any, and amounts due to each
Liquidity Provider, as the case may be, to be made from such installment of
Basic Rent or Supplemental Rent, or reduce the aggregate amount of
Stipulated Loss Value, or any other amounts payable under, or as provided
in, the Lease as in effect on the effective date hereof upon the occurrence
of an Event of Loss so that the same is less than the accrued interest on
and the principal as of the Loss Payment Date, of the Certificates at the
time Outstanding or reduce the amount of Termination Value and any other
amounts payable under, or as provided in, the Lease as in effect on the
effective date hereof upon termination of the Lease with respect to the
Aircraft so that the same is less than the accrued interest on and
principal as of the Lease Termination Date and Make-Whole Premium, if any,
of Certificates at the time Outstanding, or
(2) modify, amend or supplement the Lease in such a way as to, or
consent to any assignment of the Lease or give any consent, waiver,
authorization or approval which would, release the Lessee from its absolute
and unconditional obligations in respect of payment of Basic Rent or
Supplemental Rent, or Stipulated Loss Value and any other amounts payable
for the account of the Holders (subject in any event to Section 3.05 of the
Lease) upon the occurrence of an Event of Loss, or Termination Value and
any other amounts payable for the account of the Holders (subject in any
event to Section 3.05 of the Lease) with respect to the Aircraft, payable
under, or as provided in, the Lease as in effect on the effective date
hereof, except for any such assignment pursuant to Section 2.12 hereof, and
except as provided in the Lease as in effect on the effective date hereof.
(d) At all times so long as this Indenture is in effect, the consent
of the Owner Trustee (at the direction of the Owner Participant) shall be
required in order (i) to amend, modify or supplement the Lease or any other
Operative Document to which the Owner Trustee is a party or to waive
compliance by the Lessee with any of its obligations thereunder and (ii) to
grant any consent requested under the Lease.
Notwithstanding the foregoing, but subject always to the provision of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Article 17 (other than with respect to Excepted
Payments) thereof and (B) subject only to the provisions of this Indenture,
exercise the remedies set forth in such Article 17 of the Lease (other than in
connection with Excepted Payments) and in Article 7 hereof.
Nothing in this Indenture shall be deemed to prohibit the Owner
Participant or the Owner Trustee from making demand on the Lessee for, or from
commencing an action at law to obtain the payment of, or from receiving
payment of, any Excepted Payment; provided, however, that if the Owner Trustee
is proceeding under the Lease, the Owner Trustee shall proceed pursuant to
Section 17.01(a)(v), and only Section 17.01(a)(v), of the Lease.
Section 8.02. Owner Participant's Right to Elect to Prepay or
Purchase the Certificates. (a) If (i) an Event of Default shall have occurred
and be continuing for more than 180 days or the Certificates shall have become
due and payable pursuant to Section 7.02(b) or (c) hereof or (ii) an Event of
Default shall have occurred and be continuing for not more than 180 days and
the Certificates shall not have become due and payable pursuant to Section
7.02(b) or (c) hereof, the Owner Participant (or the Owner Trustee on behalf
of the Owner Participant) may, but shall be under no obligation to, do either
of the following:
(1) direct the Owner Trustee to cause the prepayment of all, but not
less than all, of the Certificates then Outstanding by notifying the
Indenture Trustee of such election, which notice in order to be effective
shall state that it is irrevocable (except as provided below) and shall
designate a Prepayment Date which shall be a Business Day which shall be
not less than 15 days after the date of such notice on which the Owner
Trustee shall, in the manner provided for in Section 6.04 hereof, deposit
the sum of amounts contemplated by paragraph "first" under Section 5.03 and
the aggregate Prepayment Price (determined in accordance with Section
6.02(b) hereof) of all such Certificates with the Indenture Trustee. If
such payment by the Owner Trustee to the Indenture Trustee is made, the
Certificates shall cease to accrue interest from and after the Prepayment
Date, and after distribution of such payment to the Holders, the Indenture
Trustee shall release the Trust Indenture Estate from the Lien of this
Indenture; or
(2) purchase all, but not less than all, of the Outstanding
Certificates by notifying the Indenture Trustee of such election, which
notice in order to be effective shall state that it is irrevocable (except
as provided below) and shall designate a date which shall be a Business Day
which shall be not less than 15 days after the date of such notice on which
the Owner Trustee shall pay to the Indenture Trustee an amount equal to the
aggregate unpaid principal amount of all Outstanding Certificates, together
with accrued interest on such amount to the date of purchase, the aggregate
amount of any Make-Whole Premium applicable to each Outstanding Certificate
(if such purchase occurs prior to the Premium Termination Date for such
Outstanding Certificate) in the case of a purchase pursuant to clause
(a)(ii) above (but not if such purchase is pursuant to clause (a)(i)
above), plus all other sums due any Holder or the Indenture Trustee
hereunder or under the Participation Agreement or the Lease. Upon receipt
by the Indenture Trustee of such amount, each Holder will be deemed,
whether or not Certificates shall have been delivered to the Indenture
Trustee on such date, to have thereupon sold, assigned, transferred and
conveyed (and shall promptly take such actions as the Owner Participant
shall reasonably request to evidence such sale, assignment, transfer and
conveyance) to the Owner Participant (without recourse or warranty of any
kind except for its own acts), all of the right, title and interest of such
Holder in and to the Trust Indenture Estate and this Indenture and all
Certificates held by such Holder and the former Holders shall not be
entitled to receive any interest on the principal amount of such
Certificates after the purchase date, and the Owner Participant shall be
deemed to have assumed (and shall promptly take such actions as any Holder
shall reasonably request to evidence such assumption) all of such Holder's
obligations under the Participation Agreement and this Indenture arising
subsequent to such sale. If the Owner Trustee shall so request, such
Holder will comply with all the provisions of Section 2.06 of this
Indenture to enable new Certificates to be issued to the Owner Participant
in such authorized denominations as the Owner Participant shall request.
All charges and expenses required pursuant to Section 2.06 hereof in
connection with the issuance of any such new Certificates shall be borne by
the Owner Participant.
(b) From and after the deposit by the Owner Trustee of the applicable
Prepayment Price or purchase price with the Indenture Trustee pursuant to
Section 8.02(a) hereof, the Owner Trustee shall be entitled to exercise all
remedies of the Indenture Trustee under Article VII hereof as well as of the
Lessor under the Lease.
(c) Any election to prepay or purchase the Certificates under this
Section 8.02 shall be irrevocable, provided that if on the specified date for
prepayment or purchase, the Event of Default giving rise to such election
shall no longer be continuing under the Lease such election shall be deemed to
be automatically withdrawn.
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 date
which is 15 Business Days after the Owner Participant's receipt of written
notice of such Event of Default all principal and interest on the Certificates
then due (as well as any interest on overdue principal and (to the extent
permitted by applicable law) interest), but not including any principal or
interest becoming due on account of such Event of Default, then the failure of
the Lessee to make the payment of such installment of Basic Rent or of
interest on account of such installment's being overdue shall not constitute
or result in an Indenture Event of Default under this Indenture and any
declaration based solely on the same shall be deemed to be automatically
rescinded. Nothing contained in the preceding sentence shall be deemed to
entitle the Owner Trustee to exercise any rights and powers or pursue any
remedies pursuant to Article 17 of the Lease or otherwise except as set forth
in this Indenture, and except that the Owner Trustee or the Owner Participant
may attempt to recover any amount paid by it or them under this Indenture by
demanding of the Lessee payment of such amount, or by commencing an action at
law or equity 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 be subrogated on
an unsecured basis to all the rights of the Indenture Trustee under the Lease
in respect of the payment giving rise to such Event of Default, and any right
to any interest in respect of the same, and shall be entitled to any payment
of Basic Rent (or interest thereon) actually made by the Lessee in respect of
such cured payment upon receipt by the Indenture Trustee; provided that no such
amount shall be paid to the Owner Trustee or the Owner Participant until all
amounts then due and payable to each Certificate Holder hereunder and
thereunder shall have been paid in full and no Indenture Event of Default
shall have occurred and be continuing. Notwithstanding anything in this
Indenture or the Lease to the contrary, the Owner Participant and the Owner
Trustee collectively, shall not be entitled to cure more than six (6) Events
of Default (no more than three (3) of which may be consecutive) occasioned by
defaults in the payment of Basic Rent.
(b) If (A) there shall occur an Event of Default under the Lease for
any reason other than the Lessee's failure to make any payment of an
installment of Basic Rent and (B) the Owner Trustee shall have taken or caused
to be taken such action necessary to cure and shall have cured such Event of
Default prior to the date which is 15 Business Days after the Owner
Participant's receipt of the written notice of such Event of Default, then
the failure of the Lessee to perform such covenant, condition or agreement,
the observance or performance of which was accomplished by the Owner Trustee
hereunder shall not constitute or result in an Indenture Event of Default under
this Indenture and any declaration based solely on the same shall be deemed to
be automatically rescinded. Nothing contained in the preceding sentence shall
be deemed to entitle the Owner Trustee or the Owner Participant to exercise
any rights and powers or pursue any remedies pursuant to Article 17 of the
Lease or otherwise except as set forth in this Indenture, and except that the
Owner Trustee or the Owner Participant may attempt to recover any amount paid
by it or them in effecting such cure by demanding of the Lessee payment of
such amount, plus any interest due, or by commencing an action at law or in
equity against the Lessee for the payment of such amount or taking appropriate
action in a pending action at law or in equity against the Lessee pursuant to
Section 17.01(a)(v), but only said Section 17.01(a)(v), of the Lease. Upon
curing any such Event of Default pursuant to this Section 8.03(b), the Owner
Trustee or the Owner Participant, as the case may be, shall be subrogated to
all the rights of the Indenture Trustee under the Lease in respect of the
payment, agreement or covenant giving rise to such Event of Default, and any
right to any interest in respect of the same, and shall be entitled to any
payment or other performance upon receipt by the Indenture Trustee; provided
that no such amount shall be paid to the Owner Trustee or the Owner
Participant until all amounts then due and payable to each Certificate Holder
hereunder and thereunder shall have been paid in full and no Indenture Event
of Default shall have occurred and be continuing.
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts. The Indenture Trustee in its
individual capacity hereby accepts the trusts imposed upon it by this
Indenture, and covenants and agrees to perform the same as expressed herein
and agrees to receive and disburse all moneys constituting part of the Trust
Indenture Estate in accordance with the terms hereof.
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an Indenture Event of Default.
(a) The Indenture Trustee, prior to the occurrence of an Indenture Event of
Default and after the curing or waiving of all Indenture Events of Default
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. So long as an
Indenture Event of Default has occurred and has not been cured or waived, the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs. No provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Indenture Event of Default and
after the curing or waiving of all Indenture Events of Default which may have
occurred:
(x) the duties and obligations of the Indenture Trustee shall be
determined solely by the express provisions of this Indenture, and the
Indenture Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read in to this Indenture against
the Indenture Trustee; and
(y) in the absence of bad faith on the part of the Indenture
Trustee, the Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; but in the case of any such
statements, certificate or opinions which by any provision hereof are
specifically required to be furnished to the Indenture Trustee, the Indenture
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible Officers
of the Indenture Trustee, unless it shall be proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action taken or not taken by it in good faith in accordance with the direction
of the Holders of not less than a majority in aggregate principal amount of
Outstanding Certificates relating to the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred upon the Indenture Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Indenture Trustee shall have determined
in good faith that the repayment of such funds or adequate indemnity against
such liability is not reasonably assured to it.
The Indenture Trustee agrees that it will execute and the Owner
Trustee agrees that it will, at the expense of the Lessee, file or cause to be
filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Trust Indenture
Estate as may be specified from time to time in written instructions of the
Holders of not less than 25% in aggregate principal amount of Certificates
(which instructions may, by their terms, be operative only at a future date
and which shall be accompanied by the execution form of such continuation
statement so to be filed); provided that, notwithstanding the foregoing, the
Indenture Trustee may execute and file or cause to be filed any financing
statement which it from time to time deems appropriate.
(b) If any Event of Default shall have occurred and be continuing
and, after the latest date on which the Owner Trustee may cure such Event of
Default pursuant to Section 8.03 hereof, on request of the Holders of not less
than 25% in aggregate principal amount of Outstanding Certificates and subject
to indemnification, to the extent provided in Sections 7.08 and 9.03 and
Article XI hereof, as it may require against the costs, expenses and
liabilities to be incurred, the Indenture Trustee shall exercise such remedies
under Article 17 of the Lease as shall be specified in such request.
(c) The Indenture Trustee agrees that it will, in its individual
capacity and at its own cost and expense (but without any right of indemnity
in respect of any such cost or expense under Article XI hereof) promptly take
such action as may be necessary duly to discharge all Indenture Trustee's
Liens on any part of the Trust Indenture Estate.
(d) The Indenture Trustee will execute and deliver to the Lessee for
filing in accordance with Article 18 of the Lease any properly presented
document, instrument or financing or continuation statement specified in any
opinion delivered pursuant to Section 6.03(e) of the Participation Agreement.
The Indenture Trustee may rely on the act of presentation of any such
document, instrument, financing or continuation statement as evidencing the
fact that it is properly prepared and presented, provided that the Indenture
Trustee shall promptly correct any error in any such document, instrument,
financing or continuation statement of which a Responsible Officer of the
Indenture Trustee has actual knowledge.
(e) The Indenture Trustee will furnish to each Holder promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished to
the Indenture Trustee, to the extent that the same shall not have been
otherwise furnished to such Holder pursuant to this Indenture or to the extent
the Indenture Trustee does not reasonably believe that the same shall have
been furnished by the Lessee directly to such Holder.
Section 9.03. Certain Rights of the Indenture Trustee. Subject to
Section 9.02 hereof:
(a) the Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Owner Trustee
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof be herein
specifically prescribed) upon which the Indenture Trustee may rely to prove
or establish a matter set forth therein;
(c) the Indenture Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Indenture Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Indenture Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Indenture Event of Default
hereunder and after the curing or waiving of all Indenture Events of
Default, the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or
document unless requested in writing to do so by the Majority in Interest
of Certificate Holders; provided that, if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Indenture Trustee, not reasonably assured to the Indenture Trustee
by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Owner Trustee or,
if paid by the Indenture Trustee or any predecessor trustee, shall be
repaid by the Owner Trustee upon demand; and
(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by it hereunder.
Section 9.04. Indenture Trustee Not Responsible for Recitals,
Disposition of Certificates or Application of Proceeds Thereof. The Indenture
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates, except the Indenture Trustee's
certificates of authentication. The Indenture Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Certificates. The Indenture Trustee shall not be accountable for the use or
application by the Owner Trustee of any of the Certificates or of the proceeds
thereof.
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc. The Indenture Trustee or any agent of the Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Indenture
Trustee or such agent and may otherwise deal with the Owner Trustee and
receive, collect, hold and retain collections from the Owner Trustee with the
same rights it would have if it were not the Indenture Trustee or such agent.
Section 9.06. Moneys Held by Indenture Trustee. Subject to Sections
5.08 hereof and 14.04 hereof, all moneys received by the Indenture Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Neither
the Owner Trustee nor, subject to Section 5.08 hereof, the Indenture Trustee
nor any agent thereof shall be under any liability for interest on any moneys
received by it hereunder.
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc. Subject to Sections 9.02 and 9.03 hereof, whenever in the
administration of the trusts of this Indenture the Indenture Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting any action hereunder, such matter (unless
other evidence in respect thereof be specifically prescribed herein) may, in
the absence of bad faith on the part of the Indenture Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to
the Indenture Trustee, and such certificate, in the absence of bad faith on
the part of the Indenture Trustee, shall be full warrant to the Indenture
Trustee for any action taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
Section 9.08. Replacement Airframes and Replacement Engines. At any
time and from time to time any Airframe or Engine which has been subject to an
Event of Loss and may, or is required to, be replaced under Section 10.03,
11.03 or 11.04 of the Lease by a Replacement Airframe or Replacement Engine,
as the case may be, shall be replaced in accordance with the provisions of
this Section 9.08 and the provisions of said Sections of the Lease, the Owner
Trustee shall, from time to time, direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing such Airframe and/or Engine as appropriate from the Lien
of this Indenture and the Indenture Trustee shall execute and deliver such
instrument as aforesaid without recourse or warranty, but only upon receipt by
or deposit with the Indenture Trustee of the following:
(1) A written request from the Owner Trustee requesting such release
and specifically describing the Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or other
applicable registration information) and manufacturer's serial number;
(ii) a description of the Replacement Airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Airframe the Owner Trustee
will be the legal owner of and have good and marketable title to such
Replacement Airframe free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease, that such Replacement
Airframe will on such date be in at least as good operating condition
and repair as required by the terms of the Lease, and that such
Replacement Airframe has been or, substantially concurrently with
such replacement, will be duly registered in the name of the Owner
Trustee under the Transportation Code or under the law then
applicable to the registration of the Airframe subject to the Event
of Loss and that an airworthiness certificate has been duly issued
under the Aviation Act (or such other applicable law) with respect to
such Replacement Airframe and that such registration and certificate
is, or will be, in full force and effect, and that the Lessee will
have the full right and authority to use such Replacement Airframe;
(iv) that the insurance required by Article 13 of the Lease is in
full force and effect with respect to such Replacement Airframe and
all premiums then due thereon have been paid in full;
(v) that the Replacement Airframe is of the same or an improved make
or model as the Airframe requested to be released from this Indenture;
(vi) that the value of the Replacement Airframe as of the date of such
certificate is not less than the value of the Airframe requested to
be released (assuming such Airframe was in the condition and repair
required to be maintained under the Lease);
(vii) that no Event of Default has occurred and is continuing or
would result from the making and granting of the request for release
and the addition of a Replacement Airframe;
(viii) that the release of the Airframe subject to the Event of Loss
will not impair the security of the Indenture in contravention of any
of the provisions of this Indenture;
(ix) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Airframe and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x) that each of the conditions specified in Section 11.03 of the
Lease with respect to such Replacement Airframe has been satisfied.
B. With respect to the replacement of any Engine:
(i) a description of the Engine subject to the Event of Loss
including the manufacturer's serial number;
(ii) a description of the Replacement Engine including the
manufacturer's name, the engine model and serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Engine the Owner Trustee will
be the legal owner of such Replacement Engine free and clear of all
Liens except Liens permitted under Section 6.01 of the Lease, and
that such Replacement Engine will on such date be in at least as good
operating condition and repair as required by the terms of the Lease
and will otherwise conform to the requirements set forth in the
definition of "Replacement Engine";
(iv) that the value of the Replacement Engine as of the date of such
certificate is not less than the value of the Engine to be released
(assuming such Engine was in the condition and repair required to be
maintained under the Lease);
(v) that the release of the Engine subject to the Event of Loss will
not impair the security of the Indenture in contravention of any of
the provisions of this Indenture;
(vi) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Engine and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(vii) that each of the conditions specified in Section 10.03, 11.03
or 11.04 of the Lease with respect to such Replacement Engine has
been satisfied.
(3) The appropriate instruments (i) transferring to the Owner
Trustee title to the Replacement Airframe or Replacement Engine to be received
as consideration for the Airframe or Engine to be released and (ii) assigning
to the Owner Trustee the benefit of all manufacturer's and vendor's
warranties, if any, generally available with respect to such Replacement
Airframe or Replacement Engine, and an Indenture and Security Agreement
Supplement subjecting such Replacement Airframe or Replacement Engine to the
Trust Agreement and to the Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing satisfactory to the Indenture Trustee and the Owner Trustee
confirming the accuracy of the information set forth in clause (2)A.(vi) of
this Section 9.08.
(5) The opinion of Davis Polk & Wardwell, special counsel to the
Lessee, or other counsel reasonably satisfactory to the Indenture Trustee,
stating that:
(i) the certificates, opinions and other instruments and/or property
which have been or are therewith delivered to and deposited with the
Indenture Trustee conform to the requirements of this Indenture and the
Lease and, upon the basis of such application, the property so sold or
disposed of may be properly released from the Lien of this Indenture and
all conditions precedent herein provided for relating to such release have
been complied with; and
(ii) the Replacement Airframe or Replacement Engine has been validly
subjected to the Lien of this Indenture and covered by the Lease, the
instruments subjecting such Replacement Airframe or Replacement Engine to
the Lease and to the Lien of this Indenture, as the case may be, have been
duly filed for recordation pursuant to the Transportation Code or any other
law then applicable to the registration of the Aircraft, and no further
action, filing or recording of any document is necessary or advisable in
order to establish and perfect the title of the Owner Trustee to and the
Lien of this Indenture on such Replacement Airframe or Replacement Engine
and the Indenture Trustee would be entitled to the benefits of Section 1110
of the Bankruptcy Code with respect to such Replacement Airframe or
Replacement Engine, provided, that such opinion need not be to the effect
specified in the foregoing clause to the extent that the benefits of such
Section 1110 would not have been, by reason of a change in law or
governmental interpretation thereof after the date hereof, available to the
Indenture Trustee with respect to the Aircraft immediately prior to such
substitution had such Event of Loss not occurred.
Section 9.09. Indenture and Security Agreement Supplement for
Replacements. In the event of the substitution of a Replacement Airframe or a
Replacement Engine as contemplated by Section 10.03 or Article 11 of the
Lease, the Owner Trustee and the Indenture Trustee agree for the benefit of
the Holders and the Lessee, subject to fulfillment of the conditions precedent
and compliance by the Lessee with its obligations set forth in Section 10.03
or Article 11 of the Lease, to execute and deliver an Indenture and Security
Agreement Supplement as contemplated by Section 9.08(3) hereof and, provided
no Event of Default shall have occurred and be continuing, execute and deliver
to the Lessee an appropriate instrument releasing the Airframe or Engine being
replaced from the Lien of this Indenture.
Section 9.10. Effect of Replacement. In the event of the
substitution of a Replacement Airframe or a Replacement Engine as contemplated
by Section 10.01 or Article 11 of the Lease and Section 9.08 hereof, all
provisions of this Indenture relating to the Airframe or Engine or Engines
being replaced shall be applicable to such Replacement Airframe or Replacement
Engine or Engines with the same force and effect as if such Replacement
Airframe or Replacement Engine or Engines were the same Airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine or
Engines being replaced.
Section 9.11. Compensation. The Owner Trustee covenants and agrees
to pay, and the Indenture Trustee shall be entitled to receive, reasonable
compensation and payment or reimbursement for its reasonable advances,
expenses and disbursements (including the reasonable compensation and expenses
and disbursements of its counsel, agents and other persons not regularly in
its employ) in connection with its services rendered hereunder or in any way
relating to or arising out of the administration of the Trust Indenture Estate
and shall have a priority claim on the Trust Indenture Estate for the payment
of such compensation, advances, expenses and disbursements to the extent that
such compensation, advances, expenses and disbursements shall not be paid by
the Lessee, and shall have the right to use or apply any moneys held by it
hereunder in the Trust Indenture Estate toward such payments; provided that,
so long as the Lease is in effect, the Indenture Trustee shall not make any
claim for payment under this Section 9.11 against the Owner Trustee without
first making demand on the Lessee for payment of such claim. The Indenture
Trustee agrees that it shall have no right against any Holder, SSB or the
Owner Participant for any fee as compensation for its services as trustee
under this Indenture.
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing, and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee and, if expressly required herein, to the Owner Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
9.02 and 9.03 hereof) conclusive in favor of the Indenture Trustee and the
Owner Trustee, if made in the manner provided in this Article.
(b) For the purpose of determining the Holders entitled to vote or
consent to any direction, waiver or other action of such Holders under Section
7.10 or 7.11 hereof, the Lessee may set a record date for such vote or consent
by specifying such record date in an Officer's Certificate delivered to the
Indenture Trustee. Such record date shall be a date not more than 15 days
prior to the first solicitation of such vote or consent.
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates. Subject to Sections 9.02 and 9.03 hereof, the execution of any
instrument by a Holder or his agent or proxy may be proved in accordance with
such reasonable rules and regulations as may be prescribed by the Indenture
Trustee. The holding of Certificates shall be proved by the Register or by a
certificate of the Registrar.
Section 10.03. Holders to Be Treated as Owners. Prior to due
presentment for registration of transfer of any Certificate, the Owner
Trustee, the Indenture Trustee, any agent of the Owner Trustee or the
Indenture Trustee, the Paying Agent, if any, the Registrar and the Lessee
shall deem and treat the Person in whose name such Certificate shall be
registered upon the Register as the absolute owner of such Certificate
(whether or not such Certificate shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions of
this Indenture, interest on such Certificate and for all other purposes; and
neither the Owner Trustee nor the Indenture Trustee (nor any agent of the
Owner Trustee or the Indenture Trustee) nor the Paying Agent, if any, nor the
Registrar nor the Lessee shall be affected by any notice to the contrary. All
such payments so made to any such person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Certificate.
Section 10.04. Certificates Owned by Owner Trustee and the Lessee
Deemed Not Outstanding. In determining whether the Holders of the requisite
aggregate principal amount of Certificates have concurred in any direction,
consent or waiver under this Indenture, Certificates which are owned by the
Owner Trustee, the Owner Participant, SSB, the Lessee or by any Affiliate
thereof shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination; provided that for the purpose of determining
whether the Indenture Trustee shall be protected in relying on any such
direction, consent or waiver, only if a Responsible Officer of the Indenture
Trustee has actual knowledge that certain Certificates are so owned by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Owner Trustee, the Owner Participant, SSB or
the Lessee shall such Certificates be so disregarded; and provided further
that if all Certificates which would be deemed Outstanding in the absence of
the foregoing provision are owned by the Owner Trustee, SSB or the Owner
Participant or by any Affiliate thereof, then such Certificates shall be
deemed Outstanding for the purpose of any such determination. Certificates
so owned which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Owner Trustee, the Owner Participant, SSB 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, SSB
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,
SSB, or the Owner Participant are actually named in the Register. Upon
request of the Indenture Trustee, the Owner Trustee, the Owner Participant,
SSB and the Lessee shall furnish to the Indenture Trustee promptly an
Officer's Certificate listing and identifying all Certificates, if any, known
by the Owner Trustee, the Owner Participant, SSB or the Lessee to be owned or
held by or for the account of any of the above-described persons; and, subject
to Sections 9.02 and 9.03 hereof, the Indenture Trustee shall be entitled to
accept such Officer's Certificate as conclusive evidence of the facts set
forth therein and of the fact that all Certificates not listed therein are
outstanding for the purpose of any such determination.
Section 10.05. Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Indenture Trustee, as provided
in Section 10.01, of the taking of any action by the Holders of the percentage
in aggregate principal amount of the Certificates specified in this Indenture
in connection with such action, any Holder of a Certificate, the serial number
of which is shown by the evidence to be included among the serial numbers of
the Certificates the Holders of which have consented to such action, may, by
filing written notice at the Corporate Trust Department and upon proof of
holding as provided in this Article, revoke such action so far as concerns
such Certificate. Except as aforesaid, any such action taken by the Holder
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Certificate and of any Certificates issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Certificate or otherwise. Any action taken by
the Holders of the percentage in aggregate principal amount of the
Certificates specified in this Indenture in connection with such action shall
be conclusively binding upon the Owner Trustee, the Indenture Trustee and the
Holders of all the Certificates.
Section 10.06. ERISA. Any Person, other than the Subordination
Agent, who is acquiring the Certificates will be deemed to represent and
warrant that (i) no assets of an employee benefit plan subject to Title I of
ERISA or an individual retirement account or plan subject to Section 4975 of
the Code, or any trust established under any such plan or account, have been
used to acquire or hold any of the Certificates, or (ii) that one or more
administrative or statutory exemptions from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code applies to its
purchase and holding of the Certificates such that its purchase and holding of
the Certificates will not result in a non-exempt prohibited transaction under
Section 406 of ERISA and Section 4975 of the Code.
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
The Owner Trustee, not individually but solely in its capacity as
Owner Trustee under the Trust Agreement, hereby agrees, whether or not any of
the transactions contemplated hereby shall be consummated, to assume liability
for, and does hereby indemnify, protect, save and keep harmless the Indenture
Trustee, in its individual capacity, and its successors, assigns, agents and
servants solely from the Lessor's Estate, with respect to the claims of the
Indenture Trustee for payment or reimbursement under Section 9.11 hereof and
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on or
measured by any compensation received by the Indenture Trustee for its
services under this Indenture and any taxes excluded from the Lessee's
indemnity obligation under Section 8.01(b) of the Participation Agreement),
claims, actions, suits, costs, expenses or disbursements (including legal fees
and expenses) of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Indenture Trustee (whether or not also
agreed to be indemnified against by any other person under any other document)
in any way relating to or arising out of this Indenture, or any other
Indenture Documents or the enforcement of any of the terms of any thereof, or
in any way relating to or arising out of the manufacture, purchase,
acceptance, nonacceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent and other defects, whether
or not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration
of the Trust Indenture Estate or the action or inaction of the Indenture
Trustee hereunder, except only (a) in the case of willful misconduct or gross
negligence of the Indenture Trustee in the performance of its duties
hereunder, (b) as may result from the inaccuracy of any representation or
warranty of the Indenture Trustee in the Participation Agreement, (c) as
otherwise provided in Section 9.02(c) hereof or (d) as otherwise excluded by
the terms of Article 8 or Article 9 of the Participation Agreement from the
Lessee's general indemnity or general tax indemnity to the Indenture Trustee
under said Article; provided that so long as the Lease is in effect, the
Indenture Trustee shall not make any claim under this Article XI for any claim
or expense indemnified by the Lessee under the Participation Agreement without
first making demand on the Lessee for payment of such claim or expense. The
Indenture Trustee shall be entitled to indemnification, from the Trust
Indenture Estate, for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Article XI to the extent not reimbursed by the Lessee or others, but
without releasing any of them from their respective agreements of
reimbursement; and to secure the same the Indenture Trustee shall have a prior
Lien on the Trust Indenture Estate. The indemnities contained in this Article
XI shall survive the termination of this Indenture and the resignation or
removal of the Indenture Trustee. Upon payment in full by the Owner Trustee
of any indemnity pursuant to this Article XI, the Owner Trustee shall, so long
as no Indenture Event of Default shall have occurred and be continuing, be
subrogated to the rights of the Indenture Trustee, if any, in respect of the
matter as to which the indemnity was paid.
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee. In the case of any
appointment of a successor to the Owner Trustee pursuant to the Trust
Agreement or any merger, conversion, consolidation or sale of substantially
all of the corporate trust business of the Owner Trustee pursuant to the Trust
Agreement, the successor Owner Trustee shall give prompt written notice
thereof to the Indenture Trustee.
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor. (a) The Indenture Trustee or any successor thereto
may resign at any time without cause by giving at least 30 days' prior written
notice to the Owner Trustee, the Owner Participant, the Lessee and each
Holder, such resignation to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In addition, the Majority in
Interest of the Certificate Holders or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders may at any
time remove the Indenture Trustee without cause by an instrument in writing
delivered to the Lessee, the Owner Trustee, the Owner Participant, and the
Indenture Trustee, and the Indenture Trustee shall promptly notify each Holder
thereof of such action in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the case
of the resignation or removal of the Indenture Trustee, the Majority in
Interest of the Certificate Holders, or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders, may
appoint a successor Indenture Trustee by an instrument signed by such Holders.
If a successor Indenture Trustee shall not have been appointed within 30 days
after such notice of resignation or removal, the Indenture Trustee, the Owner
Trustee, the Lessee, the Owner Participant, or any Holder may apply to any
court of competent jurisdiction to appoint a successor Indenture Trustee to
act until such time, if any, as a successor shall have been appointed as
provided above. The successor Indenture Trustee so appointed by such court
shall immediately and without further act be superseded by any successor
Indenture Trustee appointed as provided above.
(b) In case at any time any of the following shall occur:
(i) the Indenture Trustee shall cease to be eligible in accordance
with the provisions of Section 12.03 hereof and shall fail to resign after
written request therefor by the Owner Trustee or by any Holder; or
(ii) the Indenture Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Indenture Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then the Owner Trustee may remove the Indenture Trustee and, with the consent
of the Lessee, appoint a successor trustee by written instrument, in
duplicate, executed by a Responsible Officer of the Owner Trustee, one copy of
which instrument shall be delivered to the Indenture Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of Section
7.13 hereof, any Holder who has been a bona fide Holder for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Indenture Trustee
and the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Indenture
Trustee and appoint a successor trustee, which removal and appointment shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 12.04 hereof. The successor Indenture Trustee so
appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as provided above
within one year from the date of appointment by such court.
Section 12.03. Persons Eligible for Appointment as Indenture
Trustee. There shall at all times be an Indenture Trustee hereunder which
shall be (i)(x) a bank or trust company organized and doing business under the
laws of the United States of America or any state or the District of Columbia
having a combined capital and surplus of at least $100,000,000 or (y) a bank
or trust company whose obligations hereunder are fully guaranteed by a direct
or indirect parent thereof having a combined capital and surplus of at least
$100,000,000 and (ii) a Citizen of the United States authorized under
applicable law to exercise corporate trust powers and subject to supervision of
examination by Federal, state or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Indenture Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Indenture Trustee shall resign immediately in
the manner and with the effect specified in Section 12.02 hereof.
Section 12.04. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 12.02 hereof shall execute
and deliver to the Owner Trustee, the Lessee, and to its predecessor trustee
an instrument accepting such appointment hereunder, in form and substance
reasonably satisfactory to the Owner Trustee, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as trustee herein; but, nevertheless, on
the written request of the Owner Trustee or of the successor trustee, upon
payment of its charges then unpaid, the trustee ceasing to act shall, subject
to Section 14.04 hereof, pay over to the successor trustee all moneys at the
time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Owner Trustee
shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Article XI hereof.
No successor trustee shall accept appointment as provided in this
Section 12.04 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 12.03 hereof.
Upon acceptance of appointment by a successor trustee as provided in
this Section 12.04, the successor trustee shall mail notice thereof by
first-class mail to the Holders at their last addresses as they shall appear
in the Register, and shall mail a copy of such notice to the Lessee and the
Owner Trustee. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 12.02
hereof.
Section 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation into which the Indenture
Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to
the corporate trust business of the Indenture Trustee, shall be the successor
to the Indenture Trustee hereunder, provided that, anything herein to the
contrary notwithstanding, such corporation shall be eligible under the
provisions of Section 12.03 hereof, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Indenture Trustee shall
succeed to the trusts created by this Indenture any of the Certificates shall
have been authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor
Indenture Trustee and deliver such Certificates so authenticated; and, in case
at that time any of the Certificates shall not have been authenticated, any
successor to the Indenture Trustee may authenticate such Certificates either
in the name of any predecessor hereunder or in the name of the successor
Indenture Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Certificates or in this Indenture provided
that the certificate of the Indenture Trustee shall have; provided, that the
right to adopt the certificate of authentication of any predecessor Indenture
Trustee or to authenticate Certificates in the name of any predecessor
Indenture Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
Section 12.06. Appointment of Separate Trustees. (a) At any time or
times, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Indenture Estate may at the time be located or
in which any action of the Indenture Trustee may be required to be performed
or taken, the Indenture Trustee, by an instrument in writing signed by it, may
appoint one or more individuals or corporations to act as a separate trustee
or separate trustees or co-trustee, acting jointly with the Indenture Trustee,
of all or any part of the Trust Indenture Estate, to the full extent that
local law makes it necessary for such separate trustee or separate trustees or
co-trustee acting jointly with the Indenture Trustee to act.
(b) The Indenture Trustee and, at the request of the Indenture
Trustee, the Owner Trustee, shall execute, acknowledge and deliver all such
instruments as may be required by the legal requirements of any jurisdiction
or by any such separate trustee or separate trustees or co-trustee for the
purpose of more fully confirming such title, rights or duties to such separate
trustee or separate trustees or co-trustee. Upon the acceptance in writing of
such appointment by any such separate trustee or separate trustees or
co-trustee, it, he or they shall be vested with such title to the Trust
Indenture Estate or any part thereof, and with such rights, powers, duties and
obligations, as shall be specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee, or the Indenture Trustee and
such separate trustee or separate trustees or co-trustee jointly with the
Indenture Trustee subject to all the terms of this Indenture, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such separate
trustee or separate trustees or co-trustee, as the case may be. Any separate
trustee or separate trustees or co-trustee may, at any time by an instrument
in writing, constitute the Indenture Trustee its or his attorney-in-fact and
agent with full power and authority to do all acts and things and to exercise
all discretion on its or his behalf and in its or his name. In case any such
separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, the title to the Trust Indenture Estate and all assets,
property, rights, powers, duties and obligations and duties of such separate
trustee or co-trustee shall, so far as permitted by law, vest in and be
exercised by the Indenture Trustee, without the appointment of a successor to
such separate trustee or co-trustee unless and until a successor is appointed.
(c) All provisions of this Indenture which are for the benefit of
the Indenture Trustee (including without limitation Article XI hereof) shall
extend to and apply to each separate trustee or co-trustee appointed pursuant
to the foregoing provisions of this Section 12.06.
(d) Every additional trustee and separate trustee hereunder shall,
to the extent permitted by law, be appointed and act and the Indenture Trustee
shall act, subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Indenture Trustee in respect of the receipt, custody, investment and
payment of moneys shall be exercised solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed and
exercised or performed by the Indenture Trustee and such additional trustee
or trustees and separate trustee or trustees jointly except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
Indenture Estate in any such jurisdiction) shall be exercised and performed
by such additional trustee or trustees or separate trustee or trustees;
(iii) no power hereby given to, or exercisable by, any such additional
trustee or separate trustee shall be exercised hereunder by such additional
trustee or separate trustee except jointly with, or with the consent of,
the Indenture Trustee; and
(iv) no trustee hereunder shall be liable either personally or in its
capacity as such trustee, by reason of any act or omission of any other
trustee hereunder.
If at any time the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to any such law, the Indenture Trustee shall
execute and deliver an indenture supplemental hereto and all other instruments
and agreements necessary or proper to remove any additional trustee or
separate trustee.
(e) Any request, approval or consent in writing by the Indenture
Trustee to any additional trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate trustee, as the case may be, to
take such action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 12.06, the
powers of any additional trustee or separate trustee shall not exceed those of
the Indenture Trustee hereunder.
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders.
The Owner Trustee (when authorized by the Owner Participant) and the Indenture
Trustee, without consent of the Holders, may enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge any property or
assets to the Indenture Trustee as security for the Certificates;
(b) to evidence the succession of another corporation to the Owner
Trustee or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Owner
Trustee herein and in the Certificates;
(c) to add to the covenants of the Owner Trustee such further
covenants, restrictions, conditions or provisions as it and the Indenture
Trustee shall consider to be for the protection of the Holders, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Indenture
Event of Default permitting the enforcement of all or any of the several
remedies provided herein; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture
may provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Indenture Event of
Default or may limit the remedies available to the Indenture Trustee upon
such an Indenture Event of Default or may limit the right of not less than
the Majority in Interest of Certificate Holders to waive such an Indenture
Event of Default;
(d) to surrender any right or power conferred herein upon the Owner
Trustee or the Owner Participant;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Owner Trustee may deem necessary or desirable and which
shall not adversely affect the interests of the Holders;
(f) to correct or amplify the description of any property at any
time subject to the Lien of this Indenture or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the Lien of this Indenture or to subject Replacement Airframe or
Replacement Engines to the Lien of this Indenture in accordance with the
provisions hereof or with the Lease or to release from the Lien of this
Indenture property that has been substituted on or removed from the
Aircraft as contemplated in Section 3.07 hereof; provided that supplements
to this Indenture entered into for the purpose of subjecting Replacement
Airframe or Replacement Engines to the Lien of this Indenture need only be
executed by the Owner Trustee and the Indenture Trustee;
(g) to provide for the issuance under this Indenture of Certificates
in coupon form (including Certificates registrable as to principal only)
and to provide for exchangeability of such Certificates with Certificates
issued hereunder in fully registered form, and to make all appropriate
changes for such purpose;
(h) to effect the re-registration of the Aircraft pursuant to
Section 6.03(b) of the Participation Agreement; and
(i) to add, eliminate or change any provision hereunder so long as
such action shall not adversely affect the interests of the Holders.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be contained therein and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Indenture Trustee shall not be obligated to enter into any such supplemental
indenture which adversely affects the Indenture Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any such supplemental indenture may be executed without the consent of
the Holders of Outstanding Certificates, notwithstanding any of the provisions
of Section 13.02 hereof.
Section 13.02. Supplemental Indentures With Consent of Holders.
With the consent (evidenced as provided in Article X) of the Majority in
Interest of Certificate Holders, the Owner Trustee (when authorized by the
Owner Participant) and the Indenture Trustee may, from time to time and at any
time, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders; provided, however, that,
without the consent of each and every Holder and each Liquidity Provider, no
such amendment of or supplement to this Indenture or any indenture
supplemental hereto, or modification of the terms of, or consent under, any
thereof, shall (a) modify any of the provisions of Section 7.11 hereof or this
Section 13.02, (b) reduce the amount or extend the time of payment of any
amount owing or payable under any Certificate or reduce the interest payable
on any Certificate (except that only the consent of the Holder shall be
required for any decrease in any amounts of or the rate of interest payable on
such Certificate or any extension for the time of payment of any amount
payable under such Certificate), or alter or modify the provisions of Article
V hereof with respect to the order of priorities in which distributions
thereunder shall be made as among Holders of different Series of Certificates
or 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 Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental indenture complies with the applicable
provisions of this Indenture.
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures. Certificates authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may bear
a notation in form approved by the Indenture Trustee as to any matter provided
for by such supplemental indenture. If the Owner Trustee or the Indenture
Trustee shall so determine, new Certificates so modified as to conform, in the
opinion of the Owner Trustee and the Indenture Trustee, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Owner Trustee, authenticated by the Indenture Trustee and delivered in
exchange for the Outstanding Certificates.
Section 13.06. No Request Necessary for Lease Supplement or Indenture
and Security Agreement Supplement. Notwithstanding anything contained in
Section 13.02 hereof, no written request or consent of the Indenture Trustee,
any Holder or the Owner Participant pursuant to Section 13.02 hereof shall be
required to enable the Owner Trustee to enter into any supplement to the Lease
with the Lessee in accordance with the terms and conditions of the Lease to
subject a Replacement Airframe or Replacement Engine thereto or to execute and
deliver an Indenture and Security Agreement Supplement pursuant to the terms
hereof.
Section 13.07. Notices to Liquidity Providers. Any request made to
any Holder for consent to any amendment, supplement or waiver pursuant to
Section 7.11, 8.01 or this Article XIII shall be promptly furnished by the
Indenture Trustee to each Liquidity Provider.
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination
of Indenture. If at any time after (a) the Owner Trustee shall have paid or
caused to be paid the principal of and interest on all the Certificates
outstanding hereunder, as and when the same shall have become due and payable,
or (b) the Owner Trustee shall have delivered to the Indenture Trustee for
cancellation all Certificates theretofore authenticated (other than any
Certificates which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.07 hereof) or (c) (i) all
such Certificates not theretofore delivered to the Indenture Trustee for
cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for prepayment
within one year under arrangements satisfactory to the Indenture Trustee for
the giving of notice of prepayment by the Indenture Trustee in the name and at
the expense of the Owner Trustee, and (ii) the Owner Trustee shall have
irrevocably deposited or caused to be deposited with the Indenture Trustee as
trust funds the entire amount in cash (other than moneys repaid by the
Indenture Trustee or any paying agent to the Owner Trustee in accordance with
Section 14.04 hereof) or Government obligations maturing as to principal and
interest in such amounts and at such times as will insure the availability of
cash sufficient to pay at maturity all such Certificates not theretofore
delivered to the Indenture Trustee for cancellation, including principal and
interest due or to become due to such date of maturity as the case may be, and
if, in any such case, the Owner Trustee shall also pay or cause to be paid all
other sums then payable hereunder by the Owner Trustee, then this Indenture
shall cease to be of further effect (except in the case of (c) above as to (A)
rights of registration of transfer and exchange, and the Owner Trustee's right
of optional prepayment pursuant to Section 6.02(a)(ii) hereof, (B)
substitution of mutilated, defaced, destroyed, lost or stolen Certificates,
(C) rights of Holders to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), (D) the rights, obligations, indemnities and immunities of the
Indenture Trustee hereunder and (E) the rights of the Holders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them), and the Indenture Trustee, on demand of the
Owner Trustee accompanied by an Officer's Certificate and an Opinion of
Counsel (covering such matters reasonably requested by, and in form and
substance reasonably satisfactory to, the Indenture Trustee) and at the cost
and expense of the Owner Trustee, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture. The Owner
Trustee agrees to reimburse and indemnify the Indenture Trustee for any costs
or expenses thereafter reasonably and properly incurred and to compensate the
Indenture Trustee for any services thereafter reasonably and properly rendered
by the Indenture Trustee in connection with this Indenture or the
Certificates.
Upon (or at any time after) payment in full to the Indenture Trustee,
as trust funds, of the principal of and interest on and Make-Whole Premium, if
any, and all other amounts due hereunder and under all Certificates and
provided that there shall then be no other amounts due to the Indenture
Trustee hereunder or under the Participation Agreement or otherwise secured
hereby, the Owner Trustee shall direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing the Aircraft from the Lien of this Indenture and
releasing the Indenture Documents from the assignment thereof hereunder, and
the Indenture Trustee shall execute and deliver such instrument as aforesaid
and, at the Owner Trustee's expense, will execute and deliver such other
instruments or documents as may be reasonably requested by the Owner Trustee
to give effect to such release; provided, however, that this Indenture and the
trusts created hereby shall terminate earlier and this Indenture shall be of
no further force or effect upon any sale or other final disposition by the
Indenture Trustee of all property forming a part of the Trust Indenture Estate
and the final distribution by the Indenture Trustee of all moneys or other
property or proceeds constituting part of the Trust Indenture Estate in
accordance with the terms hereof. Except as aforesaid otherwise provided, this
Indenture and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof.
Section 14.02. Application by Indenture Trustee of Funds Deposited
for Payment of Certificates. Subject to Section 14.04 hereof, all moneys
deposited with the Indenture Trustee pursuant to Section 14.01 hereof shall be
held in trust and applied by it to the prompt payment, either directly or
through any Paying Agent, to the Holders of the particular Certificates for
the payment or prepayment of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal,
interest and Make-Whole Premium, if any, but such money need not be segregated
from other funds except to the extent required by law.
Section 14.03. Repayment of Moneys Held by Paying Agent. Upon the
satisfaction and discharge of this Indenture all moneys then held by any
Paying Agent under the provisions of this Indenture shall, upon demand of the
Owner Trustee, be repaid to it or paid to the Indenture Trustee and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
Section 14.04. Transfer of Moneys Held by Indenture Trustee and
Paying Agent Unclaimed for Two Years and Eleven Months. Any moneys deposited
with or paid to the Indenture Trustee or any Paying Agent for the payment of
the principal of or interest or Make-Whole Premium on any Certificate and not
applied but remaining unclaimed for two years and eleven months after the date
upon which such principal, interest or Make-Whole Premium shall have become
due and payable, shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be paid to the
Owner Trustee (or, if the Trust Agreement shall no longer be in effect, to the
Owner Participant) by the Indenture Trustee or such Paying Agent and the
Holder of such Certificate, as a general unsecured creditor, shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Owner Trustee (or the
Owner Participant) for any payment which such Holder may be entitled to
collect, and all liability of the Indenture Trustee, or any Paying Agent with
respect to such moneys shall thereupon cease.
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting. Each of SSB (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 SSB (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, Holders and Liquidity Providers. Nothing in this
Indenture, whether express or implied, shall be construed to give to any
person other than SSB, the Owner Trustee, the Lessee, the Indenture Trustee,
as trustee and in its individual capacity, the Owner Participant, each
Liquidity Provider and the Holders any legal or equitable right, remedy or
claim under or in respect of this Indenture. Upon termination of this
Indenture pursuant to Article XIV hereof, the Indenture Trustee in connection
with the satisfaction of the Indenture shall return to the Owner Trustee all
property (and related documents and instruments) constituting or evidencing
the Trust Indenture Estate.
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease. Notwithstanding any of the provisions of this Indenture or the Trust
Agreement to the contrary, so long as no Event of Default shall have occurred
and be continuing, neither the Indenture Trustee nor the Owner Trustee will
take any affirmative acts that interfere with the peaceful and quiet
possession and enjoyment of the Aircraft by the Lessee.
Section 15.06. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Indenture to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy, and (a) if to the
Owner Trustee, addressed to it c/o State Street Bank and Trust Company, Two
International Place, 4th Floor, Boston, Massachusetts 02110 (telephone: (617)
664-5526, facsimile: (617) 664-5371), Attention: Corporate Trust Department
(with a copy to the Owner Participant at the address provided for notice
pursuant to Section 14.01 of the Participation Agreement), (b) if personally
delivered to the Indenture Trustee, addressed to it at its office at 79 South
Main Street, Salt Lake City, Utah 84111 (telephone: (801) 246-5630, facsimile:
(801) 246-5053), Attention: Corporate Trust Department or (c) if to the Owner
Participant, a Liquidity Provider or the Lessee, addressed to such party at
such address as such party shall have furnished by notice to the Owner Trustee
and the Indenture Trustee, or, until an address is so furnished, addressed to
the address of such party if any, set forth in Section 14.01 of the
Participation Agreement. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the
other parties to this Indenture.
Where this Indenture provides for notice to Holders, such notice
shall be sufficiently given (unless otherwise expressly provided herein) if in
writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at such Holder's last address as it appears in the Register. In any
case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Indenture Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Owner Trustee
and Holders when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient
giving of such notice.
Section 15.07. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Lessee or the Owner Trustee to the Indenture Trustee to take any action under
any of the provisions of this Indenture, the Lessee or the Owner Trustee, as
the case may be, shall furnish to the Indenture Trustee upon request (a) an
Officer's Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and
that the proposed action is in conformity with the requirements of this
Indenture, and (b) an Opinion of Counsel 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 SSB 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 SSB, upon the certificate, statement or
opinion of or representations by an officer or officers of the Lessee or SSB,
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
SSB or of counsel thereto may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant
or firm of accountants employed by the Lessee or the Owner Trustee, as the
case may be, unless such officer or counsel, as the case may be, knows that
the certificate or opinion or representations with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Indenture Trustee shall contain a statement that
such firm is independent.
Section 15.08. Severability. Any provision of this Indenture which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 15.09. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Indenture or the Certificates may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party or other person against whom enforcement of the change,
waiver, discharge or termination is sought; and any waiver of the terms hereof
or of any Certificate shall be effective only in the specific instance and for
the specific purpose given.
Section 15.10. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and permitted assigns of each, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of
such Holder. This Indenture and the Trust Indenture Estate shall not be
affected by any amendment or supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust Agreement, except that each
reference in this Indenture to the Trust Agreement shall mean the Trust
Agreement as amended and supplemented from time to time to the extent
permitted hereby and thereby.
Section 15.11. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for the convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 15.12. Normal Commercial Relations. Anything contained in
this Indenture to the contrary notwithstanding, the Owner Participant, the
Indenture Trustee and any Holder, or any bank or other affiliate of any such
party, may conduct any banking or other financial transactions, and have
banking or other commercial relationships, with the Lessee fully to the same
extent as if this Indenture were not in effect, including without limitation
the making of loans or other extensions of credit to the Lessee for any
purpose whatsoever, whether related to any of the transactions contemplated
hereby or otherwise.
Section 15.13. Governing Law; Counterparts. THIS INDENTURE AND
EACH CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. This Indenture may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed this 28th day of May, 1997 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.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By
------------------------------------
Name: Greg A. Hawley
Title: Vice President
Exhibit A
to
Trust Indenture and Security Agreement
Indenture and Security Agreement Supplement No. ___
Indenture and Security Agreement Supplement No. ___ (Federal Express
Corporation Trust No. N672FE) dated ________, ____, of STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as owner trustee
(herein called the "Owner Trustee") under the Trust Agreement dated as of May
1, 1997 (the "Trust Agreement") between State Street Bank and Trust Company of
Connecticut, National Association and the Owner Participant named therein.
W I T N E S S E T H :
-------------------
WHEREAS, the Trust Agreement provides for the execution and delivery
of this Indenture and Security Agreement Supplement which shall particularly
describe the Aircraft and any Replacement Airframe or Replacement Engine
included in the property covered by the Trust Agreement.
WHEREAS, the Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N672FE) dated as of May 1, 1997 (the "Indenture") between
the Owner Trustee and First Security Bank, National Association (herein called
the "Indenture Trustee") provides for the execution and delivery of an
Indenture and Security Agreement Supplement substantially in the form of this
Indenture and Security Agreement Supplement No. __, which Supplement shall
particularly describe the Aircraft included in the Trust Indenture Estate, and
shall specifically mortgage such Aircraft to the Indenture Trustee.
(1)WHEREAS, the Indenture relates to the Aircraft and the Engines
described in the following paragraph and a counterpart of the Indenture is
attached to and made a part of this Indenture and Security Agreement
Supplement No. 1, and this Indenture and Security Agreement Supplement No. 1,
together with such attachment, is being filed for recordation on or promptly
after the date of this Supplement No. 1 with the Federal Aviation
Administration as one document.
- ------------
(1) This recital is to be included only in the first Indenture Supplement.
(2)Whereas, the Indenture and Indenture and Security Agreement
Supplement No. ___ dated _________________, ______ (the Indenture being
attached to and made a part of such Indenture and Security Agreement
Supplement and filed therewith) have been duly recorded pursuant to Subtitle
VII of Title 49 of the United States Code, on ____________, _____, as one
document and have been assigned Conveyance No. _________.
- ------------
(2) This recital is not to be included in the first Indenture Supplement.
NOW, THEREFORE, this Supplement witnesseth, that, to secure the prompt
payment of the principal of and Make-Whole Premium, if any, and interest on,
and all other amounts due with respect to, all Outstanding Certificates under
the Indenture and all other amounts due hereunder and the performance and
observance by the Owner Trustee of all the agreements, covenants and
provisions for the benefit of the Holders contained in the Indenture, in the
Lease, in the Participation Agreement and the Certificates, and the prompt
payment of any and all amounts from time to time owing under the Participation
Agreement by the Owner Trustee, the Owner Participant or the Lessee to the
Holders and for the uses and purposes and subject to the terms and provisions
of the Indenture and the Certificates, and in consideration of the premises
and of the covenants contained in the Indenture, and of the purchase of the
Certificates by the Holders, and of the sum of $1 paid to the Owner Trustee by
the Indenture Trustee at or before the delivery of the Indenture, the receipt
of which is hereby acknowledged, the Owner Trustee has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged, granted a security
interest in, and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge, grant a security interest in, and confirm,
unto the Indenture Trustee, its successors and assigns, in trust for the equal
and ratable security and benefit of the Holders, in the trust created by the
Indenture, and subject to all of the terms, conditions, provisions and
limitations set forth in the Indenture, a first priority security interest in
and mortgage lien on all estate, right, title and interest of the Owner Trustee
in, to and under the following described property:
Airframe
One (1) Airframe identified as follows:
FAA Manufacturer's
Registration Serial
Manufacturer Model Number Number
- ------------ ----- ------------ --------------
together with all appliances, equipment, instruments and accessories
(including, without limitation, radio and radar) from time to time belonging
thereto, owned by the Owner Trustee and installed in or appurtenant to said
aircraft.
AIRCRAFT ENGINES
Two (2) aircraft engines, each such engine having 750 or more rated takeoff
horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Serial
Manufacturer Model Number
- ------------ ----- --------------
together with all equipment and accessories belonging thereto, by whomsoever
manufactured, owned by the Owner Trustee and installed in or appurtenant to
said aircraft engines.
Together with all substitutions, replacements and renewals of the
property described above, and all property which shall hereafter become
physically attached to or incorporated in the property described above,
whether the same are now owned by the Owner Trustee or shall hereafter be
acquired by it.
As further security for the obligations referred to above and secured
by the Indenture and hereby, the Owner Trustee has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors and assigns, for the
security and benefit of the Holders, in the trust created by the Indenture,
and subject to all of the terms, conditions, provisions and limitations set
forth in the Indenture, all of the estate, right, title and interest of the
Owner Trustee in, to and under the Lease Supplement (other than Excepted
Payments, if any) covering the property described above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, for the benefit and security of
the Holders for the uses and purposes and subject to the terms and provisions
set forth in the Indenture.
This Supplement shall be construed as supplemental to the Indenture
and shall form a part thereof, and the Indenture is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplement is being delivered in the State of New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft/Engines referred to in this Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee and covered by all the terms and conditions of
the Trust Agreement, subject to the Lien of the Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this Supplement to
be duly executed as of the date first written above by one of its officers
thereunto duly authorized.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
Exhibit B
to
Trust Indenture and Security Agreement
[Form of Certificate]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD OR OFFERED FOR SALE IN CONTRAVENTION OF SAID ACT
No. ______ $_____________
EQUIPMENT TRUST CERTIFICATE
(Federal Express Corporation Trust No. N672FE)
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
(Federal Express Corporation Trust No. N672FE)
dated as of May 1, 1997
SERIES ___
Interest Rate Maturity
- ------------- --------
State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee (herein in such capacity called the "Owner
Trustee") under that certain Trust Agreement (Federal Express Corporation
Trust No. N672FE) dated as of May 1, 1997, between the Owner Participant named
therein and State Street Bank and Trust Company of Connecticut, National
Association (herein as such Trust Agreement may be amended or supplemented
from time to time called the "Trust Agreement"), hereby promises to pay to
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Subordination Agent, or its
registered assigns, the principal sum of ________________ _______________
Dollars, payable as set forth below for the Maturity specified above, in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest on the principal outstanding from time to time, semiannually on each
January 15 and July 15, on said principal sum in like coin or currency at the
rate per annum set forth above from the January 15 or the July 15, 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 January 15 or July 15 and before the
following January 15 or July 15, as the case may be, this Certificate shall
bear interest from such January 15 or July 15; provided that, if the Owner
Trustee shall default in the payment of interest due on such January 15 or
July 15, then this Certificate shall bear interest from the next preceding
January 15 or July 15 to which interest on this Certificate has been paid or
duly provided for. The interest so payable on any January 15 or July 15 will,
except as otherwise provided in the Indenture referred to below, be paid to
the person in whose name this Certificate is registered at the close of
business on the January 15 or July 15 preceding such January 15 or July 15,
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 First Security Bank, National Association
(the "Indenture Trustee") maintained for such purpose in immediately available
funds prior to 10:30 A.M. (New York time) on the due date thereof and the
Indenture Trustee shall remit all such amounts received by it to the Holders
at such account or accounts at such financial institution or institutions as
the Holders shall have designated to the Indenture Trustee in writing, in
immediately available funds, such payment to be made if the payment was
received prior to 10:30 A.M. New York time by the Indenture Trustee on any
Business Day, by 12:00 noon New York time on such Business Day; otherwise, the
Indenture Trustee shall make payment promptly, but not later than 11:00 A.M.
New York time on the next succeeding Business Day; provided that, at the
option of the Indenture Trustee or its Paying Agent, interest may be paid by
mailing a check therefor payable to or upon the written order of the
registered holder entitled thereto at his last address as it appears on the
Register. If any amount payable under this Certificate, or under the
Indenture, falls due on a day that is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
State Street Bank and Trust Company of Connecticut, National
Association and First Security Bank, National Association are not acting
individually hereunder, but solely as Owner Trustee and Indenture Trustee,
respectively.
Any Person, other than the Subordination Agent, who is acquiring the
Certificates will be deemed to represent and warrant that (i) no assets of an
employee benefit plan subject to Title I of ERISA or an individual retirement
account or plan subject to Section 4975 of the Code, or any trust established
under any such plan or account, have been used to acquire or hold any of the
Certificates, or (ii) that one or more administrative or statutory exemptions
from the prohibited transaction rules under Section 406 of ERISA and Section
4975 of the Code applies to its purchase and holding of the Certificates such
that its purchase and holding of the Certificates will not result in a
non-exempt prohibited transaction under Section 406 of ERISA and Section 4975
of the Code.
This Certificate is one of a duly authorized issue of Certificates
issued and to be issued under the Trust Indenture and Security Agreement
(Federal Express Corporation Trust No. N672FE) dated as of May 1, 1997 (herein
as amended, supplemented or modified from time to time called the "Indenture")
between the Owner Trustee and the Indenture Trustee, designated as Equipment
Trust Certificates (Federal Express Corporation Trust No. N672FE) limited in
aggregate initial principal amount to $61,984,000 consisting of the following
aggregate principal amounts of Certificates with the interest rates per annum
and Maturities shown:
Initial
Aggregate
Principal
Series Maturity Amount Interest Rate
------ -------- ----------- -------------
A January 15, 2018 $33,374,000 7.50%
B January 15, 2018 $12,515,000 7.52%
C January 15, 2014 $16,095,000 7.65%
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its
principal corporate trust office) for a more complete statement of the terms
and provisions thereof, including a statement of the properties conveyed,
pledged and assigned thereby, the nature and extent of the security, the
respective rights of the Owner Trustee, the Owner Participant, the Lessee, the
Indenture Trustee and the Holders, and the terms upon which the Certificates
are, and are to be, executed and delivered, to all of which terms and
conditions in the Indenture each Holder hereof agrees by its acceptance of
this Certificate.
Capitalized terms not otherwise defined herein shall have the
meanings given to them in the Indenture.
The principal amounts of the Certificates are payable as follows. The
Certificates are subject to redemption in part, pro rata (based on the face
amount thereof), in each case through mandatory sinking fund redemptions
providing for the redemption on the Sinking Fund Redemption Dates of the
aggregate principal amounts set forth below, together with interest accrued
thereon to the applicable Sinking Fund Redemption Date, but without Make-Whole
Premium.
Principal Amount
Series A Series B Series C
Certificates Certificates Certificates
Sinking Fund with a Maturity of with a Maturity of with a Maturity of
Redemption Date January 15, 2018 January 15, 2018 January 15, 2014
- ---------------- ------------------ ------------------ ------------------
July 15, 1997 0 0 0
January 15, 1998 192,704 250,055 0
July 15, 1998 474,776 0 0
January 15, 1999 350,565 250,305 75,480
July 15, 1999 316,915 0 0
January 15, 2000 339,643 250,305 333,740
July 15, 2000 327,837 0 0
January 15, 2001 408,040 250,305 333,740
July 15, 2001 259,440 0 0
January 15, 2002 581,596 250,305 333,740
July 15, 2002 85,884 0 0
January 15, 2003 667,480 250,305 530,847
July 15, 2003 0 0 0
January 15, 2004 667,480 250,305 721,692
July 15, 2004 0 0 0
January 15, 2005 667,480 250,305 839,540
July 15, 2005 0 0 0
January 15, 2006 667,480 250,305 808,994
July 15, 2006 0 0 0
January 15, 2007 667,480 250,305 3,739,396
July 15, 2007 0 0 0
January 15, 2008 667,480 250,305 652,598
July 15, 2008 0 0 0
January 15, 2009 667,480 250,305 1,528,250
July 15, 2009 0 0 0
January 15, 2010 667,480 336,300 1,665,821
July 15, 2010 0 0 0
January 15, 2011 667,480 2,884,537 0
July 15, 2011 0 0 0
January 15, 2012 667,480 3,168,600 0
July 15, 2012 0 0 0
January 15, 2013 3,890,457 1,009,716 0
July 15, 2013 0 0 0
January 15, 2014 754,478 0 4,531,162
July 15, 2014 0 0 0
January 15, 2015 5,701,038 0 0
July 15, 2015 0 0 0
January 15, 2016 6,145,275 0 0
July 15, 2016 0 0 0
January 15, 2017 6,624,128 0 0
July 15, 2017 0 0 0
January 15, 2018 246,424 2,112,437 0
Except as expressly provided in the Indenture, all payments of
principal, Make-Whole Premium, if any, and interest and other amounts to be
made to the Holder hereof by or at the behest of the Owner Trustee hereunder
or under the Indenture shall be made only from the income and proceeds from
the Lessor's Estate to the extent included in the Trust Indenture Estate and
only to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Lessor's Estate to the extent included in the Trust
Indenture Estate to enable the Indenture Trustee to make such distributions in
accordance with the terms of the Indenture; provided that under the Lease, the
Lessee is obligated to pay or cause to be paid, to the extent such payments
are not required to be made from the assets subject to the Lien of this
Indenture or the income and proceeds received by the Indenture Trustee
therefrom, any net loss arising from the investment of funds held by the
Indenture Trustee which but for an Event of Default would be payable to
Lessee, and each Holder hereof, by its acceptance of this Certificate, agrees
that it will (except as aforesaid) look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for distribution to the
Holder hereof as provided above and that neither the Owner Participant, the
Owner Trustee, State Street Bank and Trust Company of Connecticut, National
Association nor the Indenture Trustee is personally liable to the Holder
hereof for any amounts payable or any liability under this Certificate or
under the Indenture, except as expressly provided in the Indenture, in the
case of State Street Bank and Trust Company of Connecticut, National
Association, the Owner Trustee and the Indenture Trustee.
The Certificates are subject to prepayment in the following
circumstances at the price determined as set forth below.
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08 of
the Indenture replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and the Lessee shall not have revoked
such notice or effected an assumption of the Certificates as provided in
Section 2.12 of the Indenture).
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 of the Indenture.
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) of Indenture.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a Refinancing of the Certificates.
(vi) As contemplated by Section 2.16 of the Indenture and Section
3.05(b) of the Participation Agreement if the Delivery Date has not
occurred on or prior to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
In the case of a prepayment of the Certificates pursuant to clauses
(ii), (iv) and (v) above, the Lessee, in accordance with and subject to the
terms (including timing of notice) of Section 4.02(a) or 10.01 of the Lease or
Article 15 of the Participation Agreement, as the case may be, shall give
irrevocable (subject to Section 6.02(c) of the Indenture) written notice to
the Owner Trustee and the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Owner Trustee is
directed to prepay the Certificates. In the case of a prepayment pursuant to
clause (i) above, the Certificates shall be prepaid on the Loss Payment Date
(as defined in Section 11.02 of the Lease). In the case of a prepayment
pursuant to clause (iii) above, the Certificates shall be prepaid on the date
designated in the notice of prepayment required by Section 8.02 of the
Indenture. In the case of a prepayment of the Certificates pursuant to
clauses (ii) and (iv) above, the Certificates shall be prepaid in full on the
Termination Date. In the case of a prepayment of the Certificates pursuant to
clause (v) above, the Certificates shall be prepaid on the effective date of
the Refinancing. In the case of a prepayment of the Certificates pursuant to
clause (vi) above, the Certificates shall be prepaid on the 15th day following
the Cut-Off Date. In the case of a prepayment of the Certificates pursuant to
clause (vii) above, the Certificates shall be prepaid on the date designated
in the notice referred to therein. The day on which the Certificates are to
be prepaid is herein referred to as the "Prepayment Date". On or prior to the
Prepayment Date, immediately available funds shall be deposited with the
Indenture Trustee in an amount in respect of the Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section
6.02 of the Indenture on or after the applicable Premium Termination Date,
or (ii) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (i), (iii) (if clause (i) of the first
sentence of Section 8.02(a) of the Indenture is applicable) or (vi) above,
the sum of (A) the aggregate principal amount of such Certificates then
Outstanding, (B) accrued interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due the Indenture Trustee under the
Indenture or under the Participation Agreement or the Lease, but excluding
any Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (ii), (iii) (if clause (ii) of the
first sentence of Section 8.02(a) of the Indenture is applicable), (iv),
(v) or (vii) above, the sum of the amounts specified in clauses (A), (B)
and (C) of the preceding clause (1) plus any Make-Whole Premium payable in
respect of all Certificates with respect to which the Premium Termination
Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
If, in accordance with and subject to the satisfaction of the
conditions set forth in Section 7.11 of the Participation Agreement, the
Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall (except for prior acts) be released
and discharged from any further obligations hereunder and under the
Certificates and all other Operative Agreements (except any obligations that
have accrued prior to such assumption).
If an Indenture Event of Default under the Indenture shall occur and
be continuing, the principal of the Certificates may be declared due and
payable in the manner and with the effect provided in the Indenture. The
Indenture provides that in certain events such declaration and its
consequences may be waived the Majority in Interest of Holders. Any such
consent or waiver shall be conclusive and binding upon the Holder of this
Certificate and upon all future Holders and owners of this Certificate and any
Certificate that may be issued in exchange or substitution therefor, whether or
not any notation thereof is made upon this Certificate or such other
Certificates. Moreover, if, and only if, an Event of Default shall occur, the
Indenture Trustee may declare the Lease to be in default, and may, to the
exclusion of the Owner Trustee, exercise one or more of the remedies of the
Owner Trustee provided in the Lease.
The Owner Trustee or the Owner Participant may cure a default by the
Lessee under the Lease arising from the failure of the Lessee to make any
Basic Rent payments under the Lease, but the Owner Trustee and the Owner
Participant, collectively, may not cure more than three consecutive such
failures or more than six such failures in total. The Owner Trustee or the
Owner Participant may cure any other default by the Lessee in the performance
of its obligations under the Lease.
(A) If an Event of Default shall have occurred and be continuing for
more than 180 days or the Certificates shall have been accelerated or (B) an
Event of Default shall have occurred and be continuing for not more than 180
days and the Certificates shall not have been accelerated, the Owner
Participant (or the Owner Trustee on behalf of the Owner Participant) may:
(1) direct the Owner Trustee to cause the prepayment of all the
Outstanding Certificates by notifying the Indenture Trustee of such
election and depositing the sum of amounts contemplated by paragraph
"first" under Section 5.03 of the Indenture and the aggregate
Prepayment Price of all such Certificates with the Indenture Trustee
for distribution to the Holders; or
(2) purchase all of the Outstanding Certificates by paying to the
Indenture Trustee an amount equal to the aggregate unpaid principal
amount of all Outstanding Certificates, plus accrued interest on such
amount to the date of purchase and if such purchase occurs prior to
the Premium Termination Date for such Outstanding Certificate (in the
case of a purchase pursuant to clause (ii) of the first sentence of
Section 8.02(a) of the Indenture but not in the case of clause (i) of
Section 8.02(a) of the Indenture) any Make-Whole Premium applicable
to each Outstanding Certificate, plus all other sums due any Holder
or the Indenture Trustee under the Indenture, the Participation
Agreement or the Lease.
The right of the Holder hereof to institute an action for any remedy
under the Indenture is subject to certain restrictions specified in the
Indenture, except that the right of the Holder of this Certificate to receive
payment of the principal of and interest and Make-Whole Premium, if any, on
this Certificate on or after the respective due dates, or to institute suit
for the enforcement of any such payment, shall not be impaired or affected
without the consent of such Holder.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 and integral multiples thereof. So long as
any of the Certificates remain Outstanding, the Indenture Trustee will
maintain an office or agency where the Certificates may be presented for
payment and a facility or agency in New York, New York where the Certificates
may be presented for registration of transfer and for exchange as provided in
the Indenture. As provided in the Indenture and subject to certain
limitations therein, this Certificate is transferable, and upon surrender of
this Certificate for registration of transfer at the principal corporate trust
office of the Indenture Trustee, or at the office or agency maintained for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Indenture Trustee duly
executed by, the Holder or his attorney duly authorized in writing, one or
more new Certificates of the same Series and 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 Series and Maturity and interest rate and
of authorized denominations, as requested by the Holder surrendering the same,
upon presentation thereof for such purpose at the principal corporate trust
office of the Indenture Trustee, or at an office or agency maintained for such
purpose.
No service charge shall be levied for any such registration of
transfer or exchange, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to the due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, any agent of the Owner
Trustee or the Indenture Trustee, the Paying Agent, if any, the Registrar and
the Lessee shall deem and treat the person in whose name this Certificate is
registered as the absolute owner hereof for all purposes whether or not this
Certificate is overdue, and neither the Owner Trustee, the Indenture Trustee
(nor any agent of the Owner Trustee or the Indenture Trustee), nor the Paying
Agent, if any, the Registrar nor the Lessee shall be affected by notice to the
contrary.
The indebtedness evidenced by this Certificate is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of the Secured Obligations (as defined in
the Indenture) in respect of [Series A Certificate](1), [Series A and Series B
Certificates](2) and this Certificate is issued subject to such provisions.
The Holder of this Certificate, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Indenture Trustee
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in the Indenture and (c) appoints
the Indenture Trustee such Holder's attorney-in-fact for such purpose.(*)
- ------------
(1) To be inserted in the case of a Series B Certificate.
(2) To be inserted in the case of a Series C Certificate.
(*) To be inserted for each Certificate other than any Series A Certificate.
As provided in the Indenture, the Indenture and the Certificates
shall be construed in accordance with and governed by the laws of the State of
New York.
This Certificate shall not be secured by or be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose unless
authenticated by the Indenture Trustee as evidenced by the manual signature of
one of its authorized officers on the certificate below.
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Trust
Certificate (Federal Express Corporation Trust No. N672FE) to be duly executed
in its corporate name by its officer thereunto duly authorized.
Dated: May ___, 1997 STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust Certificates (Federal Express
Corporation Trust No. N672FE) referred to in the within mentioned Indenture.
Dated: May ___, 1997 FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By
------------------------------------
Name: Greg A. Hawley
Title: Vice President
SCHEDULE I
[Reserved]
SCHEDULE II
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N672FE)
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement,
the Series Supplements, the Intercreditor Agreement and the Liquidity
Facilities) referred to below, unless otherwise defined in an Operative
Agreement or the context thereof shall otherwise require. In the case of any
conflict between the provisions of this Schedule and the provisions of any
Operative Agreement, the provisions of such Operative Agreement shall control
the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Additional Insured. As defined in Article 13 of the Lease.
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
located in the United States succeeding to the functions of any of the
foregoing.
Affidavits. The affidavits of citizenship of the Owner Trustee and
the Owner Participant.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment to be 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 to be
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 and
actual state, local and foreign income taxes.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee as
provided in the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe thereunder) together with two Engines
(whether either is an initial Engine or a 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 Aircraft shall mean the Airbus A300F4-605R airframe bearing FAA
Registration Number N672FE and Manufacturer's serial number 779, together with
two General Electric CF6-80C2-A5F engines.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number initially and manufacturer's serial
number specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any Replacement Airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on or prior to the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, each Liquidity Provider and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N672FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Ancillary Agreement II. The Ancillary Agreement II (Federal Express
Corporation Trust No. N672FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Application. The application for registration of the Aircraft with
the FAA in the name of the Owner Trustee.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with an abbreviated report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
Assignment and Assumption Agreement. Any agreement delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Average Life Date. For any Certificate, the date which follows the
prepayment date by a period equal to the Remaining Weighted Average Life of
such Certificate.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France.
AVSA Consent and Agreement. The Consent and Agreement dated as of
May 1, 1997, executed by AVSA.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Bankruptcy Default. An event specified in Section 16.01(e), (f) or
(g) of the Lease which either does or, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Delivery Date and ending at the end of the day on November 19, 2020, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Memphis, Tennessee and the city in the
United States in which the office or agency is maintained by the Pass Through
Trustee for the payment of the Pass Through Certificates, and after the Lien
of the Indenture is discharged, Boston, Massachusetts.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N672FE), 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 either of which would change or would allow a change in
the tax assumptions or structure upon which the lease economics were based,
provided that the Owner Participant or the Lessee has notified the other party
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 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Class A Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Class B Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Collateral Account Control Agreement. The Collateral Account Control
Agreement dated as of May 1, 1997 among State Street Bank and Trust Company,
the Indenture Trustee and the Owner Trustee.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of May 1,
1997 executed by the Manufacturer.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 750 Main Street, Hartford, Connecticut
06103, Attention: Corporation Trust Administration, or such other office at
which the Owner Trustee's corporate trust business shall be administered which
the Owner Trustee shall have specified by notice in writing to the Lessee, the
Owner Participant and the Indenture Trustee.
Corporate Trust Department. The Corporate Trust Department office of
the Indenture Trustee located at 79 South Main Street, Salt Lake City, Utah
84111, Attention: Corporate Trust Department, or such other office at which
the Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to the Lessee,
the Owner Participant and the Owner Trustee.
CRAF Program. Has the meaning specified in Section 7.01(f) of the
Lease.
Cut-Off Date. November 17, 1997.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
Default. Any event or condition which, with the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
Delivery Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
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 has a combined
capital and surplus of at least $100,000,000 and a rating of A or better from
the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Section 7.02(a)(vii), 10.02(c), 10.03, 11.03, 11.04 or 12.02 of
the Lease, together with all Parts related thereto. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the Lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, both Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1997, executed
by the Engine Manufacturer.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N672FE), dated as of May 1, 1997 between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. As defined in Section 8.01(b)(xii) of the Participation
Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by Lessee for any reason whatsoever;
(ii) any damage to such property which results in an insurance settlement with
respect to such property on the basis of a total loss, or constructive or
compromised total loss; (iii) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the Government, any foreign
government or purported government or any agency or instrumentality thereof,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, for a period in excess of 180 days (or such
shorter period ending on the earlier of the expiration of the Term or on the
date on which an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss shall occur)
or (B) by the Government for a period extending beyond the Term; and (iv) as a
result of any law, rule, regulation, order or other action by the Aeronautics
Authority or other governmental body having jurisdiction, the use of the
Aircraft or Airframe in the normal course of air transportation of cargo shall
have been prohibited by virtue of a condition affecting all Airbus A300-600
series aircraft equipped with engines of the same make and model as the
Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period, shall be diligently
carrying forward all steps which are necessary or desirable to permit the
normal use of the Aircraft or Airframe or, in any event, if such use of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if any Event of Loss occurs with respect to the Airframe.
Excepted Payments. Collectively, (i) indemnity, expense,
reimbursement or other payments paid or payable by the Lessee in respect of
the Owner Participant, the Owner Trustee in its individual capacity or any of
their respective successors, permitted assigns, directors, officers,
employees, servants and agents or Affiliates, pursuant to the Participation
Agreement or any other Operative Agreement or any indemnity hereafter granted
to the Owner Participant or the Owner Trustee in its individual capacity
pursuant to the Lease or the Participation Agreement, (ii) proceeds of public
liability insurance (or government indemnities in lieu thereof) in respect of
the Aircraft payable as a result of insurance claims paid for the benefit of,
or losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Article 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) any purchase price paid to the
Owner Participant for its interest in the Trust Estate pursuant to Section
7.03(d) of the Participation Agreement, (vi) subject to Section 3.05 of the
Lease, payments constituting increases in Basic Rent attributable to payments
arising pursuant to Section 5 of the Tax Indemnity Agreement, (vii) any
payments in respect of interest to the extent attributable to payments
referred to in clauses (i) through (vi) above and (viii) any right to demand,
collect or otherwise receive and enforce the payment of any amount described
in clauses (i) through (v) and (vii) above (except with respect to interest
attributable to payments referred to in clause (vi) above).
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. 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 and Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell, assuming the Aircraft (or other property) is unencumbered
by the Lease. In such determination, except for purposes of Section 17.01 of
the Lease (when it shall be determined based upon the actual condition and
location of the Aircraft), 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 and Fair Market Value shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Final Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Fixed Renewal Rent. Semi-annual payments of rent during the Fixed
Renewal Term equal to the lesser of (i) Fair Market Rental as determined as of
the commencement of such Fixed Renewal Term and (ii) 50% of the average actual
semi-annual Basic Rent payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
FPO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
French Pledge Agreement. The French Pledge Agreement dated as of May
1, 1997 between the Owner Trustee and the Indenture Trustee.
FSB. First Security Bank, National Association, a national banking
association.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of SSB, in its individual capacity and as Owner
Trustee and Lessor, the Subordination Agent, in its individual capacity and in
its capacity as Subordination Agent, each Liquidity Provider, the Owner
Participant, the Indenture Trustee, in its individual capacity and as trustee,
the Owner Participant Guarantor and any successor (including any trustee which
may succeed to the Lessor's interest under the Lease), Affiliate, assign,
officer, director, employee, agent and servant of any of the foregoing, the
Lessor's Estate and the Trust Indenture Estate. Neither the Pass Through
Trustee nor any holder of a Pass Through Certificate shall be deemed to be an
Indemnitee.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N672FE), dated as of May 1, 1997, between the
Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N672FE) to be dated the Delivery Date, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
Indenture Trustee's Liens. Any Lien against, on or with respect to
the Aircraft, the Lessor's Estate or the Trust Indenture Estate or any part
thereof 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, (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 or (iii) Taxes imposed against
the Indenture Trustee in its individual capacity in respect of which the Lessee
has not indemnified (and is not obligated to indemnify) the Indenture Trustee
in such capacity.
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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Intercreditor Agreement. The Intercreditor Agreement dated as of May
1, 1997, among the Pass Through Trustee, the Class A Liquidity Provider, the
Class B Liquidity Provider and the Subordination Agent.
Interest Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N672FE) dated as of May 1, 1997, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, including,
without limitation, supplementation by one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N672FE) to be dated the Delivery Date, substantially in
the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA Bill
of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), any Ancillary Agreement, the GTA, the
Engine Warranty Assignment, the Engine Consent, 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 in its individual
capacity or the Owner Participant) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity, or to any of their respective directors, officers,
employees and agents pursuant to Articles 8 and 9 of the Participation
Agreement), and all other property of the Owner Trustee purportedly subjected
to the Lien of the Indenture by the Granting Clause thereof; provided that in
no event shall "Lessor's Estate" include any Excepted Payment.
Lessor's Liens. Liens against, on or with respect to the Aircraft,
the Lessor's Estate or the Trust Indenture Estate or any part thereof, title
thereto or any interest therein arising as a result of (i) claims against the
Lessor, in its individual capacity or as Owner Trustee, or the Owner
Participant, in each case not related to the transactions contemplated by the
Operative Agreements, (ii) acts or omissions of the Lessor in its individual
capacity or as Owner Trustee, and, in the case of the Lessor in its individual
capacity, arising from its gross negligence or willful misconduct or expressly
prohibited under the Operative Agreements and any act or omission of the Owner
Participant which is in violation of any of the terms of the Operative
Agreements, (iii) Taxes or Expenses imposed against the Lessor, in its
individual capacity or as Owner Trustee, Owner Participant, Lessor's Estate or
the trust created by the Trust Agreement which are not required to be
indemnified against by the Lessee pursuant to the Participation Agreement by
reason of Section 8.01(b) or 9.01(b) thereof and which are not required to be
indemnified against by the Lessee pursuant to the Tax Indemnity Agreement, or
(iv) claims against the Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner Participant of its interests in
the Aircraft other than a transfer of the Aircraft pursuant to Section 4.02(a)
or Article 10 or 11 of the Lease and other than a transfer pursuant to the
exercise of the remedies set forth in Article 17 of the Lease.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Liquidity Facility. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Liquidity Provider. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
Loss Payee. Has the meaning specified in Section 13.02(b)(i) of the
Lease.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% of the aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding for
purposes of this definition any Certificates held by (i) the Owner Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the day before the
applicable Prepayment Date (or date of purchase, as the case may be) which an
Independent Investment Banker determines to be equal to the excess, if any, of
(i) the present value of the remaining scheduled payments of such principal
amount or portion thereof and interest thereon (excluding interest accrued
from the immediately preceding Payment Date to such Prepayment Date or date of
purchase, as the case may be) to the Maturity of such Certificate in
accordance with generally accepted financial practices assuming a 360-day year
consisting of twelve 30-day months at a discount rate equal to the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
outstanding principal amount of such Certificate plus accrued interest.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
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 equal to the Debt Rate per annum compounded semi-annually.
Non-U.S. Person. Any Person other than a U.S. Person.
Obsolete Parts. Parts which are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, the Owner Trustee Guaranty,
if any, any Ancillary Agreement entered into by or with the written consent of
the Indenture Trustee, which by its terms is an Operative Agreement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the Engine Consent, the Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Account Control Agreement and any Assignment and Assumption
Agreement.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Outstanding. When used with respect to Certificates, as of the date
of determination and subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and delivered under the
Indenture, with the exception of the following:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money in the necessary amount
has been theretofore deposited with the Indenture Trustee in trust
for the Holders of such Certificates pursuant to Section 14.01 of the
Indenture; provided, that if such Certificates are to be prepaid,
notice of such prepayment has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Indenture Trustee
has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to Article II
of the Indenture.
Owner Participant. The trustor originally named in the Trust
Agreement and any successor thereto, and any Person to which the Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Guarantor. Philip Morris Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Certificate Closing Date by the Owner Participant Guarantor in favor of the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
and any guaranty delivered in compliance with Section 7.03(d) of the
Participation Agreement.
Owner Trustee. SSB, not in its individual capacity except as
otherwise expressly stated, but solely as Owner Trustee under the Trust
Agreement.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the 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 the case may be, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N672FE), dated as of May 1, 1997, among the Lessee, the
Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee, the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee and the Subordination Agent not in its
individual capacity except as otherwise expressly provided therein, but solely
as subordination agent.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine or title to which
remains vested in the Lessor pursuant to Article 8 of the Lease.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
May 1, 1997 between the Lessee and the Pass Through Trustee.
Pass Through Certificates. Any of the Pass Through Certificates,
1997-1-A, the Pass Through Certificates, 1997-1-B or the Pass Through
Certificates, 1997-1-C, in each case as issued by the related Pass Through
Trust; and "Pass Through Certificates" means all of the Pass Through
Certificates issued by each of the Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Corporation 1997-1 Pass
Through Trust Class A, Federal Express Corporation 1997-1 Pass Through Trust
Class B and Federal Express Corporation 1997-1 Pass Through Trust Class C, in
each case formed pursuant to the related Series Supplement in accordance with
the Pass Through Agreement; and "Pass Through Trusts" means all of such Pass
Through Trusts.
Pass Through Trustee. First Security Bank, National Association, a
national banking association, in its capacity as Pass Through Trustee under
the Pass Through Agreement and each Pass Through Trust.
Past Due Rate. In respect of (A) any amount payable to the Owner
Participant or the Owner Trustee a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid
in full equal to 2% plus the Debt Rate and (B) any principal of or interest on
any Certificate or any other amount payable under the Indenture, any
Certificate or any other Operative Agreement that is not paid when due
(whether at Maturity, by acceleration, by optional or mandatory prepayment or
otherwise) to any Holder, the Indenture Trustee or the Pass Through Trustee, a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to (i) in the
case of any such amount payable to the Holder of any Certificate, 2% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. Each January 15 and July 15 commencing on July 15,
1997.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local,
foreign or any agency, instrumentality, division or body thereof).
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
December 27, 2011, with respect to the Series B Certificates, February 5, 2010
and with respect to the Series C Certificates, March 22, 2007.
Prepayment Date. Has the meaning specified in Section 6.02(b) of the
Indenture.
Prepayment Price. Has the meaning specified in Section 6.02(b) of the
Indenture.
Principal Amount. With respect to a Certificate means the stated
original principal amount of such Certificate and, with respect to all
Certificates, means the aggregate stated original principal amounts of all
Certificates.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
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 Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N672FE), dated as of May 1, 1997 between
the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement II.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), December 31 for January 15
Payment Dates and June 30 for July 15 Payment Dates, whether or not such date
is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Register. Has the meaning set forth in Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N670FE, N671FE,
N673FE, N674FE, N583FE and N584FE, each dated as of May 1, 1997, between the
Owner Trustee and the Indenture Trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N581FE, dated as of May 1,
1997, between Wilmington Trust Company, as owner trustee and the Indenture
Trustee, and the Trust Indenture and Security Agreement for Federal Express
Corporation Trust No. N587FE, dated as of December 1, 1996, as amended and
restated as of May 1, 1997, between Wilmington Trust Company, as owner trustee
and the Indenture Trustee.
Remaining Weighted Average Life. On a given date with respect to any
Certificate the number of days equal to the quotient obtained by dividing (i)
the sum of each of the products obtained by multiplying (a) the amount of each
then remaining scheduled payment of principal of such Certificate by (b) the
number of days from and including such prepayment date to but excluding the
dates on which each such payment of principal is scheduled to be made; by (ii)
the then outstanding principal amount of such Certificate.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. One or more terms with respect to which the Lessee has
exercised its option to renew the Lease pursuant to Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. November 19, 2020 and each January 15 and July 15
commencing on January 15, 1998.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Aircraft. Any aircraft substituted for the Aircraft
pursuant to Section 11.03(a) of the Lease.
Replacement Airframe. Has the meaning set forth in Section 11.03 of
the Lease.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) of equal or greater value,
airworthiness, remaining useful life and utility as the Engine being replaced,
together with all Parts relating to such engine; provided, however, that if
such replacement engine is not a General Electric CF6-80C2-A5F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement in which case the definition of Responsible
Officer set forth in Section 3.10 of the Trust Agreement is applicable) or the
Indenture Trustee, any officer in its Corporate Trust Administration, as the
case may be, designated by such Person to perform obligations under the
Operative Agreements, and with respect to any other party, any corporate
officer or (except in the case of the Owner Participant) other employee of a
party who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Secured Obligations. Has the meaning specified in the Granting
Clause of the Indenture.
Securities Act. The Securities Act of 1933, as amended.
Series "A" or "Series A Certificates". Certificates issued and
designated as "Series A" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series A".
Series "B" or "Series B Certificates". Certificates issued and
designated as "Series B" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series B".
Series "C" or "Series C Certificates". Certificates issued and
designated as "Series C" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series C".
Series Supplement or Series Supplements. The Series Supplement
1997-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1997-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1997-1-C to be
executed and delivered by the Lessee and the Pass Through Trustee.
Sinking Fund Redemption Date. Has the meaning specified in Section
6.06 of the Indenture.
Sinking Fund Redemption Price. Has the meaning specified in Section
6.06 of the Indenture.
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Specified Investments. 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 S&P and Moody's,
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) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following
the date of such investment; (d) overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers; or
(e) 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 or 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.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association.
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 Factor" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with so much of the arrears portion of Basic Rent due and owing
through the date of payment of Stipulated Loss Value as does not constitute an
Excepted Payment, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment. Subject to the immediately
preceding sentence, it is understood and agreed that the amounts set forth on
Schedule III of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals and
credits of unearned Basic Rent through such date and, accordingly, no further
accrual or credit shall be required through such date whenever Stipulated Loss
Value is to be calculated with reference to any such date; provided that if
amounts in respect of Stipulated Loss Value are payable under the Operative
Agreements after the Stipulated Loss Determination Date in respect of which
such Stipulated Loss Value was determined, the Lessor shall be compensated
during the period from the Stipulated Loss Determination Date to such payment
date in accordance with the provisions of the Operative Agreements.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease.
Subordination Agent. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Subordination Agent.
Supplemental Rent. (a) All amounts, liabilities and obligations
which the Lessee assumes or agrees to perform or pay under the Lease or under
the Participation Agreement or Tax Indemnity Agreement or any Ancillary
Agreement or any other Operative Agreement to the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, FPO Price and amounts calculated by reference to Termination Value, any
amounts of Make-Whole Premium payable under the Indenture to the extent
provided in Section 3.03 of the Lease, and all amounts required to be paid by
Lessee under the agreements, covenants and indemnities contained in the Lease
or in the Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Basic Rent and (b) all amounts that the
Owner Trustee is obligated to pay in accordance with clause (b) of the last
paragraph of Section 2.04 of the Indenture.
Tax. Has the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N672FE), dated as of May 1, 1997, between the
Lessee and the Owner Participant.
Term. 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 December 31, 2004 in the case of Article 10 of the Lease, and in
the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling
on July 15, 2014, (ii) Section 4.02(a)(D) or (E) of the Lease, a Rent
Payment Date that is on or after the seventh anniversary of the Delivery Date
and (iii) Section 4.02(a)(F) of the Lease, the last day of the Basic Term.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent through such date and,
accordingly, no further accrual or credit shall be required through such date
whenever Termination Value is to be calculated with reference to any such
date; provided that if amounts in respect of Termination Value are payable
under the Operative Agreements after the Termination Date in respect of which
such Termination Value was determined, the Lessor shall be compensated during
the period from the Termination Date to such payment date in accordance with
the provisions of the Operative Agreements.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code, as amended
and in effect on the date of the Lease or as subsequently amended, or any
successor or substituted legislation at the time in effect and applicable, and
the regulations promulgated pursuant thereto.
Treasury Yield. At the time of determination with respect to any
Certificate, the interest rate (expressed as a semi-annual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semi-annual
yield to maturity for United States Treasury securities maturing on the
Average Life Date on such Certificate and trading in the public securities
markets either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in public securities markets, (i) one maturing as close as possible to,
but earlier than, the Average Life Date of such Certificate and (ii) the other
maturing as close as possible to, but later than, the Average Life Date of
such Certificate. In each case as published in the most recent H.15(519) or,
if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Certificate is reported on the most
recent H.15 (519), such weekly average yield to maturity as published in such
H.15(919). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Premium
will be the third Business Day prior to the applicable prepayment date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable prepayment date.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N672FE), dated as of May 1, 1997, between the Owner Participant and
the Owner Trustee in its individual capacity.
Trust Estate. The Lessor's Estate.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. Morgan Stanley & Co. Incorporated, First Chicago
Capital Markets, Inc., Goldman, Sachs & Co. and J.P. Morgan & Co.
Underwriting Agreement. The Underwriting Agreement dated May 22, 1997
among the Lessee and the Underwriters.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
- ------------------------------------------------------------------------------
TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust No. N673FE)
Dated as of May 1, 1997
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 780, REGISTRATION NO. N673FE
==============================================================================
TABLE OF CONTENTS
Page
Initial Recitals......................................................... 1
Granting Clause.......................................................... 2
Habendum Clause.......................................................... 6
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................. 8
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.............. 8
Section 2.02. Execution of Certificates................................ 9
Section 2.03. Certificate of Authentication............................ 9
Section 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest.......................... 9
Section 2.05. Payments from Trust Indenture Estate Only................ 12
Section 2.06. Registration, Transfer and Exchange...................... 13
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates............................................. 14
Section 2.08. Cancellation of Certificates; Destruction Thereof........ 15
Section 2.09. Temporary Certificates................................... 15
Section 2.10. Termination of Interest in Trust Indenture Estate........ 16
Section 2.11. Certificates in Respect of Replacement Aircraft.......... 16
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements..................................... 16
Section 2.13. Establishment of Collateral Account...................... 16
Section 2.14. Investment of Funds on Deposit in the Collateral Account. 17
Section 2.15. Release of Debt Portion and Lien on the Collateral Account
and the Liquid Collateral on Delivery Date............... 18
Section 2.16. Cut-Off Date............................................. 19
Section 2.17. Subordination............................................ 19
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.... 19
Section 3.02. Offices for Payments, etc................................ 20
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee.................................................. 20
Section 3.04. Paying Agents............................................ 20
Section 3.05. Covenants of SSB and the Owner Trustee................... 21
Section 3.06. [Reserved]............................................... 21
Section 3.07. Disposal of Trust Indenture Estate....................... 22
Section 3.08. No Representations or Warranties as to Aircraft or
Documents................................................ 22
Section 3.09. Further Assurances; Financing Statements................. 22
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates.................. 23
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution.................................. 23
Section 5.02. Event of Loss and Replacement; Prepayment................ 24
Section 5.03. Payment After Indenture Event of Default, etc............ 25
Section 5.04. Certain Payments......................................... 27
Section 5.05. Other Payments........................................... 28
Section 5.06. Payments to Owner Trustee................................ 28
Section 5.07. Application of Payments.................................. 28
Section 5.08. Investment of Amounts Held by Indenture Trustee.......... 29
Section 5.09. Withholding Taxes........................................ 30
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity.......................... 30
Section 6.02. Prepayment of Certificates............................... 30
Section 6.03. Notice of Prepayment to Holders.......................... 32
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price.................................................... 33
Section 6.05. Certificates Payable on Prepayment Date.................. 33
Section 6.06. Mandatory Sinking Fund Redemption........................ 33
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default............................... 35
Section 7.02. Remedies................................................. 38
Section 7.03. Return of Aircraft, etc.................................. 40
Section 7.04. Indenture Trustee May Prove Debt......................... 42
Section 7.05. Remedies Cumulative...................................... 44
Section 7.06. Suits for Enforcement.................................... 44
Section 7.07. Discontinuance of Proceedings............................ 45
Section 7.08. Limitations on Suits by Holders.......................... 45
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute
Certain Suits............................................ 45
Section 7.10. Control by Holders....................................... 46
Section 7.11. Waiver of Past Indenture Default......................... 46
Section 7.12. Notice of Indenture Default.............................. 47
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.... 47
Section 8.02. Owner Participant's Right to Elect to Prepay or Purchase the
Certificates............................................. 50
Section 8.03. Certain Rights of Owner Participant...................... 52
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts..................................... 53
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an
Indenture Event of Default............................... 54
Section 9.03. Certain Rights of the Indenture Trustee.................. 56
Section 9.04. Indenture Trustee Not Responsible for Recitals, Disposition
of Certificates or Application of Proceeds Thereof....... 57
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc......................................... 57
Section 9.06. Moneys Held by Indenture Trustee......................... 57
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc......................................... 57
Section 9.08. Replacement Airframes and Replacement Engines............ 58
Section 9.09. Indenture and Security Agreement Supplement for
Replacements............................................. 61
Section 9.10. Effect of Replacement.................................... 61
Section 9.11. Compensation............................................. 61
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders..................... 62
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates............................................ 62
Section 10.03. Holders to Be Treated as Owners......................... 63
Section 10.04. Certificates Owned by Owner Trustee and the Lessee Deemed
Not Outstanding......................................... 63
Section 10.05. Right of Revocation of Action Taken..................... 64
Section 10.06. ERISA................................................... 64
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee....................... 66
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor................................ 66
Section 12.03. Persons Eligible for Appointment as Indenture Trustee... 67
Section 12.04. Acceptance of Appointment by Successor Trustee.......... 67
Section 12.05. Merger, Conversion, Consolidation or Succession to Business
of Indenture Trustee.................................... 68
Section 12.06. Appointment of Separate Trustees........................ 69
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders...... 71
Section 13.02. Supplemental Indentures With Consent of Holders......... 72
Section 13.03. Effect of Supplemental Indenture........................ 74
Section 13.04. Documents to Be Given to Indenture Trustee.............. 74
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures.............................................. 74
Section 13.06. No Request Necessary for Lease Supplement or Indenture and
Security Agreement Supplement........................... 74
Section 13.07. Notices to Liquidity Providers.......................... 74
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture............................................... 75
Section 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates................................. 76
Section 14.03. Repayment of Moneys Held by Paying Agent................ 76
Section 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven Months......... 76
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting................................ 77
Section 15.02. No Legal Title to Trust Indenture Estate in Holders..... 77
Section 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding................................................. 77
Section 15.04. Indenture for Benefit of Owner Trustee, Indenture Trustee,
Owner Participant, Holders and Liquidity Providers...... 77
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease................................................... 78
Section 15.06. Notices................................................. 78
Section 15.07. Officer's Certificates and Opinions of Counsel; Statements
to Be Contained Therein................................. 79
Section 15.08. Severability............................................ 80
Section 15.09. No Oral Modifications or Continuing Waivers............. 80
Section 15.10. Successors and Assigns.................................. 80
Section 15.11. Headings................................................ 80
Section 15.12. Normal Commercial Relations............................. 80
Section 15.13. Governing Law; Counterparts............................. 80
Exhibit A -- Form of Indenture and Security Agreement Supplement
Exhibit B -- Form of Certificate
Schedule I -- [Reserved]
Schedule II -- Definitions
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N673FE)
TRUST INDENTURE AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION
TRUST NO. N673FE) dated as of May 1, 1997 (the "Indenture"), between STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, except as otherwise
specifically set forth herein (when acting in such individual capacity,
"SSB"), but solely as owner trustee (the "Owner Trustee") under the Trust
Agreement, as defined herein, and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, as Indenture Trustee hereunder (the "Indenture
Trustee").
W I T N E S S E T H:
-------------------
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and SSB have, immediately prior to the
execution and delivery of this Indenture, entered into a Trust Agreement
(Federal Express Corporation Trust No. N673FE) dated as of the date hereof (as
amended or otherwise modified from time to time in accordance with the
provisions thereof and of the Participation Agreement, the "Trust Agreement"),
whereby, among other things, SSB has declared a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Lien of this
Indenture for the use and benefit of, and with the priority of payment to, the
holders of the Certificates issued hereunder, and the Owner Trustee is
authorized and directed to execute and deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture, among other
things (i) to provide for the issuance by the Owner Trustee of Certificates as
provided in the Participation Agreement, and (ii) to provide for the
assignment, mortgage and pledge by the Owner Trustee to the Indenture Trustee,
as part of the Trust Indenture Estate hereunder of the Owner Trustee's right,
title and interest in the Liquid Collateral and after the Delivery Date for
the assignment, mortgage and pledge by the Owner Trustee to the Indenture
Trustee, as part of the Trust Indenture Estate hereunder, of among other
things, certain of the Owner Trustee's estate, right, title and interest in
and to the Aircraft and the Indenture Documents and certain payments and other
amounts (other than Excepted Payments) received hereunder or thereunder in
accordance with the terms hereof, as security for, among other things, the
Owner Trustee's obligations to the Certificate Holders and for the benefit and
security of such Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee, and authenticated, issued and delivered
hereunder, the valid obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of the Owner Trustee, enforceable in accordance
with its terms, have been done and performed and have happened.
NOW, THEREFORE, the parties agree as follows:
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual promises contained
herein and to secure (i) the prompt payment of the principal of and Make-Whole
Premium, if any, and interest on, and all other amounts due with respect to,
all the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of the Certificates, and the
prompt payment of any and all amounts from time to time owing under the
Participation Agreement by the Owner Trustee, the Owner Participant or the
Lessee to the Holders (collectively the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions of this Indenture, and in
consideration of the premises and of the covenants in this Indenture and in the
Certificates and of the purchase of the Certificates by their Holders, and of
the sum of $1 paid to the Owner Trustee by the Indenture Trustee at or before
the delivery of this Indenture, the receipt and sufficiency of which is hereby
acknowledged, the Owner Trustee has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged, granted a first priority security
interest in and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and grant a first priority security
interest in and confirm to the Indenture Trustee, its successors and assigns,
in trust for the equal and ratable security and benefit of the Holders from
time to time of the Certificates, a first priority security interest in and
first mortgage Lien on all estate, right, title and interest of the Owner
Trustee in, to and under the following described property, rights and
privileges other than Excepted Payments, which collectively, excluding
Excepted Payments but including all property specifically subjected to the
Lien of this Indenture by the terms hereof, by any Indenture and Security
Agreement Supplement or any mortgage supplemental to this Indenture, are
included within the Trust Indenture Estate, subject always to the rights
granted to the Owner Trustee or the Owner Participant hereunder and to the
other terms and conditions of this Indenture:
(1) The Airframe, as the same is more particularly described in the
Indenture and Security Agreement Supplement and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture; the Engines,
as the same are more particularly described in the Indenture and Security
Agreement Supplement, whether or not such Engines shall be installed in or
attached to the Airframe or any other airframe, and any Replacement Engine
therefor; and all Parts in respect of the Airframe and the Engines and all
records, logs and other documents at any time maintained with respect to the
foregoing property;
(2) The Lease and all Rent thereunder, including, without limitation,
all amounts of Basic Rent and Supplemental Rent, and payments of any kind
thereunder and including all rights of the Owner Trustee to execute any
election or option or to give or receive any notice, consent, waiver or
approval under or in respect of the Lease or to accept any surrender of the
Aircraft or any part thereof as well as any rights, powers or remedies on the
part of the Owner Trustee, whether arising under the Lease or by statute or at
law or in equity or otherwise arising out of any Event of Default;
(3) The Purchase Agreement, the Purchase Agreement Assignment, the
AVSA Consent and Agreement, the Consent and Agreement, the Consent and
Guaranty, the GTA, the Engine Warranty Assignment and the Engine Consent,
AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty,
the Ancillary Agreements and the Participation Agreement (to the extent of
amounts payable to the Owner Trustee thereunder) (collectively, and together
with the Lease, the Trust Agreement and the Certificates, the "Indenture
Documents"), including all rights of the Owner Trustee to execute any election
or option or to give or receive any notice, consent, waiver or approval under
or in respect of any of the foregoing documents and instruments;
(4) All the tolls, rents, issues, profits, products, revenues and
other income (including sales proceeds) of the property subjected or required
to be subjected to the Lien of this Indenture, and all of the estate, right,
title and interest of the Owner Trustee in and to the same and every part of
said property;
(5) The Collateral Account, the Liquid Collateral and all other
moneys and securities (including Permitted Investments) now or hereafter paid
or deposited or required to be paid or deposited to or with the Indenture
Trustee by or for the account of the Owner Trustee pursuant to any term of any
Operative Agreement, except the Tax Indemnity Agreement, and held or required
to be held by the Indenture Trustee hereunder;
(6) All requisition proceeds with respect to the Aircraft or any part
thereof (to the extent of the Owner Trustee's interest therein pursuant to the
terms of the Lease) and all insurance proceeds with respect to the Aircraft or
any part thereof from insurance required to be maintained by the Lessee under
Article 13 of the Lease, but excluding any insurance maintained by the Lessee
and not required under Article 13 of the Lease; and
(7) All proceeds of the foregoing.
EXCLUDING, HOWEVER, from the foregoing grant of the Lien and security
interest of this Indenture and from the Trust Indenture Estate, (i) 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 all rights
to collect and enforce Excepted Payments and (ii) rights granted to or
retained by the Owner Trustee or the Owner Participant hereunder and SUBJECT
TO the following provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, the Owner Trustee and the Owner Participant shall at all times
retain the right, to the exclusion of the Indenture Trustee, (A) to Excepted
Payments and to commence an action at law to obtain or otherwise demand, sue
for or receive and enforce the payment of such Excepted Payments, (B) to
exercise any election or option or make any decision or determination or to
give or receive any notice (including notice of Default), consent, waiver or
approval in respect of any such Excepted Payment, (C) to adjust (and make any
decision or determination or give any notice or consent with respect to) Basic
Rent and the percentages relating to Stipulated Loss Value and Termination
Value and the FPO Price as provided in Section 3.04 of the Lease and Section
15.01 of the Participation Agreement, (D) to exercise any election or option to
make any decision or determination, or to give or receive any notice, consent,
waiver or approval, or to take any other action in respect of, but in each
case only to the extent relating to, Excepted Payments (except for, in respect
of any portion of Basic Rent constituting an Excepted Payment, any action
changing the manner by which such Basic Rent is to be paid), (E) to retain the
rights of the "Lessor" with respect to solicitations of bids, and the election
to retain the Aircraft pursuant to Article 10 of the Lease, (F) to retain the
right of "Lessor" to determine the Fair Market Rental or Fair Market Value
pursuant to Article 4 of the Lease, (G) to exercise all other 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 or purchase options, (H) to retain all rights
with respect to insurance maintained for its own account which Section 13.05
of the Lease specifically confers on the "Lessor", (I) to approve appraisers,
lawyers and other professionals and receive notices, certificates, reports,
filings, opinions and other documents, in each case with respect to matters
relating to the Owner Participant's tax position, (J) to approve any
accountants to be used in the verification of any Rent adjustment, and (K) to
exercise, to the extent necessary to enable it to exercise its rights under
Section 8.03 hereof, the rights of the "Lessor" under Section 17.04 of the
Lease;
(ii) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have the
rights separately but not to the exclusion of the other (agreement of both
required in the case of clause (E) below), (A) to receive from the Lessee all
notices, certificates, reports, filings, opinions of counsel, copies of all
documents and all information which the Lessee is permitted or required to
give or furnish to the "Lessor" pursuant to the Lease or to the Owner Trustee
pursuant to any other Operative Agreement, (B) to exercise inspection rights
pursuant to Section 14.01 of the Lease (provided that if an Indenture Event of
Default shall be continuing, no inspection right of the Owner Trustee shall
interfere with the efforts of the Indenture Trustee to exercise remedies under
the Lease or this Indenture), (C) to maintain separate insurance pursuant to
Section 13.05 of the Lease and to retain all rights with respect to such
insurance maintained for its own account, (D) to give any notice of default
under Section 16.01 of the Lease and (E) the right to consent to changes to
the list of countries on Schedule III to the Participation Agreement;
(iii) subject to the last sentence of this clause (a), (A) so long as
no Indenture Event of Default not constituting an Event of Default shall have
occurred and be continuing (but subject to the provisions of Section 8.01
hereof), the Owner Trustee shall retain the right, to the exclusion of the
Indenture Trustee (or, if an Indenture Event of Default that is also an Event
of Default shall have occurred and be continuing, acting jointly with and not
to the exclusion of the Indenture Trustee), to exercise all rights, elections
and options of the Lessor in connection with the return of the Aircraft under
Article 12 of the Lease (but not Article 17 thereof, it being understood that
the Indenture Trustee shall have the exclusive right to exercise remedies
pursuant to such Article 17, including in respect of any related return of the
Aircraft pursuant to Article 12 of the Lease), including the right to approve
as satisfactory any accountants, engineers, appraisers or counsel to render
services for or issue appraisals, reports, certificates or opinions to the
Owner Trustee and to exercise all rights, elections and options of the Lessor
in connection with the return of the Aircraft pursuant to the express
provisions of the Operative Agreements, and (B) so long as no Indenture Event
of Default not constituting an Event of Default shall have occurred and be
continuing (but subject to the provisions of Section 8.01 hereof), the Owner
Trustee shall retain the right, jointly with the Indenture Trustee (agreement
of both not being required), to further assurances and financial information
from the Lessee pursuant to Section 19.01 of the Lease (other than the right
to receive any funds to be delivered to the "Lessor" under the Lease (except
funds delivered with respect to Excepted Payments) and under the Purchase
Agreement;
(iv) subject to the last sentence of this clause (a), at all times
the Owner Trustee shall have the right as Lessor, but not to the exclusion of
the Indenture Trustee, to seek specific performance of the covenants of the
Lessee under the Lease relating to the protection, insurance, maintenance,
possession and use of the Aircraft; and
(v) at all times the Owner Trustee and the Owner Participant shall
have the rights granted to them under Articles VI, VIII and X and Section 7.02
hereof.
Notwithstanding the foregoing, but subject always to the provisions of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) (other than
with respect to Excepted Payments) declare the Lease to be in default under
Article 17 thereof or any statute (including, without limitation, Article 2-A
of the Uniform Commercial Code) and (B) subject only to the provisions of this
Indenture, (other than in connection with Excepted Payments) exercise the
remedies set forth in such Article 17 of the Lease any statute (including
without limitation Article 2-A of the Uniform Commercial Code), at law and in
Article 7 hereof.
(b) The foregoing provisions in paragraph (a) above shall be equally
applicable to all rights of the Indenture Trustee in respect of Ancillary
Agreement I and Ancillary Agreement II, whether such rights are granted
directly to the Indenture Trustee under such agreements or are granted under
the Granting Clause of this Indenture.
(c) The leasehold interest granted to the Lessee by the Lease shall
not be subject to the security interest granted by this Indenture, and nothing
in this Indenture shall affect the rights of the Lessee under the Lease so
long as no Event of Default has occurred and is continuing.
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 and the
rights of the Owner Trustee and the Owner Participant under this Indenture.
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Documents to perform all of the obligations assumed by it under any
of those documents, all in accordance with and pursuant to the terms and
provisions of those documents, and the Indenture Trustee and the Holders of
the Certificates shall have no obligation or liability under the Indenture
Documents by reason of or arising out of the assignment under this Indenture,
nor shall the Indenture Trustee or the Holders of the Certificates be required
or obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Documents or, except as expressly
provided in this Indenture, to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or present or file
any claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
Effective upon the occurrence and continuance of an Indenture Event of
Default, the Owner Trustee hereby constitutes the Indenture Trustee the true
and lawful attorney of the Owner Trustee, irrevocably, with full power (in the
name of the Owner Trustee or otherwise), subject to the terms and conditions
of this Indenture, to ask, require, demand, receive, compound and give
acquittance for any and all Basic Rent, Supplemental Rent payable to the Owner
Trustee, Stipulated Loss Value and Termination Value payments, insurance
proceeds and any and all moneys and claims for moneys due and to become due
under or arising out of the Lease (subject to Section 8.01 hereof) or the
other Indenture Documents (other than Excepted Payments), to endorse any
checks or other instruments or orders in connection with the same and to file
any claims, take any action or institute any proceeding which the Indenture
Trustee may deem to be necessary or advisable in the premises.
Under the Lease the Lessee is directed to make all payments of Rent
(other than Excepted Payments not constituting Basic Rent) payable to the
Owner Trustee and all other amounts (other than Excepted Payments not
constituting Basic Rent) 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 not constituting Basic Rent.
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, at the
expense of the Lessee, promptly and duly execute and deliver or cause to be
duly executed and delivered any and all such further instruments and documents
as the Indenture Trustee may reasonably deem desirable in obtaining the full
benefits of the assignment hereunder and of the rights and powers herein
granted; provided, however, that the Owner Trustee shall have no obligation to
execute and deliver or cause to be executed or delivered to the Indenture
Trustee any such instrument or document if such execution and delivery would
result in the imposition of additional liabilities on the Owner Trustee or the
Owner Participant or would result in a burden on the Owner Participant's
business activities, unless the Owner Trustee or the Owner Participant, as the
case may be, is indemnified to its reasonable satisfaction against any losses,
liabilities and expenses incurred in connection with such execution and
delivery.
The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect and shall not have been terminated pursuant
to Section 14.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except in
respect of Excepted Payments or otherwise as provided in or permitted by this
Indenture, enter into an agreement amending or supplementing any of the
Indenture Documents, settle or compromise any claim (other than claims in
respect of Excepted Payments) against the Lessee arising under any of the
Indenture Documents, or 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.
Concurrently with the delivery of this Indenture, the Owner Trustee
has delivered to the Indenture Trustee executed counterparts of the Trust
Agreement and the chattel paper original counterpart of the Lease.
It is hereby further covenanted and agreed by and between the parties
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise requires,
capitalized terms utilized herein shall have the meanings set forth in
Schedule II hereto for all purposes of this Indenture and shall be equally
applicable to both the singular and plural forms of the terms defined.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.
Forthwith upon the execution and delivery of this Indenture, and from time to
time thereafter, Certificates in an aggregate principal amount not in excess
of the amount specified in Section 2.04 hereof (except as otherwise provided
in Sections 2.06 and 2.07 hereof) shall be executed by the Owner Trustee and
delivered to the Indenture Trustee for authentication, and the Indenture
Trustee shall thereupon authenticate and deliver said Certificates to or upon
the oral or written order of the Owner Trustee, signed, if written, by an
authorized officer of the Owner Trustee, without any further action by the
Owner Trustee.
Section 2.02. Execution of Certificates. The Certificates shall be
signed on behalf of the Owner Trustee by an authorized officer of SSB. 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 SSB 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 SSB, 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 SSB; 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 SSB, although
at the date of the execution and delivery of this Indenture any such person
was not such an officer. Certificates bearing the facsimile signatures of
individuals who were authorized officers of SSB 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 (subject
to Section 15.01(d) of the Participation Agreement) 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 Certificate Closing Date, shall be issued
in three separate series consisting of Series A, Series B and Series C and
shall be issued in the Maturities and principal amounts, and shall bear
interest at the rates per annum, specified in the form of Certificate set forth
in Exhibit B.
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Certificates are admitted to trading, or to
conform to general usage.
Each Certificate shall bear interest from the date of original
issuance thereof or from the most recent date to which interest has been paid
and duly provided for, as the case may be, which shall be payable on the dates
specified on the face of the form of Certificate set forth in Exhibit B hereto
until the principal thereof is paid. Interest shall be calculated on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding the preceding paragraph, each Certificate shall bear
interest at the Past Due Rate on any principal, interest and any other amount
payable hereunder or under such Certificate, which shall not be paid in full
when due (whether at stated maturity, by acceleration, by mandatory prepayment
or otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full, payable from time to time on
demand of the Indenture Trustee.
The principal of, and Make-Whole Premium, if any, and interest on, the
Certificates shall be payable at the Corporate Trust Department of the
Indenture Trustee or at any office or agency maintained for such purpose
pursuant to Section 3.02 hereof in immediately available funds prior to 10:30
A.M. (New York time) on the due date thereof and the Indenture Trustee shall
remit all such amounts received by it to the Holders at such account or
accounts at such financial institution or institutions as the Holders shall
have designated to the Indenture Trustee in writing, in immediately available
funds, such payment to be made if the payment was received prior to 10:30 A.M.
New York time by the Indenture Trustee on any Business Day, by 12:00 noon New
York time on such Business Day; otherwise, the Indenture Trustee shall make
payment promptly, but not later than 11:00 A.M. New York time on the next
succeeding Business Day; provided, however, that interest may be payable at the
option of the Indenture Trustee or its Paying Agent, as defined in Section
3.04, by mailing checks for such interest payable to or upon the written order
of the Holders entitled thereto as they shall appear on the Register. If any
amount payable under the Certificates, or under this Indenture, falls due on a
day that is not a Business Day, then such sum shall be payable on the next
succeeding Business Day, without (provided that payment is made on such next
succeeding Business Day) additional interest thereon for the period of such
extension.
The Holder at the close of business on any Record Date with respect
to any Payment Date shall be entitled to receive the interest if any payable
on such Payment Date notwithstanding any transfer or exchange of such
Certificate subsequent to the Record Date and prior to such Payment Date,
except if and to the extent the Owner Trustee shall default in the payment of
the interest due on such Payment Date, in which case such defaulted interest
shall be paid to the Holder at the close of business on a subsequent Record
Date (which shall be not less than five (5) or more than fifteen (15) Business
Days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Owner Trustee to the Holders not
less than fifteen (15) days preceding such subsequent Record Date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 5.04 hereof (a) any and all indemnity
amounts received by the Owner Trustee which are payable by the Lessee to (i)
the Indenture Trustee in its individual capacity, (ii) the Subordination Agent
or (iii) each Liquidity Provider, in each case pursuant to Article 8 or 9 of
the Participation Agreement (it being acknowledged that the Lessee has been
instructed to pay such amounts to the Person or Persons entitled thereto) and
(b) the Owner Trustee's pro rata share of all amounts owed to each Liquidity
Provider by the Subordination Agent under each Liquidity Facility other than
amounts due as (i) repayments of the principal of advances thereunder, and (ii)
interest on Interest Drawings and Final Drawings except to the extent included
in Net Interest and Related Charges. As used in this Section, the Owner
Trustee's pro rata share means as of any time:
(A) with respect to all amounts other than Net Interest and
Related Charges, a fraction the numerator of which is the aggregate
principal balance then outstanding of the Certificates issued under
this Indenture (other than the Series C Certificates) and the
denominator of which is the aggregate principal balance of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates), plus
(B) with respect to all Net Interest and Related Charges (x)
if there exists a Payment Default under any Certificate issued under
this Indenture a fraction, the numerator of which is the aggregate
principal balance then outstanding of Certificates issued under this
Indenture (other than the Series C Certificates) and the denominator
of which is the aggregate principal balance then outstanding of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates) under which there exists a
Payment Default or (y) at all other times, zero.
As used in this Section, "Net Interest and Related Charges" means the sum of
(i) the amount, if any, by which interest payable to each Liquidity Provider
on any Interest Drawing and/or Final Drawing exceeds the amount which would be
payable if such drawings bore interest at the weighted average Past Due Rate
applicable to amounts in default on all Certificates plus (ii) any amounts
payable under Section 3.01, Section 3.02, Section 3.03, Section 3.09 or
Section 7.07 of each Liquidity Facility (or similar provisions of any
replacement Liquidity Facility) which result from any Interest Drawing or
Final Drawing. As used in this Section, a Payment Default when used in
connection with a Certificate issued hereunder or a Certificate issued under
any Related Indenture means a default in the payment of principal thereof or
interest thereon (which default has not been cured), other than solely because
of acceleration.
Section 2.05. Payments from Trust Indenture Estate Only. All
payments to be made by the Owner Trustee under this Indenture shall be made
only from the income and the proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate and from any other amounts of the type
described in Section 5.01 hereof (but only to the extent actually received by
the Indenture Trustee) and only to the extent that the Owner Trustee shall
have sufficient income or proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate (and such other amounts) to enable the
Indenture Trustee to make distributions of the amounts due in respect of the
Certificates in accordance with the terms hereof and thereof. Each Holder by
its acceptance of a Certificate agrees that it will look solely to the income
and proceeds from the Trust Indenture Estate (and such other amounts of the
type described in Section 5.01 hereof but only to the extent actually received
by the Indenture Trustee) to the extent available for distribution to it as
provided herein and that neither the Owner Participant, the Owner Trustee, SSB
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 SSB, the Owner Trustee or the Indenture
Trustee.
SSB 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 SSB's gross negligence or willful misconduct, or as
otherwise expressly provided herein or in the Participation Agreement.
If (1) all or any part of the Lessor's Estate becomes the property of
a debtor subject to the reorganization provisions of the Bankruptcy Code, (2)
pursuant to such reorganization provisions the Owner Participant is required,
by reason of the Owner Participant being held to have recourse liability to
the debtor or the trustee of the debtor directly or indirectly, to make
payment on account of any amount payable as principal of or interest,
Make-Whole Premium or other amounts payable on the Certificates, and (3) the
Indenture Trustee actually receives any Recourse Amount which reflects any
payment by the Owner Participant on account of (2) above, then the Indenture
Trustee shall promptly refund to the Owner Participant such Recourse Amount.
Nothing contained in this paragraph shall prevent the Indenture Trustee from
enforcing any personal recourse obligation (and retaining the proceeds
thereof) of the Owner Participant under the Participation Agreement, or from
retaining any amount paid by the Owner Participant under Sections 5.01, 8.02
and 8.03 hereof.
Section 2.06. Registration, Transfer and Exchange. The Indenture
Trustee will keep, on behalf of the Owner Trustee, at each office or agency to
be maintained for the purpose as provided in Section 3.02 hereof a Register or
Registers on which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Certificates
as provided in this Article. Such Register shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable period of time.
Upon due presentation for registration of transfer of any Certificate
at any such office or agency, the Owner Trustee shall execute and the
Indenture Trustee shall authenticate and deliver in the name of the transferee
or transferees a new Certificate or Certificates of the same Series and
Maturity, principal amount and interest rate and in authorized denominations
for an equal aggregate principal amount; provided, that such Certificate being
transferred shall be cancelled in accordance with Section 2.08 hereof
simultaneously with the issuance of the new Certificate.
Any Certificate or Certificates may be exchanged for a Certificate or
Certificates of the same Series and Maturity and interest rate but in other
authorized denominations, in an equal aggregate principal amount.
Certificates to be exchanged shall be surrendered at any office or agency to
be maintained by the Indenture Trustee for the purpose as provided in Section
3.02 hereof, and the Owner Trustee shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor the Certificate or
Certificates which the Holder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously or previously outstanding.
All Certificates presented for registration of transfer, exchange,
prepayment or payment shall (if so required by the Owner Trustee or the
Indenture Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Owner
Trustee and the Indenture Trustee duly executed by the Holder or its attorney
duly authorized in writing and (except in the case of transfers pursuant to
Section 15.01 of the Participation Agreement) the Indenture Trustee may
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act.
The Indenture Trustee may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of Certificates. No
service charge shall be levied for any such transaction.
The Indenture Trustee shall not be required to exchange or register a
transfer of any Certificates (a) for a period of fifteen (15) days immediately
preceding the first mailing of notice of prepayment of such Certificates or
(b) with respect to which notice of prepayment has been given pursuant to
Section 6.03 hereof and such notice has not been revoked.
All Certificates issued upon any transfer or exchange of Certificates
shall be valid obligations of the Owner Trustee, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the
Certificates surrendered upon such transfer or exchange.
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates. In case any temporary or definitive Certificate shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Owner
Trustee in its discretion may execute, and upon the oral or written request of
any officer of SSB, the Indenture Trustee shall authenticate and deliver, a
new Certificate of like Maturity, principal amount and interest rate as the
Certificate being replaced, bearing a number not contemporaneously or
previously outstanding, in exchange and substitution for the mutilated or
defaced Certificate, or in lieu of and substitution for the Certificate so
apparently destroyed, lost or stolen. In the case of any Certificate so
apparently destroyed, lost or stolen, the applicant for a substitute
Certificate shall furnish to the Owner Trustee and to the Indenture Trustee
such security or indemnity as may be required by them to indemnify and defend
and to hold each of them harmless and evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Upon the issuance of any substitute Certificate, the Owner Trustee or
the Indenture Trustee may require payment from the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses incurred in connection therewith.
In case any Certificate which has matured or is about to mature, or has been
called for prepayment in full, shall become mutilated or defaced or be
apparently destroyed, lost or stolen, the Owner Trustee may, instead of
issuing a substitute Certificate, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated or defaced
Certificate), if the applicant of any Certificate so apparently destroyed,
lost or stolen, for such payment shall furnish to the Owner Trustee and to the
Indenture Trustee such security or indemnity as any of them may require to
hold each of them harmless and the applicant shall also furnish to the Owner
Trustee and the Indenture Trustee evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Every substitute Certificate issued pursuant to the provisions of
this Section by virtue of the fact that any Certificate is apparently
destroyed, lost or stolen shall constitute an original additional contractual
obligation of the Owner Trustee, whether or not the apparently destroyed, lost
or stolen Certificate shall be enforceable at any time by anyone and shall be
entitled to all the security and benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and proportionately
with any and all other Certificates duly authenticated and delivered
hereunder. All Certificates shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced, or
apparently destroyed, lost or stolen Certificates and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
Section 2.08. Cancellation of Certificates; Destruction Thereof. All
Certificates surrendered for payment, prepayment, registration of transfer or
exchange, if surrendered to the Owner Trustee or any agent of the Owner
Trustee or the Indenture Trustee, shall be delivered to the Indenture Trustee
for cancellation or, if surrendered to the Indenture Trustee, shall be
cancelled by it; and no Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Indenture
Trustee shall destroy cancelled Certificates held by it and deliver a
certificate of destruction to the Owner Trustee. If the Owner Trustee shall
acquire any of the Certificates, such acquisition shall not operate as a
prepayment or satisfaction of the indebtedness represented by such
Certificates unless and until the same are delivered to the Indenture Trustee
for cancellation.
Section 2.09. Temporary Certificates. Pending the preparation of
definitive Certificates, the Owner Trustee may execute and, upon the oral or
written request of an officer of SSB, the Indenture Trustee shall authenticate
and deliver temporary Certificates (printed, lithographed, typewritten or
otherwise reproduced, in each case in form satisfactory to the Indenture
Trustee). Temporary Certificates shall be issuable as registered Certificates
without coupons, of any authorized denomination, and substantially in the form
of the definitive Certificates but with such omissions, insertions and
variations as may be appropriate for temporary Certificates, all as may be
determined by the Owner Trustee with the concurrence of the Indenture Trustee.
Temporary Certificates may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Certificate shall be
executed by the Owner Trustee and, upon the oral or written request of an
authorized officer of the Owner Trustee, be authenticated by the Indenture
Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Certificates. Without unreasonable delay
the Owner Trustee shall execute and shall furnish definitive Certificates and
thereupon temporary Certificates shall be surrendered in exchange therefor
without charge at any office or agency to be maintained by the Indenture
Trustee for the purpose pursuant to Section 3.02 hereof, and, upon the oral
or written request of an authorized officer of the Owner Trustee, the
Indenture Trustee shall authenticate and deliver in exchange for such
temporary Certificates an equal aggregate principal amount of definitive
Certificates of the same Series and 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 and under the other Operative Agreements shall have been paid in
full.
Section 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture and Security Agreement Supplement
covering a Replacement Airframe and/or Replacement Engine, as provided in
Section 9.09 hereof, each Certificate shall be deemed to have been issued in
connection with such Replacement Airframe and/or Replacement Engine and each
Certificate issued thereafter upon a transfer or exchange of, or as a
replacement for, a Certificate, shall be designated as having been issued in
connection with such Replacement Airframe and/or Replacement Engine, but
without any other change therein except as provided for in this Article II.
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements. If, in accordance with and subject to the satisfaction
of the conditions set forth in Section 7.11 of the Participation Agreement,
the Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall be released and discharged from any
further obligations hereunder and under the
Certificates and all other Operative Agreements (except for any recourse
obligations of the Owner Participant or the Owner Trustee in its individual
capacity with respect to matters arising out of events occurring prior to such
assumption).
Section 2.13. Establishment of Collateral Account. (a) The
Indenture Trustee shall, pursuant to the Collateral Account Control Agreement,
establish, or cause to be established, with State Street Bank and Trust
Company, who shall represent and warrant that it is a financial intermediary
(as defined in Section 8-313(4) of the Connecticut Uniform Commercial Code),
in its name as secured party hereunder an Eligible Deposit Account entitled
"First Security Bank, National Association, as secured party under the Trust
Indenture and Security Agreement (Federal Express Corporation Trust No.
N673FE) dated as of May 1, 1997, 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) The Collateral Account Control Agreement shall require State
Street Bank and Trust Company to send confirmation to the Indenture Trustee
and the Lessee that it has credited the Specified Investments to the
Collateral Account and to make appropriate entries on its books identifying
the Specified Investments as pledged to the Indenture Trustee.
Section 2.14. Investment of Funds on Deposit in the Collateral
Account. (a) Funds deposited in the Collateral Account shall be invested and
reinvested by the Indenture Trustee, subject to Section 17.02 of the
Participation Agreement, at the risk of the Owner Trustee, in Specified
Investments selected by the Lessee and approved by the Indenture Trustee for
the account of the Owner Trustee in accordance with Section 2.14(b) below;
provided, however, that if Specified Investments meeting the requirements of
Section 2.14(b) are not available on any day on which funds are to be invested
as contemplated by the preceding provisions of this Section 2.14(a), the
Indenture Trustee may leave such funds in the Collateral Account 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 and approved by the Indenture Trustee for the account of the Owner
Trustee which mature on or prior to September 11, 1997. 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 referred to in the
preceding sentence may be invested in Specified Investments which mature
within 14 days after the rescheduled Delivery Date. If no Delivery Date
occurs, then any Specified Investment shall mature no later than the 15th day
after the Cut-Off Date.
(c) If for any reason the Indenture Trustee shall be required to
make any distributions of the Liquid Collateral prior to the maturity date of
any Specified Investment, the Indenture Trustee shall cause the same to be
sold in accordance with standard commercial practices, and the Lessee, for the
account of the Owner Trustee, shall forthwith compensate the Indenture Trustee
for any Losses as provided in Section 17.02(a) of the Participation Agreement.
(d) Pursuant to Section 17.02(b) of the Participation Agreement,
interest payable on the Certificates during the period in which funds are on
deposit in the Collateral Account shall be paid by the Lessee.
Section 2.15. Release of Debt Portion and Lien on the Collateral
Account and the Liquid Collateral on Delivery Date. (a) 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, subject to the proviso to Section 3.02(a) of the Participation
Agreement, 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.
Subject to the proviso to Section 3.02(a) of the Participation Agreement, such
amount so released, together with the amount of any Losses received from the
Lessee pursuant to Section 17.02(a) of the Participation Agreement, shall be
used to finance a portion of the Purchase Price payable by (x) the Owner
Trustee as contemplated by Section 3.02(a) of the Participation Agreement or
(y) if 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.
(b) The Lien of this Indenture on the Collateral Account and the
Liquid Collateral shall terminate on the Delivery Date following the transfer
of amounts described in Section 3.02(a) of the Participation Agreement.
Section 2.16. Cut-Off Date. In the case of a prepayment under
Section 6.02(a)(vi) hereof, the Indenture Trustee shall release from the
Collateral Account all amounts held in the Collateral Account on such date.
Such amount so released, together with the amount of any Losses received from
the Lessee pursuant to Sections 17.02(a) and 17.02(c) of the Participation
Agreement, shall be applied to pay amounts due under Section 6.02(b)(1) hereof
on the 15th day following 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.
Section 2.17. Subordination. (a) The Owner Trustee and, by
acceptance of its Certificates of any Series, each Holder of such Series,
hereby agree that no payment or distribution shall be made on or in respect of
the Secured Obligations owed to such Certificate Holder of such Series,
including any payment or distribution of cash, property or securities after
the commencement of a proceeding of the type referred to in clause (v), (vi)
or (vii) of Section 7.01 hereof, except as expressly provided in Article V
hereof.
(b) By the acceptance of its Certificates of any Series
(other than Series A), each Holder of such Series agrees that in the event
that such Holder, in its capacity as a Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series which it is
not entitled to received under this Section 2.17 or Article V hereof, it will
hold any amount so received in trust for the Senior Holder (as defined in
Section 2.17(c) hereof) and will forthwith turn over such payment to the
Indenture Trustee in the form received to be applied as provided in Article V
hereof.
(c) As used in this Section 2.17, the term "Senior Holder"
shall mean, (i) the Holders of Series A Certificates until the Secured
Obligations in respect of Series A Certificates have been paid in full, (ii)
after the Secured Obligations in respect of Series A Certificates have been
paid in full, the Holders of Series B Certificates until the Secured
Obligations in respect of Series B Certificates have been paid in full and
(iii) after the Secured Obligations in respect of Series B Certificates have
been paid in full, the Holders of Series C Certificates until the Secured
Obligations in respect of Series C Certificates have been paid in full.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.
The Owner Trustee covenants and agrees that it will, subject to Section 2.05
hereof, duly and punctually pay or cause to be paid the principal of, and
interest and Make-Whole Premium, if any, and all other amounts due on, each of
the Certificates and under this Indenture at the place or places, at the
respective times and in the manner provided in this Indenture and in the
Certificates.
Principal and interest and other amounts due hereunder or under the
Certificates shall be payable in dollars on the due date thereof, to the
Indenture Trustee at the Corporate Trust Department (or such other account at
such other financial institution as the Indenture Trustee may designate for
the purpose). If any amount payable under the Certificates or under this
Indenture falls due on a day which is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
Section 3.02. Offices for Payments, etc. So long as any of the
Certificates remain outstanding, the Indenture Trustee will maintain the
following: (a) an office or agency where the Certificates may be presented
for payment and (b) a facility or agency in New York, New York where the
Certificates may be presented for registration of transfer and for exchange
and for prepayment as provided in this Indenture (the "Registrar"). The
Registrar shall keep a register (the "Register") with respect to the
Certificates and their transfer and exchange. The Indenture Trustee may
appoint one or more co-registrars ("Co-Registrars") for the Certificates and
may terminate any such appointment at any time upon written notice. The term
"Registrar" includes any Co-Registrar.
The Indenture Trustee shall initially act as Registrar.
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee. The Owner Trustee, whenever necessary to avoid or fill a vacancy in
the office of Indenture Trustee, will, with the consent of the Lessee,
appoint, in the manner provided in Section 12.02 hereof, an Indenture Trustee,
so that there shall at all times be an Indenture Trustee hereunder.
Section 3.04. Paying Agents. Whenever the Indenture Trustee in its
sole discretion shall appoint a paying agent (the "Paying Agent"), it will
cause the Paying Agent to execute and deliver an instrument in which the
Paying Agent shall agree with the Indenture Trustee, subject to the provisions
of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of, and interest and Make-Whole Premium, if any,
on the Certificates (whether such sums have been paid to it by the
Indenture Trustee or the Owner Trustee) in trust for the benefit of the
Holders or of the Indenture Trustee, and
(b) that it will give the Indenture Trustee notice of any failure by
the Owner Trustee to make any payment of the principal of or interest or
Make-Whole Premium, if any, on the Certificates when the same shall be due
and payable.
Anything in this Section to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section are subject to
the provisions of Sections 14.03 and 14.04 hereof.
Section 3.05. Covenants of SSB and the Owner Trustee.
(a) SSB hereby covenants and agrees to perform its covenants set
forth in Sections 7.04(b) and 7.04(c) of the Participation Agreement.
(b) The Owner Trustee hereby covenants and agrees as follows:
(i) in the event a Responsible Officer of the Owner Trustee shall have
actual knowledge of an Indenture Event of Default, an Indenture Default or
an Event of Loss, the Owner Trustee will give prompt written notice of such
Indenture Event of Default, Indenture Default or Event of Loss to the
Indenture Trustee, the Lessee and the Owner Participant;
(ii) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to the Owner Trustee under the Lease, including,
without limitation, a copy of each report or notice from an insurer or an
insurance broker received pursuant to Article 13 of the Lease, to the
extent that the same shall not have been furnished to the Indenture Trustee;
(iii) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to the Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Indenture Documents; and
(iv) except as contemplated by the Operative Agreements, the Owner
Trustee will not contract for, create, incur or assume any debt, and will
not guarantee (directly or indirectly or by an instrument having the effect
of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise take action to
become contingently liable, directly or indirectly, in connection with the
debt of any other Person.
Section 3.06. [Reserved]
Section 3.07. Disposal of Trust Indenture Estate. At any time and
from time to time any part of the Trust Indenture Estate may be sold or
disposed of in accordance with the provisions of this Indenture and the Lease.
The Indenture Trustee shall, from time to time, release any part of the Trust
Indenture Estate so sold or disposed of or as to which an Event of Loss has
occurred or as to which the Lease has been terminated from the Lien of this
Indenture. In addition, to the extent that such property constitutes an
Airframe or Engine, the further requirements of Section 9.08 hereof shall be
complied with.
Section 3.08. No Representations or Warranties as to Aircraft or
Documents. NEITHER THE INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR SSB NOR
THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, WORKMANSHIP,
VALUE, CONDITION, DESIGN, COMPLIANCE WITH SPECIFICATIONS, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR USE OR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE
WHATSOEVER, except that SSB warrants that on the Delivery Date (a) the Owner
Trustee shall have received whatever title was conveyed to it by AVSA, and (b)
the Aircraft shall be free and clear of Lessor's Liens attributable to SSB.
Neither SSB, 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 SSB and the Indenture Trustee made under this Indenture or in
the Participation Agreement or of the Owner Participant made under 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, at the expense of the Lessee, the Owner Trustee shall promptly and
duly execute and deliver any and all such further instruments and documents as
may be specified in such request and as are necessary or advisable to perfect,
preserve or protect the Liens and assignments created or intended to be
created hereby, or to obtain for the Indenture Trustee the full benefit of the
specific rights and powers granted herein, including, without limitation, the
execution and delivery of Uniform Commercial Code financing statements and
continuation statements with respect thereto, or similar instruments relating
to the perfection of the Liens or assignments created or intended to be created
hereby.
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates. (a) The
Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Indenture Trustee is not the Registrar, the Registrar
shall furnish to the Indenture Trustee semi-annually not more than ten (10)
days after each Record Date, as of such Record Date, or at such other times as
the Indenture Trustee may request in writing, a list, in such form and as of
such date as the Indenture Trustee may reasonably require, containing all the
information in the possession or control of the Registrar as to the names and
addresses of the Holders and the amounts and Maturities of the Certificates
held by such Holders.
(b) Ownership of the Certificates shall be proved by the Register
kept by the Registrar.
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution. Except as otherwise provided
in Section 5.03 hereof, each installment of Basic Rent, any payment of
interest on overdue installments of Basic Rent, any payment received by the
Indenture Trustee pursuant to Section 8.03(a) hereof and any payment received
by the Indenture Trustee pursuant to Section 17.02(b) or 17.02(c) of the
Participation Agreement shall be distributed by the Indenture Trustee no later
than the time herein provided in the following order of priority:
first, (i) 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 Amount and interest and other amounts (as
well as any interest on any overdue Principal Amount and, to the
extent permitted by applicable law, on any overdue interest and
any other overdue amounts) then due under all Series A
Certificates shall be distributed to the Holders of Series A
Certificates ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments then
due under each Series A Certificate bears to the aggregate amount
of the payments then due under all Series A Certificates;
(ii) after giving effect to paragraph (i) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series B Certificates shall be
distributed to the Holders of Series B Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series B
Certificate bears to the aggregate amount of the payments then due
under all Series B Certificates; and
(iii) after giving effect to paragraph (ii) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series C Certificates shall be
distributed to the Holders of Series C Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series C
Certificate bears to the aggregate amount of the payments then due
under all Series C Certificates; and
second, the balance if any of such installment or payment remaining
thereafter shall be distributed to the Owner Trustee, or as the
Owner Trustee may request, for distribution pursuant to the Trust
Agreement.
Section 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft (including pursuant to Section 11.03(e) of the Lease, but, in the
case of said Section 11.03(e), subject to the time limits specified therein)
or as the result of, or in connection with any event under the Lease giving
rise to, a prepayment pursuant to Section 6.02 hereof, shall be promptly
distributed by the Indenture Trustee in the following order of priority:
first, to reimburse the Indenture Trustee for any costs or expenses
reasonably incurred in connection with such prepayment,
second, (i) to pay the amounts specified in paragraph (i) of clause
"second" of Section 5.03 hereof then due and payable in respect
of the Series A Certificates;
(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "second" of Section
5.03 hereof then due and payable in respect of the Series B
Certificates; and
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "second" of
Section 5.03 hereof then due and payable in respect of the Series
C Certificates;
provided that payments pursuant to this clause "second" shall be
made without the payment of Make-Whole Premium except in the
particular circumstances provided in Section 6.02(b) 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 Article 11 or
13 of the Lease as the result of loss or damage not constituting an Event of
Loss (x) with respect to the Aircraft, or as a result of such loss or damage
constituting an Event of Loss if and to the extent that such amounts would at
the time be required to be paid to the Lessee pursuant to said Article 11 or
13 but for the fact that a Payment Default, Bankruptcy Default or an Event of
Default shall have occurred and be continuing or (y) are pledged to the Lessor
as security in connection with an Event of Loss in accordance with Section
11.03(e) of the Lease, shall be held by the Indenture Trustee as security for
the obligations of the Lessee under the Lease and the Participation Agreement
and shall be invested in accordance with the terms of Section 5.08 hereof and
at such time as the conditions for payment to the Lessee specified in said
Article 11 or 13, as the case may be, shall be fulfilled and there shall not
be continuing any Payment Default, Bankruptcy Default or Event of Default,
such amount, and the proceeds of any investment thereof, shall, to the extent
not theretofore applied, be paid to the Lessee to the extent provided in the
Lease.
Section 5.03. Payment After Indenture Event of Default, etc. Except
as otherwise provided in Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof,
all payments (other than Excepted Payments) received and all amounts held or
realized by the Indenture Trustee 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 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 or the Holders in the
protection, exercise or enforcement of any right, power or remedy
or any damages sustained by the Indenture Trustee or the Holders,
liquidated or otherwise, upon such Indenture Event of Default)
shall be applied by the Indenture Trustee as between itself and
the Holders in reimbursement of such expenses;
second, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of
all Series A Certificates, and the accrued but unpaid interest
and other amounts due thereon and all other Secured Obligations
(other than Make-Whole Premium) in respect of the Series A
Certificates to the date of distribution, shall be distributed to
the Holders of Series A Certificates, and in case the aggregate
amount so to be distributed shall be insufficient to pay in full
as aforesaid, then ratably, without priority of one over the
other, in the proportion that the aggregate unpaid Principal
Amount of all Series A Certificates held by each holder plus the
accrued but unpaid interest and other amounts due hereunder or
thereunder (other than Make-Whole Premium) to the date of
distribution, bears to the aggregate unpaid Principal Amount of
all Series A Certificates held by all such holders plus the
accrued but unpaid interest and other amounts due thereon (other
than Make-Whole Premium) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series B
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series B Certificates to
the date of distribution, shall be distributed to the Holders of
Series B Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series B Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series B
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution; and
(iii) after giving effect to paragraph (ii) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series C
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series C Certificates to
the date of distribution, shall be distributed to the Holders of
Series C Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series C Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series C
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution;
(it being understood that amounts payable under this clause
"second" 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
in respect of (i) the Indenture Trustee in its individual capacity, (ii) the
Subordination Agent, (iii) each Liquidity Provider, and (iv) the Pass Through
Trustee, in each case whether pursuant to Article 8 or 9 of the Participation
Agreement or as Supplemental Rent, directly to the Person (which may include
the Indenture Trustee) entitled thereto. Any payment received by the
Indenture Trustee under clause (b) of the last paragraph of Section 2.04 shall
be distributed to the Subordination Agent to be distributed in accordance with
the terms of the Intercreditor Agreement.
(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 Article 9 of the Lease) shall be distributed by the Indenture
Trustee (a) to the extent received or realized at any time prior to the
payment in full of all obligations to the Holders, in the order of priority
specified in Section 5.01 hereof, and (b) to the extent received or realized
at any time after payment in full of all obligations to the Holders, in the
following order of priority:
first, in the manner provided in clause "first" of Section 5.03 hereof
and
second, in the manner provided in clause "third" of Section 5.03 hereof.
Section 5.06. Payments to Owner Trustee. Any amounts distributed
hereunder by the Indenture Trustee to the Owner Trustee shall be paid to the
Owner Trustee by wire transfer of immediately available funds of the type
received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be designated by notice from the
Owner Trustee to the Indenture Trustee from time to time. The Owner Trustee
hereby notifies the Indenture Trustee that unless and until the Indenture
Trustee receives notice to the contrary from the Owner Trustee, all amounts to
be distributed to the Owner Trustee hereunder for distribution in accordance
with the Trust Agreement shall be distributed by wire transfer of immediately
available funds of the type received by the Indenture Trustee to such account
of the Owner Participant as may be specified pursuant to Section 2.06 of the
Trust Agreement.
Section 5.07. Application of Payments. Each payment of principal of
and interest or other amounts due on each Certificate shall, except as
otherwise provided herein, be applied,
first, to the payment of interest on such Certificate due and payable to
the date of such payment, as provided in such Certificate, as
well as any interest on overdue principal and Make-Whole Premium,
if any, and, to the extent permitted by law, interest and other
amounts due thereunder,
second, to the payment of any other amount (other than the principal of
such Certificate) due hereunder to the Holder of such Certificate
or under such Certificate,
third, to the payment of the principal of such Certificate if then due
hereunder or under such Certificate and
fourth, the balance, if any remaining thereafter, to the payment of the
principal of such Certificate remaining unpaid (provided that
such Certificate shall not be subject to prepayment without the
consent of the affected Holder except as permitted by Sections
6.02, 6.06 and 8.02 hereof); provided that, solely for the
purpose of determining whether an Indenture Event of Default
shall have occurred and be continuing, each such payment shall be
deemed applied in the following order of priority: first, in the
manner provided in clause "first" above, second, in the manner
provided in clause "third" above, third, in the manner provided
in clause "second" above and fourth, in the manner provided in
clause "fourth" above.
Section 5.08. Investment of Amounts Held by Indenture Trustee.
Amounts held by the Indenture Trustee pursuant to Section 5.02(b) hereof or
pursuant to any provision of any Indenture Document providing for investment
by the Indenture Trustee of sums pursuant to Section 23.01 of the Lease or
this Section 5.08 shall be invested by the Indenture Trustee from time to time
in securities selected by (i) so long as no Event of Default shall have
occurred and be continuing, the Lessee (and in the absence of written
direction by the Lessee, the Indenture Trustee shall invest such monies in
direct obligations of the United States of America) or (ii) so long as an
Event of Default shall have occurred and be continuing, the Indenture Trustee
and in each case shall be of the type listed in clauses (i) through (iv) of
Section 23.01 of the Lease. Unless otherwise expressly provided in this
Indenture, any income realized as a result of any such investment, net of the
Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Lessee shall be responsible for and will
promptly pay to the Indenture Trustee or the Lessor, as the case may be, on
demand, the amount of any loss realized as the result of any such investment
(together with any fees, commissions and other costs and expenses, if any,
incurred by the Indenture Trustee or the Lessor in connection with such
investment), such amount to be disposed of in accordance with the terms hereof
or the Lease, as the case may be. The Indenture Trustee shall not be liable
for any loss resulting from any investment made by it or any investment sold
by it under this Indenture in accordance with instructions from the Lessee
other than by reason of its willful misconduct or gross negligence, and any
such investment may be sold (without regard to its maturity) by the Indenture
Trustee without instructions whenever the Indenture Trustee reasonably
believes such sale is necessary to make a distribution required by this
Indenture.
Unless otherwise confirmed in writing, an account statement delivered
by the Indenture Trustee to the Owner Trustee (with a copy to the Lessee)
shall be deemed written confirmation by the Owner Trustee that the investment
transactions identified therein accurately reflect the investment directions
given to the Indenture Trustee by or on behalf of the Lessee, unless the
Lessee notifies the Indenture Trustee in writing to the contrary within 30
days of the date of receipt of such statement.
Section 5.09. Withholding Taxes. The Indenture Trustee shall
withhold any Taxes required to be withheld, except to the extent that the
Holder has furnished evidence satisfactory to the Indenture Trustee of any
exemption from withholding claimed by such Holder and under no circumstances
shall the failure of any such Holder to receive any amounts so withheld
constitute an Indenture Event of Default. Notwithstanding any provision to
the contrary in Sections 5.01 through 5.05 hereof and subject to Article 8 of
the Participation Agreement, if the Lessee is required to pay any such Tax, or
any interest or penalty thereon, or to indemnify the Owner Participant or the
Owner Trustee with respect thereto pursuant to Section 8.01(c) of the
Participation Agreement, the Lessee shall be entitled to receive any payments
otherwise distributable to the Holder of any Certificate who was subject to
such Tax pursuant to Sections 5.01 to 5.05 hereof until the amounts the Lessee
shall have so paid in respect of any such Tax shall have been recovered in
full by the Lessee.
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity. Except as provided
in Sections 6.02, 6.06 and 8.02 hereof, the Certificates may not be prepaid
prior to their respective Maturities.
Section 6.02. Prepayment of Certificates. (a) The Outstanding
Certificates shall be prepaid in full (and not in part):
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08
hereof replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and Section 2.12 hereof shall not be
applicable in connection with such purchase), but subject to Section
6.02(c) below.
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 hereof (unless such notice is revoked in
accordance with such Section).
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) below.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a refinancing of the Certificates, but subject to Section
6.02(c) below.
(vi) As contemplated by Section 2.16 hereof and Section 3.05(b) of the
Participation Agreement if the Delivery Date has not occurred on or prior
to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject to the terms of Section
4.02(a) or 10.01 of the Lease or Article 15 of the Participation Agreement, as
the case may be, shall give irrevocable (subject to Section 6.02(c) hereof)
written notice to the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Certificates shall be
prepaid. In the case of a prepayment of the Certificates pursuant to Section
6.02(a)(i) above, the Certificates shall be prepaid in full on the Loss
Payment Date as defined in Section 11.02 of the Lease. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(iii) above, the
Certificates shall be prepaid in full on the date so designated in the notice
referred to in Section 8.02 hereof. In the case of a prepayment of the
Certificates pursuant to Section 6.02(a)(ii) or (iv) above, the Certificates
shall be prepaid in full on the Termination Date. In the case of a prepayment
of the Certificates pursuant to Section 6.02(a)(v) above, the Certificates
shall be prepaid on the effective date of the Refinancing. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(vi) above, the
Certificates shall be prepaid on the 15th day following the Cut-Off Date. In
the case of a prepayment of the Certificates pursuant to Section 6.02(a)(vii)
above, the Certificates shall be prepaid on the date designated in the notice
referred to therein. The day on which the Certificates are to be prepaid
pursuant to this Section 6.01(b) is herein referred to as the "Prepayment
Date".
On or prior to the Prepayment Date, immediately available funds shall
be deposited with the Indenture Trustee in an amount in respect of the
Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section 6.02
hereof on or after the applicable Premium Termination Date, or (ii) if such
prepayment is made prior to the applicable Premium Termination Date
pursuant to Section 6.02(a)(i), 6.02(a)(iii) (if clause (i) of the first
sentence of Section 8.02(a) hereof is applicable) or 6.02(a)(vi) above, the
sum of (A) the aggregate principal amount of such Certificates then
Outstanding, (B) accrued interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due the Indenture Trustee hereunder
or under the Participation Agreement or the Lease, but excluding any
Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to Section 6.02(a)(ii), 6.02(a)(iii) (if clause
(ii) of the first sentence of Section 8.02(a) hereof is applicable),
6.02(a)(iv), 6.02(a)(v) or 6.02(a)(vii) above, the sum of the amounts
specified in clauses (A), (B) and (C) of the preceding clause (1) plus any
Make-Whole Premium payable in respect of all Certificates with respect to
which the Premium Termination Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
(c) If, pursuant to the last paragraph of Section 10.01(f) of the
Lease, no Termination Date shall occur, or if, pursuant to Section 4.02(a) of
the Lease, the Lessee revokes its notice of election to purchase, or if no
refinancing shall occur pursuant to Section 15.01 of the Participation
Agreement, the Lessee shall give notice thereof to the Indenture Trustee, and
the prepayment proposed to be effected in respect thereof shall not occur.
Section 6.03. Notice of Prepayment to Holders. In order to effect
any prepayment set forth in Section 6.02(a) hereof, the Indenture Trustee
shall give prompt notice by first class mail of prepayment to each Holder of
an Outstanding Certificate. Any notice of prepayment given by the Owner
Trustee may be revoked by the Owner Trustee at any time on or before the
Prepayment Date by prompt notice to the Holders except as otherwise provided
in the Lease or the Participation Agreement.
All notices of prepayment shall state:
(1) the Prepayment Date,
(2) the applicable basis for determining the Prepayment Price,
(3) that on the Prepayment Date, subject to the provisions hereof,
the Prepayment Price will become due and payable, and that interest
on the Certificates shall cease to accrue on and after such
Prepayment Date, and
(4) the place or places where such Certificates are to be
surrendered for payment.
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price. On the Prepayment Date or the Sinking Fund Redemption Date (as defined
in Section 6.06 hereof), the Owner Trustee shall, to the extent an amount
equal to the Prepayment Price or the Sinking Fund Redemption Price (as defined
in Section 6.06 hereof), as the case may be, shall not then be held in cash or
Permitted Investments (marked-to-market net of all costs and expenses of
liquidation thereof) by the Indenture Trustee in immediately available funds
and deposited for the purpose, pay to the Indenture Trustee an amount equal to
the difference between (a) the amount then so held and (b) the Prepayment
Price or the Sinking Fund Redemption Price, as the case may be. If there
shall so be on deposit and/or deposited the applicable Prepayment Price or
Sinking Fund Redemption Price on or prior to a Prepayment Date or Sinking Fund
Redemption Date, interest shall cease to accrue in respect of all or, in the
case of a mandatory sinking fund redemption, the relevant portion being
prepaid of, the Outstanding Certificates on and after such Prepayment Date or
such Sinking Fund Redemption Date.
Section 6.05. Certificates Payable on Prepayment Date. On the
Prepayment Date, the Outstanding Certificates shall (except (A) if the Owner
Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise provided
in the Lease) become due and payable and from and after such Prepayment Date
(unless there shall be a default in the payment of the Prepayment Price) such
Certificates shall cease to bear interest. Upon surrender by any Holder of
its Certificate for prepayment in accordance with said notice, such Holder
shall be paid the principal amount of its Certificate then outstanding, accrued
interest thereon to the Prepayment Date, all other sums due to such Holder
hereunder, under the Participation Agreement or the Lease, plus, if a
Make-Whole Premium is payable pursuant to Section 6.02(b) hereof, the
Make-Whole Premium in respect of such Certificate.
If any Certificate called for prepayment shall not be so paid upon
surrender thereof for prepayment, the principal shall, until paid, continue to
bear interest from the Prepayment Date at the interest rate applicable to such
Certificate.
Section 6.06. Mandatory Sinking Fund Redemption. The Certificates
shall be subject to partial redemption, at the aggregate principal amount set
forth for the Certificates of the respective Series and Maturity, on a pro
rata basis, on each date specified in this Section (a "Sinking Fund Redemption
Date") for such payment on the Certificates of such Series and Maturity. The
Owner Trustee shall deposit funds sufficient to pay the Sinking Fund
Redemption Price with the Indenture Trustee as provided in Section 6.04
hereof. The Indenture Trustee shall pay from the amounts so deposited on each
applicable Sinking Fund Redemption Date to the Certificates of each Series in
the order of priority set forth in clause "first" of Section 5.01 and among the
Holders of the Certificates of each Series then Outstanding on a pro rata
basis the aggregate principal amount set forth below, together with accrued
interest to such Sinking Fund Redemption Date, but without Make-Whole Premium
(the "Sinking Fund Redemption Price"):
Principal Amount
Series A Series B Series C
Certificates Certificates Certificates
Sinking Fund with a Maturity of with a Maturity of with a Maturity of
Redemption Date January 15, 2018 January 15, 2018 January 15, 2014
- ---------------- ----------------- ------------------ ------------------
July 15, 1997 0 0 0
January 15, 1998 237,020 139,870 0
July 15, 1998 429,968 0 0
January 15, 1999 469,348 250,371 0
July 15, 1999 198,307 0 0
January 15, 2000 456,622 250,371 333,147
July 15, 2000 211,033 0 0
January 15, 2001 515,875 250,371 333,827
July 15, 2001 151,779 0 0
January 15, 2002 667,654 250,371 346,056
July 15, 2002 0 0 0
January 15, 2003 667,654 250,371 606,354
July 15, 2003 0 0 0
January 15, 2004 667,654 250,371 708,573
July 15, 2004 0 0 0
January 15, 2005 667,654 250,371 833,112
July 15, 2005 0 0 0
January 15, 2006 667,654 250,371 802,110
July 15, 2006 0 0 0
January 15, 2007 403,118 250,371 3,718,121
July 15, 2007 264,537 0 0
January 15, 2008 667,654 250,371 648,079
July 15, 2008 0 0 0
January 15, 2009 667,654 250,371 1,454,348
July 15, 2009 0 0 0
January 15, 2010 667,654 683,379 1,321,136
July 15, 2010 0 0 0
January 15, 2011 667,654 2,868,958 0
July 15, 2011 0 0 0
January 15, 2012 667,654 3,243,783 0
July 15, 2012 0 0 0
January 15, 2013 4,216,042 669,984 0
July 15, 2013 0 0 0
January 15, 2014 352,513 0 4,918,137
July 15, 2014 0 0 0
January 15, 2015 5,685,189 0 0
July 15, 2015 0 0 0
January 15, 2016 6,128,191 0 0
July 15, 2016 0 0 0
January 15, 2017 6,605,712 0 0
July 15, 2017 0 0 0
January 15, 2018 380,206 2,047,945 0
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default. "Indenture Event of
Default" means any of the following events (whatever the reason for such
Indenture Event of Default and whether it shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) any Event of Default specified in Article 16 of the Lease (other
than an Event of Default arising solely as the result of the failure to
make an Excepted Payment unless the Owner Participant shall notify the
Indenture Trustee in writing that such failure shall constitute an
Indenture Event of Default); or
(ii) the failure of the Owner Trustee other than by reason of a
Default or an Event of Default (i) to pay principal, interest or Make-Whole
Premium, if any, on any Certificate when due, and such failure shall have
continued unremedied for ten (10) Business Days after the date when due or
(ii) to pay any other amounts hereunder or under the Certificates when due
and such failure shall have continued unremedied for a period of thirty
(30) days after the Owner Trustee and the Owner Participant shall receive
written demand therefor from the Indenture Trustee or by the Holders of not
less than 25% in aggregate principal amount of Outstanding Certificates; or
(iii) (A) any representation or warranty made by SSB, the Owner
Trustee, the Owner Participant or the Owner Participant Guarantor or any
Owner Trustee Guarantor, in any Operative Agreement or in any certificate of
SSB, the Owner Trustee, the Owner Participant, or the Owner Participant
Guarantor furnished to the Indenture Trustee or any Holder in connection
herewith or therewith or pursuant hereto or thereto shall prove to have been
incorrect when made and was and remains in any respect material to the
Holders and if such misrepresentation is capable of being corrected as of a
subsequent date and if such correction is being sought diligently, and such
misrepresentation shall not have been corrected within 30 days following
notice thereof identified as a "Notice of Indenture Event of Default" being
given to the Owner Trustee and the Owner Participant by the Indenture
Trustee or by a Majority in Interest of Holders; or
(B) any (x) covenant made by the Owner Trustee in the fifth paragraph
following the Habendum Clause hereof or Section 3.05(b)(iii) hereof or
Section 7.02(b) or 7.12 of the Participation Agreement shall be breached in
any respect, (y) covenant made by the Owner Participant in Section 7.02(c)
or the last sentence of Section 7.13 of the Participation Agreement shall
be breached in any respect or (z) other covenant made by the Owner Trustee,
in its individual capacity or as Owner Trustee, or by any Owner Trustee
Guarantor, or by the Owner Participant or the Owner Participant Guarantor
in any Operative Agreement shall be breached in any respect and such breach
shall remain unremedied for a period of thirty (30) days after there has
been given to the Owner Trustee and the Owner Participant by the Indenture
Trustee or by Certificate Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates a written notice identified as
a "Notice of Indenture Event of Default" specifying such breach and
requiring it to be remedied; or
(iv) the Owner Trustee, the Lessor's Estate, any Owner Trustee
Guarantor, the Owner Participant or the Owner Participant Guarantor shall
file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(v) an order for relief shall be entered in respect of the Owner
Trustee or any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate by a court having jurisdiction
in the premises in an involuntary case under the federal bankruptcy laws as
now or hereafter in effect; or the Owner Trustee or any Owner Trustee
Guarantor or the Owner Participant or the Owner Participant Guarantor or
the Lessor's Estate shall file any answer admitting or not contesting the
material allegations of a petition filed against the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate in any proceeding referred to in clause
(vi) below or seek or consent or acquiesce in the appointment of any
trustee, custodian, receiver or liquidator of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, or of all or any
substantial part of its properties; or
(vi) without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered constituting an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or if any such petition shall be filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or the Owner Participant Guarantor or the Lessor's Estate, as
the case may be, and such petition shall not be dismissed within 60 days,
or if, without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered appointing a trustee, custodian, receiver or liquidator of the
Owner Trustee or any Owner Trustee Guarantor or the Owner Participant or
the Owner Participant Guarantor or the Lessor's Estate, as the case may be,
or of all or any substantial part of the properties of the Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate, as the case may be, and such
order shall not be dismissed within 60 days; or
(vii) any Owner Trustee Guaranty or the Owner Participant Guaranty
shall cease to be a valid and enforceable obligation of any Owner Trustee
Guarantor or the Owner Participant Guarantor, as the case may be, or
otherwise shall not be in full force and effect.
Section 7.02. Remedies. (a) If an Indenture Event of Default shall
have occurred and be continuing and so long as the same shall be continuing
unremedied, then and in every such case, the Indenture Trustee may, and when
required by the provisions of Article IX or Section 7.02(c) hereof, shall (i)
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article VII and (ii) in the event such Indenture
Event of Default is an Indenture Event of Default referred to in clause (i) of
Section 7.01 hereof, exercise any and all of the remedies pursuant to Article
17 of the Lease; provided that without the consent of the Owner Trustee and
the Owner Participant such exercise of remedies shall not occur until after
the latest date on which the Owner Trustee may cure the related Event of
Default pursuant to Section 8.03 hereof. The Indenture Trustee may (subject
to the provisions of the next succeeding paragraph) 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 (subject to the provisions of the next
succeeding paragraph) exercise any other right or remedy in lieu of or in
addition to the foregoing that may be available to it under applicable law, or
proceed by appropriate court action to enforce the terms hereof, of the Lease,
or both, or to rescind the Lease. Without limiting any of the foregoing, it
is understood and agreed that the Indenture Trustee may exercise any right of
sale of the Aircraft available to it, even though it shall not have taken
possession of the Aircraft and shall not have possession thereof at the time
of such sale.
Notwithstanding the foregoing, it is understood and agreed that if the
Indenture Trustee shall proceed to foreclose the Lien of this Indenture, it
shall substantially simultaneously therewith, to the extent the Indenture
Trustee is then entitled to do so hereunder and under the Lease, and is not
then stayed or otherwise prevented from doing so, proceed (to the extent it
has not already done so) to declare the Lease in default and commence the
exercise in good faith of one or more of the significant remedies under
Article 17 of the Lease (as the Indenture Trustee determines in its sole
discretion) for the purpose of recovering the Aircraft. It is further
understood and agreed that if the Indenture Trustee is unable to exercise one
or more remedies under Article 17 of the Lease because of any stay or
operation of law or otherwise, the Indenture Trustee shall not be entitled to
foreclose the Lien of this Indenture (A) until the earlier of (i) 60 days from
the date of any such stay or applicable order under Section 1110 of the
Bankruptcy Code plus any extension consented to by the Indenture Trustee or
the Holders of Certificates of such period as permitted under Section 1110(b)
of the Bankruptcy Code and (ii) the date of actual repossession of the
Aircraft by the Indenture Trustee or (B) if the Lessee has agreed to perform
or assume the Lease pursuant to Section 365 or 1110 of the Bankruptcy Code and
no Event of Default (other than as specified in Section 16.01(e), (f) or (g)
of the Lease, or other Event of Default in respect of which the 30-day period
referred to in clause (a)(1)(B)(ii)(I) of Section 1110 of the Bankruptcy Code
shall not yet have expired) shall be continuing. For the avoidance of doubt,
it is expressly understood and agreed that except as aforesaid the
above-described inability of the Indenture Trustee to exercise any right or
remedy under the Lease shall in no event and under no circumstances prevent
the Indenture Trustee from exercising all of its rights, powers and remedies
under this Indenture, including, without limitation, this Article VII. The
Indenture Trustee further agrees that notice of intent to foreclose shall be
given to the Owner Trustee at the earlier of the commencement of any
proceeding or at least 30 days prior to the consummation of foreclosure of the
Lien of this Indenture.
(b) If an Indenture Event of Default under clause (iv), (v) or (vi)
of Section 7.01 hereof shall occur and be continuing, the unpaid principal of
all Outstanding Certificates, together with interest accrued but unpaid
thereon and all other amounts due thereunder, but without Make-Whole Premium,
shall immediately become due and payable, without presentment, demand, protest
or notice, all of which are hereby waived.
(c) If any Indenture Event of Default not described in the preceding
paragraph (b) shall have occurred and be continuing, then and in every such
case, the Indenture Trustee may on its own accord or at the direction of
Holders of not less than 25% in aggregate principal amount of Outstanding
Certificates, at any time, by written notice to the Owner Trustee, the Owner
Participant and the Lessee, declare the principal of all the Certificates to
be due and payable, whereupon the unpaid principal amount of all Outstanding
Certificates, together with accrued interest thereon and all other amounts due
thereunder, but without Make-Whole Premium, shall immediately become due and
payable without presentment, demand, protest or other notice, all of which are
hereby waived. At any time after such declaration and prior to the sale or
disposition of the Trust Indenture Estate, however, the Holders of not less
than 50% in aggregate principal amount of Outstanding Certificates, by notice
to the Indenture Trustee, the Owner Trustee and the Lessee, may rescind such
declaration, whether made by the Indenture Trustee on its own accord or as
directed, if (x) there has been paid or deposited with the Indenture Trustee a
sum sufficient to pay all overdue installments of interest on all Certificates
(together, to the extent permitted by law, with interest on such overdue
installments of interest), the principal on any Certificates that has become
due otherwise than by such declaration of acceleration, all sums paid or
advanced by the Indenture Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel, or (y) all Indenture Events of Default (other than the nonpayment of
principal that has become due solely because of such acceleration) have been
either cured or waived as provided in Section 7.11 hereof. No such rescission
shall affect any subsequent default or impair any right consequent thereon.
(d) Each Holder shall be entitled at any sale to 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 (but
only to the extent that an amount equal to such purchase price would have been
paid to such Holder pursuant to Article V hereof if such purchase price were
paid in cash and the foregoing provisions of this subsection (d) were not
given effect).
Section 7.03. Return of Aircraft, etc. Subject to Section 7.02
hereof: (a) If an Indenture Event of Default shall have occurred and be
continuing, at the request of the Indenture Trustee, the Owner Trustee shall
promptly execute and deliver to the Indenture Trustee such documents as the
Indenture Trustee may deem necessary or advisable to enable the Indenture
Trustee or an agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify,
to obtain possession of all or any part of the Trust Indenture Estate to which
the Indenture Trustee shall at the time be entitled under this Indenture.
Subject to the foregoing, if the Owner Trustee shall for any reason fail to
execute and deliver such documents after such request by the Indenture
Trustee, the Indenture Trustee may pursue all or part of such Trust Indenture
Estate wherever it may be found and enter any of the premises of the Lessee or
the Owner Trustee wherever such Trust Indenture Estate may be or be supposed
to be and search for such Trust Indenture Estate and take possession of and
remove such Trust Indenture Estate. All expenses of pursuing, searching for
and taking such Trust Indenture Estate shall, until paid, be secured by the
Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Trust Indenture Estate, make all such
expenditures for maintenance, insurance and repairs to and of such Trust
Indenture Estate, as the Indenture Trustee may reasonably deem proper. In
each case subject to Section 7.02 hereof, the Indenture Trustee shall have the
right to maintain, use, operate, store, lease, control or manage the Trust
Indenture Estate and to carry on the business and to exercise all rights and
powers of the Owner Participant and the Owner Trustee relating to the Trust
Indenture Estate, as the Indenture Trustee may reasonably deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, insurance, use, operation, storage, leasing, control, management
or disposition of all or any part of the Trust Indenture Estate as the
Indenture Trustee may determine. Further, the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Trust Indenture Estate
other than Excepted Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
under this Indenture. Such tolls, rents (including Rent), revenues, issues,
income, products and profits shall be applied to pay the expenses of the use,
operation, storage, leasing, control, management, or disposition of the Trust
Indenture Estate, and of all maintenance and repairs, and to make all payments
which the Indenture Trustee may be required or may reasonably elect to make
for any taxes, assessments, insurance or other proper charges upon the Trust
Indenture Estate (including the employment of engineers and accountants to
examine, inspect and make reports upon the properties and books and records of
the Owner Trustee and the Lessee), and all other payments which the Indenture
Trustee may be required or authorized to make under any provision of this
Indenture, as well as just and reasonable compensation for the services of the
Indenture Trustee and of all persons properly engaged and employed for such
purposes by the Indenture Trustee; provided, that any excess amounts shall be
promptly distributed in accordance with Section 5.03 hereof.
(c) Subject to Section 7.02 hereof, if an Indenture Event of
Default shall have occurred and be continuing and the Indenture Trustee shall
be entitled to exercise remedies hereunder, and subject to Article VIII
hereof, the Indenture Trustee, either with or without taking possession, and
either before or after taking possession, and without instituting any legal
proceedings whatsoever, may sell, assign, transfer and deliver the whole or,
from time to time, to the extent permitted by law, any part of the Trust
Indenture Estate, or any part thereof, or interest therein, at any private
sale or public auction to the highest bidder, with or without demand,
advertisement or notice, except that in respect of any private sale 30 days
prior written notice by registered mail to the Owner Trustee and the Owner
Participant will be provided, for cash or, with the consent of the Owner
Trustee and the Owner Participant, credit or for other property, for immediate
or future delivery, and for such price or prices and on such terms as the
Indenture Trustee in exercising reasonable commercial discretion may
determine; provided, that any such action shall be at the time lawful and that
all mandatory legal requirements shall be complied with. Any notice required
pursuant to the terms hereof in the case of a public sale, shall state the
time and place fixed for such sale. Any such public sale shall be held at
such time or times within ordinary business hours as the Indenture Trustee
shall fix in the notice of such sale. At any such sale, the Trust Indenture
Estate may be sold in one lot as an entirety or in separate lots. The
Indenture Trustee shall not be obligated to make any sale pursuant to such
notice. The Indenture Trustee may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for such sale, and any such sale may
be made at any time or place to which the same may be so adjourned without
further notice or publication. The Indenture Trustee may exercise such right
of sale without possession or production of the Certificates or proof of
ownership thereof, and as representative of the Holders may exercise such
right without notice to the Holders or without including the Holders as
parties to any suit or proceedings relating to the foreclosure of any part of
the Trust Indenture Estate. The Owner Trustee shall execute any and all such
bills of sale, assignments and other documents, and perform and do all other
acts and things requested by the Indenture Trustee in order to permit
consummation of any sale of the Trust Indenture Estate in accordance with this
Section 7.03(c) and to effectuate the transfer or conveyance referred to in
the first sentence of this Section 7.03(c). Notwithstanding any other
provision of this Indenture, the Indenture Trustee shall not sell the Trust
Indenture Estate or any part thereof unless the Certificates shall have been
accelerated.
(d) To the extent permitted by applicable law, and subject to
Section 7.02 hereof, 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 of 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) 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.
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 Sections 7.02 and 7.03(c) hereof.
In case there shall be pending proceedings relative to the Owner
Trustee under the Bankruptcy Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Owner Trustee or its property, or in case of any other comparable judicial
proceedings relative to the Owner Trustee, or to the creditors or property of
the Owner Trustee, the Indenture Trustee, irrespective of whether the
principal of the Certificates shall then be due and payable as therein or
herein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal, interest and other amounts owing and unpaid in respect of the
Certificates or hereunder, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of the Holders allowed in any judicial
proceedings relative to the Owner Trustee or to the creditors or property of
the Owner Trustee,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Indenture Trustee on their
behalf;
and any trustee, receiver, or liquidator, custodian or other similar official
is hereby authorized by each of the Holders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to the Holders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or willful misconduct.
Nothing contained herein shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Certificates or the rights of any Holder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any Holder
in any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
All rights of action and rights to assert claims under this
Indenture, or under any of the Certificates, may be enforced by the Indenture
Trustee without the possession of such Certificates on any trial or other
proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders, as provided herein.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Certificates, and it shall not be
necessary to make any Holders parties to such proceedings.
Section 7.05. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee in this Indenture shall be cumulative
and shall be in addition to every other right, power and remedy specifically
given herein or now or hereafter existing at law, in equity or by statute, and
each and every right, power and remedy whether specifically given herein or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Indenture Trustee or the Holders, and
the exercise or the beginning of the exercise of any power or remedy shall not
be construed to be a waiver of the right to exercise at the same time or later
any other right, power or remedy. No delay or omission by the Indenture
Trustee or of any Holder in the exercise of any right, remedy or power or in
the pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Trustee or
the Lessee or to be an acquiescence in any such default.
Section 7.06. Suits for Enforcement. If an Indenture Event of
Default has occurred, has not been waived and is continuing, the Indenture
Trustee may in its discretion and subject to its rights of appropriate
indemnification under Sections 7.08 and 9.03 and Article XI hereof proceed to
protect and enforce its rights and rights of the Holders by such appropriate
judicial proceedings as the Indenture Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture or to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture or by
law; provided, that any sale of any portion of the Trust Indenture Estate
shall be done in accordance with Sections 7.02 and 7.03(c) hereof.
Section 7.07. Discontinuance of Proceedings. In case the Indenture
Trustee or any Holder shall have instituted any proceeding to enforce any
right, power or remedy under this Indenture by foreclosure, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Indenture Trustee or
such Holder, then the Owner Trustee, the Indenture Trustee, the Owner
Participant, the Holders and the Lessee shall, subject to any binding
determination in such proceeding, be restored to their former positions and
rights under this Indenture with respect to the Trust Indenture Estate, and all
rights, remedies and powers of the Indenture Trustee and the Holders shall
continue as if no such proceeding had been instituted.
Section 7.08. Limitations on Suits by Holders. No Holder of any
Certificate shall have any right by virtue or by availing of any provision of
this Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Indenture Trustee written notice that an
Indenture Event of Default shall then have occurred and be continuing, as
hereinbefore provided, and the Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates shall have made written request
upon the Indenture Trustee to institute such action or proceedings in its own
name as trustee hereunder and shall have offered to the Indenture Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Indenture Trustee for 60
days after its receipt of such notice, request and offer of indemnity shall
have failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Indenture
Trustee pursuant to Section 7.10 hereof; it being understood and intended, and
being expressly covenanted by the Holder of each Certificate with every other
Holder of each other Certificate and the Indenture Trustee, that no one or
more Holders shall have any right in any manner whatever to affect, disturb or
prejudice the rights of any other Holder or the Lien of this Indenture or any
part of the Trust Indenture Estate or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under this
Indenture, except in the manner provided herein and for the equal, ratable and
common benefit of all Holders. For the protection and enforcement of the
provisions of this Section, each and every Holder and the Indenture Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute Certain Suits.
Notwithstanding any other provision in this Indenture and any provision of any
Certificate, the right of any Holder to receive payment of the principal of
and interest and Make-Whole Premium, if any, on such Certificate on or after
the respective due dates and in the manner expressed in such Certificate, or,
subject to Section 7.08 hereof, to institute suit for the enforcement of any
such payment on or after such respective dates as provided herein, shall not
be impaired or affected without the consent of such Holder.
Section 7.10. Control by Holders. The Majority in Interest of
Certificate Holders shall have the right to direct the Indenture Trustee as to
the time, method, and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power conferred
on the Indenture Trustee by this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture and the Indenture Trustee shall have received, to the extent
provided in Sections 7.08 and 9.03 and Article XI hereof, such reasonable
indemnification as it may require against the costs, expenses and liabilities
to be incurred by the Indenture Trustee; and provided further that (subject to
the provisions of Section 9.02 hereof) the Indenture Trustee shall have the
right to decline to follow any such direction if the Indenture Trustee, being
advised by counsel, shall determine that the action or proceeding so directed
may not lawfully be taken or if the Indenture Trustee in good faith by its
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers of the Indenture Trustee shall determine that the
action or proceedings so directed would involve the Indenture Trustee in
personal liability or if the Indenture Trustee in good faith shall so
determine that the actions or forebearances specified in or pursuant to such
direction shall be unduly prejudicial to the interests of Holders not joining
in the giving of said direction, it being understood that (subject to Section
9.02 hereof) the Indenture Trustee shall have no duty to ascertain whether or
not such actions or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Indenture
Trustee in its discretion to take any action deemed proper by the Indenture
Trustee and which is not inconsistent with the direction by the Majority in
Interest of Certificate Holders.
Section 7.11. Waiver of Past Indenture Default. Upon written
instructions from the Majority in Interest of Certificate Holders, the
Indenture Trustee shall waive any past Indenture Default and its consequences
and upon any such waiver such Indenture Default shall cease to exist and any
Indenture Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Indenture Default or impair any right consequent
thereon; provided, however, that in the absence of written instructions from
all Holders and each Liquidity Provider, the Indenture Trustee shall not waive
any Indenture Default (a) in the payment of the principal of or Make-Whole
Premium, if any, or interest on, or other amounts due under, any Certificate
then Outstanding, or (b) in respect of a covenant or provision of this
Indenture which, under Article XIII hereof, cannot be modified or amended
without the consent of each Holder.
Section 7.12. Notice of Indenture Default. The Indenture Trustee
shall transmit to the Owner Trustee, the Holders and to the Owner Participant
notice of any Indenture Defaults actually known to a Responsible Officer of
the Indenture Trustee, such notice to be transmitted by mail to the Holders
within 90 days, and to the Owner Trustee and the Owner Participant promptly
after the occurrence thereof, unless such Indenture Default shall have been
cured before the giving of such notice; provided that except in the case of a
default in the payment of the principal of or interest on any Certificate,
under no circumstances shall the Indenture Trustee give such notice to the
Holders until the expiration of a period of 60 days from the occurrence of such
Indenture Default; and provided further that, except in the case of default in
the payment of the principal of or interest on or any other amount due under
any of the Certificates, the Indenture Trustee shall be protected in
withholding such notice to the Holders if and so long as the board of
directors, the executive committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Indenture Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.
(a) Subject to Section 13.01 hereof and the provisions of paragraph (a)
immediately following the Granting Clause hereof, without the consent of a
Majority in Interest of Certificate Holders, the respective parties to the
Indenture Documents may not modify, amend or supplement any of said
agreements, or give any consent, waiver, authorization or approval thereunder,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner the
rights of the respective parties thereunder; provided, however, that the
actions specified in subsection (b) of this Section 8.01 may be taken without
the consent of the Indenture Trustee or any Holder.
(b) Subject to the provisions of subsection (c) of this Section
8.01, the Lessor and the respective parties to the Indenture Documents, at any
time and from time to time, without the consent of the Indenture Trustee or of
any Holder, may:
(1) so long as no Indenture Event of Default shall have occurred and
be continuing, modify, amend or supplement the Lease, or give any waiver
with respect thereto, except that without compliance with subsection (a) of
this Section 8.01 the parties to the Lease shall not modify, amend or
supplement, or give any waiver for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions thereof or
of modifying in any manner the rights of the respective parties thereunder,
with respect to the following provisions of the Lease as in effect on the
effective date hereof: Article 2 (except in respect of the Term, if the
result thereof would not be to shorten the Term of the Lease to a period
shorter than the period ending with the Maturity of any Certificate),
Section 3.03 (except to the extent such Section relates to amounts payable
(whether directly or pursuant to this Indenture) to Persons other than
Holders, each Liquidity Provider, the Subordination Agent and the Indenture
Trustee in its individual capacity), Section 3.05, Section 3.06 (except
insofar as it relates to the address or account information of the Owner
Trustee or the Indenture Trustee) (other than as such Sections 3.03, 3.05
and 3.06 may be amended pursuant to Section 3.04 of the Lease as in effect
on the effective date hereof), Section 5.01, Article 6, Article 10 (except
that further restrictions may be imposed on the Lessee), Article 11 (except
that additional requirements may be imposed on the Lessee), Article 13
(except for Section 13.05 and except that additional insurance requirements
may be imposed on the Lessee), Article 14 (except in order to increase the
Lessee's liabilities or enhance the Lessor's rights thereunder), Article 15
(except in the case of an assignment by the Lessor in circumstances where
the Aircraft shall remain registrable under the Federal Aviation Act),
Section 16.01 (except to impose additional or more stringent Events of
Default), Article 17 (except to impose additional remedies), Section 19.01
(except to impose additional requirements on the Lessee), Section 20.01,
Article 22, Section 23.01, Section 26.03 and any definition of terms used
in the Lease, to the extent that any modification of such definition would
result in a modification of the Lease not permitted pursuant to this
subsection (b); provided that the parties to the Lease may take any such
action without the consent of the Indenture Trustee or any Holder to the
extent such action relates to the payment of amounts constituting, or the
Owner Trustee's, the Owner Participant's or the Lessee's rights or
obligations with respect to, Excepted Payments (other than the place, time
and manner of payment of any portion of Basic Rent constituting an Excepted
Payment);
(2) modify, amend or supplement the Trust Agreement and any other
Indenture Document (other than the Lease and the Participation Agreement),
or give any consent, waiver, authorization or approval with respect
thereto, in each case only to the extent any such action shall not
materially adversely impact the interests of the Holders;
(3) modify, amend or supplement the Participation Agreement, or give
any consent, waiver, authorization or approval with respect thereto, except
that without compliance with subsection (a) of this Section 8.01 the
parties to the Participation Agreement shall not modify, amend or
supplement, or give any consent, waiver, authorization or approval for the
purpose of adding provisions to or changing in any manner or eliminating
any of the provisions thereof or of modifying in any manner the rights of
the respective parties thereunder, with respect to the following provisions
of the Participation Agreement as in effect on the effective date hereof:
Article 6 and Section 10.01(b) (insofar as such Article 6 and Section
10.01(b) relate to the Indenture Trustee, the Pass Through Trustee and the
Holders), Article 7 and Sections 3.05, 15.01, 17.02 and 17.11 and Articles
8 and 9 (insofar as such Articles relate to the Indenture Trustee; it being
understood that only the Indenture Trustee's consent in respect thereof
need be obtained) and any definition of terms used in the Participation
Agreement, to the extent that any modification of such definition would
result in a modification of the Participation Agreement not permitted
pursuant to this subsection (b); and
(4) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided the
making of any such other provision shall not adversely affect the interests
of the Holders.
(c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease or the Participation
Agreement, whether effected pursuant to subsection (a) or pursuant to
subsection (b) of this Section 8.01 and anything in such subsections or
elsewhere in this Indenture to the contrary notwithstanding, shall, without
the consent of the Holder of each Outstanding Certificate affected thereby,
and each Liquidity Provider,
(1) modify, amend or supplement the Lease in such a way as to extend
the time of payment of Basic Rent or Stipulated Loss Value or Supplemental
Rent payable to the Holders or any Liquidity Provider or any other amounts
payable for the account of the Holders or any Liquidity Provider (subject
in any event to Section 3.05 of the Lease) upon the occurrence of an Event
of Loss or Termination Value and any other amounts payable for the account
of the Holders (subject in any event to Section 3.05 of the Lease) upon
termination of the Lease with respect to the Aircraft payable under, or as
provided in, the Lease as in effect on the effective date hereof, or reduce
the amount of any installment of Basic Rent or Supplemental Rent so that
the same is less than the payment of principal of, and interest on the
Certificates and Make-Whole Premium, if any, and amounts due to each
Liquidity Provider, as the case may be, to be made from such installment of
Basic Rent or Supplemental Rent, or reduce the aggregate amount of
Stipulated Loss Value, or any other amounts payable under, or as provided
in, the Lease as in effect on the effective date hereof upon the occurrence
of an Event of Loss so that the same is less than the accrued interest on
and the principal as of the Loss Payment Date, of the Certificates at the
time Outstanding or reduce the amount of Termination Value and any other
amounts payable under, or as provided in, the Lease as in effect on the
effective date hereof upon termination of the Lease with respect to the
Aircraft so that the same is less than the accrued interest on and
principal as of the Lease Termination Date and Make-Whole Premium, if any,
of Certificates at the time Outstanding, or
(2) modify, amend or supplement the Lease in such a way as to, or
consent to any assignment of the Lease or give any consent, waiver,
authorization or approval which would, release the Lessee from its absolute
and unconditional obligations in respect of payment of Basic Rent or
Supplemental Rent, or Stipulated Loss Value and any other amounts payable
for the account of the Holders (subject in any event to Section 3.05 of the
Lease) upon the occurrence of an Event of Loss, or Termination Value and
any other amounts payable for the account of the Holders (subject in any
event to Section 3.05 of the Lease) with respect to the Aircraft, payable
under, or as provided in, the Lease as in effect on the effective date
hereof, except for any such assignment pursuant to Section 2.12 hereof, and
except as provided in the Lease as in effect on the effective date hereof.
(d) At all times so long as this Indenture is in effect, the consent
of the Owner Trustee (at the direction of the Owner Participant) shall be
required in order (i) to amend, modify or supplement the Lease or any other
Operative Document to which the Owner Trustee is a party or to waive
compliance by the Lessee with any of its obligations thereunder and (ii) to
grant any consent requested under the Lease.
Notwithstanding the foregoing, but subject always to the provision of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Article 17 (other than with respect to Excepted
Payments) thereof and (B) subject only to the provisions of this Indenture,
exercise the remedies set forth in such Article 17 of the Lease (other than in
connection with Excepted Payments) and in Article 7 hereof.
Nothing in this Indenture shall be deemed to prohibit the Owner
Participant or the Owner Trustee from making demand on the Lessee for, or from
commencing an action at law to obtain the payment of, or from receiving
payment of, any Excepted Payment; provided, however, that if the Owner Trustee
is proceeding under the Lease, the Owner Trustee shall proceed pursuant to
Section 17.01(a)(v), and only Section 17.01(a)(v), of the Lease.
Section 8.02. Owner Participant's Right to Elect to Prepay or
Purchase the Certificates. (a) If (i) an Event of Default shall have occurred
and be continuing for more than 180 days or the Certificates shall have become
due and payable pursuant to Section 7.02(b) or (c) hereof or (ii) an Event of
Default shall have occurred and be continuing for not more than 180 days and
the Certificates shall not have become due and payable pursuant to Section
7.02(b) or (c) hereof, the Owner Participant (or the Owner Trustee on behalf
of the Owner Participant) may, but shall be under no obligation to, do either
of the following:
(1) direct the Owner Trustee to cause the prepayment of all, but not
less than all, of the Certificates then Outstanding by notifying the
Indenture Trustee of such election, which notice in order to be effective
shall state that it is irrevocable (except as provided below) and shall
designate a Prepayment Date which shall be a Business Day which shall be
not less than 15 days after the date of such notice on which the Owner
Trustee shall, in the manner provided for in Section 6.04 hereof, deposit
the sum of amounts contemplated by paragraph "first" under Section 5.03 and
the aggregate Prepayment Price (determined in accordance with Section
6.02(b) hereof) of all such Certificates with the Indenture Trustee. If
such payment by the Owner Trustee to the Indenture Trustee is made, the
Certificates shall cease to accrue interest from and after the Prepayment
Date, and after distribution of such payment to the Holders, the Indenture
Trustee shall release the Trust Indenture Estate from the Lien of this
Indenture; or
(2) purchase all, but not less than all, of the Outstanding
Certificates by notifying the Indenture Trustee of such election, which
notice in order to be effective shall state that it is irrevocable (except
as provided below) and shall designate a date which shall be a Business Day
which shall be not less than 15 days after the date of such notice on which
the Owner Trustee shall pay to the Indenture Trustee an amount equal to the
aggregate unpaid principal amount of all Outstanding Certificates, together
with accrued interest on such amount to the date of purchase, the aggregate
amount of any Make-Whole Premium applicable to each Outstanding Certificate
(if such purchase occurs prior to the Premium Termination Date for such
Outstanding Certificate) in the case of a purchase pursuant to clause
(a)(ii) above (but not if such purchase is pursuant to clause (a)(i)
above), plus all other sums due any Holder or the Indenture Trustee
hereunder or under the Participation Agreement or the Lease. Upon receipt
by the Indenture Trustee of such amount, each Holder will be deemed,
whether or not Certificates shall have been delivered to the Indenture
Trustee on such date, to have thereupon sold, assigned, transferred and
conveyed (and shall promptly take such actions as the Owner Participant
shall reasonably request to evidence such sale, assignment, transfer and
conveyance) to the Owner Participant (without recourse or warranty of any
kind except for its own acts), all of the right, title and interest of such
Holder in and to the Trust Indenture Estate and this Indenture and all
Certificates held by such Holder and the former Holders shall not be
entitled to receive any interest on the principal amount of such
Certificates after the purchase date, and the Owner Participant shall be
deemed to have assumed (and shall promptly take such actions as any Holder
shall reasonably request to evidence such assumption) all of such Holder's
obligations under the Participation Agreement and this Indenture arising
subsequent to such sale. If the Owner Trustee shall so request, such
Holder will comply with all the provisions of Section 2.06 of this
Indenture to enable new Certificates to be issued to the Owner Participant
in such authorized denominations as the Owner Participant shall request.
All charges and expenses required pursuant to Section 2.06 hereof in
connection with the issuance of any such new Certificates shall be borne by
the Owner Participant.
(b) From and after the deposit by the Owner Trustee of the applicable
Prepayment Price or purchase price with the Indenture Trustee pursuant to
Section 8.02(a) hereof, the Owner Trustee shall be entitled to exercise all
remedies of the Indenture Trustee under Article VII hereof as well as of the
Lessor under the Lease.
(c) Any election to prepay or purchase the Certificates under this
Section 8.02 shall be irrevocable, provided that if on the specified date for
prepayment or purchase, the Event of Default giving rise to such election
shall no longer be continuing under the Lease such election shall be deemed to
be automatically withdrawn.
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 date
which is 15 Business Days after the Owner Participant's receipt of written
notice of such Event of Default all principal and interest on the Certificates
then due (as well as any interest on overdue principal and (to the extent
permitted by applicable law) interest), but not including any principal or
interest becoming due on account of such Event of Default, then the failure of
the Lessee to make the payment of such installment of Basic Rent or of
interest on account of such installment's being overdue shall not constitute
or result in an Indenture Event of Default under this Indenture and any
declaration based solely on the same shall be deemed to be automatically
rescinded. Nothing contained in the preceding sentence shall be deemed to
entitle the Owner Trustee to exercise any rights and powers or pursue any
remedies pursuant to Article 17 of the Lease or otherwise except as set forth
in this Indenture, and except that the Owner Trustee or the Owner Participant
may attempt to recover any amount paid by it or them under this Indenture by
demanding of the Lessee payment of such amount, or by commencing an action at
law or equity 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 be subrogated on
an unsecured basis to all the rights of the Indenture Trustee under the Lease
in respect of the payment giving rise to such Event of Default, and any right
to any interest in respect of the same, and shall be entitled to any payment
of Basic Rent (or interest thereon) actually made by the Lessee in respect of
such cured payment upon receipt by the Indenture Trustee; provided that no such
amount shall be paid to the Owner Trustee or the Owner Participant until all
amounts then due and payable to each Certificate Holder hereunder and
thereunder shall have been paid in full and no Indenture Event of Default
shall have occurred and be continuing. Notwithstanding anything in this
Indenture or the Lease to the contrary, the Owner Participant and the Owner
Trustee collectively, shall not be entitled to cure more than six (6) Events
of Default (no more than three (3) of which may be consecutive) occasioned by
defaults in the payment of Basic Rent.
(b) If (A) there shall occur an Event of Default under the Lease for
any reason other than the Lessee's failure to make any payment of an
installment of Basic Rent and (B) the Owner Trustee shall have taken or caused
to be taken such action necessary to cure and shall have cured such Event of
Default prior to the date which is 15 Business Days after the Owner
Participant's receipt of the written notice of such Event of Default, then
the failure of the Lessee to perform such covenant, condition or agreement,
the observance or performance of which was accomplished by the Owner Trustee
hereunder shall not constitute or result in an Indenture Event of Default under
this Indenture and any declaration based solely on the same shall be deemed to
be automatically rescinded. Nothing contained in the preceding sentence shall
be deemed to entitle the Owner Trustee or the Owner Participant to exercise
any rights and powers or pursue any remedies pursuant to Article 17 of the
Lease or otherwise except as set forth in this Indenture, and except that the
Owner Trustee or the Owner Participant may attempt to recover any amount paid
by it or them in effecting such cure by demanding of the Lessee payment of
such amount, plus any interest due, or by commencing an action at law or in
equity against the Lessee for the payment of such amount or taking appropriate
action in a pending action at law or in equity against the Lessee pursuant to
Section 17.01(a)(v), but only said Section 17.01(a)(v), of the Lease. Upon
curing any such Event of Default pursuant to this Section 8.03(b), the Owner
Trustee or the Owner Participant, as the case may be, shall be subrogated to
all the rights of the Indenture Trustee under the Lease in respect of the
payment, agreement or covenant giving rise to such Event of Default, and any
right to any interest in respect of the same, and shall be entitled to any
payment or other performance upon receipt by the Indenture Trustee; provided
that no such amount shall be paid to the Owner Trustee or the Owner
Participant until all amounts then due and payable to each Certificate Holder
hereunder and thereunder shall have been paid in full and no Indenture Event
of Default shall have occurred and be continuing.
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts. The Indenture Trustee in its
individual capacity hereby accepts the trusts imposed upon it by this
Indenture, and covenants and agrees to perform the same as expressed herein
and agrees to receive and disburse all moneys constituting part of the Trust
Indenture Estate in accordance with the terms hereof.
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an Indenture Event of Default.
(a) The Indenture Trustee, prior to the occurrence of an Indenture Event of
Default and after the curing or waiving of all Indenture Events of Default
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. So long as an
Indenture Event of Default has occurred and has not been cured or waived, the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs. No provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Indenture Event of Default and
after the curing or waiving of all Indenture Events of Default which may have
occurred:
(x) the duties and obligations of the Indenture Trustee shall be
determined solely by the express provisions of this Indenture, and the
Indenture Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read in to this Indenture against
the Indenture Trustee; and
(y) in the absence of bad faith on the part of the Indenture
Trustee, the Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; but in the case of any such
statements, certificate or opinions which by any provision hereof are
specifically required to be furnished to the Indenture Trustee, the Indenture
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible Officers
of the Indenture Trustee, unless it shall be proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action taken or not taken by it in good faith in accordance with the direction
of the Holders of not less than a majority in aggregate principal amount of
Outstanding Certificates relating to the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred upon the Indenture Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Indenture Trustee shall have determined
in good faith that the repayment of such funds or adequate indemnity against
such liability is not reasonably assured to it.
The Indenture Trustee agrees that it will execute and the Owner
Trustee agrees that it will, at the expense of the Lessee, file or cause to be
filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Trust Indenture
Estate as may be specified from time to time in written instructions of the
Holders of not less than 25% in aggregate principal amount of Certificates
(which instructions may, by their terms, be operative only at a future date
and which shall be accompanied by the execution form of such continuation
statement so to be filed); provided that, notwithstanding the foregoing, the
Indenture Trustee may execute and file or cause to be filed any financing
statement which it from time to time deems appropriate.
(b) If any Event of Default shall have occurred and be continuing
and, after the latest date on which the Owner Trustee may cure such Event of
Default pursuant to Section 8.03 hereof, on request of the Holders of not less
than 25% in aggregate principal amount of Outstanding Certificates and subject
to indemnification, to the extent provided in Sections 7.08 and 9.03 and
Article XI hereof, as it may require against the costs, expenses and
liabilities to be incurred, the Indenture Trustee shall exercise such remedies
under Article 17 of the Lease as shall be specified in such request.
(c) The Indenture Trustee agrees that it will, in its individual
capacity and at its own cost and expense (but without any right of indemnity
in respect of any such cost or expense under Article XI hereof) promptly take
such action as may be necessary duly to discharge all Indenture Trustee's
Liens on any part of the Trust Indenture Estate.
(d) The Indenture Trustee will execute and deliver to the Lessee for
filing in accordance with Article 18 of the Lease any properly presented
document, instrument or financing or continuation statement specified in any
opinion delivered pursuant to Section 6.03(e) of the Participation Agreement.
The Indenture Trustee may rely on the act of presentation of any such
document, instrument, financing or continuation statement as evidencing the
fact that it is properly prepared and presented, provided that the Indenture
Trustee shall promptly correct any error in any such document, instrument,
financing or continuation statement of which a Responsible Officer of the
Indenture Trustee has actual knowledge.
(e) The Indenture Trustee will furnish to each Holder promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished to
the Indenture Trustee, to the extent that the same shall not have been
otherwise furnished to such Holder pursuant to this Indenture or to the extent
the Indenture Trustee does not reasonably believe that the same shall have
been furnished by the Lessee directly to such Holder.
Section 9.03. Certain Rights of the Indenture Trustee. Subject to
Section 9.02 hereof:
(a) the Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Owner Trustee
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof be herein
specifically prescribed) upon which the Indenture Trustee may rely to prove
or establish a matter set forth therein;
(c) the Indenture Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Indenture Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Indenture Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Indenture Event of Default
hereunder and after the curing or waiving of all Indenture Events of
Default, the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or
document unless requested in writing to do so by the Majority in Interest
of Certificate Holders; provided that, if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Indenture Trustee, not reasonably assured to the Indenture Trustee
by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Owner Trustee or,
if paid by the Indenture Trustee or any predecessor trustee, shall be
repaid by the Owner Trustee upon demand; and
(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by it hereunder.
Section 9.04. Indenture Trustee Not Responsible for Recitals,
Disposition of Certificates or Application of Proceeds Thereof. The Indenture
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates, except the Indenture Trustee's
certificates of authentication. The Indenture Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Certificates. The Indenture Trustee shall not be accountable for the use or
application by the Owner Trustee of any of the Certificates or of the proceeds
thereof.
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc. The Indenture Trustee or any agent of the Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Indenture
Trustee or such agent and may otherwise deal with the Owner Trustee and
receive, collect, hold and retain collections from the Owner Trustee with the
same rights it would have if it were not the Indenture Trustee or such agent.
Section 9.06. Moneys Held by Indenture Trustee. Subject to Sections
5.08 hereof and 14.04 hereof, all moneys received by the Indenture Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Neither
the Owner Trustee nor, subject to Section 5.08 hereof, the Indenture Trustee
nor any agent thereof shall be under any liability for interest on any moneys
received by it hereunder.
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc. Subject to Sections 9.02 and 9.03 hereof, whenever in the
administration of the trusts of this Indenture the Indenture Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting any action hereunder, such matter (unless
other evidence in respect thereof be specifically prescribed herein) may, in
the absence of bad faith on the part of the Indenture Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to
the Indenture Trustee, and such certificate, in the absence of bad faith on
the part of the Indenture Trustee, shall be full warrant to the Indenture
Trustee for any action taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
Section 9.08. Replacement Airframes and Replacement Engines. At any
time and from time to time any Airframe or Engine which has been subject to an
Event of Loss and may, or is required to, be replaced under Section 10.03,
11.03 or 11.04 of the Lease by a Replacement Airframe or Replacement Engine,
as the case may be, shall be replaced in accordance with the provisions of
this Section 9.08 and the provisions of said Sections of the Lease, the Owner
Trustee shall, from time to time, direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing such Airframe and/or Engine as appropriate from the Lien
of this Indenture and the Indenture Trustee shall execute and deliver such
instrument as aforesaid without recourse or warranty, but only upon receipt by
or deposit with the Indenture Trustee of the following:
(1) A written request from the Owner Trustee requesting such release
and specifically describing the Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or other
applicable registration information) and manufacturer's serial number;
(ii) a description of the Replacement Airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Airframe the Owner Trustee
will be the legal owner of and have good and marketable title to such
Replacement Airframe free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease, that such Replacement
Airframe will on such date be in at least as good operating condition
and repair as required by the terms of the Lease, and that such
Replacement Airframe has been or, substantially concurrently with
such replacement, will be duly registered in the name of the Owner
Trustee under the Transportation Code or under the law then
applicable to the registration of the Airframe subject to the Event
of Loss and that an airworthiness certificate has been duly issued
under the Aviation Act (or such other applicable law) with respect to
such Replacement Airframe and that such registration and certificate
is, or will be, in full force and effect, and that the Lessee will
have the full right and authority to use such Replacement Airframe;
(iv) that the insurance required by Article 13 of the Lease is in
full force and effect with respect to such Replacement Airframe and
all premiums then due thereon have been paid in full;
(v) that the Replacement Airframe is of the same or an improved make
or model as the Airframe requested to be released from this Indenture;
(vi) that the value of the Replacement Airframe as of the date of such
certificate is not less than the value of the Airframe requested to
be released (assuming such Airframe was in the condition and repair
required to be maintained under the Lease);
(vii) that no Event of Default has occurred and is continuing or
would result from the making and granting of the request for release
and the addition of a Replacement Airframe;
(viii) that the release of the Airframe subject to the Event of Loss
will not impair the security of the Indenture in contravention of any
of the provisions of this Indenture;
(ix) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Airframe and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x) that each of the conditions specified in Section 11.03 of the
Lease with respect to such Replacement Airframe has been satisfied.
B. With respect to the replacement of any Engine:
(i) a description of the Engine subject to the Event of Loss
including the manufacturer's serial number;
(ii) a description of the Replacement Engine including the
manufacturer's name, the engine model and serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Engine the Owner Trustee will
be the legal owner of such Replacement Engine free and clear of all
Liens except Liens permitted under Section 6.01 of the Lease, and
that such Replacement Engine will on such date be in at least as good
operating condition and repair as required by the terms of the Lease
and will otherwise conform to the requirements set forth in the
definition of "Replacement Engine";
(iv) that the value of the Replacement Engine as of the date of such
certificate is not less than the value of the Engine to be released
(assuming such Engine was in the condition and repair required to be
maintained under the Lease);
(v) that the release of the Engine subject to the Event of Loss will
not impair the security of the Indenture in contravention of any of
the provisions of this Indenture;
(vi) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Engine and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(vii) that each of the conditions specified in Section 10.03, 11.03
or 11.04 of the Lease with respect to such Replacement Engine has
been satisfied.
(3) The appropriate instruments (i) transferring to the Owner
Trustee title to the Replacement Airframe or Replacement Engine to be received
as consideration for the Airframe or Engine to be released and (ii) assigning
to the Owner Trustee the benefit of all manufacturer's and vendor's
warranties, if any, generally available with respect to such Replacement
Airframe or Replacement Engine, and an Indenture and Security Agreement
Supplement subjecting such Replacement Airframe or Replacement Engine to the
Trust Agreement and to the Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing satisfactory to the Indenture Trustee and the Owner Trustee
confirming the accuracy of the information set forth in clause (2)A.(vi) of
this Section 9.08.
(5) The opinion of Davis Polk & Wardwell, special counsel to the
Lessee, or other counsel reasonably satisfactory to the Indenture Trustee,
stating that:
(i) the certificates, opinions and other instruments and/or property
which have been or are therewith delivered to and deposited with the
Indenture Trustee conform to the requirements of this Indenture and the
Lease and, upon the basis of such application, the property so sold or
disposed of may be properly released from the Lien of this Indenture and
all conditions precedent herein provided for relating to such release have
been complied with; and
(ii) the Replacement Airframe or Replacement Engine has been validly
subjected to the Lien of this Indenture and covered by the Lease, the
instruments subjecting such Replacement Airframe or Replacement Engine to
the Lease and to the Lien of this Indenture, as the case may be, have been
duly filed for recordation pursuant to the Transportation Code or any other
law then applicable to the registration of the Aircraft, and no further
action, filing or recording of any document is necessary or advisable in
order to establish and perfect the title of the Owner Trustee to and the
Lien of this Indenture on such Replacement Airframe or Replacement Engine
and the Indenture Trustee would be entitled to the benefits of Section 1110
of the Bankruptcy Code with respect to such Replacement Airframe or
Replacement Engine, provided, that such opinion need not be to the effect
specified in the foregoing clause to the extent that the benefits of such
Section 1110 would not have been, by reason of a change in law or
governmental interpretation thereof after the date hereof, available to the
Indenture Trustee with respect to the Aircraft immediately prior to such
substitution had such Event of Loss not occurred.
Section 9.09. Indenture and Security Agreement Supplement for
Replacements. In the event of the substitution of a Replacement Airframe or a
Replacement Engine as contemplated by Section 10.03 or Article 11 of the
Lease, the Owner Trustee and the Indenture Trustee agree for the benefit of
the Holders and the Lessee, subject to fulfillment of the conditions precedent
and compliance by the Lessee with its obligations set forth in Section 10.03
or Article 11 of the Lease, to execute and deliver an Indenture and Security
Agreement Supplement as contemplated by Section 9.08(3) hereof and, provided
no Event of Default shall have occurred and be continuing, execute and deliver
to the Lessee an appropriate instrument releasing the Airframe or Engine being
replaced from the Lien of this Indenture.
Section 9.10. Effect of Replacement. In the event of the
substitution of a Replacement Airframe or a Replacement Engine as contemplated
by Section 10.01 or Article 11 of the Lease and Section 9.08 hereof, all
provisions of this Indenture relating to the Airframe or Engine or Engines
being replaced shall be applicable to such Replacement Airframe or Replacement
Engine or Engines with the same force and effect as if such Replacement
Airframe or Replacement Engine or Engines were the same Airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine or
Engines being replaced.
Section 9.11. Compensation. The Owner Trustee covenants and agrees
to pay, and the Indenture Trustee shall be entitled to receive, reasonable
compensation and payment or reimbursement for its reasonable advances,
expenses and disbursements (including the reasonable compensation and expenses
and disbursements of its counsel, agents and other persons not regularly in
its employ) in connection with its services rendered hereunder or in any way
relating to or arising out of the administration of the Trust Indenture Estate
and shall have a priority claim on the Trust Indenture Estate for the payment
of such compensation, advances, expenses and disbursements to the extent that
such compensation, advances, expenses and disbursements shall not be paid by
the Lessee, and shall have the right to use or apply any moneys held by it
hereunder in the Trust Indenture Estate toward such payments; provided that,
so long as the Lease is in effect, the Indenture Trustee shall not make any
claim for payment under this Section 9.11 against the Owner Trustee without
first making demand on the Lessee for payment of such claim. The Indenture
Trustee agrees that it shall have no right against any Holder, SSB or the
Owner Participant for any fee as compensation for its services as trustee
under this Indenture.
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing, and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee and, if expressly required herein, to the Owner Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
9.02 and 9.03 hereof) conclusive in favor of the Indenture Trustee and the
Owner Trustee, if made in the manner provided in this Article.
(b) For the purpose of determining the Holders entitled to vote or
consent to any direction, waiver or other action of such Holders under Section
7.10 or 7.11 hereof, the Lessee may set a record date for such vote or consent
by specifying such record date in an Officer's Certificate delivered to the
Indenture Trustee. Such record date shall be a date not more than 15 days
prior to the first solicitation of such vote or consent.
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates. Subject to Sections 9.02 and 9.03 hereof, the execution of any
instrument by a Holder or his agent or proxy may be proved in accordance with
such reasonable rules and regulations as may be prescribed by the Indenture
Trustee. The holding of Certificates shall be proved by the Register or by a
certificate of the Registrar.
Section 10.03. Holders to Be Treated as Owners. Prior to due
presentment for registration of transfer of any Certificate, the Owner
Trustee, the Indenture Trustee, any agent of the Owner Trustee or the
Indenture Trustee, the Paying Agent, if any, the Registrar and the Lessee
shall deem and treat the Person in whose name such Certificate shall be
registered upon the Register as the absolute owner of such Certificate
(whether or not such Certificate shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions of
this Indenture, interest on such Certificate and for all other purposes; and
neither the Owner Trustee nor the Indenture Trustee (nor any agent of the
Owner Trustee or the Indenture Trustee) nor the Paying Agent, if any, nor the
Registrar nor the Lessee shall be affected by any notice to the contrary. All
such payments so made to any such person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Certificate.
Section 10.04. Certificates Owned by Owner Trustee and the Lessee
Deemed Not Outstanding. In determining whether the Holders of the requisite
aggregate principal amount of Certificates have concurred in any direction,
consent or waiver under this Indenture, Certificates which are owned by the
Owner Trustee, the Owner Participant, SSB, the Lessee or by any Affiliate
thereof shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination; provided that for the purpose of determining
whether the Indenture Trustee shall be protected in relying on any such
direction, consent or waiver, only if a Responsible Officer of the Indenture
Trustee has actual knowledge that certain Certificates are so owned by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Owner Trustee, the Owner Participant, SSB or
the Lessee shall such Certificates be so disregarded; and provided further
that if all Certificates which would be deemed Outstanding in the absence of
the foregoing provision are owned by the Owner Trustee, SSB or the Owner
Participant or by any Affiliate thereof, then such Certificates shall be
deemed Outstanding for the purpose of any such determination. Certificates
so owned which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Owner Trustee, the Owner Participant, SSB 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, SSB
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,
SSB, or the Owner Participant are actually named in the Register. Upon
request of the Indenture Trustee, the Owner Trustee, the Owner Participant,
SSB and the Lessee shall furnish to the Indenture Trustee promptly an
Officer's Certificate listing and identifying all Certificates, if any, known
by the Owner Trustee, the Owner Participant, SSB or the Lessee to be owned or
held by or for the account of any of the above-described persons; and, subject
to Sections 9.02 and 9.03 hereof, the Indenture Trustee shall be entitled to
accept such Officer's Certificate as conclusive evidence of the facts set
forth therein and of the fact that all Certificates not listed therein are
outstanding for the purpose of any such determination.
Section 10.05. Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Indenture Trustee, as provided
in Section 10.01, of the taking of any action by the Holders of the percentage
in aggregate principal amount of the Certificates specified in this Indenture
in connection with such action, any Holder of a Certificate, the serial number
of which is shown by the evidence to be included among the serial numbers of
the Certificates the Holders of which have consented to such action, may, by
filing written notice at the Corporate Trust Department and upon proof of
holding as provided in this Article, revoke such action so far as concerns
such Certificate. Except as aforesaid, any such action taken by the Holder
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Certificate and of any Certificates issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Certificate or otherwise. Any action taken by
the Holders of the percentage in aggregate principal amount of the
Certificates specified in this Indenture in connection with such action shall
be conclusively binding upon the Owner Trustee, the Indenture Trustee and the
Holders of all the Certificates.
Section 10.06. ERISA. Any Person, other than the Subordination
Agent, who is acquiring the Certificates will be deemed to represent and
warrant that (i) no assets of an employee benefit plan subject to Title I of
ERISA or an individual retirement account or plan subject to Section 4975 of
the Code, or any trust established under any such plan or account, have been
used to acquire or hold any of the Certificates, or (ii) that one or more
administrative or statutory exemptions from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code applies to its
purchase and holding of the Certificates such that its purchase and holding of
the Certificates will not result in a non-exempt prohibited transaction under
Section 406 of ERISA and Section 4975 of the Code.
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
The Owner Trustee, not individually but solely in its capacity as
Owner Trustee under the Trust Agreement, hereby agrees, whether or not any of
the transactions contemplated hereby shall be consummated, to assume liability
for, and does hereby indemnify, protect, save and keep harmless the Indenture
Trustee, in its individual capacity, and its successors, assigns, agents and
servants solely from the Lessor's Estate, with respect to the claims of the
Indenture Trustee for payment or reimbursement under Section 9.11 hereof and
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on or
measured by any compensation received by the Indenture Trustee for its
services under this Indenture and any taxes excluded from the Lessee's
indemnity obligation under Section 8.01(b) of the Participation Agreement),
claims, actions, suits, costs, expenses or disbursements (including legal fees
and expenses) of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Indenture Trustee (whether or not also
agreed to be indemnified against by any other person under any other document)
in any way relating to or arising out of this Indenture, or any other
Indenture Documents or the enforcement of any of the terms of any thereof, or
in any way relating to or arising out of the manufacture, purchase,
acceptance, nonacceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent and other defects, whether
or not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration
of the Trust Indenture Estate or the action or inaction of the Indenture
Trustee hereunder, except only (a) in the case of willful misconduct or gross
negligence of the Indenture Trustee in the performance of its duties
hereunder, (b) as may result from the inaccuracy of any representation or
warranty of the Indenture Trustee in the Participation Agreement, (c) as
otherwise provided in Section 9.02(c) hereof or (d) as otherwise excluded by
the terms of Article 8 or Article 9 of the Participation Agreement from the
Lessee's general indemnity or general tax indemnity to the Indenture Trustee
under said Article; provided that so long as the Lease is in effect, the
Indenture Trustee shall not make any claim under this Article XI for any claim
or expense indemnified by the Lessee under the Participation Agreement without
first making demand on the Lessee for payment of such claim or expense. The
Indenture Trustee shall be entitled to indemnification, from the Trust
Indenture Estate, for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Article XI to the extent not reimbursed by the Lessee or others, but
without releasing any of them from their respective agreements of
reimbursement; and to secure the same the Indenture Trustee shall have a prior
Lien on the Trust Indenture Estate. The indemnities contained in this Article
XI shall survive the termination of this Indenture and the resignation or
removal of the Indenture Trustee. Upon payment in full by the Owner Trustee
of any indemnity pursuant to this Article XI, the Owner Trustee shall, so long
as no Indenture Event of Default shall have occurred and be continuing, be
subrogated to the rights of the Indenture Trustee, if any, in respect of the
matter as to which the indemnity was paid.
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee. In the case of any
appointment of a successor to the Owner Trustee pursuant to the Trust
Agreement or any merger, conversion, consolidation or sale of substantially
all of the corporate trust business of the Owner Trustee pursuant to the Trust
Agreement, the successor Owner Trustee shall give prompt written notice
thereof to the Indenture Trustee.
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor. (a) The Indenture Trustee or any successor thereto
may resign at any time without cause by giving at least 30 days' prior written
notice to the Owner Trustee, the Owner Participant, the Lessee and each
Holder, such resignation to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In addition, the Majority in
Interest of the Certificate Holders or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders may at any
time remove the Indenture Trustee without cause by an instrument in writing
delivered to the Lessee, the Owner Trustee, the Owner Participant, and the
Indenture Trustee, and the Indenture Trustee shall promptly notify each Holder
thereof of such action in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the case
of the resignation or removal of the Indenture Trustee, the Majority in
Interest of the Certificate Holders, or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders, may
appoint a successor Indenture Trustee by an instrument signed by such Holders.
If a successor Indenture Trustee shall not have been appointed within 30 days
after such notice of resignation or removal, the Indenture Trustee, the Owner
Trustee, the Lessee, the Owner Participant, or any Holder may apply to any
court of competent jurisdiction to appoint a successor Indenture Trustee to
act until such time, if any, as a successor shall have been appointed as
provided above. The successor Indenture Trustee so appointed by such court
shall immediately and without further act be superseded by any successor
Indenture Trustee appointed as provided above.
(b) In case at any time any of the following shall occur:
(i) the Indenture Trustee shall cease to be eligible in accordance
with the provisions of Section 12.03 hereof and shall fail to resign after
written request therefor by the Owner Trustee or by any Holder; or
(ii) the Indenture Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Indenture Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then the Owner Trustee may remove the Indenture Trustee and, with the consent
of the Lessee, appoint a successor trustee by written instrument, in
duplicate, executed by a Responsible Officer of the Owner Trustee, one copy of
which instrument shall be delivered to the Indenture Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of Section
7.13 hereof, any Holder who has been a bona fide Holder for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Indenture Trustee
and the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Indenture
Trustee and appoint a successor trustee, which removal and appointment shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 12.04 hereof. The successor Indenture Trustee so
appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as provided above
within one year from the date of appointment by such court.
Section 12.03. Persons Eligible for Appointment as Indenture
Trustee. There shall at all times be an Indenture Trustee hereunder which
shall be (i)(x) a bank or trust company organized and doing business under the
laws of the United States of America or any state or the District of Columbia
having a combined capital and surplus of at least $100,000,000 or (y) a bank
or trust company whose obligations hereunder are fully guaranteed by a direct
or indirect parent thereof having a combined capital and surplus of at least
$100,000,000 and (ii) a Citizen of the United States authorized under
applicable law to exercise corporate trust powers and subject to supervision of
examination by Federal, state or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Indenture Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Indenture Trustee shall resign immediately in
the manner and with the effect specified in Section 12.02 hereof.
Section 12.04. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 12.02 hereof shall execute
and deliver to the Owner Trustee, the Lessee, and to its predecessor trustee
an instrument accepting such appointment hereunder, in form and substance
reasonably satisfactory to the Owner Trustee, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as trustee herein; but, nevertheless, on
the written request of the Owner Trustee or of the successor trustee, upon
payment of its charges then unpaid, the trustee ceasing to act shall, subject
to Section 14.04 hereof, pay over to the successor trustee all moneys at the
time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Owner Trustee
shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Article XI hereof.
No successor trustee shall accept appointment as provided in this
Section 12.04 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 12.03 hereof.
Upon acceptance of appointment by a successor trustee as provided in
this Section 12.04, the successor trustee shall mail notice thereof by
first-class mail to the Holders at their last addresses as they shall appear
in the Register, and shall mail a copy of such notice to the Lessee and the
Owner Trustee. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 12.02
hereof.
Section 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation into which the Indenture
Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to
the corporate trust business of the Indenture Trustee, shall be the successor
to the Indenture Trustee hereunder, provided that, anything herein to the
contrary notwithstanding, such corporation shall be eligible under the
provisions of Section 12.03 hereof, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Indenture Trustee shall
succeed to the trusts created by this Indenture any of the Certificates shall
have been authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor
Indenture Trustee and deliver such Certificates so authenticated; and, in case
at that time any of the Certificates shall not have been authenticated, any
successor to the Indenture Trustee may authenticate such Certificates either
in the name of any predecessor hereunder or in the name of the successor
Indenture Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Certificates or in this Indenture provided
that the certificate of the Indenture Trustee shall have; provided, that the
right to adopt the certificate of authentication of any predecessor Indenture
Trustee or to authenticate Certificates in the name of any predecessor
Indenture Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
Section 12.06. Appointment of Separate Trustees. (a) At any time or
times, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Indenture Estate may at the time be located or
in which any action of the Indenture Trustee may be required to be performed
or taken, the Indenture Trustee, by an instrument in writing signed by it, may
appoint one or more individuals or corporations to act as a separate trustee
or separate trustees or co-trustee, acting jointly with the Indenture Trustee,
of all or any part of the Trust Indenture Estate, to the full extent that
local law makes it necessary for such separate trustee or separate trustees or
co-trustee acting jointly with the Indenture Trustee to act.
(b) The Indenture Trustee and, at the request of the Indenture
Trustee, the Owner Trustee, shall execute, acknowledge and deliver all such
instruments as may be required by the legal requirements of any jurisdiction
or by any such separate trustee or separate trustees or co-trustee for the
purpose of more fully confirming such title, rights or duties to such separate
trustee or separate trustees or co-trustee. Upon the acceptance in writing of
such appointment by any such separate trustee or separate trustees or
co-trustee, it, he or they shall be vested with such title to the Trust
Indenture Estate or any part thereof, and with such rights, powers, duties and
obligations, as shall be specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee, or the Indenture Trustee and
such separate trustee or separate trustees or co-trustee jointly with the
Indenture Trustee subject to all the terms of this Indenture, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such separate
trustee or separate trustees or co-trustee, as the case may be. Any separate
trustee or separate trustees or co-trustee may, at any time by an instrument
in writing, constitute the Indenture Trustee its or his attorney-in-fact and
agent with full power and authority to do all acts and things and to exercise
all discretion on its or his behalf and in its or his name. In case any such
separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, the title to the Trust Indenture Estate and all assets,
property, rights, powers, duties and obligations and duties of such separate
trustee or co-trustee shall, so far as permitted by law, vest in and be
exercised by the Indenture Trustee, without the appointment of a successor to
such separate trustee or co-trustee unless and until a successor is appointed.
(c) All provisions of this Indenture which are for the benefit of
the Indenture Trustee (including without limitation Article XI hereof) shall
extend to and apply to each separate trustee or co-trustee appointed pursuant
to the foregoing provisions of this Section 12.06.
(d) Every additional trustee and separate trustee hereunder shall,
to the extent permitted by law, be appointed and act and the Indenture Trustee
shall act, subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Indenture Trustee in respect of the receipt, custody, investment and
payment of moneys shall be exercised solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed and
exercised or performed by the Indenture Trustee and such additional trustee
or trustees and separate trustee or trustees jointly except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
Indenture Estate in any such jurisdiction) shall be exercised and performed
by such additional trustee or trustees or separate trustee or trustees;
(iii) no power hereby given to, or exercisable by, any such additional
trustee or separate trustee shall be exercised hereunder by such additional
trustee or separate trustee except jointly with, or with the consent of,
the Indenture Trustee; and
(iv) no trustee hereunder shall be liable either personally or in its
capacity as such trustee, by reason of any act or omission of any other
trustee hereunder.
If at any time the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to any such law, the Indenture Trustee shall
execute and deliver an indenture supplemental hereto and all other instruments
and agreements necessary or proper to remove any additional trustee or
separate trustee.
(e) Any request, approval or consent in writing by the Indenture
Trustee to any additional trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate trustee, as the case may be, to
take such action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 12.06, the
powers of any additional trustee or separate trustee shall not exceed those of
the Indenture Trustee hereunder.
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders.
The Owner Trustee (when authorized by the Owner Participant) and the Indenture
Trustee, without consent of the Holders, may enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge any property or
assets to the Indenture Trustee as security for the Certificates;
(b) to evidence the succession of another corporation to the Owner
Trustee or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Owner
Trustee herein and in the Certificates;
(c) to add to the covenants of the Owner Trustee such further
covenants, restrictions, conditions or provisions as it and the Indenture
Trustee shall consider to be for the protection of the Holders, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Indenture
Event of Default permitting the enforcement of all or any of the several
remedies provided herein; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture
may provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Indenture Event of
Default or may limit the remedies available to the Indenture Trustee upon
such an Indenture Event of Default or may limit the right of not less than
the Majority in Interest of Certificate Holders to waive such an Indenture
Event of Default;
(d) to surrender any right or power conferred herein upon the Owner
Trustee or the Owner Participant;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Owner Trustee may deem necessary or desirable and which
shall not adversely affect the interests of the Holders;
(f) to correct or amplify the description of any property at any
time subject to the Lien of this Indenture or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the Lien of this Indenture or to subject Replacement Airframe or
Replacement Engines to the Lien of this Indenture in accordance with the
provisions hereof or with the Lease or to release from the Lien of this
Indenture property that has been substituted on or removed from the
Aircraft as contemplated in Section 3.07 hereof; provided that supplements
to this Indenture entered into for the purpose of subjecting Replacement
Airframe or Replacement Engines to the Lien of this Indenture need only be
executed by the Owner Trustee and the Indenture Trustee;
(g) to provide for the issuance under this Indenture of Certificates
in coupon form (including Certificates registrable as to principal only)
and to provide for exchangeability of such Certificates with Certificates
issued hereunder in fully registered form, and to make all appropriate
changes for such purpose;
(h) to effect the re-registration of the Aircraft pursuant to
Section 6.03(b) of the Participation Agreement; and
(i) to add, eliminate or change any provision hereunder so long as
such action shall not adversely affect the interests of the Holders.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be contained therein and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Indenture Trustee shall not be obligated to enter into any such supplemental
indenture which adversely affects the Indenture Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any such supplemental indenture may be executed without the consent of
the Holders of Outstanding Certificates, notwithstanding any of the provisions
of Section 13.02 hereof.
Section 13.02. Supplemental Indentures With Consent of Holders.
With the consent (evidenced as provided in Article X) of the Majority in
Interest of Certificate Holders, the Owner Trustee (when authorized by the
Owner Participant) and the Indenture Trustee may, from time to time and at any
time, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders; provided, however, that,
without the consent of each and every Holder and each Liquidity Provider, no
such amendment of or supplement to this Indenture or any indenture
supplemental hereto, or modification of the terms of, or consent under, any
thereof, shall (a) modify any of the provisions of Section 7.11 hereof or this
Section 13.02, (b) reduce the amount or extend the time of payment of any
amount owing or payable under any Certificate or reduce the interest payable
on any Certificate (except that only the consent of the Holder shall be
required for any decrease in any amounts of or the rate of interest payable on
such Certificate or any extension for the time of payment of any amount
payable under such Certificate), or alter or modify the provisions of Article
V hereof with respect to the order of priorities in which distributions
thereunder shall be made as among Holders of different Series of Certificates
or 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 Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental indenture complies with the applicable
provisions of this Indenture.
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures. Certificates authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may bear
a notation in form approved by the Indenture Trustee as to any matter provided
for by such supplemental indenture. If the Owner Trustee or the Indenture
Trustee shall so determine, new Certificates so modified as to conform, in the
opinion of the Owner Trustee and the Indenture Trustee, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Owner Trustee, authenticated by the Indenture Trustee and delivered in
exchange for the Outstanding Certificates.
Section 13.06. No Request Necessary for Lease Supplement or Indenture
and Security Agreement Supplement. Notwithstanding anything contained in
Section 13.02 hereof, no written request or consent of the Indenture Trustee,
any Holder or the Owner Participant pursuant to Section 13.02 hereof shall be
required to enable the Owner Trustee to enter into any supplement to the Lease
with the Lessee in accordance with the terms and conditions of the Lease to
subject a Replacement Airframe or Replacement Engine thereto or to execute and
deliver an Indenture and Security Agreement Supplement pursuant to the terms
hereof.
Section 13.07. Notices to Liquidity Providers. Any request made to
any Holder for consent to any amendment, supplement or waiver pursuant to
Section 7.11, 8.01 or this Article XIII shall be promptly furnished by the
Indenture Trustee to each Liquidity Provider.
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination
of Indenture. If at any time after (a) the Owner Trustee shall have paid or
caused to be paid the principal of and interest on all the Certificates
outstanding hereunder, as and when the same shall have become due and payable,
or (b) the Owner Trustee shall have delivered to the Indenture Trustee for
cancellation all Certificates theretofore authenticated (other than any
Certificates which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.07 hereof) or (c) (i) all
such Certificates not theretofore delivered to the Indenture Trustee for
cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for prepayment
within one year under arrangements satisfactory to the Indenture Trustee for
the giving of notice of prepayment by the Indenture Trustee in the name and at
the expense of the Owner Trustee, and (ii) the Owner Trustee shall have
irrevocably deposited or caused to be deposited with the Indenture Trustee as
trust funds the entire amount in cash (other than moneys repaid by the
Indenture Trustee or any paying agent to the Owner Trustee in accordance with
Section 14.04 hereof) or Government obligations maturing as to principal and
interest in such amounts and at such times as will insure the availability of
cash sufficient to pay at maturity all such Certificates not theretofore
delivered to the Indenture Trustee for cancellation, including principal and
interest due or to become due to such date of maturity as the case may be, and
if, in any such case, the Owner Trustee shall also pay or cause to be paid all
other sums then payable hereunder by the Owner Trustee, then this Indenture
shall cease to be of further effect (except in the case of (c) above as to (A)
rights of registration of transfer and exchange, and the Owner Trustee's right
of optional prepayment pursuant to Section 6.02(a)(ii) hereof, (B)
substitution of mutilated, defaced, destroyed, lost or stolen Certificates,
(C) rights of Holders to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), (D) the rights, obligations, indemnities and immunities of the
Indenture Trustee hereunder and (E) the rights of the Holders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them), and the Indenture Trustee, on demand of the
Owner Trustee accompanied by an Officer's Certificate and an Opinion of
Counsel (covering such matters reasonably requested by, and in form and
substance reasonably satisfactory to, the Indenture Trustee) and at the cost
and expense of the Owner Trustee, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture. The Owner
Trustee agrees to reimburse and indemnify the Indenture Trustee for any costs
or expenses thereafter reasonably and properly incurred and to compensate the
Indenture Trustee for any services thereafter reasonably and properly rendered
by the Indenture Trustee in connection with this Indenture or the
Certificates.
Upon (or at any time after) payment in full to the Indenture Trustee,
as trust funds, of the principal of and interest on and Make-Whole Premium, if
any, and all other amounts due hereunder and under all Certificates and
provided that there shall then be no other amounts due to the Indenture
Trustee hereunder or under the Participation Agreement or otherwise secured
hereby, the Owner Trustee shall direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing the Aircraft from the Lien of this Indenture and
releasing the Indenture Documents from the assignment thereof hereunder, and
the Indenture Trustee shall execute and deliver such instrument as aforesaid
and, at the Owner Trustee's expense, will execute and deliver such other
instruments or documents as may be reasonably requested by the Owner Trustee
to give effect to such release; provided, however, that this Indenture and the
trusts created hereby shall terminate earlier and this Indenture shall be of
no further force or effect upon any sale or other final disposition by the
Indenture Trustee of all property forming a part of the Trust Indenture Estate
and the final distribution by the Indenture Trustee of all moneys or other
property or proceeds constituting part of the Trust Indenture Estate in
accordance with the terms hereof. Except as aforesaid otherwise provided, this
Indenture and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof.
Section 14.02. Application by Indenture Trustee of Funds Deposited
for Payment of Certificates. Subject to Section 14.04 hereof, all moneys
deposited with the Indenture Trustee pursuant to Section 14.01 hereof shall be
held in trust and applied by it to the prompt payment, either directly or
through any Paying Agent, to the Holders of the particular Certificates for
the payment or prepayment of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal,
interest and Make-Whole Premium, if any, but such money need not be segregated
from other funds except to the extent required by law.
Section 14.03. Repayment of Moneys Held by Paying Agent. Upon the
satisfaction and discharge of this Indenture all moneys then held by any
Paying Agent under the provisions of this Indenture shall, upon demand of the
Owner Trustee, be repaid to it or paid to the Indenture Trustee and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
Section 14.04. Transfer of Moneys Held by Indenture Trustee and
Paying Agent Unclaimed for Two Years and Eleven Months. Any moneys deposited
with or paid to the Indenture Trustee or any Paying Agent for the payment of
the principal of or interest or Make-Whole Premium on any Certificate and not
applied but remaining unclaimed for two years and eleven months after the date
upon which such principal, interest or Make-Whole Premium shall have become
due and payable, shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be paid to the
Owner Trustee (or, if the Trust Agreement shall no longer be in effect, to the
Owner Participant) by the Indenture Trustee or such Paying Agent and the
Holder of such Certificate, as a general unsecured creditor, shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Owner Trustee (or the
Owner Participant) for any payment which such Holder may be entitled to
collect, and all liability of the Indenture Trustee, or any Paying Agent with
respect to such moneys shall thereupon cease.
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting. Each of SSB (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 SSB (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, Holders and Liquidity Providers. Nothing in this
Indenture, whether express or implied, shall be construed to give to any
person other than SSB, the Owner Trustee, the Lessee, the Indenture Trustee,
as trustee and in its individual capacity, the Owner Participant, each
Liquidity Provider and the Holders any legal or equitable right, remedy or
claim under or in respect of this Indenture. Upon termination of this
Indenture pursuant to Article XIV hereof, the Indenture Trustee in connection
with the satisfaction of the Indenture shall return to the Owner Trustee all
property (and related documents and instruments) constituting or evidencing
the Trust Indenture Estate.
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease. Notwithstanding any of the provisions of this Indenture or the Trust
Agreement to the contrary, so long as no Event of Default shall have occurred
and be continuing, neither the Indenture Trustee nor the Owner Trustee will
take any affirmative acts that interfere with the peaceful and quiet
possession and enjoyment of the Aircraft by the Lessee.
Section 15.06. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Indenture to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy, and (a) if to the
Owner Trustee, addressed to it c/o State Street Bank and Trust Company, Two
International Place, 4th Floor, Boston, Massachusetts 02110 (telephone: (617)
664-5526, facsimile: (617) 664-5371), Attention: Corporate Trust Department
(with a copy to the Owner Participant at the address provided for notice
pursuant to Section 14.01 of the Participation Agreement), (b) if personally
delivered to the Indenture Trustee, addressed to it at its office at 79 South
Main Street, Salt Lake City, Utah 84111 (telephone: (801) 246-5630, facsimile:
(801) 246-5053), Attention: Corporate Trust Department or (c) if to the Owner
Participant, a Liquidity Provider or the Lessee, addressed to such party at
such address as such party shall have furnished by notice to the Owner Trustee
and the Indenture Trustee, or, until an address is so furnished, addressed to
the address of such party if any, set forth in Section 14.01 of the
Participation Agreement. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the
other parties to this Indenture.
Where this Indenture provides for notice to Holders, such notice
shall be sufficiently given (unless otherwise expressly provided herein) if in
writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at such Holder's last address as it appears in the Register. In any
case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Indenture Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Owner Trustee
and Holders when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient
giving of such notice.
Section 15.07. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Lessee or the Owner Trustee to the Indenture Trustee to take any action under
any of the provisions of this Indenture, the Lessee or the Owner Trustee, as
the case may be, shall furnish to the Indenture Trustee upon request (a) an
Officer's Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and
that the proposed action is in conformity with the requirements of this
Indenture, and (b) an Opinion of Counsel 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 SSB 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 SSB, upon the certificate, statement or
opinion of or representations by an officer or officers of the Lessee or SSB,
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
SSB or of counsel thereto may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant
or firm of accountants employed by the Lessee or the Owner Trustee, as the
case may be, unless such officer or counsel, as the case may be, knows that
the certificate or opinion or representations with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Indenture Trustee shall contain a statement that
such firm is independent.
Section 15.08. Severability. Any provision of this Indenture which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 15.09. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Indenture or the Certificates may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party or other person against whom enforcement of the change,
waiver, discharge or termination is sought; and any waiver of the terms hereof
or of any Certificate shall be effective only in the specific instance and for
the specific purpose given.
Section 15.10. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and permitted assigns of each, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of
such Holder. This Indenture and the Trust Indenture Estate shall not be
affected by any amendment or supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust Agreement, except that each
reference in this Indenture to the Trust Agreement shall mean the Trust
Agreement as amended and supplemented from time to time to the extent
permitted hereby and thereby.
Section 15.11. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for the convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 15.12. Normal Commercial Relations. Anything contained in
this Indenture to the contrary notwithstanding, the Owner Participant, the
Indenture Trustee and any Holder, or any bank or other affiliate of any such
party, may conduct any banking or other financial transactions, and have
banking or other commercial relationships, with the Lessee fully to the same
extent as if this Indenture were not in effect, including without limitation
the making of loans or other extensions of credit to the Lessee for any
purpose whatsoever, whether related to any of the transactions contemplated
hereby or otherwise.
Section 15.13. Governing Law; Counterparts. THIS INDENTURE AND
EACH CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. This Indenture may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed this 28th day of May, 1997 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.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By
------------------------------------
Name: Greg A. Hawley
Title: Vice President
Exhibit A
to
Trust Indenture and Security Agreement
Indenture and Security Agreement Supplement No. ___
Indenture and Security Agreement Supplement No. ___ (Federal Express
Corporation Trust No. N673FE) dated ________, ____, of STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as owner trustee
(herein called the "Owner Trustee") under the Trust Agreement dated as of May
1, 1997 (the "Trust Agreement") between State Street Bank and Trust Company of
Connecticut, National Association and the Owner Participant named therein.
W I T N E S S E T H :
-------------------
WHEREAS, the Trust Agreement provides for the execution and delivery
of this Indenture and Security Agreement Supplement which shall particularly
describe the Aircraft and any Replacement Airframe or Replacement Engine
included in the property covered by the Trust Agreement.
WHEREAS, the Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N673FE) dated as of May 1, 1997 (the "Indenture") between
the Owner Trustee and First Security Bank, National Association (herein called
the "Indenture Trustee") provides for the execution and delivery of an
Indenture and Security Agreement Supplement substantially in the form of this
Indenture and Security Agreement Supplement No. __, which Supplement shall
particularly describe the Aircraft included in the Trust Indenture Estate, and
shall specifically mortgage such Aircraft to the Indenture Trustee.
(1)WHEREAS, the Indenture relates to the Aircraft and the Engines
described in the following paragraph and a counterpart of the Indenture is
attached to and made a part of this Indenture and Security Agreement
Supplement No. 1, and this Indenture and Security Agreement Supplement No. 1,
together with such attachment, is being filed for recordation on or promptly
after the date of this Supplement No. 1 with the Federal Aviation
Administration as one document.
- ------------
(1) This recital is to be included only in the first Indenture Supplement.
(2)Whereas, the Indenture and Indenture and Security Agreement
Supplement No. ___ dated _________________, ______ (the Indenture being
attached to and made a part of such Indenture and Security Agreement
Supplement and filed therewith) have been duly recorded pursuant to Subtitle
VII of Title 49 of the United States Code, on ____________, _____, as one
document and have been assigned Conveyance No. _________.
- ------------
(2) This recital is not to be included in the first Indenture Supplement.
NOW, THEREFORE, this Supplement witnesseth, that, to secure the prompt
payment of the principal of and Make-Whole Premium, if any, and interest on,
and all other amounts due with respect to, all Outstanding Certificates under
the Indenture and all other amounts due hereunder and the performance and
observance by the Owner Trustee of all the agreements, covenants and
provisions for the benefit of the Holders contained in the Indenture, in the
Lease, in the Participation Agreement and the Certificates, and the prompt
payment of any and all amounts from time to time owing under the Participation
Agreement by the Owner Trustee, the Owner Participant or the Lessee to the
Holders and for the uses and purposes and subject to the terms and provisions
of the Indenture and the Certificates, and in consideration of the premises
and of the covenants contained in the Indenture, and of the purchase of the
Certificates by the Holders, and of the sum of $1 paid to the Owner Trustee by
the Indenture Trustee at or before the delivery of the Indenture, the receipt
of which is hereby acknowledged, the Owner Trustee has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged, granted a security
interest in, and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge, grant a security interest in, and confirm,
unto the Indenture Trustee, its successors and assigns, in trust for the equal
and ratable security and benefit of the Holders, in the trust created by the
Indenture, and subject to all of the terms, conditions, provisions and
limitations set forth in the Indenture, a first priority security interest in
and mortgage lien on all estate, right, title and interest of the Owner Trustee
in, to and under the following described property:
Airframe
One (1) Airframe identified as follows:
FAA Manufacturer's
Registration Serial
Manufacturer Model Number Number
- ------------ ----- ------------ --------------
together with all appliances, equipment, instruments and accessories
(including, without limitation, radio and radar) from time to time belonging
thereto, owned by the Owner Trustee and installed in or appurtenant to said
aircraft.
AIRCRAFT ENGINES
Two (2) aircraft engines, each such engine having 750 or more rated takeoff
horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Serial
Manufacturer Model Number
- ------------ ----- --------------
together with all equipment and accessories belonging thereto, by whomsoever
manufactured, owned by the Owner Trustee and installed in or appurtenant to
said aircraft engines.
Together with all substitutions, replacements and renewals of the
property described above, and all property which shall hereafter become
physically attached to or incorporated in the property described above,
whether the same are now owned by the Owner Trustee or shall hereafter be
acquired by it.
As further security for the obligations referred to above and secured
by the Indenture and hereby, the Owner Trustee has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors and assigns, for the
security and benefit of the Holders, in the trust created by the Indenture,
and subject to all of the terms, conditions, provisions and limitations set
forth in the Indenture, all of the estate, right, title and interest of the
Owner Trustee in, to and under the Lease Supplement (other than Excepted
Payments, if any) covering the property described above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, for the benefit and security of
the Holders for the uses and purposes and subject to the terms and provisions
set forth in the Indenture.
This Supplement shall be construed as supplemental to the Indenture
and shall form a part thereof, and the Indenture is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplement is being delivered in the State of New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft/Engines referred to in this Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee and covered by all the terms and conditions of
the Trust Agreement, subject to the Lien of the Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this Supplement to
be duly executed as of the date first written above by one of its officers
thereunto duly authorized.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
Exhibit B
to
Trust Indenture and Security Agreement
[Form of Certificate]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD OR OFFERED FOR SALE IN CONTRAVENTION OF SAID ACT
No. ______ $_____________
EQUIPMENT TRUST CERTIFICATE
(Federal Express Corporation Trust No. N673FE)
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
(Federal Express Corporation Trust No. N673FE)
dated as of May 1, 1997
SERIES ___
Interest Rate Maturity
- ------------- --------
State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee (herein in such capacity called the "Owner
Trustee") under that certain Trust Agreement (Federal Express Corporation
Trust No. N673FE) dated as of May 1, 1997, between the Owner Participant named
therein and State Street Bank and Trust Company of Connecticut, National
Association (herein as such Trust Agreement may be amended or supplemented
from time to time called the "Trust Agreement"), hereby promises to pay to
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Subordination Agent, or its
registered assigns, the principal sum of ________________ _______________
Dollars, payable as set forth below for the Maturity specified above, in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest on the principal outstanding from time to time, semiannually on each
January 15 and July 15, on said principal sum in like coin or currency at the
rate per annum set forth above from the January 15 or the July 15, 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 January 15 or July 15 and before the
following January 15 or July 15, as the case may be, this Certificate shall
bear interest from such January 15 or July 15; provided that, if the Owner
Trustee shall default in the payment of interest due on such January 15 or
July 15, then this Certificate shall bear interest from the next preceding
January 15 or July 15 to which interest on this Certificate has been paid or
duly provided for. The interest so payable on any January 15 or July 15 will,
except as otherwise provided in the Indenture referred to below, be paid to
the person in whose name this Certificate is registered at the close of
business on the January 15 or July 15 preceding such January 15 or July 15,
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 First Security Bank, National Association
(the "Indenture Trustee") maintained for such purpose in immediately available
funds prior to 10:30 A.M. (New York time) on the due date thereof and the
Indenture Trustee shall remit all such amounts received by it to the Holders
at such account or accounts at such financial institution or institutions as
the Holders shall have designated to the Indenture Trustee in writing, in
immediately available funds, such payment to be made if the payment was
received prior to 10:30 A.M. New York time by the Indenture Trustee on any
Business Day, by 12:00 noon New York time on such Business Day; otherwise, the
Indenture Trustee shall make payment promptly, but not later than 11:00 A.M.
New York time on the next succeeding Business Day; provided that, at the
option of the Indenture Trustee or its Paying Agent, interest may be paid by
mailing a check therefor payable to or upon the written order of the
registered holder entitled thereto at his last address as it appears on the
Register. If any amount payable under this Certificate, or under the
Indenture, falls due on a day that is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
State Street Bank and Trust Company of Connecticut, National
Association and First Security Bank, National Association are not acting
individually hereunder, but solely as Owner Trustee and Indenture Trustee,
respectively.
Any Person, other than the Subordination Agent, who is acquiring the
Certificates will be deemed to represent and warrant that (i) no assets of an
employee benefit plan subject to Title I of ERISA or an individual retirement
account or plan subject to Section 4975 of the Code, or any trust established
under any such plan or account, have been used to acquire or hold any of the
Certificates, or (ii) that one or more administrative or statutory exemptions
from the prohibited transaction rules under Section 406 of ERISA and Section
4975 of the Code applies to its purchase and holding of the Certificates such
that its purchase and holding of the Certificates will not result in a
non-exempt prohibited transaction under Section 406 of ERISA and Section 4975
of the Code.
This Certificate is one of a duly authorized issue of Certificates
issued and to be issued under the Trust Indenture and Security Agreement
(Federal Express Corporation Trust No. N673FE) dated as of May 1, 1997 (herein
as amended, supplemented or modified from time to time called the "Indenture")
between the Owner Trustee and the Indenture Trustee, designated as Equipment
Trust Certificates (Federal Express Corporation Trust No. N673FE) limited in
aggregate initial principal amount to $61,813,000 consisting of the following
aggregate principal amounts of Certificates with the interest rates per annum
and Maturities shown:
Initial
Aggregate
Principal
Series Maturity Amount Interest Rate
------ -------- ----------- -------------
A January 15, 2018 $33,382,000 7.50%
B January 15, 2018 $12,408,000 7.52%
C January 15, 2014 $16,023,000 7.65%
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its
principal corporate trust office) for a more complete statement of the terms
and provisions thereof, including a statement of the properties conveyed,
pledged and assigned thereby, the nature and extent of the security, the
respective rights of the Owner Trustee, the Owner Participant, the Lessee, the
Indenture Trustee and the Holders, and the terms upon which the Certificates
are, and are to be, executed and delivered, to all of which terms and
conditions in the Indenture each Holder hereof agrees by its acceptance of
this Certificate.
Capitalized terms not otherwise defined herein shall have the
meanings given to them in the Indenture.
The principal amounts of the Certificates are payable as follows. The
Certificates are subject to redemption in part, pro rata (based on the face
amount thereof), in each case through mandatory sinking fund redemptions
providing for the redemption on the Sinking Fund Redemption Dates of the
aggregate principal amounts set forth below, together with interest accrued
thereon to the applicable Sinking Fund Redemption Date, but without Make-Whole
Premium.
Principal Amount
Series A Series B Series C
Certificates Certificates Certificates
Sinking Fund with a Maturity of with a Maturity of with a Maturity of
Redemption Date January 15, 2018 January 15, 2018 January 15, 2014
- ---------------- ------------------ ------------------ ------------------
July 15, 1997 0 0 0
January 15, 1998 237,020 139,870 0
July 15, 1998 429,968 0 0
January 15, 1999 469,348 250,371 0
July 15, 1999 198,307 0 0
January 15, 2000 456,622 250,371 333,147
July 15, 2000 211,033 0 0
January 15, 2001 515,875 250,371 333,827
July 15, 2001 151,779 0 0
January 15, 2002 667,654 250,371 346,056
July 15, 2002 0 0 0
January 15, 2003 667,654 250,371 606,354
July 15, 2003 0 0 0
January 15, 2004 667,654 250,371 708,573
July 15, 2004 0 0 0
January 15, 2005 667,654 250,371 833,112
July 15, 2005 0 0 0
January 15, 2006 667,654 250,371 802,110
July 15, 2006 0 0 0
January 15, 2007 403,118 250,371 3,718,121
July 15, 2007 264,537 0 0
January 15, 2008 667,654 250,371 648,079
July 15, 2008 0 0 0
January 15, 2009 667,654 250,371 1,454,348
July 15, 2009 0 0 0
January 15, 2010 667,654 683,379 1,321,136
July 15, 2010 0 0 0
January 15, 2011 667,654 2,868,958 0
July 15, 2011 0 0 0
January 15, 2012 667,654 3,243,783 0
July 15, 2012 0 0 0
January 15, 2013 4,216,042 669,984 0
July 15, 2013 0 0 0
January 15, 2014 352,513 0 4,918,137
July 15, 2014 0 0 0
January 15, 2015 5,685,189 0 0
July 15, 2015 0 0 0
January 15, 2016 6,128,191 0 0
July 15, 2016 0 0 0
January 15, 2017 6,605,712 0 0
July 15, 2017 0 0 0
January 15, 2018 380,206 2,047,945 0
Except as expressly provided in the Indenture, all payments of
principal, Make-Whole Premium, if any, and interest and other amounts to be
made to the Holder hereof by or at the behest of the Owner Trustee hereunder
or under the Indenture shall be made only from the income and proceeds from
the Lessor's Estate to the extent included in the Trust Indenture Estate and
only to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Lessor's Estate to the extent included in the Trust
Indenture Estate to enable the Indenture Trustee to make such distributions in
accordance with the terms of the Indenture; provided that under the Lease, the
Lessee is obligated to pay or cause to be paid, to the extent such payments
are not required to be made from the assets subject to the Lien of this
Indenture or the income and proceeds received by the Indenture Trustee
therefrom, any net loss arising from the investment of funds held by the
Indenture Trustee which but for an Event of Default would be payable to
Lessee, and each Holder hereof, by its acceptance of this Certificate, agrees
that it will (except as aforesaid) look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for distribution to the
Holder hereof as provided above and that neither the Owner Participant, the
Owner Trustee, State Street Bank and Trust Company of Connecticut, National
Association nor the Indenture Trustee is personally liable to the Holder
hereof for any amounts payable or any liability under this Certificate or
under the Indenture, except as expressly provided in the Indenture, in the
case of State Street Bank and Trust Company of Connecticut, National
Association, the Owner Trustee and the Indenture Trustee.
The Certificates are subject to prepayment in the following
circumstances at the price determined as set forth below.
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08 of
the Indenture replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and the Lessee shall not have revoked
such notice or effected an assumption of the Certificates as provided in
Section 2.12 of the Indenture).
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 of the Indenture.
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) of Indenture.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a Refinancing of the Certificates.
(vi) As contemplated by Section 2.16 of the Indenture and Section
3.05(b) of the Participation Agreement if the Delivery Date has not
occurred on or prior to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
In the case of a prepayment of the Certificates pursuant to clauses
(ii), (iv) and (v) above, the Lessee, in accordance with and subject to the
terms (including timing of notice) of Section 4.02(a) or 10.01 of the Lease or
Article 15 of the Participation Agreement, as the case may be, shall give
irrevocable (subject to Section 6.02(c) of the Indenture) written notice to
the Owner Trustee and the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Owner Trustee is
directed to prepay the Certificates. In the case of a prepayment pursuant to
clause (i) above, the Certificates shall be prepaid on the Loss Payment Date
(as defined in Section 11.02 of the Lease). In the case of a prepayment
pursuant to clause (iii) above, the Certificates shall be prepaid on the date
designated in the notice of prepayment required by Section 8.02 of the
Indenture. In the case of a prepayment of the Certificates pursuant to
clauses (ii) and (iv) above, the Certificates shall be prepaid in full on the
Termination Date. In the case of a prepayment of the Certificates pursuant to
clause (v) above, the Certificates shall be prepaid on the effective date of
the Refinancing. In the case of a prepayment of the Certificates pursuant to
clause (vi) above, the Certificates shall be prepaid on the 15th day following
the Cut-Off Date. In the case of a prepayment of the Certificates pursuant to
clause (vii) above, the Certificates shall be prepaid on the date designated
in the notice referred to therein. The day on which the Certificates are to
be prepaid is herein referred to as the "Prepayment Date". On or prior to the
Prepayment Date, immediately available funds shall be deposited with the
Indenture Trustee in an amount in respect of the Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section
6.02 of the Indenture on or after the applicable Premium Termination Date,
or (ii) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (i), (iii) (if clause (i) of the first
sentence of Section 8.02(a) of the Indenture is applicable) or (vi) above,
the sum of (A) the aggregate principal amount of such Certificates then
Outstanding, (B) accrued interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due the Indenture Trustee under the
Indenture or under the Participation Agreement or the Lease, but excluding
any Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (ii), (iii) (if clause (ii) of the
first sentence of Section 8.02(a) of the Indenture is applicable), (iv),
(v) or (vii) above, the sum of the amounts specified in clauses (A), (B)
and (C) of the preceding clause (1) plus any Make-Whole Premium payable in
respect of all Certificates with respect to which the Premium Termination
Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
If, in accordance with and subject to the satisfaction of the
conditions set forth in Section 7.11 of the Participation Agreement, the
Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall (except for prior acts) be released
and discharged from any further obligations hereunder and under the
Certificates and all other Operative Agreements (except any obligations that
have accrued prior to such assumption).
If an Indenture Event of Default under the Indenture shall occur and
be continuing, the principal of the Certificates may be declared due and
payable in the manner and with the effect provided in the Indenture. The
Indenture provides that in certain events such declaration and its
consequences may be waived the Majority in Interest of Holders. Any such
consent or waiver shall be conclusive and binding upon the Holder of this
Certificate and upon all future Holders and owners of this Certificate and any
Certificate that may be issued in exchange or substitution therefor, whether or
not any notation thereof is made upon this Certificate or such other
Certificates. Moreover, if, and only if, an Event of Default shall occur, the
Indenture Trustee may declare the Lease to be in default, and may, to the
exclusion of the Owner Trustee, exercise one or more of the remedies of the
Owner Trustee provided in the Lease.
The Owner Trustee or the Owner Participant may cure a default by the
Lessee under the Lease arising from the failure of the Lessee to make any
Basic Rent payments under the Lease, but the Owner Trustee and the Owner
Participant, collectively, may not cure more than three consecutive such
failures or more than six such failures in total. The Owner Trustee or the
Owner Participant may cure any other default by the Lessee in the performance
of its obligations under the Lease.
(A) If an Event of Default shall have occurred and be continuing for
more than 180 days or the Certificates shall have been accelerated or (B) an
Event of Default shall have occurred and be continuing for not more than 180
days and the Certificates shall not have been accelerated, the Owner
Participant (or the Owner Trustee on behalf of the Owner Participant) may:
(1) direct the Owner Trustee to cause the prepayment of all the
Outstanding Certificates by notifying the Indenture Trustee of such
election and depositing the sum of amounts contemplated by paragraph
"first" under Section 5.03 of the Indenture and the aggregate
Prepayment Price of all such Certificates with the Indenture Trustee
for distribution to the Holders; or
(2) purchase all of the Outstanding Certificates by paying to the
Indenture Trustee an amount equal to the aggregate unpaid principal
amount of all Outstanding Certificates, plus accrued interest on such
amount to the date of purchase and if such purchase occurs prior to
the Premium Termination Date for such Outstanding Certificate (in the
case of a purchase pursuant to clause (ii) of the first sentence of
Section 8.02(a) of the Indenture but not in the case of clause (i) of
Section 8.02(a) of the Indenture) any Make-Whole Premium applicable
to each Outstanding Certificate, plus all other sums due any Holder
or the Indenture Trustee under the Indenture, the Participation
Agreement or the Lease.
The right of the Holder hereof to institute an action for any remedy
under the Indenture is subject to certain restrictions specified in the
Indenture, except that the right of the Holder of this Certificate to receive
payment of the principal of and interest and Make-Whole Premium, if any, on
this Certificate on or after the respective due dates, or to institute suit
for the enforcement of any such payment, shall not be impaired or affected
without the consent of such Holder.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 and integral multiples thereof. So long as
any of the Certificates remain Outstanding, the Indenture Trustee will
maintain an office or agency where the Certificates may be presented for
payment and a facility or agency in New York, New York where the Certificates
may be presented for registration of transfer and for exchange as provided in
the Indenture. As provided in the Indenture and subject to certain
limitations therein, this Certificate is transferable, and upon surrender of
this Certificate for registration of transfer at the principal corporate trust
office of the Indenture Trustee, or at the office or agency maintained for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Indenture Trustee duly
executed by, the Holder or his attorney duly authorized in writing, one or
more new Certificates of the same Series and 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 Series and Maturity and interest rate and
of authorized denominations, as requested by the Holder surrendering the same,
upon presentation thereof for such purpose at the principal corporate trust
office of the Indenture Trustee, or at an office or agency maintained for such
purpose.
No service charge shall be levied for any such registration of
transfer or exchange, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to the due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, any agent of the Owner
Trustee or the Indenture Trustee, the Paying Agent, if any, the Registrar and
the Lessee shall deem and treat the person in whose name this Certificate is
registered as the absolute owner hereof for all purposes whether or not this
Certificate is overdue, and neither the Owner Trustee, the Indenture Trustee
(nor any agent of the Owner Trustee or the Indenture Trustee), nor the Paying
Agent, if any, the Registrar nor the Lessee shall be affected by notice to the
contrary.
The indebtedness evidenced by this Certificate is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of the Secured Obligations (as defined in
the Indenture) in respect of [Series A Certificate](1), [Series A and Series B
Certificates](2) and this Certificate is issued subject to such provisions.
The Holder of this Certificate, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Indenture Trustee
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in the Indenture and (c) appoints
the Indenture Trustee such Holder's attorney-in-fact for such purpose.(*)
- ------------
(1) To be inserted in the case of a Series B Certificate.
(2) To be inserted in the case of a Series C Certificate.
(*) To be inserted for each Certificate other than any Series A Certificate.
As provided in the Indenture, the Indenture and the Certificates
shall be construed in accordance with and governed by the laws of the State of
New York.
This Certificate shall not be secured by or be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose unless
authenticated by the Indenture Trustee as evidenced by the manual signature of
one of its authorized officers on the certificate below.
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Trust
Certificate (Federal Express Corporation Trust No. N673FE) to be duly executed
in its corporate name by its officer thereunto duly authorized.
Dated: May ___, 1997 STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust Certificates (Federal Express
Corporation Trust No. N673FE) referred to in the within mentioned Indenture.
Dated: May ___, 1997 FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By
------------------------------------
Name: Greg A. Hawley
Title: Vice President
SCHEDULE I
[Reserved]
SCHEDULE II
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N673FE)
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement,
the Series Supplements, the Intercreditor Agreement and the Liquidity
Facilities) referred to below, unless otherwise defined in an Operative
Agreement or the context thereof shall otherwise require. In the case of any
conflict between the provisions of this Schedule and the provisions of any
Operative Agreement, the provisions of such Operative Agreement shall control
the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Additional Insured. As defined in Article 13 of the Lease.
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
located in the United States succeeding to the functions of any of the
foregoing.
Affidavits. The affidavits of citizenship of the Owner Trustee and
the Owner Participant.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment to be 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 to be
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 and
actual state, local and foreign income taxes.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee as
provided in the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe thereunder) together with two Engines
(whether either is an initial Engine or a 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 Aircraft shall mean the Airbus A300F4-605R airframe bearing FAA
Registration Number N673FE and Manufacturer's serial number 780, together with
two General Electric CF6-80C2-A5F engines.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number initially and manufacturer's serial
number specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any Replacement Airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on or prior to the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, each Liquidity Provider and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N673FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Ancillary Agreement II. The Ancillary Agreement II (Federal Express
Corporation Trust No. N673FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Application. The application for registration of the Aircraft with
the FAA in the name of the Owner Trustee.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with an abbreviated report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
Assignment and Assumption Agreement. Any agreement delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Average Life Date. For any Certificate, the date which follows the
prepayment date by a period equal to the Remaining Weighted Average Life of
such Certificate.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France.
AVSA Consent and Agreement. The Consent and Agreement dated as of
May 1, 1997, executed by AVSA.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Bankruptcy Default. An event specified in Section 16.01(e), (f) or
(g) of the Lease which either does or, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Delivery Date and ending at the end of the day on December 11, 2020, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Memphis, Tennessee and the city in the
United States in which the office or agency is maintained by the Pass Through
Trustee for the payment of the Pass Through Certificates, and after the Lien
of the Indenture is discharged, Boston, Massachusetts.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N673FE), 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 either of which would change or would allow a change in
the tax assumptions or structure upon which the lease economics were based,
provided that the Owner Participant or the Lessee has notified the other party
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 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Class A Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Class B Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Collateral Account Control Agreement. The Collateral Account Control
Agreement dated as of May 1, 1997 among State Street Bank and Trust Company,
the Indenture Trustee and the Owner Trustee.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of May 1,
1997 executed by the Manufacturer.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 750 Main Street, Hartford, Connecticut
06103, Attention: Corporation Trust Administration, or such other office at
which the Owner Trustee's corporate trust business shall be administered which
the Owner Trustee shall have specified by notice in writing to the Lessee, the
Owner Participant and the Indenture Trustee.
Corporate Trust Department. The Corporate Trust Department office of
the Indenture Trustee located at 79 South Main Street, Salt Lake City, Utah
84111, Attention: Corporate Trust Department, or such other office at which
the Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to the Lessee,
the Owner Participant and the Owner Trustee.
CRAF Program. Has the meaning specified in Section 7.01(f) of the
Lease.
Cut-Off Date. December 10, 1997.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
Default. Any event or condition which, with the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
Delivery Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
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 has a combined
capital and surplus of at least $100,000,000 and a rating of A or better from
the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Section 7.02(a)(vii), 10.02(c), 10.03, 11.03, 11.04 or 12.02 of
the Lease, together with all Parts related thereto. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the Lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, both Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1997, executed
by the Engine Manufacturer.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N673FE), dated as of May 1, 1997 between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. As defined in Section 8.01(b)(xii) of the Participation
Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by Lessee for any reason whatsoever;
(ii) any damage to such property which results in an insurance settlement with
respect to such property on the basis of a total loss, or constructive or
compromised total loss; (iii) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the Government, any foreign
government or purported government or any agency or instrumentality thereof,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, for a period in excess of 180 days (or such
shorter period ending on the earlier of the expiration of the Term or on the
date on which an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss shall occur)
or (B) by the Government for a period extending beyond the Term; and (iv) as a
result of any law, rule, regulation, order or other action by the Aeronautics
Authority or other governmental body having jurisdiction, the use of the
Aircraft or Airframe in the normal course of air transportation of cargo shall
have been prohibited by virtue of a condition affecting all Airbus A300-600
series aircraft equipped with engines of the same make and model as the
Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period, shall be diligently
carrying forward all steps which are necessary or desirable to permit the
normal use of the Aircraft or Airframe or, in any event, if such use of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if any Event of Loss occurs with respect to the Airframe.
Excepted Payments. Collectively, (i) indemnity, expense,
reimbursement or other payments paid or payable by the Lessee in respect of
the Owner Participant, the Owner Trustee in its individual capacity or any of
their respective successors, permitted assigns, directors, officers,
employees, servants and agents or Affiliates, pursuant to the Participation
Agreement or any other Operative Agreement or any indemnity hereafter granted
to the Owner Participant or the Owner Trustee in its individual capacity
pursuant to the Lease or the Participation Agreement, (ii) proceeds of public
liability insurance (or government indemnities in lieu thereof) in respect of
the Aircraft payable as a result of insurance claims paid for the benefit of,
or losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Article 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) any purchase price paid to the
Owner Participant for its interest in the Trust Estate pursuant to Section
7.03(d) of the Participation Agreement, (vi) subject to Section 3.05 of the
Lease, payments constituting increases in Basic Rent attributable to payments
arising pursuant to Section 5 of the Tax Indemnity Agreement, (vii) any
payments in respect of interest to the extent attributable to payments
referred to in clauses (i) through (vi) above and (viii) any right to demand,
collect or otherwise receive and enforce the payment of any amount described
in clauses (i) through (v) and (vii) above (except with respect to interest
attributable to payments referred to in clause (vi) above).
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. 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 and Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell, assuming the Aircraft (or other property) is unencumbered
by the Lease. In such determination, except for purposes of Section 17.01 of
the Lease (when it shall be determined based upon the actual condition and
location of the Aircraft), 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 and Fair Market Value shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Final Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Fixed Renewal Rent. Semi-annual payments of rent during the Fixed
Renewal Term equal to the lesser of (i) Fair Market Rental as determined as of
the commencement of such Fixed Renewal Term and (ii) 50% of the average actual
semi-annual Basic Rent payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
FPO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
French Pledge Agreement. The French Pledge Agreement dated as of May
1, 1997 between the Owner Trustee and the Indenture Trustee.
FSB. First Security Bank, National Association, a national banking
association.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of SSB, in its individual capacity and as Owner
Trustee and Lessor, the Subordination Agent, in its individual capacity and in
its capacity as Subordination Agent, each Liquidity Provider, the Owner
Participant, the Indenture Trustee, in its individual capacity and as trustee,
the Owner Participant Guarantor and any successor (including any trustee which
may succeed to the Lessor's interest under the Lease), Affiliate, assign,
officer, director, employee, agent and servant of any of the foregoing, the
Lessor's Estate and the Trust Indenture Estate. Neither the Pass Through
Trustee nor any holder of a Pass Through Certificate shall be deemed to be an
Indemnitee.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N673FE), dated as of May 1, 1997, between the
Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N673FE) to be dated the Delivery Date, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
Indenture Trustee's Liens. Any Lien against, on or with respect to
the Aircraft, the Lessor's Estate or the Trust Indenture Estate or any part
thereof 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, (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 or (iii) Taxes imposed against
the Indenture Trustee in its individual capacity in respect of which the Lessee
has not indemnified (and is not obligated to indemnify) the Indenture Trustee
in such capacity.
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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Intercreditor Agreement. The Intercreditor Agreement dated as of May
1, 1997, among the Pass Through Trustee, the Class A Liquidity Provider, the
Class B Liquidity Provider and the Subordination Agent.
Interest Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N673FE) dated as of May 1, 1997, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, including,
without limitation, supplementation by one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N673FE) to be dated the Delivery Date, substantially in
the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA Bill
of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), any Ancillary Agreement, the GTA, the
Engine Warranty Assignment, the Engine Consent, 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 in its individual
capacity or the Owner Participant) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity, or to any of their respective directors, officers,
employees and agents pursuant to Articles 8 and 9 of the Participation
Agreement), and all other property of the Owner Trustee purportedly subjected
to the Lien of the Indenture by the Granting Clause thereof; provided that in
no event shall "Lessor's Estate" include any Excepted Payment.
Lessor's Liens. Liens against, on or with respect to the Aircraft,
the Lessor's Estate or the Trust Indenture Estate or any part thereof, title
thereto or any interest therein arising as a result of (i) claims against the
Lessor, in its individual capacity or as Owner Trustee, or the Owner
Participant, in each case not related to the transactions contemplated by the
Operative Agreements, (ii) acts or omissions of the Lessor in its individual
capacity or as Owner Trustee, and, in the case of the Lessor in its individual
capacity, arising from its gross negligence or willful misconduct or expressly
prohibited under the Operative Agreements and any act or omission of the Owner
Participant which is in violation of any of the terms of the Operative
Agreements, (iii) Taxes or Expenses imposed against the Lessor, in its
individual capacity or as Owner Trustee, Owner Participant, Lessor's Estate or
the trust created by the Trust Agreement which are not required to be
indemnified against by the Lessee pursuant to the Participation Agreement by
reason of Section 8.01(b) or 9.01(b) thereof and which are not required to be
indemnified against by the Lessee pursuant to the Tax Indemnity Agreement, or
(iv) claims against the Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner Participant of its interests in
the Aircraft other than a transfer of the Aircraft pursuant to Section 4.02(a)
or Article 10 or 11 of the Lease and other than a transfer pursuant to the
exercise of the remedies set forth in Article 17 of the Lease.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Liquidity Facility. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Liquidity Provider. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
Loss Payee. Has the meaning specified in Section 13.02(b)(i) of the
Lease.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% of the aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding for
purposes of this definition any Certificates held by (i) the Owner Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the day before the
applicable Prepayment Date (or date of purchase, as the case may be) which an
Independent Investment Banker determines to be equal to the excess, if any, of
(i) the present value of the remaining scheduled payments of such principal
amount or portion thereof and interest thereon (excluding interest accrued
from the immediately preceding Payment Date to such Prepayment Date or date of
purchase, as the case may be) to the Maturity of such Certificate in
accordance with generally accepted financial practices assuming a 360-day year
consisting of twelve 30-day months at a discount rate equal to the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
outstanding principal amount of such Certificate plus accrued interest.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
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 equal to the Debt Rate per annum compounded semi-annually.
Non-U.S. Person. Any Person other than a U.S. Person.
Obsolete Parts. Parts which are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, the Owner Trustee Guaranty,
if any, any Ancillary Agreement entered into by or with the written consent of
the Indenture Trustee, which by its terms is an Operative Agreement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the Engine Consent, the Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Account Control Agreement and any Assignment and Assumption
Agreement.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Outstanding. When used with respect to Certificates, as of the date
of determination and subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and delivered under the
Indenture, with the exception of the following:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money in the necessary amount
has been theretofore deposited with the Indenture Trustee in trust
for the Holders of such Certificates pursuant to Section 14.01 of the
Indenture; provided, that if such Certificates are to be prepaid,
notice of such prepayment has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Indenture Trustee
has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to Article II
of the Indenture.
Owner Participant. The trustor originally named in the Trust
Agreement and any successor thereto, and any Person to which the Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Guarantor. Philip Morris Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Certificate Closing Date by the Owner Participant Guarantor in favor of the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
and any guaranty delivered in compliance with Section 7.03(d) of the
Participation Agreement.
Owner Trustee. SSB, not in its individual capacity except as
otherwise expressly stated, but solely as Owner Trustee under the Trust
Agreement.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the 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 the case may be, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N673FE), dated as of May 1, 1997, among the Lessee, the
Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee, the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee and the Subordination Agent not in its
individual capacity except as otherwise expressly provided therein, but solely
as subordination agent.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine or title to which
remains vested in the Lessor pursuant to Article 8 of the Lease.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
May 1, 1997 between the Lessee and the Pass Through Trustee.
Pass Through Certificates. Any of the Pass Through Certificates,
1997-1-A, the Pass Through Certificates, 1997-1-B or the Pass Through
Certificates, 1997-1-C, in each case as issued by the related Pass Through
Trust; and "Pass Through Certificates" means all of the Pass Through
Certificates issued by each of the Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Corporation 1997-1 Pass
Through Trust Class A, Federal Express Corporation 1997-1 Pass Through Trust
Class B and Federal Express Corporation 1997-1 Pass Through Trust Class C, in
each case formed pursuant to the related Series Supplement in accordance with
the Pass Through Agreement; and "Pass Through Trusts" means all of such Pass
Through Trusts.
Pass Through Trustee. First Security Bank, National Association, a
national banking association, in its capacity as Pass Through Trustee under
the Pass Through Agreement and each Pass Through Trust.
Past Due Rate. In respect of (A) any amount payable to the Owner
Participant or the Owner Trustee a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid
in full equal to 2% plus the Debt Rate and (B) any principal of or interest on
any Certificate or any other amount payable under the Indenture, any
Certificate or any other Operative Agreement that is not paid when due
(whether at Maturity, by acceleration, by optional or mandatory prepayment or
otherwise) to any Holder, the Indenture Trustee or the Pass Through Trustee, a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to (i) in the
case of any such amount payable to the Holder of any Certificate, 2% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. Each January 15 and July 15 commencing on July 15,
1997.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local,
foreign or any agency, instrumentality, division or body thereof).
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
December 27, 2011, with respect to the Series B Certificates, February 5, 2010
and with respect to the Series C Certificates, March 22, 2007.
Prepayment Date. Has the meaning specified in Section 6.02(b) of the
Indenture.
Prepayment Price. Has the meaning specified in Section 6.02(b) of the
Indenture.
Principal Amount. With respect to a Certificate means the stated
original principal amount of such Certificate and, with respect to all
Certificates, means the aggregate stated original principal amounts of all
Certificates.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
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 Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N673FE), dated as of May 1, 1997 between
the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement II.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), December 31 for January 15
Payment Dates and June 30 for July 15 Payment Dates, whether or not such date
is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Register. Has the meaning set forth in Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N670FE, N671FE,
N672FE, N674FE, N583FE and N584FE, each dated as of May 1, 1997, between the
Owner Trustee and the Indenture Trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N581FE, dated as of May 1,
1997, between Wilmington Trust Company, as owner trustee and the Indenture
Trustee, and the Trust Indenture and Security Agreement for Federal Express
Corporation Trust No. N587FE, dated as of December 1, 1996, as amended and
restated as of May 1, 1997, between Wilmington Trust Company, as owner trustee
and the Indenture Trustee.
Remaining Weighted Average Life. On a given date with respect to any
Certificate the number of days equal to the quotient obtained by dividing (i)
the sum of each of the products obtained by multiplying (a) the amount of each
then remaining scheduled payment of principal of such Certificate by (b) the
number of days from and including such prepayment date to but excluding the
dates on which each such payment of principal is scheduled to be made; by (ii)
the then outstanding principal amount of such Certificate.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. One or more terms with respect to which the Lessee has
exercised its option to renew the Lease pursuant to Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. December 11, 2020 and each January 15 and July 15
commencing on January 15, 1998.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Aircraft. Any aircraft substituted for the Aircraft
pursuant to Section 11.03(a) of the Lease.
Replacement Airframe. Has the meaning set forth in Section 11.03 of
the Lease.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) of equal or greater value,
airworthiness, remaining useful life and utility as the Engine being replaced,
together with all Parts relating to such engine; provided, however, that if
such replacement engine is not a General Electric CF6-80C2-A5F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement in which case the definition of Responsible
Officer set forth in Section 3.10 of the Trust Agreement is applicable) or the
Indenture Trustee, any officer in its Corporate Trust Administration, as the
case may be, designated by such Person to perform obligations under the
Operative Agreements, and with respect to any other party, any corporate
officer or (except in the case of the Owner Participant) other employee of a
party who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Secured Obligations. Has the meaning specified in the Granting
Clause of the Indenture.
Securities Act. The Securities Act of 1933, as amended.
Series "A" or "Series A Certificates". Certificates issued and
designated as "Series A" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series A".
Series "B" or "Series B Certificates". Certificates issued and
designated as "Series B" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series B".
Series "C" or "Series C Certificates". Certificates issued and
designated as "Series C" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series C".
Series Supplement or Series Supplements. The Series Supplement
1997-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1997-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1997-1-C to be
executed and delivered by the Lessee and the Pass Through Trustee.
Sinking Fund Redemption Date. Has the meaning specified in Section
6.06 of the Indenture.
Sinking Fund Redemption Price. Has the meaning specified in Section
6.06 of the Indenture.
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Specified Investments. 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 S&P and Moody's,
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) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following
the date of such investment; (d) overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers; or
(e) 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 or 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.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association.
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 Factor" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with so much of the arrears portion of Basic Rent due and owing
through the date of payment of Stipulated Loss Value as does not constitute an
Excepted Payment, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment. Subject to the immediately
preceding sentence, it is understood and agreed that the amounts set forth on
Schedule III of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals and
credits of unearned Basic Rent through such date and, accordingly, no further
accrual or credit shall be required through such date whenever Stipulated Loss
Value is to be calculated with reference to any such date; provided that if
amounts in respect of Stipulated Loss Value are payable under the Operative
Agreements after the Stipulated Loss Determination Date in respect of which
such Stipulated Loss Value was determined, the Lessor shall be compensated
during the period from the Stipulated Loss Determination Date to such payment
date in accordance with the provisions of the Operative Agreements.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease.
Subordination Agent. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Subordination Agent.
Supplemental Rent. (a) All amounts, liabilities and obligations
which the Lessee assumes or agrees to perform or pay under the Lease or under
the Participation Agreement or Tax Indemnity Agreement or any Ancillary
Agreement or any other Operative Agreement to the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, FPO Price and amounts calculated by reference to Termination Value, any
amounts of Make-Whole Premium payable under the Indenture to the extent
provided in Section 3.03 of the Lease, and all amounts required to be paid by
Lessee under the agreements, covenants and indemnities contained in the Lease
or in the Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Basic Rent and (b) all amounts that the
Owner Trustee is obligated to pay in accordance with clause (b) of the last
paragraph of Section 2.04 of the Indenture.
Tax. Has the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N673FE), dated as of May 1, 1997, between the
Lessee and the Owner Participant.
Term. 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 December 31, 2004 in the case of Article 10 of the Lease, and in
the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling
on January 15, 2016, (ii) Section 4.02(a)(D) or (E) of the Lease, a Rent
Payment Date that is on or after the seventh anniversary of the Delivery Date
and (iii) Section 4.02(a)(F) of the Lease, the last day of the Basic Term.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent through such date and,
accordingly, no further accrual or credit shall be required through such date
whenever Termination Value is to be calculated with reference to any such
date; provided that if amounts in respect of Termination Value are payable
under the Operative Agreements after the Termination Date in respect of which
such Termination Value was determined, the Lessor shall be compensated during
the period from the Termination Date to such payment date in accordance with
the provisions of the Operative Agreements.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code, as amended
and in effect on the date of the Lease or as subsequently amended, or any
successor or substituted legislation at the time in effect and applicable, and
the regulations promulgated pursuant thereto.
Treasury Yield. At the time of determination with respect to any
Certificate, the interest rate (expressed as a semi-annual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semi-annual
yield to maturity for United States Treasury securities maturing on the
Average Life Date on such Certificate and trading in the public securities
markets either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in public securities markets, (i) one maturing as close as possible to,
but earlier than, the Average Life Date of such Certificate and (ii) the other
maturing as close as possible to, but later than, the Average Life Date of
such Certificate. In each case as published in the most recent H.15(519) or,
if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Certificate is reported on the most
recent H.15 (519), such weekly average yield to maturity as published in such
H.15(919). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Premium
will be the third Business Day prior to the applicable prepayment date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable prepayment date.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N673FE), dated as of May 1, 1997, between the Owner Participant and
the Owner Trustee in its individual capacity.
Trust Estate. The Lessor's Estate.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. Morgan Stanley & Co. Incorporated, First Chicago
Capital Markets, Inc., Goldman, Sachs & Co. and J.P. Morgan & Co.
Underwriting Agreement. The Underwriting Agreement dated May 22, 1997
among the Lessee and the Underwriters.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
- ------------------------------------------------------------------------------
TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust No. N674FE)
Dated as of May 1, 1997
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 781, REGISTRATION NO. N674FE
==============================================================================
TABLE OF CONTENTS
Page
Initial Recitals......................................................... 1
Granting Clause.......................................................... 2
Habendum Clause.......................................................... 6
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................. 8
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.............. 8
Section 2.02. Execution of Certificates................................ 9
Section 2.03. Certificate of Authentication............................ 9
Section 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest.......................... 9
Section 2.05. Payments from Trust Indenture Estate Only................ 12
Section 2.06. Registration, Transfer and Exchange...................... 13
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates............................................. 14
Section 2.08. Cancellation of Certificates; Destruction Thereof........ 15
Section 2.09. Temporary Certificates................................... 15
Section 2.10. Termination of Interest in Trust Indenture Estate........ 16
Section 2.11. Certificates in Respect of Replacement Aircraft.......... 16
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements..................................... 16
Section 2.13. Establishment of Collateral Account...................... 16
Section 2.14. Investment of Funds on Deposit in the Collateral Account. 17
Section 2.15. Release of Debt Portion and Lien on the Collateral Account
and the Liquid Collateral on Delivery Date............... 18
Section 2.16. Cut-Off Date............................................. 19
Section 2.17. Subordination............................................ 19
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.... 19
Section 3.02. Offices for Payments, etc................................ 20
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee.................................................. 20
Section 3.04. Paying Agents............................................ 20
Section 3.05. Covenants of SSB and the Owner Trustee................... 21
Section 3.06. [Reserved]............................................... 21
Section 3.07. Disposal of Trust Indenture Estate....................... 22
Section 3.08. No Representations or Warranties as to Aircraft or
Documents................................................ 22
Section 3.09. Further Assurances; Financing Statements................. 22
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates.................. 23
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution.................................. 23
Section 5.02. Event of Loss and Replacement; Prepayment................ 24
Section 5.03. Payment After Indenture Event of Default, etc............ 25
Section 5.04. Certain Payments......................................... 27
Section 5.05. Other Payments........................................... 28
Section 5.06. Payments to Owner Trustee................................ 28
Section 5.07. Application of Payments.................................. 28
Section 5.08. Investment of Amounts Held by Indenture Trustee.......... 29
Section 5.09. Withholding Taxes........................................ 30
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity.......................... 30
Section 6.02. Prepayment of Certificates............................... 30
Section 6.03. Notice of Prepayment to Holders.......................... 32
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price.................................................... 33
Section 6.05. Certificates Payable on Prepayment Date.................. 33
Section 6.06. Mandatory Sinking Fund Redemption........................ 33
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default............................... 35
Section 7.02. Remedies................................................. 38
Section 7.03. Return of Aircraft, etc.................................. 40
Section 7.04. Indenture Trustee May Prove Debt......................... 42
Section 7.05. Remedies Cumulative...................................... 44
Section 7.06. Suits for Enforcement.................................... 44
Section 7.07. Discontinuance of Proceedings............................ 45
Section 7.08. Limitations on Suits by Holders.......................... 45
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute
Certain Suits............................................ 45
Section 7.10. Control by Holders....................................... 46
Section 7.11. Waiver of Past Indenture Default......................... 46
Section 7.12. Notice of Indenture Default.............................. 47
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.... 47
Section 8.02. Owner Participant's Right to Elect to Prepay or Purchase the
Certificates............................................. 50
Section 8.03. Certain Rights of Owner Participant...................... 52
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts..................................... 53
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an
Indenture Event of Default............................... 54
Section 9.03. Certain Rights of the Indenture Trustee.................. 56
Section 9.04. Indenture Trustee Not Responsible for Recitals, Disposition
of Certificates or Application of Proceeds Thereof....... 57
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc......................................... 57
Section 9.06. Moneys Held by Indenture Trustee......................... 57
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc......................................... 57
Section 9.08. Replacement Airframes and Replacement Engines............ 58
Section 9.09. Indenture and Security Agreement Supplement for
Replacements............................................. 61
Section 9.10. Effect of Replacement.................................... 61
Section 9.11. Compensation............................................. 61
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders..................... 62
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates............................................ 62
Section 10.03. Holders to Be Treated as Owners......................... 63
Section 10.04. Certificates Owned by Owner Trustee and the Lessee Deemed
Not Outstanding......................................... 63
Section 10.05. Right of Revocation of Action Taken..................... 64
Section 10.06. ERISA................................................... 64
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee....................... 66
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor................................ 66
Section 12.03. Persons Eligible for Appointment as Indenture Trustee... 67
Section 12.04. Acceptance of Appointment by Successor Trustee.......... 67
Section 12.05. Merger, Conversion, Consolidation or Succession to Business
of Indenture Trustee.................................... 68
Section 12.06. Appointment of Separate Trustees........................ 69
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders...... 71
Section 13.02. Supplemental Indentures With Consent of Holders......... 72
Section 13.03. Effect of Supplemental Indenture........................ 74
Section 13.04. Documents to Be Given to Indenture Trustee.............. 74
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures.............................................. 74
Section 13.06. No Request Necessary for Lease Supplement or Indenture and
Security Agreement Supplement........................... 74
Section 13.07. Notices to Liquidity Providers.......................... 74
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture............................................... 75
Section 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates................................. 76
Section 14.03. Repayment of Moneys Held by Paying Agent................ 76
Section 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven Months......... 76
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting................................ 77
Section 15.02. No Legal Title to Trust Indenture Estate in Holders..... 77
Section 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding................................................. 77
Section 15.04. Indenture for Benefit of Owner Trustee, Indenture Trustee,
Owner Participant, Holders and Liquidity Providers...... 77
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease................................................... 78
Section 15.06. Notices................................................. 78
Section 15.07. Officer's Certificates and Opinions of Counsel; Statements
to Be Contained Therein................................. 79
Section 15.08. Severability............................................ 80
Section 15.09. No Oral Modifications or Continuing Waivers............. 80
Section 15.10. Successors and Assigns.................................. 80
Section 15.11. Headings................................................ 80
Section 15.12. Normal Commercial Relations............................. 80
Section 15.13. Governing Law; Counterparts............................. 80
Exhibit A -- Form of Indenture and Security Agreement Supplement
Exhibit B -- Form of Certificate
Schedule I -- [Reserved]
Schedule II -- Definitions
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N674FE)
TRUST INDENTURE AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION
TRUST NO. N674FE) dated as of May 1, 1997 (the "Indenture"), between STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, except as otherwise
specifically set forth herein (when acting in such individual capacity,
"SSB"), but solely as owner trustee (the "Owner Trustee") under the Trust
Agreement, as defined herein, and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, as Indenture Trustee hereunder (the "Indenture
Trustee").
W I T N E S S E T H:
-------------------
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and SSB have, immediately prior to the
execution and delivery of this Indenture, entered into a Trust Agreement
(Federal Express Corporation Trust No. N674FE) dated as of the date hereof (as
amended or otherwise modified from time to time in accordance with the
provisions thereof and of the Participation Agreement, the "Trust Agreement"),
whereby, among other things, SSB has declared a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Lien of this
Indenture for the use and benefit of, and with the priority of payment to, the
holders of the Certificates issued hereunder, and the Owner Trustee is
authorized and directed to execute and deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture, among other
things (i) to provide for the issuance by the Owner Trustee of Certificates as
provided in the Participation Agreement, and (ii) to provide for the
assignment, mortgage and pledge by the Owner Trustee to the Indenture Trustee,
as part of the Trust Indenture Estate hereunder of the Owner Trustee's right,
title and interest in the Liquid Collateral and after the Delivery Date for
the assignment, mortgage and pledge by the Owner Trustee to the Indenture
Trustee, as part of the Trust Indenture Estate hereunder, of among other
things, certain of the Owner Trustee's estate, right, title and interest in
and to the Aircraft and the Indenture Documents and certain payments and other
amounts (other than Excepted Payments) received hereunder or thereunder in
accordance with the terms hereof, as security for, among other things, the
Owner Trustee's obligations to the Certificate Holders and for the benefit and
security of such Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee, and authenticated, issued and delivered
hereunder, the valid obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of the Owner Trustee, enforceable in accordance
with its terms, have been done and performed and have happened.
NOW, THEREFORE, the parties agree as follows:
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual promises contained
herein and to secure (i) the prompt payment of the principal of and Make-Whole
Premium, if any, and interest on, and all other amounts due with respect to,
all the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of the Certificates, and the
prompt payment of any and all amounts from time to time owing under the
Participation Agreement by the Owner Trustee, the Owner Participant or the
Lessee to the Holders (collectively the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions of this Indenture, and in
consideration of the premises and of the covenants in this Indenture and in the
Certificates and of the purchase of the Certificates by their Holders, and of
the sum of $1 paid to the Owner Trustee by the Indenture Trustee at or before
the delivery of this Indenture, the receipt and sufficiency of which is hereby
acknowledged, the Owner Trustee has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged, granted a first priority security
interest in and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and grant a first priority security
interest in and confirm to the Indenture Trustee, its successors and assigns,
in trust for the equal and ratable security and benefit of the Holders from
time to time of the Certificates, a first priority security interest in and
first mortgage Lien on all estate, right, title and interest of the Owner
Trustee in, to and under the following described property, rights and
privileges other than Excepted Payments, which collectively, excluding
Excepted Payments but including all property specifically subjected to the
Lien of this Indenture by the terms hereof, by any Indenture and Security
Agreement Supplement or any mortgage supplemental to this Indenture, are
included within the Trust Indenture Estate, subject always to the rights
granted to the Owner Trustee or the Owner Participant hereunder and to the
other terms and conditions of this Indenture:
(1) The Airframe, as the same is more particularly described in the
Indenture and Security Agreement Supplement and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture; the Engines,
as the same are more particularly described in the Indenture and Security
Agreement Supplement, whether or not such Engines shall be installed in or
attached to the Airframe or any other airframe, and any Replacement Engine
therefor; and all Parts in respect of the Airframe and the Engines and all
records, logs and other documents at any time maintained with respect to the
foregoing property;
(2) The Lease and all Rent thereunder, including, without limitation,
all amounts of Basic Rent and Supplemental Rent, and payments of any kind
thereunder and including all rights of the Owner Trustee to execute any
election or option or to give or receive any notice, consent, waiver or
approval under or in respect of the Lease or to accept any surrender of the
Aircraft or any part thereof as well as any rights, powers or remedies on the
part of the Owner Trustee, whether arising under the Lease or by statute or at
law or in equity or otherwise arising out of any Event of Default;
(3) The Purchase Agreement, the Purchase Agreement Assignment, the
AVSA Consent and Agreement, the Consent and Agreement, the Consent and
Guaranty, the GTA, the Engine Warranty Assignment and the Engine Consent,
AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty,
the Ancillary Agreements and the Participation Agreement (to the extent of
amounts payable to the Owner Trustee thereunder) (collectively, and together
with the Lease, the Trust Agreement and the Certificates, the "Indenture
Documents"), including all rights of the Owner Trustee to execute any election
or option or to give or receive any notice, consent, waiver or approval under
or in respect of any of the foregoing documents and instruments;
(4) All the tolls, rents, issues, profits, products, revenues and
other income (including sales proceeds) of the property subjected or required
to be subjected to the Lien of this Indenture, and all of the estate, right,
title and interest of the Owner Trustee in and to the same and every part of
said property;
(5) The Collateral Account, the Liquid Collateral and all other
moneys and securities (including Permitted Investments) now or hereafter paid
or deposited or required to be paid or deposited to or with the Indenture
Trustee by or for the account of the Owner Trustee pursuant to any term of any
Operative Agreement, except the Tax Indemnity Agreement, and held or required
to be held by the Indenture Trustee hereunder;
(6) All requisition proceeds with respect to the Aircraft or any part
thereof (to the extent of the Owner Trustee's interest therein pursuant to the
terms of the Lease) and all insurance proceeds with respect to the Aircraft or
any part thereof from insurance required to be maintained by the Lessee under
Article 13 of the Lease, but excluding any insurance maintained by the Lessee
and not required under Article 13 of the Lease; and
(7) All proceeds of the foregoing.
EXCLUDING, HOWEVER, from the foregoing grant of the Lien and security
interest of this Indenture and from the Trust Indenture Estate, (i) 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 all rights
to collect and enforce Excepted Payments and (ii) rights granted to or
retained by the Owner Trustee or the Owner Participant hereunder and SUBJECT
TO the following provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, the Owner Trustee and the Owner Participant shall at all times
retain the right, to the exclusion of the Indenture Trustee, (A) to Excepted
Payments and to commence an action at law to obtain or otherwise demand, sue
for or receive and enforce the payment of such Excepted Payments, (B) to
exercise any election or option or make any decision or determination or to
give or receive any notice (including notice of Default), consent, waiver or
approval in respect of any such Excepted Payment, (C) to adjust (and make any
decision or determination or give any notice or consent with respect to) Basic
Rent and the percentages relating to Stipulated Loss Value and Termination
Value and the FPO Price as provided in Section 3.04 of the Lease and Section
15.01 of the Participation Agreement, (D) to exercise any election or option to
make any decision or determination, or to give or receive any notice, consent,
waiver or approval, or to take any other action in respect of, but in each
case only to the extent relating to, Excepted Payments (except for, in respect
of any portion of Basic Rent constituting an Excepted Payment, any action
changing the manner by which such Basic Rent is to be paid), (E) to retain the
rights of the "Lessor" with respect to solicitations of bids, and the election
to retain the Aircraft pursuant to Article 10 of the Lease, (F) to retain the
right of "Lessor" to determine the Fair Market Rental or Fair Market Value
pursuant to Article 4 of the Lease, (G) to exercise all other 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 or purchase options, (H) to retain all rights
with respect to insurance maintained for its own account which Section 13.05
of the Lease specifically confers on the "Lessor", (I) to approve appraisers,
lawyers and other professionals and receive notices, certificates, reports,
filings, opinions and other documents, in each case with respect to matters
relating to the Owner Participant's tax position, (J) to approve any
accountants to be used in the verification of any Rent adjustment, and (K) to
exercise, to the extent necessary to enable it to exercise its rights under
Section 8.03 hereof, the rights of the "Lessor" under Section 17.04 of the
Lease;
(ii) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have the
rights separately but not to the exclusion of the other (agreement of both
required in the case of clause (E) below), (A) to receive from the Lessee all
notices, certificates, reports, filings, opinions of counsel, copies of all
documents and all information which the Lessee is permitted or required to
give or furnish to the "Lessor" pursuant to the Lease or to the Owner Trustee
pursuant to any other Operative Agreement, (B) to exercise inspection rights
pursuant to Section 14.01 of the Lease (provided that if an Indenture Event of
Default shall be continuing, no inspection right of the Owner Trustee shall
interfere with the efforts of the Indenture Trustee to exercise remedies under
the Lease or this Indenture), (C) to maintain separate insurance pursuant to
Section 13.05 of the Lease and to retain all rights with respect to such
insurance maintained for its own account, (D) to give any notice of default
under Section 16.01 of the Lease and (E) the right to consent to changes to
the list of countries on Schedule III to the Participation Agreement;
(iii) subject to the last sentence of this clause (a), (A) so long as
no Indenture Event of Default not constituting an Event of Default shall have
occurred and be continuing (but subject to the provisions of Section 8.01
hereof), the Owner Trustee shall retain the right, to the exclusion of the
Indenture Trustee (or, if an Indenture Event of Default that is also an Event
of Default shall have occurred and be continuing, acting jointly with and not
to the exclusion of the Indenture Trustee), to exercise all rights, elections
and options of the Lessor in connection with the return of the Aircraft under
Article 12 of the Lease (but not Article 17 thereof, it being understood that
the Indenture Trustee shall have the exclusive right to exercise remedies
pursuant to such Article 17, including in respect of any related return of the
Aircraft pursuant to Article 12 of the Lease), including the right to approve
as satisfactory any accountants, engineers, appraisers or counsel to render
services for or issue appraisals, reports, certificates or opinions to the
Owner Trustee and to exercise all rights, elections and options of the Lessor
in connection with the return of the Aircraft pursuant to the express
provisions of the Operative Agreements, and (B) so long as no Indenture Event
of Default not constituting an Event of Default shall have occurred and be
continuing (but subject to the provisions of Section 8.01 hereof), the Owner
Trustee shall retain the right, jointly with the Indenture Trustee (agreement
of both not being required), to further assurances and financial information
from the Lessee pursuant to Section 19.01 of the Lease (other than the right
to receive any funds to be delivered to the "Lessor" under the Lease (except
funds delivered with respect to Excepted Payments) and under the Purchase
Agreement;
(iv) subject to the last sentence of this clause (a), at all times
the Owner Trustee shall have the right as Lessor, but not to the exclusion of
the Indenture Trustee, to seek specific performance of the covenants of the
Lessee under the Lease relating to the protection, insurance, maintenance,
possession and use of the Aircraft; and
(v) at all times the Owner Trustee and the Owner Participant shall
have the rights granted to them under Articles VI, VIII and X and Section 7.02
hereof.
Notwithstanding the foregoing, but subject always to the provisions of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) (other than
with respect to Excepted Payments) declare the Lease to be in default under
Article 17 thereof or any statute (including, without limitation, Article 2-A
of the Uniform Commercial Code) and (B) subject only to the provisions of this
Indenture, (other than in connection with Excepted Payments) exercise the
remedies set forth in such Article 17 of the Lease any statute (including
without limitation Article 2-A of the Uniform Commercial Code), at law and in
Article 7 hereof.
(b) The foregoing provisions in paragraph (a) above shall be equally
applicable to all rights of the Indenture Trustee in respect of Ancillary
Agreement I and Ancillary Agreement II, whether such rights are granted
directly to the Indenture Trustee under such agreements or are granted under
the Granting Clause of this Indenture.
(c) The leasehold interest granted to the Lessee by the Lease shall
not be subject to the security interest granted by this Indenture, and nothing
in this Indenture shall affect the rights of the Lessee under the Lease so
long as no Event of Default has occurred and is continuing.
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 and the
rights of the Owner Trustee and the Owner Participant under this Indenture.
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Documents to perform all of the obligations assumed by it under any
of those documents, all in accordance with and pursuant to the terms and
provisions of those documents, and the Indenture Trustee and the Holders of
the Certificates shall have no obligation or liability under the Indenture
Documents by reason of or arising out of the assignment under this Indenture,
nor shall the Indenture Trustee or the Holders of the Certificates be required
or obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Documents or, except as expressly
provided in this Indenture, to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or present or file
any claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
Effective upon the occurrence and continuance of an Indenture Event of
Default, the Owner Trustee hereby constitutes the Indenture Trustee the true
and lawful attorney of the Owner Trustee, irrevocably, with full power (in the
name of the Owner Trustee or otherwise), subject to the terms and conditions
of this Indenture, to ask, require, demand, receive, compound and give
acquittance for any and all Basic Rent, Supplemental Rent payable to the Owner
Trustee, Stipulated Loss Value and Termination Value payments, insurance
proceeds and any and all moneys and claims for moneys due and to become due
under or arising out of the Lease (subject to Section 8.01 hereof) or the
other Indenture Documents (other than Excepted Payments), to endorse any
checks or other instruments or orders in connection with the same and to file
any claims, take any action or institute any proceeding which the Indenture
Trustee may deem to be necessary or advisable in the premises.
Under the Lease the Lessee is directed to make all payments of Rent
(other than Excepted Payments not constituting Basic Rent) payable to the
Owner Trustee and all other amounts (other than Excepted Payments not
constituting Basic Rent) 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 not constituting Basic Rent.
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, at the
expense of the Lessee, promptly and duly execute and deliver or cause to be
duly executed and delivered any and all such further instruments and documents
as the Indenture Trustee may reasonably deem desirable in obtaining the full
benefits of the assignment hereunder and of the rights and powers herein
granted; provided, however, that the Owner Trustee shall have no obligation to
execute and deliver or cause to be executed or delivered to the Indenture
Trustee any such instrument or document if such execution and delivery would
result in the imposition of additional liabilities on the Owner Trustee or the
Owner Participant or would result in a burden on the Owner Participant's
business activities, unless the Owner Trustee or the Owner Participant, as the
case may be, is indemnified to its reasonable satisfaction against any losses,
liabilities and expenses incurred in connection with such execution and
delivery.
The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect and shall not have been terminated pursuant
to Section 14.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except in
respect of Excepted Payments or otherwise as provided in or permitted by this
Indenture, enter into an agreement amending or supplementing any of the
Indenture Documents, settle or compromise any claim (other than claims in
respect of Excepted Payments) against the Lessee arising under any of the
Indenture Documents, or 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.
Concurrently with the delivery of this Indenture, the Owner Trustee
has delivered to the Indenture Trustee executed counterparts of the Trust
Agreement and the chattel paper original counterpart of the Lease.
It is hereby further covenanted and agreed by and between the parties
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise requires,
capitalized terms utilized herein shall have the meanings set forth in
Schedule II hereto for all purposes of this Indenture and shall be equally
applicable to both the singular and plural forms of the terms defined.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.
Forthwith upon the execution and delivery of this Indenture, and from time to
time thereafter, Certificates in an aggregate principal amount not in excess
of the amount specified in Section 2.04 hereof (except as otherwise provided
in Sections 2.06 and 2.07 hereof) shall be executed by the Owner Trustee and
delivered to the Indenture Trustee for authentication, and the Indenture
Trustee shall thereupon authenticate and deliver said Certificates to or upon
the oral or written order of the Owner Trustee, signed, if written, by an
authorized officer of the Owner Trustee, without any further action by the
Owner Trustee.
Section 2.02. Execution of Certificates. The Certificates shall be
signed on behalf of the Owner Trustee by an authorized officer of SSB. 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 SSB 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 SSB, 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 SSB; 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 SSB, although
at the date of the execution and delivery of this Indenture any such person
was not such an officer. Certificates bearing the facsimile signatures of
individuals who were authorized officers of SSB 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 (subject
to Section 15.01(d) of the Participation Agreement) 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 Certificate Closing Date, shall be issued
in three separate series consisting of Series A, Series B and Series C and
shall be issued in the Maturities and principal amounts, and shall bear
interest at the rates per annum, specified in the form of Certificate set forth
in Exhibit B.
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Certificates are admitted to trading, or to
conform to general usage.
Each Certificate shall bear interest from the date of original
issuance thereof or from the most recent date to which interest has been paid
and duly provided for, as the case may be, which shall be payable on the dates
specified on the face of the form of Certificate set forth in Exhibit B hereto
until the principal thereof is paid. Interest shall be calculated on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding the preceding paragraph, each Certificate shall bear
interest at the Past Due Rate on any principal, interest and any other amount
payable hereunder or under such Certificate, which shall not be paid in full
when due (whether at stated maturity, by acceleration, by mandatory prepayment
or otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full, payable from time to time on
demand of the Indenture Trustee.
The principal of, and Make-Whole Premium, if any, and interest on, the
Certificates shall be payable at the Corporate Trust Department of the
Indenture Trustee or at any office or agency maintained for such purpose
pursuant to Section 3.02 hereof in immediately available funds prior to 10:30
A.M. (New York time) on the due date thereof and the Indenture Trustee shall
remit all such amounts received by it to the Holders at such account or
accounts at such financial institution or institutions as the Holders shall
have designated to the Indenture Trustee in writing, in immediately available
funds, such payment to be made if the payment was received prior to 10:30 A.M.
New York time by the Indenture Trustee on any Business Day, by 12:00 noon New
York time on such Business Day; otherwise, the Indenture Trustee shall make
payment promptly, but not later than 11:00 A.M. New York time on the next
succeeding Business Day; provided, however, that interest may be payable at the
option of the Indenture Trustee or its Paying Agent, as defined in Section
3.04, by mailing checks for such interest payable to or upon the written order
of the Holders entitled thereto as they shall appear on the Register. If any
amount payable under the Certificates, or under this Indenture, falls due on a
day that is not a Business Day, then such sum shall be payable on the next
succeeding Business Day, without (provided that payment is made on such next
succeeding Business Day) additional interest thereon for the period of such
extension.
The Holder at the close of business on any Record Date with respect
to any Payment Date shall be entitled to receive the interest if any payable
on such Payment Date notwithstanding any transfer or exchange of such
Certificate subsequent to the Record Date and prior to such Payment Date,
except if and to the extent the Owner Trustee shall default in the payment of
the interest due on such Payment Date, in which case such defaulted interest
shall be paid to the Holder at the close of business on a subsequent Record
Date (which shall be not less than five (5) or more than fifteen (15) Business
Days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Owner Trustee to the Holders not
less than fifteen (15) days preceding such subsequent Record Date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 5.04 hereof (a) any and all indemnity
amounts received by the Owner Trustee which are payable by the Lessee to (i)
the Indenture Trustee in its individual capacity, (ii) the Subordination Agent
or (iii) each Liquidity Provider, in each case pursuant to Article 8 or 9 of
the Participation Agreement (it being acknowledged that the Lessee has been
instructed to pay such amounts to the Person or Persons entitled thereto) and
(b) the Owner Trustee's pro rata share of all amounts owed to each Liquidity
Provider by the Subordination Agent under each Liquidity Facility other than
amounts due as (i) repayments of the principal of advances thereunder, and (ii)
interest on Interest Drawings and Final Drawings except to the extent included
in Net Interest and Related Charges. As used in this Section, the Owner
Trustee's pro rata share means as of any time:
(A) with respect to all amounts other than Net Interest and
Related Charges, a fraction the numerator of which is the aggregate
principal balance then outstanding of the Certificates issued under
this Indenture (other than the Series C Certificates) and the
denominator of which is the aggregate principal balance of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates), plus
(B) with respect to all Net Interest and Related Charges (x)
if there exists a Payment Default under any Certificate issued under
this Indenture a fraction, the numerator of which is the aggregate
principal balance then outstanding of Certificates issued under this
Indenture (other than the Series C Certificates) and the denominator
of which is the aggregate principal balance then outstanding of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates) under which there exists a
Payment Default or (y) at all other times, zero.
As used in this Section, "Net Interest and Related Charges" means the sum of
(i) the amount, if any, by which interest payable to each Liquidity Provider
on any Interest Drawing and/or Final Drawing exceeds the amount which would be
payable if such drawings bore interest at the weighted average Past Due Rate
applicable to amounts in default on all Certificates plus (ii) any amounts
payable under Section 3.01, Section 3.02, Section 3.03, Section 3.09 or
Section 7.07 of each Liquidity Facility (or similar provisions of any
replacement Liquidity Facility) which result from any Interest Drawing or
Final Drawing. As used in this Section, a Payment Default when used in
connection with a Certificate issued hereunder or a Certificate issued under
any Related Indenture means a default in the payment of principal thereof or
interest thereon (which default has not been cured), other than solely because
of acceleration.
Section 2.05. Payments from Trust Indenture Estate Only. All
payments to be made by the Owner Trustee under this Indenture shall be made
only from the income and the proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate and from any other amounts of the type
described in Section 5.01 hereof (but only to the extent actually received by
the Indenture Trustee) and only to the extent that the Owner Trustee shall
have sufficient income or proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate (and such other amounts) to enable the
Indenture Trustee to make distributions of the amounts due in respect of the
Certificates in accordance with the terms hereof and thereof. Each Holder by
its acceptance of a Certificate agrees that it will look solely to the income
and proceeds from the Trust Indenture Estate (and such other amounts of the
type described in Section 5.01 hereof but only to the extent actually received
by the Indenture Trustee) to the extent available for distribution to it as
provided herein and that neither the Owner Participant, the Owner Trustee, SSB
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 SSB, the Owner Trustee or the Indenture
Trustee.
SSB 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 SSB's gross negligence or willful misconduct, or as
otherwise expressly provided herein or in the Participation Agreement.
If (1) all or any part of the Lessor's Estate becomes the property of
a debtor subject to the reorganization provisions of the Bankruptcy Code, (2)
pursuant to such reorganization provisions the Owner Participant is required,
by reason of the Owner Participant being held to have recourse liability to
the debtor or the trustee of the debtor directly or indirectly, to make
payment on account of any amount payable as principal of or interest,
Make-Whole Premium or other amounts payable on the Certificates, and (3) the
Indenture Trustee actually receives any Recourse Amount which reflects any
payment by the Owner Participant on account of (2) above, then the Indenture
Trustee shall promptly refund to the Owner Participant such Recourse Amount.
Nothing contained in this paragraph shall prevent the Indenture Trustee from
enforcing any personal recourse obligation (and retaining the proceeds
thereof) of the Owner Participant under the Participation Agreement, or from
retaining any amount paid by the Owner Participant under Sections 5.01, 8.02
and 8.03 hereof.
Section 2.06. Registration, Transfer and Exchange. The Indenture
Trustee will keep, on behalf of the Owner Trustee, at each office or agency to
be maintained for the purpose as provided in Section 3.02 hereof a Register or
Registers on which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Certificates
as provided in this Article. Such Register shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable period of time.
Upon due presentation for registration of transfer of any Certificate
at any such office or agency, the Owner Trustee shall execute and the
Indenture Trustee shall authenticate and deliver in the name of the transferee
or transferees a new Certificate or Certificates of the same Series and
Maturity, principal amount and interest rate and in authorized denominations
for an equal aggregate principal amount; provided, that such Certificate being
transferred shall be cancelled in accordance with Section 2.08 hereof
simultaneously with the issuance of the new Certificate.
Any Certificate or Certificates may be exchanged for a Certificate or
Certificates of the same Series and Maturity and interest rate but in other
authorized denominations, in an equal aggregate principal amount.
Certificates to be exchanged shall be surrendered at any office or agency to
be maintained by the Indenture Trustee for the purpose as provided in Section
3.02 hereof, and the Owner Trustee shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor the Certificate or
Certificates which the Holder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously or previously outstanding.
All Certificates presented for registration of transfer, exchange,
prepayment or payment shall (if so required by the Owner Trustee or the
Indenture Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Owner
Trustee and the Indenture Trustee duly executed by the Holder or its attorney
duly authorized in writing and (except in the case of transfers pursuant to
Section 15.01 of the Participation Agreement) the Indenture Trustee may
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act.
The Indenture Trustee may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of Certificates. No
service charge shall be levied for any such transaction.
The Indenture Trustee shall not be required to exchange or register a
transfer of any Certificates (a) for a period of fifteen (15) days immediately
preceding the first mailing of notice of prepayment of such Certificates or
(b) with respect to which notice of prepayment has been given pursuant to
Section 6.03 hereof and such notice has not been revoked.
All Certificates issued upon any transfer or exchange of Certificates
shall be valid obligations of the Owner Trustee, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the
Certificates surrendered upon such transfer or exchange.
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates. In case any temporary or definitive Certificate shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Owner
Trustee in its discretion may execute, and upon the oral or written request of
any officer of SSB, the Indenture Trustee shall authenticate and deliver, a
new Certificate of like Maturity, principal amount and interest rate as the
Certificate being replaced, bearing a number not contemporaneously or
previously outstanding, in exchange and substitution for the mutilated or
defaced Certificate, or in lieu of and substitution for the Certificate so
apparently destroyed, lost or stolen. In the case of any Certificate so
apparently destroyed, lost or stolen, the applicant for a substitute
Certificate shall furnish to the Owner Trustee and to the Indenture Trustee
such security or indemnity as may be required by them to indemnify and defend
and to hold each of them harmless and evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Upon the issuance of any substitute Certificate, the Owner Trustee or
the Indenture Trustee may require payment from the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses incurred in connection therewith.
In case any Certificate which has matured or is about to mature, or has been
called for prepayment in full, shall become mutilated or defaced or be
apparently destroyed, lost or stolen, the Owner Trustee may, instead of
issuing a substitute Certificate, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated or defaced
Certificate), if the applicant of any Certificate so apparently destroyed,
lost or stolen, for such payment shall furnish to the Owner Trustee and to the
Indenture Trustee such security or indemnity as any of them may require to
hold each of them harmless and the applicant shall also furnish to the Owner
Trustee and the Indenture Trustee evidence to their satisfaction of the
apparent destruction, loss or theft of such Certificate and of the ownership
thereof.
Every substitute Certificate issued pursuant to the provisions of
this Section by virtue of the fact that any Certificate is apparently
destroyed, lost or stolen shall constitute an original additional contractual
obligation of the Owner Trustee, whether or not the apparently destroyed, lost
or stolen Certificate shall be enforceable at any time by anyone and shall be
entitled to all the security and benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and proportionately
with any and all other Certificates duly authenticated and delivered
hereunder. All Certificates shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced, or
apparently destroyed, lost or stolen Certificates and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
Section 2.08. Cancellation of Certificates; Destruction Thereof. All
Certificates surrendered for payment, prepayment, registration of transfer or
exchange, if surrendered to the Owner Trustee or any agent of the Owner
Trustee or the Indenture Trustee, shall be delivered to the Indenture Trustee
for cancellation or, if surrendered to the Indenture Trustee, shall be
cancelled by it; and no Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Indenture
Trustee shall destroy cancelled Certificates held by it and deliver a
certificate of destruction to the Owner Trustee. If the Owner Trustee shall
acquire any of the Certificates, such acquisition shall not operate as a
prepayment or satisfaction of the indebtedness represented by such
Certificates unless and until the same are delivered to the Indenture Trustee
for cancellation.
Section 2.09. Temporary Certificates. Pending the preparation of
definitive Certificates, the Owner Trustee may execute and, upon the oral or
written request of an officer of SSB, the Indenture Trustee shall authenticate
and deliver temporary Certificates (printed, lithographed, typewritten or
otherwise reproduced, in each case in form satisfactory to the Indenture
Trustee). Temporary Certificates shall be issuable as registered Certificates
without coupons, of any authorized denomination, and substantially in the form
of the definitive Certificates but with such omissions, insertions and
variations as may be appropriate for temporary Certificates, all as may be
determined by the Owner Trustee with the concurrence of the Indenture Trustee.
Temporary Certificates may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Certificate shall be
executed by the Owner Trustee and, upon the oral or written request of an
authorized officer of the Owner Trustee, be authenticated by the Indenture
Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Certificates. Without unreasonable delay
the Owner Trustee shall execute and shall furnish definitive Certificates and
thereupon temporary Certificates shall be surrendered in exchange therefor
without charge at any office or agency to be maintained by the Indenture
Trustee for the purpose pursuant to Section 3.02 hereof, and, upon the oral
or written request of an authorized officer of the Owner Trustee, the
Indenture Trustee shall authenticate and deliver in exchange for such
temporary Certificates an equal aggregate principal amount of definitive
Certificates of the same Series and 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 and under the other Operative Agreements shall have been paid in
full.
Section 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture and Security Agreement Supplement
covering a Replacement Airframe and/or Replacement Engine, as provided in
Section 9.09 hereof, each Certificate shall be deemed to have been issued in
connection with such Replacement Airframe and/or Replacement Engine and each
Certificate issued thereafter upon a transfer or exchange of, or as a
replacement for, a Certificate, shall be designated as having been issued in
connection with such Replacement Airframe and/or Replacement Engine, but
without any other change therein except as provided for in this Article II.
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements. If, in accordance with and subject to the satisfaction
of the conditions set forth in Section 7.11 of the Participation Agreement,
the Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall be released and discharged from any
further obligations hereunder and under the
Certificates and all other Operative Agreements (except for any recourse
obligations of the Owner Participant or the Owner Trustee in its individual
capacity with respect to matters arising out of events occurring prior to such
assumption).
Section 2.13. Establishment of Collateral Account. (a) The
Indenture Trustee shall, pursuant to the Collateral Account Control Agreement,
establish, or cause to be established, with State Street Bank and Trust
Company, who shall represent and warrant that it is a financial intermediary
(as defined in Section 8-313(4) of the Connecticut Uniform Commercial Code),
in its name as secured party hereunder an Eligible Deposit Account entitled
"First Security Bank, National Association, as secured party under the Trust
Indenture and Security Agreement (Federal Express Corporation Trust No.
N674FE) dated as of May 1, 1997, 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) The Collateral Account Control Agreement shall require State
Street Bank and Trust Company to send confirmation to the Indenture Trustee
and the Lessee that it has credited the Specified Investments to the
Collateral Account and to make appropriate entries on its books identifying
the Specified Investments as pledged to the Indenture Trustee.
Section 2.14. Investment of Funds on Deposit in the Collateral
Account. (a) Funds deposited in the Collateral Account shall be invested and
reinvested by the Indenture Trustee, subject to Section 17.02 of the
Participation Agreement, at the risk of the Owner Trustee, in Specified
Investments selected by the Lessee and approved by the Indenture Trustee for
the account of the Owner Trustee in accordance with Section 2.14(b) below;
provided, however, that if Specified Investments meeting the requirements of
Section 2.14(b) are not available on any day on which funds are to be invested
as contemplated by the preceding provisions of this Section 2.14(a), the
Indenture Trustee may leave such funds in the Collateral Account 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 and approved by the Indenture Trustee for the account of the Owner
Trustee which mature on or prior to September 23, 1997. 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 referred to in the
preceding sentence may be invested in Specified Investments which mature
within 14 days after the rescheduled Delivery Date. If no Delivery Date
occurs, then any Specified Investment shall mature no later than the 15th day
after the Cut-Off Date.
(c) If for any reason the Indenture Trustee shall be required to
make any distributions of the Liquid Collateral prior to the maturity date of
any Specified Investment, the Indenture Trustee shall cause the same to be
sold in accordance with standard commercial practices, and the Lessee, for the
account of the Owner Trustee, shall forthwith compensate the Indenture Trustee
for any Losses as provided in Section 17.02(a) of the Participation Agreement.
(d) Pursuant to Section 17.02(b) of the Participation Agreement,
interest payable on the Certificates during the period in which funds are on
deposit in the Collateral Account shall be paid by the Lessee.
Section 2.15. Release of Debt Portion and Lien on the Collateral
Account and the Liquid Collateral on Delivery Date. (a) 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, subject to the proviso to Section 3.02(a) of the Participation
Agreement, 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.
Subject to the proviso to Section 3.02(a) of the Participation Agreement, such
amount so released, together with the amount of any Losses received from the
Lessee pursuant to Section 17.02(a) of the Participation Agreement, shall be
used to finance a portion of the Purchase Price payable by (x) the Owner
Trustee as contemplated by Section 3.02(a) of the Participation Agreement or
(y) if 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.
(b) The Lien of this Indenture on the Collateral Account and the
Liquid Collateral shall terminate on the Delivery Date following the transfer
of amounts described in Section 3.02(a) of the Participation Agreement.
Section 2.16. Cut-Off Date. In the case of a prepayment under
Section 6.02(a)(vi) hereof, the Indenture Trustee shall release from the
Collateral Account all amounts held in the Collateral Account on such date.
Such amount so released, together with the amount of any Losses received from
the Lessee pursuant to Sections 17.02(a) and 17.02(c) of the Participation
Agreement, shall be applied to pay amounts due under Section 6.02(b)(1) hereof
on the 15th day following 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.
Section 2.17. Subordination. (a) The Owner Trustee and, by
acceptance of its Certificates of any Series, each Holder of such Series,
hereby agree that no payment or distribution shall be made on or in respect of
the Secured Obligations owed to such Certificate Holder of such Series,
including any payment or distribution of cash, property or securities after
the commencement of a proceeding of the type referred to in clause (v), (vi)
or (vii) of Section 7.01 hereof, except as expressly provided in Article V
hereof.
(b) By the acceptance of its Certificates of any Series
(other than Series A), each Holder of such Series agrees that in the event
that such Holder, in its capacity as a Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series which it is
not entitled to received under this Section 2.17 or Article V hereof, it will
hold any amount so received in trust for the Senior Holder (as defined in
Section 2.17(c) hereof) and will forthwith turn over such payment to the
Indenture Trustee in the form received to be applied as provided in Article V
hereof.
(c) As used in this Section 2.17, the term "Senior Holder"
shall mean, (i) the Holders of Series A Certificates until the Secured
Obligations in respect of Series A Certificates have been paid in full, (ii)
after the Secured Obligations in respect of Series A Certificates have been
paid in full, the Holders of Series B Certificates until the Secured
Obligations in respect of Series B Certificates have been paid in full and
(iii) after the Secured Obligations in respect of Series B Certificates have
been paid in full, the Holders of Series C Certificates until the Secured
Obligations in respect of Series C Certificates have been paid in full.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.
The Owner Trustee covenants and agrees that it will, subject to Section 2.05
hereof, duly and punctually pay or cause to be paid the principal of, and
interest and Make-Whole Premium, if any, and all other amounts due on, each of
the Certificates and under this Indenture at the place or places, at the
respective times and in the manner provided in this Indenture and in the
Certificates.
Principal and interest and other amounts due hereunder or under the
Certificates shall be payable in dollars on the due date thereof, to the
Indenture Trustee at the Corporate Trust Department (or such other account at
such other financial institution as the Indenture Trustee may designate for
the purpose). If any amount payable under the Certificates or under this
Indenture falls due on a day which is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
Section 3.02. Offices for Payments, etc. So long as any of the
Certificates remain outstanding, the Indenture Trustee will maintain the
following: (a) an office or agency where the Certificates may be presented
for payment and (b) a facility or agency in New York, New York where the
Certificates may be presented for registration of transfer and for exchange
and for prepayment as provided in this Indenture (the "Registrar"). The
Registrar shall keep a register (the "Register") with respect to the
Certificates and their transfer and exchange. The Indenture Trustee may
appoint one or more co-registrars ("Co-Registrars") for the Certificates and
may terminate any such appointment at any time upon written notice. The term
"Registrar" includes any Co-Registrar.
The Indenture Trustee shall initially act as Registrar.
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee. The Owner Trustee, whenever necessary to avoid or fill a vacancy in
the office of Indenture Trustee, will, with the consent of the Lessee,
appoint, in the manner provided in Section 12.02 hereof, an Indenture Trustee,
so that there shall at all times be an Indenture Trustee hereunder.
Section 3.04. Paying Agents. Whenever the Indenture Trustee in its
sole discretion shall appoint a paying agent (the "Paying Agent"), it will
cause the Paying Agent to execute and deliver an instrument in which the
Paying Agent shall agree with the Indenture Trustee, subject to the provisions
of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of, and interest and Make-Whole Premium, if any,
on the Certificates (whether such sums have been paid to it by the
Indenture Trustee or the Owner Trustee) in trust for the benefit of the
Holders or of the Indenture Trustee, and
(b) that it will give the Indenture Trustee notice of any failure by
the Owner Trustee to make any payment of the principal of or interest or
Make-Whole Premium, if any, on the Certificates when the same shall be due
and payable.
Anything in this Section to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section are subject to
the provisions of Sections 14.03 and 14.04 hereof.
Section 3.05. Covenants of SSB and the Owner Trustee.
(a) SSB hereby covenants and agrees to perform its covenants set
forth in Sections 7.04(b) and 7.04(c) of the Participation Agreement.
(b) The Owner Trustee hereby covenants and agrees as follows:
(i) in the event a Responsible Officer of the Owner Trustee shall have
actual knowledge of an Indenture Event of Default, an Indenture Default or
an Event of Loss, the Owner Trustee will give prompt written notice of such
Indenture Event of Default, Indenture Default or Event of Loss to the
Indenture Trustee, the Lessee and the Owner Participant;
(ii) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to the Owner Trustee under the Lease, including,
without limitation, a copy of each report or notice from an insurer or an
insurance broker received pursuant to Article 13 of the Lease, to the
extent that the same shall not have been furnished to the Indenture Trustee;
(iii) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to the Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Indenture Documents; and
(iv) except as contemplated by the Operative Agreements, the Owner
Trustee will not contract for, create, incur or assume any debt, and will
not guarantee (directly or indirectly or by an instrument having the effect
of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise take action to
become contingently liable, directly or indirectly, in connection with the
debt of any other Person.
Section 3.06. [Reserved]
Section 3.07. Disposal of Trust Indenture Estate. At any time and
from time to time any part of the Trust Indenture Estate may be sold or
disposed of in accordance with the provisions of this Indenture and the Lease.
The Indenture Trustee shall, from time to time, release any part of the Trust
Indenture Estate so sold or disposed of or as to which an Event of Loss has
occurred or as to which the Lease has been terminated from the Lien of this
Indenture. In addition, to the extent that such property constitutes an
Airframe or Engine, the further requirements of Section 9.08 hereof shall be
complied with.
Section 3.08. No Representations or Warranties as to Aircraft or
Documents. NEITHER THE INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR SSB NOR
THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, WORKMANSHIP,
VALUE, CONDITION, DESIGN, COMPLIANCE WITH SPECIFICATIONS, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR USE OR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE
WHATSOEVER, except that SSB warrants that on the Delivery Date (a) the Owner
Trustee shall have received whatever title was conveyed to it by AVSA, and (b)
the Aircraft shall be free and clear of Lessor's Liens attributable to SSB.
Neither SSB, 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 SSB and the Indenture Trustee made under this Indenture or in
the Participation Agreement or of the Owner Participant made under 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, at the expense of the Lessee, the Owner Trustee shall promptly and
duly execute and deliver any and all such further instruments and documents as
may be specified in such request and as are necessary or advisable to perfect,
preserve or protect the Liens and assignments created or intended to be
created hereby, or to obtain for the Indenture Trustee the full benefit of the
specific rights and powers granted herein, including, without limitation, the
execution and delivery of Uniform Commercial Code financing statements and
continuation statements with respect thereto, or similar instruments relating
to the perfection of the Liens or assignments created or intended to be created
hereby.
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates. (a) The
Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Indenture Trustee is not the Registrar, the Registrar
shall furnish to the Indenture Trustee semi-annually not more than ten (10)
days after each Record Date, as of such Record Date, or at such other times as
the Indenture Trustee may request in writing, a list, in such form and as of
such date as the Indenture Trustee may reasonably require, containing all the
information in the possession or control of the Registrar as to the names and
addresses of the Holders and the amounts and Maturities of the Certificates
held by such Holders.
(b) Ownership of the Certificates shall be proved by the Register
kept by the Registrar.
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution. Except as otherwise provided
in Section 5.03 hereof, each installment of Basic Rent, any payment of
interest on overdue installments of Basic Rent, any payment received by the
Indenture Trustee pursuant to Section 8.03(a) hereof and any payment received
by the Indenture Trustee pursuant to Section 17.02(b) or 17.02(c) of the
Participation Agreement shall be distributed by the Indenture Trustee no later
than the time herein provided in the following order of priority:
first, (i) 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 Amount and interest and other amounts (as
well as any interest on any overdue Principal Amount and, to the
extent permitted by applicable law, on any overdue interest and
any other overdue amounts) then due under all Series A
Certificates shall be distributed to the Holders of Series A
Certificates ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments then
due under each Series A Certificate bears to the aggregate amount
of the payments then due under all Series A Certificates;
(ii) after giving effect to paragraph (i) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series B Certificates shall be
distributed to the Holders of Series B Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series B
Certificate bears to the aggregate amount of the payments then due
under all Series B Certificates; and
(iii) after giving effect to paragraph (ii) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series C Certificates shall be
distributed to the Holders of Series C Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series C
Certificate bears to the aggregate amount of the payments then due
under all Series C Certificates; and
second, the balance if any of such installment or payment remaining
thereafter shall be distributed to the Owner Trustee, or as the
Owner Trustee may request, for distribution pursuant to the Trust
Agreement.
Section 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft (including pursuant to Section 11.03(e) of the Lease, but, in the
case of said Section 11.03(e), subject to the time limits specified therein)
or as the result of, or in connection with any event under the Lease giving
rise to, a prepayment pursuant to Section 6.02 hereof, shall be promptly
distributed by the Indenture Trustee in the following order of priority:
first, to reimburse the Indenture Trustee for any costs or expenses
reasonably incurred in connection with such prepayment,
second, (i) to pay the amounts specified in paragraph (i) of clause
"second" of Section 5.03 hereof then due and payable in respect
of the Series A Certificates;
(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "second" of Section
5.03 hereof then due and payable in respect of the Series B
Certificates; and
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "second" of
Section 5.03 hereof then due and payable in respect of the Series
C Certificates;
provided that payments pursuant to this clause "second" shall be
made without the payment of Make-Whole Premium except in the
particular circumstances provided in Section 6.02(b) 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 Article 11 or
13 of the Lease as the result of loss or damage not constituting an Event of
Loss (x) with respect to the Aircraft, or as a result of such loss or damage
constituting an Event of Loss if and to the extent that such amounts would at
the time be required to be paid to the Lessee pursuant to said Article 11 or
13 but for the fact that a Payment Default, Bankruptcy Default or an Event of
Default shall have occurred and be continuing or (y) are pledged to the Lessor
as security in connection with an Event of Loss in accordance with Section
11.03(e) of the Lease, shall be held by the Indenture Trustee as security for
the obligations of the Lessee under the Lease and the Participation Agreement
and shall be invested in accordance with the terms of Section 5.08 hereof and
at such time as the conditions for payment to the Lessee specified in said
Article 11 or 13, as the case may be, shall be fulfilled and there shall not
be continuing any Payment Default, Bankruptcy Default or Event of Default,
such amount, and the proceeds of any investment thereof, shall, to the extent
not theretofore applied, be paid to the Lessee to the extent provided in the
Lease.
Section 5.03. Payment After Indenture Event of Default, etc. Except
as otherwise provided in Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof,
all payments (other than Excepted Payments) received and all amounts held or
realized by the Indenture Trustee 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 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 or the Holders in the
protection, exercise or enforcement of any right, power or remedy
or any damages sustained by the Indenture Trustee or the Holders,
liquidated or otherwise, upon such Indenture Event of Default)
shall be applied by the Indenture Trustee as between itself and
the Holders in reimbursement of such expenses;
second, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of
all Series A Certificates, and the accrued but unpaid interest
and other amounts due thereon and all other Secured Obligations
(other than Make-Whole Premium) in respect of the Series A
Certificates to the date of distribution, shall be distributed to
the Holders of Series A Certificates, and in case the aggregate
amount so to be distributed shall be insufficient to pay in full
as aforesaid, then ratably, without priority of one over the
other, in the proportion that the aggregate unpaid Principal
Amount of all Series A Certificates held by each holder plus the
accrued but unpaid interest and other amounts due hereunder or
thereunder (other than Make-Whole Premium) to the date of
distribution, bears to the aggregate unpaid Principal Amount of
all Series A Certificates held by all such holders plus the
accrued but unpaid interest and other amounts due thereon (other
than Make-Whole Premium) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series B
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series B Certificates to
the date of distribution, shall be distributed to the Holders of
Series B Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series B Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series B
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution; and
(iii) after giving effect to paragraph (ii) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series C
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series C Certificates to
the date of distribution, shall be distributed to the Holders of
Series C Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series C Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series C
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution;
(it being understood that amounts payable under this clause
"second" 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
in respect of (i) the Indenture Trustee in its individual capacity, (ii) the
Subordination Agent, (iii) each Liquidity Provider, and (iv) the Pass Through
Trustee, in each case whether pursuant to Article 8 or 9 of the Participation
Agreement or as Supplemental Rent, directly to the Person (which may include
the Indenture Trustee) entitled thereto. Any payment received by the
Indenture Trustee under clause (b) of the last paragraph of Section 2.04 shall
be distributed to the Subordination Agent to be distributed in accordance with
the terms of the Intercreditor Agreement.
(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 Article 9 of the Lease) shall be distributed by the Indenture
Trustee (a) to the extent received or realized at any time prior to the
payment in full of all obligations to the Holders, in the order of priority
specified in Section 5.01 hereof, and (b) to the extent received or realized
at any time after payment in full of all obligations to the Holders, in the
following order of priority:
first, in the manner provided in clause "first" of Section 5.03 hereof
and
second, in the manner provided in clause "third" of Section 5.03 hereof.
Section 5.06. Payments to Owner Trustee. Any amounts distributed
hereunder by the Indenture Trustee to the Owner Trustee shall be paid to the
Owner Trustee by wire transfer of immediately available funds of the type
received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be designated by notice from the
Owner Trustee to the Indenture Trustee from time to time. The Owner Trustee
hereby notifies the Indenture Trustee that unless and until the Indenture
Trustee receives notice to the contrary from the Owner Trustee, all amounts to
be distributed to the Owner Trustee hereunder for distribution in accordance
with the Trust Agreement shall be distributed by wire transfer of immediately
available funds of the type received by the Indenture Trustee to such account
of the Owner Participant as may be specified pursuant to Section 2.06 of the
Trust Agreement.
Section 5.07. Application of Payments. Each payment of principal of
and interest or other amounts due on each Certificate shall, except as
otherwise provided herein, be applied,
first, to the payment of interest on such Certificate due and payable to
the date of such payment, as provided in such Certificate, as
well as any interest on overdue principal and Make-Whole Premium,
if any, and, to the extent permitted by law, interest and other
amounts due thereunder,
second, to the payment of any other amount (other than the principal of
such Certificate) due hereunder to the Holder of such Certificate
or under such Certificate,
third, to the payment of the principal of such Certificate if then due
hereunder or under such Certificate and
fourth, the balance, if any remaining thereafter, to the payment of the
principal of such Certificate remaining unpaid (provided that
such Certificate shall not be subject to prepayment without the
consent of the affected Holder except as permitted by Sections
6.02, 6.06 and 8.02 hereof); provided that, solely for the
purpose of determining whether an Indenture Event of Default
shall have occurred and be continuing, each such payment shall be
deemed applied in the following order of priority: first, in the
manner provided in clause "first" above, second, in the manner
provided in clause "third" above, third, in the manner provided
in clause "second" above and fourth, in the manner provided in
clause "fourth" above.
Section 5.08. Investment of Amounts Held by Indenture Trustee.
Amounts held by the Indenture Trustee pursuant to Section 5.02(b) hereof or
pursuant to any provision of any Indenture Document providing for investment
by the Indenture Trustee of sums pursuant to Section 23.01 of the Lease or
this Section 5.08 shall be invested by the Indenture Trustee from time to time
in securities selected by (i) so long as no Event of Default shall have
occurred and be continuing, the Lessee (and in the absence of written
direction by the Lessee, the Indenture Trustee shall invest such monies in
direct obligations of the United States of America) or (ii) so long as an
Event of Default shall have occurred and be continuing, the Indenture Trustee
and in each case shall be of the type listed in clauses (i) through (iv) of
Section 23.01 of the Lease. Unless otherwise expressly provided in this
Indenture, any income realized as a result of any such investment, net of the
Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Lessee shall be responsible for and will
promptly pay to the Indenture Trustee or the Lessor, as the case may be, on
demand, the amount of any loss realized as the result of any such investment
(together with any fees, commissions and other costs and expenses, if any,
incurred by the Indenture Trustee or the Lessor in connection with such
investment), such amount to be disposed of in accordance with the terms hereof
or the Lease, as the case may be. The Indenture Trustee shall not be liable
for any loss resulting from any investment made by it or any investment sold
by it under this Indenture in accordance with instructions from the Lessee
other than by reason of its willful misconduct or gross negligence, and any
such investment may be sold (without regard to its maturity) by the Indenture
Trustee without instructions whenever the Indenture Trustee reasonably
believes such sale is necessary to make a distribution required by this
Indenture.
Unless otherwise confirmed in writing, an account statement delivered
by the Indenture Trustee to the Owner Trustee (with a copy to the Lessee)
shall be deemed written confirmation by the Owner Trustee that the investment
transactions identified therein accurately reflect the investment directions
given to the Indenture Trustee by or on behalf of the Lessee, unless the
Lessee notifies the Indenture Trustee in writing to the contrary within 30
days of the date of receipt of such statement.
Section 5.09. Withholding Taxes. The Indenture Trustee shall
withhold any Taxes required to be withheld, except to the extent that the
Holder has furnished evidence satisfactory to the Indenture Trustee of any
exemption from withholding claimed by such Holder and under no circumstances
shall the failure of any such Holder to receive any amounts so withheld
constitute an Indenture Event of Default. Notwithstanding any provision to
the contrary in Sections 5.01 through 5.05 hereof and subject to Article 8 of
the Participation Agreement, if the Lessee is required to pay any such Tax, or
any interest or penalty thereon, or to indemnify the Owner Participant or the
Owner Trustee with respect thereto pursuant to Section 8.01(c) of the
Participation Agreement, the Lessee shall be entitled to receive any payments
otherwise distributable to the Holder of any Certificate who was subject to
such Tax pursuant to Sections 5.01 to 5.05 hereof until the amounts the Lessee
shall have so paid in respect of any such Tax shall have been recovered in
full by the Lessee.
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity. Except as provided
in Sections 6.02, 6.06 and 8.02 hereof, the Certificates may not be prepaid
prior to their respective Maturities.
Section 6.02. Prepayment of Certificates. (a) The Outstanding
Certificates shall be prepaid in full (and not in part):
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08
hereof replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and Section 2.12 hereof shall not be
applicable in connection with such purchase), but subject to Section
6.02(c) below.
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 hereof (unless such notice is revoked in
accordance with such Section).
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) below.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a refinancing of the Certificates, but subject to Section
6.02(c) below.
(vi) As contemplated by Section 2.16 hereof and Section 3.05(b) of the
Participation Agreement if the Delivery Date has not occurred on or prior
to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject to the terms of Section
4.02(a) or 10.01 of the Lease or Article 15 of the Participation Agreement, as
the case may be, shall give irrevocable (subject to Section 6.02(c) hereof)
written notice to the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Certificates shall be
prepaid. In the case of a prepayment of the Certificates pursuant to Section
6.02(a)(i) above, the Certificates shall be prepaid in full on the Loss
Payment Date as defined in Section 11.02 of the Lease. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(iii) above, the
Certificates shall be prepaid in full on the date so designated in the notice
referred to in Section 8.02 hereof. In the case of a prepayment of the
Certificates pursuant to Section 6.02(a)(ii) or (iv) above, the Certificates
shall be prepaid in full on the Termination Date. In the case of a prepayment
of the Certificates pursuant to Section 6.02(a)(v) above, the Certificates
shall be prepaid on the effective date of the Refinancing. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(vi) above, the
Certificates shall be prepaid on the 15th day following the Cut-Off Date. In
the case of a prepayment of the Certificates pursuant to Section 6.02(a)(vii)
above, the Certificates shall be prepaid on the date designated in the notice
referred to therein. The day on which the Certificates are to be prepaid
pursuant to this Section 6.01(b) is herein referred to as the "Prepayment
Date".
On or prior to the Prepayment Date, immediately available funds shall
be deposited with the Indenture Trustee in an amount in respect of the
Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section 6.02
hereof on or after the applicable Premium Termination Date, or (ii) if such
prepayment is made prior to the applicable Premium Termination Date
pursuant to Section 6.02(a)(i), 6.02(a)(iii) (if clause (i) of the first
sentence of Section 8.02(a) hereof is applicable) or 6.02(a)(vi) above, the
sum of (A) the aggregate principal amount of such Certificates then
Outstanding, (B) accrued interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due the Indenture Trustee hereunder
or under the Participation Agreement or the Lease, but excluding any
Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to Section 6.02(a)(ii), 6.02(a)(iii) (if clause
(ii) of the first sentence of Section 8.02(a) hereof is applicable),
6.02(a)(iv), 6.02(a)(v) or 6.02(a)(vii) above, the sum of the amounts
specified in clauses (A), (B) and (C) of the preceding clause (1) plus any
Make-Whole Premium payable in respect of all Certificates with respect to
which the Premium Termination Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
(c) If, pursuant to the last paragraph of Section 10.01(f) of the
Lease, no Termination Date shall occur, or if, pursuant to Section 4.02(a) of
the Lease, the Lessee revokes its notice of election to purchase, or if no
refinancing shall occur pursuant to Section 15.01 of the Participation
Agreement, the Lessee shall give notice thereof to the Indenture Trustee, and
the prepayment proposed to be effected in respect thereof shall not occur.
Section 6.03. Notice of Prepayment to Holders. In order to effect
any prepayment set forth in Section 6.02(a) hereof, the Indenture Trustee
shall give prompt notice by first class mail of prepayment to each Holder of
an Outstanding Certificate. Any notice of prepayment given by the Owner
Trustee may be revoked by the Owner Trustee at any time on or before the
Prepayment Date by prompt notice to the Holders except as otherwise provided
in the Lease or the Participation Agreement.
All notices of prepayment shall state:
(1) the Prepayment Date,
(2) the applicable basis for determining the Prepayment Price,
(3) that on the Prepayment Date, subject to the provisions hereof,
the Prepayment Price will become due and payable, and that interest
on the Certificates shall cease to accrue on and after such
Prepayment Date, and
(4) the place or places where such Certificates are to be
surrendered for payment.
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price. On the Prepayment Date or the Sinking Fund Redemption Date (as defined
in Section 6.06 hereof), the Owner Trustee shall, to the extent an amount
equal to the Prepayment Price or the Sinking Fund Redemption Price (as defined
in Section 6.06 hereof), as the case may be, shall not then be held in cash or
Permitted Investments (marked-to-market net of all costs and expenses of
liquidation thereof) by the Indenture Trustee in immediately available funds
and deposited for the purpose, pay to the Indenture Trustee an amount equal to
the difference between (a) the amount then so held and (b) the Prepayment
Price or the Sinking Fund Redemption Price, as the case may be. If there
shall so be on deposit and/or deposited the applicable Prepayment Price or
Sinking Fund Redemption Price on or prior to a Prepayment Date or Sinking Fund
Redemption Date, interest shall cease to accrue in respect of all or, in the
case of a mandatory sinking fund redemption, the relevant portion being
prepaid of, the Outstanding Certificates on and after such Prepayment Date or
such Sinking Fund Redemption Date.
Section 6.05. Certificates Payable on Prepayment Date. On the
Prepayment Date, the Outstanding Certificates shall (except (A) if the Owner
Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise provided
in the Lease) become due and payable and from and after such Prepayment Date
(unless there shall be a default in the payment of the Prepayment Price) such
Certificates shall cease to bear interest. Upon surrender by any Holder of
its Certificate for prepayment in accordance with said notice, such Holder
shall be paid the principal amount of its Certificate then outstanding, accrued
interest thereon to the Prepayment Date, all other sums due to such Holder
hereunder, under the Participation Agreement or the Lease, plus, if a
Make-Whole Premium is payable pursuant to Section 6.02(b) hereof, the
Make-Whole Premium in respect of such Certificate.
If any Certificate called for prepayment shall not be so paid upon
surrender thereof for prepayment, the principal shall, until paid, continue to
bear interest from the Prepayment Date at the interest rate applicable to such
Certificate.
Section 6.06. Mandatory Sinking Fund Redemption. The Certificates
shall be subject to partial redemption, at the aggregate principal amount set
forth for the Certificates of the respective Series and Maturity, on a pro
rata basis, on each date specified in this Section (a "Sinking Fund Redemption
Date") for such payment on the Certificates of such Series and Maturity. The
Owner Trustee shall deposit funds sufficient to pay the Sinking Fund
Redemption Price with the Indenture Trustee as provided in Section 6.04
hereof. The Indenture Trustee shall pay from the amounts so deposited on each
applicable Sinking Fund Redemption Date to the Certificates of each Series in
the order of priority set forth in clause "first" of Section 5.01 and among the
Holders of the Certificates of each Series then Outstanding on a pro rata
basis the aggregate principal amount set forth below, together with accrued
interest to such Sinking Fund Redemption Date, but without Make-Whole Premium
(the "Sinking Fund Redemption Price"):
Principal Amount
Series A Series B Series C
Certificates Certificates Certificates
with a with a with a
Sinking Fund Maturity of Maturity of Maturity of
Redemption Date January 15, 2018 January 15, 2018 January 15, 2014
- ---------------- ---------------- ---------------- -----------------
July 15, 1997 0 0 0
January 15, 1998 178,525 161,870 0
July 15, 1998 488,462 0 0
January 15, 1999 405,194 250,371 0
July 15, 1999 262,461 0 0
January 15, 2000 391,578 250,371 333,147
July 15, 2000 276,076 0 0
January 15, 2001 449,906 250,371 333,827
July 15, 2001 217,749 0 0
January 15, 2002 612,950 250,371 333,827
July 15, 2002 54,705 0 0
January 15, 2003 667,654 250,371 551,201
July 15, 2003 0 0 0
January 15, 2004 667,654 250,371 709,532
July 15, 2004 0 0 0
January 15, 2005 667,654 250,371 829,238
July 15, 2005 0 0 0
January 15, 2006 667,654 250,371 798,676
July 15, 2006 0 0 0
January 15, 2007 350,625 250,371 3,713,379
July 15, 2007 317,030 0 0
January 15, 2008 667,654 250,371 645,550
July 15, 2008 0 0 0
January 15, 2009 667,654 250,371 1,415,654
July 15, 2009 0 0 0
January 15, 2010 667,654 1,026,373 981,208
July 15, 2010 0 0 0
January 15, 2011 667,654 2,862,630 0
July 15, 2011 0 0 0
January 15, 2012 667,654 3,146,944 0
July 15, 2012 0 0 0
January 15, 2013 4,556,464 190,066 123,763
July 15, 2013 0 0 0
January 15, 2014 0 0 5,253,998
July 15, 2014 0 0 0
January 15, 2015 5,667,502 0 0
July 15, 2015 0 0 0
January 15, 2016 6,109,126 0 0
July 15, 2016 0 0 0
January 15, 2017 6,585,161 0 0
July 15, 2017 0 0 0
January 15, 2018 449,600 2,288,036 0
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default. "Indenture Event of
Default" means any of the following events (whatever the reason for such
Indenture Event of Default and whether it shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) any Event of Default specified in Article 16 of the Lease (other
than an Event of Default arising solely as the result of the failure to
make an Excepted Payment unless the Owner Participant shall notify the
Indenture Trustee in writing that such failure shall constitute an
Indenture Event of Default); or
(ii) the failure of the Owner Trustee other than by reason of a
Default or an Event of Default (i) to pay principal, interest or Make-Whole
Premium, if any, on any Certificate when due, and such failure shall have
continued unremedied for ten (10) Business Days after the date when due or
(ii) to pay any other amounts hereunder or under the Certificates when due
and such failure shall have continued unremedied for a period of thirty
(30) days after the Owner Trustee and the Owner Participant shall receive
written demand therefor from the Indenture Trustee or by the Holders of not
less than 25% in aggregate principal amount of Outstanding Certificates; or
(iii) (A) any representation or warranty made by SSB, the Owner
Trustee, the Owner Participant or the Owner Participant Guarantor or any
Owner Trustee Guarantor, in any Operative Agreement or in any certificate of
SSB, the Owner Trustee, the Owner Participant, or the Owner Participant
Guarantor furnished to the Indenture Trustee or any Holder in connection
herewith or therewith or pursuant hereto or thereto shall prove to have been
incorrect when made and was and remains in any respect material to the
Holders and if such misrepresentation is capable of being corrected as of a
subsequent date and if such correction is being sought diligently, and such
misrepresentation shall not have been corrected within 30 days following
notice thereof identified as a "Notice of Indenture Event of Default" being
given to the Owner Trustee and the Owner Participant by the Indenture
Trustee or by a Majority in Interest of Holders; or
(B) any (x) covenant made by the Owner Trustee in the fifth paragraph
following the Habendum Clause hereof or Section 3.05(b)(iii) hereof or
Section 7.02(b) or 7.12 of the Participation Agreement shall be breached in
any respect, (y) covenant made by the Owner Participant in Section 7.02(c)
or the last sentence of Section 7.13 of the Participation Agreement shall
be breached in any respect or (z) other covenant made by the Owner Trustee,
in its individual capacity or as Owner Trustee, or by any Owner Trustee
Guarantor, or by the Owner Participant or the Owner Participant Guarantor
in any Operative Agreement shall be breached in any respect and such breach
shall remain unremedied for a period of thirty (30) days after there has
been given to the Owner Trustee and the Owner Participant by the Indenture
Trustee or by Certificate Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates a written notice identified as
a "Notice of Indenture Event of Default" specifying such breach and
requiring it to be remedied; or
(iv) the Owner Trustee, the Lessor's Estate, any Owner Trustee
Guarantor, the Owner Participant or the Owner Participant Guarantor shall
file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(v) an order for relief shall be entered in respect of the Owner
Trustee or any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate by a court having jurisdiction
in the premises in an involuntary case under the federal bankruptcy laws as
now or hereafter in effect; or the Owner Trustee or any Owner Trustee
Guarantor or the Owner Participant or the Owner Participant Guarantor or
the Lessor's Estate shall file any answer admitting or not contesting the
material allegations of a petition filed against the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate in any proceeding referred to in clause
(vi) below or seek or consent or acquiesce in the appointment of any
trustee, custodian, receiver or liquidator of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, or of all or any
substantial part of its properties; or
(vi) without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered constituting an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or if any such petition shall be filed
against the Owner Trustee or any Owner Trustee Guarantor or the Owner
Participant or the Owner Participant Guarantor or the Lessor's Estate, as
the case may be, and such petition shall not be dismissed within 60 days,
or if, without the consent or acquiescence of the Owner Trustee or any
Owner Trustee Guarantor or the Owner Participant or the Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered appointing a trustee, custodian, receiver or liquidator of the
Owner Trustee or any Owner Trustee Guarantor or the Owner Participant or
the Owner Participant Guarantor or the Lessor's Estate, as the case may be,
or of all or any substantial part of the properties of the Owner Trustee or
any Owner Trustee Guarantor or the Owner Participant or the Owner
Participant Guarantor or the Lessor's Estate, as the case may be, and such
order shall not be dismissed within 60 days; or
(vii) any Owner Trustee Guaranty or the Owner Participant Guaranty
shall cease to be a valid and enforceable obligation of any Owner Trustee
Guarantor or the Owner Participant Guarantor, as the case may be, or
otherwise shall not be in full force and effect.
Section 7.02. Remedies. (a) If an Indenture Event of Default shall
have occurred and be continuing and so long as the same shall be continuing
unremedied, then and in every such case, the Indenture Trustee may, and when
required by the provisions of Article IX or Section 7.02(c) hereof, shall (i)
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article VII and (ii) in the event such Indenture
Event of Default is an Indenture Event of Default referred to in clause (i) of
Section 7.01 hereof, exercise any and all of the remedies pursuant to Article
17 of the Lease; provided that without the consent of the Owner Trustee and
the Owner Participant such exercise of remedies shall not occur until after
the latest date on which the Owner Trustee may cure the related Event of
Default pursuant to Section 8.03 hereof. The Indenture Trustee may (subject
to the provisions of the next succeeding paragraph) 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 (subject to the provisions of the next
succeeding paragraph) exercise any other right or remedy in lieu of or in
addition to the foregoing that may be available to it under applicable law, or
proceed by appropriate court action to enforce the terms hereof, of the Lease,
or both, or to rescind the Lease. Without limiting any of the foregoing, it
is understood and agreed that the Indenture Trustee may exercise any right of
sale of the Aircraft available to it, even though it shall not have taken
possession of the Aircraft and shall not have possession thereof at the time
of such sale.
Notwithstanding the foregoing, it is understood and agreed that if the
Indenture Trustee shall proceed to foreclose the Lien of this Indenture, it
shall substantially simultaneously therewith, to the extent the Indenture
Trustee is then entitled to do so hereunder and under the Lease, and is not
then stayed or otherwise prevented from doing so, proceed (to the extent it
has not already done so) to declare the Lease in default and commence the
exercise in good faith of one or more of the significant remedies under
Article 17 of the Lease (as the Indenture Trustee determines in its sole
discretion) for the purpose of recovering the Aircraft. It is further
understood and agreed that if the Indenture Trustee is unable to exercise one
or more remedies under Article 17 of the Lease because of any stay or
operation of law or otherwise, the Indenture Trustee shall not be entitled to
foreclose the Lien of this Indenture (A) until the earlier of (i) 60 days from
the date of any such stay or applicable order under Section 1110 of the
Bankruptcy Code plus any extension consented to by the Indenture Trustee or
the Holders of Certificates of such period as permitted under Section 1110(b)
of the Bankruptcy Code and (ii) the date of actual repossession of the
Aircraft by the Indenture Trustee or (B) if the Lessee has agreed to perform
or assume the Lease pursuant to Section 365 or 1110 of the Bankruptcy Code and
no Event of Default (other than as specified in Section 16.01(e), (f) or (g)
of the Lease, or other Event of Default in respect of which the 30-day period
referred to in clause (a)(1)(B)(ii)(I) of Section 1110 of the Bankruptcy Code
shall not yet have expired) shall be continuing. For the avoidance of doubt,
it is expressly understood and agreed that except as aforesaid the
above-described inability of the Indenture Trustee to exercise any right or
remedy under the Lease shall in no event and under no circumstances prevent
the Indenture Trustee from exercising all of its rights, powers and remedies
under this Indenture, including, without limitation, this Article VII. The
Indenture Trustee further agrees that notice of intent to foreclose shall be
given to the Owner Trustee at the earlier of the commencement of any
proceeding or at least 30 days prior to the consummation of foreclosure of the
Lien of this Indenture.
(b) If an Indenture Event of Default under clause (iv), (v) or (vi)
of Section 7.01 hereof shall occur and be continuing, the unpaid principal of
all Outstanding Certificates, together with interest accrued but unpaid
thereon and all other amounts due thereunder, but without Make-Whole Premium,
shall immediately become due and payable, without presentment, demand, protest
or notice, all of which are hereby waived.
(c) If any Indenture Event of Default not described in the preceding
paragraph (b) shall have occurred and be continuing, then and in every such
case, the Indenture Trustee may on its own accord or at the direction of
Holders of not less than 25% in aggregate principal amount of Outstanding
Certificates, at any time, by written notice to the Owner Trustee, the Owner
Participant and the Lessee, declare the principal of all the Certificates to
be due and payable, whereupon the unpaid principal amount of all Outstanding
Certificates, together with accrued interest thereon and all other amounts due
thereunder, but without Make-Whole Premium, shall immediately become due and
payable without presentment, demand, protest or other notice, all of which are
hereby waived. At any time after such declaration and prior to the sale or
disposition of the Trust Indenture Estate, however, the Holders of not less
than 50% in aggregate principal amount of Outstanding Certificates, by notice
to the Indenture Trustee, the Owner Trustee and the Lessee, may rescind such
declaration, whether made by the Indenture Trustee on its own accord or as
directed, if (x) there has been paid or deposited with the Indenture Trustee a
sum sufficient to pay all overdue installments of interest on all Certificates
(together, to the extent permitted by law, with interest on such overdue
installments of interest), the principal on any Certificates that has become
due otherwise than by such declaration of acceleration, all sums paid or
advanced by the Indenture Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel, or (y) all Indenture Events of Default (other than the nonpayment of
principal that has become due solely because of such acceleration) have been
either cured or waived as provided in Section 7.11 hereof. No such rescission
shall affect any subsequent default or impair any right consequent thereon.
(d) Each Holder shall be entitled at any sale to 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 (but
only to the extent that an amount equal to such purchase price would have been
paid to such Holder pursuant to Article V hereof if such purchase price were
paid in cash and the foregoing provisions of this subsection (d) were not
given effect).
Section 7.03. Return of Aircraft, etc. Subject to Section 7.02
hereof: (a) If an Indenture Event of Default shall have occurred and be
continuing, at the request of the Indenture Trustee, the Owner Trustee shall
promptly execute and deliver to the Indenture Trustee such documents as the
Indenture Trustee may deem necessary or advisable to enable the Indenture
Trustee or an agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify,
to obtain possession of all or any part of the Trust Indenture Estate to which
the Indenture Trustee shall at the time be entitled under this Indenture.
Subject to the foregoing, if the Owner Trustee shall for any reason fail to
execute and deliver such documents after such request by the Indenture
Trustee, the Indenture Trustee may pursue all or part of such Trust Indenture
Estate wherever it may be found and enter any of the premises of the Lessee or
the Owner Trustee wherever such Trust Indenture Estate may be or be supposed
to be and search for such Trust Indenture Estate and take possession of and
remove such Trust Indenture Estate. All expenses of pursuing, searching for
and taking such Trust Indenture Estate shall, until paid, be secured by the
Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Trust Indenture Estate, make all such
expenditures for maintenance, insurance and repairs to and of such Trust
Indenture Estate, as the Indenture Trustee may reasonably deem proper. In
each case subject to Section 7.02 hereof, the Indenture Trustee shall have the
right to maintain, use, operate, store, lease, control or manage the Trust
Indenture Estate and to carry on the business and to exercise all rights and
powers of the Owner Participant and the Owner Trustee relating to the Trust
Indenture Estate, as the Indenture Trustee may reasonably deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, insurance, use, operation, storage, leasing, control, management
or disposition of all or any part of the Trust Indenture Estate as the
Indenture Trustee may determine. Further, the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Trust Indenture Estate
other than Excepted Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
under this Indenture. Such tolls, rents (including Rent), revenues, issues,
income, products and profits shall be applied to pay the expenses of the use,
operation, storage, leasing, control, management, or disposition of the Trust
Indenture Estate, and of all maintenance and repairs, and to make all payments
which the Indenture Trustee may be required or may reasonably elect to make
for any taxes, assessments, insurance or other proper charges upon the Trust
Indenture Estate (including the employment of engineers and accountants to
examine, inspect and make reports upon the properties and books and records of
the Owner Trustee and the Lessee), and all other payments which the Indenture
Trustee may be required or authorized to make under any provision of this
Indenture, as well as just and reasonable compensation for the services of the
Indenture Trustee and of all persons properly engaged and employed for such
purposes by the Indenture Trustee; provided, that any excess amounts shall be
promptly distributed in accordance with Section 5.03 hereof.
(c) Subject to Section 7.02 hereof, if an Indenture Event of
Default shall have occurred and be continuing and the Indenture Trustee shall
be entitled to exercise remedies hereunder, and subject to Article VIII
hereof, the Indenture Trustee, either with or without taking possession, and
either before or after taking possession, and without instituting any legal
proceedings whatsoever, may sell, assign, transfer and deliver the whole or,
from time to time, to the extent permitted by law, any part of the Trust
Indenture Estate, or any part thereof, or interest therein, at any private
sale or public auction to the highest bidder, with or without demand,
advertisement or notice, except that in respect of any private sale 30 days
prior written notice by registered mail to the Owner Trustee and the Owner
Participant will be provided, for cash or, with the consent of the Owner
Trustee and the Owner Participant, credit or for other property, for immediate
or future delivery, and for such price or prices and on such terms as the
Indenture Trustee in exercising reasonable commercial discretion may
determine; provided, that any such action shall be at the time lawful and that
all mandatory legal requirements shall be complied with. Any notice required
pursuant to the terms hereof in the case of a public sale, shall state the
time and place fixed for such sale. Any such public sale shall be held at
such time or times within ordinary business hours as the Indenture Trustee
shall fix in the notice of such sale. At any such sale, the Trust Indenture
Estate may be sold in one lot as an entirety or in separate lots. The
Indenture Trustee shall not be obligated to make any sale pursuant to such
notice. The Indenture Trustee may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for such sale, and any such sale may
be made at any time or place to which the same may be so adjourned without
further notice or publication. The Indenture Trustee may exercise such right
of sale without possession or production of the Certificates or proof of
ownership thereof, and as representative of the Holders may exercise such
right without notice to the Holders or without including the Holders as
parties to any suit or proceedings relating to the foreclosure of any part of
the Trust Indenture Estate. The Owner Trustee shall execute any and all such
bills of sale, assignments and other documents, and perform and do all other
acts and things requested by the Indenture Trustee in order to permit
consummation of any sale of the Trust Indenture Estate in accordance with this
Section 7.03(c) and to effectuate the transfer or conveyance referred to in
the first sentence of this Section 7.03(c). Notwithstanding any other
provision of this Indenture, the Indenture Trustee shall not sell the Trust
Indenture Estate or any part thereof unless the Certificates shall have been
accelerated.
(d) To the extent permitted by applicable law, and subject to
Section 7.02 hereof, 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 of 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) 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.
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 Sections 7.02 and 7.03(c) hereof.
In case there shall be pending proceedings relative to the Owner
Trustee under the Bankruptcy Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Owner Trustee or its property, or in case of any other comparable judicial
proceedings relative to the Owner Trustee, or to the creditors or property of
the Owner Trustee, the Indenture Trustee, irrespective of whether the
principal of the Certificates shall then be due and payable as therein or
herein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal, interest and other amounts owing and unpaid in respect of the
Certificates or hereunder, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of the Holders allowed in any judicial
proceedings relative to the Owner Trustee or to the creditors or property of
the Owner Trustee,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Indenture Trustee on their
behalf;
and any trustee, receiver, or liquidator, custodian or other similar official
is hereby authorized by each of the Holders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to the Holders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or willful misconduct.
Nothing contained herein shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Certificates or the rights of any Holder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any Holder
in any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
All rights of action and rights to assert claims under this
Indenture, or under any of the Certificates, may be enforced by the Indenture
Trustee without the possession of such Certificates on any trial or other
proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders, as provided herein.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Certificates, and it shall not be
necessary to make any Holders parties to such proceedings.
Section 7.05. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee in this Indenture shall be cumulative
and shall be in addition to every other right, power and remedy specifically
given herein or now or hereafter existing at law, in equity or by statute, and
each and every right, power and remedy whether specifically given herein or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Indenture Trustee or the Holders, and
the exercise or the beginning of the exercise of any power or remedy shall not
be construed to be a waiver of the right to exercise at the same time or later
any other right, power or remedy. No delay or omission by the Indenture
Trustee or of any Holder in the exercise of any right, remedy or power or in
the pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Trustee or
the Lessee or to be an acquiescence in any such default.
Section 7.06. Suits for Enforcement. If an Indenture Event of
Default has occurred, has not been waived and is continuing, the Indenture
Trustee may in its discretion and subject to its rights of appropriate
indemnification under Sections 7.08 and 9.03 and Article XI hereof proceed to
protect and enforce its rights and rights of the Holders by such appropriate
judicial proceedings as the Indenture Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture or to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture or by
law; provided, that any sale of any portion of the Trust Indenture Estate
shall be done in accordance with Sections 7.02 and 7.03(c) hereof.
Section 7.07. Discontinuance of Proceedings. In case the Indenture
Trustee or any Holder shall have instituted any proceeding to enforce any
right, power or remedy under this Indenture by foreclosure, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Indenture Trustee or
such Holder, then the Owner Trustee, the Indenture Trustee, the Owner
Participant, the Holders and the Lessee shall, subject to any binding
determination in such proceeding, be restored to their former positions and
rights under this Indenture with respect to the Trust Indenture Estate, and all
rights, remedies and powers of the Indenture Trustee and the Holders shall
continue as if no such proceeding had been instituted.
Section 7.08. Limitations on Suits by Holders. No Holder of any
Certificate shall have any right by virtue or by availing of any provision of
this Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Indenture Trustee written notice that an
Indenture Event of Default shall then have occurred and be continuing, as
hereinbefore provided, and the Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates shall have made written request
upon the Indenture Trustee to institute such action or proceedings in its own
name as trustee hereunder and shall have offered to the Indenture Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Indenture Trustee for 60
days after its receipt of such notice, request and offer of indemnity shall
have failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Indenture
Trustee pursuant to Section 7.10 hereof; it being understood and intended, and
being expressly covenanted by the Holder of each Certificate with every other
Holder of each other Certificate and the Indenture Trustee, that no one or
more Holders shall have any right in any manner whatever to affect, disturb or
prejudice the rights of any other Holder or the Lien of this Indenture or any
part of the Trust Indenture Estate or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under this
Indenture, except in the manner provided herein and for the equal, ratable and
common benefit of all Holders. For the protection and enforcement of the
provisions of this Section, each and every Holder and the Indenture Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute Certain Suits.
Notwithstanding any other provision in this Indenture and any provision of any
Certificate, the right of any Holder to receive payment of the principal of
and interest and Make-Whole Premium, if any, on such Certificate on or after
the respective due dates and in the manner expressed in such Certificate, or,
subject to Section 7.08 hereof, to institute suit for the enforcement of any
such payment on or after such respective dates as provided herein, shall not
be impaired or affected without the consent of such Holder.
Section 7.10. Control by Holders. The Majority in Interest of
Certificate Holders shall have the right to direct the Indenture Trustee as to
the time, method, and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power conferred
on the Indenture Trustee by this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture and the Indenture Trustee shall have received, to the extent
provided in Sections 7.08 and 9.03 and Article XI hereof, such reasonable
indemnification as it may require against the costs, expenses and liabilities
to be incurred by the Indenture Trustee; and provided further that (subject to
the provisions of Section 9.02 hereof) the Indenture Trustee shall have the
right to decline to follow any such direction if the Indenture Trustee, being
advised by counsel, shall determine that the action or proceeding so directed
may not lawfully be taken or if the Indenture Trustee in good faith by its
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers of the Indenture Trustee shall determine that the
action or proceedings so directed would involve the Indenture Trustee in
personal liability or if the Indenture Trustee in good faith shall so
determine that the actions or forebearances specified in or pursuant to such
direction shall be unduly prejudicial to the interests of Holders not joining
in the giving of said direction, it being understood that (subject to Section
9.02 hereof) the Indenture Trustee shall have no duty to ascertain whether or
not such actions or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Indenture
Trustee in its discretion to take any action deemed proper by the Indenture
Trustee and which is not inconsistent with the direction by the Majority in
Interest of Certificate Holders.
Section 7.11. Waiver of Past Indenture Default. Upon written
instructions from the Majority in Interest of Certificate Holders, the
Indenture Trustee shall waive any past Indenture Default and its consequences
and upon any such waiver such Indenture Default shall cease to exist and any
Indenture Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Indenture Default or impair any right consequent
thereon; provided, however, that in the absence of written instructions from
all Holders and each Liquidity Provider, the Indenture Trustee shall not waive
any Indenture Default (a) in the payment of the principal of or Make-Whole
Premium, if any, or interest on, or other amounts due under, any Certificate
then Outstanding, or (b) in respect of a covenant or provision of this
Indenture which, under Article XIII hereof, cannot be modified or amended
without the consent of each Holder.
Section 7.12. Notice of Indenture Default. The Indenture Trustee
shall transmit to the Owner Trustee, the Holders and to the Owner Participant
notice of any Indenture Defaults actually known to a Responsible Officer of
the Indenture Trustee, such notice to be transmitted by mail to the Holders
within 90 days, and to the Owner Trustee and the Owner Participant promptly
after the occurrence thereof, unless such Indenture Default shall have been
cured before the giving of such notice; provided that except in the case of a
default in the payment of the principal of or interest on any Certificate,
under no circumstances shall the Indenture Trustee give such notice to the
Holders until the expiration of a period of 60 days from the occurrence of such
Indenture Default; and provided further that, except in the case of default in
the payment of the principal of or interest on or any other amount due under
any of the Certificates, the Indenture Trustee shall be protected in
withholding such notice to the Holders if and so long as the board of
directors, the executive committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Indenture Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
Section 8.01. Certain Rights of Owner Trustee and Owner Participant.
(a) Subject to Section 13.01 hereof and the provisions of paragraph (a)
immediately following the Granting Clause hereof, without the consent of a
Majority in Interest of Certificate Holders, the respective parties to the
Indenture Documents may not modify, amend or supplement any of said
agreements, or give any consent, waiver, authorization or approval thereunder,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner the
rights of the respective parties thereunder; provided, however, that the
actions specified in subsection (b) of this Section 8.01 may be taken without
the consent of the Indenture Trustee or any Holder.
(b) Subject to the provisions of subsection (c) of this Section
8.01, the Lessor and the respective parties to the Indenture Documents, at any
time and from time to time, without the consent of the Indenture Trustee or of
any Holder, may:
(1) so long as no Indenture Event of Default shall have occurred and
be continuing, modify, amend or supplement the Lease, or give any waiver
with respect thereto, except that without compliance with subsection (a) of
this Section 8.01 the parties to the Lease shall not modify, amend or
supplement, or give any waiver for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions thereof or
of modifying in any manner the rights of the respective parties thereunder,
with respect to the following provisions of the Lease as in effect on the
effective date hereof: Article 2 (except in respect of the Term, if the
result thereof would not be to shorten the Term of the Lease to a period
shorter than the period ending with the Maturity of any Certificate),
Section 3.03 (except to the extent such Section relates to amounts payable
(whether directly or pursuant to this Indenture) to Persons other than
Holders, each Liquidity Provider, the Subordination Agent and the Indenture
Trustee in its individual capacity), Section 3.05, Section 3.06 (except
insofar as it relates to the address or account information of the Owner
Trustee or the Indenture Trustee) (other than as such Sections 3.03, 3.05
and 3.06 may be amended pursuant to Section 3.04 of the Lease as in effect
on the effective date hereof), Section 5.01, Article 6, Article 10 (except
that further restrictions may be imposed on the Lessee), Article 11 (except
that additional requirements may be imposed on the Lessee), Article 13
(except for Section 13.05 and except that additional insurance requirements
may be imposed on the Lessee), Article 14 (except in order to increase the
Lessee's liabilities or enhance the Lessor's rights thereunder), Article 15
(except in the case of an assignment by the Lessor in circumstances where
the Aircraft shall remain registrable under the Federal Aviation Act),
Section 16.01 (except to impose additional or more stringent Events of
Default), Article 17 (except to impose additional remedies), Section 19.01
(except to impose additional requirements on the Lessee), Section 20.01,
Article 22, Section 23.01, Section 26.03 and any definition of terms used
in the Lease, to the extent that any modification of such definition would
result in a modification of the Lease not permitted pursuant to this
subsection (b); provided that the parties to the Lease may take any such
action without the consent of the Indenture Trustee or any Holder to the
extent such action relates to the payment of amounts constituting, or the
Owner Trustee's, the Owner Participant's or the Lessee's rights or
obligations with respect to, Excepted Payments (other than the place, time
and manner of payment of any portion of Basic Rent constituting an Excepted
Payment);
(2) modify, amend or supplement the Trust Agreement and any other
Indenture Document (other than the Lease and the Participation Agreement),
or give any consent, waiver, authorization or approval with respect
thereto, in each case only to the extent any such action shall not
materially adversely impact the interests of the Holders;
(3) modify, amend or supplement the Participation Agreement, or give
any consent, waiver, authorization or approval with respect thereto, except
that without compliance with subsection (a) of this Section 8.01 the
parties to the Participation Agreement shall not modify, amend or
supplement, or give any consent, waiver, authorization or approval for the
purpose of adding provisions to or changing in any manner or eliminating
any of the provisions thereof or of modifying in any manner the rights of
the respective parties thereunder, with respect to the following provisions
of the Participation Agreement as in effect on the effective date hereof:
Article 6 and Section 10.01(b) (insofar as such Article 6 and Section
10.01(b) relate to the Indenture Trustee, the Pass Through Trustee and the
Holders), Article 7 and Sections 3.05, 15.01, 17.02 and 17.11 and Articles
8 and 9 (insofar as such Articles relate to the Indenture Trustee; it being
understood that only the Indenture Trustee's consent in respect thereof
need be obtained) and any definition of terms used in the Participation
Agreement, to the extent that any modification of such definition would
result in a modification of the Participation Agreement not permitted
pursuant to this subsection (b); and
(4) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided the
making of any such other provision shall not adversely affect the interests
of the Holders.
(c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease or the Participation
Agreement, whether effected pursuant to subsection (a) or pursuant to
subsection (b) of this Section 8.01 and anything in such subsections or
elsewhere in this Indenture to the contrary notwithstanding, shall, without
the consent of the Holder of each Outstanding Certificate affected thereby,
and each Liquidity Provider,
(1) modify, amend or supplement the Lease in such a way as to extend
the time of payment of Basic Rent or Stipulated Loss Value or Supplemental
Rent payable to the Holders or any Liquidity Provider or any other amounts
payable for the account of the Holders or any Liquidity Provider (subject
in any event to Section 3.05 of the Lease) upon the occurrence of an Event
of Loss or Termination Value and any other amounts payable for the account
of the Holders (subject in any event to Section 3.05 of the Lease) upon
termination of the Lease with respect to the Aircraft payable under, or as
provided in, the Lease as in effect on the effective date hereof, or reduce
the amount of any installment of Basic Rent or Supplemental Rent so that
the same is less than the payment of principal of, and interest on the
Certificates and Make-Whole Premium, if any, and amounts due to each
Liquidity Provider, as the case may be, to be made from such installment of
Basic Rent or Supplemental Rent, or reduce the aggregate amount of
Stipulated Loss Value, or any other amounts payable under, or as provided
in, the Lease as in effect on the effective date hereof upon the occurrence
of an Event of Loss so that the same is less than the accrued interest on
and the principal as of the Loss Payment Date, of the Certificates at the
time Outstanding or reduce the amount of Termination Value and any other
amounts payable under, or as provided in, the Lease as in effect on the
effective date hereof upon termination of the Lease with respect to the
Aircraft so that the same is less than the accrued interest on and
principal as of the Lease Termination Date and Make-Whole Premium, if any,
of Certificates at the time Outstanding, or
(2) modify, amend or supplement the Lease in such a way as to, or
consent to any assignment of the Lease or give any consent, waiver,
authorization or approval which would, release the Lessee from its absolute
and unconditional obligations in respect of payment of Basic Rent or
Supplemental Rent, or Stipulated Loss Value and any other amounts payable
for the account of the Holders (subject in any event to Section 3.05 of the
Lease) upon the occurrence of an Event of Loss, or Termination Value and
any other amounts payable for the account of the Holders (subject in any
event to Section 3.05 of the Lease) with respect to the Aircraft, payable
under, or as provided in, the Lease as in effect on the effective date
hereof, except for any such assignment pursuant to Section 2.12 hereof, and
except as provided in the Lease as in effect on the effective date hereof.
(d) At all times so long as this Indenture is in effect, the consent
of the Owner Trustee (at the direction of the Owner Participant) shall be
required in order (i) to amend, modify or supplement the Lease or any other
Operative Document to which the Owner Trustee is a party or to waive
compliance by the Lessee with any of its obligations thereunder and (ii) to
grant any consent requested under the Lease.
Notwithstanding the foregoing, but subject always to the provision of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Article 17 (other than with respect to Excepted
Payments) thereof and (B) subject only to the provisions of this Indenture,
exercise the remedies set forth in such Article 17 of the Lease (other than in
connection with Excepted Payments) and in Article 7 hereof.
Nothing in this Indenture shall be deemed to prohibit the Owner
Participant or the Owner Trustee from making demand on the Lessee for, or from
commencing an action at law to obtain the payment of, or from receiving
payment of, any Excepted Payment; provided, however, that if the Owner Trustee
is proceeding under the Lease, the Owner Trustee shall proceed pursuant to
Section 17.01(a)(v), and only Section 17.01(a)(v), of the Lease.
Section 8.02. Owner Participant's Right to Elect to Prepay or
Purchase the Certificates. (a) If (i) an Event of Default shall have occurred
and be continuing for more than 180 days or the Certificates shall have become
due and payable pursuant to Section 7.02(b) or (c) hereof or (ii) an Event of
Default shall have occurred and be continuing for not more than 180 days and
the Certificates shall not have become due and payable pursuant to Section
7.02(b) or (c) hereof, the Owner Participant (or the Owner Trustee on behalf
of the Owner Participant) may, but shall be under no obligation to, do either
of the following:
(1) direct the Owner Trustee to cause the prepayment of all, but not
less than all, of the Certificates then Outstanding by notifying the
Indenture Trustee of such election, which notice in order to be effective
shall state that it is irrevocable (except as provided below) and shall
designate a Prepayment Date which shall be a Business Day which shall be
not less than 15 days after the date of such notice on which the Owner
Trustee shall, in the manner provided for in Section 6.04 hereof, deposit
the sum of amounts contemplated by paragraph "first" under Section 5.03 and
the aggregate Prepayment Price (determined in accordance with Section
6.02(b) hereof) of all such Certificates with the Indenture Trustee. If
such payment by the Owner Trustee to the Indenture Trustee is made, the
Certificates shall cease to accrue interest from and after the Prepayment
Date, and after distribution of such payment to the Holders, the Indenture
Trustee shall release the Trust Indenture Estate from the Lien of this
Indenture; or
(2) purchase all, but not less than all, of the Outstanding
Certificates by notifying the Indenture Trustee of such election, which
notice in order to be effective shall state that it is irrevocable (except
as provided below) and shall designate a date which shall be a Business Day
which shall be not less than 15 days after the date of such notice on which
the Owner Trustee shall pay to the Indenture Trustee an amount equal to the
aggregate unpaid principal amount of all Outstanding Certificates, together
with accrued interest on such amount to the date of purchase, the aggregate
amount of any Make-Whole Premium applicable to each Outstanding Certificate
(if such purchase occurs prior to the Premium Termination Date for such
Outstanding Certificate) in the case of a purchase pursuant to clause
(a)(ii) above (but not if such purchase is pursuant to clause (a)(i)
above), plus all other sums due any Holder or the Indenture Trustee
hereunder or under the Participation Agreement or the Lease. Upon receipt
by the Indenture Trustee of such amount, each Holder will be deemed,
whether or not Certificates shall have been delivered to the Indenture
Trustee on such date, to have thereupon sold, assigned, transferred and
conveyed (and shall promptly take such actions as the Owner Participant
shall reasonably request to evidence such sale, assignment, transfer and
conveyance) to the Owner Participant (without recourse or warranty of any
kind except for its own acts), all of the right, title and interest of such
Holder in and to the Trust Indenture Estate and this Indenture and all
Certificates held by such Holder and the former Holders shall not be
entitled to receive any interest on the principal amount of such
Certificates after the purchase date, and the Owner Participant shall be
deemed to have assumed (and shall promptly take such actions as any Holder
shall reasonably request to evidence such assumption) all of such Holder's
obligations under the Participation Agreement and this Indenture arising
subsequent to such sale. If the Owner Trustee shall so request, such
Holder will comply with all the provisions of Section 2.06 of this
Indenture to enable new Certificates to be issued to the Owner Participant
in such authorized denominations as the Owner Participant shall request.
All charges and expenses required pursuant to Section 2.06 hereof in
connection with the issuance of any such new Certificates shall be borne by
the Owner Participant.
(b) From and after the deposit by the Owner Trustee of the applicable
Prepayment Price or purchase price with the Indenture Trustee pursuant to
Section 8.02(a) hereof, the Owner Trustee shall be entitled to exercise all
remedies of the Indenture Trustee under Article VII hereof as well as of the
Lessor under the Lease.
(c) Any election to prepay or purchase the Certificates under this
Section 8.02 shall be irrevocable, provided that if on the specified date for
prepayment or purchase, the Event of Default giving rise to such election
shall no longer be continuing under the Lease such election shall be deemed to
be automatically withdrawn.
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 date
which is 15 Business Days after the Owner Participant's receipt of written
notice of such Event of Default all principal and interest on the Certificates
then due (as well as any interest on overdue principal and (to the extent
permitted by applicable law) interest), but not including any principal or
interest becoming due on account of such Event of Default, then the failure of
the Lessee to make the payment of such installment of Basic Rent or of
interest on account of such installment's being overdue shall not constitute
or result in an Indenture Event of Default under this Indenture and any
declaration based solely on the same shall be deemed to be automatically
rescinded. Nothing contained in the preceding sentence shall be deemed to
entitle the Owner Trustee to exercise any rights and powers or pursue any
remedies pursuant to Article 17 of the Lease or otherwise except as set forth
in this Indenture, and except that the Owner Trustee or the Owner Participant
may attempt to recover any amount paid by it or them under this Indenture by
demanding of the Lessee payment of such amount, or by commencing an action at
law or equity 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 be subrogated on
an unsecured basis to all the rights of the Indenture Trustee under the Lease
in respect of the payment giving rise to such Event of Default, and any right
to any interest in respect of the same, and shall be entitled to any payment
of Basic Rent (or interest thereon) actually made by the Lessee in respect of
such cured payment upon receipt by the Indenture Trustee; provided that no such
amount shall be paid to the Owner Trustee or the Owner Participant until all
amounts then due and payable to each Certificate Holder hereunder and
thereunder shall have been paid in full and no Indenture Event of Default
shall have occurred and be continuing. Notwithstanding anything in this
Indenture or the Lease to the contrary, the Owner Participant and the Owner
Trustee collectively, shall not be entitled to cure more than six (6) Events
of Default (no more than three (3) of which may be consecutive) occasioned by
defaults in the payment of Basic Rent.
(b) If (A) there shall occur an Event of Default under the Lease for
any reason other than the Lessee's failure to make any payment of an
installment of Basic Rent and (B) the Owner Trustee shall have taken or caused
to be taken such action necessary to cure and shall have cured such Event of
Default prior to the date which is 15 Business Days after the Owner
Participant's receipt of the written notice of such Event of Default, then
the failure of the Lessee to perform such covenant, condition or agreement,
the observance or performance of which was accomplished by the Owner Trustee
hereunder shall not constitute or result in an Indenture Event of Default under
this Indenture and any declaration based solely on the same shall be deemed to
be automatically rescinded. Nothing contained in the preceding sentence shall
be deemed to entitle the Owner Trustee or the Owner Participant to exercise
any rights and powers or pursue any remedies pursuant to Article 17 of the
Lease or otherwise except as set forth in this Indenture, and except that the
Owner Trustee or the Owner Participant may attempt to recover any amount paid
by it or them in effecting such cure by demanding of the Lessee payment of
such amount, plus any interest due, or by commencing an action at law or in
equity against the Lessee for the payment of such amount or taking appropriate
action in a pending action at law or in equity against the Lessee pursuant to
Section 17.01(a)(v), but only said Section 17.01(a)(v), of the Lease. Upon
curing any such Event of Default pursuant to this Section 8.03(b), the Owner
Trustee or the Owner Participant, as the case may be, shall be subrogated to
all the rights of the Indenture Trustee under the Lease in respect of the
payment, agreement or covenant giving rise to such Event of Default, and any
right to any interest in respect of the same, and shall be entitled to any
payment or other performance upon receipt by the Indenture Trustee; provided
that no such amount shall be paid to the Owner Trustee or the Owner
Participant until all amounts then due and payable to each Certificate Holder
hereunder and thereunder shall have been paid in full and no Indenture Event
of Default shall have occurred and be continuing.
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts. The Indenture Trustee in its
individual capacity hereby accepts the trusts imposed upon it by this
Indenture, and covenants and agrees to perform the same as expressed herein
and agrees to receive and disburse all moneys constituting part of the Trust
Indenture Estate in accordance with the terms hereof.
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an Indenture Event of Default.
(a) The Indenture Trustee, prior to the occurrence of an Indenture Event of
Default and after the curing or waiving of all Indenture Events of Default
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. So long as an
Indenture Event of Default has occurred and has not been cured or waived, the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs. No provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Indenture Event of Default and
after the curing or waiving of all Indenture Events of Default which may have
occurred:
(x) the duties and obligations of the Indenture Trustee shall be
determined solely by the express provisions of this Indenture, and the
Indenture Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read in to this Indenture against
the Indenture Trustee; and
(y) in the absence of bad faith on the part of the Indenture
Trustee, the Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; but in the case of any such
statements, certificate or opinions which by any provision hereof are
specifically required to be furnished to the Indenture Trustee, the Indenture
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible Officers
of the Indenture Trustee, unless it shall be proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action taken or not taken by it in good faith in accordance with the direction
of the Holders of not less than a majority in aggregate principal amount of
Outstanding Certificates relating to the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred upon the Indenture Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Indenture Trustee shall have determined
in good faith that the repayment of such funds or adequate indemnity against
such liability is not reasonably assured to it.
The Indenture Trustee agrees that it will execute and the Owner
Trustee agrees that it will, at the expense of the Lessee, file or cause to be
filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Trust Indenture
Estate as may be specified from time to time in written instructions of the
Holders of not less than 25% in aggregate principal amount of Certificates
(which instructions may, by their terms, be operative only at a future date
and which shall be accompanied by the execution form of such continuation
statement so to be filed); provided that, notwithstanding the foregoing, the
Indenture Trustee may execute and file or cause to be filed any financing
statement which it from time to time deems appropriate.
(b) If any Event of Default shall have occurred and be continuing
and, after the latest date on which the Owner Trustee may cure such Event of
Default pursuant to Section 8.03 hereof, on request of the Holders of not less
than 25% in aggregate principal amount of Outstanding Certificates and subject
to indemnification, to the extent provided in Sections 7.08 and 9.03 and
Article XI hereof, as it may require against the costs, expenses and
liabilities to be incurred, the Indenture Trustee shall exercise such remedies
under Article 17 of the Lease as shall be specified in such request.
(c) The Indenture Trustee agrees that it will, in its individual
capacity and at its own cost and expense (but without any right of indemnity
in respect of any such cost or expense under Article XI hereof) promptly take
such action as may be necessary duly to discharge all Indenture Trustee's
Liens on any part of the Trust Indenture Estate.
(d) The Indenture Trustee will execute and deliver to the Lessee for
filing in accordance with Article 18 of the Lease any properly presented
document, instrument or financing or continuation statement specified in any
opinion delivered pursuant to Section 6.03(e) of the Participation Agreement.
The Indenture Trustee may rely on the act of presentation of any such
document, instrument, financing or continuation statement as evidencing the
fact that it is properly prepared and presented, provided that the Indenture
Trustee shall promptly correct any error in any such document, instrument,
financing or continuation statement of which a Responsible Officer of the
Indenture Trustee has actual knowledge.
(e) The Indenture Trustee will furnish to each Holder promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished to
the Indenture Trustee, to the extent that the same shall not have been
otherwise furnished to such Holder pursuant to this Indenture or to the extent
the Indenture Trustee does not reasonably believe that the same shall have
been furnished by the Lessee directly to such Holder.
Section 9.03. Certain Rights of the Indenture Trustee. Subject to
Section 9.02 hereof:
(a) the Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Owner Trustee
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof be herein
specifically prescribed) upon which the Indenture Trustee may rely to prove
or establish a matter set forth therein;
(c) the Indenture Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Indenture Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Indenture Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Indenture Event of Default
hereunder and after the curing or waiving of all Indenture Events of
Default, the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or
document unless requested in writing to do so by the Majority in Interest
of Certificate Holders; provided that, if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Indenture Trustee, not reasonably assured to the Indenture Trustee
by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Owner Trustee or,
if paid by the Indenture Trustee or any predecessor trustee, shall be
repaid by the Owner Trustee upon demand; and
(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by it hereunder.
Section 9.04. Indenture Trustee Not Responsible for Recitals,
Disposition of Certificates or Application of Proceeds Thereof. The Indenture
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates, except the Indenture Trustee's
certificates of authentication. The Indenture Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Certificates. The Indenture Trustee shall not be accountable for the use or
application by the Owner Trustee of any of the Certificates or of the proceeds
thereof.
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc. The Indenture Trustee or any agent of the Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Indenture
Trustee or such agent and may otherwise deal with the Owner Trustee and
receive, collect, hold and retain collections from the Owner Trustee with the
same rights it would have if it were not the Indenture Trustee or such agent.
Section 9.06. Moneys Held by Indenture Trustee. Subject to Sections
5.08 hereof and 14.04 hereof, all moneys received by the Indenture Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Neither
the Owner Trustee nor, subject to Section 5.08 hereof, the Indenture Trustee
nor any agent thereof shall be under any liability for interest on any moneys
received by it hereunder.
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc. Subject to Sections 9.02 and 9.03 hereof, whenever in the
administration of the trusts of this Indenture the Indenture Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting any action hereunder, such matter (unless
other evidence in respect thereof be specifically prescribed herein) may, in
the absence of bad faith on the part of the Indenture Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to
the Indenture Trustee, and such certificate, in the absence of bad faith on
the part of the Indenture Trustee, shall be full warrant to the Indenture
Trustee for any action taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
Section 9.08. Replacement Airframes and Replacement Engines. At any
time and from time to time any Airframe or Engine which has been subject to an
Event of Loss and may, or is required to, be replaced under Section 10.03,
11.03 or 11.04 of the Lease by a Replacement Airframe or Replacement Engine,
as the case may be, shall be replaced in accordance with the provisions of
this Section 9.08 and the provisions of said Sections of the Lease, the Owner
Trustee shall, from time to time, direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing such Airframe and/or Engine as appropriate from the Lien
of this Indenture and the Indenture Trustee shall execute and deliver such
instrument as aforesaid without recourse or warranty, but only upon receipt by
or deposit with the Indenture Trustee of the following:
(1) A written request from the Owner Trustee requesting such release
and specifically describing the Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or other
applicable registration information) and manufacturer's serial number;
(ii) a description of the Replacement Airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Airframe the Owner Trustee
will be the legal owner of and have good and marketable title to such
Replacement Airframe free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease, that such Replacement
Airframe will on such date be in at least as good operating condition
and repair as required by the terms of the Lease, and that such
Replacement Airframe has been or, substantially concurrently with
such replacement, will be duly registered in the name of the Owner
Trustee under the Transportation Code or under the law then
applicable to the registration of the Airframe subject to the Event
of Loss and that an airworthiness certificate has been duly issued
under the Aviation Act (or such other applicable law) with respect to
such Replacement Airframe and that such registration and certificate
is, or will be, in full force and effect, and that the Lessee will
have the full right and authority to use such Replacement Airframe;
(iv) that the insurance required by Article 13 of the Lease is in
full force and effect with respect to such Replacement Airframe and
all premiums then due thereon have been paid in full;
(v) that the Replacement Airframe is of the same or an improved make
or model as the Airframe requested to be released from this Indenture;
(vi) that the value of the Replacement Airframe as of the date of such
certificate is not less than the value of the Airframe requested to
be released (assuming such Airframe was in the condition and repair
required to be maintained under the Lease);
(vii) that no Event of Default has occurred and is continuing or
would result from the making and granting of the request for release
and the addition of a Replacement Airframe;
(viii) that the release of the Airframe subject to the Event of Loss
will not impair the security of the Indenture in contravention of any
of the provisions of this Indenture;
(ix) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Airframe and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x) that each of the conditions specified in Section 11.03 of the
Lease with respect to such Replacement Airframe has been satisfied.
B. With respect to the replacement of any Engine:
(i) a description of the Engine subject to the Event of Loss
including the manufacturer's serial number;
(ii) a description of the Replacement Engine including the
manufacturer's name, the engine model and serial number;
(iii) that on the date of the Indenture and Security Agreement
Supplement relating to the Replacement Engine the Owner Trustee will
be the legal owner of such Replacement Engine free and clear of all
Liens except Liens permitted under Section 6.01 of the Lease, and
that such Replacement Engine will on such date be in at least as good
operating condition and repair as required by the terms of the Lease
and will otherwise conform to the requirements set forth in the
definition of "Replacement Engine";
(iv) that the value of the Replacement Engine as of the date of such
certificate is not less than the value of the Engine to be released
(assuming such Engine was in the condition and repair required to be
maintained under the Lease);
(v) that the release of the Engine subject to the Event of Loss will
not impair the security of the Indenture in contravention of any of
the provisions of this Indenture;
(vi) that upon such replacement, the Lien of this Indenture will
apply to the Replacement Engine and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(vii) that each of the conditions specified in Section 10.03, 11.03
or 11.04 of the Lease with respect to such Replacement Engine has
been satisfied.
(3) The appropriate instruments (i) transferring to the Owner
Trustee title to the Replacement Airframe or Replacement Engine to be received
as consideration for the Airframe or Engine to be released and (ii) assigning
to the Owner Trustee the benefit of all manufacturer's and vendor's
warranties, if any, generally available with respect to such Replacement
Airframe or Replacement Engine, and an Indenture and Security Agreement
Supplement subjecting such Replacement Airframe or Replacement Engine to the
Trust Agreement and to the Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing satisfactory to the Indenture Trustee and the Owner Trustee
confirming the accuracy of the information set forth in clause (2)A.(vi) of
this Section 9.08.
(5) The opinion of Davis Polk & Wardwell, special counsel to the
Lessee, or other counsel reasonably satisfactory to the Indenture Trustee,
stating that:
(i) the certificates, opinions and other instruments and/or property
which have been or are therewith delivered to and deposited with the
Indenture Trustee conform to the requirements of this Indenture and the
Lease and, upon the basis of such application, the property so sold or
disposed of may be properly released from the Lien of this Indenture and
all conditions precedent herein provided for relating to such release have
been complied with; and
(ii) the Replacement Airframe or Replacement Engine has been validly
subjected to the Lien of this Indenture and covered by the Lease, the
instruments subjecting such Replacement Airframe or Replacement Engine to
the Lease and to the Lien of this Indenture, as the case may be, have been
duly filed for recordation pursuant to the Transportation Code or any other
law then applicable to the registration of the Aircraft, and no further
action, filing or recording of any document is necessary or advisable in
order to establish and perfect the title of the Owner Trustee to and the
Lien of this Indenture on such Replacement Airframe or Replacement Engine
and the Indenture Trustee would be entitled to the benefits of Section 1110
of the Bankruptcy Code with respect to such Replacement Airframe or
Replacement Engine, provided, that such opinion need not be to the effect
specified in the foregoing clause to the extent that the benefits of such
Section 1110 would not have been, by reason of a change in law or
governmental interpretation thereof after the date hereof, available to the
Indenture Trustee with respect to the Aircraft immediately prior to such
substitution had such Event of Loss not occurred.
Section 9.09. Indenture and Security Agreement Supplement for
Replacements. In the event of the substitution of a Replacement Airframe or a
Replacement Engine as contemplated by Section 10.03 or Article 11 of the
Lease, the Owner Trustee and the Indenture Trustee agree for the benefit of
the Holders and the Lessee, subject to fulfillment of the conditions precedent
and compliance by the Lessee with its obligations set forth in Section 10.03
or Article 11 of the Lease, to execute and deliver an Indenture and Security
Agreement Supplement as contemplated by Section 9.08(3) hereof and, provided
no Event of Default shall have occurred and be continuing, execute and deliver
to the Lessee an appropriate instrument releasing the Airframe or Engine being
replaced from the Lien of this Indenture.
Section 9.10. Effect of Replacement. In the event of the
substitution of a Replacement Airframe or a Replacement Engine as contemplated
by Section 10.01 or Article 11 of the Lease and Section 9.08 hereof, all
provisions of this Indenture relating to the Airframe or Engine or Engines
being replaced shall be applicable to such Replacement Airframe or Replacement
Engine or Engines with the same force and effect as if such Replacement
Airframe or Replacement Engine or Engines were the same Airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine or
Engines being replaced.
Section 9.11. Compensation. The Owner Trustee covenants and agrees
to pay, and the Indenture Trustee shall be entitled to receive, reasonable
compensation and payment or reimbursement for its reasonable advances,
expenses and disbursements (including the reasonable compensation and expenses
and disbursements of its counsel, agents and other persons not regularly in
its employ) in connection with its services rendered hereunder or in any way
relating to or arising out of the administration of the Trust Indenture Estate
and shall have a priority claim on the Trust Indenture Estate for the payment
of such compensation, advances, expenses and disbursements to the extent that
such compensation, advances, expenses and disbursements shall not be paid by
the Lessee, and shall have the right to use or apply any moneys held by it
hereunder in the Trust Indenture Estate toward such payments; provided that,
so long as the Lease is in effect, the Indenture Trustee shall not make any
claim for payment under this Section 9.11 against the Owner Trustee without
first making demand on the Lessee for payment of such claim. The Indenture
Trustee agrees that it shall have no right against any Holder, SSB or the
Owner Participant for any fee as compensation for its services as trustee
under this Indenture.
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing, and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee and, if expressly required herein, to the Owner Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
9.02 and 9.03 hereof) conclusive in favor of the Indenture Trustee and the
Owner Trustee, if made in the manner provided in this Article.
(b) For the purpose of determining the Holders entitled to vote or
consent to any direction, waiver or other action of such Holders under Section
7.10 or 7.11 hereof, the Lessee may set a record date for such vote or consent
by specifying such record date in an Officer's Certificate delivered to the
Indenture Trustee. Such record date shall be a date not more than 15 days
prior to the first solicitation of such vote or consent.
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates. Subject to Sections 9.02 and 9.03 hereof, the execution of any
instrument by a Holder or his agent or proxy may be proved in accordance with
such reasonable rules and regulations as may be prescribed by the Indenture
Trustee. The holding of Certificates shall be proved by the Register or by a
certificate of the Registrar.
Section 10.03. Holders to Be Treated as Owners. Prior to due
presentment for registration of transfer of any Certificate, the Owner
Trustee, the Indenture Trustee, any agent of the Owner Trustee or the
Indenture Trustee, the Paying Agent, if any, the Registrar and the Lessee
shall deem and treat the Person in whose name such Certificate shall be
registered upon the Register as the absolute owner of such Certificate
(whether or not such Certificate shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions of
this Indenture, interest on such Certificate and for all other purposes; and
neither the Owner Trustee nor the Indenture Trustee (nor any agent of the
Owner Trustee or the Indenture Trustee) nor the Paying Agent, if any, nor the
Registrar nor the Lessee shall be affected by any notice to the contrary. All
such payments so made to any such person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Certificate.
Section 10.04. Certificates Owned by Owner Trustee and the Lessee
Deemed Not Outstanding. In determining whether the Holders of the requisite
aggregate principal amount of Certificates have concurred in any direction,
consent or waiver under this Indenture, Certificates which are owned by the
Owner Trustee, the Owner Participant, SSB, the Lessee or by any Affiliate
thereof shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination; provided that for the purpose of determining
whether the Indenture Trustee shall be protected in relying on any such
direction, consent or waiver, only if a Responsible Officer of the Indenture
Trustee has actual knowledge that certain Certificates are so owned by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Owner Trustee, the Owner Participant, SSB or
the Lessee shall such Certificates be so disregarded; and provided further
that if all Certificates which would be deemed Outstanding in the absence of
the foregoing provision are owned by the Owner Trustee, SSB or the Owner
Participant or by any Affiliate thereof, then such Certificates shall be
deemed Outstanding for the purpose of any such determination. Certificates
so owned which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Owner Trustee, the Owner Participant, SSB 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, SSB
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,
SSB, or the Owner Participant are actually named in the Register. Upon
request of the Indenture Trustee, the Owner Trustee, the Owner Participant,
SSB and the Lessee shall furnish to the Indenture Trustee promptly an
Officer's Certificate listing and identifying all Certificates, if any, known
by the Owner Trustee, the Owner Participant, SSB or the Lessee to be owned or
held by or for the account of any of the above-described persons; and, subject
to Sections 9.02 and 9.03 hereof, the Indenture Trustee shall be entitled to
accept such Officer's Certificate as conclusive evidence of the facts set
forth therein and of the fact that all Certificates not listed therein are
outstanding for the purpose of any such determination.
Section 10.05. Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Indenture Trustee, as provided
in Section 10.01, of the taking of any action by the Holders of the percentage
in aggregate principal amount of the Certificates specified in this Indenture
in connection with such action, any Holder of a Certificate, the serial number
of which is shown by the evidence to be included among the serial numbers of
the Certificates the Holders of which have consented to such action, may, by
filing written notice at the Corporate Trust Department and upon proof of
holding as provided in this Article, revoke such action so far as concerns
such Certificate. Except as aforesaid, any such action taken by the Holder
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Certificate and of any Certificates issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Certificate or otherwise. Any action taken by
the Holders of the percentage in aggregate principal amount of the
Certificates specified in this Indenture in connection with such action shall
be conclusively binding upon the Owner Trustee, the Indenture Trustee and the
Holders of all the Certificates.
Section 10.06. ERISA. Any Person, other than the Subordination
Agent, who is acquiring the Certificates will be deemed to represent and
warrant that (i) no assets of an employee benefit plan subject to Title I of
ERISA or an individual retirement account or plan subject to Section 4975 of
the Code, or any trust established under any such plan or account, have been
used to acquire or hold any of the Certificates, or (ii) that one or more
administrative or statutory exemptions from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code applies to its
purchase and holding of the Certificates such that its purchase and holding of
the Certificates will not result in a non-exempt prohibited transaction under
Section 406 of ERISA and Section 4975 of the Code.
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
The Owner Trustee, not individually but solely in its capacity as
Owner Trustee under the Trust Agreement, hereby agrees, whether or not any of
the transactions contemplated hereby shall be consummated, to assume liability
for, and does hereby indemnify, protect, save and keep harmless the Indenture
Trustee, in its individual capacity, and its successors, assigns, agents and
servants solely from the Lessor's Estate, with respect to the claims of the
Indenture Trustee for payment or reimbursement under Section 9.11 hereof and
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on or
measured by any compensation received by the Indenture Trustee for its
services under this Indenture and any taxes excluded from the Lessee's
indemnity obligation under Section 8.01(b) of the Participation Agreement),
claims, actions, suits, costs, expenses or disbursements (including legal fees
and expenses) of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Indenture Trustee (whether or not also
agreed to be indemnified against by any other person under any other document)
in any way relating to or arising out of this Indenture, or any other
Indenture Documents or the enforcement of any of the terms of any thereof, or
in any way relating to or arising out of the manufacture, purchase,
acceptance, nonacceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent and other defects, whether
or not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration
of the Trust Indenture Estate or the action or inaction of the Indenture
Trustee hereunder, except only (a) in the case of willful misconduct or gross
negligence of the Indenture Trustee in the performance of its duties
hereunder, (b) as may result from the inaccuracy of any representation or
warranty of the Indenture Trustee in the Participation Agreement, (c) as
otherwise provided in Section 9.02(c) hereof or (d) as otherwise excluded by
the terms of Article 8 or Article 9 of the Participation Agreement from the
Lessee's general indemnity or general tax indemnity to the Indenture Trustee
under said Article; provided that so long as the Lease is in effect, the
Indenture Trustee shall not make any claim under this Article XI for any claim
or expense indemnified by the Lessee under the Participation Agreement without
first making demand on the Lessee for payment of such claim or expense. The
Indenture Trustee shall be entitled to indemnification, from the Trust
Indenture Estate, for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Article XI to the extent not reimbursed by the Lessee or others, but
without releasing any of them from their respective agreements of
reimbursement; and to secure the same the Indenture Trustee shall have a prior
Lien on the Trust Indenture Estate. The indemnities contained in this Article
XI shall survive the termination of this Indenture and the resignation or
removal of the Indenture Trustee. Upon payment in full by the Owner Trustee
of any indemnity pursuant to this Article XI, the Owner Trustee shall, so long
as no Indenture Event of Default shall have occurred and be continuing, be
subrogated to the rights of the Indenture Trustee, if any, in respect of the
matter as to which the indemnity was paid.
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee. In the case of any
appointment of a successor to the Owner Trustee pursuant to the Trust
Agreement or any merger, conversion, consolidation or sale of substantially
all of the corporate trust business of the Owner Trustee pursuant to the Trust
Agreement, the successor Owner Trustee shall give prompt written notice
thereof to the Indenture Trustee.
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor. (a) The Indenture Trustee or any successor thereto
may resign at any time without cause by giving at least 30 days' prior written
notice to the Owner Trustee, the Owner Participant, the Lessee and each
Holder, such resignation to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In addition, the Majority in
Interest of the Certificate Holders or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders may at any
time remove the Indenture Trustee without cause by an instrument in writing
delivered to the Lessee, the Owner Trustee, the Owner Participant, and the
Indenture Trustee, and the Indenture Trustee shall promptly notify each Holder
thereof of such action in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the case
of the resignation or removal of the Indenture Trustee, the Majority in
Interest of the Certificate Holders, or the Owner Trustee, with the consent of
the Lessee and the Majority in Interest of the Certificate Holders, may
appoint a successor Indenture Trustee by an instrument signed by such Holders.
If a successor Indenture Trustee shall not have been appointed within 30 days
after such notice of resignation or removal, the Indenture Trustee, the Owner
Trustee, the Lessee, the Owner Participant, or any Holder may apply to any
court of competent jurisdiction to appoint a successor Indenture Trustee to
act until such time, if any, as a successor shall have been appointed as
provided above. The successor Indenture Trustee so appointed by such court
shall immediately and without further act be superseded by any successor
Indenture Trustee appointed as provided above.
(b) In case at any time any of the following shall occur:
(i) the Indenture Trustee shall cease to be eligible in accordance
with the provisions of Section 12.03 hereof and shall fail to resign after
written request therefor by the Owner Trustee or by any Holder; or
(ii) the Indenture Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Indenture Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then the Owner Trustee may remove the Indenture Trustee and, with the consent
of the Lessee, appoint a successor trustee by written instrument, in
duplicate, executed by a Responsible Officer of the Owner Trustee, one copy of
which instrument shall be delivered to the Indenture Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of Section
7.13 hereof, any Holder who has been a bona fide Holder for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Indenture Trustee
and the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Indenture
Trustee and appoint a successor trustee, which removal and appointment shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 12.04 hereof. The successor Indenture Trustee so
appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as provided above
within one year from the date of appointment by such court.
Section 12.03. Persons Eligible for Appointment as Indenture
Trustee. There shall at all times be an Indenture Trustee hereunder which
shall be (i)(x) a bank or trust company organized and doing business under the
laws of the United States of America or any state or the District of Columbia
having a combined capital and surplus of at least $100,000,000 or (y) a bank
or trust company whose obligations hereunder are fully guaranteed by a direct
or indirect parent thereof having a combined capital and surplus of at least
$100,000,000 and (ii) a Citizen of the United States authorized under
applicable law to exercise corporate trust powers and subject to supervision of
examination by Federal, state or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Indenture Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Indenture Trustee shall resign immediately in
the manner and with the effect specified in Section 12.02 hereof.
Section 12.04. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 12.02 hereof shall execute
and deliver to the Owner Trustee, the Lessee, and to its predecessor trustee
an instrument accepting such appointment hereunder, in form and substance
reasonably satisfactory to the Owner Trustee, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as trustee herein; but, nevertheless, on
the written request of the Owner Trustee or of the successor trustee, upon
payment of its charges then unpaid, the trustee ceasing to act shall, subject
to Section 14.04 hereof, pay over to the successor trustee all moneys at the
time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Owner Trustee
shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Article XI hereof.
No successor trustee shall accept appointment as provided in this
Section 12.04 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 12.03 hereof.
Upon acceptance of appointment by a successor trustee as provided in
this Section 12.04, the successor trustee shall mail notice thereof by
first-class mail to the Holders at their last addresses as they shall appear
in the Register, and shall mail a copy of such notice to the Lessee and the
Owner Trustee. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 12.02
hereof.
Section 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation into which the Indenture
Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to
the corporate trust business of the Indenture Trustee, shall be the successor
to the Indenture Trustee hereunder, provided that, anything herein to the
contrary notwithstanding, such corporation shall be eligible under the
provisions of Section 12.03 hereof, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Indenture Trustee shall
succeed to the trusts created by this Indenture any of the Certificates shall
have been authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor
Indenture Trustee and deliver such Certificates so authenticated; and, in case
at that time any of the Certificates shall not have been authenticated, any
successor to the Indenture Trustee may authenticate such Certificates either
in the name of any predecessor hereunder or in the name of the successor
Indenture Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Certificates or in this Indenture provided
that the certificate of the Indenture Trustee shall have; provided, that the
right to adopt the certificate of authentication of any predecessor Indenture
Trustee or to authenticate Certificates in the name of any predecessor
Indenture Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
Section 12.06. Appointment of Separate Trustees. (a) At any time or
times, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Indenture Estate may at the time be located or
in which any action of the Indenture Trustee may be required to be performed
or taken, the Indenture Trustee, by an instrument in writing signed by it, may
appoint one or more individuals or corporations to act as a separate trustee
or separate trustees or co-trustee, acting jointly with the Indenture Trustee,
of all or any part of the Trust Indenture Estate, to the full extent that
local law makes it necessary for such separate trustee or separate trustees or
co-trustee acting jointly with the Indenture Trustee to act.
(b) The Indenture Trustee and, at the request of the Indenture
Trustee, the Owner Trustee, shall execute, acknowledge and deliver all such
instruments as may be required by the legal requirements of any jurisdiction
or by any such separate trustee or separate trustees or co-trustee for the
purpose of more fully confirming such title, rights or duties to such separate
trustee or separate trustees or co-trustee. Upon the acceptance in writing of
such appointment by any such separate trustee or separate trustees or
co-trustee, it, he or they shall be vested with such title to the Trust
Indenture Estate or any part thereof, and with such rights, powers, duties and
obligations, as shall be specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee, or the Indenture Trustee and
such separate trustee or separate trustees or co-trustee jointly with the
Indenture Trustee subject to all the terms of this Indenture, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such separate
trustee or separate trustees or co-trustee, as the case may be. Any separate
trustee or separate trustees or co-trustee may, at any time by an instrument
in writing, constitute the Indenture Trustee its or his attorney-in-fact and
agent with full power and authority to do all acts and things and to exercise
all discretion on its or his behalf and in its or his name. In case any such
separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, the title to the Trust Indenture Estate and all assets,
property, rights, powers, duties and obligations and duties of such separate
trustee or co-trustee shall, so far as permitted by law, vest in and be
exercised by the Indenture Trustee, without the appointment of a successor to
such separate trustee or co-trustee unless and until a successor is appointed.
(c) All provisions of this Indenture which are for the benefit of
the Indenture Trustee (including without limitation Article XI hereof) shall
extend to and apply to each separate trustee or co-trustee appointed pursuant
to the foregoing provisions of this Section 12.06.
(d) Every additional trustee and separate trustee hereunder shall,
to the extent permitted by law, be appointed and act and the Indenture Trustee
shall act, subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Indenture Trustee in respect of the receipt, custody, investment and
payment of moneys shall be exercised solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed and
exercised or performed by the Indenture Trustee and such additional trustee
or trustees and separate trustee or trustees jointly except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
Indenture Estate in any such jurisdiction) shall be exercised and performed
by such additional trustee or trustees or separate trustee or trustees;
(iii) no power hereby given to, or exercisable by, any such additional
trustee or separate trustee shall be exercised hereunder by such additional
trustee or separate trustee except jointly with, or with the consent of,
the Indenture Trustee; and
(iv) no trustee hereunder shall be liable either personally or in its
capacity as such trustee, by reason of any act or omission of any other
trustee hereunder.
If at any time the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to any such law, the Indenture Trustee shall
execute and deliver an indenture supplemental hereto and all other instruments
and agreements necessary or proper to remove any additional trustee or
separate trustee.
(e) Any request, approval or consent in writing by the Indenture
Trustee to any additional trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate trustee, as the case may be, to
take such action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 12.06, the
powers of any additional trustee or separate trustee shall not exceed those of
the Indenture Trustee hereunder.
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders.
The Owner Trustee (when authorized by the Owner Participant) and the Indenture
Trustee, without consent of the Holders, may enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge any property or
assets to the Indenture Trustee as security for the Certificates;
(b) to evidence the succession of another corporation to the Owner
Trustee or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Owner
Trustee herein and in the Certificates;
(c) to add to the covenants of the Owner Trustee such further
covenants, restrictions, conditions or provisions as it and the Indenture
Trustee shall consider to be for the protection of the Holders, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Indenture
Event of Default permitting the enforcement of all or any of the several
remedies provided herein; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture
may provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Indenture Event of
Default or may limit the remedies available to the Indenture Trustee upon
such an Indenture Event of Default or may limit the right of not less than
the Majority in Interest of Certificate Holders to waive such an Indenture
Event of Default;
(d) to surrender any right or power conferred herein upon the Owner
Trustee or the Owner Participant;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Owner Trustee may deem necessary or desirable and which
shall not adversely affect the interests of the Holders;
(f) to correct or amplify the description of any property at any
time subject to the Lien of this Indenture or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the Lien of this Indenture or to subject Replacement Airframe or
Replacement Engines to the Lien of this Indenture in accordance with the
provisions hereof or with the Lease or to release from the Lien of this
Indenture property that has been substituted on or removed from the
Aircraft as contemplated in Section 3.07 hereof; provided that supplements
to this Indenture entered into for the purpose of subjecting Replacement
Airframe or Replacement Engines to the Lien of this Indenture need only be
executed by the Owner Trustee and the Indenture Trustee;
(g) to provide for the issuance under this Indenture of Certificates
in coupon form (including Certificates registrable as to principal only)
and to provide for exchangeability of such Certificates with Certificates
issued hereunder in fully registered form, and to make all appropriate
changes for such purpose;
(h) to effect the re-registration of the Aircraft pursuant to
Section 6.03(b) of the Participation Agreement; and
(i) to add, eliminate or change any provision hereunder so long as
such action shall not adversely affect the interests of the Holders.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be contained therein and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Indenture Trustee shall not be obligated to enter into any such supplemental
indenture which adversely affects the Indenture Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any such supplemental indenture may be executed without the consent of
the Holders of Outstanding Certificates, notwithstanding any of the provisions
of Section 13.02 hereof.
Section 13.02. Supplemental Indentures With Consent of Holders.
With the consent (evidenced as provided in Article X) of the Majority in
Interest of Certificate Holders, the Owner Trustee (when authorized by the
Owner Participant) and the Indenture Trustee may, from time to time and at any
time, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders; provided, however, that,
without the consent of each and every Holder and each Liquidity Provider, no
such amendment of or supplement to this Indenture or any indenture
supplemental hereto, or modification of the terms of, or consent under, any
thereof, shall (a) modify any of the provisions of Section 7.11 hereof or this
Section 13.02, (b) reduce the amount or extend the time of payment of any
amount owing or payable under any Certificate or reduce the interest payable
on any Certificate (except that only the consent of the Holder shall be
required for any decrease in any amounts of or the rate of interest payable on
such Certificate or any extension for the time of payment of any amount
payable under such Certificate), or alter or modify the provisions of Article
V hereof with respect to the order of priorities in which distributions
thereunder shall be made as among Holders of different Series of Certificates
or 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 Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental indenture complies with the applicable
provisions of this Indenture.
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures. Certificates authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may bear
a notation in form approved by the Indenture Trustee as to any matter provided
for by such supplemental indenture. If the Owner Trustee or the Indenture
Trustee shall so determine, new Certificates so modified as to conform, in the
opinion of the Owner Trustee and the Indenture Trustee, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Owner Trustee, authenticated by the Indenture Trustee and delivered in
exchange for the Outstanding Certificates.
Section 13.06. No Request Necessary for Lease Supplement or Indenture
and Security Agreement Supplement. Notwithstanding anything contained in
Section 13.02 hereof, no written request or consent of the Indenture Trustee,
any Holder or the Owner Participant pursuant to Section 13.02 hereof shall be
required to enable the Owner Trustee to enter into any supplement to the Lease
with the Lessee in accordance with the terms and conditions of the Lease to
subject a Replacement Airframe or Replacement Engine thereto or to execute and
deliver an Indenture and Security Agreement Supplement pursuant to the terms
hereof.
Section 13.07. Notices to Liquidity Providers. Any request made to
any Holder for consent to any amendment, supplement or waiver pursuant to
Section 7.11, 8.01 or this Article XIII shall be promptly furnished by the
Indenture Trustee to each Liquidity Provider.
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination
of Indenture. If at any time after (a) the Owner Trustee shall have paid or
caused to be paid the principal of and interest on all the Certificates
outstanding hereunder, as and when the same shall have become due and payable,
or (b) the Owner Trustee shall have delivered to the Indenture Trustee for
cancellation all Certificates theretofore authenticated (other than any
Certificates which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.07 hereof) or (c) (i) all
such Certificates not theretofore delivered to the Indenture Trustee for
cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for prepayment
within one year under arrangements satisfactory to the Indenture Trustee for
the giving of notice of prepayment by the Indenture Trustee in the name and at
the expense of the Owner Trustee, and (ii) the Owner Trustee shall have
irrevocably deposited or caused to be deposited with the Indenture Trustee as
trust funds the entire amount in cash (other than moneys repaid by the
Indenture Trustee or any paying agent to the Owner Trustee in accordance with
Section 14.04 hereof) or Government obligations maturing as to principal and
interest in such amounts and at such times as will insure the availability of
cash sufficient to pay at maturity all such Certificates not theretofore
delivered to the Indenture Trustee for cancellation, including principal and
interest due or to become due to such date of maturity as the case may be, and
if, in any such case, the Owner Trustee shall also pay or cause to be paid all
other sums then payable hereunder by the Owner Trustee, then this Indenture
shall cease to be of further effect (except in the case of (c) above as to (A)
rights of registration of transfer and exchange, and the Owner Trustee's right
of optional prepayment pursuant to Section 6.02(a)(ii) hereof, (B)
substitution of mutilated, defaced, destroyed, lost or stolen Certificates,
(C) rights of Holders to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), (D) the rights, obligations, indemnities and immunities of the
Indenture Trustee hereunder and (E) the rights of the Holders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them), and the Indenture Trustee, on demand of the
Owner Trustee accompanied by an Officer's Certificate and an Opinion of
Counsel (covering such matters reasonably requested by, and in form and
substance reasonably satisfactory to, the Indenture Trustee) and at the cost
and expense of the Owner Trustee, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture. The Owner
Trustee agrees to reimburse and indemnify the Indenture Trustee for any costs
or expenses thereafter reasonably and properly incurred and to compensate the
Indenture Trustee for any services thereafter reasonably and properly rendered
by the Indenture Trustee in connection with this Indenture or the
Certificates.
Upon (or at any time after) payment in full to the Indenture Trustee,
as trust funds, of the principal of and interest on and Make-Whole Premium, if
any, and all other amounts due hereunder and under all Certificates and
provided that there shall then be no other amounts due to the Indenture
Trustee hereunder or under the Participation Agreement or otherwise secured
hereby, the Owner Trustee shall direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing the Aircraft from the Lien of this Indenture and
releasing the Indenture Documents from the assignment thereof hereunder, and
the Indenture Trustee shall execute and deliver such instrument as aforesaid
and, at the Owner Trustee's expense, will execute and deliver such other
instruments or documents as may be reasonably requested by the Owner Trustee
to give effect to such release; provided, however, that this Indenture and the
trusts created hereby shall terminate earlier and this Indenture shall be of
no further force or effect upon any sale or other final disposition by the
Indenture Trustee of all property forming a part of the Trust Indenture Estate
and the final distribution by the Indenture Trustee of all moneys or other
property or proceeds constituting part of the Trust Indenture Estate in
accordance with the terms hereof. Except as aforesaid otherwise provided, this
Indenture and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof.
Section 14.02. Application by Indenture Trustee of Funds Deposited
for Payment of Certificates. Subject to Section 14.04 hereof, all moneys
deposited with the Indenture Trustee pursuant to Section 14.01 hereof shall be
held in trust and applied by it to the prompt payment, either directly or
through any Paying Agent, to the Holders of the particular Certificates for
the payment or prepayment of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal,
interest and Make-Whole Premium, if any, but such money need not be segregated
from other funds except to the extent required by law.
Section 14.03. Repayment of Moneys Held by Paying Agent. Upon the
satisfaction and discharge of this Indenture all moneys then held by any
Paying Agent under the provisions of this Indenture shall, upon demand of the
Owner Trustee, be repaid to it or paid to the Indenture Trustee and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
Section 14.04. Transfer of Moneys Held by Indenture Trustee and
Paying Agent Unclaimed for Two Years and Eleven Months. Any moneys deposited
with or paid to the Indenture Trustee or any Paying Agent for the payment of
the principal of or interest or Make-Whole Premium on any Certificate and not
applied but remaining unclaimed for two years and eleven months after the date
upon which such principal, interest or Make-Whole Premium shall have become
due and payable, shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be paid to the
Owner Trustee (or, if the Trust Agreement shall no longer be in effect, to the
Owner Participant) by the Indenture Trustee or such Paying Agent and the
Holder of such Certificate, as a general unsecured creditor, shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Owner Trustee (or the
Owner Participant) for any payment which such Holder may be entitled to
collect, and all liability of the Indenture Trustee, or any Paying Agent with
respect to such moneys shall thereupon cease.
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting. Each of SSB (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 SSB (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, Holders and Liquidity Providers. Nothing in this
Indenture, whether express or implied, shall be construed to give to any
person other than SSB, the Owner Trustee, the Lessee, the Indenture Trustee,
as trustee and in its individual capacity, the Owner Participant, each
Liquidity Provider and the Holders any legal or equitable right, remedy or
claim under or in respect of this Indenture. Upon termination of this
Indenture pursuant to Article XIV hereof, the Indenture Trustee in connection
with the satisfaction of the Indenture shall return to the Owner Trustee all
property (and related documents and instruments) constituting or evidencing
the Trust Indenture Estate.
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease. Notwithstanding any of the provisions of this Indenture or the Trust
Agreement to the contrary, so long as no Event of Default shall have occurred
and be continuing, neither the Indenture Trustee nor the Owner Trustee will
take any affirmative acts that interfere with the peaceful and quiet
possession and enjoyment of the Aircraft by the Lessee.
Section 15.06. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Indenture to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy, and (a) if to the
Owner Trustee, addressed to it c/o State Street Bank and Trust Company, Two
International Place, 4th Floor, Boston, Massachusetts 02110 (telephone: (617)
664-5526, facsimile: (617) 664-5371), Attention: Corporate Trust Department
(with a copy to the Owner Participant at the address provided for notice
pursuant to Section 14.01 of the Participation Agreement), (b) if personally
delivered to the Indenture Trustee, addressed to it at its office at 79 South
Main Street, Salt Lake City, Utah 84111 (telephone: (801) 246-5630, facsimile:
(801) 246-5053), Attention: Corporate Trust Department or (c) if to the Owner
Participant, a Liquidity Provider or the Lessee, addressed to such party at
such address as such party shall have furnished by notice to the Owner Trustee
and the Indenture Trustee, or, until an address is so furnished, addressed to
the address of such party if any, set forth in Section 14.01 of the
Participation Agreement. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the
other parties to this Indenture.
Where this Indenture provides for notice to Holders, such notice
shall be sufficiently given (unless otherwise expressly provided herein) if in
writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at such Holder's last address as it appears in the Register. In any
case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Indenture Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Owner Trustee
and Holders when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient
giving of such notice.
Section 15.07. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Lessee or the Owner Trustee to the Indenture Trustee to take any action under
any of the provisions of this Indenture, the Lessee or the Owner Trustee, as
the case may be, shall furnish to the Indenture Trustee upon request (a) an
Officer's Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and
that the proposed action is in conformity with the requirements of this
Indenture, and (b) an Opinion of Counsel 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 SSB 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 SSB, upon the certificate, statement or
opinion of or representations by an officer or officers of the Lessee or SSB,
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
SSB or of counsel thereto may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant
or firm of accountants employed by the Lessee or the Owner Trustee, as the
case may be, unless such officer or counsel, as the case may be, knows that
the certificate or opinion or representations with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Indenture Trustee shall contain a statement that
such firm is independent.
Section 15.08. Severability. Any provision of this Indenture which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 15.09. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Indenture or the Certificates may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party or other person against whom enforcement of the change,
waiver, discharge or termination is sought; and any waiver of the terms hereof
or of any Certificate shall be effective only in the specific instance and for
the specific purpose given.
Section 15.10. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and permitted assigns of each, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of
such Holder. This Indenture and the Trust Indenture Estate shall not be
affected by any amendment or supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust Agreement, except that each
reference in this Indenture to the Trust Agreement shall mean the Trust
Agreement as amended and supplemented from time to time to the extent
permitted hereby and thereby.
Section 15.11. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for the convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 15.12. Normal Commercial Relations. Anything contained in
this Indenture to the contrary notwithstanding, the Owner Participant, the
Indenture Trustee and any Holder, or any bank or other affiliate of any such
party, may conduct any banking or other financial transactions, and have
banking or other commercial relationships, with the Lessee fully to the same
extent as if this Indenture were not in effect, including without limitation
the making of loans or other extensions of credit to the Lessee for any
purpose whatsoever, whether related to any of the transactions contemplated
hereby or otherwise.
Section 15.13. Governing Law; Counterparts. THIS INDENTURE AND
EACH CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. This Indenture may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed this 28th day of May, 1997 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.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By
------------------------------------
Name: Greg A. Hawley
Title: Vice President
Exhibit A
to
Trust Indenture and Security Agreement
Indenture and Security Agreement Supplement No. ___
Indenture and Security Agreement Supplement No. ___ (Federal Express
Corporation Trust No. N674FE) dated ________, ____, of STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as owner trustee
(herein called the "Owner Trustee") under the Trust Agreement dated as of May
1, 1997 (the "Trust Agreement") between State Street Bank and Trust Company of
Connecticut, National Association and the Owner Participant named therein.
W I T N E S S E T H :
-------------------
WHEREAS, the Trust Agreement provides for the execution and delivery
of this Indenture and Security Agreement Supplement which shall particularly
describe the Aircraft and any Replacement Airframe or Replacement Engine
included in the property covered by the Trust Agreement.
WHEREAS, the Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N674FE) dated as of May 1, 1997 (the "Indenture") between
the Owner Trustee and First Security Bank, National Association (herein called
the "Indenture Trustee") provides for the execution and delivery of an
Indenture and Security Agreement Supplement substantially in the form of this
Indenture and Security Agreement Supplement No. __, which Supplement shall
particularly describe the Aircraft included in the Trust Indenture Estate, and
shall specifically mortgage such Aircraft to the Indenture Trustee.
(1)WHEREAS, the Indenture relates to the Aircraft and the Engines
described in the following paragraph and a counterpart of the Indenture is
attached to and made a part of this Indenture and Security Agreement
Supplement No. 1, and this Indenture and Security Agreement Supplement No. 1,
together with such attachment, is being filed for recordation on or promptly
after the date of this Supplement No. 1 with the Federal Aviation
Administration as one document.
- ------------
(1) This recital is to be included only in the first Indenture Supplement.
(2)Whereas, the Indenture and Indenture and Security Agreement
Supplement No. ___ dated _________________, ______ (the Indenture being
attached to and made a part of such Indenture and Security Agreement
Supplement and filed therewith) have been duly recorded pursuant to Subtitle
VII of Title 49 of the United States Code, on ____________, _____, as one
document and have been assigned Conveyance No. _________.
- ------------
(2) This recital is not to be included in the first Indenture Supplement.
NOW, THEREFORE, this Supplement witnesseth, that, to secure the prompt
payment of the principal of and Make-Whole Premium, if any, and interest on,
and all other amounts due with respect to, all Outstanding Certificates under
the Indenture and all other amounts due hereunder and the performance and
observance by the Owner Trustee of all the agreements, covenants and
provisions for the benefit of the Holders contained in the Indenture, in the
Lease, in the Participation Agreement and the Certificates, and the prompt
payment of any and all amounts from time to time owing under the Participation
Agreement by the Owner Trustee, the Owner Participant or the Lessee to the
Holders and for the uses and purposes and subject to the terms and provisions
of the Indenture and the Certificates, and in consideration of the premises
and of the covenants contained in the Indenture, and of the purchase of the
Certificates by the Holders, and of the sum of $1 paid to the Owner Trustee by
the Indenture Trustee at or before the delivery of the Indenture, the receipt
of which is hereby acknowledged, the Owner Trustee has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged, granted a security
interest in, and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge, grant a security interest in, and confirm,
unto the Indenture Trustee, its successors and assigns, in trust for the equal
and ratable security and benefit of the Holders, in the trust created by the
Indenture, and subject to all of the terms, conditions, provisions and
limitations set forth in the Indenture, a first priority security interest in
and mortgage lien on all estate, right, title and interest of the Owner Trustee
in, to and under the following described property:
Airframe
One (1) Airframe identified as follows:
FAA Manufacturer's
Registration Serial
Manufacturer Model Number Number
- ------------ ----- ------------ --------------
together with all appliances, equipment, instruments and accessories
(including, without limitation, radio and radar) from time to time belonging
thereto, owned by the Owner Trustee and installed in or appurtenant to said
aircraft.
AIRCRAFT ENGINES
Two (2) aircraft engines, each such engine having 750 or more rated takeoff
horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Serial
Manufacturer Model Number
- ------------ ----- --------------
together with all equipment and accessories belonging thereto, by whomsoever
manufactured, owned by the Owner Trustee and installed in or appurtenant to
said aircraft engines.
Together with all substitutions, replacements and renewals of the
property described above, and all property which shall hereafter become
physically attached to or incorporated in the property described above,
whether the same are now owned by the Owner Trustee or shall hereafter be
acquired by it.
As further security for the obligations referred to above and secured
by the Indenture and hereby, the Owner Trustee has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors and assigns, for the
security and benefit of the Holders, in the trust created by the Indenture,
and subject to all of the terms, conditions, provisions and limitations set
forth in the Indenture, all of the estate, right, title and interest of the
Owner Trustee in, to and under the Lease Supplement (other than Excepted
Payments, if any) covering the property described above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, for the benefit and security of
the Holders for the uses and purposes and subject to the terms and provisions
set forth in the Indenture.
This Supplement shall be construed as supplemental to the Indenture
and shall form a part thereof, and the Indenture is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplement is being delivered in the State of New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft/Engines referred to in this Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee and covered by all the terms and conditions of
the Trust Agreement, subject to the Lien of the Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this Supplement to
be duly executed as of the date first written above by one of its officers
thereunto duly authorized.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as specifically set forth herein
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
Exhibit B
to
Trust Indenture and Security Agreement
[Form of Certificate]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD OR OFFERED FOR SALE IN CONTRAVENTION OF SAID ACT
No. ______ $_____________
EQUIPMENT TRUST CERTIFICATE
(Federal Express Corporation Trust No. N674FE)
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
(Federal Express Corporation Trust No. N674FE)
dated as of May 1, 1997
SERIES ___
Interest Rate Maturity
- ------------- --------
State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee (herein in such capacity called the "Owner
Trustee") under that certain Trust Agreement (Federal Express Corporation
Trust No. N674FE) dated as of May 1, 1997, between the Owner Participant named
therein and State Street Bank and Trust Company of Connecticut, National
Association (herein as such Trust Agreement may be amended or supplemented
from time to time called the "Trust Agreement"), hereby promises to pay to
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Subordination Agent, or its
registered assigns, the principal sum of ________________ _______________
Dollars, payable as set forth below for the Maturity specified above, in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest on the principal outstanding from time to time, semiannually on each
January 15 and July 15, on said principal sum in like coin or currency at the
rate per annum set forth above from the January 15 or the July 15, 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 January 15 or July 15 and before the
following January 15 or July 15, as the case may be, this Certificate shall
bear interest from such January 15 or July 15; provided that, if the Owner
Trustee shall default in the payment of interest due on such January 15 or
July 15, then this Certificate shall bear interest from the next preceding
January 15 or July 15 to which interest on this Certificate has been paid or
duly provided for. The interest so payable on any January 15 or July 15 will,
except as otherwise provided in the Indenture referred to below, be paid to
the person in whose name this Certificate is registered at the close of
business on the January 15 or July 15 preceding such January 15 or July 15,
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 First Security Bank, National Association
(the "Indenture Trustee") maintained for such purpose in immediately available
funds prior to 10:30 A.M. (New York time) on the due date thereof and the
Indenture Trustee shall remit all such amounts received by it to the Holders
at such account or accounts at such financial institution or institutions as
the Holders shall have designated to the Indenture Trustee in writing, in
immediately available funds, such payment to be made if the payment was
received prior to 10:30 A.M. New York time by the Indenture Trustee on any
Business Day, by 12:00 noon New York time on such Business Day; otherwise, the
Indenture Trustee shall make payment promptly, but not later than 11:00 A.M.
New York time on the next succeeding Business Day; provided that, at the
option of the Indenture Trustee or its Paying Agent, interest may be paid by
mailing a check therefor payable to or upon the written order of the
registered holder entitled thereto at his last address as it appears on the
Register. If any amount payable under this Certificate, or under the
Indenture, falls due on a day that is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
State Street Bank and Trust Company of Connecticut, National
Association and First Security Bank, National Association are not acting
individually hereunder, but solely as Owner Trustee and Indenture Trustee,
respectively.
Any Person, other than the Subordination Agent, who is acquiring the
Certificates will be deemed to represent and warrant that (i) no assets of an
employee benefit plan subject to Title I of ERISA or an individual retirement
account or plan subject to Section 4975 of the Code, or any trust established
under any such plan or account, have been used to acquire or hold any of the
Certificates, or (ii) that one or more administrative or statutory exemptions
from the prohibited transaction rules under Section 406 of ERISA and Section
4975 of the Code applies to its purchase and holding of the Certificates such
that its purchase and holding of the Certificates will not result in a
non-exempt prohibited transaction under Section 406 of ERISA and Section 4975
of the Code.
This Certificate is one of a duly authorized issue of Certificates
issued and to be issued under the Trust Indenture and Security Agreement
(Federal Express Corporation Trust No. N674FE) dated as of May 1, 1997 (herein
as amended, supplemented or modified from time to time called the "Indenture")
between the Owner Trustee and the Indenture Trustee, designated as Equipment
Trust Certificates (Federal Express Corporation Trust No. N674FE) limited in
aggregate initial principal amount to $61,835,000 consisting of the following
aggregate principal amounts of Certificates with the interest rates per annum
and Maturities shown:
Initial
Aggregate
Principal
Series Maturity Amount Interest Rate
------ -------- ----------- -------------
A January 15, 2018 $33,382,000 7.50%
B January 15, 2018 $12,430,000 7.52%
C January 15, 2014 $16,023,000 7.65%
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its
principal corporate trust office) for a more complete statement of the terms
and provisions thereof, including a statement of the properties conveyed,
pledged and assigned thereby, the nature and extent of the security, the
respective rights of the Owner Trustee, the Owner Participant, the Lessee, the
Indenture Trustee and the Holders, and the terms upon which the Certificates
are, and are to be, executed and delivered, to all of which terms and
conditions in the Indenture each Holder hereof agrees by its acceptance of
this Certificate.
Capitalized terms not otherwise defined herein shall have the
meanings given to them in the Indenture.
The principal amounts of the Certificates are payable as follows. The
Certificates are subject to redemption in part, pro rata (based on the face
amount thereof), in each case through mandatory sinking fund redemptions
providing for the redemption on the Sinking Fund Redemption Dates of the
aggregate principal amounts set forth below, together with interest accrued
thereon to the applicable Sinking Fund Redemption Date, but without Make-Whole
Premium.
Principal Amount
Series A Series B Series C
Certificates Certificates Certificates
with a with a with a
Sinking Fund Maturity of Maturity of Maturity of
Redemption Date January 15, 2018 January 15, 2018 January 15, 2014
- ---------------- ---------------- ---------------- -----------------
July 15, 1997 0 0 0
January 15, 1998 178,525 161,870 0
July 15, 1998 488,462 0 0
January 15, 1999 405,194 250,371 0
July 15, 1999 262,461 0 0
January 15, 2000 391,578 250,371 333,147
July 15, 2000 276,076 0 0
January 15, 2001 449,906 250,371 333,827
July 15, 2001 217,749 0 0
January 15, 2002 612,950 250,371 333,827
July 15, 2002 54,705 0 0
January 15, 2003 667,654 250,371 551,201
July 15, 2003 0 0 0
January 15, 2004 667,654 250,371 709,532
July 15, 2004 0 0 0
January 15, 2005 667,654 250,371 829,238
July 15, 2005 0 0 0
January 15, 2006 667,654 250,371 798,676
July 15, 2006 0 0 0
January 15, 2007 350,625 250,371 3,713,379
July 15, 2007 317,030 0 0
January 15, 2008 667,654 250,371 645,550
July 15, 2008 0 0 0
January 15, 2009 667,654 250,371 1,415,654
July 15, 2009 0 0 0
January 15, 2010 667,654 1,026,373 981,208
July 15, 2010 0 0 0
January 15, 2011 667,654 2,862,630 0
July 15, 2011 0 0 0
January 15, 2012 667,654 3,146,944 0
July 15, 2012 0 0 0
January 15, 2013 4,556,464 190,066 123,763
July 15, 2013 0 0 0
January 15, 2014 0 0 5,253,998
July 15, 2014 0 0 0
January 15, 2015 5,667,502 0 0
July 15, 2015 0 0 0
January 15, 2016 6,109,126 0 0
July 15, 2016 0 0 0
January 15, 2017 6,585,161 0 0
July 15, 2017 0 0 0
January 15, 2018 449,600 2,288,036 0
Except as expressly provided in the Indenture, all payments of
principal, Make-Whole Premium, if any, and interest and other amounts to be
made to the Holder hereof by or at the behest of the Owner Trustee hereunder
or under the Indenture shall be made only from the income and proceeds from
the Lessor's Estate to the extent included in the Trust Indenture Estate and
only to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Lessor's Estate to the extent included in the Trust
Indenture Estate to enable the Indenture Trustee to make such distributions in
accordance with the terms of the Indenture; provided that under the Lease, the
Lessee is obligated to pay or cause to be paid, to the extent such payments
are not required to be made from the assets subject to the Lien of this
Indenture or the income and proceeds received by the Indenture Trustee
therefrom, any net loss arising from the investment of funds held by the
Indenture Trustee which but for an Event of Default would be payable to
Lessee, and each Holder hereof, by its acceptance of this Certificate, agrees
that it will (except as aforesaid) look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for distribution to the
Holder hereof as provided above and that neither the Owner Participant, the
Owner Trustee, State Street Bank and Trust Company of Connecticut, National
Association nor the Indenture Trustee is personally liable to the Holder
hereof for any amounts payable or any liability under this Certificate or
under the Indenture, except as expressly provided in the Indenture, in the
case of State Street Bank and Trust Company of Connecticut, National
Association, the Owner Trustee and the Indenture Trustee.
The Certificates are subject to prepayment in the following
circumstances at the price determined as set forth below.
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08 of
the Indenture replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and the Lessee shall not have revoked
such notice or effected an assumption of the Certificates as provided in
Section 2.12 of the Indenture).
(iii) If the Owner Participant or the Owner Trustee on behalf of the
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 of the Indenture.
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) of Indenture.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a Refinancing of the Certificates.
(vi) As contemplated by Section 2.16 of the Indenture and Section
3.05(b) of the Participation Agreement if the Delivery Date has not
occurred on or prior to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee and the Owner Participant upon not less than 25 days'
prior written notice.
In the case of a prepayment of the Certificates pursuant to clauses
(ii), (iv) and (v) above, the Lessee, in accordance with and subject to the
terms (including timing of notice) of Section 4.02(a) or 10.01 of the Lease or
Article 15 of the Participation Agreement, as the case may be, shall give
irrevocable (subject to Section 6.02(c) of the Indenture) written notice to
the Owner Trustee and the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Owner Trustee is
directed to prepay the Certificates. In the case of a prepayment pursuant to
clause (i) above, the Certificates shall be prepaid on the Loss Payment Date
(as defined in Section 11.02 of the Lease). In the case of a prepayment
pursuant to clause (iii) above, the Certificates shall be prepaid on the date
designated in the notice of prepayment required by Section 8.02 of the
Indenture. In the case of a prepayment of the Certificates pursuant to
clauses (ii) and (iv) above, the Certificates shall be prepaid in full on the
Termination Date. In the case of a prepayment of the Certificates pursuant to
clause (v) above, the Certificates shall be prepaid on the effective date of
the Refinancing. In the case of a prepayment of the Certificates pursuant to
clause (vi) above, the Certificates shall be prepaid on the 15th day following
the Cut-Off Date. In the case of a prepayment of the Certificates pursuant to
clause (vii) above, the Certificates shall be prepaid on the date designated
in the notice referred to therein. The day on which the Certificates are to
be prepaid is herein referred to as the "Prepayment Date". On or prior to the
Prepayment Date, immediately available funds shall be deposited with the
Indenture Trustee in an amount in respect of the Certificates equal to:
(1) (i) if such prepayment is made under any provision of Section
6.02 of the Indenture on or after the applicable Premium Termination Date,
or (ii) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (i), (iii) (if clause (i) of the first
sentence of Section 8.02(a) of the Indenture is applicable) or (vi) above,
the sum of (A) the aggregate principal amount of such Certificates then
Outstanding, (B) accrued interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due the Indenture Trustee under the
Indenture or under the Participation Agreement or the Lease, but excluding
any Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date pursuant to clause (ii), (iii) (if clause (ii) of the
first sentence of Section 8.02(a) of the Indenture is applicable), (iv),
(v) or (vii) above, the sum of the amounts specified in clauses (A), (B)
and (C) of the preceding clause (1) plus any Make-Whole Premium payable in
respect of all Certificates with respect to which the Premium Termination
Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
If, in accordance with and subject to the satisfaction of the
conditions set forth in Section 7.11 of the Participation Agreement, the
Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participant and the Owner Trustee shall (except for prior acts) be released
and discharged from any further obligations hereunder and under the
Certificates and all other Operative Agreements (except any obligations that
have accrued prior to such assumption).
If an Indenture Event of Default under the Indenture shall occur and
be continuing, the principal of the Certificates may be declared due and
payable in the manner and with the effect provided in the Indenture. The
Indenture provides that in certain events such declaration and its
consequences may be waived the Majority in Interest of Holders. Any such
consent or waiver shall be conclusive and binding upon the Holder of this
Certificate and upon all future Holders and owners of this Certificate and any
Certificate that may be issued in exchange or substitution therefor, whether or
not any notation thereof is made upon this Certificate or such other
Certificates. Moreover, if, and only if, an Event of Default shall occur, the
Indenture Trustee may declare the Lease to be in default, and may, to the
exclusion of the Owner Trustee, exercise one or more of the remedies of the
Owner Trustee provided in the Lease.
The Owner Trustee or the Owner Participant may cure a default by the
Lessee under the Lease arising from the failure of the Lessee to make any
Basic Rent payments under the Lease, but the Owner Trustee and the Owner
Participant, collectively, may not cure more than three consecutive such
failures or more than six such failures in total. The Owner Trustee or the
Owner Participant may cure any other default by the Lessee in the performance
of its obligations under the Lease.
(A) If an Event of Default shall have occurred and be continuing for
more than 180 days or the Certificates shall have been accelerated or (B) an
Event of Default shall have occurred and be continuing for not more than 180
days and the Certificates shall not have been accelerated, the Owner
Participant (or the Owner Trustee on behalf of the Owner Participant) may:
(1) direct the Owner Trustee to cause the prepayment of all the
Outstanding Certificates by notifying the Indenture Trustee of such
election and depositing the sum of amounts contemplated by paragraph
"first" under Section 5.03 of the Indenture and the aggregate
Prepayment Price of all such Certificates with the Indenture Trustee
for distribution to the Holders; or
(2) purchase all of the Outstanding Certificates by paying to the
Indenture Trustee an amount equal to the aggregate unpaid principal
amount of all Outstanding Certificates, plus accrued interest on such
amount to the date of purchase and if such purchase occurs prior to
the Premium Termination Date for such Outstanding Certificate (in the
case of a purchase pursuant to clause (ii) of the first sentence of
Section 8.02(a) of the Indenture but not in the case of clause (i) of
Section 8.02(a) of the Indenture) any Make-Whole Premium applicable
to each Outstanding Certificate, plus all other sums due any Holder
or the Indenture Trustee under the Indenture, the Participation
Agreement or the Lease.
The right of the Holder hereof to institute an action for any remedy
under the Indenture is subject to certain restrictions specified in the
Indenture, except that the right of the Holder of this Certificate to receive
payment of the principal of and interest and Make-Whole Premium, if any, on
this Certificate on or after the respective due dates, or to institute suit
for the enforcement of any such payment, shall not be impaired or affected
without the consent of such Holder.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 and integral multiples thereof. So long as
any of the Certificates remain Outstanding, the Indenture Trustee will
maintain an office or agency where the Certificates may be presented for
payment and a facility or agency in New York, New York where the Certificates
may be presented for registration of transfer and for exchange as provided in
the Indenture. As provided in the Indenture and subject to certain
limitations therein, this Certificate is transferable, and upon surrender of
this Certificate for registration of transfer at the principal corporate trust
office of the Indenture Trustee, or at the office or agency maintained for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Indenture Trustee duly
executed by, the Holder or his attorney duly authorized in writing, one or
more new Certificates of the same Series and 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 Series and Maturity and interest rate and
of authorized denominations, as requested by the Holder surrendering the same,
upon presentation thereof for such purpose at the principal corporate trust
office of the Indenture Trustee, or at an office or agency maintained for such
purpose.
No service charge shall be levied for any such registration of
transfer or exchange, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to the due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, any agent of the Owner
Trustee or the Indenture Trustee, the Paying Agent, if any, the Registrar and
the Lessee shall deem and treat the person in whose name this Certificate is
registered as the absolute owner hereof for all purposes whether or not this
Certificate is overdue, and neither the Owner Trustee, the Indenture Trustee
(nor any agent of the Owner Trustee or the Indenture Trustee), nor the Paying
Agent, if any, the Registrar nor the Lessee shall be affected by notice to the
contrary.
The indebtedness evidenced by this Certificate is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of the Secured Obligations (as defined in
the Indenture) in respect of [Series A Certificate](1), [Series A and Series B
Certificates](2) and this Certificate is issued subject to such provisions.
The Holder of this Certificate, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Indenture Trustee
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in the Indenture and (c) appoints
the Indenture Trustee such Holder's attorney-in-fact for such purpose.(*)
- ------------
(1) To be inserted in the case of a Series B Certificate.
(2) To be inserted in the case of a Series C Certificate.
(*) To be inserted for each Certificate other than any Series A Certificate.
As provided in the Indenture, the Indenture and the Certificates
shall be construed in accordance with and governed by the laws of the State of
New York.
This Certificate shall not be secured by or be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose unless
authenticated by the Indenture Trustee as evidenced by the manual signature of
one of its authorized officers on the certificate below.
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Trust
Certificate (Federal Express Corporation Trust No. N674FE) to be duly executed
in its corporate name by its officer thereunto duly authorized.
Dated: May ___, 1997 STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Owner Trustee
By
------------------------------------
Name: Paul D. Allen
Title: Vice President
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust Certificates (Federal Express
Corporation Trust No. N674FE) referred to in the within mentioned Indenture.
Dated: May ___, 1997 FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By
------------------------------------
Name: Greg A. Hawley
Title: Vice President
SCHEDULE I
[Reserved]
SCHEDULE II
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N674FE)
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement,
the Series Supplements, the Intercreditor Agreement and the Liquidity
Facilities) referred to below, unless otherwise defined in an Operative
Agreement or the context thereof shall otherwise require. In the case of any
conflict between the provisions of this Schedule and the provisions of any
Operative Agreement, the provisions of such Operative Agreement shall control
the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Additional Insured. As defined in Article 13 of the Lease.
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
located in the United States succeeding to the functions of any of the
foregoing.
Affidavits. The affidavits of citizenship of the Owner Trustee and
the Owner Participant.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment to be 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 to be
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 and
actual state, local and foreign income taxes.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee as
provided in the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe thereunder) together with two Engines
(whether either is an initial Engine or a 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 Aircraft shall mean the Airbus A300F4-605R airframe bearing FAA
Registration Number N674FE and Manufacturer's serial number 781, together with
two General Electric CF6-80C2-A5F engines.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number initially and manufacturer's serial
number specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any Replacement Airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on or prior to the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, each Liquidity Provider and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N674FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Ancillary Agreement II. The Ancillary Agreement II (Federal Express
Corporation Trust No. N674FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Application. The application for registration of the Aircraft with
the FAA in the name of the Owner Trustee.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with an abbreviated report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
Assignment and Assumption Agreement. Any agreement delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Average Life Date. For any Certificate, the date which follows the
prepayment date by a period equal to the Remaining Weighted Average Life of
such Certificate.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France.
AVSA Consent and Agreement. The Consent and Agreement dated as of
May 1, 1997, executed by AVSA.
AVSA's FAA Bill of Sale. The bill of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Bankruptcy Default. An event specified in Section 16.01(e), (f) or
(g) of the Lease which either does or, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Delivery Date and ending at the end of the day on December 23, 2020, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Memphis, Tennessee and the city in the
United States in which the office or agency is maintained by the Pass Through
Trustee for the payment of the Pass Through Certificates, and after the Lien
of the Indenture is discharged, Boston, Massachusetts.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N674FE), 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 either of which would change or would allow a change in
the tax assumptions or structure upon which the lease economics were based,
provided that the Owner Participant or the Lessee has notified the other party
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 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Class A Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Class B Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Collateral Account Control Agreement. The Collateral Account Control
Agreement dated as of May 1, 1997 among State Street Bank and Trust Company,
the Indenture Trustee and the Owner Trustee.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of May 1,
1997 executed by the Manufacturer.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 750 Main Street, Hartford, Connecticut
06103, Attention: Corporation Trust Administration, or such other office at
which the Owner Trustee's corporate trust business shall be administered which
the Owner Trustee shall have specified by notice in writing to the Lessee, the
Owner Participant and the Indenture Trustee.
Corporate Trust Department. The Corporate Trust Department office of
the Indenture Trustee located at 79 South Main Street, Salt Lake City, Utah
84111, Attention: Corporate Trust Department, or such other office at which
the Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to the Lessee,
the Owner Participant and the Owner Trustee.
CRAF Program. Has the meaning specified in Section 7.01(f) of the
Lease.
Cut-Off Date. December 22, 1997.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
Default. Any event or condition which, with the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
Delivery Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
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 has a combined
capital and surplus of at least $100,000,000 and a rating of A or better from
the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Section 7.02(a)(vii), 10.02(c), 10.03, 11.03, 11.04 or 12.02 of
the Lease, together with all Parts related thereto. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the Lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, both Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1997, executed
by the Engine Manufacturer.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N674FE), dated as of May 1, 1997 between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. As defined in Section 8.01(b)(xii) of the Participation
Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by Lessee for any reason whatsoever;
(ii) any damage to such property which results in an insurance settlement with
respect to such property on the basis of a total loss, or constructive or
compromised total loss; (iii) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the Government, any foreign
government or purported government or any agency or instrumentality thereof,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, for a period in excess of 180 days (or such
shorter period ending on the earlier of the expiration of the Term or on the
date on which an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss shall occur)
or (B) by the Government for a period extending beyond the Term; and (iv) as a
result of any law, rule, regulation, order or other action by the Aeronautics
Authority or other governmental body having jurisdiction, the use of the
Aircraft or Airframe in the normal course of air transportation of cargo shall
have been prohibited by virtue of a condition affecting all Airbus A300-600
series aircraft equipped with engines of the same make and model as the
Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period, shall be diligently
carrying forward all steps which are necessary or desirable to permit the
normal use of the Aircraft or Airframe or, in any event, if such use of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if any Event of Loss occurs with respect to the Airframe.
Excepted Payments. Collectively, (i) indemnity, expense,
reimbursement or other payments paid or payable by the Lessee in respect of
the Owner Participant, the Owner Trustee in its individual capacity or any of
their respective successors, permitted assigns, directors, officers,
employees, servants and agents or Affiliates, pursuant to the Participation
Agreement or any other Operative Agreement or any indemnity hereafter granted
to the Owner Participant or the Owner Trustee in its individual capacity
pursuant to the Lease or the Participation Agreement, (ii) proceeds of public
liability insurance (or government indemnities in lieu thereof) in respect of
the Aircraft payable as a result of insurance claims paid for the benefit of,
or losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Article 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) any purchase price paid to the
Owner Participant for its interest in the Trust Estate pursuant to Section
7.03(d) of the Participation Agreement, (vi) subject to Section 3.05 of the
Lease, payments constituting increases in Basic Rent attributable to payments
arising pursuant to Section 5 of the Tax Indemnity Agreement, (vii) any
payments in respect of interest to the extent attributable to payments
referred to in clauses (i) through (vi) above and (viii) any right to demand,
collect or otherwise receive and enforce the payment of any amount described
in clauses (i) through (v) and (vii) above (except with respect to interest
attributable to payments referred to in clause (vi) above).
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. 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 and Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell, assuming the Aircraft (or other property) is unencumbered
by the Lease. In such determination, except for purposes of Section 17.01 of
the Lease (when it shall be determined based upon the actual condition and
location of the Aircraft), 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 and Fair Market Value shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Final Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Fixed Renewal Rent. Semi-annual payments of rent during the Fixed
Renewal Term equal to the lesser of (i) Fair Market Rental as determined as of
the commencement of such Fixed Renewal Term and (ii) 50% of the average actual
semi-annual Basic Rent payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
FPO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
French Pledge Agreement. The French Pledge Agreement dated as of May
1, 1997 between the Owner Trustee and the Indenture Trustee.
FSB. First Security Bank, National Association, a national banking
association.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of SSB, in its individual capacity and as Owner
Trustee and Lessor, the Subordination Agent, in its individual capacity and in
its capacity as Subordination Agent, each Liquidity Provider, the Owner
Participant, the Indenture Trustee, in its individual capacity and as trustee,
the Owner Participant Guarantor and any successor (including any trustee which
may succeed to the Lessor's interest under the Lease), Affiliate, assign,
officer, director, employee, agent and servant of any of the foregoing, the
Lessor's Estate and the Trust Indenture Estate. Neither the Pass Through
Trustee nor any holder of a Pass Through Certificate shall be deemed to be an
Indemnitee.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N674FE), dated as of May 1, 1997, between the
Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N674FE) to be dated the Delivery Date, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
Indenture Trustee's Liens. Any Lien against, on or with respect to
the Aircraft, the Lessor's Estate or the Trust Indenture Estate or any part
thereof 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, (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 or (iii) Taxes imposed against
the Indenture Trustee in its individual capacity in respect of which the Lessee
has not indemnified (and is not obligated to indemnify) the Indenture Trustee
in such capacity.
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, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Intercreditor Agreement. The Intercreditor Agreement dated as of May
1, 1997, among the Pass Through Trustee, the Class A Liquidity Provider, the
Class B Liquidity Provider and the Subordination Agent.
Interest Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N674FE) dated as of May 1, 1997, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, including,
without limitation, supplementation by one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N674FE) to be dated the Delivery Date, substantially in
the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA Bill
of Sale, AVSA's Warranty Bill of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), any Ancillary Agreement, the GTA, the
Engine Warranty Assignment, the Engine Consent, 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 in its individual
capacity or the Owner Participant) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity, or to any of their respective directors, officers,
employees and agents pursuant to Articles 8 and 9 of the Participation
Agreement), and all other property of the Owner Trustee purportedly subjected
to the Lien of the Indenture by the Granting Clause thereof; provided that in
no event shall "Lessor's Estate" include any Excepted Payment.
Lessor's Liens. Liens against, on or with respect to the Aircraft,
the Lessor's Estate or the Trust Indenture Estate or any part thereof, title
thereto or any interest therein arising as a result of (i) claims against the
Lessor, in its individual capacity or as Owner Trustee, or the Owner
Participant, in each case not related to the transactions contemplated by the
Operative Agreements, (ii) acts or omissions of the Lessor in its individual
capacity or as Owner Trustee, and, in the case of the Lessor in its individual
capacity, arising from its gross negligence or willful misconduct or expressly
prohibited under the Operative Agreements and any act or omission of the Owner
Participant which is in violation of any of the terms of the Operative
Agreements, (iii) Taxes or Expenses imposed against the Lessor, in its
individual capacity or as Owner Trustee, Owner Participant, Lessor's Estate or
the trust created by the Trust Agreement which are not required to be
indemnified against by the Lessee pursuant to the Participation Agreement by
reason of Section 8.01(b) or 9.01(b) thereof and which are not required to be
indemnified against by the Lessee pursuant to the Tax Indemnity Agreement, or
(iv) claims against the Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner Participant of its interests in
the Aircraft other than a transfer of the Aircraft pursuant to Section 4.02(a)
or Article 10 or 11 of the Lease and other than a transfer pursuant to the
exercise of the remedies set forth in Article 17 of the Lease.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Liquidity Facility. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Liquidity Provider. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
Loss Payee. Has the meaning specified in Section 13.02(b)(i) of the
Lease.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% of the aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding for
purposes of this definition any Certificates held by (i) the Owner Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the day before the
applicable Prepayment Date (or date of purchase, as the case may be) which an
Independent Investment Banker determines to be equal to the excess, if any, of
(i) the present value of the remaining scheduled payments of such principal
amount or portion thereof and interest thereon (excluding interest accrued
from the immediately preceding Payment Date to such Prepayment Date or date of
purchase, as the case may be) to the Maturity of such Certificate in
accordance with generally accepted financial practices assuming a 360-day year
consisting of twelve 30-day months at a discount rate equal to the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
outstanding principal amount of such Certificate plus accrued interest.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. Moody's Investors Service, Inc.
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 equal to the Debt Rate per annum compounded semi-annually.
Non-U.S. Person. Any Person other than a U.S. Person.
Obsolete Parts. Parts which are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, the Owner Trustee Guaranty,
if any, any Ancillary Agreement entered into by or with the written consent of
the Indenture Trustee, which by its terms is an Operative Agreement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the Engine Consent, the Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Account Control Agreement and any Assignment and Assumption
Agreement.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Outstanding. When used with respect to Certificates, as of the date
of determination and subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and delivered under the
Indenture, with the exception of the following:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money in the necessary amount
has been theretofore deposited with the Indenture Trustee in trust
for the Holders of such Certificates pursuant to Section 14.01 of the
Indenture; provided, that if such Certificates are to be prepaid,
notice of such prepayment has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Indenture Trustee
has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to Article II
of the Indenture.
Owner Participant. The trustor originally named in the Trust
Agreement and any successor thereto, and any Person to which the Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Guarantor. Philip Morris Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Certificate Closing Date by the Owner Participant Guarantor in favor of the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
and any guaranty delivered in compliance with Section 7.03(d) of the
Participation Agreement.
Owner Trustee. SSB, not in its individual capacity except as
otherwise expressly stated, but solely as Owner Trustee under the Trust
Agreement.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the 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 the case may be, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N674FE), dated as of May 1, 1997, among the Lessee, the
Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee, the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee and the Subordination Agent not in its
individual capacity except as otherwise expressly provided therein, but solely
as subordination agent.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine or title to which
remains vested in the Lessor pursuant to Article 8 of the Lease.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
May 1, 1997 between the Lessee and the Pass Through Trustee.
Pass Through Certificates. Any of the Pass Through Certificates,
1997-1-A, the Pass Through Certificates, 1997-1-B or the Pass Through
Certificates, 1997-1-C, in each case as issued by the related Pass Through
Trust; and "Pass Through Certificates" means all of the Pass Through
Certificates issued by each of the Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Corporation 1997-1 Pass
Through Trust Class A, Federal Express Corporation 1997-1 Pass Through Trust
Class B and Federal Express Corporation 1997-1 Pass Through Trust Class C, in
each case formed pursuant to the related Series Supplement in accordance with
the Pass Through Agreement; and "Pass Through Trusts" means all of such Pass
Through Trusts.
Pass Through Trustee. First Security Bank, National Association, a
national banking association, in its capacity as Pass Through Trustee under
the Pass Through Agreement and each Pass Through Trust.
Past Due Rate. In respect of (A) any amount payable to the Owner
Participant or the Owner Trustee a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid
in full equal to 2% plus the Debt Rate and (B) any principal of or interest on
any Certificate or any other amount payable under the Indenture, any
Certificate or any other Operative Agreement that is not paid when due
(whether at Maturity, by acceleration, by optional or mandatory prepayment or
otherwise) to any Holder, the Indenture Trustee or the Pass Through Trustee, a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to (i) in the
case of any such amount payable to the Holder of any Certificate, 2% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. Each January 15 and July 15 commencing on July 15,
1997.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local,
foreign or any agency, instrumentality, division or body thereof).
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
December 27, 2011, with respect to the Series B Certificates, February 5, 2010
and with respect to the Series C Certificates, March 22, 2007.
Prepayment Date. Has the meaning specified in Section 6.02(b) of the
Indenture.
Prepayment Price. Has the meaning specified in Section 6.02(b) of the
Indenture.
Principal Amount. With respect to a Certificate means the stated
original principal amount of such Certificate and, with respect to all
Certificates, means the aggregate stated original principal amounts of all
Certificates.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
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 Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N674FE), dated as of May 1, 1997 between
the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement II.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), December 31 for January 15
Payment Dates and June 30 for July 15 Payment Dates, whether or not such date
is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Register. Has the meaning set forth in Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N670FE, N671FE,
N672FE, N673FE, N583FE and N584FE, each dated as of May 1, 1997, between the
Owner Trustee and the Indenture Trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N581FE, dated as of May 1,
1997, between Wilmington Trust Company, as owner trustee and the Indenture
Trustee, and the Trust Indenture and Security Agreement for Federal Express
Corporation Trust No. N587FE, dated as of December 1, 1996, as amended and
restated as of May 1, 1997, between Wilmington Trust Company, as owner trustee
and the Indenture Trustee.
Remaining Weighted Average Life. On a given date with respect to any
Certificate the number of days equal to the quotient obtained by dividing (i)
the sum of each of the products obtained by multiplying (a) the amount of each
then remaining scheduled payment of principal of such Certificate by (b) the
number of days from and including such prepayment date to but excluding the
dates on which each such payment of principal is scheduled to be made; by (ii)
the then outstanding principal amount of such Certificate.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. One or more terms with respect to which the Lessee has
exercised its option to renew the Lease pursuant to Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. December 23, 2020 and each January 15 and July 15
commencing on January 15, 1998.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Aircraft. Any aircraft substituted for the Aircraft
pursuant to Section 11.03(a) of the Lease.
Replacement Airframe. Has the meaning set forth in Section 11.03 of
the Lease.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) of equal or greater value,
airworthiness, remaining useful life and utility as the Engine being replaced,
together with all Parts relating to such engine; provided, however, that if
such replacement engine is not a General Electric CF6-80C2-A5F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement in which case the definition of Responsible
Officer set forth in Section 3.10 of the Trust Agreement is applicable) or the
Indenture Trustee, any officer in its Corporate Trust Administration, as the
case may be, designated by such Person to perform obligations under the
Operative Agreements, and with respect to any other party, any corporate
officer or (except in the case of the Owner Participant) other employee of a
party who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Secured Obligations. Has the meaning specified in the Granting
Clause of the Indenture.
Securities Act. The Securities Act of 1933, as amended.
Series "A" or "Series A Certificates". Certificates issued and
designated as "Series A" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series A".
Series "B" or "Series B Certificates". Certificates issued and
designated as "Series B" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series B".
Series "C" or "Series C Certificates". Certificates issued and
designated as "Series C" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series C".
Series Supplement or Series Supplements. The Series Supplement
1997-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1997-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1997-1-C to be
executed and delivered by the Lessee and the Pass Through Trustee.
Sinking Fund Redemption Date. Has the meaning specified in Section
6.06 of the Indenture.
Sinking Fund Redemption Price. Has the meaning specified in Section
6.06 of the Indenture.
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Specified Investments. 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 S&P and Moody's,
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) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following
the date of such investment; (d) overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers; or
(e) 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 or 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.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association.
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 Factor" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with so much of the arrears portion of Basic Rent due and owing
through the date of payment of Stipulated Loss Value as does not constitute an
Excepted Payment, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment. Subject to the immediately
preceding sentence, it is understood and agreed that the amounts set forth on
Schedule III of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals and
credits of unearned Basic Rent through such date and, accordingly, no further
accrual or credit shall be required through such date whenever Stipulated Loss
Value is to be calculated with reference to any such date; provided that if
amounts in respect of Stipulated Loss Value are payable under the Operative
Agreements after the Stipulated Loss Determination Date in respect of which
such Stipulated Loss Value was determined, the Lessor shall be compensated
during the period from the Stipulated Loss Determination Date to such payment
date in accordance with the provisions of the Operative Agreements.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease.
Subordination Agent. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Subordination Agent.
Supplemental Rent. (a) All amounts, liabilities and obligations
which the Lessee assumes or agrees to perform or pay under the Lease or under
the Participation Agreement or Tax Indemnity Agreement or any Ancillary
Agreement or any other Operative Agreement to the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, FPO Price and amounts calculated by reference to Termination Value, any
amounts of Make-Whole Premium payable under the Indenture to the extent
provided in Section 3.03 of the Lease, and all amounts required to be paid by
Lessee under the agreements, covenants and indemnities contained in the Lease
or in the Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Basic Rent and (b) all amounts that the
Owner Trustee is obligated to pay in accordance with clause (b) of the last
paragraph of Section 2.04 of the Indenture.
Tax. Has the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N674FE), dated as of May 1, 1997, between the
Lessee and the Owner Participant.
Term. 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 December 31, 2004 in the case of Article 10 of the Lease, and in
the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling
on July 15, 2017, (ii) Section 4.02(a)(D) or (E) of the Lease, a Rent
Payment Date that is on or after the seventh anniversary of the Delivery Date
and (iii) Section 4.02(a)(F) of the Lease, the last day of the Basic Term.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent through such date and,
accordingly, no further accrual or credit shall be required through such date
whenever Termination Value is to be calculated with reference to any such
date; provided that if amounts in respect of Termination Value are payable
under the Operative Agreements after the Termination Date in respect of which
such Termination Value was determined, the Lessor shall be compensated during
the period from the Termination Date to such payment date in accordance with
the provisions of the Operative Agreements.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code, as amended
and in effect on the date of the Lease or as subsequently amended, or any
successor or substituted legislation at the time in effect and applicable, and
the regulations promulgated pursuant thereto.
Treasury Yield. At the time of determination with respect to any
Certificate, the interest rate (expressed as a semi-annual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semi-annual
yield to maturity for United States Treasury securities maturing on the
Average Life Date on such Certificate and trading in the public securities
markets either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in public securities markets, (i) one maturing as close as possible to,
but earlier than, the Average Life Date of such Certificate and (ii) the other
maturing as close as possible to, but later than, the Average Life Date of
such Certificate. In each case as published in the most recent H.15(519) or,
if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Certificate is reported on the most
recent H.15 (519), such weekly average yield to maturity as published in such
H.15(919). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Premium
will be the third Business Day prior to the applicable prepayment date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable prepayment date.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N674FE), dated as of May 1, 1997, between the Owner Participant and
the Owner Trustee in its individual capacity.
Trust Estate. The Lessor's Estate.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. Morgan Stanley & Co. Incorporated, First Chicago
Capital Markets, Inc., Goldman, Sachs & Co. and J.P. Morgan & Co.
Underwriting Agreement. The Underwriting Agreement dated May 22, 1997
among the Lessee and the Underwriters.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
- ------------------------------------------------------------------------------
TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust No. N581FE)
Dated as of May 1, 1997
between
WILMINGTON TRUST COMPANY,
Not in its Individual
Capacity, but solely
As Owner Trustee,
Owner Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Not in its Individual
Capacity, but solely
As Indenture Trustee,
Indenture Trustee
COVERING ONE MCDONNELL DOUGLAS MD-11F AIRCRAFT
SERIAL NO. 48419, REGISTRATION NO. N581FE
==============================================================================
TABLE OF CONTENTS
Page
----
Initial Recitals......................................................... 1
Granting Clause.......................................................... 2
Habendum Clause.......................................................... 5
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................. 7
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.............. 7
Section 2.02. Execution of Certificates................................ 8
Section 2.03. Certificate of Authentication............................ 8
Section 2.04. Form and Terms of Certificates; Payments of Principal,
Make-Whole Premium and Interest.......................... 8
Section 2.05. Payments from Trust Indenture Estate Only................ 11
Section 2.06. Registration, Transfer and Exchange...................... 12
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates............................................. 13
Section 2.08. Cancellation of Certificates; Destruction Thereof........ 14
Section 2.09. Temporary Certificates................................... 14
Section 2.10. Termination of Interest in Trust Indenture Estate........ 15
Section 2.11. Certificates in Respect of Replacement Aircraft.......... 15
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements..................................... 15
Section 2.13. Establishment of Collateral Account...................... 15
Section 2.14. Investment of Funds on Deposit in the Collateral Account. 16
Section 2.15. Release of Debt Portion and Lien on the Collateral Account
and the Liquid Collateral on Delivery Date............... 17
Section 2.16. Cut-Off Date............................................. 17
Section 2.17. Subordination............................................ 18
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.... 18
Section 3.02. Offices for Payments, etc................................ 19
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee.................................................. 19
Section 3.04. Paying Agents............................................ 19
Section 3.05. Covenants of WTC and the Owner Trustee................... 19
Section 3.06. [Reserved]............................................... 20
Section 3.07. Disposal of Trust Indenture Estate....................... 20
Section 3.08. No Representations or Warranties as to Aircraft or
Documents................................................ 20
Section 3.09. Further Assurances; Financing Statements................. 21
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates.................. 21
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution.................................. 22
Section 5.02. Event of Loss and Replacement; Prepayment................ 23
Section 5.03. Payment After Indenture Event of Default, etc............ 24
Section 5.04. Certain Payments......................................... 26
Section 5.05. Other Payments........................................... 26
Section 5.06. Payments to Owner Trustee................................ 27
Section 5.07. Application of Payments.................................. 27
Section 5.08. Investment of Amounts Held by Indenture Trustee.......... 27
Section 5.09. Withholding Taxes........................................ 28
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity.......................... 29
Section 6.02. Prepayment of Certificates............................... 29
Section 6.03. Notice of Prepayment to Holders.......................... 31
Section 6.04. Deposit of Prepayment Price and Sinking Fund Redemption
Price.................................................... 31
Section 6.05. Certificates Payable on Prepayment Date.................. 31
Section 6.06. Mandatory Sinking Fund Redemption........................ 32
ARTICLE VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
Section 7.01. Indenture Event of Default............................... 34
Section 7.02. Remedies................................................. 36
Section 7.03. Return of Aircraft, etc.................................. 38
Section 7.04. Indenture Trustee May Prove Debt......................... 41
Section 7.05. Remedies Cumulative...................................... 43
Section 7.06. Suits for Enforcement.................................... 43
Section 7.07. Discontinuance of Proceedings............................ 43
Section 7.08. Limitations on Suits by Holders.......................... 44
Section 7.09. Unconditional Right of Holders to Receive Principal,
Interest and Make-Whole Premium, and to Institute
Certain Suits............................................ 44
Section 7.10. Control by Holders....................................... 44
Section 7.11. Waiver of Past Indenture Default......................... 45
Section 7.12. Notice of Indenture Default.............................. 45
Section 7.13. Waiver of Appraisement, etc.; Laws....................... 46
ARTICLE VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANTS
Section 8.01. Certain Rights of Owner Trustee and Owner Participants... 46
Section 8.02. Owner Participants' Right to Elect to Prepay or Purchase
the Certificates......................................... 50
Section 8.03. Certain Rights of Owner Participants..................... 51
ARTICLE IX
CONCERNING THE INDENTURE TRUSTEE
Section 9.01. Acceptance of Trusts..................................... 52
Section 9.02. Duties and Responsibilities of the Indenture Trustee;
During an Indenture Event of Default; Prior to an
Indenture Event of Default............................... 53
Section 9.03. Certain Rights of the Indenture Trustee.................. 55
Section 9.04. Indenture Trustee Not Responsible for Recitals,
Disposition of Certificates or Application of Proceeds
Thereof.................................................. 56
Section 9.05. Indenture Trustee and Agents May Hold Certificates;
Collections, etc......................................... 56
Section 9.06. Moneys Held by Indenture Trustee......................... 56
Section 9.07. Right of Indenture Trustee to Rely on Officer's
Certificate, etc......................................... 56
Section 9.08. Replacement Airframes and Replacement Engines............ 57
Section 9.09. Indenture and Security Agreement Supplement for
Replacements............................................. 60
Section 9.10. Effect of Replacement.................................... 60
Section 9.11. Compensation............................................. 60
ARTICLE X
CONCERNING THE HOLDERS
Section 10.01. Evidence of Action Taken by Holders..................... 61
Section 10.02. Proof of Execution of Instruments and of Holding of
Certificates............................................ 61
Section 10.03. Holders to Be Treated as Owners......................... 62
Section 10.04. Certificates Owned by Owner Trustee and the Lessee Deemed
Not Outstanding......................................... 62
Section 10.05. Right of Revocation of Action Taken..................... 63
Section 10.06. ERISA................................................... 63
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
ARTICLE XII
SUCCESSOR TRUSTEES
Section 12.01. Notice of Successor Owner Trustee....................... 65
Section 12.02. Resignation and Removal of Indenture Trustee;
Appointment of Successor................................ 65
Section 12.03. Persons Eligible for Appointment as Indenture Trustee... 66
Section 12.04. Acceptance of Appointment by Successor Trustee.......... 66
Section 12.05. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee........................... 67
Section 12.06. Appointment of Separate Trustees........................ 68
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
Section 13.01. Supplemental Indentures Without Consent of Holders...... 70
Section 13.02. Supplemental Indentures With Consent of Holders......... 71
Section 13.03. Effect of Supplemental Indenture........................ 73
Section 13.04. Documents to Be Given to Indenture Trustee.............. 73
Section 13.05. Notation on Certificates in Respect of Supplemental
Indentures.............................................. 73
Section 13.06. No Request Necessary for Lease Supplement or Indenture
and Security Agreement Supplement....................... 73
Section 13.07. Notices to Liquidity Providers.......................... 73
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 14.01. Satisfaction and Discharge of Indenture; Termination of
Indenture............................................... 74
Section 14.02. Application by Indenture Trustee of Funds Deposited for
Payment of Certificates................................. 75
Section 14.03. Repayment of Moneys Held by Paying Agent................ 75
Section 14.04. Transfer of Moneys Held by Indenture Trustee and Paying
Agent Unclaimed for Two Years and Eleven Months......... 75
ARTICLE XV
MISCELLANEOUS
Section 15.01. Capacity in Which Acting................................ 76
Section 15.02. No Legal Title to Trust Indenture Estate in Holders..... 76
Section 15.03. Sale of Trust Indenture Estate by Indenture Trustee is
Binding................................................. 76
Section 15.04. Indenture for Benefit of Owner Trustee, Indenture
Trustee, Owner Participants, Holders and Liquidity
Providers............................................... 76
Section 15.05. No Action Contrary to the Lessee's Rights Under the
Lease................................................... 77
Section 15.06. Notices................................................. 77
Section 15.07. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein...................... 78
Section 15.08. Severability............................................ 78
Section 15.09. No Oral Modifications or Continuing Waivers............. 79
Section 15.10. Successors and Assigns.................................. 79
Section 15.11. Headings................................................ 79
Section 15.12. Normal Commercial Relations............................. 79
Section 15.13. Governing Law; Counterparts............................. 79
Exhibit A -- Form of Indenture and Security Agreement Supplement
Exhibit B -- Form of Certificate
Schedule I -- [Reserved]
Schedule II -- Definitions
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N581FE)
TRUST INDENTURE AND SECURITY AGREEMENT (FEDERAL EXPRESS CORPORATION
TRUST NO. N581FE) dated as of May 1, 1997 (the "Indenture"), between
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity, except as otherwise specifically set forth herein (when
acting in such individual capacity, "WTC"), but solely as owner trustee (the
"Owner Trustee") under the Trust Agreement, as defined herein, and FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, as
Indenture Trustee hereunder (the "Indenture Trustee").
W I T N E S S E T H:
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participants and WTC have, immediately prior to the
execution and delivery of this Indenture, entered into a Trust Agreement
(Federal Express Corporation Trust No. N581FE) dated as of the date hereof (as
amended or otherwise modified from time to time in accordance with the
provisions thereof and of the Participation Agreement, the "Trust Agreement"),
whereby, among other things, WTC has declared a certain trust for the use and
benefit of the Owner Participants, subject, however, to the Lien of this
Indenture for the use and benefit of, and with the priority of payment to, the
holders of the Certificates issued hereunder, and the Owner Trustee is
authorized and directed to execute and deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture, among other
things (i) to provide for the issuance by the Owner Trustee of Certificates as
provided in the Participation Agreement, and (ii) to provide for the
assignment, mortgage and pledge by the Owner Trustee to the Indenture Trustee,
as part of the Trust Indenture Estate hereunder of the Owner Trustee's right,
title and interest in the Liquid Collateral and after the Delivery Date for
the assignment, mortgage and pledge by the Owner Trustee to the Indenture
Trustee, as part of the Trust Indenture Estate hereunder, of among other
things, certain of the Owner Trustee's estate, right, title and interest in
and to the Aircraft and the Indenture Documents and certain payments and other
amounts (other than Excepted Payments) received hereunder or thereunder in
accordance with the terms hereof, as security for, among other things, the
Owner Trustee's obligations to the Certificate Holders and for the benefit and
security of such Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee, and authenticated, issued and delivered
hereunder, the valid obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of the Owner Trustee, enforceable in accordance
with its terms, have been done and performed and have happened.
NOW, THEREFORE, the parties agree as follows:
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual promises contained
herein and to secure (i) the prompt payment of the principal of and Make-Whole
Premium, if any, and interest on, and all other amounts due with respect to,
all the Certificates from time to time outstanding under this Indenture and
all other amounts due hereunder and (ii) the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in this
Indenture, in the Certificates, in the Participation Agreement and in the
Lease contained for the benefit of the Holders of the Certificates, and the
prompt payment of any and all amounts from time to time owing under the
Participation Agreement by the Owner Trustee, the Owner Participants or the
Lessee to the Holders (collectively the "Secured Obligations") and for the
uses and purposes and subject to the terms and provisions of this Indenture,
and in consideration of the premises and of the covenants in this Indenture
and in the Certificates and of the purchase of the Certificates by their
Holders, and of the sum of $1 paid to the Owner Trustee by the Indenture
Trustee at or before the delivery of this Indenture, the receipt and
sufficiency of which is hereby acknowledged, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged, granted
a first priority security interest in and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and grant a first
priority security interest in and confirm to the Indenture Trustee, its
successors and assigns, in trust for the equal and ratable security and
benefit of the Holders from time to time of the Certificates, a first priority
security interest in and first mortgage Lien on all estate, right, title and
interest of the Owner Trustee in, to and under the following described
property, rights and privileges other than Excepted Payments, which
collectively, excluding Excepted Payments but including all property
specifically subjected to the Lien of this Indenture by the terms hereof, by
any Indenture and Security Agreement Supplement or any mortgage supplemental
to this Indenture, are included within the Trust Indenture Estate, subject
always to the rights granted to the Owner Trustee or the Owner Participants
hereunder and to the other terms and conditions of this Indenture:
(1) The Airframe, as the same is more particularly described in the
Indenture and Security Agreement Supplement and any airframe substituted in
replacement thereof pursuant to the provisions of this Indenture; the Engines,
as the same are more particularly described in the Indenture and Security
Agreement Supplement, whether or not such Engines shall be installed in or
attached to the Airframe or any other airframe, and any Replacement Engine
therefor; and all Parts in respect of the Airframe and the Engines and all
records, logs and other documents at any time maintained with respect to the
foregoing property;
(2) The Lease and all Rent thereunder, including, without limitation,
all amounts of Basic Rent and Supplemental Rent, and payments of any kind
thereunder and including all rights of the Owner Trustee to execute any
election or option or to give or receive any notice, consent, waiver or
approval under or in respect of the Lease or to accept any surrender of the
Aircraft or any part thereof as well as any rights, powers or remedies on the
part of the Owner Trustee, whether arising under the Lease or by statute or at
law or in equity or otherwise arising out of any Event of Default;
(3) The Modification Agreement, the GTA, the Engine Warranty
Assignment and the Engine Consent, the Bills of Sale and the Participation
Agreement (to the extent of amounts payable to the Owner Trustee thereunder)
(collectively, and together with the Lease, the Trust Agreement and the
Certificates, the "Indenture Documents"), including all rights of the Owner
Trustee to execute any election or option or to give or receive any notice,
consent, waiver or approval under or in respect of any of the foregoing
documents and instruments;
(4) All the tolls, rents, issues, profits, products, revenues and
other income (including sales proceeds) of the property subjected or required
to be subjected to the Lien of this Indenture, and all of the estate, right,
title and interest of the Owner Trustee in and to the same and every part of
said property;
(5) The Collateral Account, the Liquid Collateral and all other
moneys and securities (including Permitted Investments) now or hereafter paid
or deposited or required to be paid or deposited to or with the Indenture
Trustee by or for the account of the Owner Trustee pursuant to any term of any
Operative Agreement, except the Tax Indemnity Agreements, and held or required
to be held by the Indenture Trustee hereunder;
(6) All requisition proceeds with respect to the Aircraft or any part
thereof (to the extent of the Owner Trustee's interest therein pursuant to the
terms of the Lease) and all insurance proceeds with respect to the Aircraft or
any part thereof from insurance required to be maintained by the Lessee under
Article 13 of the Lease, but excluding any insurance maintained by the Lessee
and not required under Article 13 of the Lease; and
(7) All proceeds of the foregoing.
Notwithstanding the foregoing provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, the Owner Trustee and the Owner Participants shall at all times
retain the right, to the exclusion of the Indenture Trustee, (A) to Excepted
Payments and to commence an action at law to obtain such Excepted Payments and
(B) to adjust Basic Rent and the percentages relating to Stipulated Loss Value
and Termination Value and the EBO Price as provided in Section 3.04 of the
Lease and Section 15.01 of the Participation Agreement, (C) to exercise any
election or option to make any decision or determination, or to give or
receive any notice, consent, waiver or approval, or to take any other action
in respect of, but in each case only to the extent relating to, Excepted
Payments (except for, in respect of Basic Rent constituting an Excepted
Payment, the manner by which such amount is paid), (D) to retain the rights of
the "Lessor" with respect to solicitations of bids, and the election to retain
the Aircraft, pursuant to Article 10 of the Lease, (E) to retain the right of
"Lessor" to determine the Fair Market Rental or Fair Market Value pursuant to
Article 4 of the Lease, (F) to retain all rights with respect to insurance
maintained for its own account which Section 13.05 of the Lease specifically
confers on the "Lessor" and (G) to exercise, to the extent necessary to enable
it to exercise its rights under Section 8.03 hereof, the rights of the "Lessor"
under Section 17.04 of the Lease;
(ii) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have the
rights separately but not to the exclusion of the other (agreement of both
required in the case of clause (E) below), (A) to receive from the Lessee all
notices, certificates, reports, filings, opinions of counsel, copies of all
documents and all information which the Lessee is permitted or required to
give or furnish to the "Lessor" pursuant to the Lease or to the Owner Trustee
pursuant to any other Operative Agreement, (B) to exercise inspection rights
pursuant to Section 14.01 of the Lease (provided that if an Indenture Event of
Default shall be continuing, no inspection right of the Owner Trustee shall
interfere with the efforts of the Indenture Trustee to exercise remedies under
the Lease or this Indenture), (C) to maintain separate insurance pursuant to
Section 13.05 of the Lease and to retain all rights with respect to such
insurance maintained for its own account, (D) to give any notice of default
under Section 16.01 of the Lease and to declare the Lease in default in
respect thereof, and (E) the right to consent to changes to the list of
countries on Schedule III to the Participation Agreement;
(iii) (A) so long as no Indenture Event of Default shall have
occurred and be continuing (but subject to the provisions of Section 8.01
hereof), the Owner Trustee shall retain the right, to the exclusion of the
Indenture Trustee, to approve as satisfactory any accountants, engineers,
appraisers or counsel to render services for or issue appraisals, reports,
certificates or opinions to the Owner Trustee pursuant to express provisions
of the Operative Agreements, and (B) so long as no Indenture Event of Default
not constituting an Event of Default shall have occurred and be continuing
(but subject to the provisions of Section 8.01 hereof), the Owner Trustee
shall retain the right, jointly with the Indenture Trustee (agreement of both
not being required), to further assurances and financial information from the
Lessee pursuant to Section 19.01 of the Lease (other than the right to receive
any funds to be delivered to the "Lessor" under the Lease (except funds
delivered with respect to Excepted Payments) and under the Purchase Agreement;
and
(iv) at all times the Owner Trustee shall have the right as Lessor,
but not to the exclusion of the Indenture Trustee, to seek specific
performance of the covenants of the Lessee under the Lease relating to the
protection, insurance, maintenance, possession and use of the Aircraft.
(b) The leasehold interest granted to the Lessee by the Lease shall
not be subject to the security interest granted by this Indenture, and nothing
in this Indenture shall affect the rights of the Lessee under the Lease so
long as no Event of Default has occurred and is continuing.
HABENDUM CLAUSE
TO HAVE AND TO HOLD the aforesaid property unto the Indenture Trustee,
its successors and assigns, in trust for the equal and ratable benefit and
security of the Holders from time to time of the Certificates, without any
priority of any one Certificate over any other and for the uses and purposes
and subject to the terms and conditions set forth in this Indenture.
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Documents to perform all of the obligations assumed by it under any
of those documents, all in accordance with and pursuant to the terms and
provisions of those documents, and the Indenture Trustee and the Holders of
the Certificates shall have no obligation or liability under the Indenture
Documents by reason of or arising out of the assignment under this Indenture,
nor shall the Indenture Trustee or the Holders of the Certificates be required
or obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Documents or, except as expressly
provided in this Indenture, to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or present or file
any claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
Effective upon the occurrence and continuance of an Indenture Event of
Default, the Owner Trustee hereby constitutes the Indenture Trustee the true
and lawful attorney of the Owner Trustee, irrevocably, with full power (in the
name of the Owner Trustee or otherwise), subject to the terms and conditions
of this Indenture, to ask, require, demand, receive, compound and give
acquittance for any and all Basic Rent, Supplemental Rent payable to the Owner
Trustee, Stipulated Loss Value and Termination Value payments, insurance
proceeds and any and all moneys and claims for moneys due and to become due
under or arising out of the Lease (subject to Section 8.01 hereof) or the
other Indenture Documents (other than Excepted Payments), to endorse any
checks or other instruments or orders in connection with the same and to file
any claims, take any action or institute any proceeding which the Indenture
Trustee may deem to be necessary or advisable in the premises.
Under the Lease the Lessee is directed to make all payments of Rent
(other than Excepted Payments not constituting Basic Rent) payable to the
Owner Trustee and all other amounts (other than Excepted Payments not
constituting Basic Rent) 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 not constituting Basic Rent.
The Owner Trustee agrees that at any time and from time to time, upon
the written request of the Indenture Trustee, the Owner Trustee will promptly
and duly execute and deliver or cause to be duly executed and delivered any
and all such further instruments and documents as the Indenture Trustee may
reasonably deem desirable in obtaining the full benefits of the assignment
hereunder and of the rights and powers herein granted; provided, however, that
the Owner Trustee shall have no obligation to execute and deliver or cause to
be executed or delivered to the Indenture Trustee any such instrument or
document if such execution and delivery would result in the imposition of
additional liabilities on the Owner Trustee or any Owner Participant or would
result in a burden on such Owner Participant's business activities, unless the
Owner Trustee or such Owner Participant, as the case may be, is indemnified to
its reasonable satisfaction against any losses, liabilities and expenses
incurred in connection with such execution and delivery.
The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect, any of its right, title or interest hereby
assigned, to anyone other than the Indenture Trustee, and that it will not,
except in respect of Excepted Payments or otherwise as provided in or
permitted by this Indenture, accept any payment from the Lessee or any
sublessee, enter into an agreement amending or supplementing any of the
Operative Agreements, execute any waiver or modification of, or consent under
the terms of any of the Operative Agreements, settle or compromise any claim
(other than claims in respect of Excepted Payments) against the Lessee arising
under any of the Operative Agreements, or submit or consent to the submission
of any dispute, difference or other matter arising under or in respect of any
of the Operative Agreements, to arbitration thereunder.
Concurrently with the delivery of this Indenture, the Owner Trustee
has delivered to the Indenture Trustee executed counterparts of the Trust
Agreement and the chattel paper original counterpart of the Lease.
It is hereby further covenanted and agreed by and between the parties
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise requires,
capitalized terms utilized herein shall have the meanings set forth in
Schedule II hereto for all purposes of this Indenture and shall be equally
applicable to both the singular and plural forms of the terms defined.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES;
COLLATERAL ACCOUNT
Section 2.01. Authentication and Delivery of Certificates.
Forthwith upon the execution and delivery of this Indenture, and from time to
time thereafter, Certificates in an aggregate principal amount not in excess
of the amount specified in Section 2.04 hereof (except as otherwise provided
in Sections 2.06 and 2.07 hereof) shall be executed by the Owner Trustee and
delivered to the Indenture Trustee for authentication, and the Indenture
Trustee shall thereupon authenticate and deliver said Certificates to or upon
the oral or written order of the Owner Trustee, signed, if written, by an
authorized officer of the Owner Trustee, without any further action by the
Owner Trustee.
Section 2.02. Execution of Certificates. The Certificates shall be
signed on behalf of the Owner Trustee by an authorized officer of WTC. 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 WTC 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 WTC, 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 WTC; 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 WTC, although
at the date of the execution and delivery of this Indenture any such person
was not such an officer. Certificates bearing the facsimile signatures of
individuals who were authorized officers of WTC 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 Certificate Closing Date, shall be issued
in three separate series consisting of Series A, Series B and Series C and
shall be issued in the Maturities and principal amounts, and shall bear
interest at the rates per annum, specified in the form of Certificate set forth
in Exhibit B.
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Certificates are admitted to trading, or to
conform to general usage.
Each Certificate shall bear interest from the date of original
issuance thereof or from the most recent date to which interest has been paid
and duly provided for, as the case may be, which shall be payable on the dates
specified on the face of the form of Certificate set forth in Exhibit B hereto
until the principal thereof is paid. Interest shall be calculated on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding the preceding paragraph, each Certificate shall bear
interest at the Past Due Rate on any principal, interest and any other amount
payable hereunder or under such Certificate, which shall not be paid in full
when due (whether at stated maturity, by acceleration, by mandatory prepayment
or otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full, payable from time to time on
demand of the Indenture Trustee.
The principal of, and Make-Whole Premium, if any, and interest on, the
Certificates shall be payable at the Corporate Trust Department 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. If any amount payable under the Certificates, or under this
Indenture, falls due on a day that is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
The Holder at the close of business on any Record Date with respect
to any Payment Date shall be entitled to receive the interest if any payable
on such Payment Date notwithstanding any transfer or exchange of such
Certificate subsequent to the Record Date and prior to such Payment Date,
except if and to the extent the Owner Trustee shall default in the payment of
the interest due on such Payment Date, in which case such defaulted interest
shall be paid to the Holder at the close of business on a subsequent Record
Date (which shall be not less than five (5) or more than fifteen (15) Business
Days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Owner Trustee to the Holders not
less than fifteen (15) days preceding such subsequent Record Date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 5.04 hereof (a) any and all indemnity
amounts received by the Owner Trustee which are payable by the Lessee to (i)
the Indenture Trustee in its individual capacity, (ii) the Subordination Agent
or (iii) each Liquidity Provider, in each case pursuant to Article 8 or 9 of
the Participation Agreement (it being acknowledged that the Lessee has been
instructed to pay such amounts to the Person or Persons entitled thereto) and
(b) the Owner Trustee's pro rata share of all amounts owed to each Liquidity
Provider by the Subordination Agent under each Liquidity Facility other than
amounts due as (i) repayments of the principal of advances thereunder, and (ii)
interest on Interest Drawings and Final Drawings except to the extent included
in Net Interest and Related Charges. As used in this Section, the Owner
Trustee's pro rata share means as of any time:
(A) with respect to all amounts other than Net Interest and
Related Charges, a fraction the numerator of which is the aggregate
principal balance then outstanding of the Certificates issued under
this Indenture (other than the Series C Certificates) and the
denominator of which is the aggregate principal balance of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates), plus
(B) with respect to all Net Interest and Related Charges (x)
if there exists a Payment Default under any Certificate issued under
this Indenture a fraction, the numerator of which is the aggregate
principal balance then outstanding of Certificates issued under this
Indenture (other than the Series C Certificates) and the denominator
of which is the aggregate principal balance then outstanding of all
Certificates issued under this Indenture and the Related Indentures
(other than the Series C Certificates) under which there exists a
Payment Default or (y) at all other times, zero.
As used in this Section, "Net Interest and Related Charges" means the sum of
(i) the amount, if any, by which interest payable to each Liquidity Provider
on any Interest Drawing and/or Final Drawing exceeds the amount which would be
payable if such drawings bore interest at the weighted average Past Due Rate
applicable to amounts in default on all Certificates plus (ii) any amounts
payable under Section 3.01, Section 3.02, Section 3.03, Section 3.09 or
Section 7.07 of each Liquidity Facility (or similar provisions of any
replacement Liquidity Facility) which result from any Interest Drawing or
Final Drawing. As used in this Section, a Payment Default when used in
connection with a Certificate issued hereunder or a Certificate issued under
any Related Indenture means a default in the payment of principal thereof or
interest thereon (which default has not been cured), other than solely because
of acceleration. As used in this Section, "Related Indentures" means,
collectively, the Trust Indenture and Security Agreement for each of Federal
Express Corporation Trust Nos. N670FE, N671FE, N672FE, N673FE, N674FE, N583FE,
N584FE, each dated as of May 1, 1997, between State Street Bank and Trust
Company of Connecticut, National Association, as owner trustee and the
Indenture Trustee, and the Trust Indenture and Security Agreement for Federal
Express Corporation Trust No. N587FE, dated as of December 1, 1996, as amended
and restated as of May 1, 1997, between the Owner Trustee and the Indenture
Trustee.
Section 2.05. Payments from Trust Indenture Estate Only. All
payments to be made by the Owner Trustee under this Indenture shall be made
only from the income and the proceeds from the Lessor's Estate to the extent
included in the Trust Indenture Estate and from any other amounts of the type
described in Section 5.01 hereof to the extent actually received by the
Indenture Trustee and only to the extent that the Owner Trustee shall have
sufficient income or proceeds from the Lessor's Estate to the extent included
in the Trust Indenture Estate (and such other amounts) to enable the Indenture
Trustee to make distributions of the amounts due in respect of the
Certificates in accordance with the terms hereof and thereof. Each Holder by
its acceptance of a Certificate agrees that it will look solely to the income
and proceeds from the Trust Indenture Estate (and such other amounts of the
type described in Section 5.01 hereof to the extent actually received by the
Indenture Trustee) to the extent available for distribution to it as provided
herein and that neither the Owner Participants, the Owner Trustee, WTC 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 WTC, the Owner Trustee or the Indenture
Trustee.
WTC is not personally liable to any Holder, the Lessee, any 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 WTC'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 each Owner Participant is required,
by reason of such Owner Participant being held to have recourse liability to
the debtor or the trustee of the debtor directly or indirectly, to make
payment on account of any amount payable as principal of or interest,
Make-Whole Premium or other amounts payable on the Certificates, and (3) the
Indenture Trustee actually receives any Recourse Amount which reflects any
payment by the Owner Participants on account of (2) above, then the Indenture
Trustee shall promptly refund to the Owner Participants such Recourse Amount.
Nothing contained in this paragraph shall prevent the Indenture Trustee from
enforcing any personal recourse obligation (and retaining the proceeds
thereof) of any Owner Participant under the Participation Agreement, or from
retaining any amount paid by any Owner Participant under Sections 5.01, 8.02
and 8.03 hereof.
Section 2.06. Registration, Transfer and Exchange. The Indenture
Trustee will keep, on behalf of the Owner Trustee, at each office or agency to
be maintained for the purpose as provided in Section 3.02 hereof a Register or
Registers on which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Certificates
as provided in this Article. Such Register shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable 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 Series and
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 Series and Maturity and interest rate but in other
authorized denominations, in an equal aggregate principal amount.
Certificates to be exchanged shall be surrendered at any office or agency to
be maintained by the Indenture Trustee for the purpose as provided in Section
3.02 hereof, and the Owner Trustee shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor the Certificate or
Certificates which the Holder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously or previously outstanding.
All Certificates presented for registration of transfer, exchange,
prepayment or payment shall (if so required by the Owner Trustee or the
Indenture Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Owner
Trustee and the Indenture Trustee duly executed by the Holder or its attorney
duly authorized in writing and (except in the case of transfers pursuant to
Section 15.01 of the Participation Agreement) the Indenture Trustee may
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act.
The Indenture Trustee may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of Certificates. No
service charge shall be levied for any such transaction.
The Indenture Trustee shall not be required to exchange or register a
transfer of any Certificates (a) for a period of fifteen (15) days immediately
preceding the first mailing of notice of prepayment of such Certificates or
(b) with respect to which notice of prepayment has been given pursuant to
Section 6.03 hereof and such notice has not been revoked.
All Certificates issued upon any transfer or exchange of Certificates
shall be valid obligations of the Owner Trustee, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the
Certificates surrendered upon such transfer or exchange.
Section 2.07. Mutilated, Defaced, Destroyed, Lost and Stolen
Certificates. In case any temporary or definitive Certificate shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Owner
Trustee in its discretion may execute, and upon the oral or written request of
any officer of WTC, 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 WTC, the Indenture Trustee shall authenticate
and deliver temporary Certificates (printed, lithographed, typewritten or
otherwise reproduced, in each case in form satisfactory to the Indenture
Trustee). Temporary Certificates shall be issuable as registered Certificates
without coupons, of any authorized denomination, and substantially in the form
of the definitive Certificates but with such omissions, insertions and
variations as may be appropriate for temporary Certificates, all as may be
determined by the Owner Trustee with the concurrence of the Indenture Trustee.
Temporary Certificates may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Certificate shall be
executed by the Owner Trustee and, upon the oral or written request of an
authorized officer of the Owner Trustee, be authenticated by the Indenture
Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Certificates. Without unreasonable delay
the Owner Trustee shall execute and shall furnish definitive Certificates and
thereupon temporary Certificates shall be surrendered in exchange therefor
without charge at any office or agency to be maintained by the Indenture
Trustee for the purpose pursuant to Section 3.02 hereof, and, upon the oral
or written request of an authorized officer of the Owner Trustee, the
Indenture Trustee shall authenticate and deliver in exchange for such
temporary Certificates an equal aggregate principal amount of definitive
Certificates of the same Series and 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 and under the other Operative Agreements shall have been paid in
full.
Section 2.11. Certificates in Respect of Replacement Aircraft. Upon
the execution and delivery of an Indenture and Security Agreement Supplement
covering a Replacement Airframe and/or Replacement Engine, as provided in
Section 9.09 hereof, each Certificate shall be deemed to have been issued in
connection with such Replacement Airframe and/or Replacement Engine and each
Certificate issued thereafter upon a transfer or exchange of, or as a
replacement for, a Certificate, shall be designated as having been issued in
connection with such Replacement Airframe and/or Replacement Engine, but
without any other change therein except as provided for in this Article II.
Section 2.12. Assumption of Obligations Under Certificates and Other
Operative Agreements. If, in accordance with and subject to the satisfaction
of the conditions set forth in Section 7.11 of the Participation Agreement,
the Lessee shall assume all of the obligations of the Owner Trustee hereunder,
under the Certificates and all other Operative Agreements, the Owner
Participants and the Owner Trustee shall be released and discharged from any
further obligations hereunder and under the
Certificates and all other Operative Agreements (except any obligations that
have accrued prior to such assumption).
Section 2.13. Establishment of Collateral Account. (a) The
Indenture Trustee shall, pursuant to the Collateral Account Control Agreement,
establish, or cause to be established, with State Street Bank and Trust
Company, who shall represent and warrant that it is a financial intermediary
(as defined in Section 8-313(4) of the Connecticut Uniform Commercial Code),
in its name as secured party hereunder an Eligible Deposit Account entitled
"First Security Bank, National Association, as secured party under the Trust
Indenture and Security Agreement (Federal Express Corporation Trust No.
N581FE) dated as of May 1, 1997, 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) The Collateral Account Control Agreement shall require State
Street Bank and Trust Company to send confirmation to the Indenture Trustee
and the Lessee that it has credited the Specified Investments to the
Collateral Account and to make appropriate entries on its books identifying
the Specified Investments as pledged to the Indenture Trustee.
Section 2.14. Investment of Funds on Deposit in the Collateral
Account. (a) Funds deposited in the Collateral Account shall be invested and
reinvested by the Indenture Trustee, subject to Section 17.02 of the
Participation Agreement, at the risk of the Owner Trustee, in Specified
Investments selected by the Lessee and approved by the Indenture Trustee for
the account of the Owner Trustee in accordance with Section 2.14(b) below;
provided, however, that if Specified Investments meeting the requirements of
Section 2.14(b) are not available on any day on which funds are to be invested
as contemplated by the preceding provisions of this Section 2.14(a), the
Indenture Trustee may leave such funds in the Collateral Account 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 and approved by the Indenture Trustee for the account of the Owner
Trustee which mature on or prior to June 6, 1997. 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 referred to in the
preceding sentence may be invested in Specified Investments which mature
within 14 days after the rescheduled Delivery Date. If no Delivery Date
occurs, then any Specified Investment shall mature no later than the 15th day
after the Cut-Off Date.
(c) If for any reason the Indenture Trustee shall be required to
make any distributions of the Liquid Collateral prior to the maturity date of
any Specified Investment, the Indenture Trustee shall cause the same to be
sold in accordance with standard commercial practices, and the Lessee, for the
account of the Owner Trustee, shall forthwith compensate the Indenture Trustee
for any Losses as provided in Section 17.02(a) of the Participation Agreement.
(d) Pursuant to Section 17.02(b) of the Participation Agreement,
interest payable on the Certificates during the period in which funds are on
deposit in the Collateral Account shall be paid by the Lessee.
Section 2.15. Release of Debt Portion and Lien on the Collateral
Account and the Liquid Collateral on Delivery Date. (a) 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 subject to the proviso to Section 3.02(a) of the Participation
Agreement, 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.
Subject to the proviso to Section 3.02(a) of the Participation Agreement, such
amount so released, together with the amount of any Losses received from the
Lessee pursuant to Section 17.02(a) of the Participation Agreement, shall be
used to finance a portion of the Purchase Price as contemplated by Section
3.02(a) of the Participation Agreement. 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)(B) of the Participation Agreement.
(b) The Lien of this Indenture on the Collateral Account and the
Liquid Collateral shall terminate on the Delivery Date following the transfer
of amounts described in Section 3.02(a) of the Participation Agreement.
Section 2.16. Cut-Off Date. In the case of a prepayment under
Section 6.02(a)(vi) hereof, the Indenture Trustee shall release from the
Collateral Account all amounts held in the Collateral Account on such date.
Such amount so released, together with the amount of any Losses received from
the Lessee pursuant to Sections 17.02(a) and 17.02(c) of the Participation
Agreement, shall be applied to pay amounts due under Section 6.02(b)(1) hereof
on the 15th day following 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.
Section 2.17. Subordination. (a) The Owner Trustee and, by
acceptance of its Certificates of any Series, each Holder of such Series,
hereby agree that no payment or distribution shall be made on or in respect of
the Secured Obligations owed to such Certificate Holder of such Series,
including any payment or distribution of cash, property or securities after
the commencement of a proceeding of the type referred to in clause (v), (vi)
or (vii) of Section 7.01 hereof, except as expressly provided in Article V
hereof.
(b) By the acceptance of its Certificates of any Series
(other than Series A), each Holder of such Series agrees that in the event
that such Holder, in its capacity as a Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series which it is
not entitled to received under this Section 2.17 or Article V hereof, it will
hold any amount so received in trust for the Senior Holder (as defined in
Section 2.17(c) hereof) and will forthwith turn over such payment to the
Indenture Trustee in the form received to be applied as provided in Article V
hereof.
(c) As used in this Section 2.17, the term "Senior Holder"
shall mean, (i) the Holders of Series A Certificates until the Secured
Obligations in respect of Series A Certificates have been paid in full, (ii)
after the Secured Obligations in respect of Series A Certificates have been
paid in full, the Holders of Series B Certificates until the Secured
Obligations in respect of Series B Certificates have been paid in full and
(iii) after the Secured Obligations in respect of Series B Certificates have
been paid in full, the Holders of Series C Certificates until the Secured
Obligations in respect of Series C Certificates have been paid in full.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal, Make-Whole Premium and Interest.
The Owner Trustee covenants and agrees that it will, subject to Section 2.05
hereof, duly and punctually pay or cause to be paid the principal of, and
interest and Make-Whole Premium, if any, and all other amounts due on, each of
the Certificates and under this Indenture at the place or places, at the
respective times and in the manner provided in this Indenture and in the
Certificates.
Principal and interest and other amounts due hereunder or under the
Certificates shall be payable in dollars on the due date thereof, to the
Indenture Trustee at the Corporate Trust Department (or such other account at
such other financial institution as the Indenture Trustee may designate for
the purpose). If any amount payable under the Certificates or under this
Indenture falls due on a day which is not a Business Day, then such sum shall
be payable on the next succeeding Business Day, without (provided that payment
is made on such next succeeding Business Day) additional interest thereon for
the period of such extension.
Section 3.02. Offices for Payments, etc. So long as any of the
Certificates remain outstanding, the Indenture Trustee will maintain the
following: (a) an office or agency where the Certificates may be presented
for payment and (b) a facility or agency in New York, New York where the
Certificates may be presented for registration of transfer and for exchange
and for prepayment as provided in this Indenture (the "Registrar"). The
Registrar shall keep a register (the "Register") with respect to the
Certificates and their transfer and exchange. The Indenture Trustee may
appoint one or more co-registrars ("Co-Registrars") for the Certificates and
may terminate any such appointment at any time upon written notice. The term
"Registrar" includes any Co-Registrar.
The Indenture Trustee shall initially act as Registrar.
Section 3.03. Appointment to Fill a Vacancy in Office of Indenture
Trustee. The Owner Trustee, whenever necessary to avoid or fill a vacancy in
the office of Indenture Trustee, will, with the consent of the Lessee,
appoint, in the manner provided in Section 12.02 hereof, an Indenture Trustee,
so that there shall at all times be an Indenture Trustee hereunder.
Section 3.04. Paying Agents. Whenever the Indenture Trustee in its
sole discretion shall appoint a paying agent (the "Paying Agent"), it will
cause the Paying Agent to execute and deliver an instrument in which the
Paying Agent shall agree with the Indenture Trustee, subject to the provisions
of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of, and interest and Make-Whole Premium, if any,
on the Certificates (whether such sums have been paid to it by the
Indenture Trustee or the Owner Trustee) in trust for the benefit of the
Holders or of the Indenture Trustee, and
(b) that it will give the Indenture Trustee notice of any failure by
the Owner Trustee to make any payment of the principal of or interest or
Make-Whole Premium, if any, on the Certificates when the same shall be due
and payable.
Anything in this Section to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section are subject to
the provisions of Sections 14.03 and 14.04 hereof.
Section 3.05. Covenants of WTC and the Owner Trustee.
(a) WTC hereby covenants and agrees to perform its covenants set
forth in Sections 7.04(b) and 7.04(c) of the Participation Agreement.
(b) The Owner Trustee hereby covenants and agrees as follows:
(i) in the event a Responsible Officer of the Owner Trustee shall have
actual knowledge of an Indenture Event of Default, an Indenture Default or
an Event of Loss, the Owner Trustee will give prompt written notice of such
Indenture Event of Default, Indenture Default or Event of Loss to the
Indenture Trustee, the Lessee and the Owner Participants;
(ii) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to the Owner Trustee under the Lease, including,
without limitation, a copy of each report or notice received pursuant to
Article 11 of the Lease, to the extent that the same shall not have been
furnished to the Indenture Trustee;
(iii) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to the Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Indenture Documents; and
(iv) except as contemplated by the Operative Agreements, the Owner
Trustee will not contract for, create, incur or assume any debt, and will
not guarantee (directly or indirectly or by an instrument having the effect
of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise take action to
become contingently liable, directly or indirectly, in connection with the
debt of any other Person.
Section 3.06. [Reserved].
Section 3.07. Disposal of Trust Indenture Estate. At any time and
from time to time any part of the Trust Indenture Estate may be sold or
disposed of in accordance with the provisions of this Indenture and the Lease.
The Indenture Trustee shall, from time to time, release any part of the Trust
Indenture Estate so sold or disposed of or as to which an Event of Loss has
occurred or as to which the Lease has been terminated from the Lien of this
Indenture. In addition, to the extent that such property constitutes an
Airframe or Engine, the further requirements of Section 9.08 hereof shall be
complied with.
Section 3.08. No Representations or Warranties as to Aircraft or
Documents. NEITHER THE INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR WTC NOR
THE OWNER PARTICIPANTS MAKES OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, WORKMANSHIP, VALUE, CONDITION, DESIGN, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR 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 WTC 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 WTC. Neither WTC, the Indenture Trustee nor the Owner
Participants 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 WTC, the Indenture Trustee and the Owner
Participants made under this Indenture or in the Participation Agreement.
Section 3.09. Further Assurances; Financing Statements. At any time
and from time to time, upon the request of the Indenture Trustee or the
Lessee, the Owner Trustee shall promptly and duly execute and deliver any and
all such further instruments and documents as may be specified in such request
and as are necessary or advisable to perfect, preserve or protect the Liens
and assignments created or intended to be created hereby, or to obtain for the
Indenture Trustee the full benefit of the specific rights and powers granted
herein, including, without limitation, the execution and delivery of Uniform
Commercial Code financing statements and continuation statements with respect
thereto, or similar instruments relating to the perfection of the Liens or
assignments created or intended to be created hereby.
ARTICLE IV
HOLDER LISTS
Section 4.01. Holder Lists; Ownership of Certificates. (a) The
Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Indenture Trustee is not the Registrar, the Registrar
shall furnish to the Indenture Trustee semi-annually not more than fifteen
(15) days after each Record Date, as of such Record Date, or at such other
times as the Indenture Trustee may request in writing, a list, in such form
and as of such date as the Indenture Trustee may reasonably require,
containing all the information in the possession or control of the Registrar
as to the names and addresses of the Holders and the amounts and Maturities of
the Certificates held by such Holders.
(b) Ownership of the Certificates shall be proved by the Register
kept by the Registrar.
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
Section 5.01. Basic Rent Distribution. Except as otherwise provided
in Section 5.03 hereof, each installment of Basic Rent, any payment of
interest on overdue installments of Basic Rent, any payment received by the
Indenture Trustee pursuant to Section 8.03(a) hereof and any payment received
by the Indenture Trustee pursuant to Section 17.02(b) or 17.02(c) of the
Participation Agreement shall be promptly distributed in the following order
of priority:
first, (i) 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 Amount and interest and other amounts (as
well as any interest on any overdue Principal Amount and, to the
extent permitted by applicable law, on any overdue interest and
any other overdue amounts) then due under all Series A
Certificates shall be distributed to the Holders of Series A
Certificates ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments then
due under each Series A Certificate bears to the aggregate amount
of the payments then due under all Series A Certificates;
(ii) after giving effect to paragraph (i) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series B Certificates shall be
distributed to the Holders of Series B Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series B
Certificate bears to the aggregate amount of the payments then due
under all Series B Certificates; and
(iii) after giving effect to paragraph (ii) above, 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
Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue
amounts) then due under all Series C Certificates shall be
distributed to the Holders of Series C Certificates ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series C
Certificate bears to the aggregate amount of the payments then due
under all Series C Certificates; and
second, the balance if any of such installment or payment remaining
thereafter shall be distributed to the Owner Trustee, or as the
Owner Trustee may request, for distribution pursuant to the Trust
Agreement.
Section 5.02. Event of Loss and Replacement; Prepayment. (a)
Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of an Event of Loss with respect to the
Aircraft (including pursuant to Section 11.03(e) of the Lease, but, in the
case of said Section 11.03(e), subject to the time limits specified therein)
or as the result of, or in connection with any event under the Lease giving
rise to, a prepayment pursuant to Section 6.02 hereof, shall be promptly
distributed by the Indenture Trustee in the following order of priority:
first, to reimburse the Indenture Trustee for any costs or expenses
reasonably incurred in connection with such prepayment,
second, (i) to pay the amounts specified in paragraph (i) of clause
"second" of Section 5.03 hereof then due and payable in respect
of the Series A Certificates;
(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "second" of Section
5.03 hereof then due and payable in respect of the Series B
Certificates; and
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "second" of
Section 5.03 hereof then due and payable in respect of the Series
C Certificates;
provided that payments pursuant to this clause "second" shall be
made without the payment of Make-Whole Premium except in the
particular circumstances provided in Section 6.02(b) 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 Article 11 or
13 of the Lease as the result of loss or damage not constituting an Event of
Loss with respect to the Aircraft, or as a result of such loss or damage
constituting an Event of Loss (x) if and to the extent that such amounts would
at the time be required to be paid to the Lessee pursuant to said Article 11
or 13 but for the fact that an Event of Default shall have occurred and be
continuing or (y) are pledged to the Lessor as security in connection with an
Event of Loss in accordance with Section 11.03(e) of the Lease, shall be held
by the Indenture Trustee as security for the obligations of the Lessee under
the Lease and the Participation Agreement and shall be invested in accordance
with the terms of Section 5.08 hereof and at such time as the conditions for
payment to the Lessee specified in said Article 11 or 13, as the case may be,
shall be fulfilled and there shall not be continuing any Event of Default,
such amount, and the proceeds of any investment thereof, shall, to the extent
not theretofore applied, be paid to the Lessee to the extent provided in the
Lease.
Section 5.03. Payment After Indenture Event of Default, etc. Except
as otherwise provided in Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof,
all payments (other than Excepted Payments) received and all amounts held or
realized by the Indenture Trustee (a) after an Indenture Event of Default
shall have occurred and so long as such an Indenture Event of Default shall be
continuing, and the Indenture Trustee has commenced the exercise of remedies
pursuant to Article VIII 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 or the Holders in the
protection, exercise or enforcement of any right, power or remedy
or any damages sustained by the Indenture Trustee or the Holders,
liquidated or otherwise, upon such Indenture Event of Default)
shall be applied by the Indenture Trustee as between itself and
the Holders in reimbursement of such expenses;
second, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of
all Series A Certificates, and the accrued but unpaid interest
and other amounts due thereon and all other Secured Obligations
(other than Make-Whole Premium) in respect of the Series A
Certificates to the date of distribution, shall be distributed to
the Holders of Series A Certificates, and in case the aggregate
amount so to be distributed shall be insufficient to pay in full
as aforesaid, then ratably, without priority of one over the
other, in the proportion that the aggregate unpaid Principal
Amount of all Series A Certificates held by each holder plus the
accrued but unpaid interest and other amounts due hereunder or
thereunder (other than Make-Whole Premium) to the date of
distribution, bears to the aggregate unpaid Principal Amount of
all Series A Certificates held by all such holders plus the
accrued but unpaid interest and other amounts due thereon (other
than Make-Whole Premium) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series B
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series B Certificates to
the date of distribution, shall be distributed to the Holders of
Series B Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series B Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series B
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution; and
(iii) after giving effect to paragraph (ii) above, so much of
such payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series C
Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations (other than
Make-Whole Premium) in respect of the Series C Certificates to
the date of distribution, shall be distributed to the Holders of
Series C Certificates, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series C Certificates held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution,
bears to the aggregate unpaid Principal Amount of all Series C
Certificates held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than Make-Whole
Premium) to the date of distribution;
(it being understood that amounts payable under this clause
"second" 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
in respect of (i) the Indenture Trustee in its individual capacity, (ii) the
Subordination Agent, (iii) each Liquidity Provider, and (iv) the Pass Through
Trustee, in each case whether pursuant to Article 8 or 9 of the Participation
Agreement or as Supplemental Rent, directly to the Person (which may include
the Indenture Trustee) entitled thereto. Any payment received by the
Indenture Trustee under clause (b) of the last paragraph of Section 2.04 shall
be distributed to the Subordination Agent to be distributed in accordance with
the terms of the Intercreditor Agreement.
(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 Article 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 each Owner Participant as may be specified pursuant to Section 2.06 of the
Trust Agreement.
Section 5.07. Application of Payments. Each payment of principal of
and interest or other amounts due on each Certificate shall, except as
otherwise provided herein, be applied, first, to the payment of interest on
such Certificate due and payable to the date of such payment, as provided in
such Certificate, as well as any interest on overdue principal and Make-Whole
Premium, if any, and, to the extent permitted by law, interest and other
amounts due thereunder, second, to the payment of any other amount (other than
the principal of such Certificate) due hereunder to the Holder of such
Certificate or under such Certificate, third, to the payment of the principal
of such Certificate if then due hereunder or under such Certificate and
fourth, the balance, if any remaining thereafter, to the payment of the
principal of such Certificate remaining unpaid (provided that such Certificate
shall not be subject to prepayment without the consent of the affected Holder
except as permitted by Sections 6.02, 6.06 and 8.02 hereof); provided that,
solely for the purpose of determining whether an Indenture Event of Default
shall have occurred and be continuing, each such payment shall be deemed
applied in the following order of priority: first, in the manner provided in
clause "first" above, second, in the manner provided in clause "third" above,
third, in the manner provided in clause "second" above and fourth, in the
manner provided in clause "fourth" above.
Section 5.08. Investment of Amounts Held by Indenture Trustee.
Amounts held by the Indenture Trustee pursuant to Section 5.02(b) hereof or
pursuant to any provision of any Indenture Document providing for investment
by the Indenture Trustee of sums pursuant to Section 23.01 of the Lease or
this Section 5.08 shall be invested by the Indenture Trustee from time to time
in securities selected by (i) so long as no Event of Default shall have
occurred and be continuing, the Lessee (and in the absence of written
direction by the Lessee, the Indenture Trustee shall invest such monies in
direct obligations of the United States of America) or (ii) so long as an
Event of Default shall have occurred and be continuing, the Indenture Trustee
and in each case shall be of the type listed in clauses (i) through (iv) of
Section 23.01 of the Lease. Unless otherwise expressly provided in this
Indenture, any income realized as a result of any such investment, net of the
Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Lessee shall be responsible for and will
promptly pay to the Indenture Trustee or the Lessor, as the case may be, on
demand, the amount of any loss realized as the result of any such investment
(together with any fees, commissions and other costs and expenses, if any,
incurred by the Indenture Trustee or the Lessor in connection with such
investment), such amount to be disposed of in accordance with the terms hereof
or the Lease, as the case may be. The Indenture Trustee shall not be liable
for any loss resulting from any investment made by it under this Indenture in
accordance with instructions from the Lessee other than by reason of its
willful misconduct or gross negligence, and any such investment may be sold
(without regard to its maturity) by the Indenture Trustee without instructions
whenever the Indenture Trustee reasonably believes such sale is necessary to
make a distribution required by this Indenture.
Unless otherwise confirmed in writing, an account statement delivered
by the Indenture Trustee to the Owner Trustee (with a copy to the Lessee)
shall be deemed written confirmation by the Owner Trustee that the investment
transactions identified therein accurately reflect the investment directions
given to the Indenture Trustee by or on behalf of the Owner Trustee, unless
the Owner Trustee (or the Lessee on its behalf) notifies the Indenture Trustee
in writing to the contrary within 30 days of the date of receipt of such
statement.
Section 5.09. Withholding Taxes. The Indenture Trustee shall
withhold any Taxes required to be withheld, except to the extent that the
Holder has furnished evidence satisfactory to the Indenture Trustee of any
exemption from withholding claimed by such Holder and under no circumstances
shall the failure of any such Holder to receive any amounts so withheld
constitute an Indenture Event of Default. Notwithstanding any provision to
the contrary in Sections 5.01 through 5.05 hereof and subject to Article 8 of
the Participation Agreement, if the Lessee is required to pay any such Tax, or
any interest or penalty thereon, or to indemnify the Owner Participants or the
Owner Trustee with respect thereto pursuant to Section 8.01(c) of the
Participation Agreement, the Lessee shall be entitled to receive any payments
otherwise distributable to the Holder of any Certificate who was subject to
such Tax pursuant to Sections 5.01 to 5.05 hereof until the foregoing amounts
shall have been recovered in full by the Lessee.
ARTICLE VI
PREPAYMENT OF CERTIFICATES
Section 6.01. No Prepayment Prior to Maturity. Except as provided
in Sections 6.02, 6.06 and 8.02 hereof, the Certificates may not be prepaid
prior to their respective Maturities.
Section 6.02. Prepayment of Certificates. (a) The Outstanding
Certificates shall be prepaid in full (and not in part):
(i) If an Event of Loss occurs with respect to the Airframe or with
respect to the Airframe and the Engines or engines then installed on the
Airframe (unless pursuant to Section 11.03 of the Lease and Section 9.08
hereof replacement equipment is substituted therefor).
(ii) If the Lessee, pursuant to Section 4.02(a) of the Lease, gives
notice of purchase of the Aircraft (and Section 2.12 hereof shall not be
applicable in connection with such purchase).
(iii) If any Owner Participant or the Owner Trustee on behalf of any
Owner Participant gives notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 hereof.
(iv) If the Lessee, pursuant to Section 10.01 of the Lease, gives
notice of a voluntary termination for obsolescence or surplus, but subject
to Section 6.02(c) below.
(v) Pursuant to Section 15.01 of the Participation Agreement in
connection with a Refinancing of the Certificates.
(vi) As contemplated by Section 2.16 hereof and Section 3.05(b) of the
Participation Agreement if the Delivery Date has not occurred on or prior
to the Cut-Off Date.
(vii) At the option of the Owner Trustee with the prior written
consent of the Lessee upon not less than 25 days' prior written notice.
(b) In the event of a prepayment of the Certificates pursuant to
Sections 6.02(a)(ii), (iv) and (v) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject to the terms of Section
4.02(a) or 10.01 of the Lease or Article 15 of the Participation Agreement, as
the case may be, shall give irrevocable (subject to Section 6.02(c) hereof)
written notice to the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the Certificates shall be
prepaid. In the case of a prepayment of the Certificates pursuant to Section
6.02(a)(i) above, the Certificates shall be prepaid in full on the Loss
Payment Date as defined in Section 11.02 of the Lease. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(iii) above, the
Certificates shall be prepaid in full on the date so designated in the notice
referred to in Section 8.02 hereof. In the case of a prepayment of the
Certificates pursuant to Section 6.02(a)(ii) or (iv) above, the Certificates
shall be prepaid in full on the Termination Date. In the case of a prepayment
of the Certificates pursuant to Section 6.02(a)(v) above, the Certificates
shall be prepaid on the effective date of the Refinancing. In the case of a
prepayment of the Certificates pursuant to Section 6.02(a)(vi) above, the
Certificates shall be prepaid on the 15th day following the Cut-Off Date. In
the case of a prepayment of the Certificates pursuant to Section 6.02(a)(vii)
above, the Certificates shall be prepaid on the date designated in the notice
referred to therein. The day on which the Certificates are to be prepaid
pursuant to this Section 6.01(b) is herein referred to as the "Prepayment
Date".
On or prior to the Prepayment Date, immediately available funds shall
be deposited with the Indenture Trustee in an amount in respect of the
Certificates equal to:
(1) in the event of a prepayment of the Certificates pursuant to
Section 6.02(a)(i), 6.02(a)(iii) (if clause (i) of the first sentence of
Section 8.02(a) hereof is applicable) or, if such prepayment is made on or
after the applicable Premium Termination Date, 6.02(a)(ii), 6.02(a)(iii)
(if clause (ii) of the first sentence of Section 8.02(a) hereof is
applicable) or 6.02(a)(vi) above, the sum of (A) the aggregate principal
amount of such Certificates then Outstanding, (B) accrued interest on the
Certificates to the Prepayment Date and (C) all other aggregate sums due
the Indenture Trustee hereunder or under the Participation Agreement or the
Lease, but excluding any Make-Whole Premium or other premium or penalty, or
(2) if such prepayment is made prior to the applicable Premium
Termination Date, in the event of a prepayment of the Certificates pursuant
to Section 6.02(a)(ii), 6.02(a)(iii) (if clause (ii) of the first sentence
of Section 8.02(a) hereof is applicable), 6.02(a)(iv), 6.02(a)(v) or
6.02(a)(vii) above, the sum of the amounts specified in clauses (A), (B)
and (C) of the preceding clause (1) plus any Make-Whole Premium payable in
respect of all Certificates with respect to which the Premium Termination
Date therefor has not occurred
(the aggregate amount required to be paid pursuant to this sentence being
herein referred to as the "Prepayment Price").
(c) If, pursuant to the last paragraph of Section 10.01(f) of the
Lease, no Termination Date shall occur, or if no refinancing shall occur
pursuant to Section 15.01 of the Participation Agreement, the Lessee shall
give notice thereof to the Indenture Trustee, and the prepayment proposed to
be effected in respect thereof shall not occur.
Section 6.03. Notice of Prepayment to Holders. In order to effect
any prepayment set forth in Section 6.02(a) hereof, the Indenture Trustee
shall give prompt notice by first class mail of prepayment to each Holder of
an Outstanding Certificate. 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 and Sinking Fund Redemption
Price. On the Prepayment Date or the Sinking Fund Redemption Date (as defined
in Section 6.06 hereof), the Owner Trustee shall, to the extent an amount
equal to the Prepayment Price or the Sinking Fund Redemption Price (as defined
in Section 6.06 hereof), as the case may be, shall not then be held in cash or
Permitted Investments (marked-to-market net of all costs and expenses of
liquidation thereof) by the Indenture Trustee in immediately available funds
and deposited for the purpose, pay to the Indenture Trustee an amount equal to
the difference between (a) the amount then so held and (b) the Prepayment
Price or the Sinking Fund Redemption Price, as the case may be. If there
shall so be on deposit and/or deposited the applicable Prepayment Price or
Sinking Fund Redemption Price on or prior to a Prepayment Date or Sinking Fund
Redemption Date, interest shall cease to accrue in respect of all or, in the
case of a mandatory sinking fund redemption, the relevant portion being
prepaid of, the Outstanding Certificates on and after such Prepayment Date or
such Sinking Fund Redemption Date.
Section 6.05. Certificates Payable on Prepayment Date. On the
Prepayment Date, the Outstanding Certificates shall (except (A) if the Owner
Trustee has requested the Indenture Trustee to revoke such notice of
prepayment in accordance with Section 6.03 hereof or (B) as otherwise provided
in the Lease) become due and payable and from and after such Prepayment Date
(unless there shall be a default in the payment of the Prepayment Price) such
Certificates shall cease to bear interest. Upon surrender by any Holder of
its Certificate for prepayment in accordance with said notice, such Holder
shall be paid the principal amount of its Certificate then outstanding, accrued
interest thereon to the Prepayment Date, all other sums due to such Holder
hereunder, under the Participation Agreement or the Lease, plus, if a
Make-Whole Premium is payable pursuant to Section 6.02(b) hereof, the
Make-Whole Premium in respect of such Certificate.
If any Certificate called for prepayment shall not be so paid upon
surrender thereof for prepayment, the principal shall, until paid, continue to
bear interest from the Prepayment Date at the interest rate applicable to such
Certificate.
Section 6.06. Mandatory Sinking Fund Redemption. The Certificates
shall be subject to partial redemption, at the aggregate principal amount set
forth for the Certificates of the respective Series and Maturity, on a pro
rata basis, on each date specified in this Section (a "Sinking Fund Redemption
Date") for such payment on the Certificates of such Series and Maturity. The
Owner Trustee shall deposit funds sufficient to pay the Sinking Fund
Redemption Price with the Indenture Trustee as provided in Section 6.04
hereof. The Indenture Trustee shall pay from the amounts so deposited on each
applicable Sinking Fund Redemption Date to the Certificates of each Series in
the order of priority set forth in clause "first" of Section 5.01 hereof and
among the Holders of the Certificates of each Series then Outstanding on a pro
rata basis the aggregate principal amount set forth below, together with
accrued interest to such Sinking Fund Redemption Date, but without Make-Whole
Premium (the "Sinking Fund Redemption Price"):
Principal Amount
<TABLE>
<CAPTION>
Series A Series B Series C
Certificates with Certificates with Certificates with
Sinking Fund a Maturity of a Maturity of a Maturity of
Redemption Date January 15, 2017 January 15, 2013 January 15, 2009
- ---------------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
July 15, 1997 0 0 0
January 15, 1998 705,440 118,915 612
July 15, 1998 0 0 0
January 15, 1999 712,440 267,165 422,853
July 15, 1999 0 0 0
January 15, 2000 712,440 267,165 487,095
July 15, 2000 0 0 0
January 15, 2001 712,440 267,165 601,601
July 15, 2001 0 0 0
January 15, 2002 712,440 267,165 721,202
July 15, 2002 0 0 0
January 15, 2003 712,440 267,165 850,280
July 15, 2003 0 0 0
January 15, 2004 356,220 267,165 1,345,453
July 15, 2004 356,220 0 0
January 15, 2005 660,860 267,165 818,083
July 15, 2005 51,580 0 0
January 15, 2006 356,220 133,583 1,767,096
July 15, 2006 356,220 133,582 0
January 15, 2007 712,440 267,165 2,965,098
July 15, 2007 0 0 0
January 15, 2008 712,440 267,165 2,280,789
July 15, 2008 0 0 0
January 15, 2009 712,440 1,339,061 747,838
July 15, 2009 0 0 0
January 15, 2010 712,440 2,158,388 0
July 15, 2010 0 0 0
January 15, 2011 712,440 3,441,339 0
July 15, 2011 0 0 0
January 15, 2012 712,440 2,766,370 0
July 15, 2012 0 0 0
January 15, 2013 4,852,281 714,277 0
July 15, 2013 0 0 0
January 15, 2014 5,917,242 0 0
July 15, 2014 80,029 0 0
January 15, 2015 6,142,140 0 0
July 15, 2015 313,361 0 0
January 15, 2016 6,384,222 0 0
July 15, 2016 564,520 0 0
January 15, 2017 681,605 0 0
</TABLE> 
