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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 7, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DELTA AIR LINES, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 58-0218548
(State or Other Jurisdiction (I.R.S. Employer
Of Incorporation or Organization) Identification Number)
</TABLE>
HARTSFIELD ATLANTA INTERNATIONAL AIRPORT
ATLANTA, GEORGIA 30320
(404) 715-2600
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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COPIES OF CORRESPONDENCE TO:
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<S> <C>
ROBERT S. HARKEY, ESQ. JEFFREY M. STEIN, ESQ.
SENIOR VICE PRESIDENT -- KING & SPALDING
GENERAL COUNSEL & SECRETARY 191 PEACHTREE STREET
DELTA AIR LINES, INC. ATLANTA, GEORGIA 30303-1763
HARTSFIELD ATLANTA (404) 572-4729
INTERNATIONAL AIRPORT
ATLANTA, GEORGIA 30320
(404) 715-2387
(Name, Address, Including Zip Code, and
Telephone
Number, Including Area Code, of Agent For
Service)
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PRICE(1) FEE(2)(3)
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<S> <C> <C> <C>
Debt Securities and Pass Through
Certificates....................... $1,500,000,000 $1,500,000,000 $442,500
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</TABLE>
(1) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(o) under the Securities Act. If any Debt Securities or Pass
Through Certificates are issued at a discount, such greater amount as shall
result in an aggregate initial offering price of $1,500,000,000. If any Debt
Securities or Pass Through Certificates are issued in a currency or
composite currency other than U.S. dollars, such different amount as shall
result in an aggregate initial offering price of U.S. $1,500,000,000.
(2) Pursuant to Rule 457(o), the registration fee has been calculated on the
basis of the maximum aggregate offering price of the securities listed.
(3) Pursuant to Rule 429, the Prospectuses filed as part of this Registration
Statement also relate to the remaining unsold $3,600,000 principal amount of
Debt Securities, and the remaining unsold $80,281,000 principal amount of
Equipment Trust Certificates and Pass Through Certificates, previously
registered under Form S-3 Registration Statement (File No. 33-50175). A
filing fee of $26,213 was paid with respect to these securities.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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EXPLANATORY NOTE
This Registration Statement contains two separate forms of prospectuses to
be used in connection with offerings of Debt Securities and Pass Through
Certificates, respectively.
<PAGE> 3
SUBJECT TO COMPLETION, DATED JULY 7, 1998
PROSPECTUS
DELTA AIR LINES, INC.
DEBT SECURITIES
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This Prospectus relates to the issuance of unsecured debt securities and
other evidences of indebtedness ("Debt Securities") by Delta Air Lines, Inc.
("Delta" or the "Company").
ISSUANCE OF DEBT SECURITIES:
- - Series may be periodically offered;
- - Series may be denominated in U.S. dollars or other currencies or currency
units;
- - Prices and terms will be determined at the time of sale; and
- - The total aggregate principal amount (or, in the case of Debt Securities
issued at a discount, initial offering price) will not exceed US
$1,583,881,000 (or the equivalent in foreign currencies or currency units).
FORMS THAT DEBT SECURITIES MAY TAKE:
- - Registered form;
- - Bearer form; or
- - Global form.
This Prospectus is accompanied by a Prospectus Supplement which includes
additional information as to a particular series of Debt Securities. Sales of
Debt Securities may not be consummated without both this Prospectus and a
Prospectus Supplement.
INFORMATION FOUND IN THE PROSPECTUS SUPPLEMENT:
- - Aggregate principal amount of the series of Debt Securities
- - Denominations
- - Maturity
- - Interest rate
- - Time of interest payments
- - Any terms for redemption
- - Any terms for sinking fund payments
- - Any listing on a national securities exchange
- - Initial public offering price
- - Names of any underwriters or agents
- - Terms of any underwriting arrangements
- - Amounts to be purchased by underwriters or agents
- - Compensation of underwriters or agents
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this Prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell securities and it is not soliciting an offer to buy securities in any
state where the offer or sale is not permitted.
, 1998
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). You may read
and copy any documents we file at the SEC's public reference room, 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. Our SEC filings are also
available to the public on the SEC's web site at http://www.sec.gov and through
the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which
our common stock is listed.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and later information that we file
with the SEC will automatically update and supersede this information as well as
the information included in this Prospectus. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 ("Exchange
Act") until we sell all the Debt Securities. This Prospectus is part of a
registration statement we filed with the SEC.
- - Annual Report on Form 10-K for the fiscal year ended June 30, 1997;
- - Quarterly Reports on Form 10-Q for the quarters ended September 30, 1997,
December 31, 1997 and March 31, 1998; and
- - Current Report on Form 8-K dated April 30, 1998.
You may request a copy of these filings (other than any exhibits unless
specifically incorporated by reference into this Prospectus), at no cost, by
writing or telephoning us at the following address:
Delta Air Lines, Inc.
Investor Relations Department (Dept. No. 829)
P.O. Box 20706
Atlanta, Georgia 30320
(404) 715-2600
You should rely only on the information incorporated by reference or
provided in this Prospectus or any Prospectus Supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these Debt Securities in any state where the offer is not permitted.
You should not assume that the information in this Prospectus or any Prospectus
Supplement is accurate as of any date other than the date on the front of those
documents.
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THE COMPANY
Delta is a major airline engaged in domestic and foreign air
transportation. We are one of the largest air carriers of passengers, property
and mail in the United States. We provide scheduled air transportation over a
network of routes throughout the United States, and between the United States
and other countries in North America, Europe, the Middle East and Asia. We
operate hubs at Atlanta, Cincinnati, Dallas/Fort Worth and Salt Lake City. We
also operate an international gateway at New York's Kennedy Airport and a
Pacific gateway in Portland, Oregon.
Delta is incorporated under the laws of the State of Delaware. Our
principal executive offices are located at Hartsfield Atlanta International
Airport, Atlanta, Georgia 30320, and our telephone number is (404) 715-2600.
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds to the Company from the sale of the Debt Securities offered hereby
will be available for general corporate purposes, including, but not limited to,
repayment of short-term or long-term indebtedness, capital expenditures,
repurchases of common stock and acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges represents the number of times that
fixed charges were covered by earnings. For purposes of computing the ratio of
earnings to fixed charges, "earnings" represents net income plus the provision
for income taxes (prior to any amortization of investment tax credit) and fixed
charges, excluding capitalized interest and interest and interest offset on the
Guaranteed Serial ESOP Notes. "Fixed charges" represents gross interest (which
includes gross interest on the Guaranteed Serial ESOP Notes and capitalized
interest) plus one-third of rentals (except for the nine months ended March 31,
1998 where one half of the rentals were added into "Fixed Charges"), which is
considered representative of the interest factor.
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NINE MONTHS ENDED
YEAR ENDED JUNE 30, MARCH 31,
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1993 1994 1995 1996 1997 1997 1998
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<S> <C> <C> <C> <C> <C> <C>
(1 ) (1) 1.69 1.43 3.05 3.29 3.06
</TABLE>
(1) Earnings for the fiscal years ended June 30, 1993 and 1994 were inadequate
to cover fixed charges. Additional earnings of $728.0 million for the fiscal
year ended June 30, 1993 and $707.0 million for the fiscal year ended June
30, 1994 would have been necessary to bring the ratio to 1.0 in the
respective periods.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture, dated as of May 1,
1991 (the "Indenture"), between the Company and The Bank of New York, successor
to The Citizens and Southern National Bank of Florida, as Trustee (the
"Trustee"), a copy of which is incorporated by reference as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and qualified in
their entirety by reference to, all of the provisions of the Indenture,
including the definitions therein of certain terms capitalized in this
Prospectus. Wherever particular Sections or Articles or defined terms of the
Indenture are referred to herein or in a Prospectus Supplement, such Sections or
defined terms are incorporated herein or therein by reference.
The term "Securities," as used under this caption, refers to all securities
issued under the Indenture and includes the Debt Securities.
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The Securities may be issued from time to time in one or more series. The
particular terms of each series of Securities offered by any Prospectus
Supplement or Prospectus Supplements will be described in such Prospectus
Supplement or Prospectus Supplements relating to such series.
All references to the Securities or Debt Securities under this caption
refer to Securities or Debt Securities issued in fully registered form without
coupons. However, the Indenture permits the issuance of Securities in bearer
form with or without coupons attached. If any of the Securities are issued in
bearer form, the Prospectus Supplement relating to such Securities in bearer
form will describe the terms and provisions of, and the tax considerations
relating to, such Securities in bearer form.
GENERAL
The Indenture does not limit the aggregate amount of Securities which may
be issued thereunder, and Securities may be issued thereunder from time to time
in separate series up to the aggregate amount from time to time authorized by
the Company for each series. The Securities will be unsecured and unsubordinated
obligations of the Company and will rank equally and ratably with other
unsecured and unsubordinated indebtedness of the Company.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Debt Securities ("Offered
Securities") in respect of which this Prospectus is being delivered: (1) the
title of the Offered Securities; (2) any limit on the aggregate principal amount
of the Offered Securities; (3) whether the Offered Securities are to be issuable
in registered form or bearer form, or both; (4) whether any of the Offered
Securities are to be issuable in whole or in part initially in temporary global
form and whether any of the Offered Securities are to be issuable in permanent
global form and, if so, the terms and conditions, if any, upon which interests
in such Securities in global form may be exchanged, in whole or in part, for the
individual Securities represented thereby; (5) the person to whom any interest
on any Offered Security of the series shall be payable if other than the person
in whose name the Security is registered on the Regular Record Date; (6) the
date or dates on which the Offered Securities will mature; (7) the rate or rates
at which the Offered Securities will bear interest, if any; (8) the date or
dates from which any such interest will accrue, the Interest Payment Dates on
which any such interest on the Offered Securities will be payable and the
Regular Record Date for any Interest Payment Date; (9) each office or agency
where the principal of, or premium, if any, and interest on the Offered
Securities will be payable and each office or agency where the Offered
Securities may be presented for registration of transfer or exchange; (10) the
period or periods within which, the events upon the occurrence of which, and the
price or prices at which, the Offered Securities may, pursuant to any optional
or mandatory provisions, be redeemed or purchased, in whole or in part, by the
Company and any terms and conditions relevant thereto; (11) the obligation of
the Company, if any, to redeem or repurchase the Securities at the option of the
Holders; (12) the denominations in which any Offered Securities will be
issuable, if other than denominations of $1,000 and any integral multiple
thereof; (13) the currency or currencies, including composite currencies, of
payment of principal of and any premium and interest on the Offered Securities
if other than U.S. dollars and whether the Company or the Holders may elect to
receive payments in respect of the Securities in a coin or currency other than
that in which the Securities are stated to be payable; (14) any index or formula
used to determine the amount of payments of principal of and any premium and
interest on the Offered Securities; (15) if other than the principal amount
thereof, the portion of the principal amount of the Offered Securities of the
series which will be payable upon declaration of the acceleration of the
Maturity thereof; (16) any Events of Default with respect to the Securities of
such series, if not otherwise set forth under "Events of Default"; (17) the
applicability of the provisions described under "Defeasance"; and (18) any other
terms of the Offered Securities not inconsistent with the provisions of the
Indenture (Section 301).
Securities may be issued at a discount from their principal amount. Federal
income tax consequences and other special considerations applicable to any such
Original Issue Discount Securities will be described in the applicable
Prospectus Supplement.
If the purchase price of any of the Securities is denominated in a foreign
currency or currencies or a foreign currency unit or units or if the principal
of, premium, if any, and interest on any series of Securities is
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payable in a foreign currency or currencies or a foreign currency unit or units,
the restrictions, elections, general tax considerations, specific terms and
other information with respect to such issue of Securities and such foreign
currency or currencies or foreign currency unit or units will be set forth in
the applicable Prospectus Supplement.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will not have the benefit of any covenants that limit or
restrict the Company's business or operations, the pledging of the Company's
assets or the incurrence of indebtedness by the Company. Further, unless
otherwise indicated in the Prospectus Supplement, the Debt Securities will not
have the benefit of any covenants that afford Holders of the Debt Securities
protection in the event of a highly leveraged or other transaction involving the
Company that may adversely affect Holders of Debt Securities.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal, premium, if any, and interest on the Securities will be payable,
and the exchange of and the transfer of Securities will be registerable, at the
office or agency of the Company in the City of Atlanta, Georgia maintained for
such purpose and at any other office or agency maintained for such purpose,
except that, at the option of the Company, interest may be paid by mailing a
check to the address of the Person entitled thereto as it appears on the
Security Register. (Sections 301, 305 and 1002) Unless otherwise indicated in
the applicable Prospectus Supplement, the Securities will be issued in
denominations of $1,000 or integral multiples thereof. (Section 302) No service
charge will be made for any registration or transfer or exchange of the
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge imposed in connection therewith. (Section 305)
All monies paid by the Company to a Paying Agent for the payment of
principal of, premium, if any, or interest on any Security which remain
unclaimed for two years after such principal, premium or interest has become due
and payable may be repaid to the Company and thereafter the Holder of such
Security may look only to the Company for payment thereof. (Section 1003)
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a Depositary or its nominee
identified in the applicable Prospectus Supplement. In such a case, one or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of Outstanding Debt
Securities of the series to be represented by such Global Security or
Securities. Unless and until it is exchanged in whole or in part for Debt
Securities in registered form, a Global Security may not be registered for
transfer or exchange except as a whole by the Depositary for such Global
Security to a nominee of such Depositary and except in the circumstances
described in the applicable Prospectus Supplement. (Sections 204 and 305)
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement,
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security registered
in the name of such Depositary or its nominee. Upon the issuance of such Global
Security, and the deposit of such Global Security with or on behalf of the
Depositary for such Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Securities or by the Company, if such Securities
are offered and sold directly by the Company. Ownership of beneficial interests
in such Global Security will be limited to participants or Persons that may hold
interests through participants. Ownership of beneficial interests by
participants in such Global Security will be shown on, and the transfer of that
ownership interest will be effected only through,
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records maintained by the Depositary or its nominees for such Global Security.
Ownership of beneficial interests in such Global Security by Persons that hold
through participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Securities
represented by such Global Security for all purposes under the Indenture. Unless
otherwise specified in the applicable Prospectus Supplement, owners of
beneficial interests in such Global Security will not be entitled to have
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of
Securities of such series in certificated form and will not be considered the
Holders thereof for any purposes under the Indenture. (Sections 204 and 305)
Accordingly, each Person owning a beneficial interest in such Global Security
must rely on the procedures of the Depositary and, if such Person is not a
participant, on the procedures of the participant through which such Person owns
its interest, to exercise any rights of a Holder under the Indenture. Payments,
transfers, exchanges and other matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of the Company, the Trustee or any agent of
the Company or the Trustee will have any responsibility or liability for any
aspect of the Depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in a Global Security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
The Indenture provides that the Depositary may grant proxies and otherwise
authorize participants to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a Holder is entitled to
give or take under the Indenture. (Section 104) The Company understands that
under existing industry practices, if the Company requests any action of Holders
or an owner of a beneficial interest in such Global Security desires to give any
notice or take any action a Holder is entitled to give or take under the
Indenture, the Depositary would authorize the participants to give such notice
or take such action, and participants would authorize beneficial owners owning
through such participants to give such notice or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
Principal of, premium, if any, and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
Debt Securities of any series: (a) failure to pay principal of or premium, if
any, on any Debt Security of that series when due, continued for five Business
Days; (b) failure to pay any interest on any Debt Security of that series when
due, continued for 30 days; (c) failure to deposit any sinking fund payment,
when due, continued for five Business Days, in respect of any Debt Security of
that series; (d) failure to perform any other covenant of the Company in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of Debt Securities other than that series), continued for 60
days after written notice as provided in the Indenture; (e) a default under any
evidence of indebtedness for money borrowed by the Company or a Restricted
Subsidiary (including a default with respect to Debt Securities of any other
series) or under any instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed by the
Company or a Restricted Subsidiary (including the Indenture), whether such
indebtedness exists as of the date of the Indenture or is thereafter created,
which default (i) results from the failure by the Company or any Restricted
Subsidiary to pay the principal amount due upon the final stated maturity of
such indebtedness in an amount in excess of $75 million after the expiration of
any applicable grace period, or (ii) results in the acceleration of such
indebtedness in an amount in excess of $75 million, in either case, without such
indebtedness having been discharged, or such acceleration having been rescinded
or annulled, within 10 days, after written notice to the Company by the Trustee
or by the Holders of at least 25% in principal amount of the Outstanding
Securities of such series as provided in the Indenture; (f) certain events of
bankruptcy,
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insolvency or reorganization; and (g) any other Event of Default provided with
respect to Debt Securities of that series. (Section 501) If an Event of Default
with respect to Outstanding Debt Securities of any series shall occur and be
continuing, either the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Debt Securities of that series by notice as provided
in the Indenture may declare the principal amount (or, if the Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all Debt Securities
of that series or such specified amount to be due and payable immediately.
However, at any time after a declaration of acceleration with respect to Debt
Securities of any series has been made, but before a judgment or decree based on
such acceleration has been obtained, the Holders of a majority in principal
amount of the Outstanding Debt Securities of that series may, under certain
circumstances, rescind and annul such acceleration. (Section 502) For
information as to waiver of defaults, see "Modification and Waiver" below.
"Subsidiary" is defined to mean a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. "Restricted Subsidiary" is defined to mean any Subsidiary
substantially all of the property and operations of which are located in the
United States and which owns a Principal Property, except a Subsidiary which is
primarily engaged in the business of a finance company. "Principal Property" is
defined to include any aircraft, and any aircraft engine installed in any
aircraft, that has 75 or more passenger seats, whether now owned or hereafter
acquired by the Company or any Restricted Subsidiary. (Section 101).
The Indenture provides that, subject to the duty of the Trustee during an
Event of Default to act with the required standard of care, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the Holders, unless such Holders shall
have offered to the Trustee reasonable security or indemnity. (Sections 601 and
603) Subject to certain provisions, including those requiring security or
indemnification of the Trustee, the Holders of a majority in principal amount of
the Outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debt Securities of that series. (Section 512)
No holder of a Security of any series will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or a trustee, or for any other remedy thereunder, unless (i) such Holder has
previously given to the Trustee written notice of a continuing Event of Default
with respect to the Securities of that series, (ii) the Holders of at least 25%
in aggregate principal amount of the Outstanding Securities of that series have
made written request, and such Holder or Holders have offered reasonable
indemnity to the Trustee, to institute such proceeding as trustee and (iii) the
Trustee has failed to institute such proceeding, and has not received from the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series a direction inconsistent with such request, within 60
days after such notice, request and offer. (Section 507) However, such
limitations do not apply to a suit instituted by a Holder of a Security for the
enforcement of payment of the principal of, or premium, if any, or interest on
such Security on or after the applicable due date specified in such Security.
(Section 508)
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of its obligations under the Indenture and
as to any default in such performance. (Section 1004) The Indenture provides
that the Trustee may withhold notice to the Holders of the Debt Securities of
any series of the default (except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Debt Securities of such series
or in the payment of any sinking fund installment with respect to Debt
Securities of such series) if the Trustee considers it in the interest of the
Holders of the Debt Securities to do so. (Section 602)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected
thereby; provided, however, that no such modification or amendment may, without
the consent of the Holder of each Outstanding Debt Security affected thereby:
(a) change the Stated Maturity of
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the principal of, or any installment of principal of, or interest on, any Debt
Security; (b) (unless otherwise provided in the applicable Prospectus
Supplement) reduce the principal amount of, the rate of interest on, or the
premium, if any, payable upon the redemption of, any Debt Security; (c) reduce
the amount of principal of an Original Issue Discount Security payable upon
acceleration of the Maturity thereof; (d) change the place or currency of
payment of principal of, premium, if any, or interest on any Debt Security; (e)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security; or (f) reduce the percentage in principal amount
of Outstanding Debt Securities of any series, the consent of the Holders of
which is required for modification or amendment of the Indenture or for waiver
of compliance with certain provisions of the Indenture or for waiver of certain
defaults. (Section 902)
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain covenants of the Indenture. (Section
1006) The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may, on behalf of the Holders of all
Debt Securities of that series, waive any past default under the Indenture with
respect to that series, except a default in the payment of the principal of,
premium, if any, or interest on, any Debt Security of that series or in respect
of a provision which under the Indenture cannot be modified or amended without
the consent of the Holder of each Outstanding Debt Security of that series
affected. (Section 513)
Except in certain limited circumstances, the Company will be entitled to
set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give or take any direction,
notice, consent, waiver or other action under the Indenture, in the manner and
subject to the limitations provided in the Indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of Outstanding Debt
Securities, may consolidate with or merge into, or transfer or lease its assets
substantially as an entirety to, any Person, and any other Person may
consolidate with or merge into, or transfer or lease its assets substantially as
an entirety to, the Company, provided (a) that the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or
which acquires or leases the assets of the Company substantially as an entirety
is a Person organized and existing under the laws of any United States
jurisdiction and assumes the Company's obligations on the Debt Securities and
under the Indenture, (b) that after giving effect to such transaction no Event
of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing, and (c) that
certain other conditions are met. (Article Eight)
DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement with
respect to the Debt Securities of a series, the Company, at its option, (i) will
be discharged from any and all obligations in respect of the Debt Securities of
such series (except for certain obligations to register the transfer or exchange
of Debt Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, and to maintain paying agents and hold moneys for
payment in trust) or (ii) need not comply with any covenants that are specified
in a Prospectus Supplement, and the occurrence of an event described under
clause (d) with respect to any defeased covenant and clause (e) of the "Events
of Default" shall no longer be an Event of Default if, in each case, the Company
deposits with the Trustee, in trust, money or U.S. Government Obligations that
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay all the principal
of (and premium, if any) and any interest on the Debt Securities of such series
on the dates such payments are due (which may include one or more redemption
dates designated by the Company) in accordance with the terms of such Debt
Securities. Such a trust may only be established if, among other things, (a) no
Event of Default or event which with the giving of notice or lapse of time, or
both, would become an Event of Default under the Indenture shall have occurred
and be continuing on the date of such deposit, (b) in the event of a defeasance
of the type described in clause (i) above, no Event of Default described under
clause (f) of "Events of Default" above or event which with the giving of notice
or lapse of time, or both, would become an Event of Default described under such
clause
8
<PAGE> 11
(f) shall have occurred and be continuing at any time during the period ending
on the 91st day following such date of deposit, and (c) the Company shall have
delivered an Opinion of Counsel to the effect that the Holders of the Debt
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit or defeasance and will be subject to
federal income tax in the same manner as if such defeasance had not occurred.
In the event the Company omits to comply with its remaining obligations
under the Indenture after a defeasance of the Indenture with respect to the Debt
Securities of any series as described under clause (ii) above and the Debt
Securities of such series are declared due and payable because of the occurrence
of any undefeased Event of Default, the amount of money and U.S. Government
Obligations on deposit with the Trustee may be insufficient to pay amounts due
on the Debt Securities of such series at the time of the acceleration resulting
from such Event of Default. However, the Company will remain liable in respect
of such payments. (Article Thirteen)
GOVERNING LAW
The Indenture and the Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Trustee and certain of its affiliates are the trustees under a number
of other indentures qualified under the Trust Indenture Act of 1939, as amended
(the "Indenture Act"), in respect of which the Company is the obligor with
respect to certain unsecured debt securities and are the trustees under a number
of indentures qualified under the Indenture Act in respect of which the Company
is the lessee of the equipment that constitutes the collateral for the debt
obligations issued pursuant to such indentures. Affiliates of the Trustee are
also the trustees under one or more indentures with the Company that have not
been qualified under the Indenture Act. Upon the occurrence of an Event of
Default, or any event of default under such other indenture, the Trustee may be
deemed to have a conflicting interest with respect to the Securities for
purposes of the Indenture Act and, accordingly, may be required to resign as
Trustee under the Indenture.
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee
will be permitted to engage in certain other transactions; however, if it
acquires any conflicting interest it must eliminate such conflict or resign.
(Section 608)
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters and also
may sell Debt Securities directly to other purchasers or through agents.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Debt Securities for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Debt Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described, in the applicable Prospectus Supplement.
9
<PAGE> 12
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Debt Securities from the
Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the Offered Securities is not at the time of delivery prohibited under the laws
of the jurisdiction to which such purchaser is subject. The underwriters and
such other agents will not have any responsibility in respect of the validity or
performance of such contracts.
Unless otherwise indicated in the applicable Prospectus Supplement, Delta
does not intend to apply for the listing of any Debt Securities on a national
securities exchange. If any Debt Securities are sold to or through underwriters,
dealers or agents, the underwriters, dealers or agents may make a market in such
Debt Securities, as permitted by applicable laws and regulations. No
underwriter, dealer or agent would be obligated, however, to make a market in
such Debt Securities, and any such market-making could be discontinued at any
time at the sole discretion of the underwriter, dealer or agent. Accordingly, no
assurance can be given as to the liquidity of, or trading markets for, such Debt
Securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for, the Company in the
ordinary course of business.
VALIDITY OF THE DEBT SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Debt Securities offered hereby will be passed upon for the
Company by King & Spalding, Atlanta, Georgia, and for any agents, dealers or
underwriters by Sullivan & Cromwell, New York, New York.
EXPERTS
The consolidated financial statements and schedules included or
incorporated by reference in the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1997 and incorporated by reference in this
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports. Reference is made to
said report, which includes an explanatory paragraph with respect to the change
in the method of accounting for postemployment benefits effective July 1, 1994
as discussed in Note 10 to the consolidated financial statements.
10
<PAGE> 13
======================================================
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE
ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF
THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT
ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE AS
OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
Where You Can Find More Information... 2
The Company........................... 3
Use of Proceeds....................... 3
Ratio of Earnings to Fixed Charges.... 3
Description of Debt Securities........ 3
Plan of Distribution.................. 9
Validity of the Debt Securities....... 10
Experts............................... 10
</TABLE>
======================================================
======================================================
$1,583,881,000
DELTA AIR LINES, INC.
DEBT SECURITIES
---------------------
PROSPECTUS
---------------------
, 1998
======================================================
<PAGE> 14
SUBJECT TO COMPLETION, DATED JULY 7, 1998
PROSPECTUS
DELTA AIR LINES, INC.
PASS THROUGH CERTIFICATES
---------------------
This Prospectus relates to the issuance of Pass Through Certificates (the
"Certificates") by one or more Pass Through Trusts (each, a "Trust") to be
formed by Delta Air Lines, Inc. ("Delta" or the "Company").
THE CERTIFICATES --
- Will be issued in one or more series with distribution rates and
distribution dates specified in the Prospectus Supplement;
- Will represent interests in the relevant Pass Through Trust only and will
be repaid only from the assets of that Trust, and will not represent
obligations of, or be guaranteed by, Delta;
- May have one or more forms of liquidity enhancement;
- Will be issued in registered form;
- May be issued in accordance with a book-entry system; and
- Will have an aggregate public offering price of up to $1,583,881,000.
EACH PASS THROUGH TRUST --
- Will issue one or more series of Certificates;
- Will use the proceeds of each series of Certificates to purchase Equipment
Notes of one or more series, each with an interest rate equal to the rate
on that series of Certificates and with a maturity date on or prior to the
final distribution date for that series of Certificates; and
- Will pass through principal and interest paid on the Equipment Notes that
it owns, subject to any applicable subordination provisions.
THE EQUIPMENT NOTES --
- Will be issued in series.
- Will be issued either
- on a non-recourse basis in connection with aircraft sale/leaseback
transactions to finance or refinance a portion of the cost of aircraft
or to raise funds for general corporate purposes (such aircraft
referred to as "Leased Aircraft") -- in which case the amounts due from
Delta under the relevant lease will be sufficient to make all payments
required under the related Equipment Notes; or
- with recourse to Delta either to finance or refinance all or a portion
of the cost of aircraft owned by Delta ("Owned Aircraft") or to raise
funds for general corporate purposes.
These two types of Equipment Notes are referred to as Leased Aircraft
Notes and Owned Aircraft Notes. The Leased Aircraft Notes will not be
obligations of, or guaranteed by, Delta. The Owned Aircraft Notes will be
general obligations of Delta.
- Will be secured by the aircraft specified in the Prospectus Supplement
and, in the case of any Leased Aircraft, by the interest of the lessor in
that lease.
This Prospectus is accompanied by a Prospectus Supplement which includes
additional information as to the particular series of Certificates being sold
and the underlying Equipment Notes. Sales of Certificates may not be consummated
without both this Prospectus and a Prospectus Supplement.
INFORMATION FOUND IN THE PROSPECTUS SUPPLEMENT:
- - Aggregate principal amount of each series of Certificates
- - Denominations
- - Distribution dates and distribution rates on Certificates
- - Ranking of the Certificates in terms of priority of payment
- - Equipment Notes to be purchased
- - Interest rate and payment dates on Equipment Notes
- - Description of the related aircraft
- - Any related lease or financing arrangements
- - Initial public offering price
- - Any listing on a national securities exchange
- - Names of any underwriters or agents
- - Terms of any underwriting arrangements
- - Amounts to be purchased by underwriters or agents
- - Compensation of underwriters or agents
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this Prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell securities and it is not soliciting an offer to buy securities in any
state where the offer or sale is not permitted.
, 1998
<PAGE> 15
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). You may read
and copy any documents we file at the SEC's public reference room 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. Our SEC filings are also
available to the public on the SEC's web site at http://www.sec.gov and through
the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which
our common stock is listed.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and later information that we file
with the SEC will automatically update and supersede this information as well as
the information included in this Prospectus. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 ("Exchange
Act") until we sell all the Certificates. This Prospectus is part of a
registration statement we filed with the SEC.
- - Annual Report on Form 10-K for the fiscal year ended June 30, 1997;
- - Quarterly Reports on Form 10-Q for the quarters ended September 30, 1997,
December 31, 1997 and March 31, 1998; and
- - Current Report on Form 8-K dated April 30, 1998.
You may request a copy of these filings (other than any exhibits unless
specifically incorporated by reference into this Prospectus), at no cost, by
writing or telephoning us at the following address:
Delta Air Lines, Inc.
Investor Relations Department (Dept. No. 829)
P.O. Box 20706
Atlanta, Georgia 30320
(404) 715-2600
You should rely only on the information incorporated by reference or
provided in this Prospectus or any Prospectus Supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these Certificates in any state where the offer is not permitted. You
should not assume that the information in this Prospectus or any Prospectus
Supplement is accurate as of any date other than the date on the front of those
documents.
2
<PAGE> 16
THE COMPANY
Delta is a major airline engaged in domestic and foreign air
transportation. We are one of the largest air carriers of passengers, property
and mail in the United States. We provide scheduled air transportation over a
network of routes throughout the United States, and between the United States
and other countries in North America, Europe, the Middle East and Asia. We
operate hubs in Atlanta, Cincinnati, Dallas/Fort Worth and Salt Lake City. We
also operate an international gateway at New York's Kennedy Airport and a
Pacific gateway in Portland, Oregon.
Delta is incorporated under the laws of the State of Delaware. Our
principal executive offices are located at Hartsfield Atlanta International
Airport, Atlanta, Georgia 30320, and our telephone number is (404) 715-2600.
GENERAL OUTLINE OF TRUST STRUCTURE
A separate Trust will be formed for each series of Certificates to be
offered pursuant to a Pass Through Trust Agreement (the "Basic Agreement") and
one or more supplements thereto (each, a "Trust Supplement") between Delta and
the trustee named therein (the "Trustee"), as trustee under each Trust.
Concurrently with the execution and delivery of each Trust Supplement, the
Trustee, on behalf of the Trust formed thereby, will enter into one or more
purchase or refunding agreements (each such agreement being herein referred to
as a "Note Purchase Agreement") pursuant to which it will agree to purchase one
or more equipment notes ("Equipment Notes") relating to one or more of the
Aircraft described in the applicable Prospectus Supplement. Pursuant to the
applicable Note Purchase Agreement or Note Purchase Agreements, the Trustee, on
behalf of each Trust, will purchase Equipment Notes of one or more series such
that the Equipment Notes that constitute the property of such Trust will have
identical interest rates (in each case equal to the rate applicable to the
Certificates issued by such Trust) and identical priority of payment relative to
each of the other Equipment Notes issued under the Related Indentures (as
defined below). The maturity dates of the Equipment Notes acquired by each Trust
will occur on or before the final distribution date applicable to the
Certificates that will be issued by such Trust. The Trustee will distribute the
amount of payments of principal, premium, if any, and interest received by it as
holder of the Equipment Notes to the registered holders of Certificates of the
Trust (the "Certificateholders") in which such Equipment Notes are held, subject
to the effect of any cross-subordination provisions described in the Prospectus
Supplement for a series of Certificates. To the extent that the proceeds of any
offering of Certificates are not used to purchase Equipment Notes on the date of
issuance of such Certificates, such proceeds will be held for the benefit of the
holders of such Certificates. If any such proceeds are not subsequently utilized
to purchase Equipment Notes by the relevant date specified in the applicable
Prospectus Supplement, such proceeds will be returned to the holders of such
Certificates. See "Description of the Certificates" and "Description of the
Equipment Notes".
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement for a
specific offering of Certificates, the Certificates will be issued in order to
(a) finance or refinance the debt portion and, in certain cases, refinance some
of the equity portion of one or more separate leveraged lease transactions
entered into by Delta, as lessee, with respect to the Leased Aircraft, as
described in the applicable Prospectus Supplement, (b) finance or refinance the
aggregate principal amount of debt to be issued, or the purchase of the
aggregate principal amount of the debt previously issued, by Delta in respect of
the Owned Aircraft as described in the applicable Prospectus Supplement or (c)
provide Delta with proceeds that it may use for general corporate purposes.
Except as otherwise provided in the applicable Prospectus Supplement for a
specific offering of Certificates, the proceeds from the sale of the
Certificates will be used by the Trustee on behalf of the applicable Trust or
Trusts (a) to purchase Leased Aircraft Notes issued by the respective Owner
Trustee or Owner Trustees to finance or refinance (as specified in the
applicable Prospectus Supplement) the related Leased Aircraft, and (b) to
purchase Owned Aircraft Notes issued by Delta to (i) finance or refinance (as
specified in the applicable Prospectus Supplement) the related Owned Aircraft,
or (ii) provide Delta with
3
<PAGE> 17
proceeds that it may use for general corporate purposes. Such general corporate
purposes of Delta include, but are not limited to, repayment of short-term or
long-term indebtedness, capital expenditures, repurchases of common stock and
acquisitions. To the extent that the proceeds of any offering of Certificates
are not used to purchase Equipment Notes on the date of issuance of such
Certificates, such proceeds will be held for the benefit of the holders of such
Certificates. If any such proceeds are not subsequently utilized to purchase
Equipment Notes by the relevant date specified in the applicable Prospectus
Supplement, such proceeds will be returned to the holders of such Certificates.
See "Description of Certificates -- Delayed Purchase of Equipment Notes".
The Leased Aircraft Notes will be issued under separate trust indentures
(the "Leased Aircraft Indentures") between a bank, trust company or other
institution specified in the related Prospectus Supplement, as trustee
thereunder (in such capacity, herein referred to as the "Loan Trustee"), and an
institution specified in the related Prospectus Supplement acting, not in its
individual capacity, but solely as owner trustee (an "Owner Trustee") of a
separate trust for the benefit of one or more institutional investors (each, an
"Owner Participant"). With respect to each Leased Aircraft, the related Owner
Participant will have provided or will provide from sources other than the
Leased Aircraft Notes a portion of the equipment cost of the related Leased
Aircraft. No Owner Participant, however, will be personally liable for any
amount payable under the related Leased Aircraft Indenture or the Leased
Aircraft Notes issued thereunder. Each Leased Aircraft will have been or will be
leased by the related Owner Trustee to Delta pursuant to a separate lease
agreement (each such lease agreement, a "Lease"). The Owned Aircraft Notes will
be issued under separate trust indentures (the "Owned Aircraft Indentures" and,
together with any Leased Aircraft Indentures, the "Indentures") between the
applicable Loan Trustee and Delta.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges represents the number of times that
fixed charges were covered by earnings. For purposes of computing the ratio of
earnings to fixed charges, "earnings" represents net income plus the provision
for income taxes (prior to any amortization of investment tax credit) and fixed
charges, excluding capitalized interest and interest and interest offset on the
Guaranteed Serial ESOP Notes. "Fixed charges" represents gross interest (which
includes gross interest on the Guaranteed Serial ESOP Notes and capitalized
interest) plus one-third of rentals (except for the nine months ended March 31,
1998 where one half of the rentals were added into "Fixed Charges"), which is
considered representative of the interest factor.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JUNE 30, MARCH 31,
- -------------------------------- -----------------
1993 1994 1995 1996 1997 1997 1998
- ---- ---- ---- ---- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C>
(1 ) (1) 1.69 1.43 3.05 3.29 3.06
</TABLE>
(1) Earnings for the fiscal years ended June 30, 1993 and 1994 were inadequate
to cover fixed charges. Additional earnings of $728.0 million for the fiscal
year ended June 30, 1993 and $707.0 million for the fiscal year ended June
30, 1994 would have been necessary to bring the ratio to 1.0 in the
respective periods.
DESCRIPTION OF THE CERTIFICATES
In connection with each offering of Certificates, one or more separate
Trusts will be formed and one or more series of Certificates will be issued
pursuant to the Basic Agreement and one or more separate Trust Supplements to be
entered into between Delta and the Trustee. The statements made under this
caption are summaries and reference is made to the detailed provisions of the
Basic Agreement, a form of which has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The summaries relate
to the Basic Agreement and each of the Trust Supplements, the Trusts to be
formed thereby and the Certificates to be issued by each Trust except to the
extent, if any, described in the applicable Prospectus Supplement. The
Prospectus Supplement that accompanies this Prospectus contains a glossary of
the material terms used with respect to the specific series of Certificates
being offered thereby. The Trust Supplement relating to each series of
Certificates and the forms of the related Note Purchase Agreement, Indenture,
Lease, trust
4
<PAGE> 18
agreement, participation agreement, intercreditor agreement and liquidity
facility arrangement, as applicable, will be filed as exhibits to a
post-effective amendment to the Registration Statement of which this Prospectus
is a part, a Current Report on Form 8-K, a Quarterly Report on Form 10-Q or an
Annual Report on Form 10-K, as applicable, filed by Delta with the SEC.
The Certificates offered pursuant to this Prospectus will be limited to
$1,583,881,000 aggregate public offering price.
To the extent that any provision in any Prospectus Supplement is
inconsistent with any provision in this summary, the provision of such
Prospectus Supplement will control.
GENERAL
Each Certificate will represent a fractional undivided interest in the
Trust created by the Trust Supplement pursuant to which such Certificate was
issued and all payments and distributions shall be made only from the related
Trust Property (as defined below). The property of each Trust (the "Trust
Property") will include (i) the Equipment Notes held in such Trust and all
monies at any time paid thereon and all monies due and to become due thereunder,
subject to the effect of any cross-subordination provisions described in the
Prospectus Supplement for a series of Certificates, (ii) funds from time to time
deposited with the Trustee in accounts relating to such Trust and (iii) if so
specified in the Prospectus Supplement related to a series of Certificates,
rights under intercreditor agreements relating to cross-subordination
arrangements and monies receivable under a liquidity facility. Each Certificate
will represent a pro rata share of the outstanding principal amount of the
Equipment Notes held in the related Trust and, unless otherwise specified in the
applicable Prospectus Supplement, will be issued in minimum denominations of
$1,000 or any integral multiple thereof except that one Certificate of each
series may be issued in a different denomination. The Certificates do not
represent an interest in or obligation of Delta, the Trustee, any of the Loan
Trustees or Owner Trustees in their individual capacities, any Owner
Participant, or any affiliate of any thereof. Each Certificateholder by its
acceptance of a Certificate agrees to look solely to the income and proceeds
from the Trust Property as provided in the Basic Agreement and the applicable
Trust Supplement.
The Equipment Notes issued under an Indenture may be held in more than one
Trust and one Trust may hold Equipment Notes issued under more than one
Indenture (each Indenture the Equipment Notes of which are held in a Trust, a
"Related Indenture"). Unless otherwise provided in a Prospectus Supplement, only
Equipment Notes having the same priority of payment (the Equipment Notes of any
such priority, a "Class") may be held in the same Trust.
Interest will be passed through to Certificateholders of each Trust at the
rate per annum payable on the Equipment Notes held in such Trust, as set forth
for such Trust on the cover page of the applicable Prospectus Supplement,
subject to the effect of any cross-subordination provisions described in the
Prospectus Supplement for a series of Certificates.
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for a description of the specific series of Certificates being
offered thereby, including: (1) the specific designation and title of such
Certificates; (2) the Regular Distribution Dates (as defined below) and Special
Distribution Dates (as defined below) applicable to such Certificates; (3) the
currency or currencies (including currency units) in which such Certificates may
be denominated; (4) the specific form of such Certificates, including whether or
not such Certificates are to be issued in accordance with a book-entry system;
(5) a description of the Equipment Notes to be purchased by such Trust,
including (a) the period or periods within which, the price or prices at which,
and the terms and conditions upon which such Equipment Notes may or must be
redeemed or defeased in whole or in part, by Delta or, with respect to Leased
Aircraft Notes, the Owner Trustee, (b) the payment priority of such Equipment
Notes in relation to any other Equipment Notes issued with respect to the
related Aircraft, (c) any additional security or liquidity enhancements therefor
and (d) any intercreditor or other rights or limitations between or among the
holders of Equipment Notes of different priorities issued with respect to the
same Aircraft; (6) a description of the related Aircraft; (7) a description of
the related Note Purchase Agreement and Related Indentures, including a
description of the events of default under the Related Indentures, the remedies
exercisable upon the occurrence of such events of default and any
5
<PAGE> 19
limitations on the exercise of such remedies with respect to such Equipment
Notes; (8) if such Certificates relate to Leased Aircraft, a description of the
related Leases, Trust Agreements and Participation Agreements, including (a) the
names of the related Owner Trustees, (b) a description of the events of default
under the related Leases, the remedies exercisable upon the occurrence of such
events of default and any limitations on the exercise of such remedies with
respect to such Leased Aircraft Notes, and (c) the rights of the related Owner
Trustee, if any, and/or Owner Participant, if any, to cure failures of Delta to
pay rent under the related Lease; (9) the extent, if any, to which the
provisions of the operative documents applicable to such Equipment Notes may be
amended by the parties thereto without the consent of the holders of, or only
upon the consent of the holders of a specified percentage of aggregate principal
amount of, such Equipment Notes; (10) subordination provisions among the holders
of Certificates, including any cross-subordination provisions among the holders
of Certificates in separate Trusts; and (11) any other special terms pertaining
to such Certificates.
BOOK-ENTRY REGISTRATION
General
If specified in the applicable Prospectus Supplement, the Certificates will
be subject to the provisions described below and under the caption
"-- Definitive Certificates". Upon issuance, each series of Certificates will be
represented by one or more fully registered global certificates. Unless
otherwise provided in a Prospectus Supplement, each global certificate will be
deposited with, or on behalf of, The Depository Trust Company ("DTC") and
registered in the name of CEDE & Co. ("Cede"), the nominee of DTC. No person
acquiring an interest in such Certificates ("Certificate Owner") will be
entitled to receive a certificate representing such person's interest in such
Certificates, except as set forth below under "-- Definitive Certificates".
Unless and until Definitive Certificates are issued under the limited
circumstances described herein, all references to actions by Certificateholders
shall refer to actions taken by DTC upon instructions from DTC Participants (as
defined below), and all references herein to distributions, notices, reports and
statements to Certificateholders shall refer, as the case may be, to
distributions, notices, reports and statements to DTC or Cede, as the registered
holder of such Certificates, or to DTC Participants for distribution to
Certificate Owners in accordance with DTC procedures.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and
"clearing agency" registered pursuant to section 17A of the Exchange Act. DTC
was created to hold securities for its participants ("DTC Participants") and to
facilitate the clearance and settlement of securities transactions between DTC
Participants through electronic book-entries, thereby eliminating the need for
physical transfer of certificates. DTC Participants include securities brokers
and dealers, banks, trust companies and clearing corporations. Indirect access
to the DTC system also is available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a DTC Participant either directly or indirectly ("Indirect Participants").
Certificate Owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, the Certificates may do so only through DTC Participants and
Indirect Participants. In addition, Certificate Owners will receive all
distributions of principal and interest from the Trustee through DTC
Participants or Indirect Participants, as the case may be. Under a book-entry
format, Certificate Owners may experience some delay in their receipt of
payments, because such payments will be forwarded by the Trustee to Cede, as
nominee for DTC. DTC will forward such payments in same-day funds to DTC
Participants who are credited with ownership of the Certificates in amounts
proportionate to the principal amount of each such DTC Participant's respective
holdings of beneficial interests in the Certificates. DTC Participants will
thereafter forward payments to Indirect Participants or Certificate Owners, as
the case may be, in accordance with customary industry practices. The forwarding
of such distributions to the Certificate Owners will be the responsibility of
such DTC Participants. Unless and until the Definitive Certificates are issued
under the limited circumstances described herein, the only "Certificateholder"
will be Cede, as nominee of DTC. Certificate Owners will not be recognized by
the Trustee as Certificateholders, as such term is used in the Basic Agreement,
and Certificate Owners will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and DTC Participants.
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Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
the Certificates among DTC Participants on whose behalf it acts with respect to
the Certificates and to receive and transmit distributions of principal,
premium, if any, and interest with respect to the Certificates. DTC Participants
and Indirect Participants with which Certificate Owners have accounts with
respect to the Certificates similarly are required to make book-entry transfers
and receive and transmit such payments on behalf of their respective customers.
Accordingly, although Certificate Owners will not possess the Certificates, the
Rules provide a mechanism by which Certificate Owners will receive payments and
will be able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants, the ability of a Certificate Owner to pledge
the Certificates to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to such Certificates, may be limited
due to the lack of a physical certificate for such Certificates.
DTC has advised Delta that it will take any action permitted to be taken by
a Certificateholder under the Basic Agreement only at the direction of one or
more DTC Participants to whose accounts with DTC the Certificates are credited.
Additionally, in the event any action requires approval by Certificateholders of
a certain percentage of beneficial interest in each Trust, DTC will take such
action only at the direction of and on behalf of DTC Participants whose holdings
include undivided interests that satisfy any such percentage. DTC may take
conflicting actions with respect to other undivided interests to the extent that
such actions are taken on behalf of DTC Participants whose holdings include such
undivided interests.
Neither Delta nor the Trustee will have any liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Certificates held by Cede, as nominee for DTC, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Definitive Certificates
Certificates will be issued in certificated form ("Definitive
Certificates") to Certificate Owners or their nominees, rather than to DTC or
its nominee, only if (i) Delta advises the Trustee in writing that DTC is no
longer willing or able to discharge properly its responsibilities as depository
with respect to such Certificates and Delta is unable to locate a qualified
successor, (ii) Delta, at its option, elects to terminate the book-entry system
through DTC or (iii) after the occurrence of certain events of default or other
events specified in the related Prospectus Supplement, Certificate Owners with
fractional undivided interests aggregating not less than a majority in interest
in such Trust advise the Trustee, Delta and DTC through DTC Participants in
writing that the continuation of a book-entry system through DTC (or a successor
thereto) is no longer in the Certificate Owners' best interest. Upon the
occurrence of any event described in the immediately preceding sentence, the
Trustee will be required to notify all Certificate Owners through DTC
Participants of the availability of Definitive Certificates. Upon surrender by
DTC of the certificates representing the Certificates and receipt of
instructions for re-registration, the Trustee will reissue the Certificates as
Definitive Certificates to Certificate Owners.
Distributions of principal, premium, if any, and interest with respect to
Certificates will thereafter be made by the Trustee directly in accordance with
the procedures set forth in the Basic Agreement and the applicable Trust
Supplements, to holders in whose names the Definitive Certificates were
registered at the close of business on the applicable record date. Such
distributions will be made by check mailed to the address of such holder as it
appears on the register maintained by the Trustee. The final payment on any
Certificate, however, will be made only upon presentation and surrender of such
Certificate at the office or agency specified in the notice of final
distribution to Certificateholders.
Definitive Certificates will be freely transferable and exchangeable at the
office of the Trustee upon compliance with the requirements set forth in the
Basic Agreement and the applicable Trust Supplements. No service charge will be
imposed for any registration of transfer or exchange, but payment of a sum
sufficient to cover any tax or other governmental charge shall be required.
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PAYMENTS AND DISTRIBUTIONS
Subject to the effect of any cross-subordination provisions set forth in
the Prospectus Supplement for a series of Certificates, payments of principal,
premium, if any, and interest with respect to the Equipment Notes held in each
Trust will be distributed by the Trustee, upon receipt, to Certificateholders of
such Trust on the dates specified in the applicable Prospectus Supplement,
except in certain cases when some or all of such Equipment Notes are in default
as described in the applicable Prospectus Supplement. Payments of principal of,
and interest on, the unpaid principal amount of the Equipment Notes held in each
Trust will be scheduled to be received by the Trustee on the dates specified in
the applicable Prospectus Supplement (such scheduled payments of interest and
principal on the Equipment Notes to the Trustee are herein referred to as
"Scheduled Payments", and the dates specified in the applicable Prospectus
Supplement for distribution of Scheduled Payments to the Trustee are herein
referred to as "Regular Distribution Dates"). See "Description of the Equipment
Notes -- General". Subject to the effect of any cross-subordination provisions
set forth in the Prospectus Supplement for a series of Certificates, each
Certificateholder of each Trust will be entitled to receive a pro rata share of
any distribution in respect of Scheduled Payments of principal and interest made
on the Equipment Notes held in the Trust.
Payments of principal, premium, if any, and interest received by the
Trustee on account of the early redemption or purchase, if any, of the Equipment
Notes relating to one or more Aircraft held in a Trust, and payments, other than
Scheduled Payments received on a Regular Distribution Date or within five days
thereafter ("Special Payments"), received by the Trustee relating to one or more
Aircraft will be distributed on the date determined as described in the
applicable Prospectus Supplement (a "Special Distribution Date") except that, if
specified in the applicable Prospectus Supplement, payments received by the
Trustee following default in respect of the Equipment Notes on a Regular
Distribution Date as a result of a drawing under any liquidity facility, as
described in the applicable Prospectus Supplement (each, a "Liquidity
Facility"), provided for the benefit of the specified Certificateholders shall
be distributed on such Regular Distribution Date to such Certificateholders. The
Trustee will mail notice to the Certificateholders of record of the applicable
Trust stating any anticipated Special Distribution Date.
POOL FACTORS
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Balance" for each Trust or for the Certificates issued by any Trust
indicates, as of any date, the original aggregate face amount of the
Certificates of such Trust less the aggregate amount of all payments made in
respect of the 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 Trust as of any Regular
Distribution Date or Special Distribution Date shall be computed after giving
effect to the payment of principal, if any, on the Equipment Notes or other
Trust Property held in such Trust and the distribution thereof to be made on
that date.
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Factor" for each Trust as of any Regular Distribution Date or Special
Distribution Date is the quotient (rounded to the seventh decimal place)
computed by dividing (i) the Pool Balance by (ii) the aggregate original face
amount of the Certificates of such Trust. The Pool Factor for each Trust as of
any Regular Distribution Date or Special Distribution Date shall be computed
after giving effect to the payment of principal, if any, on the Equipment Notes
or other Trust Property held in such Trust and distribution thereof to be made
on that date. The Pool Factor for each Trust will initially be 1.0000000;
thereafter, the Pool Factor for each Trust will decline as described herein to
reflect reductions in the Pool Balance of such Trust. The amount of a
Certificateholder's pro rata share of the Pool Balance of a Trust can be
determined by multiplying the original denomination of the holder's Certificate
of such Trust by the Pool Factor for such Trust as of the applicable Regular
Distribution Date or Special Distribution Date. The Pool Factor and the Pool
Balance for each Trust will be mailed to Certificateholders of such Trust on
each Regular Distribution Date and Special Distribution Date.
Unless there has been an early redemption, a purchase of an issue of
Equipment Notes by the related Owner Trustee after an Indenture Default (as
defined below), a default in the payment of principal in respect
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of one or more issues of the Equipment Notes held in a Trust or certain actions
have been taken following a default thereon, as described in the applicable
Prospectus Supplement, the Pool Factor for the Trusts will decline in proportion
to the scheduled repayments of principal on the Equipment Notes held in such
Trust as described in the applicable Prospectus Supplement. In the event of such
redemption, purchase or payment default (if such payment is not made within five
days of the Regular Distribution Date), the Pool Factor and the Pool Balance of
each Trust so affected will be recomputed after giving effect thereto and notice
thereof will be mailed to the Certificateholders of such Trust. Each Trust will
have a separate Pool Factor.
REPORTS TO CERTIFICATEHOLDERS
On each Regular Distribution Date and Special Distribution Date, the
Trustee will include with each distribution of a Scheduled Payment or Special
Payment to Certificateholders of the related Trust a statement, giving effect to
such distribution to be made on such Regular Distribution Date or Special
Distribution Date, setting forth the following information (per $1,000 aggregate
principal amount of Certificate for such Trust, as to (i) and (ii) below):
(i) the amount of such distribution allocable to principal and the
amount allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
(iii) the Pool Balance and the Pool Factor for such Trust.
So long as the Certificates are registered in the name of DTC or its
nominee, on the record date prior to each Regular Distribution Date and Special
Distribution Date, the Trustee will request from DTC a securities position
listing setting forth the names of all DTC Participants reflected on DTC's books
as holding interests in the Certificates on such record date. On each Regular
Distribution Date and Special Distribution Date, the applicable Trustee will
mail to each such DTC Participant the statement described above and will make
available additional copies as requested by such DTC Participant for forwarding
to Certificate Owners.
In addition, after the end of each calendar year, the Trustee will prepare
for each Certificateholder of each Trust at any time during the preceding
calendar year a report containing the sum of the amounts determined pursuant to
clauses (i) and (ii) above with respect to the Trust for such calendar year or,
in the event such person was a Certificateholder during only a portion of such
calendar year, for the applicable portion of such calendar year, and such other
items as are readily available to the Trustee and which a Certificateholder
shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax returns. Such report
and such other items shall be prepared on the basis of information supplied to
the Trustee by the DTC Participants and shall be delivered by the Trustee to
such DTC Participants to be available for forwarding by such DTC Participants to
Certificate Owners in the manner described above.
At such time, if any, as the Certificates are issued in the form of
Definitive Certificates, the Trustee will prepare and deliver the information
described above to each Certificateholder of record of each Trust as the name
and period of ownership of such Certificateholder appears on the records of the
registrar of the Certificates.
VOTING OF EQUIPMENT NOTES
Subject to the effect of any cross-subordination provisions set forth in
the related Prospectus Supplement, the Trustee, as holder of the Equipment Notes
held in each Trust, has the right to vote and give consents and waivers with
respect to such Equipment Notes under the Related Indentures. The Basic
Agreement and related Trust Supplement set forth (i) the circumstances in which
the Trustee may direct any action or cast any vote as the holder of the
Equipment Notes held in the applicable Trust at its own discretion, (ii) the
circumstances in which the Trustee shall seek instructions from the
Certificateholders of such Trust and (iii) the percentage of Certificateholders
required to direct the Trustee to take any such action. If specified in the
related Prospectus Supplement, the right of a Trustee to vote and give consents
and waivers with respect to the Equipment Notes held in the related Trust may,
in the circumstances set forth in an intercreditor
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agreement to be executed by such Trustee and specified in such Prospectus
Supplement, be exercisable by another person specified in such Prospectus
Supplement.
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
The Prospectus Supplement will specify the events of default under the
Basic Agreement (an "Event of Default") and the Related Indentures (an
"Indenture Default"). The Indenture Defaults in the case of Leased Aircraft
Indentures will include events of default under the related Leases (a "Lease
Event of Default"). With respect to any Equipment Notes which are supported by a
Liquidity Facility, the Indenture Defaults or Events of Default may include
events of default under such Liquidity Facility. Unless otherwise provided in a
Prospectus Supplement, all of the Equipment Notes issued under the same
Indenture will relate to a specific Aircraft and there will be no
cross-collateralization or cross-default provisions in the Indentures;
accordingly, events resulting in an Indenture Default under any particular
Indenture would not necessarily result in an Indenture Default occurring under
any other Indenture. If an Indenture Default occurs in fewer than all of the
Indentures, notwithstanding the treatment of Equipment Notes issued under any
Indenture under which an Indenture Default has occurred, payments of principal
and interest on the Equipment Notes issued pursuant to Indentures with respect
to which an Indenture Default has not occurred will continue to be made as
originally scheduled. As described below under "-- Cross-Subordination Issues",
a Prospectus Supplement may provide the terms of any cross-subordination
provisions among Certificateholders of separate Trusts. If such provisions are
so provided, payments made pursuant to a Related Indenture under which an
Indenture Default has not occurred may be distributed first to the holders of
the Certificates issued under the Trust which holds the most senior Equipment
Notes issued under all Related Indentures.
The ability of the applicable Owner Trustee or Owner Participant under a
Leased Aircraft Indenture to cure Indenture Defaults, including an Indenture
Default that results from the occurrence of a Lease Event of Default under the
related Lease, will be described in the Prospectus Supplement. Unless otherwise
provided in a Prospectus Supplement, with respect to any Certificates or
Equipment Notes entitled to the benefits of a Liquidity Facility, a drawing
under any such Liquidity Facility for the purpose of making a payment of
interest as a result of the failure by Delta to have made a corresponding
payment will not cure an Indenture Default or any Lease Default related to such
failure by Delta.
The Prospectus Supplement related to a series of Certificates will describe
the circumstances under which the Trustee of the related Trust may vote some or
all of the Equipment Notes held in such Trust. Such Prospectus Supplement also
will set forth the percentage of Certificateholders of such Trust entitled to
direct the Trustee to take any action with respect to such Equipment Notes. If
the Equipment Notes outstanding under an Indenture are held by more than one
Trust, then the ability of the Certificateholders issued with respect to any one
Trust to cause the Loan Trustee with respect to any Equipment Notes held in such
Trust to accelerate the Equipment Notes under the applicable Indenture or to
direct the exercise of remedies by the Loan Trustee under the applicable
Indenture will depend, in part, upon the proportion of the aggregate principal
amount of the Equipment Notes outstanding under such Indenture and held in such
Trust to the aggregate principal amount of all Equipment Notes outstanding under
such Indenture. In addition, if cross-subordination provisions are applicable to
any series of Certificates, then the ability of the Certificateholders of any
one Trust holding Equipment Notes issued under an Indenture to cause the Loan
Trustee with respect to any Equipment Notes held in such Trust to accelerate the
Equipment Notes under such Indenture or to direct the exercise of remedies by
the Loan Trustee under such Indenture will depend, in part, upon the Class of
Equipment Notes held in such Trust. If the Equipment Notes outstanding under an
Indenture are held by more than one Trust, then each Trust will hold Equipment
Notes with different terms from the Equipment Notes held in the other Trusts and
therefore the Certificateholders of each Trust may have divergent or conflicting
interests from those of the Certificateholders of the other Trusts holding
Equipment Notes issued under the same Indenture. In addition, so long as the
same institution acts as Trustee of each Trust, in the absence of instructions
from the Certificateholders of any such Trust, the Trustee for such Trust could
for the same reason be faced with a potential conflict of interest upon an
Indenture Default. In such event, the Trustee has indicated that it would resign
as Trustee of one or all such Trusts, and a successor trustee would be appointed
in accordance with the terms of the Basic Agreement.
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The Prospectus Supplement for a series of Certificates will specify whether
and under what circumstances the Trustee may sell for cash to any person all or
part of the Equipment Notes held in the related Trust. Any proceeds received by
the Trustee upon any such sale shall be deposited in an account established by
the Trustee for the benefit of the Certificateholders of such Trust for the
deposit of such Special Payments (the "Special Payments Account") and shall be
distributed to the Certificateholders of such Trust on a Special Distribution
Date. The market for Equipment Notes in default may be very limited, and there
can be no assurance that they could be sold for a reasonable price. Furthermore,
so long as the same institution acts as Trustee of multiple Trusts, it may be
faced with a conflict in deciding from which Trust to sell Equipment Notes to
available buyers. If the Trustee sells any such Equipment Notes with respect to
which an Indenture Default exists for less than their outstanding principal
amount, the Certificateholders of such Trust will receive a smaller amount of
principal distributions than anticipated and will not have any claim for the
shortfall against Delta, any Owner Trustee, Owner Participant or the Trustee.
Furthermore, unless otherwise specified in the applicable Prospectus Supplement,
neither the Trustee nor the Certificateholders of such Trust could take any
action with respect to any remaining Equipment Notes held in such Trust so long
as no Indenture Defaults exist with respect thereto.
Any amount, other than Scheduled Payments received on a Regular
Distribution Date or within five days thereafter, distributed to the Trustee of
any Trust by the Loan Trustee under any Indenture on account of the Equipment
Notes held in such Trust following an Indenture Default under such Indenture
shall be deposited in the Special Payments Account for such Trust and shall be
distributed to the Certificateholders of such Trust on a Special Distribution
Date. In addition, if a Prospectus Supplement provides that the applicable Owner
Trustee may, under circumstances specified therein, redeem or purchase the
outstanding Equipment Notes issued under the applicable Indenture, the price
paid by such Owner Trustee to the Trustee of any Trust for the Equipment Notes
issued under such Indenture and held in such Trust shall be deposited in the
Special Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date.
Any funds representing payments received with respect to any Equipment
Notes in default held in a Trust, or the proceeds from the sale by the Trustee
of any such Equipment Notes, held by the Trustee in the Special Payments Account
for such Trust shall, to the extent practicable, be invested and reinvested by
the Trustee in Permitted Investments pending the distribution of such funds on a
Special Distribution Date. "Permitted Investments" will be specified in the
related Prospectus Supplement.
The Basic Agreement provides that the Trustee of each Trust shall, within
90 days after the occurrence of a default (as defined below) in respect of such
Trust, give to the Certificateholders of such Trust notice, transmitted by mail,
of all uncured or unwaived defaults with respect to such Trust known to it,
provided that, except in the case of default in the payment of principal,
premium, if any, or interest on any of the Equipment Notes held in such Trust,
the Trustee shall be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the interests of such
Certificateholders. The term "default" as used in this paragraph only means the
occurrence of an Indenture Default with respect to Equipment Notes held in a
Trust as described above, except that in determining whether any such Indenture
Default has occurred, any grace period or notice in connection therewith shall
be disregarded.
The Basic Agreement contains a provision entitling the Trustee of each
Trust, subject to the duty of the Trustee during a default to act with the
required standard of care, to be offered reasonable security or indemnity by the
Certificateholders of such Trust before proceeding to exercise any right or
power under the Basic Agreement at the request of such Certificateholders.
The Prospectus Supplement for a series of Certificates will specify the
percentage of Certificateholders entitled to waive, or to instruct the Trustee
to waive, any past Event of Default with respect to such Trust and its
consequences. The Prospectus Supplement for a series of Certificates also will
specify the percentage of Certificateholders (and whether of such Trust or of
any other Trust holding Equipment Notes issued under Related Indentures)
entitled to waive, or to instruct the Trustee or the Loan Trustee to waive, any
past Indenture Default under any Related Indenture and thereby annul any
direction given with respect thereto.
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MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
Delta will be prohibited from consolidating with or merging into any other
corporation or transferring substantially all of its assets as an entirety to
any other corporation unless (i) the surviving, successor or transferee
corporation shall (a) be organized and validly existing under the laws of the
United States or any state thereof or the District of Columbia, (b) be a
"citizen of the United States" (as defined in Title 49 of the United States Code
relating to aviation (the "Transportation Code")) holding an air carrier
operating certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49, United States Code, if, and so long as, such status is
a condition of entitlement to the benefits of Section 1110 of the Bankruptcy
Code, and (c) expressly assume all of the obligations of Delta contained in the
Basic Agreement and any Trust Supplement, the Note Purchase Agreements, any
Owned Aircraft Indentures and, with respect to the Leased Aircraft, the
applicable Participation Agreements and Leases, and any other operative
documents; and (ii) Delta shall have delivered a certificate and an opinion or
opinions of counsel indicating that such transaction, in effect, complies with
such conditions.
MODIFICATIONS OF THE BASIC AGREEMENT
The Basic Agreement contains provisions permitting Delta and the Trustee of
each Trust to enter into a supplemental trust agreement, without the consent of
the holders of any of the Certificates of such Trust, including among other
things (i) to provide for the formation of such Trust and the issuance of a
series of Certificates, (ii) to evidence the succession of another corporation
to Delta and the assumption by such corporation of Delta's obligations under the
Basic Agreement and the applicable Trust Supplement, (iii) to add to the
covenants of Delta for the benefit of holders of such Certificates, or to
surrender any right or power in the Basic Agreement conferred upon Delta, (iv)
to cure any ambiguity or correct or supplement any defective or inconsistent
provision of the Basic Agreement or the applicable Trust Supplement or to make
any other provisions with respect to matters or questions arising thereunder,
provided such action shall not materially adversely affect the interests of the
holders of such Certificates, or to cure any ambiguity or correct any mistake or
(without limitation of the foregoing), to give effect or provide for replacement
liquidity facilities, if applicable to such Certificates, (v) to comply with any
requirement of the SEC, any applicable law, rules or regulations of any exchange
or quotation system on which any Certificates may be listed or of any regulatory
body, (vi) to modify, eliminate or add to the provisions of the Basic Agreement
to the extent as shall be necessary to continue the qualification of the Basic
Agreement (including any supplemental agreement) under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act") and to add to the Basic
Agreement such other provisions as may be expressly permitted by the Trust
Indenture Act, with certain exceptions, (vii) to provide for a successor Trustee
or to add to or change any provision of the Basic Agreement as shall be
necessary to facilitate the administration of the Trusts thereunder by more than
one Trustee and (viii) to make any other amendments or modifications to the
Basic Agreement, provided such amendments or modifications shall only apply to
Certificates issued thereafter; provided, in the case of clauses (i) through
(viii) above, that no such supplemental trust agreement shall adversely affect
the status of any Trust as a grantor trust for U.S. federal income tax purposes.
The Basic Agreement also contains provisions permitting Delta and the
Trustee of each Trust, with the consent of the Certificateholders of such Trust
evidencing fractional undivided interests aggregating not less than a majority
in interest of such Trust (and with the consent of any related Owner Trustee),
to execute supplemental trust agreements adding any provisions to or changing or
eliminating any of the provisions of the Basic Agreement, to the extent relating
to such Trust, and the applicable Trust Supplement, or modifying the rights of
the Certificateholders, except that no such supplemental trust agreement may,
without the consent of each Certificateholder so affected thereby, (a) reduce in
any manner the amount of, or delay the timing of, any receipt by the Trustee of
payments on the Equipment Notes held in such Trust or distributions in respect
of any Certificate related to such Trust, or change the date or place of any
payment in respect of any Certificate, or make distributions payable in coin or
currency other than that provided for in such Certificates, or impair the right
of any Certificateholder of such Trust to institute suit for the enforcement of
any such payment when due, (b) permit the disposition of any Equipment Note held
in such Trust, except as provided in the Basic Agreement or the applicable Trust
Supplement, or otherwise deprive any Certificateholder of the
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benefit of the ownership of the applicable Equipment Notes, (c) reduce the
percentage of the aggregate fractional undivided interests of the Trust provided
for in the Basic Agreement or the applicable Trust Supplement, the consent of
the holders of which is required for any such supplemental trust agreement or
for any waiver provided for in the Basic Agreement or such Trust Supplement, (d)
modify any of the provisions relating to the rights of the Certificateholders in
respect of the waiver of events of default or supplemental agreements, with
certain limited exceptions, (e) alter the priority of distributions specified in
any applicable intercreditor agreement in a manner materially adverse to the
interests of the Certificateholders of such Trust or (f) adversely affect the
status of any Trust as a grantor trust for U.S. federal income tax purposes.
MODIFICATION OF INDENTURE AND RELATED AGREEMENTS
The Prospectus Supplement will specify the Trustee's obligations in the
event that the Trustee, as the holder of any Equipment Notes held in a Trust,
receives a request for its consent to any amendment, modification or waiver
under the Indenture or other documents relating to such Equipment Notes
(including any Lease with respect to Leased Aircraft Notes) or any Liquidity
Facility.
CROSS-SUBORDINATION ISSUES
The Equipment Notes issued under an Indenture may be held in more than one
Trust and one Trust may hold Equipment Notes issued under more than one Related
Indenture. Unless otherwise provided in a Prospectus Supplement, only Equipment
Notes of the same Class may be held in the same Trust. In such event, payments
made on account of a subordinate class of Certificates issued under a Prospectus
Supplement may, under circumstances described in such Prospectus Supplement, be
subordinated to the prior payment of all amounts owing to Certificateholders of
a Trust which holds senior Equipment Notes issued under any Related Indentures.
The Prospectus Supplement related to an issuance of Certificates will describe
any such "cross-subordination" provisions and any related terms, including the
percentage of Certificateholders under any Trust which are permitted to (i)
grant waivers of defaults under any Related Indenture, (ii) consent to the
amendment or modification of any Related Indenture or (iii) direct the exercise
of remedial actions under any Related Indenture. Payments made on account of
Certificates may also be subordinated to the rights of the provider of any
related Liquidity Facility, as described below.
TERMINATION OF THE TRUSTS
The obligations of Delta and the Trustee with respect to a Trust will
terminate upon the distribution to Certificateholders of such Trust of all
amounts required to be distributed to them pursuant to the Basic Agreement and
the applicable Trust Supplement and the disposition of all property held in such
Trust. The Trustee will send to each Certificateholder of record of such Trust
notice of the termination of such Trust, the amount of the proposed final
payment and the proposed date for the distribution of such final payment for
such Trust. The final distribution to any Certificateholder of such Trust will
be made only upon surrender of such Certificateholder's Certificates at the
office or agency of the Trustee specified in such notice of termination.
DELAYED PURCHASE OF EQUIPMENT NOTES
In the event that, on the issuance date of any Certificates, all of the
proceeds from the sale of such Certificates are not used to purchase the
Equipment Notes contemplated to be held in the related Trust, such Equipment
Notes may be purchased by the Trustee at any time on or prior to the date
specified in the applicable Prospectus Supplement. In such event, the proceeds
from the sale of such Certificates not used to purchase Equipment Notes will be
held under an arrangement described in the applicable Prospectus Supplement
pending the purchase of the Equipment Notes not so purchased. The arrangements
with respect to the payment of interest on funds so held will be described in
the applicable Prospectus Supplement. If any such proceeds are not subsequently
utilized to purchase Equipment Notes by the relevant date specified in the
applicable Prospectus Supplement, such proceeds will be returned to the holders
of such Certificates.
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LIQUIDITY FACILITY
The related Prospectus Supplement may provide that distributions made by
the Trustee with respect to the related Certificates will be supported by a
Liquidity Facility issued by an institution identified in the related Prospectus
Supplement. Unless otherwise provided in the related Prospectus Supplement, the
provider of such Liquidity Facility will have a senior claim upon the assets of
the related Trust. See "Description of the Equipment Notes -- Liquidity
Facility".
THE TRUSTEE
Unless otherwise provided in the Prospectus Supplement for any series of
Certificates, the Trustee for each series of Certificates will be The Bank of
New York. With certain exceptions, the Trustee makes no representations as to
the validity or sufficiency of the Basic Agreement, the Trust Supplements, the
Certificates, the Equipment Notes, the Indentures, the Leases or other related
documents. The Trustee shall not be liable with respect to any series of
Certificates for any action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of a majority in principal amount
of outstanding Certificates of such series issued under the Basic Agreement.
Subject to such provisions, such Trustee shall be under no obligation to
exercise any of its rights or powers under the Basic Agreement at the request of
any holders of Certificates issued thereunder unless they shall have offered to
the Trustee indemnity satisfactory to it. The Basic Agreement provides that the
Trustee in its individual or any other capacity may acquire and hold
Certificates issued thereunder and, subject to certain conditions, may otherwise
deal with Delta and, with respect to the Leased Aircraft, with any Owner Trustee
with the same rights it would have if it were not the Trustee.
The Trustee may resign with respect to any or all of the Trusts at any
time, in which event Delta will be obligated to appoint a successor trustee. If
the Trustee ceases to be eligible to continue as Trustee with respect to a Trust
or becomes incapable of acting as Trustee or becomes insolvent, Delta may remove
such Trustee, or any Certificateholder of such Trust 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 such Trustee and the appointment of
a successor trustee. Any resignation or removal of the Trustee with respect to a
Trust and appointment of a successor trustee for such Trust does not become
effective until acceptance of the appointment by the successor trustee. Pursuant
to such resignation and successor trustee provisions, it is possible that a
different trustee could be appointed to act as the successor trustee with
respect to each Trust. All references in this Prospectus to the Trustee should
be read to take into account the possibility that the Trusts could have
different successor trustees in the event of such a resignation or removal.
The Basic Agreement provides that Delta will pay the Trustee's fees and
expenses and indemnify the Trustee against certain liabilities.
DESCRIPTION OF THE EQUIPMENT NOTES
The statements made under this caption are summaries and reference is made
to the entire Prospectus and detailed information appearing in the applicable
Prospectus Supplement. Where no distinction is made between the Leased Aircraft
Notes and the Owned Aircraft Notes or between their respective Indentures, such
statements refer to any Equipment Notes and any Indenture.
To the extent that any provision in any Prospectus Supplement is
inconsistent with any provision in this summary, the provision of such
Prospectus Supplement will control.
GENERAL
Equipment Notes will be issued under Indentures either (a) between the
related Owner Trustee of a trust for the benefit of the Owner Participant who is
the beneficial owner of the related Aircraft, and the related Loan Trustee, or
(b) between Delta and the related Loan Trustee. The Equipment Notes issued
pursuant to clause (a) of the preceding sentence will be nonrecourse obligations
of the applicable Owner Trust. Each Equipment Note will be authenticated under
an Indenture by the Loan Trustee. All Equipment Notes issued
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under the same Indenture will relate to, and be secured by, one or more Aircraft
identified and described in the related Prospectus Supplement and which, in the
case of Equipment Notes issued as described in such clause (a), are leased to
Delta pursuant to a Lease between the Owner Trustee under the applicable Owner
Trust and Delta or, in the case of Equipment Notes issued as described in clause
(b), owned by Delta.
With respect to each Leased Aircraft, the related Owner Trustee has
acquired or will acquire such Aircraft, will grant a security interest in such
Aircraft to the related Loan Trustee as security for the payments of the related
Leased Aircraft Notes, and has leased or will lease such Aircraft to Delta
pursuant to the related Lease which has been or will be assigned to the related
Loan Trustee. Pursuant to each such Lease, Delta will be obligated to make or
cause to be made rental and other payments to the related Loan Trustee on behalf
of the related Owner Trustee.
PRINCIPAL AND INTEREST PAYMENTS
Interest received by the Trustee on the Equipment Notes held in each Trust
will be passed through to the Certificateholders of such Trust on the dates and
at the rate per annum set forth in the applicable Prospectus Supplement until
the final distribution for such Trust. Principal payments received by the
Trustee on the Equipment Notes held in each Trust will be passed through to the
Certificateholders of such Trust in scheduled amounts on the dates set forth in
the applicable Prospectus Supplement until the final distribution date for such
Trust.
REDEMPTION
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the Equipment Notes may be
redeemed or purchased prior to the stated maturity date thereof, in whole or in
part, the premium, if any, applicable upon certain redemptions or purchases and
other terms applying to the redemptions or purchases of such Equipment Notes.
SECURITY
The Leased Aircraft Notes will be secured by (i) an assignment by the
related Owner Trustee to the related Loan Trustee of such Owner Trustee's rights
(except for certain rights, including those described below) under the Lease or
Leases with respect to the related Aircraft, including the right to receive
payments of rent thereunder, and (ii) a mortgage granted to such Loan Trustee in
such Aircraft, subject to the rights of Delta under such Lease or Leases. Under
the terms of each Lease, Delta's obligations in respect of each Leased Aircraft
will be those of a lessee under a "net lease". Accordingly, Delta will be
obligated, among other things and at its expense, to cause each Leased Aircraft
to be duly registered, to pay all costs of operating such Aircraft and to
maintain, service, repair and overhaul (or cause to be maintained, serviced,
repaired and overhauled) such Aircraft. With respect to the Leased Aircraft, the
assignment by the related Owner Trustee to the related Loan Trustee of its
rights under the related Lease will exclude, among other things, rights of such
Owner Trustee and the related Owner Participant relating to indemnification by
Delta for certain matters, insurance proceeds payable to such Owner Trustee in
its individual capacity and to such Owner Participant under liability insurance
maintained by Delta pursuant to such Lease or by such Owner Trustee or such
Owner Participant, insurance proceeds payable to such Owner Trustee in its
individual capacity or to such Owner Participant under certain casualty
insurance maintained by such Owner Trustee or such Owner Participant pursuant to
such Lease and any rights of such Owner Participant or such Owner Trustee to
enforce payment of the foregoing amounts and their respective rights to the
proceeds of the foregoing.
The Owned Aircraft Notes will be secured by a mortgage granted to the
related Loan Trustee of all of Delta's right, title and interest in and to the
Owned Aircraft specified in the related Owned Aircraft Indenture. Under the
terms of each Owned Aircraft Indenture, Delta will be obligated, among other
things and at its expense, to cause each Owned Aircraft to be duly registered,
to pay all costs of operating such Aircraft and to maintain, service, repair and
overhaul (or cause to be maintained, serviced, repaired and overhauled) such
Aircraft.
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The Prospectus Supplement will describe the required insurance coverage
with respect to the Aircraft.
Delta will be required, except under certain circumstances, to keep each
Aircraft registered under the Transportation Code, and to record the Indenture
and the Lease, if applicable, among other documents, with respect to each
Aircraft under the Transportation Code. Such recordation of the Indenture, the
Lease, if applicable, and other documents with respect to each Aircraft will
give the related Loan Trustee a perfected security interest in the related
Aircraft whenever it is located in the United States or any of its territories
and possessions; the Convention on the International Recognition of Rights in
Aircraft (the "Convention") provides that such security will also be recognized,
with certain limited exceptions, in those jurisdictions that have ratified or
adhere to the Convention. Delta will have the right, subject to certain
conditions, at its own expense to register each Aircraft in countries other than
the United States. Each Aircraft may also be operated by Delta or under lease,
sublease or interchange arrangements in countries that are not parties to the
Convention. The extent to which the related Loan Trustee's security interest
would be recognized in an Aircraft located in a country that is not a party to
the Convention, and the extent to which such security interest would be
recognized in a jurisdiction adhering to the Convention if the Aircraft is
registered in a jurisdiction not a party to the Convention, is uncertain.
Moreover, in the case of an Indenture Default, the ability of the related Loan
Trustee to realize upon its security interest in an Aircraft could be adversely
affected as a legal or practical matter if such Aircraft were registered or
located outside the United States.
Unless otherwise specified in the applicable Prospectus Supplement, the
Equipment Notes will not be cross-collateralized and consequently the Equipment
Notes issued in respect of any one Aircraft will not be secured by any other
Aircraft or, in the case of Leased Aircraft Notes, the Lease related thereto.
Unless and until an Indenture Default with respect to a Leased Aircraft has
occurred and is continuing, the related Loan Trustee may exercise only limited
rights of the related Owner Trustee under the related Lease.
Funds, if any, held from time to time by the Loan Trustee with respect to
any Aircraft, prior to the distribution thereof, will be invested and reinvested
by such Loan Trustee. Such investment and reinvestment will be at the direction
of Delta (except, with respect to a Leased Aircraft, in the case of a Lease
Event of Default under the applicable Lease or, with respect to an Owned
Aircraft, in the case of an Indenture Default under the applicable Indenture or
an incipient payment default or incipient bankruptcy default), in certain
investments described in the applicable Indenture. The net amount of any loss
resulting from any such investments will be paid by Delta.
Section 1110 of the U.S. Bankruptcy Code provides in relevant part that the
right of lessors, conditional vendors and holders of security interests with
respect to "equipment" (as defined in Section 1110 of the U.S. Bankruptcy Code)
to take possession of such equipment in compliance with the provisions of a
lease, conditional sale contract or security agreement, as the case may be, is
not affected by (a) the automatic stay provision of the U.S. Bankruptcy Code,
which provision enjoins repossessions by creditors for the duration of the
reorganization period, (b) the provision of the U.S. Bankruptcy Code allowing
the trustee in reorganization to use property of the debtor during the
reorganization period, (c) Section 1129 of the U.S. Bankruptcy Code (which
governs the confirmation of plans of reorganization in Chapter 11 cases) or (d)
any power of the bankruptcy court to enjoin a repossession. Such Section 1110
relief would not be available, however, if the following two conditions are
satisfied: (1) within 60 days after the date of the order for relief under the
U.S. Bankruptcy Code (or such longer period consented to by the lessor,
conditional vendor or holder of a security interest), the trustee in
reorganization agrees to perform the debtor's obligations that become due on or
after such date, and (2) all defaults (other than defaults resulting solely from
the financial condition, bankruptcy, insolvency or reorganization of the debtor,
or from any failure of the debtor to pay penalty rates based on a failure to
perform non-monetary obligations) are cured before the later of the expiration
of such 60-day period and the date that is 30 days after the date of such
default. Accordingly, the right of a lessor, conditional vendor or holder of a
security interest to take possession of an aircraft in the event of default
would not be exercisable for 60 days following the date of the order for relief
(unless specifically permitted by the bankruptcy court). Furthermore, if the
conditions specified above are satisfied within the applicable period, it is
unclear whether Section 1110 affords any relief at all with respect to the
exercise of such rights based on an event of default occurring after such
period.
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"Equipment" is defined in Section 1110 of the U.S. Bankruptcy Code, in
part, as an aircraft, aircraft engine, propeller, appliance, or spare part (as
defined in Section 40102 of Title 49 of the U.S. Code) that is subject to a
security interest granted by, leased to, or conditionally sold to a debtor that
is a citizen of the United States (as defined in Section 40102 of Title 49 of
the U.S. Code) holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to chapter 447 of Title 49 of the U.S. Code
for aircraft capable of carrying 10 or more individuals or 6,000 pounds of more
of cargo. The provisions of Section 1110 are subject to certain limitations in
the case of equipment first placed in service on or prior to October 22, 1994.
In the event that the applicable Aircraft has been first placed into service on
or prior to such date, a description of such limitations shall be set forth in
the related Prospectus Supplement.
In connection with any issuance of Certificates under this Prospectus and
the applicable Prospectus Supplement, unless otherwise described in the
applicable Prospectus Supplement, it is a condition to the Trustee's obligation
to purchase Equipment Notes with respect to each Aircraft that outside counsel
to Delta provide its opinion to such Trustee that (i) if such Aircraft is a
Leased Aircraft, the Owner Trustee, as lessor under the Lease for such Aircraft,
and the Loan Trustee, as assignee of such Owner Trustee's rights under such
Lease pursuant to the applicable Indenture, will be entitled to the benefits of
Section 1110 of the U.S. Bankruptcy Code with respect to the airframe and
engines comprising such Aircraft or (ii) if such Aircraft is an Owned Aircraft,
the Loan Trustee will be entitled to the benefits of Section 1110 with respect
to the airframe and engines comprising such Owned Aircraft, in each case so long
as Delta continues to be a "citizen of the United States" as defined in Section
40102 of Title 49 of the U.S. Code holding an air carrier operating certificate
issued by the Secretary of Transportation pursuant to Chapter 447 of Title 49 of
the U.S. Code for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo. Such opinion will not address the possible replacement
of an Aircraft after an Event of Loss (as defined in the Indenture) in the
future.
RANKING OF EQUIPMENT NOTES
Some of the Equipment Notes related to one or more Aircraft, as described
in the related Prospectus Supplement, may be subordinated and junior in right of
payment to other Equipment Notes related to the same Aircraft. The terms of such
subordination, if any, will be described in the related Prospectus Supplement.
PAYMENTS AND LIMITATION OF LIABILITY
Each Leased Aircraft will be leased by the related Owner Trustee to Delta
for a term commencing on the delivery date thereof to such Owner Trustee and
expiring on a date not earlier than the latest maturity date of the related
Leased Aircraft Notes, unless previously terminated as permitted by the terms of
the related Lease. The basic rent and certain other payments under each such
Lease will be payable by Delta and will be assigned by the related Owner Trustee
under the applicable Indenture to the related Loan Trustee to provide the funds
necessary to pay principal of, premium, if any, and interest due from such Owner
Trustee on the Leased Aircraft Notes issued under such Indenture. In certain
cases, the basic rent payments under a Lease may be adjusted, but each Lease
will provide that under no circumstances will rent payments by Delta be less
than the scheduled payments on the related Leased Aircraft Notes. The balance of
any basic rent payment under each Lease, after payment of amounts due on the
Leased Aircraft Notes issued under the Indenture corresponding to such Lease,
will be paid over to the applicable Owner Trustee. Delta's obligation to pay
rent and to cause other payments to be made under each Lease will be general
obligations of Delta.
With respect to the Leased Aircraft Notes, except in certain circumstances
involving Delta's purchase of a Leased Aircraft and the assumption by Delta of
certain obligations relating thereto, including the obligation to make payments
in respect of the related Leased Aircraft Notes, the Leased Aircraft Notes will
not be obligations of, or guaranteed by, Delta. With respect to the Leased
Aircraft Notes, none of the Owner Trustees, the Owner Participants or the Loan
Trustees shall be personally liable to any holder of such Leased Aircraft Notes
for amounts payable under such Leased Aircraft Notes, or, except as provided in
the Indentures relating thereto in the case of the Owner Trustees and the Loan
Trustees, for any liability under such Indentures. Except in the circumstances
referred to above, all amounts payable under any Leased
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Aircraft Notes (other than payments made in connection with an optional
redemption or purchase by the related Owner Trustee or the related Owner
Participant) will be made only from (i) the assets subject to the lien of the
applicable Indenture with respect to such Aircraft or the income and proceeds
received by the related Loan Trustee therefrom (including rent payable by Delta
under the related Lease) or (ii) if so provided in the related Prospectus
Supplement, the applicable Liquidity Facility. With respect to the Leased
Aircraft Notes, except as otherwise provided in the applicable Indenture, no
Owner Trustee shall be personally liable for any amount payable or for any
statements, representations, warranties, agreements or obligations under any
such Indenture or under such Leased Aircraft Notes except for its own willful
misconduct or gross negligence. None of the Owner Participants shall have any
duty or responsibility under the Leased Aircraft Indentures or under such Leased
Aircraft Notes to the related Loan Trustee or to any holder of any such Leased
Aircraft Note.
Delta's obligations under each Owned Aircraft Indenture and under the Owned
Aircraft Notes will be general obligations of Delta.
DEFEASANCE OF THE INDENTURES AND THE EQUIPMENT NOTES IN CERTAIN CIRCUMSTANCES
Unless otherwise specified in the applicable Prospectus Supplement, each
Indenture provides that the obligations of the related Loan Trustee and, with
respect to any Leased Aircraft Notes, the related Owner Trustee or, with respect
to any Owned Aircraft Notes, Delta under the applicable Indenture shall be
deemed to have been discharged and paid in full (except for certain obligations,
including the obligations to register the transfer or exchange of Equipment
Notes, to replace stolen, lost, destroyed or mutilated Equipment Notes and to
maintain paying agencies and hold money for payment in trust) on the 91st day
after the date of irrevocable deposit with the related Loan Trustee of money or
certain obligations of the United States or any agency or instrumentality
thereof the payment of which is backed by the full faith and credit of the
United States which, through the payment of principal and interest in respect
thereof in accordance with their terms, will provide money in an aggregate
amount sufficient to pay when due (including as a consequence of redemption in
respect of which notice is given on or prior to the date of such deposit)
principal of, premium, if any, and interest on all Equipment Notes issued
thereunder in accordance with the terms of such Indenture. Such discharge may
occur only if, among other things, (a) no event of default or event which with
the giving of notice or lapse of time, or both, would become an event of default
under such Indenture shall have occurred and be continuing on the date of such
deposit and (b) Delta shall have delivered an opinion of counsel to the effect
that holders of such Equipment Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount and in
the same manner and at the same time as would have been the case if such
deposit, defeasance and discharge had not occurred.
Upon such defeasance, or upon payment in full of the principal of, premium,
if any, and interest on all Equipment Notes issued under any Indenture on the
maturity date therefor or deposit with the applicable Loan Trustee of money
sufficient therefor no earlier than one year prior to the date of such maturity,
the holders of such Equipment Notes will have no beneficial interest in or other
rights with respect to the related Aircraft or other assets subject to the lien
of such Indenture and such lien shall terminate.
ASSUMPTION OF OBLIGATIONS BY DELTA
Unless otherwise specified in the applicable Prospectus Supplement with
respect to Leased Aircraft, upon the exercise by Delta of any purchase options
it may have under the related Lease prior to the end of the term of such Lease,
Delta may assume on a full recourse basis all of the obligations of the Owner
Trustee (other than its obligations in its individual capacity) under the
Indenture with respect to such Aircraft, including the obligations to make
payments in respect of the related Leased Aircraft Notes. In such event, certain
relevant provisions of the related Lease, including (among others) provisions
relating to maintenance, possession and use of the related Aircraft, liens,
insurance and events of default will be incorporated into such Indenture, and
the Leased Aircraft Notes issued under such Indenture will not be redeemed and
will continue to be secured by such Aircraft. It is a condition to such
assumption that, if such Aircraft is registered under the laws of the United
States, an opinion of counsel be delivered at the time of such assumption
substantially to the effect
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that the related Loan Trustee under such Indenture would, immediately following
such assumption, be entitled to the benefits of Section 1110 of the Bankruptcy
Code with respect to such Aircraft (including the engines related thereto), but
such opinion need not be delivered to the extent that the benefits of such
Section 1110 are not available to the Loan Trustee with respect to such Aircraft
or any engine related thereto immediately prior to such assumption.
LIQUIDITY FACILITY
The related Prospectus Supplement may provide that one or more payments of
interest on the related Equipment Notes of one or more series will be supported
by a Liquidity Facility issued by an institution identified in the related
Prospectus Supplement. Unless otherwise provided in the related Prospectus
Supplement, the provider of the Liquidity Facility will have a senior claim upon
the assets securing the Equipment Notes.
INTERCREDITOR ISSUES
Equipment Notes may be issued in different Classes, which means that the
Equipment Notes may have different payment priorities even though they are
issued by the same borrower and relate to the same Aircraft. In such event, the
related Prospectus Supplement will describe the priority of distributions among
such Equipment Notes (and any Liquidity Facilities therefor), the ability of any
Class to exercise and/or enforce any or all remedies with respect to the related
Aircraft (and, if the Equipment Notes are Leased Aircraft Notes, the Lease
related thereto) and certain other intercreditor terms and provisions.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Unless otherwise indicated in the applicable Prospectus Supplement, the
following summary describes the principal U.S. federal income tax consequences
to Certificateholders of the purchase, ownership and disposition of the
Certificates offered hereby and in the opinion of King & Spalding, special tax
counsel to Delta ("Tax Counsel"), is accurate in all material respects with
respect to the matters discussed therein. Except as otherwise specified, the
summary is addressed to beneficial owners of Certificates ("U.S.
Certificateholders") that are citizens or residents of the United States,
corporations, partnerships or other entities created or organized in or under
the laws of the United States or any state therein, an estate the income of
which is subject to U.S. federal income taxation regardless of its source or a
trust if a court within the United States is able to exercise primary
jurisdiction over the trust's administration and one or more United States
persons have the authority to control all the substantial decisions of such
trust ("U.S. Persons") and that will hold the Certificates as capital assets.
This summary does not address the tax treatment of U.S. Certificateholders that
may be subject to special tax rules, such as banks, insurance companies, dealers
in securities or commodities, traders in securities electing to mark to market,
tax-exempt entities, holders that will hold Certificates as part of a straddle
or holders that have a "functional currency" other than the U.S. Dollar, nor
does it address the tax treatment of U.S. Certificateholders that do not acquire
Certificates at the initial offering price as part of the initial offering
thereof. The summary does not purport to be a comprehensive description of all
of the tax considerations that may be relevant to a decision to purchase
Certificates. This summary does not describe any tax consequences arising under
the laws of any state, locality or taxing jurisdiction other than the United
States.
The summary is based upon the tax laws and practice of the United States as
in effect on the date of this Prospectus, as well as judicial and administrative
interpretations thereof (in final or proposed form) available on or before such
date. All of the foregoing are subject to change, which change could apply
retroactively. Prospective investors should note that no rulings have been
sought from the Internal Revenue Service (the "IRS") with respect to the federal
income tax consequences discussed below, and no assurances can be given that the
IRS will not take contrary positions. The Trusts are not indemnified for any
federal income taxes that may be imposed upon them, and the imposition of any
such taxes on a Trust could result in a reduction in the amounts available for
distribution to the Certificateholders of such Trust. PROSPECTIVE INVESTORS
SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL
AND FOREIGN TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION
OF THE CERTIFICATES.
TAX STATUS OF THE TRUSTS
In the opinion of Tax Counsel, each Trust will be classified as a grantor
trust for U.S. federal income tax purposes.
TAXATION OF CERTIFICATEHOLDERS GENERALLY
A U.S. Certificateholder will be treated as owning its pro rata undivided
interest in each of the Equipment Notes and any other property held by the
related Trust. Accordingly, each U.S. Certificateholder's share of interest paid
on the Equipment Notes will be taxable as ordinary income, as it is paid or
accrued, in accordance with such U.S. Certificateholder's method of accounting
for U.S. federal income tax purposes, and a U.S. Certificateholder's share of
premium, if any, paid on redemption of an Equipment Note will be treated as
capital gain. In the event that a Trust is supported by a Liquidity Facility,
any amounts received by the Trust under the Liquidity Facility with respect to
unpaid interest will be treated for U.S. federal income tax purposes as having
the same characteristics as the payments they replace. If Delta were to assume
an Owner Trust's obligations under Leased Aircraft Notes, such assumption would
be treated for federal income tax purposes as a taxable exchange of such Leased
Aircraft Notes, resulting in recognition of gain or loss by the U.S.
Certificateholder.
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Each U.S. Certificateholder will be entitled to deduct, consistent with its
method of accounting, its pro rata share of fees and expenses paid or incurred
by the corresponding Trust as provided in Section 162 or 212 of the Internal
Revenue Code of 1986, as amended (the "Code"). Certain fees and expenses,
including fees paid to the Trustee and the provider of the Liquidity Facility
(if applicable), will be borne by parties other than the Certificateholders. It
is possible that such fees and expenses will be treated as constructively
received by the Trust, in which event a U.S. Certificateholder will be required
to include in income and will be entitled to deduct its pro rata share of such
fees and expenses. If a U.S. Certificateholder is an individual, estate or
trust, the deduction for such holder's share of such fees or expenses will be
allowed only to the extent that all of such holder's miscellaneous itemized
deductions, including such holder's share of such fees and expenses, exceed 2%
of such holder's adjusted gross income. In addition, in the case of U.S.
Certificateholders who are individuals, certain otherwise allowable itemized
deductions will be subject generally to additional limitations on itemized
deductions under applicable provisions of the Code.
ORIGINAL ISSUE DISCOUNT
The Equipment Notes may be issued with original issue discount ("OID"). The
applicable Prospectus Supplement will state whether any Equipment Notes to be
held by the related Trust will be issued with OID and, if applicable, will
describe the special U.S. federal income tax rules governing debt instruments
issued with OID. Generally, a holder of a debt instrument issued with OID that
is not de minimis must include such OID in income for federal income tax
purposes as it accrues, in advance of the receipt of the cash attributable to
such income, under a method that takes into account the compounding of interest.
SALE OR OTHER DISPOSITION OF THE CERTIFICATES
Upon the sale, exchange or other disposition of a Certificate, a U.S.
Certificateholder generally will recognize capital gain or loss equal to the
difference between the amount realized on the disposition (other than any amount
attributable to accrued interest which will be taxable as ordinary income) and
the U.S. Certificateholder's adjusted tax basis in the related Equipment Notes
and any other property held by the corresponding Trust. Any gain or loss will be
long-term capital gain or loss to the extent attributable to property held by
the Trust for more than one year. In the case of individuals, estates and
trusts, long-term capital gains generally are taxable at a lower rate than
short-term capital gains.
FOREIGN CERTIFICATEHOLDERS
Payment of Interest
Generally, payments of interest on an Equipment Note to, or on behalf of,
any beneficial owner of a Certificate that is not a U.S. Person (a "Non-U.S.
Certificateholder") will qualify for the "portfolio interest exemption" and
therefore will not be subject to United States federal income tax or
withholding, provided that such interest income is not effectively connected
with a United States trade or business of the Non-U.S. Certificateholder and
provided that (i) the Non-U.S. Certificateholder does not actually or
constructively own 10% or more of the combined voting power of all classes of
stock of an Owner Participant or Delta entitled to vote, (ii) the Non-U.S.
Certificateholder is not a controlled foreign corporation related to an Owner
Participant or Delta actually or constructively through stock ownership, (iii)
such Non-U.S. Certificateholder is not a bank receiving interest described in
Section 881(c)(3)(A) of the Code, and (iv) either (a) the Non-U.S.
Certificateholder provides a Form W-8 (or a suitable substitute form) signed
under penalties of perjury that includes its name and address and certifies as
to its non-United States status in compliance with applicable law and
regulations or (b) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its trade
or business holds the Equipment Note and certifies under penalties of perjury
that such a Form W-8 (or a suitable substitute) has been received by it from the
Non-U.S. Certificateholder or qualifying intermediary and furnishes the payor or
its agent with a copy thereof.
Recently issued Treasury Regulations (the "New Withholding Regulations")
provide alternative methods for satisfying the certification requirements
described in clause (iv) above. The New Withholding
21
<PAGE> 35
Regulations generally are effective for payments after December 31, 1998,
subject to certain transition rules. The IRS recently issued a notice announcing
the intent of the Treasury Department and the IRS to amend the New Withholding
Regulations so that they generally will not apply to payments made before
January 1, 2000. See "-- Information Reporting and Backup Withholding" for a
description of the New Withholding Regulations.
If the interest on an Equipment Note is effectively connected with a United
States trade or business of the Non-U.S. Certificateholder, such interest will
be included in the income of such holder as ordinary income at the time such
interest is received or accrued, in accordance with such holder's regular method
of accounting for United States federal income tax purposes, unless an
applicable treaty provides otherwise. Under certain circumstances, effectively
connected interest received by a corporate Non-U.S. Certificateholder may be
subject to an additional "branch profits tax" at a 30% rate (or, if applicable,
a lower tax rate specified by a treaty). Even though such effectively connected
interest is subject to income tax, and may be subject to the branch profits tax,
it is not subject to withholding if the holder delivers a properly executed IRS
Form 4224 to the payor.
Interest income of a Non-U.S. Certificateholder that is not effectively
connected with a United States trade or business and that does not qualify for
the portfolio interest exemption described above generally will be subject to a
withholding tax at a 30% rate (or, if applicable, a lower tax rate specified by
a treaty).
A Non-U.S.Certificateholder generally will not be subject to United States
federal income tax or withholding on any gain realized on the sale, exchange,
redemption, retirement or other disposition of a Certificate or upon receipt of
premium paid on an Equipment Note unless (1) the gain is effectively connected
with a United States trade or business of the Non-U.S. Certificateholder, (2) in
the case of a Non-U.S. Certificateholder who is an individual, such holder is
present in the United States for a period or periods aggregating 183 days or
more during the taxable year of the disposition, and either such holder has a
"tax home" in the United States or the disposition is attributable to an office
or other fixed place of business maintained by such holder in the United States
or (3) the holder is subject to tax pursuant to the provisions of the Code
applicable to certain United States expatriates.
Information Reporting and Backup Withholding
Except as provided below, this section describes rules applicable to
payments made on or before the effective date of the New Withholding
Regulations.
In general, information reporting requirements and backup withholding will
apply to payments on an Equipment Note (including stated interest payments and
payments of the proceeds from the sale, exchange, redemption, retirement or
other disposition of an Equipment Note), unless the holder of the Equipment Note
is a corporation or comes within certain exempt categories and, when required,
demonstrates that fact. In addition, backup withholding at a rate of 31% may
apply to such payments, unless the holder of the Equipment Note provides a
correct taxpayer identification number, certifies as to its exemption from
backup withholding and otherwise complies with applicable requirements of the
backup withholding rules. Certain penalties may be imposed by the IRS on a
holder that is required to supply information but does not do so in the proper
manner.
Information reporting requirements and backup withholding will not apply to
payments on an Equipment Note to a Non-U.S. Certificateholder if the statement
described under "--Payment of Interest" above is duly provided by such holder,
provided that the payor does not have actual knowledge that the holder is a
United States person. Information reporting requirements and backup withholding
will not apply to any payment of the proceeds of the sale of a Certificate
effected outside the United States by a foreign office of a "broker" (as defined
in applicable Treasury Regulations), unless such broker (i) is a United States
person, (ii) derives 50% or more of its gross income for certain periods from
the conduct of a trade or business in the United States or (iii) is a controlled
foreign corporation as to the United States. Payment of the proceeds of any such
sale effected outside the United States by a foreign office of any broker that
is described in (i), (ii) or (iii) of the preceding sentence will not be subject
to backup withholding, but will be subject to information reporting requirements
unless such broker has documentary evidence in its records that the beneficial
owner is a Non-
22
<PAGE> 36
U.S. Certificateholder and certain other conditions are met, or the beneficial
owner otherwise establishes an exemption. Payment of the proceeds of any such
sale to or through the United States office of a broker is subject to
information reporting and backup withholding requirements, unless the beneficial
owner of the Certificate provides the statement described under "-- Payment of
Interest" above or otherwise establishes an exemption.
Any amount withheld from a payment to a holder of an Equipment Note under
the backup withholding rules is allowable as a credit against such holder's
United States federal income tax liability (which might entitle such holder to a
refund), provided that such holder furnishes the required information to the
IRS.
The New Withholding Regulations impose certain certification and
documentation requirements on Non-U.S. Certificateholders claiming an exemption
from withholding, information reporting and backup withholding on interest paid
on the Equipment Notes and proceeds from the sale, exchange, redemption,
retirement or other disposition of the Certificates. In general, the New
Withholding Regulations do not significantly alter the substantive withholding
and information reporting requirements of current law; rather they unify current
certification procedures and forms and clarify reliance standards. PROSPECTIVE
PURCHASERS OF THE CERTIFICATES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO
THE EFFECT, IF ANY, OF THE NEW WITHHOLDING REGULATIONS ON THEIR PURCHASES,
OWNERSHIP AND DISPOSITION OF THE CERTIFICATES.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Certificates may not be purchased by an employee benefit plan (a "Plan") subject
to Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or an individual retirement account or an employee benefit plan
subject to section 4975 of the Code. Certain governmental plans and non-electing
church plans, however, are not subject to Title I of ERISA or Section 4975 of
the Code and, therefore, may purchase the Certificates.
PLAN OF DISTRIBUTION
The Certificates may be sold to or through underwriters, directly to other
purchasers or through agents.
The distribution of the Certificates may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Certificates, underwriters or agents may
receive compensation from Delta or from purchasers of Certificates for whom they
may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Certificates to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
Certificates may be deemed to be underwriters, and any discounts or commissions
received by them from Delta and any profit on the resale of Certificates by them
may be deemed to be underwriting discounts and commissions, under the Securities
Act. Any such underwriter or agent will be identified, and any such compensation
received from Delta will be described, in the applicable Prospectus Supplement.
Under agreements which may be entered into by Delta, underwriters and
agents who participate in the distribution of Certificates may be entitled to
indemnification by Delta against certain liabilities, including liabilities
under the Securities Act.
If so indicated in the applicable Prospectus Supplement, Delta will
authorize underwriters or other persons acting as Delta's agents to solicit
offers by certain institutions to purchase Certificates from Delta pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
Delta. The obligations of any purchaser under any such contract will be subject
to the condition that the purchase of the Certificates is not at the time of
delivery prohibited under the laws of the
23
<PAGE> 37
jurisdiction to which such purchaser is subject. The underwriters and such other
agents will not have any responsibility in respect of the validity or
performance of such contracts.
Unless otherwise indicated in the applicable Prospectus Supplement, Delta
does not intend to apply for the listing of any series of Certificates on a
national securities exchange. If the Certificates of any series are sold to or
through underwriters, the underwriters may make a market in such Certificates,
as permitted by applicable laws and regulations. No underwriter would be
obligated, however, to make a market in such Certificates, and any such
market-making could be discontinued at any time at the sole discretion of the
underwriters. Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the Certificates of any series.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for, Delta in the ordinary
course of business.
VALIDITY OF THE CERTIFICATES
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Certificates offered hereby will be passed upon for Delta by
King & Spalding, Atlanta, Georgia, and for any agents, dealers or underwriters
by Sullivan & Cromwell, New York, New York.
EXPERTS
The consolidated financial statements and schedules included or
incorporated by reference in the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1997 and incorporated by reference in this
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports. Reference is made to
said report, which includes an explanatory paragraph with respect to the change
in the method of accounting for postemployment benefits effective July 1, 1994
as discussed in Note 10 to the consolidated financial statements.
24
<PAGE> 38
------------------------------------------------------
------------------------------------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE
ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF
THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT
ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE AS
OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
Where You Can Find More Information... 2
The Company........................... 3
General Outline of Trust Structure.... 3
Use of Proceeds....................... 3
Ratio of Earnings to Fixed Charges.... 4
Description of the Certificates....... 4
Description of the Equipment Notes.... 14
Certain United States Federal Income
Tax Consequences.................... 20
ERISA Considerations.................. 23
Plan of Distribution.................. 23
Validity of the Certificates.......... 24
Experts............................... 24
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$1,583,881,000
DELTA AIR LINES, INC.
PASS THROUGH CERTIFICATES
---------------------
PROSPECTUS
---------------------
, 1998
------------------------------------------------------
------------------------------------------------------
<PAGE> 39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with this offering, other than
underwriting discounts and commissions, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $442,500
Printing and engraving expenses............................. 120,000*
Trustee and agents' fees and expenses....................... 25,000*
Accountant's fees and expenses.............................. 60,000*
Rating Agency fees.......................................... 60,000*
Legal fees and expenses..................................... 150,000*
Miscellaneous............................................... 42,500*
--------
Total............................................. $900,000*
</TABLE>
- ---------------
* Estimate.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102 of the Delaware General Corporation Law ("DGCL") allows a
corporation to eliminate the personal liability of directors of a corporation to
the corporation or to any of its stockholders for monetary damages for a breach
of fiduciary duty as a director, except (i) for breach of the director's duty of
loyalty, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for certain unlawful
dividends and stock repurchases or (iv) for any transaction from which the
director derived an improper personal benefit. Article Eighteenth of the
Certificate of Incorporation of Delta (the "Certificate") provides that no
director shall be personally liable to Delta or its stockholders for monetary
damages for any breach of his fiduciary duty as a director, except as provided
in Section 102 of the DGCL.
Section 145 of the DGCL provides that in the case of any action other than
one by or in the right of the corporation, a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
in such capacity on behalf of another corporation or enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
Section 145 of the DGCL provides that in the case of an action by or in the
right of a corporation to procure a judgment in its favor, a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any action or suit by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation in such capacity on behalf of another corporation
or enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement or such
action or suit if he acted under standards similar to those set forth in the
preceding paragraph, except that no indemnification may be made in respect of
any action or claim as to which such person shall have been adjudged to be
liable to the corporation unless a court determines that such person is fairly
and reasonably entitled to indemnification.
Article Tenth of Delta's Certificate provides that Delta shall to the
extent permitted by law indemnify any person for all liabilities incurred by or
imposed upon him as a result of any actual or threatened action, suit or
proceeding, whether civil, criminal, administrative or investigative, in which
he shall be involved by reason of
II-1
<PAGE> 40
the fact that he is or was serving as a director, officer or employee of Delta,
or that, at the request of Delta, he is or was serving another corporation or
enterprise in any capacity.
Delta has purchased and maintains at its expense on behalf of directors and
officers insurance, within certain limits, covering liabilities that may be
incurred by them in such capacities.
The Forms of Underwriting Agreements filed or to be filed as Exhibits 1(a)
and 1(b) to the Registration Statement will provide for indemnification of
Delta's directors and officers by the Underwriters against certain liabilities,
including liabilities under the Securities Act.
ITEM 16. LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
REFERENCE
NUMBER DOCUMENT DESCRIPTION
- --------- --------------------
<S> <C> <C>
1(a) -- Form of Underwriting Agreement Standard Provisions relating
to Pass Through Certificates.
1(b) -- Form of Underwriting Agreement relating to Debt Securities.
4(a) -- Form of Pass Through Trust Agreement to be entered into
between Delta Air Lines, Inc. and the Pass Through Trustee
relating to Pass Through Certificates.
4(b) -- Form of Indenture, dated as of May 1, 1991, relating to the
Debt Securities. Incorporated by reference to Exhibit 4 to
Delta's Registration Statement on Form S-3 (Registration No.
33-40190).
5(a) -- Opinion of King & Spalding, counsel for Delta, relating to
Debt Securities.
5(b) -- Opinion of King & Spalding, counsel for Delta, relating to
Pass Through Certificates.
8 -- Tax Opinion of King & Spalding, counsel for Delta (included
under the caption "Certain United States Federal Income Tax
Consequences" in the Prospectus relating to Pass Through
Certificates).
12(a) -- Statement regarding computation of Ratio of Earnings to
Fixed Charges for the five fiscal years ended June 30, 1997.
Incorporated by reference to Exhibit 12 to Delta's Annual
Report on Form 10-K for the fiscal year ended June 30, 1997
(File No. 1-5424).
12(b) -- Statement regarding computation of Ratio of Earnings to
Fixed Charges for the nine months ended March 31, 1997 and
March 31, 1998. Incorporated by reference to Exhibit 12 to
Delta's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 (File No. 1-5424).
23(a) -- Consent of King & Spalding, counsel for Delta (included in
Exhibits 5(a) and 5(b)).
23(b) -- Consent of Arthur Andersen LLP, independent public
accountants.
24 -- Powers of Attorney.
25 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as Trustee
for the Debt Securities and as Pass Through Trustee for the
Pass Through Certificates.
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 ("Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
II-2
<PAGE> 41
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of such registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, and State of Georgia, on the 7th day of
July, 1998.
DELTA AIR LINES, INC.
By: /s/ WARREN C. JENSON
----------------------------------
Warren C. Jenson,
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by or on behalf of the following
persons in the capacities indicated on the 7th day of July, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ LEO F. MULLIN Director, President and Chief Executive Officer
- --------------------------------------------------- (Principal Executive Officer)
Leo F. Mullin
* Director
- ---------------------------------------------------
Edwin L. Artzt
* Director
- ---------------------------------------------------
Henry A. Biedenharn, III
* Director
- ---------------------------------------------------
James L. Broadhead
* Director
- ---------------------------------------------------
Edward H. Budd
* Director
- ---------------------------------------------------
R. Eugene Cartledge
* Director
- ---------------------------------------------------
Mary Johnston Evans
* Director and Chairman of the Board of Directors
- ---------------------------------------------------
Gerald Grinstein
* Director
- ---------------------------------------------------
Jesse Hill, Jr.
* Director
- ---------------------------------------------------
Andrew J. Young
/s/ WARREN C. JENSON Executive Vice President and Chief Financial
- --------------------------------------------------- Officer (Principal Financial Officer and
Warren C. Jenson Principal Accounting Officer)
*By: /s/ WARREN C. JENSON Attorney-in-Fact
--------------------------------------------
Warren C. Jenson
</TABLE>
<PAGE> 1
S&C Draft of July 2, 1998
EXHIBIT 1(A)
DELTA AIR LINES, INC.
Pass Through Certificates
Underwriting Agreement
Standard Provisions
[Date]
From time to time, Delta Air Lines, Inc., a Delaware
corporation (the "Company"), may enter into one or more underwriting agreements
(each, an "Underwriting Agreement") that provide for the sale of Designated
Certificates (as defined below) to the several underwriters named therein. Each
Underwriting Agreement will consist of a pricing agreement substantially in the
form of Annex I hereto, which may incorporate by reference the standard
provisions set forth herein and include such additions and deletions as the
parties thereto may determine (the "Pricing Agreement"). For any Underwriting
Agreement, the term "Underwriters" means the firms named in Schedule I to the
applicable Pricing Agreement, and the term "Representatives" means the firms
designated in the Pricing Agreement as the Representatives of the Underwriters
in connection with such Underwriting Agreement. The term "Representatives" also
refers to a single firm acting as sole representative of the Underwriters and to
Underwriters who act without any firm being designated as their representative.
1. Sale of Pass Through Certificates. The Company proposes
that from time to time The Bank of New York as Pass Through Trustee or another
Pass Through Trustee identified in a Pricing Agreement (the "Pass Through
Trustee"), pursuant to the Pass Through Agreement, as supplemented by a
supplement thereto (each, a "Series Supplement") between the Company and the
Pass Through Trustee (such Pass Through Agreement, as supplemented by each
Series Supplement relating to the Designated Certificates (as defined below)
being herein referred to as the "Pass Through Agreement"), issue Pass Through
Certificates ("Pass Through Certificates") and, subject to the terms and
conditions set forth in the applicable Underwriting Agreement, sell to the
several Underwriters therefor the Pass Through Certificates specified in
Schedule II to the related Pricing Agreement (the
<PAGE> 2
"Designated Certificates"). Each series of Designated Certificates will
represent interests in a separate trust (each, a "Trust") established pursuant
to the Pass Through Agreement to fund the purchase of notes (with respect to any
series of Designated Certificates, the "Equipment Notes") issued (a) on a
nonrecourse basis by one or more owner trustees pursuant to separate leveraged
lease transactions (such Equipment Notes, the "Leased Aircraft Notes") to
finance or refinance a portion of the equipment cost of aircraft, including
engines (each, a "Leased Aircraft" and, collectively, the "Leased Aircraft"),
which have been or will be leased to the Company pursuant to a separate lease
agreement (each such lease agreement, a "Lease") for each Leased Aircraft, or
(b) by, and with recourse to, the Company (such Equipment Notes, the "Owned
Aircraft Notes") either (i) to finance or refinance all or a portion of the
equipment cost of, or to purchase all or a portion of the outstanding debt with
respect to, aircraft, including engines (each, an "Owned Aircraft" and,
collectively, the "Owned Aircraft"; together with Leased Aircraft, the
"Aircraft"), which have been or will be purchased and owned by the Company or
(ii) for the Company's general corporate purposes, using Owned Aircraft as
collateral. In the case of either Leased Aircraft Notes or Owned Aircraft Notes,
such financing or refinancing is referred to herein as a "Financing" or
"Refinancing", respectively; any financing contemplated by clause (ii) above
shall be deemed a "Financing" for purposes of this Agreement. In connection with
each series of Equipment Notes, the Company will enter into a separate note
purchase agreement (each a "Note Purchase Agreement") in the form given to the
Representatives prior to execution of the relevant Pricing Agreement. Each
series of Leased Aircraft Notes will be issued under a Trust Indenture and
Security Agreement between The Bank of New York, as indenture trustee, or
another indenture trustee identified in a Pricing Agreement (the "Loan
Trustee"), and the Owner Trustee (the "Leased Aircraft Indenture"), the form of
which has been given to the Representatives. Each series of Owned Aircraft Notes
will be issued under a Trust Indenture and Security Agreement between The Bank
of New York, as indenture trustee, or another indenture trustee identified in a
Pricing Agreement, as Loan Trustee, and the Company (the "Owned Aircraft
Indenture" and together with the Leased Aircraft Indenture, the "Indentures").
Capitalized terms used but not otherwise defined herein shall have the meaning,
with respect to each series of Pass Through Certificates as to which such
reference relates, specified in or pursuant to the Indenture or Note Purchase
Agreement relating to each related series of Equipment Notes.
-2-
<PAGE> 3
Each Pricing Agreement shall specify the aggregate face amount
of the Designated Certificates covered thereby, the initial public offering
price of such Designated Certificates, the purchase price to the Underwriters of
such Designated Certificates, the compensation payable to the Underwriters with
respect to such Designated Certificates, the names of the Underwriters of such
Designated Certificates, the names of the Representatives of such Underwriters
and the face amount of such Designated Certificates to be purchased by each
Underwriter and shall set forth the date, time and manner of delivery of such
Designated Certificates and payment therefor. The Pricing Agreement shall also
specify certain terms and rights of such Designated Certificates, and may
specify additional representations, warranties, agreements and conditions
applicable to the sale of such Designated Certificates. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. For each Underwriting Agreement, the obligations of the related
Underwriters shall be several and not joint.
The Company has filed with the Securities and Exchange
Commission (the "Commission") two registration statements on Form S-3 (File No.
333-[_____] and File No. 33-50175)(collectively, the "Initial Registration
Statement") relating to certain debt securities and pass through certificates,
including the Designated Certificates, and the offering thereof from time to
time in accordance with Rule 415 under the Securities Act of 1933, as amended
(the "Act"). The Company has filed with, or transmitted for filing to, or shall
within some period of time hereafter file with or transmit for filing to, the
Commission a prospectus supplement (the "Prospectus Supplement") specifically
relating to the Designated Certificates pursuant to Rule 424 under the Act.
The term "Preliminary Prospectus" means any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act. The term "Registration Statement" means the various
parts of the Initial Registration Statement, including all exhibits thereto and
including (i) the information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part
of the registration
-3-
<PAGE> 4
statement at the time it was declared effective and (ii) the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the registration statement
became effective but excluding Form T-1, each as amended at the time such part
of the registration statement became effective or such part of a registration
statement increasing the size of the offering filed pursuant to Rule 462(b)
under the Act (a "Rule 462(b) Registration Statement"), if any, became or
hereafter becomes effective, such final prospectus in form first filed pursuant
to Rule 424(b) under the Act, being hereafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act, as of the date of such Preliminary Prospectus
or Prospectus, as the case may be; any reference to any amendment or supplement
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be; any reference to any amendment
to the Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange
Act after the effective date of the Registration Statement that is incorporated
by reference in the Registration Statement; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the applicable Designated Certificates in the
form in which it is filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof, including any documents incorporated
by reference therein as of the date of such filing. The term "Pass Through
Documents" with respect to any Designated Certificates means the Underwriting
Agreement, the Pass Through Agreement, each Note Document (as defined in the
Pass Through Agreement); any Participation Agreement relating to the Equipment
Notes underlying such Designated Certificates, and each other agreement or
document referred to in the relevant Pricing Agreement; and the term "Company
PTC Documents" with respect to any Designated Certificates means the Pass
Through Documents relating to such Designated Certificates to which the Company
is or is intended to be a party.
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<PAGE> 5
2. Representations and Warranties. For any Underwriting
Agreement and the related Designated Certificates the Company represents and
warrants to, and agrees with, each Underwriter therefor that:
(a) The Company meets the requirements for use of Form S-3
under the Act for purposes of the registration under the Act of the
Pass Through Certificates; the Company is the "issuer" within the
meaning of the Act and appropriate registrant with respect to the Pass
Through Certificates. The Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to the Representatives and, excluding exhibits to the Initial
Registration Statement, but including all documents incorporated by
reference in the prospectus contained therein, to the Representatives
for each of the other Underwriters, has been declared effective by the
Commission in such form, other than a Rule 462(b) Registration
Statement, if any, which became effective upon filing; no other
document with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission; no stop order suspending
the effectiveness of the Initial Registration Statement has been issued
and no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission;
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
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; and any further documents so filed
and incorporated by reference in the Prospectus, when such documents
become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder 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 to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or
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<PAGE> 6
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any
Representative expressly for use in the Prospectus as amended or
supplemented relating to such Designated Certificates;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date and Time of Delivery (as defined below) as
to the Prospectus and any amendment or supplement thereto, 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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of any Representative with respect to
the Designated Certificates expressly for use in the Prospectus as
amended or supplemented relating to such Designated Certificates; on
the effective date of the Registration Statement the form of the Pass
Through Agreement filed as an exhibit to the Registration Statement did
comply in all material respects with the requirements of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
rules thereunder, and as of the Time of Delivery the Pass Through
Agreement will comply in all material respects with the requirements of
the Trust Indenture Act and the rules thereunder;
(d) Since the date of the latest financial statements included
or incorporated by reference in the Prospectus, there has been no
material adverse change in, or any development known to the Company
which would have a material adverse effect on, the financial condition
or operations of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Prospectus;
(e) The Company is a corporation duly organized, validly
existing and in good standing under the laws of
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<PAGE> 7
the State of Delaware, is a "citizen of the United States" within the
meaning of Section 40102 of the Federal Aviation Act of 1958, as
amended (the "Aviation Act") and holds an air carrier operating
certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of the Aviation Act for aircraft capable of carrying 10 or
more individuals or 6,600 pounds or more of cargo, has the corporate
power, authority and legal right to own its properties or hold such
properties under lease, to execute and deliver the Company PTC
Documents with respect to such Designated Certificates and to perform
its obligations under each such Company PTC Document, and is duly
qualified to do business as a foreign corporation in good standing
under the laws of each other jurisdiction in which the failure to so
qualify would have a material adverse effect on the business or
operations of the Company and its subsidiaries, taken as a whole;
(f) The execution and delivery of the Company PTC Documents
relating to such Designated Certificates and the performance thereof,
in accordance with the provisions thereof, have been duly authorized by
all necessary corporate action on the part of the Company, do not
require any stockholder approval, or approval or consent of any trustee
or holder of any indebtedness or obligations of the Company, and do not
and will not contravene any law, judgment, governmental rule,
regulation, order or decree currently in effect or in effect at the
time of execution and delivery of such document and applicable to the
Company or any of its subsidiaries or the certificate of incorporation
or by-laws of the Company or any of its subsidiaries or contravene or
result in a breach of any of the terms or the provisions of, or
constitute a default under, or result in the creation of any Lien
(other than as permitted under each Lease and each Owned Aircraft
Indenture relating to a series of Equipment Notes) upon the property of
the Company under any indenture, mortgage, bank credit agreement, note
or bond purchase agreement, long-term lease, license or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which it or any of its subsidiaries may be bound or
affected, which contravention, breach or default would have a material
adverse effect on the financial condition or operations of the Company
and its subsidiaries, taken as a whole;
(g) Neither the valid authorization, execution and delivery by
the Company of the Company PTC
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<PAGE> 8
Documents relating to such Designated Certificates in accordance with
the provisions thereof, nor the consummation by the Company of any of
the transactions 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 U.S. Department of Transportation,
the Federal Aviation Administration (the "FAA"), the Commission or any
other federal or state governmental authority or agency, other than (i)
the registration of the issuance and sale of the Pass Through
Certificates under the Act and under the securities laws of any state
in which the Pass Through Certificates may be offered for sale if the
laws of such state require such action, (ii) the qualification of the
Pass Through Agreement under the Trust Indenture Act and (iii) the
filing of certain Operative Documents (as defined in the relevant Note
Purchase Agreement) and, in the case of a Refinancing, Original
Documents (as defined in the relevant Note Purchase Agreement), with
the FAA, all of which shall have been or shall be made on or prior to
each relevant Transfer Date (as defined in the Pass Through Agree-
ment);
(h) The Company PTC Documents (except, with respect to the
date of the Pricing Agreement, each Series Supplement and Company PTC
Document specified in the Pricing Agreement) relating to such
Designated Certificates have been duly executed and delivered by the
Company, and each such Company PTC Document constitutes a legal, valid
and binding obligation of the Company enforceable against the Company
in accordance with the terms thereof, subject, as to enforceability,
(A) to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditors' rights
generally, (B) to recognized equitable principles of general
application to or affecting the enforcement of creditors' rights, and
(C) to limitations on rights to indemnity under federal and state
securities laws or the public policy underlying such laws;
(i) None of the Trusts is required to be registered under the
Investment Company Act of 1940, as amended;
(j) The Operative Documents relating to each series of
Equipment Notes are substantially in the form filed or to be filed as
exhibits to the Registration Statement or in a post-effective amendment
thereto or a
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<PAGE> 9
report by the Company under the Exchange Act, and the Pass Through
Agreement has been duly qualified under the Trust Indenture Act; the
Designated Certificates, Pass Through Agreement, Indentures, Note
Purchase Agreements, any Leases, any Participation Agreements, any
intercreditor agreement, any liquidity facility and other Operative
Documents relating to each series of Equipment Notes, conform or will
upon execution conform in all material respects to the descriptions
thereof in the Prospectus as amended or supplemented relating to such
Designated Certificates;
(k) Assuming the accuracy of the representations and
warranties of the Pass Through Trustee contained in each Note Purchase
Agreement and in any Participation Agreement relating to a series of
Equipment Notes, the Pass Through Certificates issued or to be issued
under the Pass Through Agreement, when duly authorized, executed,
authenticated and delivered by the Pass Through Trustee in accordance
with the terms thereof, will be duly issued thereunder and will
constitute the valid and binding obligation of the Pass Through
Trustee; and the holders thereof will be entitled to the benefits of
the Pass Through Agreement; in each case subject as to enforceability
to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and to equitable principles of general applicability;
(l) The documents incorporated by reference into each
Preliminary Prospectus and Prospectus have been, and each document
filed by the Company hereafter pursuant to Section 13, 14 or 15(d) of
the Exchange Act prior to the termination of the offering of the
Designated Certificates (such subsequently filed documents being
referred to herein as "Incorporated Documents") will be, prepared by
the Company in conformity in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder and such documents have been, or in the case of an
Incorporated Document will be, timely filed as required thereby;
accurate copies of each of the documents incorporated by reference into
each Preliminary Prospectus and the Prospectus have been delivered by
the Company to the Representatives and accurate copies of any
Incorporated Documents will be delivered to the Representatives
promptly upon filing thereof;
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<PAGE> 10
(m) The financial statements filed as part of the Registration
Statement or included in, or incorporated by reference into, any
Preliminary Prospectus or Prospectus present fairly, and the financial
statements included in any Incorporated Document will present fairly,
the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been, and in the case of financial statements
included in any Incorporated Document will be, prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, except as approved by Arthur
Andersen LLP. Arthur Andersen LLP, who certified the consolidated
financial statement of the Company and its consolidated subsidiaries
for the most recent fiscal year included or incorporated by reference
in the Registration Statement and Prospectus, are independent public
accountants as required by the Act and the rules thereunder; and
(n) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, in the reasonable
judgment of the Company, individually or in the aggregate, is likely to
have a material adverse effect on the consolidated financial condition
or operations of the Company and its subsidiaries taken as a whole;
and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
In addition, for any Underwriting Agreement and the related
Designated Certificates, all of the representations and warranties by the
Company contained in each Note Purchase Agreement and any Participation
Agreement relating to a series of Equipment Notes are incorporated by reference
in such Underwriting Agreement as if set forth herein, and the Company
represents and warrants to each of the Underwriters with respect to such
Designated Certificates that such representations and warranties are true and
correct as of the date of the Pricing Agreement with respect to such Designated
Certificates, except to the extent that such representations and warranties
relate solely to an earlier date or later date (in which case such representa-
tions and warranties are correct on and as of such earlier date or will be
correct on and as of such later date, as the case may be).
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<PAGE> 11
3. Offer by Underwriters. Upon the execution of the Pricing
Agreement applicable to any Designated Certificates and authorization by the
Representatives of the release of such Designated Certificates, the several
Underwriters propose to offer such Designated Certificates for sale upon the
terms and conditions set forth in the related Prospectus as amended or
supplemented with respect to such Designated Certificates.
4. Delivery and Payment. Designated Certificates to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in definitive form to the extent practicable, and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company, shall be delivered
by or on behalf of the Company to the Representatives for the account of such
Underwriter, at the place and time and date specified in such Pricing Agreement
or at such other place and time and date as the Representatives and the Company
may agree upon in writing or as provided in Section 9 hereof (such date being
herein called the "Closing Date" and such time of delivery and payment for the
Certificates being herein called the "Time of Delivery"). Such delivery of the
Designated Certificates shall be made to the Representatives for the account of
each such Underwriter against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer, payable to the order of the Pass
Through Trustee (or such other person as the Company may direct) in Federal
(same day) funds specified in such Pricing Agreement.
The Company agrees to have the Certificates available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 P.M. on the business day prior to the Closing Date.
5. Agreements. The Company agrees with each of the
Underwriters of any Designated Certificates:
(a) To prepare the Prospectus as amended or supplemented in
relation to the applicable Designated Certificates in a form reasonably
approved by the Representatives and to file such Prospectus pursuant to
Rule 424(b) under the Act not later than the Commission's close of
business on the second business day following the execution and
delivery of the Pricing Agreement relating to the applicable Designated
Certificates or, if applicable, such earlier time as may be required by
Rule 424(b); to make no further amendment or any supplement to the
Registration
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<PAGE> 12
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Designated Certificates and
prior to the Time of Delivery for such Designated Certificates which
shall be reasonably disapproved by the Representatives for such
Designated Certificates promptly after reasonable notice thereof; to
advise the Representatives promptly of any such amendment or supplement
after such Time of Delivery and furnish the Representatives with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Designated Certificates,
and during such same period to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed,
or transmitted for filing, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
prospectus relating to such Designated Certificates, of the suspension
of the qualification of such Designated Certificates for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to such Designated
Certificates or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal;
(b) To cooperate with you and counsel for the Underwriters for
the qualification of such Designated Certificates for sale under the
laws of such jurisdictions as you may reasonably designate, to maintain
such qualifications in effect so long as required for the distribution
of such Designated Certificates and will cooperate with you and counsel
for the Underwriters in determining the legality of such Designated
Certificates for purchase by institutional investors. The Company,
however, shall not be obligated to qualify as a foreign corporation or
file any general consent to service of process under
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<PAGE> 13
the laws of any such jurisdiction or subject itself to taxation as
doing business in any such jurisdiction;
(c) As soon as practicable but in no case later than noon, New
York City time, on the New York Business Day next succeeding the date
of any Pricing Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time in connection with the
offering or sale of such Designated Certificates and if at such time
any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities (it being understood that
each such Underwriter and dealer shall, at the Company's request, be
specified by the Representatives to the Company) as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance; and in case the
Representatives or any of the Underwriters or any dealer in securities
is required to deliver a prospectus in connection with sales of any
Designated Certificates at any time nine months or more after the time
of issue of the Prospectus as amended or supplemented relating to such
Designated Certificates, then upon the request of the Representatives,
but at the expense of the Representatives, the relevant Underwriters or
the relevant dealers in securities, as the case may be, the Company
shall prepare and deliver to the Representatives, such Underwriters or
such dealers in securities as many copies as the Representatives may
request of any amended or supplemented prospectus complying with
Section 10(a)(3) of the Act;
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<PAGE> 14
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c)), an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including at
the option of the Company Rule 158);
(e) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of the applicable Pricing Agreement, and the
Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act; and
(f) During the period beginning from the date of the Pricing
Agreement for such Designated Certificates and continuing to and
including the earlier of (i) the termination of trading restrictions
for such Designated Certificates, as notified to the Company by the
Representatives, and (ii) the Time of Delivery for such Designated
Certificates, not to offer, sell, contract to sell or otherwise dispose
of any public debt securities registered under the Act or any debt
securities which may be sold in a transaction exempt from the
registration requirements of the Act in reliance on Rule 144A under the
Act and which are marketed through the use of a disclosure document
containing substantially the same information as a prospectus for
similar debt securities registered under the Act without the prior
written consent of the Representatives, which consent shall not be
unreasonably withheld.
In addition, the Company agrees with each Underwriter of
Designated Certificates that, if the purchase of any Equipment Notes, or if the
purchase of Equipment Notes is delayed pursuant to a Postponement Notice (as
defined in the Pass Through Agreement) then, prior to any such purchase all
conditions specified in any related Participation Agreement, Note Purchase
Agreement or Pass Through Agreement to be performed or satisfied at or prior to
such purchase shall have been performed or satisfied; and the Company will
provide (or cause to be provided) to the
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<PAGE> 15
Representatives executed copies of all documents delivered under such
Participation Agreement, Note Purchase Agreement or Pass Through Agreement and
of each opinion to be delivered pursuant to such Participation Agreement (other
than any opinion delivered to an Owner Participant (in the case of any Leased
Aircraft Notes) relating solely to tax matters), Note Purchase Agreement or Pass
Through Agreement, addressed to the Representatives on behalf of the
Underwriters or accompanied by a letter from counsel rendering such opinion
authorizing the Underwriters to rely on such opinion as if it were addressed to
them.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters of any Designated Certificates under the
Underwriting Agreement relating to such Designated Certificates shall be
subject, at the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Underwriting Agreement relating to such
Designated Certificates are, at and as of the Time of Delivery for such
Designated Certificates, true and correct in all material respects, except to
the extent that such representations and warranties relate solely to an earlier
date or later date (in which case such representations and warranties are
correct on and as of such earlier date or will be correct on and as of such
later date, as the case may be), the condition that the Company shall have
performed in all material respects all of its obligations under such
Underwriting Agreement theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended and supplemented in relation to
the applicable Designated Certificates shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the date
of the Pricing Agreement; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to the Representatives' reasonable satisfaction;
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<PAGE> 16
(b) At the Time of Delivery, the Representatives shall have
received:
(1) An opinion of King & Spalding, special counsel
for the Company, dated the Time of Delivery for the Designated
Certificates, in substantially the form of Exhibit A attached
hereto;
(2) Counsel for the Company reasonably satisfactory
to the Representatives (it being understood that the Company's
General Counsel, Associate General Counsel or an Assistant
General Counsel is reasonably satisfactory to the
Representatives) shall have furnished to the Representatives
their written opinion, dated the Time of Delivery for the
Designated Certificates, in substantially the form of Exhibit
B attached hereto;
(3) Counsel for the Pass Through Trustee shall have
furnished to the Representatives their written opinion, dated
the Time of Delivery for the Designated Certificates, in
substantially the form of Exhibit C attached hereto;
(4) Counsel for the Underwriters shall have furnished
to the Representatives such opinion or opinions, dated the
Time of Delivery for the Designated Certificates, with respect
to the incorporation of the Company, the validity of the
Designated Certificates and the Pass Through Agreement with
respect thereto, the Registration Statement, the Prospectus
and other related matters as you may reasonably request, and
such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon
such matters;
(5) A certificate of the Company, signed by any two
of the Chairman, President, Senior Vice President-Finance,
Vice President-Treasurer or Vice President-Comptroller, dated
the Time of Delivery for the Designated Certificates, to the
effect that:
(i) the representations and warranties of
the Company in or incorporated in such Underwriting
Agreement are true and correct in all material
respects on and as of the
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<PAGE> 17
Time of Delivery with the same effect as if made at
the Time of Delivery and the Company has complied
with all the agreements and satisfied all the
conditions herein and in each Note Purchase Agreement
and any Participation Agreement relating to a series
of Equipment Notes on its part to be performed or
satisfied at or prior to the Time of Delivery;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to the Company's knowledge, threatened; and
(iii) since the date of the latest financial
statements included or incorporated by reference in
the Prospectus, there has been no material adverse
change in the financial condition or operations of
the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the
ordinary course of business, except as set forth in
or contemplated in the Prospectus as amended or
supplemented;
(c) On the date of the Pricing Agreement for such Designated
Certificates and at the Time of Delivery for the Designated
Certificates, Arthur Andersen LLP, the independent accountants of the
Company, who have audited the financial statements of the Company and
its subsidiaries included or incorporated by reference in the
Registration Statement, shall have furnished to the Representatives a
letter, dated the effective date of the Registration Statement or the
date of the most recent report filed with the Commission containing
financial statements and incorporated by reference in the Registration
Statement, if the date of such report is later than such effective
date, and a letter dated such Time of Delivery, respectively, to the
effect set forth in Annex II hereto, and with respect to such letter
dated such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and substance
reasonably satisfactory to the Representatives;
(d) Subsequent to the time of execution of the Pricing
Agreement relating to the Designated
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<PAGE> 18
Certificates, there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (c) of this
Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company and its subsidiaries, taken as a whole, the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the reasonable
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the public offering or the
delivery of the Designated Certificates as contemplated by the
Prospectus as amended or supplemented;
(e) Subsequent to the time of execution of the Pricing
Agreement relating to the Designated Certificates (i) there shall not
have been any decrease in the ratings of any of the Company's debt
securities by Standard & Poor's Ratings Service or Moody's Investors
Service, Inc. and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's unsecured
debt securities; and
(f) All conditions specified in each Note Purchase Agreement
and any Participation Agreement relating to a series of Equipment Notes
to be performed or satisfied on or prior to the relevant Transfer Date
shall have been performed or satisfied; and the Representatives shall
have received copies of all documents delivered under each such Note
Purchase Agreement and Participation Agreement, which shall be executed
copies in the case of Operative Documents and such other documents as
the Representatives shall reasonably request and shall be true and
complete copies of executed documents in the case of any other
documents, and executed copies of each opinion to be delivered pursuant
to each such Note Purchase Agreement and Participation Agreement (other
than, in the case of any Leased Aircraft Notes, any opinion delivered
to the Owner Participant relating to solely tax matters), addressed to
the Representatives on behalf of the Underwriters or accompanied by a
letter from counsel rendering such opinion authorizing the Underwriters
to rely on such opinion as if it were addressed to them; provided,
however, that this condition (f) need not be satisfied prior to the
Time of Delivery with respect to conditions specified in any such Note
Purchase Agreement or Participation Agreement under which the
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<PAGE> 19
purchase of the Equipment Notes contemplated thereby is delayed until
after the Time of Delivery pursuant to a Postponement Notice to the
Pass Through Trustee pursuant thereto;
(g) Prior to the Time of Delivery, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request; and
(h) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of the Pricing
Agreement.
All such opinions, certificates, letters and documents shall
be deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Representatives and counsel to
the Underwriters; provided, however, to the extent that any of the matters set
forth in the opinions annexed as Exhibits A, B or C hereto shall be separately
covered in substantially the same form in legal opinions of the relevant legal
counsel addressed to the Representatives and delivered at the Time of Delivery
in connection with the Note Purchase Agreement or Participation Agreements, such
other legal opinions shall be deemed to satisfy the foregoing requirements to
the extent of the matters covered.
For any Underwriting Agreement, if any condition specified in
this Section shall not have been fulfilled in all material respects when and as
required to be fulfilled, other than by reason of any default by any
Underwriter, such failure to fulfill a condition may be waived by the
Representatives, or such Underwriting Agreement may be terminated by the
Representatives by written notice to the Company at, or at any time prior to,
the Time of Delivery for the related Designated Certificates. Notice of such
termination shall be given to the Company in writing or by oral communication or
telegraph confirmed in writing.
7. Payment of Expenses. For any Underwriting Agreement, the
Company will pay the reasonable costs incident to the authorization, issuance,
sale and delivery of the Designated Certificates to be sold to the Underwriters
and any taxes payable in that connection; the reasonable costs (other than fees
and disbursements of counsel for the Underwriters, except as provided below)
incident to the preparation, printing and filing under the Act of the
Registration Statement and any amendments and
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<PAGE> 20
exhibits thereto, any Preliminary Prospectus and the Prospectus and any
amendments or supplements thereto; the costs incident to the preparation,
printing and filing of any document and any amendments and exhibits thereto
required to be filed by the Company under the Exchange Act, any Incorporated
Document or any other document relating to any of the transactions contemplated
by any of the Note Purchase Agreements or Participation Agreements relating to
the Equipment Notes in connection with any such transaction or the related
Financing or Refinancing, as the case may be; the costs of distributing the
Registration Statement as originally filed and each amendment thereto (including
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus and any documents incorporated by reference in any
of the foregoing documents, as provided in such Underwriting Agreement; the fees
paid to rating agencies in connection with the rating of the Designated
Certificates; the costs incident to issuance and delivery of the Designated
Certificates to the Underwriters; the fees and expenses of qualifying the
Designated Certificates under the securities laws of the several jurisdictions
as provided in this Section and of preparing a Blue Sky Memorandum and a
memorandum concerning the legality of the Designated Certificates as an
investment (including reasonable fees and disbursements and other charges of
counsel to the Underwriters ("Blue Sky Fees")); and all other costs and expenses
incident to the performance of the obligations of the Company under such
Underwriting Agreement; provided that, except as provided in this Section and in
Sections 8 and 12, each of the Underwriters shall pay its own expenses
(including the fees of counsel for the Underwriters (other than Blue Sky Fees))
and the expenses of advertising any offering of the Designated Certificates made
by it.
8. Indemnification and Contribution. For any Underwriting
Agreement: (a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or in any amendment thereof, or in any
Preliminary Prospectus, preliminary prospectus supplement relating to the
Designated
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<PAGE> 21
Certificates or the Prospectus, or in any amendment thereof or supplement
thereto, or in any other prospectus relating to the Pass Through Certificates,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Representatives specifically for use therein, (ii) such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) as to whom it shall be
established did not send or deliver to the person asserting any such loss,
claim, damage or liability and who purchased the Designated Certificates which
are the subject thereof a copy of the Prospectus as amended or supplemented
excluding documents incorporated therein by reference at or prior to the written
confirmation of the sale of such Designated Certificates to such person in any
case where such delivery is required by the Act and the untrue statement or
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus as amended or supplemented and (iii) the Company
will not be liable for any such loss, claim, damage or liability in connection
with any settlement of any pending or threatened litigation or any pending or
threatened governmental agency investigation or proceeding if that settlement is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
loss, claim, damage,
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<PAGE> 22
liability or action, but only with reference to written information furnished to
the Company by or on behalf of any Underwriter specifically for inclusion in the
Registration Statement, any Preliminary Prospectus, any preliminary prospectus
supplement relating to the Designated Certificates, the Prospectus, or in any
amendment thereof or supplement thereto, or any other prospectus relating to the
Designated Certificates. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action or proceeding (including
any governmental investigation), such indemnified party will, if a claim for
indemnification in respect thereof is to be made against the indemnifying party
under Section 8 (a) or (b) hereof, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to such indemnified
party otherwise than under this Section 8 (a) or (b) hereof, and then only to
the extent that the indemnifying party is prejudiced thereby. In case any such
action or proceeding is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein (jointly with any other indemnifying party
similarly notified), and to the extent that it may elect, by written notice,
delivered to such indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to appoint counsel to defend such action
and approval by the indemnified party of such counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
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<PAGE> 23
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the Underwriters
in the case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or (b)
of this Section 8 is due in accordance with its terms but is for any reason
unavailable on grounds of policy or otherwise, the Company and the Underwriters
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Designated Certificates to which such
loss, claim, damage, or liability (or action in respect thereof) relates. If the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable to such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total proceeds from such offering net of
compensation paid to the Underwriters with respect thereto (but before deducting
expenses) bear to the total underwriting discounts and commissions received by
such Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
-23-
<PAGE> 24
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or such Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding (including any governmental investigation) against such party in
respect of which a claim for contribution may be made against another party or
parties under this paragraph (d), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have here under or otherwise than under this
paragraph (d), except to the extent that the party or parties is prejudiced
thereby. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which (i) the total price at
which the applicable Designated Certificates underwritten by it and distributed
to the public were offered to the public exceeds (ii) the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 8, each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act shall have the same rights to contribution as any Underwriter, and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the provisions of this
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<PAGE> 25
paragraph (d). The obligations of the Underwriters of Designated Certificates in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Designated Certificates and not
joint.
9. Default by an Underwriter. (a) If any Underwriter shall
default in its obligation to purchase the Designated Certificates which it has
agreed to purchase under the Underwriting Agreement relating to such Designated
Certificates, the Representatives with respect thereto may in their discretion
arrange for themselves or another party or other parties to purchase such
Designated Certificates on the terms contained herein. If within thirty-six
hours after such default by any Underwriter such Representatives do not arrange
for the purchase of such Designated Certificates, then the Company shall be
entitled to a further period of thirty-six hours within which to procure another
party or other parties reasonably satisfactory to the Representatives to
purchase such Designated Certificates on such terms. In the event that, within
the respective prescribed period, such Representatives notify the Company that
they have so arranged for the purchase of such Designated Certificates, or the
Company notifies such Representatives that it has so arranged for the purchase
of such Designated Certificates, such Representatives or the Company shall have
the right to postpone the Time of Delivery for such Designated Certificates for
a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus or in
any other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the reasonable opinion of such Representatives may thereby be made necessary.
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to the Underwriting Agreement with respect to such Designated
Certificates.
(b) If, after giving effect to any arrangements for the
purchase of the Designated Certificates of a defaulting Underwriter or
Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate face amount of any series of such Designated
Certificates which remains unpurchased does not exceed one-eleventh of the
aggregate face amount of the relevant series of such Designated Certificates,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the face amount of Designated
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<PAGE> 26
Certificates which such Underwriter agreed to purchase under the Underwriting
Agreement relating to such Designated Certificates and, in addition, to require
each non-defaulting Underwriter to purchase its pro rata share (based on the
face amount of Designated Certificates which such Underwriter agreed to purchase
under such Underwriting Agreement) of the Designated Certificates of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Designated Certificates of a defaulting Underwriter or
Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate face amount of any series of Designated Certificates
which remains unpurchased exceeds one-eleventh of the aggregate face amount of
the relevant series of such Designated Certificates, as referred to in
subsection (b) above, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Certificates of a defaulting Underwriter or Underwriters, then the
Underwriting Agreement relating to such Designated Certificates shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Sections 7 and 12 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. Termination. Any Underwriting Agreement shall be subject
to termination in the discretion of the Representations with respect thereto, by
notice given to the Company prior to Time of Delivery for the applicable
Designated Certificates, if prior to such time (i) trading in the Company's
common stock shall have been suspended by the Commission or the New York Stock
Exchange or trading in securities generally on the New York Stock Exchange shall
have been suspended or materially limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any material outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in the reasonable judgment of such
Representatives, impracticable to market such Designated Certificates.
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<PAGE> 27
11. Representations and Indemnities to Survive. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriters as set forth in or made by or
pursuant to any Underwriting Agreement shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any such Underwriter or the Company or any of the
officers, directors or controlling persons of the Company or the Underwriters
referred to in Section 8 hereof, and shall survive delivery of and payment for
the Designated Certificates relating to such Underwriting Agreement. The
provisions of Sections 8, 11 and 12 of such Underwriting Agreement shall survive
the termination or cancellation of such Underwriting Agreement.
12. Reimbursement of Underwriters' Expenses. If the
Underwriting Agreement relating to the sale of any Designated Certificates shall
be terminated pursuant to Section 9 or Section 10 hereof, then the Company shall
not then be under any liability to any Underwriter with respect to the
Designated Certificates relating to such Underwriting Agreement except as
provided in Section 7 and Section 8 hereof; but if the sale of any Designated
Certificates is not consummated because any condition set forth in Section 6
hereof is not satisfied, because of any termination pursuant to Section 10
hereof or because of any refusal, inability or failure on the part of the
Company to perform any agreement in the Underwriting Agreement relating to such
Designated Certificates or comply with any provision thereof other than by
reason of a default by any of the Underwriters for such Designated Certificates,
the Company will reimburse such Underwriters severally through the
Representatives upon demand for all reasonable out-of-pocket expenses approved
in writing by the Representatives (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Designated Certificates but the Company shall
then be under no further liability to any Underwriter with respect to such
Designated Certificates except as provided in Section 7 and Section 8 hereof.
13. Notices. In all dealings hereunder, the Representatives of
the Underwriters of Designated Certificates shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if
any, as may be designated for such purpose in the Pricing Agreement.
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<PAGE> 28
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Representatives as
set forth in the Pricing Agreement; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement: Attention: Treasurer (with a copy to the
General Counsel); provided, however, that any notice to an Underwriter pursuant
to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
14. Successors. Each Underwriting Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters thereunder, the
Company and, to the extent provided in Section 8 and Section 11 hereof, the
officers and directors of the Company and each person who controls the Company
or any such Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of such Underwriting Agreement. No purchaser of any of the
Pass Through Certificates from any Underwriter therefor shall be deemed a
successor or assign by reason merely of such purchase.
15. Time is of Essence. Time shall be of the essence of each
Underwriting Agreement. As used herein, "business day" shall mean any day when
the Commission's office in Washington, D.C. is open for business and "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
16. APPLICABLE LAW. EACH UNDERWRITING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Counterparts. Each Underwriting Agreement may be executed
by any one or more of the parties thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
DELTA AIR LINES, INC.
By:
------------------------------
Name:
Title:
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<PAGE> 29
Annex I
Underwriting Agreement
PRICING AGREEMENT
Dear Sirs:
Delta Air Lines, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions set forth or incorporated by
reference herein to cause the Pass Through Trustee (as defined in the Standard
Provisions referred to below) to issue and sell to each of the Underwriters
named in Schedule I hereto (the "Underwriters") the Pass Through Certificates,
Series __, specified in Schedule II hereto (the "Designated Certificates"). Each
of the provisions of the document entitled Delta Air Lines, Inc. Pass Through
Certificates Underwriting Agreement Standard Provisions dated _________, 1998
(the "Standard Provisions") is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Standard Provisions so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Standard Provisions are used herein as therein defined. The
Representative designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Certificates pursuant to Section
13 of the Underwriting Agreement and the address of the Representatives referred
to in such Section 13 are set forth at the end of Schedule II hereto.
Subject to the terms and conditions set forth or incorporated
by reference herein, each of the Underwriters agrees, severally and not jointly,
to purchase from the Pass Through Trustee, at the time and place and at the
purchase price to the Underwriters set forth in Schedule II hereto, the face
amount of each series of Designated Certificates set forth opposite the name of
such Underwriter in Schedule I hereto.
As compensation to each of the Underwriters for their
respective commitments and obligations hereunder in respect of the Designated
Certificates, including their undertaking to offer the Designated Certificates
for sale to the public, the Company will pay (or cause to be paid) to
<PAGE> 30
the Representatives for the respective accounts of the Underwriters the
percentage of the aggregate face amount of each series of Designated
Certificates purchased by each Underwriter as set forth on Schedule II hereto.
Such payment will be made by wire transfer in Federal (same day) funds to the
order of _______________ at the time heretofore agreed by the Company and the
Representatives.
If the foregoing is in accordance with your understanding,
please sign and return to us four counterparts hereof, and upon acceptance
hereof to you, on behalf of each of the Underwriters, this letter and such
acceptance hereof, including the provisions of the Standard Provisions
incorporated by reference herein, shall constitute a binding agreement between
each of the Underwriters and the Company. It is understood that your acceptance
of this letter on behalf of each of the Underwriters is or will be pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination, upon request.
Very truly yours,
DELTA AIR LINES, INC.
By:
-----------------------------
Name:
Title:
Accepted as of the date hereof:
[Name of designated Representative]
By:
-------------------------------
[Title:]
On behalf of each of the Underwriters
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<PAGE> 31
SCHEDULE I
<TABLE>
<CAPTION>
Face
Amount of
Designated
Certificates
to be
Underwriter Purchased *
----------- ------------
<S> <C>
- ---------------------- . . . . . . . . . . . . . . . . . . . . . . . . ----------
- ---------------------- . . . . . . . . . . . . . . . . . . . . . . . . ----------
- ---------------------- . . . . . . . . . . . . . . . . . . . . . . . . ----------
* Repeat column for each series of Designated
Certificates.
----------
Total . . . . . . . . . . ==========
</TABLE>
-3-
<PAGE> 32
SCHEDULE II
Title of Designated Certificates:
Aggregate face amount:
Price to Public:
Purchase Price of Underwriters:
Final Maturity:
Rate:
Regular Distribution Dates:
Special Distribution Dates:
Record Dates:
Denominations:
Compensation to Underwriters (as a percentage of face amount of Designated
Certificates):
Concession to Dealers (as a percentage of face amount of Designated
Certificates):
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<PAGE> 33
Reallowance Concessions (as a percentage of face amount of Designated
Certificates):
Time of Delivery:
Closing Location:
Names and addresses of Representatives:
Trust Property:
The property held in each Trust relating to the [Series __ and Series
__] Designated Certificates will consist of [leased aircraft notes(the
"Leased Aircraft Notes" or "Equipment Notes")from each of _______
separate series of Leased Aircraft Notes being issued as nonrecourse
obligations by the Owner Trustee in connection with the [financing]
[refinancing] of the [debt] [equity] portion of the purchase price paid
by such Owner Trustee on behalf of _______ separate Owner Trusts,
respectively, in respect of ___ separate Aircraft which were leased to
the Company in ______ separate leveraged lease transactions identified
on Annex A hereto] [and] [owned aircraft notes ("Owned Aircraft Notes"
or "Equipment Notes") being issued with recourse to the Company [in
connection with the [financing] [refinancing] of the [debt] [equity]
portion of the purchase price paid by the Company in respect of
___separate Aircraft][for the Company's general corporate purposes,
using Owned Aircraft as collateral]. Each Trust will include Equipment
Notes with identical interest rates, in each case equal to the rate
applicable to the [Series __ or Series __] Designated Certificates, as
the case may be, and will have maturity dates on or before the final
distribution date for the [Series __ or Series __] Designated
Certificates, as the case may be. For each such Trust, the aggregate
principal amount of the Equipment Notes held in such Trust will equal
the aggregate amount of the related series of Designated Certificates.
-5-
<PAGE> 34
Other Terms:
For each of the ______ Aircraft, ______ series of Equipment Notes, each
of which will have a different principal amount, interest rate,
maturity date and schedule of principal payments, will be issued under
the related Indenture. The aggregate principal amounts of the Equipment
Notes issued with respect to each Aircraft, as such Equipment Notes are
held in each of the Trusts, are as set forth on Annex B hereto.
Additional Covenants:
The Company agrees with each of the Underwriters to cause to be filed
with the Securities and Exchange Commission prior to the Time of
Delivery the following agreements:
[refer to Operative Documents and Pass Through
Documents other than the Pass Through Agreement
and the Indentures].
[Intercreditor Arrangements: Specify and provide details, if any.]
[Liquidity Facility or Other Credit Support: Specify and provide details, if
any.]
Additional Pass Through Documents:
[Liquidity Facility documents]
[Intercreditor Agreement]
[Deposit Agreement or similar arrangement referred to
in Section 2.01 of the Pass Through Agreement]
[Variation of Standard Terms: Specify, if any]
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<PAGE> 35
Annex II
DELTA AIR LINES, INC.
Pursuant to Section 6(c) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified
in such letter, as indicated in their reports thereon, copies of which
have been furnished to the representative or representatives of the
Underwriters (the "Representatives") such term to include an
Underwriter or Underwriters who act without any firm being designated
as its or their representatives and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of operations,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which are attached hereto;
and on the basis of specified procedures including inquiries of
officials of the Company who have
<PAGE> 36
responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to
in paragraph (vi)(A)(i) below comply as to form in all, material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations, nothing
came to their attention that caused them to believe that the unaudited
condensed consolidated financial statement do not comply as to form in
all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for five
such fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing procedures
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries
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<PAGE> 37
of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated
statements of operations, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of
operations, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus or
included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis
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<PAGE> 38
substantially consistent with the basis for the audited
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, in each case as compared with amounts shown
in the latest balance sheet included or incorporated by
reference in the Prospectus except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated operating revenues or
operating income or the total or per share amounts of
consolidated net income available to common shareholders or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, except in each
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<PAGE> 39
case for increases or decreases which the
Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by
the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
All references in this Annex II to the Prospectus shall be
deemed to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Underwriting Agreement as of the date of
the letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Securities for purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
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<PAGE> 1
EXHIBIT 1b
Draft of June 29, 1998
DELTA AIR LINES, INC.
Debt Securities
Underwriting Agreement
June , 1998
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Sirs:
From time to time, Delta Air Lines, Inc., a Delaware
corporation (the "Company") proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the "Securities")
specified in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the Indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from
time to time to the Underwriters of such Securities, for whom the firms
designated as representatives of the Underwriters of such Securities in the
Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. This Underwriting
<PAGE> 2
Agreement shall not be construed as an obligation of the Company to sell any of
the Securities or, if any of the Securities are to be sold, as an obligation of
the Company to sell such Securities to any of the Underwriters or as an
obligation of any of the Underwriters to purchase the Securities. The obligation
of the Company to issue and sell any of the Securities and the obligation of any
of the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified therein.
Each Pricing Agreement shall specify the aggregate principal amount of such
Designated Securities, the initial public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters and the principal amount of
such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery of such Designated Securities and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(a) A registration statement (the "Initial Registration
Statement") in respect of the Securities has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to the Initial Registration
Statement, but including all documents incorporated by reference in
the prospectus contained therein, to the Representatives for each of
the other Underwriters, have been declared effective by the
Commission in such form, other than a registration statement, if any,
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<PAGE> 3
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act
of 1933, as amended (the "Act"), which became effective upon filing;
no other document with respect to the Initial Registration Statement
or document incorporated by reference therein has heretofore been
filed or transmitted for filing with the Commission; and no stop
order suspending the effectiveness of the Initial Registration
Statement has been issued and no proceeding for that purpose has been
initiated or, to the Company's knowledge, threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act,
being hereinafter called a "Preliminary Prospectus"; the various
parts of the Initial Registration Statement, including all exhibits
thereto and including (i) the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the registration
statement at the time it was declared effective and (ii) the
documents incorporated by reference in the prospectus contained in
the Initial Registration Statement at the time such part of the
registration statement became effective but excluding Form T-1, each
as amended at the time such part of the registration statement became
effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective being hereinafter
collectively called the "Registration Statement"; such final
Prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, being hereinafter called the "Prospectus"; any reference herein
to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference
in such Preliminary Prospectus or the
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<PAGE> 4
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in
the form in which it is filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof,
including any documents incorporated by reference therein as of the
date of such filing);
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents 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; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder 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 to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use
in the Prospectus as amended or supplemented relating to such
Securities;
(c) The Registration Statement and the Prospectus conform,
and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to
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<PAGE> 5
the requirements of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of
the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, 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; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(d) Since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
there has been no material adverse change in, or any development
known to the Company which would have a material adverse effect on,
the financial condition or operations of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated by the Prospectus;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as it is now being
conducted except where the failure to have such power or authority
would not individually or in the aggregate have a material adverse
effect on the financial condition or operations of the Company and
its subsidiaries, taken as a whole; the Company is an "air carrier"
within the meaning of the Federal Aviation Act of 1958, as amended,
and is duly qualified as a foreign corporation for the transaction of
business and in good standing under the laws of each other
jurisdiction in which it has intrastate routes or has a principal
office or major overhaul facility and where the failure to so qualify
would have a material adverse effect on the financial condition or
operations of the Company
-5-
<PAGE> 6
and its subsidiaries, taken as a whole; and each subsidiary of the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation;
(f) The Company has an authorized capital stock as set
forth in the Prospectus and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(g) The Securities have been duly authorized, and, when
Designated Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities, such Designated Securities will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company, enforceable in accordance
with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles, and will be entitled to the benefits provided by the
Indenture, which will be substantially in the form filed as an
exhibit to the Registration Statement; the Indenture has been duly
authorized by the Company and duly qualified under the Trust
Indenture Act and, at each Time of Delivery for such Designated
Securities (as defined in Section 4 hereof), the Indenture will
constitute a valid and legally binding instrument, enforceable
against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles and the Indenture conforms in all
material respects, and the Designated Securities will conform in all
material respects, to the descriptions thereof contained in the
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<PAGE> 7
Prospectus as amended or supplemented with respect to such Designated
Securities;
(h) The issue and sale of the Securities and the
compliance by the Company with all of the provisions of the
Securities, the Indenture, this Agreement and any Pricing Agreement,
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject (except for such
conflicts, breaches, violations and defaults that would not have a
material adverse effect on the financial condition or operations of
the Company and its subsidiaries, taken as a whole, and that would
not affect the validity of the Securities), nor will such action
result in any violation of the provisions of the Certificate of
Incorporation, as amended, or By-laws of the Company or any statute
or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue
and sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or any Pricing Agreement
or the Indenture, except such as have been or will have been prior to
the Time of Delivery obtained under the Act and the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Securities by the Underwriters; and
(i) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject
-7-
<PAGE> 8
which, in the reasonable judgment of the Company individually or in
the aggregate, is likely to have a material adverse effect on the
consolidated financial condition or operations of the Company and its
subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
3. Upon the execution of the Pricing Agreement applicable to
any Designated Securities and authorization by the Representatives of the
release of such Designated Securities, the several Underwriters propose to offer
such Designated Securities for sale upon the terms and conditions set forth in
the Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter
pursuant to the Pricing Agreement relating thereto, in definitive form to the
extent practicable, and in such authorized denominations and registered in such
names as the Representatives may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer,
payable to the order of the Company, in Federal (same day) funds specified in
such Pricing Agreement, all at the place and time and date specified in such
Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "Time of Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any
Designated Securities:
(a) To prepare the Prospectus as amended and supplemented
in relation to the applicable Designated Securities in a form
reasonably approved by the Representatives and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following
the execution and delivery of the Pricing Agreement relating to the
applicable Designated Securities or, if applicable, such earlier time
as may be required by Rule 430A(a)(3); to make no further amendment
or any supplement to the Registration
-8-
<PAGE> 9
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Securities and prior to the
Time of Delivery for such Securities which shall be reasonably
disapproved by the Representatives for such Securities promptly after
reasonable notice thereof; to advise the Representatives promptly of
any such amendment or supplement after such Time of Delivery and
furnish the Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering
or sale of such Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed, or transmitted for filing, of the
issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of such Securities
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any such stop order or of any
such order preventing or suspending the use of any prospectus
relating to the Securities or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may reasonably request and to comply with such
laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction or subject
-9-
<PAGE> 10
itself to taxation as doing business in any such jurisdiction;
(c) As soon as practicable but in no case later than noon,
New York City time, on the New York Business Day next succeeding the
date of any Pricing Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City as
amended or supplemented in such quantities as the Representatives may
reasonably request, and, if the delivery of a prospectus is required
at any time in connection with the offering or sale of the Securities
and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with
the Act, the Exchange Act or the Trust Indenture Act, to notify the
Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities (it being understood that each such Underwriter
and dealer shall, at the Company's request, be specified by the
Representatives to the Company) as many copies as the Representatives
may from time to time reasonably request of an amended Prospectus or
a supplement to the Prospectus which will correct such statement or
omission or effect such compliance; and in case the Representatives
or any of the Underwriters or any dealer in securities is required to
deliver a prospectus in connection with sales of any Designated
Securities at any time nine months or more after the time of issue of
the Prospectus as amended or supplemented relating to such Designated
Securities, then upon the request of the Representatives, but at the
expense of the Representatives, the relevant Underwriters or the
relevant dealers in securities, as the case may be, the Company shall
prepare and deliver to the Representatives, such Underwriters or such
dealers in securities as many copies as the Representatives may
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<PAGE> 11
request of any amended or supplemented prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c)), an earning statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including at the option of the Company Rule 158); and
(e) During the period beginning from the date of the
Pricing Agreement for such Designated Securities and continuing to
and including the earlier of (i) the termination of trading
restrictions for such Designated Securities, as notified to the
Company by the Representatives, and (ii) the Time of Delivery for
such Designated Securities, not to offer, sell, contract to sell or
otherwise dispose of any taxable debt securities of the Company
(other than (x) the Securities that are to be sold pursuant to such
Pricing Agreement and (y) debt securities under bank or other
institutional credit agreements in effect as of the date of such
Pricing Agreement) which mature more than one year after such Time of
Delivery and which are substantially similar to such Designated
Securities, without the prior written consent of the Representatives,
which consent shall not be unreasonably withheld.
(f) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of the applicable Pricing Agreement, and the
Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following: except
as otherwise provided in Section 5(c), (i) the fees, disbursements and expenses
of
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<PAGE> 12
the Company's counsel and accountants in connection with the registration of the
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing any Agreement among Underwriters, this Agreement, any
Pricing Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda
and any other documents reasonably necessary in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses reasonably
incurred in connection with the qualification of the Securities for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) any filing fees incident to any required review by
the National Association of Securities Dealers, Inc. of the terms of the sale of
the Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 12 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such Designated Securities
shall be subject, in the discretion of the Representatives, to the condition
that all representations and warranties and other statements of the Company in
or incorporated by reference in the Pricing Agreement relating to such
Designated Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed in all material respects all of its obligations
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<PAGE> 13
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation
to the applicable Designated Securities shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under
the Act and in accordance with Section 5(a) thereof; if the Company
has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., Washington, D.C.
time, on the date of the Pricing Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to
the Representatives such opinion or opinions, dated the Time of
Delivery for such Designated Securities, with respect to the
incorporation of the Company, the validity of the Indenture, the
Designated Securities, the Registration Statement, the Prospectus as
amended or supplemented and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request
to enable them to pass upon such matters;
(c) Counsel for the Company reasonably satisfactory to the
Representatives (it being understood that the Company's General
Counsel, Associate General Counsel or an Assistant General Counsel is
reasonably satisfactory to the Representatives) shall have furnished
to the Representatives their written opinion, dated the Time of
Delivery for such Designated Securities, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in
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<PAGE> 14
good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its
properties and conduct its business as it is now being
conducted except where the failure to have such power or
authority would not individually or in the aggregate have
a material adverse effect on the financial condition or
operations of the Company and its subsidiaries, taken as a
whole;
(ii) The Company is an "air carrier" within
the meaning of the Federal Aviation Act of 1958, as
amended, and has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in the United
States of America other than that of its incorporation in
which it has intrastate routes or has a principal office
or major overhaul facility and where the failure to so
qualify would have a material adverse effect on the
financial condition or operations of the Company and its
subsidiaries, taken as a whole (such counsel being
entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company,
provided that such counsel shall state that such counsel
believes that the Representatives and such counsel are
justified in relying upon such opinions and certificates);
(iii) Each subsidiary of the Company has been
duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation; and all of the issued shares of capital
stock of each such subsidiary (except for directors'
qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances,
equities or claims (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon
certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that
such counsel believes that the Representatives and such
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<PAGE> 15
counsel are justified in relying upon such opinions and
certificates);
(iv) The Company has an authorized capital
stock as set forth in the Prospectus as amended or
supplemented and all of the issued shares of capital stock
of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(v) To the best of such counsel's knowledge
after reasonable investigation and other than as set forth
in the Prospectus as amended or supplemented, there are no
legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is
the subject which, individually or in the aggregate, is
likely to have a material adverse effect on the
consolidated financial condition or operations of the
Company and its subsidiaries, taken as a whole; and, to
the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities
or threatened by others;
(vi) This Agreement and the Pricing Agreement
with respect to the Designated Securities have been duly
authorized, executed and delivered by the Company;
(vii) The Designated Securities have been duly
authorized, executed, issued and delivered and constitute
valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or
affecting creditors' rights and to general equity
principles, and will be entitled to the benefits provided
by the Indenture, and the Designated Securities and the
Indenture conform in all material respects to the
descriptions thereof in the Prospectus as amended or
supplemented;
(viii) The Indenture has been duly authorized,
executed and delivered by the Company
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<PAGE> 16
and constitutes a valid and legally binding instrument,
enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights
and to general equity principles; and the Indenture has
been duly qualified under the Trust Indenture Act;
(ix) The issue and sale of the Designated
Securities and the compliance by the Company with all of
the provisions of the Designated Securities, the
Indenture, this Agreement and the Pricing Agreement with
respect to the Designated Securities and the consummation
of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject (except for
such conflicts, breaches, violations and defaults that
would not have a material adverse effect on the financial
condition or operations of the Company and its
subsidiaries taken as a whole and that would not affect
the validity of the Designated Securities), nor will such
actions result in any violation of the provisions of the
Certificate of Incorporation, as amended, or By-laws of
the Company or any statute or any order, rule or
regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their
properties;
(x) To the best of such counsel's knowledge
after reasonable investigation, no consent, approval,
authorization, order, registration or qualification of or
with any such court or governmental agency or body is
required for the issue and sale of the Designated
Securities or the consummation by the Company of
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<PAGE> 17
the other transactions contemplated by this Agreement or
such Pricing Agreement or the Indenture, except such as
have been obtained under the Act and the Trust Indenture
Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by
the Underwriters;
(xi) The documents incorporated by reference
in the Prospectus as amended or supplemented (other than
the financial statements and related schedules and other
financial data therein, as to which such counsel need
express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as
to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder; and such
counsel has no reason to believe that any of such
documents, when they became effective or were so filed, as
the case may be, contained, in the case of a registration
statement which became effective under the Act, 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, and, in the
case of other documents which were filed under the Act or
the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made when
such documents were so filed, not misleading; and
(xii) The Registration Statement and the
Prospectus as amended or supplemented and any further
amendments and supplements thereto made by the Company
prior to the Time of Delivery for the Designated
Securities (other than the financial statements and
related schedules and other financial data therein, as to
which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the
Act and the Trust Indenture Act and the rules and
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<PAGE> 18
regulations thereunder; such counsel has no reason to
believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the
Company prior to the Time of Delivery (other than the
financial statements and related schedules and other
financial data therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the
Prospectus, as amended or supplemented, or any further
amendment or supplement thereto made by the Company prior
to the Time of Delivery (other than the financial
statements and related schedules and other financial data
therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading or that, as of the Time of
Delivery, either the Registration Statement or the
Prospectus, as amended or supplemented, or any further
amendment or supplement thereto made by the Company prior
to the Time of Delivery (other than the financial
statements and related schedules and other financial data
therein, as to which such counsel need express no opinion)
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 statements in the Prospectus as
amended or supplemented with respect to statutes,
administrative orders and regulations and legal and
governmental proceedings fairly and accurately present in
all material respects the information required to be set
forth therein and there are no statutes, administrative
orders or regulations required to be described in the
Prospectus as amended or supplemented which are not
described as required; the statements in the Prospectus as
amended or supplemented as to the route system which the
Company presently operates or is authorized to operate are
correct in all material respects and no authorization of
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<PAGE> 19
the Company to operate any such route is the subject of
any "show cause" or other order of, or any proceeding
before, or any investigation by, the Department of
Transportation (other than proceedings for the renewal of
temporary rights) which in the opinion of such counsel is
reasonably likely to result in a final order impairing the
validity of such authorization; and such counsel does not
know of any amendment to the Registration Statement
required to be filed or any contracts or other documents
of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented
or required to be described in the Registration Statement
or the Prospectus as amended or supplemented which are not
filed or incorporated by reference or described as
required;
With respect to the opinions in clauses (vii)
and (viii) above, such counsel may rely as to all matters
of New York law on the opinion of counsel for the
Underwriters delivered pursuant to Section 7(b).
(d) On the date of the Pricing Agreement for
such Designated Securities and at the Time of Delivery for
such Designated Securities, Arthur Andersen LLP, the
independent accountants of the Company, who have audited
the financial statements of the Company and its
subsidiaries included or incorporated by reference in the
Registration Statement, shall have furnished to the
Representatives a letter, dated the effective date of the
Registration Statement or the date of the most recent
report filed with the Commission containing financial
statements and incorporated by reference in the
Registration Statement, if the date of such report is
later than such effective date, and a letter dated such
Time of Delivery, respectively, to the effect set forth in
Annex II hereto, and with respect to such letter dated
such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and
substance reasonably satisfactory to the Representatives;
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<PAGE> 20
(e) On or after the date of the Pricing
Agreement relating to the Designated Securities, there
shall not have been (i) any change or decrease, specified
in the letter or letters referred to in paragraph (d) of
this Section 7 or (ii) any change, or any development
involving a prospective change, in or affecting the
business or properties of the Company and its
subsidiaries, taken as a whole, the effect of which, in
any case referred to in clause (i) or (ii) above, is, in
the reasonable judgment of the Representatives, so
material and adverse as to make it impractical or
inadvisable to proceed with the public offering or the
delivery of the Designated Securities as contemplated by
the Prospectus as amended or supplemented;
(f) On or after the date of the Pricing
Agreement relating to the Designated Securities (i) no
downgrading shall have occurred in the rating accorded the
Company's unsecured debt securities by any "nationally
recognized statistical rating organization," as that term
is defined by the Commission for purposes of Rule
436(g)(2) under the Act and (ii) no such organization
shall have publicly announced that it has under
surveillance or review, with possible negative
implications, its rating of any of the Company's unsecured
debt securities;
(g) The Company shall have furnished or caused
to be furnished to the Representatives at the Time of
Delivery for the Designated Securities a certificate or
certificates of officers of the Company reasonably
satisfactory to the Representatives as to the accuracy of
the representations and warranties of the Company herein
at and as of such Time of Delivery, as to the performance
by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (e) of this
Section and as to such other matters as the
Representatives may reasonably request;
(h) The Company shall have complied with the
provisions of Section 5(c) hereof with respect to
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<PAGE> 21
the furnishing of prospectuses on the New York Business
Day next succeeding the date of the Pricing Agreement.
8. (a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or in any amendment thereof, or in any
Preliminary Prospectus, preliminary prospectus supplement relating to the
Securities or the Prospectus, or in any amendment thereof or supplement thereto,
or in any other prospectus relating to the Securities, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically for use in
connection with the preparation thereof, (ii) such indemnity with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) as to whom it shall be established that the
person asserting any such loss, claim, damage or liability purchased the
Designated Securities which are the subject thereof if such underwriter did not
send or deliver a copy of the Prospectus as amended or supplemented at or prior
to the written confirmation of the sale of such Designated Securities to such
person in any case where such delivery is required by the Act and the untrue
statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus as amended or supplemented and (iii)
the Company will not be
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<PAGE> 22
liable for any such loss, claim, damage or liability in connection with any
settlement of any pending or threatened litigation or any pending or threatened
governmental agency investigation or proceeding if that settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
loss, claim, damage, liability or action, but only with reference to written
information furnished to the Company by any Underwriter specifically for
inclusion in the Registration Statement, any Preliminary Prospectus, any
preliminary prospectus supplement relating to the Securities, the Prospectus, or
in any amendment thereof or supplement thereto, or any other prospectus relating
to the Securities. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of the cover page of any Prospectus
Supplement and the disclosures concerning (i) the terms of the reoffering and
resale of the Designated Securities by the Underwriters, (ii) any intention of
the Underwriters to make a market in the Designated Securities and (iii) any
stabilizing or short covering transactions by the Underwriters, all as set forth
under the heading "Underwriting" in any Prospectus Supplement constitute the
only information furnished in writing by the Underwriters or on the
Underwriters' behalf for inclusion in any Preliminary Prospectus, preliminary
prospectus supplement relating to the Securities or the Prospectus, or in any
amendment thereof or supplement thereto, or in any prospectus relating to the
Securities, and the Representatives will confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of
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<PAGE> 23
any action or proceeding (including any governmental investigation), such
indemnified party will, if a claim for indemnification in respect thereof is to
be made against the indemnifying party under Section 8(a) or (b) hereof, notify
the indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under Section 8(a) or (b)
hereof, and then only to the extent that the indemnifying party is prejudiced
thereby. In case any such action or proceeding is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein (jointly
with any other indemnifying party similarly notified), and to the extent that it
may elect, by written notice, delivered to such indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to appoint counsel to defend such
action and approval by the indemnified party of such counsel, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Underwriters in the case of paragraph (a) of this Section 8, representing the
indemnified parties under such paragraph (a) who are parties to such action),
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel
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<PAGE> 24
for the indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or (b)
of this Section 8 is due in accordance with its terms but is for any reason
unavailable on grounds of policy or otherwise, the Company and the Underwriters
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigation or defending same) to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Designated Securities to which such loss,
claim, damage, or liability (or action in respect thereof) relates. If the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable to such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by such Underwriters. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or such
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation
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<PAGE> 25
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which (i) the total price at which the applicable Designated Securities
underwritten by it and distributed to the public were offered to the public
exceeds (ii) the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls any Underwriter within the meaning
of either the Act or the Exchange Act shall have the same rights to contribution
as any Underwriter, and each person who controls the Company within the meaning
of either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to the
provisions of this paragraph (d). The obligations of the Underwriters of
Designated Securities in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to such
Securities and not joint.
9. (a) If any Underwriter shall default in its obligation to
purchase the Designated Securities which it has agreed to purchase under the
Pricing Agreement relating to such Designated Securities, the Representatives
may in their discretion arrange for themselves or another party or other parties
to purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other
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parties reasonably satisfactory to the Representatives to purchase such
Designated Securities on such terms. In the event that, within the respective
prescribed period, the Representatives notify the Company that they have so
arranged for the purchase of such Designated Securities, or the Company notifies
the Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Company shall have the right to postpone
the Time of Delivery for such Designated Securities for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the reasonable opinion of the Representatives may
thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to the Pricing Agreement with respect to
such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of
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Designated Securities which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of the Designated Securities, as referred to in
subsection (b) above, or if the Company shall not exercise the right described
in subsection (b) above to require nondefaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. Any Pricing Agreement shall be subject to termination in
the Representatives' discretion, by notice given to the Company prior to Time of
Delivery for the applicable Designated Securities, if prior to such time (i)
trading in the Company's common stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or materially limited or
minimum prices shall have been established on such Exchange, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any material outbreak or material
escalation hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the reasonable
judgment of the Representatives, impracticable to market such Designated
Securities.
11. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the company, and
shall survive delivery of and payment for the Securities.
12. If any Pricing Agreement shall be terminated pursuant to
Section 9 hereof or if the Company fails to
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satisfy the condition set forth in Section 7(f)(ii) hereof, the Company shall
not then be under any liability to any Underwriter with respect to the
Designated Securities covered by such Pricing Agreement except as provided in
Section 6 and Section 8 hereof; but if the Designated Securities are not
delivered by or on behalf of the Company as herein provided because the Company
fails to satisfy any the conditions set forth in Section 7 hereof (other than
the condition in Section 7(f)(ii)) or because of any refusal, inability or
failure of the Company to perform any agreement herein or to comply with any
provision hereof, other than by reason of a default by the Underwriters, the
Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Securities, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Securities except as provided in
Section 6 and Section 8 hereof.
13. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if any,
as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Representatives as
set forth in the Pricing Agreement; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement: Attention: Treasurer (with a copy to the
General Counsel); provided, however, that any notice to an Underwriter pursuant
to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Representatives upon request. Any such
statements,
-28-
<PAGE> 29
requests, notices or agreements shall take effect upon receipt thereof.
14. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Company and, to
the extent provided in Section 8 and Section 11 hereof, the officers and
directors of the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement or any such Pricing Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
15. Time shall be of the essence of each Pricing Agreement. As
used herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business and "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day in which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
16. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement and each Pricing Agreement may be executed
by any one or more of the parties hereto and
-29-
<PAGE> 30
thereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
Very truly yours,
DELTA AIR LINES, INC.
By:
----------------------------
Warren C. Jenson
Executive Vice President and
Chief Financial Officer
Accepted as of the date hereof:
- -------------------------------
(name of designated underwriter)
-30-
<PAGE> 31
Pricing Agreement
_______________, 1998
[Names and addresses
of Underwriters]
Dear Sirs:
Delta Air Lines, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated May __, 1998 (the "Underwriting Agreement"),
between the Company on one hand and [name of designated Underwriter] on the
other hand, to issue and sell to the Underwriters named in Schedule I hereto
(the "Underwriters") the securities specified in Schedule II hereto (the
"Designated Securities"). Each of the provisions of the Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representative designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 13
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 13 are set forth at the end of Schedule II hereto.
<PAGE> 32
An amendment to the Registration Statement, or an amendment or
supplement to the Prospectus, as the case may be, relating to the Designated
Securities, in the form heretofore delivered to you is now proposed to be filed
with the Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the principal amount of Designated Securities is set forth opposite the
name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us [five] counterparts hereof, and upon acceptance
hereof to you, on behalf of each of the Underwriters, this letter and such
acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement between
each of the Underwriters and the Company. It is understood that your acceptance
of this letter on behalf of each of the Underwriters is or will be pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination, upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
DELTA AIR LINES, INC.
By:
---------------------------------------
Name:
Title:
Accepted as of the date hereof:
By: [Name of designated Underwriter ]
-----------------------------------------
On behalf of each of the Underwriters
-2-
<PAGE> 33
SCHEDULE I
<TABLE>
<CAPTION>
Principal
Amount of
Designated
Securities
to be
Underwriter Purchased
----------- ----------
<S> <C>
- ----------------------- .......................................................................-----------
- ----------------------- .......................................................................-----------
- ----------------------- .......................................................................-----------
----------
Total.....................................==========
</TABLE>
<PAGE> 34
SCHEDULE II
Title of Designated Securities:
Aggregate principal amount:
Price to Public:
Purchase Price of Underwriters:
Indenture:
Maturity:
Interest Rate:
Interest Payment Dates:
Regular Record Dates:
Redemption Provisions:
Sinking Fund Provisions:
Defeasance Provisions:
Denominations:
Time of Delivery:
<PAGE> 35
Closing Location:
New York, New York
Names and addresses of Representatives:
Designated Representatives
Address for Notices, etc.:
Other Terms:
-2-
<PAGE> 36
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements
and any supplementary financial information and schedules audited (and,
if applicable, financial forecasts and/or pro forma financial
information) audited by them and included or incorporated by reference
in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act or the Exchange Act and the related published rules and
regulations, as applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been furnished
to the representative or representatives of the Underwriters (the
"Representatives") such term to include an Underwriter or Underwriters
who act without any firm being designated as its or their
representatives and are attached hereto;
(iii) They have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of any
interim financial information included or incorporated by reference in
the Prospectus as described in Statement on Auditing Standard No. 71,
"Interim Financial Information," as indicated in their reports thereon;
and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated
-3-
<PAGE> 37
financial statements referred to in paragraph (vi)(A)(i) below comply
as to form in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form 10-Q and the
related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statement do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing procedures
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301,
302, [402] and 503(d), respectively, of Regulation S-K;
(v) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) the latest available unaudited condensed
consolidated statements of operations, consolidated balance
sheets and consolidated statements of cash flows included in
the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting
-4-
<PAGE> 38
requirements of the Exchange Act and the related published
rules and regulations, or (ii) any material modifications
should be made to the unaudited condensed consolidated
statements of operations, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus for them
to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
-5-
<PAGE> 39
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights and upon conversions of convertible securities, in each
case which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Prospectus)
or any increase in the consolidated long-term debt of the
Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items
specified by the Representatives, in each case as compared
with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus except in each
case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated operating revenues or
operating income or the total or per share amounts of
consolidated net income available to common shareholders or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records
of the
-6-
<PAGE> 40
Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be
deemed to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Underwriting Agreement as of the date of
the letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Securities for purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
-7-
<PAGE> 1
EXHIBIT 4(a)
PASS THROUGH TRUST AGREEMENT
Dated as of ______________, 1998
between
DELTA AIR LINES, INC.
and
THE BANK OF NEW YORK
as Trustee
-----------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
------
ARTICLE I - DEFINITIONS
<S> <C> <C>
Section 1.01. Definitions..........................................................................................8
Section 1.02. Compliance Certificates and Opinions................................................................18
Section 1.03. Form of Documents Delivered to Trustee .............................................................18
Section 1.04. Directions of Certificateholders....................................................................19
ARTICLE II - ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY
Section 2.01. Amount Unlimited; Issuable in Series................................................................20
Section 2.02. Acquisition of Equipment Notes......................................................................22
Section 2.03. Acceptance by Trustee...............................................................................24
Section 2.04. Limitation of Powers................................................................................24
ARTICLE III - THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates....................................................25
Section 3.02. Authentication of Certificates......................................................................25
Section 3.03. Temporary Certificates..............................................................................26
Section 3.04. Transfer and Exchange...............................................................................26
Section 3.05. Book-Entry and Definitive Certificates..............................................................27
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates...................................................29
Section 3.07. Persons Deemed Owners...............................................................................29
Section 3.08. Cancellation........................................................................................30
Section 3.09. Limitation of Liability for Payments................................................................30
ARTICLE IV - DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account....................................................30
Section 4.02. Distributions from Certificate Account and Special Payments Account ................................31
Section 4.03. Statements to Certificateholders....................................................................33
Section 4.04. Investment of Special Payment Moneys................................................................33
</TABLE>
- 2 -
<PAGE> 3
<TABLE>
ARTICLE V - THE COMPANY
<S> <C> <C>
Section 5.01. Maintenance of Corporate Existence..................................................................34
Section 5.02. Consolidation, Merger, Etc..........................................................................34
ARTICLE VI - DEFAULT
Section 6.01. Events of Default...................................................................................35
Section 6.02. Incidents of Sale of Equipment Notes................................................................36
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee May Bring Suit..................................37
Section 6.04. Control by Certificateholders.......................................................................37
Section 6.05. Waiver of Past Defaults.............................................................................38
Section 6.06. Right of Certificateholders to Receive Payments Not to Be Impaired..................................38
Section 6.07. Certificateholders May Not Bring Suit Except Under Certain Conditions...............................39
Section 6.08. Remedies Cumulative.................................................................................39
Section 6.09. Undertaking for Costs...............................................................................39
ARTICLE VII - THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities.................................................................40
Section 7.02. Notice of Defaults..................................................................................40
Section 7.03. Certain Rights of Trustee...........................................................................41
Section 7.04. Not Responsible for Recitals or Issuance of Certificates............................................42
Section 7.05. May Hold Certificates...............................................................................42
Section 7.06. Money Held in Trust ................................................................................42
Section 7.07. Compensation and Reimbursement .....................................................................42
Section 7.08. Corporate Trustee Required; Eligibility ............................................................42
Section 7.09. Resignation and Removal; Appointment of Successor ..................................................44
Section 7.10. Acceptance of Appointment by Successor .............................................................45
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.........................................46
Section 7.12. Maintenance of Agencies.............................................................................46
Section 7.13. Money for Certificate Payments to Be Held in Trust..................................................48
Section 7.14. Registration of Equipment Notes in Trustee's Name...................................................48
Section 7.15. Representations and Warranties of Trustee...........................................................48
Section 7.16. Withholding Taxes; Information Reporting ...........................................................49
Section 7.17. Trustee's Liens.....................................................................................49
Section 7.18. Preferential Collection of Claims...................................................................50
ARTICLE VIII - CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders ...................................................................50
Section 8.02. Preservation of Information; Communications to Certificateholders...................................50
</TABLE>
- 3 -
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 8.03. Reports by Trustee..................................................................................50
Section 8.04. Reports by the Company..............................................................................50
ARTICLE IX - SUPPLEMENTAL AGREEMENTS
Section 9.01. Supplemental Agreements Without Consent of Certificateholders.......................................51
Section 9.02. Supplemental Agreements With Consent of Certificateholders..........................................53
Section 9.03. Documents Affecting Immunity or Indemnity...........................................................54
Section 9.04. Execution of Supplemental Agreements................................................................54
Section 9.05. Effect of Supplemental Agreements...................................................................54
Section 9.06. Conformity with Trust Indenture Act.................................................................54
Section 9.07. Reference in Certificates to Supplemental Agreements................................................55
ARTICLE X - AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. Amendments and Supplements to Indenture and Other Note Documents....................................55
ARTICLE XI - TERMINATION OF TRUSTS
Section 11.01. Termination of the Trusts...........................................................................56
ARTICLE XII - MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders..........................................................57
Section 12.02. Liabilities of Certificateholders...................................................................57
Section 12.03. Registration of Equipment Notes in Name of Subordination Agent......................................57
Section 12.04. Notices.............................................................................................57
Section 12.05. Governing Law.......................................................................................58
Section 12.06. Severability of Provisions..........................................................................58
Section 12.07. Trust Indenture Act Controls........................................................................58
Section 12.08. Effect of Headings and Table of Contents............................................................58
Section 12.09. Successors and Assigns..............................................................................58
Section 12.10. Benefits of Agreement...............................................................................58
Section 12.11. Legal Holidays......................................................................................58
Section 12.12. Counterparts........................................................................................60
Section 12.13. Communication by Certificateholders with Other Certificateholders...................................60
Section 12.14. Intention of Parties................................................................................60
</TABLE>
EXHIBITS
Exhibit A Form of Certificate
- 4 -
<PAGE> 5
Reconciliation and tie between Delta Air Lines Pass Through Trust Agreement,
dated as of _______, 1998 and the Trust Indenture Act of 1939. This
reconciliation does not constitute part of the Pass Through Trust Agreement.
- 5 -
<PAGE> 6
<TABLE>
<CAPTION>
Trust Indenture Act Pass Through Trust
of 1939 Section Agreement Section
------------------- ------------------
<S> <C>
310(a)(1) 7.08
(a)(2) 7.08
310(b)(i)-(iii) 7.09
312(a) 3.05; 8.01; 8.02
313(a) 8.03
313(c) 8.04
314(a) 8.04(a) - (c)
(a)(4) 8.04(d)
(c)(1) 1.02
(c)(2) 1.02
(e) 1.02
315(b) 7.02
316(a)(last sentence) 1.04(c)
(a)(1)(A) 6.04
(a)(1)(B) 6.05
(b) 6.06
(c) 1.04(d)
317(a)(1) 6.03
(b) 7.13
318(a) 12.07
</TABLE>
- 6 -
<PAGE> 7
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of { }, 1998 (the
"Basic Agreement"), between DELTA AIR LINES, INC., a Delaware corporation (the
"Company"), and THE BANK OF NEW YORK, a banking corporation organized under the
laws of the State of New York, as Trustee, is made with respect to the formation
from time to time of separate Pass Through Trusts, and the issuance from time to
time of separate series of Pass Through Certificates representing fractional
undivided interests in the respective Trusts.
WITNESSETH:
WHEREAS, capitalized terms used herein shall have the meanings
set forth or referred to in Section 1.01;
WHEREAS, from time to time, the Company and the Trustee may enter
into a Trust Supplement pursuant to which the Trustee shall declare the creation
of a separate Trust for the benefit of the Holders of the series of Certificates
to be issued in respect of such Trust, and the initial Holders of the
Certificates of such series, as the grantors of such Trust, by their respective
acceptances of the Certificates of such series, shall join in the creation of
such Trust with the Trustee;
WHEREAS, all Certificates to be issued in respect of each
separate Trust will be issued as a separate series pursuant to this Agreement,
will evidence fractional undivided interests in such Trust and will have no
rights, benefits or interests in respect of any other separate Trust or the
property held therein, subject, however, to the provisions of any Intercreditor
Agreement to which one or more Trusts may be a party;
WHEREAS, from time to time, pursuant to the terms and conditions
of this Agreement with respect to each separate Trust formed hereunder, the
Trustee on behalf of such Trust shall purchase one or more issues of Equipment
Notes having the same interest rate as, and final maturity dates not later than
the final Regular Distribution Date of, the series of Certificates issued in
respect of such Trust and, subject to the terms of any related Intercreditor
Agreement, shall hold such Equipment Notes in trust for the benefit of the
Certificateholders of such Trust;
WHEREAS, to facilitate the sale of Equipment Notes to, and the
purchase of Equipment Notes by, the Trustee on behalf of each Trust created from
time to time pursuant to this Agreement, the Company as the "Issuer", as such
term is defined in and solely for purposes of the Securities Act of 1933, as
amended, of the Certificates to be issued in respect of each Trust and as the
"Obligor", as such term is defined in and solely for purposes of the Trust
Indenture Act of 1939, as amended, has duly authorized the execution and
delivery of this Basic Agreement and each Trust Supplement with respect to all
such Certificates and is undertaking to
- 7 -
<PAGE> 8
perform certain administrative and ministerial duties hereunder and is also
undertaking to pay the fees and expenses of the Trustee; and
WHEREAS, this Basic Agreement, as supplemented from time to time,
is subject to the provisions of the Trust Indenture Act of 1939, as amended, and
shall, to the extent applicable, be governed by such provisions;
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 1.01. DEFINITIONS. For all purposes of this Basic
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms used herein that are defined in this
Article I have the meanings assigned to them in this Article I,
and include the plural as well as the singular;
(b) all other terms used herein that are defined in
the Trust Indenture Act, either directly or by reference therein,
or by the rules promulgated under the Trust Indenture Act, have
the meanings assigned to them therein;
(c) all references in this Basic Agreement to
designated "Articles", "Sections", "Subsections" and other
subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this Basic Agreement;
(d) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Basic Agreement
as a whole and not to any particular Article, Section, Subsection
or other subdivision;
(e) whenever the words "including", "include" or
"includes" are used herein, it shall be deemed to be followed by
the phrase "without limitation"; and
(f) the term "this Agreement" (as distinguished
from "this Basic Agreement") refers, unless the context otherwise
requires, to this Basic Agreement as supplemented by the Trust
Supplement creating a particular Trust and establishing the
series of Certificates issued or to be issued in respect thereof,
with reference to such Trust and such series of Certificates, as
this Basic Agreement as so supplemented may be further
supplemented with respect to such Trust and such series of
Certificates.
- 8 -
<PAGE> 9
ACT: has the meaning, with respect to any
Certificateholder, specified in Section 1.04(a).
AFFILIATE: has, for any Person, the meaning specified in
Rule 0-2 under the Trust Indenture Act.
AIRCRAFT: means one or more aircraft, including engines
therefor, owned by or leased to the Company and securing one or
more Equipment Notes.
AUTHORIZED AGENT: means, with respect to the
Certificates of any series, any Paying Agent or Registrar for
the Certificates of such series.
BASIC AGREEMENT: means this Pass Through Trust
Agreement, as the same may from time to time be supplemented,
amended or modified, but does not include any Trust Supplement.
BOOK-ENTRY CERTIFICATES: means, with respect to the
Certificates of any series, a beneficial interest in the
Certificates of such series, ownership and transfers of which
shall be made through book entries as described in Section 3.05.
BUSINESS DAY: means, with respect to the Certificates of
any series, any day other than a Saturday, a Sunday or a day on
which commercial banks are required or authorized to close in
Atlanta, Georgia; New York, New York; or, so long as any
Certificate of such series is outstanding, the city and state in
which the Trustee or any related Loan Trustee maintains its
Corporate Trust Office or receives and disburses funds.
CERTIFICATE: means any one of the certificates executed
and authenticated by the Trustee, substantially in the form of
Exhibit A hereto.
CERTIFICATE ACCOUNT: means, with respect to the
Certificates of any series, the account or accounts created and
maintained for such series pursuant to Section 4.01(a) and the
related Trust Supplement.
CERTIFICATEHOLDER OR HOLDER: means, with respect to the
Certificates of any series, the Person in whose name a
Certificate of such series is registered in the Register for
Certificates of such series.
CERTIFICATE OWNER: means, with respect to the
Certificates of any series, for purposes of Section 3.05, the
Person who owns a Book-Entry Certificate of such series.
CLEARING AGENCY: means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended.
- 9 -
<PAGE> 10
CLEARING AGENCY PARTICIPANT: means a broker, dealer,
bank, other financial institution or other Person for whom from
time to time a Clearing Agency effects, directly or indirectly,
book-entry transfers and pledges of securities deposited with the
Clearing Agency.
COMPANY: means Delta Air Lines, Inc., a Delaware
corporation, or its successor in interest pursuant to Section
5.02, or (only in the context of provisions hereof, if any, when
such reference is required for purposes of compliance with the
Trust Indenture Act) any other "obligor" (within the meaning of
the Trust Indenture Act) with respect to the Certificates of any
series.
CONTROLLING PARTY: means the Person entitled to act
as such pursuant to the terms of any Intercreditor Agreement.
CORPORATE TRUST OFFICE: means, with respect to the
Trustee or any Loan Trustee, the office of such trustee in the
city at which at any particular time its corporate trust business
shall be principally administered.
CUT-OFF DATE: means, with respect to the
Certificates of any series, the date designated as such in the
Trust Supplement establishing such series.
DEFINITIVE CERTIFICATES: has the meaning, with
respect to the Certificates of any series, specified in Section
3.05.
DIRECTION: has the meaning specified in Section
1.04(a).
EQUIPMENT NOTES: means, with respect to the
Certificates of any series, all of the equipment notes issued
under the Indentures related to such series of Certificates.
ERISA: means the Employee Retirement Income Security
Act of 1974, as amended from time to time, or any successor
federal statute.
ESCROW ACCOUNT: has the meaning, with respect to the
Certificates of any series, specified in Section 2.02(b).
ESCROWED FUNDS: has the meaning, with respect to any
Trust, specified in Section 2.02(b).
EVENT OF DEFAULT: means, in respect of any Trust, an
Indenture Event of Default under any Indenture pursuant to which
Equipment Notes held by such Trust were issued.
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<PAGE> 11
FRACTIONAL UNDIVIDED INTEREST: means the fractional
undivided interest in a Trust that is evidenced by a Certificate
relating to such Trust.
INDENTURE: means, with respect to any Trust, each of
the one or more separate trust indenture and security agreements
or trust indenture and mortgages or similar documents described
in, or on a schedule attached to, the Trust Supplement and trust
indenture and security agreement or trust indenture and mortgage
or similar document having substantially the same terms and
conditions which relates to a Substitute Aircraft, as each such
indenture may be amended or supplemented in accordance with its
respective terms; and "Indentures" means all of such agreements.
INDENTURE EVENT OF DEFAULT: means, with respect to
any Indenture, any Indenture Event of Default (as such term is
defined in such Indenture).
INITIAL REGULAR DISTRIBUTION DATE: means, with
respect to the Certificates of any series, the first Regular
Distribution Date on which a Scheduled Payment is to be made.
INTERCREDITOR AGREEMENT: means any agreement by and
among the Trustee, as trustee hereunder with respect to one or
more Trusts, one or more Liquidity Providers and a Subordination
Agent providing, among other things, for the distribution of
payments made in respect of Equipment Notes held by such Trusts.
ISSUANCE DATE: means, with respect to the
Certificates of any series, the date of the issuance of such
Certificates.
LEASE: means any lease between an Owner Trustee, as
the lessor, and the Company, as the lessee, referred to in the
related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms; and "Leases"
means all such Leases.
LETTER OF REPRESENTATIONS: means, with respect to
the Certificates of any series, an agreement among the Company,
the Trustee and the initial Clearing Agency.
LIQUIDITY FACILITY: means, with respect to the
Certificates of any series, any revolving credit agreement, letter
of credit or similar facility relating to the Certificates of such
series between a bank or other financial institution and a
Subordination Agent, as amended, replaced, supplemented or
otherwise modified from time to time in accordance with its terms
and the terms of any Intercreditor Agreement.
LIQUIDITY PROVIDER: means, with respect to the
Certificates of any series, a bank or other financial institution
that agrees to provide a Liquidity Facility for the benefit of the
holders of Certificates of such series.
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<PAGE> 12
LOAN TRUSTEE: means, with respect to any Equipment
Note or the Indenture applicable thereto, the bank or trust
company designated as loan or indenture trustee under such
Indenture, and any successor to such Loan Trustee as such trustee;
and "Loan Trustees" means all of the Loan Trustees under the
Indentures.
NOTE DOCUMENTS: means, with respect to the
Certificates of any series, the Equipment Notes with respect to
such Certificates and, with respect to such Equipment Notes, the
related Indenture, Note Purchase Agreement, Participation
Agreement, if any, and, if the related Aircraft is leased to the
Company, the related Lease and the related Owner Trustee's
Purchase Agreement.
NOTE PURCHASE AGREEMENT: means, with respect to the
Certificates of any series, any note purchase, refunding,
participation or similar agreement providing for, among other
things, the purchase of Equipment Notes by the Trustee on behalf
of the relevant Trust; and "Note Purchase Agreements" means all
such agreements.
OFFICER'S CERTIFICATE: means a certificate signed by
a Responsible Officer of the Company, the Trustee, an Owner
Trustee or a Loan Trustee, as the case may be.
OPINION OF COUNSEL: means a written opinion of legal
counsel who (a) in the case of counsel for the Company may be (i)
a senior attorney of the Company one of whose principal duties is
furnishing advice as to legal matters, (ii) King & Spalding or
(iii) such other counsel designated by the Company and reasonably
acceptable to the Trustee and (b) in the case of any Owner Trustee
or any Loan Trustee, may be such counsel as may be designated by
any of them whether or not such counsel is an employee of any of
them, and who shall be reasonably acceptable to the Trustee.
OTHER AGREEMENTS: has the meaning specified in
Section 6.01(b).
OUTSTANDING: when used with respect to Certificates
of any series, means, as of the date of determination, all
Certificates of such series theretofore authenticated and
delivered under this Agreement, except:
(i) Certificates of such series
theretofore canceled by the Registrar or delivered
to the Trustee or the Registrar for cancellation;
(ii) all of the Certificates of such
series if money in the full amount required to make
the final distribution with respect to such series
pursuant to Section 11.01 hereof has been
theretofore deposited with the Trustee in trust for
the Holders of the Certificates of such series as
provided in Section 4.01 pending distribution of
such money to such Certificateholders pursuant to
payment of such final distribution payment; and
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<PAGE> 13
(iii) Certificates of such series in
exchange for or in lieu of which other Certificates
of such series have been authenticated and delivered
pursuant to this Agreement.
OWNER PARTICIPANT: means, with respect to any
Equipment Note, the "Owner Participant", if any, as referred to in
the Indenture pursuant to which such Equipment Note is issued and
any permitted successor or assign of such Owner Participant; and
"Owner Participants" at any time of determination means all of the
Owner Participants thus referred to in the Indentures.
OWNER TRUSTEE: means, with respect to any Equipment
Note, the "Owner Trustee", if any, as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and "Owner Trustees"
means all of the Owner Trustees party to any of the related
Indentures.
OWNER TRUSTEE'S PURCHASE AGREEMENT: has the meaning,
with respect to the Certificates of any series if the related
Aircraft is leased to the Company, specified therefor in the
related Lease.
PARTICIPATION AGREEMENT means, with respect to the
Certificates of any series, any participation or similar agreement
providing for, among other things, the purchase of Equipment Notes
by the Trustee on behalf of the relevant Trust; and "Participation
Agreements" means all of such Agreements.
PAYING AGENT: means, with respect to the
Certificates of any series, the paying agent maintained and
appointed for the Certificates of such series pursuant to Section
7.12.
PERMITTED INVESTMENTS: means obligations of the
United States of America or agencies or instrumentalities thereof
for the payment of which the full faith and credit of the United
States of America is pledged, maturing in not more than 60 days
after the date of acquisition thereof or such lesser time as is
required for the distribution of any Special Payments on a Special
Distribution Date.
PERSON: means any individual, corporation, limited
liability company, 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 the
Certificates of any series as of any date, (i) the original
aggregate face amount of the Certificates of any series less (ii)
the aggregate amount of all payments made in respect of such
Certificates other than payments made in respect of interest or
premium thereon or reimbursement of any costs or expenses incurred
in connection therewith. The Pool Balance as of any Regular
Distribution Date or Special Distribution Date shall be computed
after giving effect to the payment of principal, if any, on the
Equipment Notes or other Trust Property held in the Trust and the
distribution thereof to be made on such date.
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<PAGE> 14
POOL FACTOR: means, with respect to any series of
Certificates as of any date, the quotient (rounded to the seventh
decimal place) computed by dividing (i) the Pool Balance of such
series as at such date by (ii) the original aggregate face amount
of the Certificates of such series. The Pool Factor as of any
Regular Distribution Date or Special Distribution Date shall be
computed after giving effect to the payment of principal, if any,
on the Equipment Notes or other Trust Property held in the Trust
and the distribution thereof to be made on such Distribution Date.
POSTPONED NOTES: means, with respect to any Trust or
the related series of Certificates, the Equipment Notes to be held
in such Trust as to which a Postponement Notice shall have been
delivered pursuant to Section 2.02(b).
POSTPONEMENT NOTICE: means, with respect to any
Trust or the related series of Certificates, an Officer's
Certificate of the Company (1) requesting that the Trustee
temporarily postpone purchase of the related Equipment Notes to a
date later than the Issuance Date of such series of Certificates,
(2) identifying the amount of the purchase price of each such
Equipment Note and the aggregate purchase price for all such
Equipment Notes, (3) setting forth the reasons for such
postponement and (4) with respect to each such Equipment Note,
either (a) setting or resetting a new Transfer Date (which shall
be on or prior to the applicable Cut-off Date) for payment by the
Trustee of such purchase price and issuance of the related
Equipment Note (subject to subsequent change from time to time in
accordance with the relevant Note Purchase Agreement or
Participation Agreement), or (b) indicating that such new Transfer
Date (which shall be on or prior to the applicable Cut-off Date)
will be set by subsequent written notice not less than one
Business Day prior to such new Transfer Date (subject to
subsequent change from time to time in accordance with the
relevant Note Purchase Agreement or Participation Agreement).
POTENTIAL PURCHASER: has the meaning, with respect
to any Certificateholder, specified in Section 6.01(b).
PURCHASING CERTIFICATEHOLDER: has the meaning, with
respect to any Certificateholder, specified in Section 6.01(b).
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<PAGE> 15
RECORD DATE: means, with respect to any Trust or the
related series of Certificates, (i) for Scheduled Payments to be
distributed on any Regular Distribution Date, other than the final
distribution with respect to such series, the 15th day (whether or
not a Business Day) preceding such Regular Distribution Date, and
(ii) for Special Payments to be distributed on any Special
Distribution Date, other than the final distribution with respect
to such series, the 15th day (whether or not a Business Day)
preceding such Special Distribution Date.
REGISTER and REGISTRAR: means, each with respect to
the Certificates of any series, the register maintained and the
registrar appointed pursuant to Sections 3.04 and 7.12.
REGULAR DISTRIBUTION DATE: means, with respect to
distributions of Scheduled Payments in respect of any series of
Certificates, each date designated as such in this Agreement,
until payment of all the Scheduled Payments to be made under the
Equipment Notes held in the Trust have been made.
REQUEST: means a request by the Company setting
forth the subject matter of the request accompanied by an
Officer's Certificate and an Opinion of Counsel as provided in
Section 1.02 of this Basic Agreement.
RESPONSIBLE OFFICER: means, in the case of the
Company, the President or any other officer with the authority of
at least a vice president; and, in the case of any Trustee, any
Loan Trustee and any Owner Trustee, any officer in the Corporate
Trust Department of the Trustee, Loan Trustee or Owner 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 his knowledge of and familiarity with a
particular subject.
RESPONSIBLE PARTY: means, with respect to the
Certificates of any series, the person designated as such in the
related Trust Supplement.
SCHEDULED PAYMENT: means, with respect to any
Equipment Note, (i) any payment of principal or interest on such
Equipment Note (other than any such payment which is not in fact
received by the Trustee or any Subordination Agent within five
days of the date on which such payment is scheduled to be made) or
(ii) any payment of interest on the Certificates of any series
with funds drawn under the Liquidity Facility for such series,
which payment represents the installment of principal on such
Equipment Note at the stated maturity of such installment, the
payment of regularly scheduled interest accrued on the unpaid
principal amount of such Equipment Note, or both; PROVIDED,
HOWEVER, that any payment of principal, premium, if any, or
interest resulting from the redemption or purchase of any
Equipment Note shall not constitute a Scheduled Payment.
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<PAGE> 16
SEC: means the Securities and Exchange Commission,
as from time to time constituted or created under the Securities
Exchange Act of 1934, as amended, or, if at any time after the
execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
SELLING CERTIFICATEHOLDER: has the meaning, with
respect to any Certificateholder, specified in Section 6.01(b).
SPECIAL DISTRIBUTION DATE: means, with respect to
the Certificates of any series, each date on which a Special
Payment is to be distributed as specified in this Agreement.
SPECIAL PAYMENT: means (i) any payment (other than a
Scheduled Payment) in respect of, or any proceeds of, any
Equipment Note or Trust Indenture Estate (as defined in each
Indenture), (ii) the amounts required to be distributed pursuant
to the last paragraph of Section 2.02(b) (iii) the amounts
required to be distributed pursuant to the penultimate paragraph
of Section 2.02(b), (iv) any payment in respect of proceeds
received from the sale of all or part of the Equipment Notes by
the Trustee, (v) any payment in respect of amounts paid in respect
of the Equipment Notes following an Indenture Event of Default
(other than Scheduled Payments), or (vi) any payment in respect of
amounts paid by the applicable Owner Trustee to the Trustee for
the purchase or redemption of Equipment Notes.
SPECIAL PAYMENTS ACCOUNT: means, with respect to the
Certificates of any series, the account or accounts created and
maintained for such series pursuant to Section 4.01(b) and the
related Trust Supplement.
SPECIFIED INVESTMENTS: means, with respect to any
Trust, unless otherwise specified in the related Trust Supplement,
(i) obligations of, or guaranteed by, the United States Government
or agencies thereof, (ii) open market commercial paper of any
corporation incorporated under the laws of the United States of
America or any state thereof rated at least P-2 or its equivalent
by Moody's Investors Service, Inc. or at least A- 2 or its
equivalent by Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc., (iii) certificates of deposit
issued by commercial banks organized under the laws of the United
States or of any political subdivision thereof having a combined
capital and surplus in excess of $100,000,000 which banks or their
holding companies have a rating of A or its equivalent by Moody's
Investors Service, Inc. or Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.; PROVIDED, HOWEVER,
that the aggregate amount at any one time so invested in
certificates of deposit issued by any one bank shall not exceed 5%
of such bank's capital and surplus, (iv) U.S. dollar-denominated
offshore certificates of deposit issued by, or offshore time
deposits with, any commercial bank described in clause (iii) above
or any subsidiary thereof and (v) repurchase agreements with any
financial institution having combined capital and surplus of at
least $100,000,000 with any of the obligations described in
clauses (i) through (iv) above as collateral; PROVIDED FURTHER
that if all of the above investments are unavailable, the entire
amounts to be invested may be used to purchase federal funds from
an entity described in clause (iii) above.
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<PAGE> 17
SUBORDINATION AGENT: has the meaning specified
therefor in any Intercreditor Agreement.
SUBSTITUTE AIRCRAFT: means, with respect to any
Trust, any Aircraft of a type specified in this Agreement and, at
the election of the Company, substituted prior to the applicable
Cut-off Date, if any, pursuant to the terms of this Agreement.
TRANSFER DATE: has the meaning assigned to that term
or any of the terms "Delivery Date", "Funding Date" or "Closing
Date" in a Note Purchase Agreement or Participation Agreement, and
in any event refers to any such date as it may be changed from
time to time in accordance with the terms of such Note Purchase
Agreement or Participation Agreement.
TRIGGERING EVENT: has the meaning specified therefor
in any Intercreditor Agreement.
TRUST: means, with respect to the Certificates of
any series, the trust under this Agreement.
TRUSTEE: means The Bank of New York, or its
successor in interest, and any successor or other trustee
appointed as provided herein.
TRUST INDENTURE ACT: except as otherwise provided in
Section 9.06, means, with respect to any particular Trust, the
United States Trust Indenture Act of 1939, as in force at the date
as of which the related Trust Supplement was executed.
TRUST PROPERTY: means, with respect to any Trust,
(i) subject to any related Intercreditor Agreement, the Equipment
Notes held as the property of such Trust, all monies at any time
paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the related Escrow Account,
the related Certificate Account and the related Special Payments
Account and, subject to the related Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI
hereof of any such Equipment Note, (iii) all rights of such Trust
and the Trustee, on behalf of the Trust, under any Intercreditor
Agreement, including, without limitation, all monies receivable in
respect of such rights, and (iv) all monies receivable under any
Liquidity Facility for such Trust.
TRUST SUPPLEMENT: means an agreement supplemental
hereto pursuant to which (i) a separate Trust is created for the
benefit of the Holders of the Certificates of a series, (ii) the
issuance of the Certificates of such series representing
fractional undivided interests in such Trust is authorized and
(iii) the terms of the Certificates of such series are
established.
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<PAGE> 18
Section 1.02. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Company, any Owner Trustee or any Loan Trustee to
the Trustee to take any action under any provision of this Basic Agreement or,
in respect of the Certificates of any series, this Agreement, the Company, such
Owner Trustee or such Loan Trustee, as the case may be, shall furnish to the
Trustee (i) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Basic Agreement
or this Agreement relating to the proposed action have been complied with and
(ii) an Opinion of Counsel stating that all such conditions precedent, if any,
have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically required by
any provision of this Basic Agreement or this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Basic Agreement or, in respect of the
Certificates of any series, this Agreement (other than a certificate provided
pursuant to Section 8.04(d)) or any Trust Supplement shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and
the definitions in this Basic Agreement or this Agreement
relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with;
and
(4) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been
complied with.
Section 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters and any such Person may certify or give an opinion as to
such matters in one or several documents.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Basic
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<PAGE> 19
Agreement or, in respect of the Certificates of any series, this Agreement, they
may, but need not, be consolidated and form one instrument.
Section 1.04. DIRECTIONS OF CERTIFICATEHOLDERS.
(a) Any direction, consent, request, demand, authorization,
notice, waiver or other action provided by this Agreement in respect of the
Certificates of any series to be given or taken by Certificateholders (a
"Direction") may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Certificateholders in person or by an
agent or proxy duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, when it is hereby expressly
required pursuant to this Agreement, to the Company or any Loan Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent or proxy shall be
sufficient for any purpose of this Trust Agreement and conclusive in favor of
the Trustee, the Company and the related Loan Trustee, if made in the manner
provided in this Section 1.04.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or such other officer, and where such execution is by
an officer of a corporation or association or a member of a partnership, on
behalf of such corporation, association or partnership, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other reasonable manner
which the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the
requisite Fractional Undivided Interests of Certificates of any series
Outstanding have given any Direction under this Agreement, Certificates owned by
the Company or any Affiliate thereof shall be disregarded and deemed not to be
Outstanding for purposes of any such determination. In determining whether the
Trustee shall be protected in relying upon any such Direction, only Certificates
which the Trustee knows to be so owned shall be so disregarded. Notwithstanding
the foregoing, (i) if any such Person owns 100% of the Certificates of any
series Outstanding, such Certificates shall not be so disregarded, and (ii) if
any amount of Certificates of any series so owned by any such Person have been
pledged in good faith, such Certificates shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Certificates and that the pledgee is not the Company or any
Affiliate thereof.
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<PAGE> 20
(d) The Company may, at its option, by delivery of an Officer's
Certificate to the Trustee, set a record date to determine the
Certificateholders in respect of the Certificates of any series entitled to give
any Direction. Notwithstanding Section 316(c) of the Trust Indenture Act, such
record date shall be the record date specified in such Officer's Certificate,
which shall be a date not more than 30 days prior to the first solicitation of
Certificateholders of the applicable series in connection therewith. If such a
record date is fixed, such Direction may be given before or after such record
date, but only the Certificateholders of record of the applicable series at the
close of business on such record date shall be deemed to be Certificateholders
for the purposes of determining whether Certificateholders of the requisite
proportion of Outstanding Certificates of such series have authorized or agreed
or consented to such Direction, and for that purpose the Outstanding
Certificates shall be computed as of such record date; provided, however, that
no such Direction by the Certificateholders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Agreement not later than one year after such record date.
(e) Any Direction by the Holder of any Certificate shall bind the
Holder of every Certificate issued upon the transfer thereof or in exchange
therefor or in lieu thereof, whether or not notation of such Direction is made
upon such Certificate.
(f) Except as otherwise provided in Section 1.04(c), Certificates
of any series owned by or pledged to any Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Certificates of such
series.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY
Section 2.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
(a) The aggregate principal amount of Certificates which may be
authenticated and delivered under this Basic Agreement is unlimited. The
Certificates may be issued from time to time in one or more series and shall be
designated generally as the "Pass Through Certificates", with such further
designations added or incorporated in such title for the Certificates of each
series as specified in the related Trust Supplement. Each Certificate shall bear
upon its face the designation so selected for the series to which it belongs.
All Certificates of the same series shall be substantially identical except that
the Certificates of a series may differ as to denomination and as may otherwise
be provided in the Trust Supplement establishing the Certificates of such
series. Each series of Certificates issued pursuant to this Agreement will
evidence fractional undivided interests in the related Trust and, except as may
be contained in any Intercreditor Agreement, will have no rights, benefits or
interests in respect of any other Trust or the Trust Property held therein. All
Certificates of the same series shall be in all respects equally and
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<PAGE> 21
ratably entitled to the benefits of this Agreement without preference, priority
or distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Agreement.
(b) The following matters shall be established with respect to
the Certificates of each series issued hereunder by a Trust Supplement executed
and delivered by and among the Company and the Trustee:
(1) the formation of the Trust as to which the
Certificates of such series represent fractional undivided
interests and its designation (which designation shall
distinguish such Trust from each other Trust created under this
Basic Agreement and a Trust Supplement);
(2) the specific title of the Certificates of such
series (which title shall distinguish the Certificates of such
series from each other series of Certificates created under this
Basic Agreement and a Trust Supplement);
(3) any limit upon the aggregate principal amount
of the Certificates of such series which may be authenticated and
delivered (which limit shall not pertain to Certificates
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Certificates of the series
pursuant to Sections 3.03, 3.04 and 3.06);
(4) the Cut-off Date with respect to the
Certificates of such series;
(5) the Regular Distribution Dates applicable to
the Certificates of such series;
(6) the Special Distribution Dates applicable to
the Certificates of such series;
(7) if other than as provided in Section 7.12(b),
the Registrar or the Paying Agent for the Certificates of such
series, including any Co-Registrar or additional Paying Agent;
(8) if other than as provided in Section 3.02, the
denominations in which the Certificates of such series shall be
issuable;
(9) if other than United States dollars, the
currency or currencies (including currency units) in which the
Certificates of such series shall be denominated;
(10) the specific form of the Certificates of such
series (including the interest rate applicable thereto) and
whether or not Certificates of such series are to be issued as
Book-Entry Certificates and, if such Certificates are to be
Book-Entry Certificates, the form of Letter of Representations,
if any (or, in the case of any Certificates denominated in a
currency other than United States dollars and if other than as
provided in Section 3.05, whether and the circumstances under
which beneficial owners of interests in such Certificates in
permanent global form may exchange such interests for
Certificates of such series and of like tenor of any authorized
form and denomination);
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<PAGE> 22
(11) a description of the Equipment Notes to be
acquired and held in the related Trust and of the related
Aircraft and Note Documents;
(12) provisions with respect to the terms for which
the definitions set forth in Article I hereof or the terms of
Section 11.01 hereof permit or require further specification in
the related Trust Supplement;
(13) any restrictions (including legends) in
respect of ERISA;
(14) whether such series will be subject to an
Intercreditor Agreement and, if so, the specific designation of
such Intercreditor Agreement;
(15) whether such series will have the benefit of a
Liquidity Facility and, if so, the specific designation of such
Liquidity Facility;
(16) whether there will be a deposit agreement or
other comparable arrangement prior to the delivery of one or more
Aircraft and, if so, any terms appropriate thereto; and
(17) any other terms of the Certificates of such
series (which terms shall not be inconsistent with the provisions
of the Trust Indenture Act), including any terms of the
Certificates of such series which may be required or advisable
under United States laws or regulations or advisable in
connection with the marketing of Certificates of the series.
(c) At any time and from time to time after the execution and
delivery of this Basic Agreement and a Trust Supplement forming a Trust and
establishing the terms of Certificates of a series, Certificates of such series
shall be executed, authenticated and delivered by the Trustee to the Person or
Persons specified by the Company upon request of the Company and upon
satisfaction or waiver of any conditions precedent set forth in such Trust
Supplement.
Section 2.02. ACQUISITION OF EQUIPMENT NOTES.
(a) Unless otherwise specified in the related Trust Supplement,
on or prior to the Issuance Date of the Certificates of a series, the Trustee
shall execute and deliver the related Note Purchase Agreements and Participation
Agreements, if any, each in the form delivered to the Trustee by the Company and
shall, subject to the respective terms thereof, perform its obligations under
such Note Purchase Agreements and Participation Agreements, if any. The Trustee
shall issue and sell such Certificates, in authorized denominations and in such
Fractional Undivided Interests, so as to result in the receipt of consideration
in an amount equal to the aggregate purchase price of the Equipment Notes
contemplated to be purchased by the Trustee under the related Note Purchase
Agreements and Participation Agreements, if any, and, concurrently therewith,
the Trustee shall purchase, pursuant to the terms and conditions of the Note
Purchase Agreements and Participation Agreements, if any, such Equipment Notes
at an aggregate purchase price equal to the amount of such consideration so
received. Except as provided in Sections 3.03, 3.04 and 3.06 hereof, the Trustee
shall not execute, authenticate or deliver Certificates of such series in excess
of the aggregate amount specified in
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this paragraph. The provisions of this Subsection (a) are subject to the
provisions of Subsection (b) below.
(b) If on or prior to the Issuance Date with respect to a series
of Certificates the Company shall deliver to the Trustee a Postponement Notice
relating to one or more Postponed Notes, the Trustee shall postpone the purchase
of such Postponed Notes and shall deposit into an escrow account (as to such
Trust, the "Escrow Account") to be maintained as part of the related Trust an
amount equal to the purchase price of such Postponed Notes (the "Escrowed
Funds"). The portion of the Escrowed Funds so deposited with respect to any
particular Postponed Notes shall be invested by the Trustee at the written
direction and risk of, and for the benefit of, the Company in Specified
Investments (i) maturing no later than any scheduled Transfer Date relating to
such Postponed Notes or (ii) if no such Transfer Date has been scheduled,
maturing on the next Business Day, or (iii) if the Company has given notice to
the Trustee that such Postponed Notes will not be issued, maturing on the next
applicable Special Distribution Date, if such investments are reasonably
available for purchase. The Trustee shall make withdrawals from the Escrow
Account only as provided in this Agreement. Upon request of the Company on one
or more occasions and the satisfaction or waiver of the closing conditions
specified in the applicable Note Purchase Agreements on or prior to the related
Cut-off Date, the Trustee shall purchase the applicable Postponed Notes with the
Escrowed Funds withdrawn from the Escrow Account. The purchase price shall equal
the principal amount of such Postponed Notes.
The Trustee shall hold all Specified Investments until the
maturity thereof and will not sell or otherwise transfer Specified Investments.
If Specified Investments held in an Escrow Account mature prior to any
applicable Transfer Date, any proceeds received on the maturity of such
Specified Investments (other than any earnings thereon) shall be reinvested by
the Trustee at the written direction and risk of, and for the benefit of, the
Responsible Party in Specified Investments maturing as provided in the preceding
paragraph.
Unless an Indenture Event of Default or an Event of Default has
occurred and is continuing, any earnings on Specified Investments received
from time to time by the Trustee shall be promptly distributed to the
Responsible Party. The Company shall pay, or cause the Responsible Party to pay,
to the Trustee for deposit to the relevant Escrow Account an amount equal to any
losses on such Specified Investments as incurred. On the Initial Regular
Distribution Date in respect of the Certificates of any series, the Company will
pay, or cause the Responsible Party to pay (in immediately available funds), to
the Trustee an amount equal to the interest that would have accrued on any
Postponed Notes with respect to such Certificates, if any, purchased after the
Issuance Date if such Postponed Notes had been purchased on the Issuance Date,
from the Issuance Date to, but not including, the date of the purchase of such
Postponed Notes by the Trustee.
If, in respect of the Certificates of any series, the Company
notifies the Trustee prior to the Cut-off Date that any Postponed Notes will not
be issued on or prior to the Cut-off Date for any reason, on the next Special
Distribution Date for such Certificates occurring not less than 15 days
following the date of such notice, (i) the Company shall pay, or cause the
Responsible Party to pay, to the Trustee for
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<PAGE> 24
deposit in the related Special Payments Account, in immediately available funds,
an amount equal to the interest that would have accrued on the Postponed Notes
designated in such notice at a rate equal to the interest rate applicable to
such Certificates from the Issuance Date to, but not including, such Special
Distribution Date and (ii) the Trustee shall transfer an amount equal to that
amount of Escrowed Funds that would have been used to purchase the Postponed
Notes designated in such notice and the amount paid by the Company or the
Responsible Party pursuant to the immediately preceding clause (i) to the
related Special Payments Account for distribution as a Special Payment in
accordance with the provisions hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the next such
Special Distribution Date occurring not less than 15 days following such Cut-off
Date (i) the Company shall pay, or cause the Responsible Party to pay, to the
Trustee for deposit in such Special Payments Account, in immediately available
funds, an amount equal to the interest that would have accrued on such Postponed
Notes contemplated to be purchased with such unused Escrowed Funds (other than
Escrowed Funds referred to in the immediately preceding paragraph) but not so
purchased at a rate equal to the interest rate applicable to such Certificates
from the Issuance Date to, but not including, such Special Distribution Date and
(ii) the Trustee shall transfer such unused Escrowed Funds and the amount paid
by the Company or the Responsible Party pursuant to the immediately preceding
clause (i) to such Special Payments Account for distribution as a Special
Payment in accordance with the provisions hereof.
Section 2.03. ACCEPTANCE BY TRUSTEE. The Trustee, upon the
execution and delivery of a Trust Supplement creating a Trust and establishing a
series of Certificates, shall acknowledge its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 2.02
hereof and the related Note Purchase Agreements or Participation Agreements and
shall declare that the Trustee holds and will hold such right, title and
interest for the benefit of all then present and future Certificateholders of
such series, upon the trusts herein and in such Trust Supplement set forth. By
the acceptance of each Certificate of such series issued to it under this
Agreement, each initial Holder of such series as grantor of such Trust shall
thereby join in the creation and declaration of such Trust.
Section 2.04. LIMITATION OF POWERS. Each Trust shall be
constituted solely for the purpose of making the investment in the Equipment
Notes provided for in the related Trust Supplement, and, except as set forth
herein, the Trustee shall not be authorized or empowered to acquire any other
investments or engage in any other activities and, in particular, the Trustee
shall not be authorized or empowered to do anything that would cause such Trust
to fail to qualify as a "grantor trust" for federal income tax purposes
(including, as subject to this restriction, acquiring any Aircraft (as defined
in the respective Indentures), by bidding such Equipment Notes or otherwise, or
taking any action with respect to any such Aircraft once acquired).
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ARTICLE III
THE CERTIFICATES
Section 3.01. FORM, DENOMINATION AND EXECUTION OF CERTIFICATES.
The Certificates of each series shall be issued in fully registered form without
coupons and shall be substantially in the form attached hereto as Exhibit A,
with such omissions, variations and insertions as are permitted by this
Agreement, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange on which such Certificates may be
listed or to conform to any usage in respect thereof, or as may, consistently
herewith, be determined by the Trustee or the officers executing such
Certificates, as evidenced by the Trustee's or respective officers' execution of
the Certificates.
Except as provided in Section 3.05, the definitive Certificates
of such series shall be typed, printed, lithographed or engraved or produced by
any combination of these methods or may be produced in any other manner
permitted by the rules of any securities exchange on which the Certificates may
be listed, all as determined by the officers executing such Certificates, as
evidenced by their execution of such Certificates.
Except as otherwise provided in the related Trust Supplement, the
Certificates of each series shall be issued in minimum denominations of $1,000
or integral multiples thereof except that one Certificate of such series may be
issued in a different denomination.
The Certificates of such series shall be executed on behalf of
the Trustee by manual or facsimile signature of a Responsible Officer of the
Trustee. Certificates of any series bearing the manual or facsimile signature of
an individual who was, at the time when such signature was affixed, authorized
to sign on behalf of the Trustee shall be valid and binding obligations of the
Trustee, notwithstanding that such individual has ceased to be so authorized
prior to the authentication and delivery of such Certificates or did not hold
such office at the date of such Certificates.
Section 3.02. AUTHENTICATION OF CERTIFICATES.
(a) On the Issuance Date, the Trustee shall duly execute,
authenticate and deliver Certificates of each series in authorized denominations
equalling in the aggregate the aggregate principal amount of the Equipment Notes
that may be purchased by the Trustee pursuant to the related Note Purchase
Agreements or Participation Agreements, and evidencing the entire ownership of
the related Trust. Thereafter, the Trustee shall duly execute, authenticate and
deliver the Certificates of such series as herein provided.
(b) No Certificate of any series shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication
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substantially in the form set forth in Exhibit A hereto executed by the Trustee
by manual signature, and such certificate of authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate has
been duly authenticated and delivered hereunder. All Certificates of any series
shall be dated the date of their authentication.
Section 3.03. TEMPORARY CERTIFICATES. Until definitive
Certificates are ready for delivery, the Trustee shall execute, authenticate and
deliver temporary Certificates of each series. Temporary Certificates of each
series shall be substantially in the form of definitive Certificates of such
series but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the officers executing the temporary
Certificates of such series, as evidenced by their execution of such temporary
Certificates. If temporary Certificates of any series are issued, the Trustee
will cause definitive Certificates of such series to be prepared without
unreasonable delay. After the preparation of definitive Certificates of such
series, the temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of such temporary Certificates at the office or
agency of the Trustee designated for such purpose pursuant to Section 7.12,
without charge to the Certificateholder. Upon surrender for cancellation of any
one or more temporary Certificates, the Trustee shall execute, authenticate and
deliver in exchange therefor a like face amount of definitive Certificates of
like series, in authorized denominations and of a like Fractional Undivided
Interest. Until so exchanged, such temporary Certificates shall be entitled to
the same benefits under this Agreement as definitive Certificates.
Section 3.04. TRANSFER AND EXCHANGE. The Trustee shall cause to
be kept at the office or agency to be maintained by it in accordance with the
provisions of Section 7.12 a register (the "Register") for each series of
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates of
such series and of transfers and exchanges of such Certificates as herein
provided. The Trustee shall initially be the registrar (the "Registrar") for the
purpose of registering such Certificates of each series and transfers and
exchanges of such Certificates as herein provided.
All Certificates issued upon any registration of transfer or
exchange of Certificates of any series shall be valid obligations of the
applicable Trust, evidencing the same interest therein, and entitled to the same
benefits under this Agreement, as the Certificates of such series surrendered
upon such registration of transfer or exchange.
Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office or such other office or agency, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of like series, in authorized
denominations of a like aggregate Fractional Undivided Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of like series, in authorized denominations and
of a like aggregate Fractional Undivided Interest, upon surrender of the
Certificates to be exchanged at any such office or agency. Whenever any
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Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Registrar duly executed by the Certificateholder thereof or its attorney duly
authorized in writing.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Trustee shall
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates. All
Certificates surrendered for registration of transfer or exchange shall be
canceled and subsequently destroyed by the Trustee.
Section 3.05. BOOK-ENTRY AND DEFINITIVE CERTIFICATES.
(a) The Certificates of any series may be issued in the form of
one or more typewritten Certificates representing the Book-Entry Certificates of
such series, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Company. In such case, the
Certificates of such series delivered to The Depository Trust Company shall
initially be registered on the Register in the name of CEDE & Co., the nominee
of the initial Clearing Agency, and no Certificate Owner will receive a
definitive certificate representing such Certificate Owner's interest in the
Certificates of such series, except as provided above and in Subsection (d)
below. As to the Certificates of any series, unless and until definitive, fully
registered Certificates (the "Definitive Certificates") have been issued
pursuant to Subsection (d) below:
(i) the provisions of this Section 3.05 shall be
in full force and effect;
(ii) the Company, the Paying Agent, the Registrar
and the Trustee may deal with the Clearing Agency Participants
for all purposes (including the making of distributions on the
Certificates) as the authorized representatives of the
Certificate Owners;
(iii) to the extent that the provisions of this
Section 3.05 conflict with any other provisions of this Agreement
(other than the provisions of any Trust Supplement expressly
amending this Section 3.05 as permitted by this Basic Agreement),
the provisions of this Section 3.05 shall control;
(iv) the rights of Certificate Owners shall be
exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between such
Certificate Owners and the Clearing Agency Participants; and
until Definitive Certificates are issued pursuant to Subsection
(d) below, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions
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of principal, interest and premium, if any, on the Certificates
to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits
actions to be taken based upon instructions or directions of
Certificateholders of such series holding Certificates of such
series evidencing a specified percentage of the Fractional
Undivided Interests in the related Trust, the Clearing Agency
shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Clearing
Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in Certificates of
such series and has delivered such instructions to the Trustee.
The Trustee shall have no obligation to determine whether the
Clearing Agency has in fact received any such instructions.
(b) Whenever notice or other communication to the
Certificateholders of such series is required under this Agreement, unless and
until Definitive Certificates shall have been issued pursuant to Subsection (d)
below, the Trustee shall give all such notices and communications specified
herein to be given to Certificateholders of such series to the Clearing Agency.
(c) Unless and until Definitive Certificates of a series are
issued pursuant to Subsection (d) below, on the Record Date prior to each
applicable Regular Distribution Date and Special Distribution Date, the Trustee
will request from the Clearing Agency a securities position listing setting
forth the names of all Clearing Agency Participants reflected on the Clearing
Agency's books as holding interests in the Certificates on such Record Date.
(d) If with respect to the Certificates of any series (i) the
Company advises the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities and the Trustee or
the Company is unable to locate a qualified successor, (ii) the Company, at its
option, advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, Certificate Owners of Book-Entry Certificates of such
series evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in the related Trust, by Act of such Certificate Owners
delivered to the Company and the Trustee, advise the Company, the Trustee and
the Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency Participants is
no longer in the best interests of the Certificate Owners of such series, then
the Trustee shall notify all Certificate Owners of such series, through the
Clearing Agency, of the occurrence of any such event and of the availability of
Definitive Certificates. Upon surrender to the Trustee of all the Certificates
of such series held by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency Participants for registration of
Definitive Certificates in the names of Certificate Owners of such series, the
Trustee shall issue and deliver the Definitive Certificates of such series in
accordance with the instructions of the Clearing Agency. Neither the Company,
the Registrar, the Paying Agent nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such registration
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instructions. Upon the issuance of Definitive Certificates of such series, the
Trustee shall recognize the Person in whose name the Definitive Certificates are
registered in the Register as Certificateholders hereunder. Neither the Company
nor the Trustee shall be liable if the Trustee or the Company is unable to
locate a qualified successor Clearing Agency.
(e) Except as otherwise provided in the related Trust Supplement,
the Trustee shall enter into the applicable Letter of Representations with
respect to such series of Certificates and fulfill its responsibilities
thereunder.
(f) The provisions of this Section 3.05 may be made inapplicable
to any series or may be amended with respect to any series in the related Trust
Supplement.
Section 3.06. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Registrar, or the
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (b) there is delivered to the Registrar and the
Trustee such security, indemnity or bond, as may be required by them to save
each of them harmless, then, in the absence of notice to the Registrar or the
Trustee that such destroyed, lost or stolen Certificate has been acquired by a
protected purchaser, and PROVIDED, HOWEVER, that the requirements of Section
8-405 of the Uniform Commercial Code in effect in any applicable jurisdiction
are met, the Trustee shall execute, authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate or Certificates of like series, in authorized denominations and of
like Fractional Undivided Interest and bearing a number not contemporaneously
outstanding.
In connection with the issuance of any new Certificate under this
Section 3.06, the Trustee shall require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee and the
Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section 3.06
shall constitute conclusive evidence of the appropriate Fractional Undivided
Interest in the related Trust, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
The provisions of this Section 3.06 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.07. PERSONS DEEMED OWNERS. Prior to due presentment of
a Certificate for registration of transfer, the Trustee, the Registrar and any
Paying Agent may treat the Person in whose name any Certificate is registered
(as of the day of determination) as the owner of such Certificate for the
purpose of receiving distributions pursuant to Article IV and for all other
purposes whatsoever, and none of the Trustee, the Registrar or any Paying Agent
shall be affected by any notice to the contrary.
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Section 3.08. CANCELLATION. All Certificates surrendered for
payment or transfer or exchange shall, if surrendered to the Trustee or any
agent of the Trustee other than the Registrar, be delivered to the Registrar for
cancellation and shall promptly be canceled by it. No Certificates shall be
authenticated in lieu of or in exchange for any Certificates canceled as
provided in this Section 3.08, except as expressly permitted by this Agreement.
All canceled Certificates held by the Registrar shall be destroyed and a
certification of their destruction delivered to the Trustee.
Section 3.09. LIMITATION OF LIABILITY FOR PAYMENTS. All payments
and distributions made to Certificateholders of any series in respect of the
Certificates of such series shall be made only from the Trust Property of the
related Trust and only to the extent that the Trustee shall have sufficient
income or proceeds from such Trust Property to make such payments in accordance
with the terms of Article IV of this Agreement. Each Certificateholder, by its
acceptance of a Certificate, agrees that it will look solely to the income and
proceeds from the Trust Property of the related Trust for any payment or
distribution due to such Certificateholder pursuant to the terms of this
Agreement and that it will not have any recourse to the Company, the Trustee,
the Loan Trustees, the Owner Trustees or the Owner Participants, except as
otherwise expressly provided herein or in the related Intercreditor Agreement.
The Company is a party to this Agreement solely for purposes of
meeting the requirements of the Trust Indenture Act, and therefore shall not
have any right, obligation or liability hereunder (except as otherwise expressly
provided herein).
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. CERTIFICATE ACCOUNT AND SPECIAL PAYMENTS ACCOUNT.
(a) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Certificate Account as one or more
non-interest-bearing accounts. The Trustee shall hold such Certificate Account
in trust for the benefit of the Certificateholders of such series, and shall
make or permit withdrawals therefrom only as provided in this Agreement. On each
day when a Scheduled Payment is made to the Trustee (under an Intercreditor
Agreement, if applicable) with respect to the Certificates of such series, the
Trustee, upon receipt thereof, shall immediately deposit the aggregate amount of
such Scheduled Payment in such Certificate Account.
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section
4.04. The Trustee shall hold the Special Payments Account in trust for the
benefit of the Certificateholders of such series and shall make or permit
withdrawals therefrom only as provided in this Agreement. On each day when one
or more Special Payments
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are made to the Trustee (under an Intercreditor Agreement, if applicable) with
respect to the Certificates of such series, the Trustee, upon receipt thereof,
shall immediately deposit the aggregate amount of such Special Payments in such
Special Payments Account.
(c) The Trustee shall present (or, if applicable, cause the
Subordination Agent to present) to the related Loan Trustee of each Equipment
Note such Equipment Note on the date of its stated final maturity or, in the
case of any Equipment Note which is to be redeemed in whole pursuant to the
related Indenture, on the applicable redemption date under such Indenture.
Section 4.02. DISTRIBUTIONS FROM CERTIFICATE ACCOUNT AND SPECIAL
PAYMENTS ACCOUNT.
(a) On each Regular Distribution Date with respect to a series of
Certificates or as soon thereafter as the Trustee has confirmed receipt of the
payment of all or any part of the Scheduled Payments due on the Equipment Notes
held (subject to the Intercreditor Agreement) in the related Trust on such date,
the Trustee shall distribute out of the applicable Certificate Account the
entire amount deposited therein pursuant to Section 4.01(a). There shall be so
distributed to each Certificateholder of record of such series on the Record
Date with respect to such Regular Distribution Date (other than as provided in
Section 11.01 concerning the final distribution) by check mailed to such
Certificateholder, at the address appearing in the Register, such
Certificateholder's pro rata share (based on the Fractional Undivided Interest
in the Trust held by such Certificateholder) of the total amount in the
applicable Certificate Account, except that, with respect to Certificates
registered on the Record Date in the name of a Clearing Agency (or its nominee),
such distribution shall be made by wire transfer in immediately available funds
to the account designated by such Clearing Agency (or such nominee).
(b) On each Special Distribution Date with respect to any Special
Payment with respect to a series of Certificates or as soon thereafter as the
Trustee has confirmed receipt of any Special Payments due on the Equipment Notes
held (subject to the Intercreditor Agreement) in the related Trust or realized
upon the sale of such Equipment Notes, the Trustee shall distribute out of the
applicable Special Payments Account the entire amount of such applicable Special
Payment deposited therein pursuant to Section 4.01(b). There shall be so
distributed to each Certificateholder of record of such series on the Record
Date with respect to such Special Distribution Date (other than as provided in
Section 11.01 concerning the final distribution) by check mailed to such
Certificateholder, at the address appearing in the Register, such
Certificateholder's pro rata share (based on the Fractional Undivided Interest
in the related Trust held by such Certificateholder) of the total amount in the
applicable Special Payments Account on account of such Special Payment, except
that, with respect to Certificates registered on the Record Date in the name of
a Clearing Agency (or its nominee), such distribution shall be made by wire
transfer in immediately available funds to the account designated by such
Clearing Agency (or such nominee).
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(c) The Trustee shall, at the expense of the Company, cause
notice of each Special Payment with respect to a series of Certificates to be
mailed to each Certificateholder of such series at his address as it appears in
the Register. In the event of redemption or purchase of Equipment Notes held in
the related Trust, such notice shall be mailed not less than 15 days prior to
the Special Distribution Date for the Special Payment resulting from such
redemption or purchase, which Special Distribution Date shall be the date of
such redemption or purchase. In the event that the Trustee receives a notice
from the Company that Postponed Notes will not be purchased by the Trustee
pursuant to Section 2.02, such notice of Special Payment shall be mailed as soon
as practicable after receipt of such notice from the Company and shall state the
Special Distribution Date for such Special Payment, which shall occur 15 days
after the date of such notice of Special Payment or (if such 15th day is not
practicable) as soon as practicable thereafter. In the event that any Special
Payment is to be made pursuant to the last paragraph of Section 2.02(b) hereof,
there shall be mailed on the Cut-off Date (or, if such mailing on the Cutoff
Date is not practicable, as soon as practicable after the Cut-off Date), notice
of such Special Payment stating the Special Distribution Date for such Special
Payment, which shall occur 15 days after the date of such notice of such Special
Payment (or, if such 15th day is not practicable, as soon as practicable
thereafter). In the case of any other Special Payments, such notice shall be
mailed as soon as practicable after the Trustee has confirmed that it has
received funds for such Special Payment, stating the Special Distribution Date
for such Special Payment which shall occur not less than 15 days after the date
of such notice and as soon as practicable thereafter.
Notices mailed by the Trustee shall set forth:
(i) the Special Distribution Date and the Record
Date therefor (except as otherwise provided in Section 11.01),
(ii) the amount of the Special Payment (taking
into account any payment to be made by the Company pursuant to
Section 2.02(b)) for each $1,000 face amount Certificate and the
amount thereof constituting principal, premium, if any, and
interest,
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same
date as a Regular Distribution Date for the Certificates of such
series, the total amount to be received on such date for each
$1,000 face amount Certificate.
If the amount of premium, if any, payable upon the redemption or purchase of an
Equipment Note has not been calculated at the time that the Trustee mails notice
of a Special Payment, it shall be sufficient if the notice sets forth the other
amounts to be distributed and states that any premium received will also be
distributed.
If any redemption of the Equipment Notes held in any Trust is
canceled, the Trustee, as soon as possible after learning thereof, shall cause
notice thereof to be mailed to each Certificateholder of the related series at
its address as it appears on the Register.
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Section 4.03. STATEMENTS TO CERTIFICATEHOLDERS.
(a) On each Regular Distribution Date and Special Distribution
Date, the Trustee will include with each distribution of a Scheduled Payment or
Special Payment, as the case may be, to Certificateholders of the related series
a statement setting forth the information provided below. Such statement shall
set forth (per $1,000 aggregate principal amount of Certificate as to (i) and
(ii) below) the following information:
(i) the amount of such distribution hereunder
allocable to principal and the amount allocable to premium, if
any;
(ii) the amount of such distribution hereunder
allocable to interest; and
(iii) the Pool Balance and the Pool Factor of the
related Trust.
With respect to the Certificates registered in the name of a
Clearing Agency or its nominee, on the Record Date prior to each Regular
Distribution Date and Special Distribution Date, the Trustee will request from
the Clearing Agency a securities position listing setting forth the names of all
the Clearing Agency Participants reflected on the Clearing Agency's books as
holding interests in the Certificates on such Record Date. On each Distribution
Date, the applicable Trustee will mail to each such Clearing Agency Participant
the statement described above and will make available additional copies as
requested by such Clearing Agency Participant for forwarding to holders of
interests in the Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the Trustee
shall furnish to each Person who at any time during such calendar year was a
Certificateholder of record a statement containing the sum of the amounts
determined pursuant to clauses (a)(i) and (a)(ii) above with respect to the
related Trust for such calendar year or, in the event such Person was a
Certificateholder of record during a portion of such calendar year, for the
applicable portion of such year, and such other items as are readily available
to the Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation of its federal
income tax returns. With respect to Certificates registered in the name of a
Clearing Agency or its nominee, such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Certificates in the manner
described in Section 4.03(a).
Section 4.04. INVESTMENT OF SPECIAL PAYMENT MONEYS. Any money
received by the Trustee pursuant to Section 4.01(b) representing a Special
Payment which is not distributed on the date received shall, to the extent
practicable, be invested in Permitted Investments by the Trustee pending
distribution of such Special Payment pursuant to Section
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4.02. Any investment made pursuant to this Section 4.04 shall be in such
Permitted Investments having maturities not later than the date that such moneys
are required to be used to make the payment required under Section 4.02 on the
applicable Special Distribution Date and the Trustee shall hold any such
Permitted Investments until maturity. The Trustee shall have no liability with
respect to any investment made pursuant to this Section 4.04, other than by
reason of the willful misconduct or negligence of the Trustee. All income and
earnings from such investments shall be distributed on such Special Distribution
Date as part of such Special Payment.
ARTICLE V
THE COMPANY
Section 5.01. MAINTENANCE OF CORPORATE EXISTENCE. The Company, at
its own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises, except as otherwise specifically permitted in Section 5.02;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any right
or franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
Section 5.02. CONSOLIDATION, MERGER, ETC. The Company shall not
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
(a) the corporation formed by such consolidation or into which
the Company is merged or the Person that acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall (i) be
organized and validly existing under the laws of the United States of America or
any state thereof or the District of Columbia, and (ii) be a "citizen of the
United States" as defined in 49 U.S.C. ss. 40102(a)(15), as amended, holding an
air carrier operating certificate issued by the Secretary of Transportation
pursuant to Chapter 447 of 49 U.S.C., if and so long as such status is a
condition of entitlement to the benefits of Section 1110 of the Bankruptcy
Reform Act of 1978, as amended (11 U.S.C. ss. 1110), with respect to the Leases
or the Aircraft owned by the Company; and
(b) the corporation formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
execute and deliver to the Trustee applicable to the Certificates of each series
a duly authorized, valid, binding and enforceable agreement in form and
substance reasonably satisfactory to the Trustee containing an assumption by
such successor corporation or Person of the due and punctual performance and
observance of each covenant and condition of the Note Documents and of this
Agreement applicable to the Certificates of each series to be performed or
observed by the Company.
(c) the Company shall have delivered to the Trustee an Officer's
Certificate of the Company and an Opinion or Opinions of Counsel of the Company
each stating that such consolidation, merger, conveyance, transfer or lease and
the assumption
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agreement mentioned in clause (b) above comply with this Section 5.02 and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
Upon any consolidation or merger, or any conveyance, transfer or
lease of substantially all of the assets of the Company as an entirety in
accordance with this Section 5.02, the successor corporation or Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Agreement
applicable to the Certificates of each series with the same effect as if such
successor corporation or Person had been named as the Company herein. No such
conveyance, transfer or lease of substantially all of the assets of the Company
as an entirety shall have the effect of releasing any successor corporation or
Person which shall have become such in the manner prescribed in this Section
5.02 from its liability in respect of this Agreement and any Note Document
applicable to the Certificates of such series to which it is a party.
ARTICLE VI
DEFAULT
Section 6.01. EVENTS OF DEFAULT.
(a) EXERCISE OF REMEDIES. Upon the occurrence and during the
continuation of any Indenture Event of Default under any Indenture, the Trustee
may (i) to the extent it is the Controlling Party at such time (as determined
pursuant to the related Intercreditor Agreement), direct the exercise of
remedies as provided in such related Intercreditor Agreement and (ii) if there
is no related Intercreditor Agreement, direct the exercise of remedies or take
other action as provided in the relevant Indenture to the extent that it may do
so as the holder of the Equipment Notes issued under such Indenture and held in
the related Trust.
(b) PURCHASE RIGHTS OF CERTIFICATEHOLDERS. At any time after the
occurrence and during the continuation of a Triggering Event, each
Certificateholder of Certificates of certain series (each, a "Potential
Purchaser" and, collectively, the "Potential Purchasers") will have certain
rights to purchase the Certificates of one or more other series, all as set
forth in the Trust Supplement applicable to the Certificates held by such
Potential Purchaser. The purchase price with respect to the Certificates of any
series shall be equal to the Pool Balance of the Certificates of such series,
together with accrued and unpaid interest thereon to the date of such purchase,
without premium, but including any other amounts then due and payable to the
Certificateholders of such series under this Agreement, any related
Intercreditor Agreement or any other Note Document or on or in respect of the
Certificates of such series; PROVIDED, HOWEVER, that if such purchase occurs
after a Record Date, such purchase price shall be reduced by the amount to be
distributed hereunder on the related Distribution Date
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(which deducted amounts shall remain distributable to, and may be retained by,
the Certificateholder as of such Record Date); PROVIDED, FURTHER, that no such
purchase of Certificates of such series shall be effective unless the purchasing
Certificateholder (each, a "Purchasing Certificateholder" and, collectively, the
"Purchasing Certificateholders") shall certify to the Trustee that
contemporaneously with such purchase, one or more Purchasing Certificateholders
are purchasing, pursuant to the terms of this Agreement and the other
Agreements, if any, relating to the Certificates of a series that are subject to
the same Intercreditor Agreement (such other Agreements, the "Other
Agreements"), the Certificates of each such series that the Trust Supplement
applicable to the Certificates held by the Purchasing Certificateholder
specifies may be purchased by such Purchasing Certificateholder. Each payment of
the purchase price of the Certificates of any series shall be made to an account
or accounts designated by the Trustee and each such purchase shall be subject to
the terms of this Section 6.01. By acceptance of its Certificate, each
Certificateholder (each, a "Selling Certificateholder" and, collectively, the
"Selling Certificateholders") of a series that is subject to purchase by
Potential Purchasers, all as set forth in the Trust Supplement applicable to the
Certificates held by the Selling Certificateholders, agrees that, at any time
after the occurrence and during the continuance of a Triggering Event, it will,
upon payment of the purchase price specified herein by one or more Purchasing
Certificateholders, forthwith sell, assign, transfer and convey to such
Purchasing Certificateholder (without recourse, representation or warranty of
any kind except for its own acts), all of the right, title, interest and
obligation of such Selling Certificateholder in this Agreement, any related
Intercreditor Agreement, the related Liquidity Facility, the related Note
Documents and all Certificates of such series held by such Selling
Certificateholder (excluding all right, title and interest under any of the
foregoing to the extent such right, title or interest is with respect to an
obligation not then due and payable as respects any action or inaction or state
of affairs occurring prior to such sale) and the Purchasing Certificateholder
shall assume all of such Selling Certificateholder's obligations under this
Agreement, any related Intercreditor Agreement, the related Liquidity Facility
and the related Note Documents. The Certificates of such series will be deemed
to be purchased on the date payment of the purchase price is made
notwithstanding the failure of any Selling Certificateholder to deliver any
Certificates of such series and, upon such a purchase, (i) the only rights of
the Selling Certificateholders will be to deliver the Certificates to the
Purchasing Certificateholder and receive the purchase price for such
Certificates of such series and (ii) if the Purchasing Certificateholder shall
so request, such Selling Certificateholder will comply with all of the
provisions of Section 3.04 hereof to enable new Certificates of such series to
be issued to the Purchasing Certificateholder in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the Purchasing Certificateholder.
Section 6.02. INCIDENTS OF SALE OF EQUIPMENT NOTES. Upon any sale
of all or any part of the Equipment Notes held in the Trust made either under
the power of sale given under this Agreement or otherwise for the enforcement of
this Agreement, the following shall be applicable:
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(a) CERTIFICATEHOLDERS AND TRUSTEE MAY PURCHASE
EQUIPMENT NOTES. Any Certificateholder, the Trustee in its
individual or any other capacity or any other Person may bid for
and purchase any of the Equipment Notes held in the Trust, and
upon compliance with the terms of sale, may hold, retain, possess
and dispose of such Equipment Notes in their own absolute right
without further accountability.
(b) RECEIPT OF TRUSTEE SHALL DISCHARGE PURCHASER.
The receipt of the Trustee making such sale shall be a sufficient
discharge to any purchaser for his purchase money, and, after
paying such purchase money and receiving such receipt, such
purchaser or its personal representative or assigns shall not be
obliged to see to the application of such purchase money, or be
in any way answerable for any loss, misapplication or
non-application thereof.
(c) APPLICATION OF MONEYS RECEIVED UPON SALE. Any
moneys collected by the Trustee upon any sale made either under
the power of sale given by this Agreement or otherwise for the
enforcement of this Agreement shall be applied as provided in
Section 4.02.
Section 6.03. JUDICIAL PROCEEDINGS INSTITUTED BY TRUSTEE; TRUSTEE
MAY BRING SUIT. If there shall be a failure to make payment of the principal of,
premium, if any, or interest on any Equipment Note held in the related Trust, or
if there shall be any failure to pay Rent (as defined in the relevant Lease)
under any Lease when due and payable, then the Trustee, in its own name and as
trustee of an express trust, as holder of such Equipment Notes, to the extent
permitted by and in accordance with the terms of any related Intercreditor
Agreement and any related Note Documents (subject to rights of the applicable
Owner Trustee or Owner Participant to cure any such failure to pay principal of,
premium, if any, or interest on any Equipment Note or to pay Rent under any
Lease in accordance with the applicable Indenture), shall be entitled and
empowered to institute any suits, actions or proceedings at law, in equity or
otherwise, for the collection of the sums so due and unpaid on such Equipment
Notes or under such Lease and may prosecute any such claim or proceeding to
judgment or final decree with respect to the whole amount of any such sums so
due and unpaid.
Section 6.04. CONTROL BY CERTIFICATEHOLDERS. Subject to Section
6.03 and any related Intercreditor Agreement, the Certificateholders holding
Certificates of a series evidencing Fractional Undivided Interests aggregating
not less than a majority in interest in the related Trust shall have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee with respect to such Trust or pursuant to the terms of
such Intercreditor Agreement, or exercising any trust or power conferred on the
Trustee under this Agreement or such Intercreditor Agreement, including any
right of the Trustee as Controlling Party under such Intercreditor Agreement or
as holder of the Equipment Notes held in the related Trust; PROVIDED, HOWEVER,
that
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(a) such Direction shall not in the opinion of the
Trustee be in conflict with any rule of law or with this
Agreement and would not involve the Trustee in personal liability
or expense,
(b) the Trustee shall not determine that the action
so directed would be unjustly prejudicial to the
Certificateholders of such series not taking part in such
Direction, and
(c) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
Direction.
Section 6.05. WAIVER OF PAST DEFAULTS. Subject to any related
Intercreditor Agreement, the Certificateholders holding Certificates of a series
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the Trust (i) may on behalf of all of the Certificateholders
waive any past Event of Default hereunder and its consequences or (ii) if the
Trustee is the Controlling Party, may direct the Trustee to instruct the
applicable Loan Trustee to waive any past Indenture Event of Default under any
related Indenture and its consequences, and thereby annul any Direction given by
such Certificateholders or the Trustee to such Loan Trustee with respect
thereto, except a default:
(1) in the deposit of any Scheduled Payment or
Special Payment under Section 4.01 or in the distribution of any
payment under Section 4.02 on the Certificates of a series, or
(2) in the payment of the principal of (premium, if
any) or interest on the Equipment Notes held in the related
Trust, or
(3) in respect of a covenant or provision hereof
which under Article IX hereof cannot be modified or amended
without the consent of each Certificateholder holding an
Outstanding Certificate of a series affected thereby.
Upon any such waiver, such default shall cease to exist with respect to the
Certificates of such series and any Event of Default arising therefrom shall be
deemed to have been cured for every purpose and any direction given by the
Trustee on behalf of the Certificateholders of such series to the relevant Loan
Trustee shall be annulled with respect thereto; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon. Upon any such waiver, the Trustee shall vote the Equipment
Notes issued under the relevant Indenture to waive the corresponding Indenture
Event of Default.
Section 6.06. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT
TO BE IMPAIRED. Anything in this Agreement to the contrary notwithstanding,
including, without limitation, Section 6.07 hereof, but subject to any related
Intercreditor Agreement, the right of any Certificateholder to receive
distributions of payments required pursuant to Section 4.02 hereof on the
applicable Certificates when due, or to institute suit for the enforcement of
any
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such payment on or after the applicable Regular Distribution Date or Special
Distribution Date, shall not be impaired or affected without the consent of such
Certificateholder.
Section 6.07. CERTIFICATEHOLDERS MAY NOT BRING SUIT EXCEPT UNDER
CERTAIN CONDITIONS. A Certificateholder of any series shall not have the right
to institute any suit, action or proceeding at law or in equity or otherwise
with respect to this Agreement, for the appointment of a receiver or for the
enforcement of any other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have
given written notice to the Trustee of a continuing Event of
Default;
(2) Certificateholders holding Certificates of such
series evidencing Fractional Undivided Interests aggregating not
less than 25% of the related Trust shall have requested the
Trustee in writing to institute such action, suit or proceeding
and shall have offered to the Trustee indemnity as provided in
Section 7.03(e);
(3) the Trustee shall have refused or neglected to
institute any such action, suit or proceeding for 60 days after
receipt of such notice, request and offer of indemnity; and
(4) no direction inconsistent with such written
request shall have been given to the Trustee during such 60-day
period by Certificateholders holding Certificates of such series
evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the related Trust.
It is understood and intended that no one or more of the
Certificateholders of any series shall have any right in any manner whatsoever
hereunder or under the related Trust Supplement or under the Certificates of
such series to (i) surrender, impair, waive, affect, disturb or prejudice any
property in the Trust Property of the related Trust, or the lien of any related
Indenture on any property subject thereto, or the rights of the
Certificateholders of such series or the holders of the related Equipment Notes,
(ii) obtain or seek to obtain priority over or preference with respect to any
other such Certificateholder of such series or (iii) enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all the Certificateholders of such series subject to the
provisions of this Agreement.
Section 6.08. REMEDIES CUMULATIVE. Every remedy given hereunder
to the Trustee or to any of the Certificateholders of any series shall not be
exclusive of any other remedy or remedies, and every such remedy shall be
cumulative and in addition to every other remedy given hereunder or now or
hereafter given by statute, law, equity or otherwise.
Section 6.09. UNDERTAKING FOR COSTS. In any suit for the
enforcement of any right or remedy under this Agreement, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an
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undertaking to pay the costs of such suit, and may assess costs against any such
party litigant, in the manner and to the extent provided in the Trust Indenture
Act; PROVIDED, HOWEVER, that neither this Section 6.09 nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company.
ARTICLE VII
THE TRUSTEE
Section 7.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default in
respect of a Trust, the Trustee undertakes to perform such duties in respect of
such Trust as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Trustee.
(b) In case an Event of Default in respect of a Trust has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement in respect of such Trust, 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.
(c) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a)of this Section 7.01; and
(2) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts.
(d) Whether or not herein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01.
Section 7.02. NOTICE OF DEFAULTS. As promptly as practicable
after, and in any event within 90 days after, the occurrence of any default (as
such term is defined below) hereunder known to the Trustee, the Trustee shall
transmit by mail to the Company, any related Owner Trustees, any related Owner
Participants, the related Loan Trustees and the Certificateholders holding
Certificates of the related series in accordance with Section 313(c) of the
Trust Indenture Act, notice of such default hereunder known to the Trustee,
unless such
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default shall have been cured or waived; PROVIDED, HOWEVER, that, except in the
case of a default in the payment of the principal, premium, if any, or interest
on any Equipment Note, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
shall determine that the withholding of such notice is in the interests of the
Certificateholders of the related series. For the purpose of this Section 7.02
in respect of any Trust, the term "Default" means any event that is, or after
notice or lapse of time or both would become, an Event of Default in respect of
that Trust.
Section 7.03. CERTAIN RIGHTS OF TRUSTEE. Subject to the
provisions of Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting in reliance upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Request;
(c) whenever in the administration of this Agreement or any
Intercreditor Agreement, the Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an Officer's Certificate
of the Company, any related Owner Trustee or any related Loan Trustee;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement or any Intercreditor
Agreement at the Direction of any of the Certificateholders pursuant to this
Agreement or any Intercreditor Agreement, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity against the cost,
expenses and liabilities which might be incurred by it in compliance with such
Direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document;
(g) the Trustee may execute any of the trusts or powers under
this Agreement or any Intercreditor Agreement or perform any duties under this
Agreement or any Intercreditor Agreement either directly or by or through agents
or attorneys, and the Trustee shall not be
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responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it under this Agreement or any Intercreditor
Agreement;
(h) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
Direction of the Certificateholders holding Certificates of any series
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the related Trust relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Agreement or any
Intercreditor Agreement; and
(i) the Trustee shall not be required to expend or risk its own
funds in the performance of any of its duties under this Agreement, 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
is not reasonably assured to it.
Section 7.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
CERTIFICATES. The recitals contained herein and in the Certificates of each
series, except the certificates of authentication, shall not be taken as the
statements of the Trustee, and the Trustee assumes no responsibility for their
correctness. Subject to Section 7.15, the Trustee makes no representations as to
the validity or sufficiency of this Basic Agreement, any Equipment Notes, any
Intercreditor Agreement, the Certificates of any series, any Trust Supplement or
any Note Documents, except that the Trustee hereby represents and warrants that
this Basic Agreement has been, and each Trust Supplement, each Certificate, each
Note Purchase Agreement, each Participation Agreement and each Intercreditor
Agreement of, or relating to, each series will be executed and delivered by one
of its officers who is duly authorized to execute and deliver such document on
its behalf.
Section 7.05. MAY HOLD CERTIFICATES. The Trustee, any Paying
Agent, Registrar or any of their Affiliates or any other agent, in their
respective individual or any other capacity, may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
if applicable, may otherwise deal with the Company, any Owner Trustees or the
Loan Trustees with the same rights it would have if it were not Trustee, Paying
Agent, Registrar or such other agent.
Section 7.06. MONEY HELD IN TRUST. Money held by the Trustee or
the Paying Agent in trust under this Agreement need not be segregated from other
funds except to the extent required herein or by law and neither the Trustee nor
the Paying Agent shall have any liability for interest upon any such moneys
except as provided for herein.
Section 7.07. COMPENSATION AND REIMBURSEMENT. The Company agrees:
(1) to pay, or cause to be paid, to the Trustee
from time to time reasonable compensation for all services
rendered by it hereunder (which compensation shall not be
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limited by any provision of law in regard to the compensation of
a trustee of an express trust); and
(2) except as otherwise expressly provided herein
or in any Trust Supplement, to reimburse, or cause to be
reimbursed, the Trustee upon its request for all reasonable
out-of-pocket expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this
Basic Agreement, any Trust Supplement or any Intercreditor
Agreement (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence, willful misconduct or bad faith or as may be incurred
due to the Trustee's breach of its representations and warranties
set forth in Section 7.15; and
(3) to indemnify, or cause to be indemnified, the
Trustee with respect to the Certificates of any series, pursuant
to the particular sections of the Note Purchase Agreements or
Participation Agreement specified in the related Trust
Supplement.
The Trustee shall be entitled to reimbursement from, and shall
have a lien prior to the Certificates of each series upon, all property and
funds held or collected by the Trustee in its capacity as Trustee with respect
to such series or the related Trust for any tax incurred without negligence, bad
faith or willful misconduct, on its part, arising out of or in connection with
the acceptance or administration of such Trust (other than any tax attributable
to the Trustee's compensation for serving as such), including any costs and
expenses incurred in contesting the imposition of any such tax. The Trustee
shall notify the Company of any claim for any tax for which it may seek
reimbursement. If the Trustee reimburses itself from the Trust Property of such
Trust for any such tax, it will mail a brief report within 30 days setting forth
the amount of such tax and the circumstances thereof to all Certificateholders
of such series as their names and addresses appear in the Register.
Section 7.08. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. Each Trust
shall at all times have a Trustee which shall be eligible to act as a trustee
under Section 310(a) of the Trust Indenture Act and shall have a combined
capital and surplus of at least $75,000,000 (or a combined capital and surplus
in excess of $5,000,000 and 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 or
territory thereof or of the District of Columbia and having a combined capital
and surplus of at least $75,000,000). If such corporation publishes reports of
conditions at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 7.08 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 conditions so published.
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In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.08 to act as Trustee of any
Trust, the Trustee shall resign immediately as Trustee of such Trust in the
manner and with the effect specified in Section 7.09.
Section 7.09. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee of any Trust pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 7.10.
(b) The Trustee may resign at any time as Trustee of any or all
Trusts by giving prior written notice thereof to the Company, the Authorized
Agents, the related Owner Trustees and the related Loan Trustees. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Company, the related Owner Trustees and the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Direction of the
Certificateholders of the related series holding Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in such Trust delivered to the Trustee and to the Company, the related Owner
Trustees and the related Loan Trustees.
(d) If at any time in respect of any Trust:
(1) the Trustee shall fail to comply with Section
310 of the Trust Indenture Act, if applicable, after written
request therefor by the Company or by any Certificateholder who
has been a bona fide holder of Certificates for at least six
months; or
(2) the Trustee shall cease to be eligible under
Section 7.08 and shall fail to resign after written request
therefor by the Company or by any such Certificateholder; or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation; then, in any case, (i) the Company
may remove the Trustee or (ii) any Certificateholder of the
related series who has been a bona fide holder of Certificates
for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor
Trustee of such Trust.
(e) If a Responsible Officer of the Trustee shall obtain actual
knowledge of an Avoidable Tax (as defined below) in respect of any Trust which
has been or is likely to be asserted, the Trustee shall promptly notify the
Company and shall, within 30 days of such notification, resign
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as Trustee of such Trust hereunder unless within such 30-day period the Trustee
shall have received notice that the Company has agreed to pay such tax. The
Company shall promptly appoint a successor Trustee of such Trust in a
jurisdiction where there are no Avoidable Taxes. As used herein, an "Avoidable
Tax" in respect of such Trust means a state or local tax: (i) upon (w) such
Trust, (x) such Trust Property, (y) Certificateholders of such Trust or (z) the
Trustee for which the Trustee is entitled to seek reimbursement from the Trust
Property of such Trust, and (ii) which would be avoided if the Trustee were
located in another state, or jurisdiction within a state, within the United
States of America. A tax shall not be an Avoidable Tax in respect of any Trust
if the Company or any Owner Trustee shall agree to pay, and shall pay, such tax.
(f) If the Trustee shall resign, be removed or become incapable
of acting as Trustee of any Trust or if a vacancy shall occur in the office of
the Trustee of any Trust for any cause, the Company shall promptly appoint a
successor Trustee of such Trust. If, within one year after such resignation,
removal or incapability, or other occurrence of such vacancy, a successor
Trustee of such Trust shall be appointed by Direction of the Certificateholders
of the related series holding Certificates of such series evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in such
Trust delivered to the Company, the related Owner Trustees, the related Loan
Trustee and the retiring Trustee, then the successor Trustee of such Trust so
appointed shall, with the approval of the Company of such appointment, which
approval shall not be unreasonably withheld, forthwith upon its acceptance of
such appointment, become the successor Trustee of such Trust and supersede the
successor Trustee of such Trust appointed as provided above. If no successor
Trustee shall have been so appointed as provided above and accepted appointment
in the manner hereinafter provided, the resigning Trustee or any
Certificateholder who has been a bona fide holder of Certificates of the related
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee of such Trust.
(g) The successor Trustee of a Trust shall give notice of the
resignation and removal of the Trustee and appointment of the successor Trustee
by mailing written notice of such event by first-class mail, postage prepaid, to
the Certificateholders of the related series as their names and addresses appear
in the Register. Each notice shall include the name of such successor Trustee
and the address of its Corporate Trust Office.
Section 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every
successor Trustee appointed hereunder shall execute and deliver to the Company
and to the retiring Trustee with respect to any or all Trusts an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee with respect to such Trusts shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Company or the successor Trustee, such retiring Trustee
shall execute and deliver an instrument transferring to such successor Trustee
all such rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all Trust Property held
by such retiring Trustee in respect of such Trusts hereunder, subject
nevertheless to its lien, if any,
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provided for in Section 7.07. Upon request of any such successor Trustee, the
Company, the retiring Trustee and such successor Trustee shall execute and
deliver any and all instruments containing such provisions as shall be necessary
or desirable to transfer and confirm to, and for more fully and certainly
vesting in, such successor Trustee all such rights, powers and trusts.
If a successor Trustee is appointed with respect to one or more
(but not all) Trusts, the Company, the predecessor Trustee and each successor
Trustee with respect to any Trust shall execute and deliver a supplemental
agreement hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the predecessor Trustee with respect to the Trusts as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Basic Agreement and the applicable Trust Supplements as shall be necessary to
provide for or facilitate the administration of the Trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental agreement shall constitute such Trustees as co-Trustees of the same
Trust and that each such Trustee shall be Trustee of separate Trusts.
No institution shall accept its appointment as a Trustee
hereunder unless at the time of such acceptance such institution shall be
qualified and eligible under this Article VII.
Section 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
PROVIDED, HOWEVER, that such corporation shall be otherwise qualified and
eligible under this Article VII, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any
Certificates shall have been executed or authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such execution or authentication and
deliver the Certificates so executed or authenticated with the same effect as if
such successor Trustee had itself executed or authenticated such Certificates.
Section 7.12. MAINTENANCE OF AGENCIES. (a) With respect to each
series of Certificates, there shall at all times be maintained an office or
agency in the location set forth in Section 12.04 where Certificates of such
series may be presented or surrendered for registration of transfer or for
exchange, and for payment thereof, and where notices and demands, to or upon the
Trustee in respect of such Certificates or this Agreement may be served;
PROVIDED, HOWEVER, that, if it shall be necessary that the Trustee maintain an
office or agency in another location with respect to the Certificates of any
series (e.g., the Certificates of such series shall be represented by Definitive
Certificates and shall be listed on a national securities exchange), the Trustee
will make all reasonable efforts to establish such an office or agency. Written
notice of the location of each such other office or agency and of any change of
location thereof shall be
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given by the Trustee to the Company, any Owner Trustees, the Loan Trustees (in
the case of any Owner Trustee or Loan Trustee, at its address specified in the
Note Documents or such other address as may be notified to the Trustee) and the
Certificateholders of such series. In the event that no such office or agency
shall be maintained or no such notice of location or of change of location shall
be given, presentations and demands may be made and notices may be served at the
Corporate Trust Office of the Trustee.
(b) There shall at all times be a Registrar and a Paying Agent
hereunder with respect to the Certificates of each series. Each such Authorized
Agent shall be a bank or trust company, shall be a corporation organized and
doing business under the laws of the United States or any state, with a combined
capital and surplus of at least $75,000,000, or a corporation having a combined
capital and surplus in excess of $5,000,000, the obligations of which are
guaranteed by a corporation organized and doing business under the laws of the
United States or any state, with a combined capital and surplus of at least
$75,000,000, and shall be authorized under such laws to exercise corporate trust
powers, subject to supervision by federal or state authorities. The Trustee
shall initially be the Paying Agent and, as provided in Section 3.04, Registrar
hereunder with respect to the Certificates of each series. Each Registrar shall
furnish to the Trustee, at stated intervals of not more than six months, and at
such other times as the Trustee may request in writing, a copy of the Register
maintained by such Registrar.
(c) Any corporation into which any Authorized Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent shall
be a party, or any corporation succeeding to the corporate trust business of any
Authorized Agent, shall be the successor of such Authorized Agent, if such
successor corporation is otherwise eligible under this Section 7.12, without the
execution or filing of any paper or any further act on the part of the parties
hereto or such Authorized Agent or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving written
notice of resignation to the Trustee, the Company, any related Owner Trustees
and the related Loan Trustees. The Company may, and at the request of the
Trustee shall, at any time terminate the agency of any Authorized Agent by
giving written notice of termination to such Authorized Agent and to the
Trustee. Upon the resignation or termination of an Authorized Agent or in case
at any time any such Authorized Agent shall cease to be eligible under this
Section 7.12 (when, in either case, no other Authorized Agent performing the
functions of such Authorized Agent shall have been appointed), the Company shall
promptly appoint one or more qualified successor Authorized Agents, reasonably
satisfactory to the Trustee, to perform the functions of the Authorized Agent
which has resigned or whose agency has been terminated or who shall have ceased
to be eligible under this Section 7.12. The Company shall give written notice of
any such appointment made by it to the Trustee, any related Owner Trustees and
the related Loan Trustees; and in each case the Trustee shall mail notice of
such appointment to all Certificateholders of the related series as their names
and addresses appear on the Register for such series.
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(e) The Company agrees to pay, or cause to be paid, from time to
time to each Authorized Agent reasonable compensation for its services and to
reimburse it for its reasonable expenses.
Section 7.13. MONEY FOR CERTIFICATE PAYMENTS TO BE HELD IN TRUST.
All moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of this
Section 7.13. Moneys so deposited and held in trust shall constitute a separate
trust fund for the benefit of the Certificateholders with respect to which such
money was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Section 7.14. REGISTRATION OF EQUIPMENT NOTES IN TRUSTEE'S NAME.
Subject to the provisions of any Intercreditor Agreement, the Trustee agrees
that all Equipment Notes to be purchased by any Trust and Permitted Investments,
if any, shall be issued in the name of the Trustee as trustee for the applicable
Trust or its nominee and held by the Trustee in trust for the benefit of the
Certificateholders of such series, or, if not so held, the Trustee or its
nominee shall be reflected as the owner of such Equipment Notes or Permitted
Investments, as the case may be, in the register of the issuer of such Equipment
Notes or Permitted Investments, as the case may be.
Section 7.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The
Trustee hereby represents and warrants that:
(a) the Trustee is a banking corporation organized and validly
existing in good standing under the laws of the State of New York;
(b) the Trustee has full power, authority and legal right to
execute, deliver and perform this Agreement, any Intercreditor Agreement, any
Participation Agreement and the Note Purchase Agreements and has taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement, any Intercreditor Agreement, any Participation Agreement and the
Note Purchase Agreements;
(c) the execution, delivery and performance by the Trustee of
this Agreement, any Intercreditor Agreement, any Participation Agreement and the
Note Purchase Agreements (i) will not violate any provision of any United States
federal law or the law of the state of the United States where it is located
governing the banking and trust powers of the Trustee or any order, writ,
judgment, or decree of any court, arbitrator or governmental authority
applicable to the Trustee or any of its assets, (ii)
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will not violate any provision of the articles of association or by-laws of the
Trustee, and (iii) will not violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust Property pursuant
to the provisions of any mortgage, indenture, contract, agreement or other
undertaking to which it is a party, which violation, default or lien could
reasonably be expected to have an adverse effect on the Trustee's performance or
ability to perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(d) the execution, delivery and performance by the Trustee of
this Agreement, any Intercreditor Agreement, any Participation Agreement and the
Note Purchase Agreements will not require the authorization, consent, or
approval of, the giving of notice to, the filing or registration with, or the
taking of any other action in respect of, any governmental authority or agency
of the United States or the state of the United States where it is located
regulating the banking and corporate trust activities of the Trustee; and
(e) this Agreement, any Intercreditor Agreement, any
Participation Agreement and the Note Purchase Agreements have been duly executed
and delivered by the Trustee and constitute the legal, valid and binding
agreements of the Trustee, enforceable against it in accordance with their
respective terms; PROVIDED, HOWEVER, that enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and (ii) general principles of
equity.
Section 7.16. WITHHOLDING TAXES; INFORMATION REPORTING. As to the
Certificates of any series, the Trustee, as trustee of the related grantor trust
created by this Agreement, shall exclude and withhold from each distribution of
principal, premium, if any, and interest and other amounts due under this
Agreement or under the Certificates of such series any and all withholding taxes
applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the Certificates of such series, to withhold such amounts
and timely pay the same to the appropriate authority in the name of and on
behalf of the Certificateholders of such series, that it will file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it will deliver to each such
Certificateholder of such series appropriate documentation showing the payment
thereof, together with such additional documentary evidence as such
Certificateholders may reasonably request from time to time. The Trustee agrees
to file any other information reports as it may be required to file under United
States law.
Section 7.17. TRUSTEE'S LIENS. The Trustee in its individual
capacity agrees that it will, in respect of each Trust created by this
Agreement, at its own cost and expense promptly take any action as may be
necessary to duly discharge and satisfy in full any mortgage, pledge, lien,
charge, encumbrance, security interest or claim ("Trustee's Liens") on or with
respect to the Trust Property of such Trust which is attributable to the Trustee
either (i) in its individual capacity and which is unrelated to the transactions
contemplated by this Agreement or the related
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Note Documents or (ii) as Trustee hereunder or in its individual capacity and
which arises out of acts or omissions which are not contemplated by this
Agreement.
Section 7.18. PREFERENTIAL COLLECTION OF CLAIMS. The Trustee
shall comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship listed in Section 311(b) of the Trust Indenture Act. If
the Trustee shall resign or be removed as Trustee, it shall be subject to
Section 311(a) of the Trust Indenture Act to the extent provided therein.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. THE COMPANY TO FURNISH TRUSTEE WITH NAMES AND
ADDRESSES OF CERTIFICATEHOLDERS. The Company will furnish to the Trustee within
15 days after each Record Date with respect to a Scheduled Payment, and at such
other times as the Trustee may request in writing within 30 days after receipt
by the Company of any such request, a list, in such form as the Trustee may
reasonably require, of all information in the possession or control of the
Company as to the names and addresses of the Certificateholders of each series,
in each case as of a date not more than 15 days prior to the time such list is
furnished; PROVIDED, HOWEVER, that so long as the Trustee is the sole Registrar
for such series, no such list need be furnished; and PROVIDED FURTHER, HOWEVER,
that no such list need be furnished for so long as a copy of the Register is
being furnished to the Trustee pursuant to Section 7.12.
Section 8.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
CERTIFICATEHOLDERS. The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Certificateholders of each
series contained in the most recent list furnished to the Trustee as provided in
Section 7.12 or Section 8.01, as the case may be, and the names and addresses of
Certificateholders of each series received by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.12 or Section 8.01, as the case may be, upon receipt of a
new list so furnished.
Section 8.03. REPORTS BY TRUSTEE. Within 60 days after May 15 of
each year commencing with the first full year following the issuance of any
series of Certificates, the Trustee shall transmit to the Certificateholders of
such series, as provided in Section 313(c) of the Trust Indenture Act, a brief
report dated as of such May 15, if required by Section 313(a) of the Trust
Indenture Act.
Section 8.04. REPORTS BY THE COMPANY. The Company shall:
(a) file with the Trustee, within 30 days after the Company is
required to file the same with the SEC, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may from time to time by rules
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and regulations prescribe) which the Company is required to file with the SEC
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934,
as amended; or, if the Company is not required to file information, documents or
reports pursuant to either of such sections, then to file with the Trustee and
the SEC, in accordance with rules and regulations prescribed by the SEC, such of
the supplementary and periodic information, documents and reports which may be
required pursuant to section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national securities
exchange as may be prescribed in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with the
rules and regulations prescribed by the SEC, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants of the Company provided for in this Agreement, as may
be required by such rules and regulations, including, in the case of annual
reports, if required by such rules and regulations, certificates or opinions of
independent public accountants, conforming to the requirements of Section 1.02;
(c) transmit to all Certificateholders, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act such summaries of
any information, documents and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section 8.04 as may be required by
rules and regulations prescribed by the SEC; and
(d) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his knowledge of the Company's compliance
with all conditions and covenants under this Agreement (it being understood that
for purposes of this paragraph (d), such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Agreement).
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
CERTIFICATEHOLDERS. Without the consent of the Certificateholders, the Company
may (but will not be required to), and the Trustee (subject to Section 9.03)
shall, at the Company's request, at any time and from time to time, enter into
one or more agreements supplemental hereto or, if applicable, to an
Intercreditor Agreement or a Liquidity Facility, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to provide for the formation of a Trust, the
issuance of a series of Certificates and other matters
contemplated by Section 2.01(b); or
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(2) to evidence the succession of another
corporation to the Company and the assumption by any such
successor of the covenants of the Company herein contained or of
the Company's obligations under any Intercreditor Agreement or
any Liquidity Facility; or
(3) to add to the covenants of the Company for the
benefit of the Certificateholders of any series, or to surrender
any right or power conferred upon the Company in this Agreement,
any Intercreditor Agreement or any Liquidity Facility; or
(4) to correct or supplement any provision in this
Agreement, any Intercreditor Agreement or any Liquidity Facility
which may be defective or inconsistent with any other provision
herein or therein or to cure any ambiguity or to modify any other
provision with respect to matters or questions arising under this
Agreement, any Intercreditor Agreement or any Liquidity Facility;
PROVIDED, HOWEVER, that any such action shall not materially
adversely affect the interests of the Certificateholders of any
series; to correct any mistake in this Agreement, any
Intercreditor Agreement or any Liquidity Facility; or, as
provided in any Intercreditor Agreement, to give effect to or
provide for a Replacement Liquidity Facility (as defined in such
Intercreditor Agreement); or
(5) to comply with any requirement of the SEC, any
applicable law, rules or regulations of any exchange or quotation
system on which the Certificates of any series are listed or of
any regulatory body; or
(6) to modify, eliminate or add to the provisions
of this Agreement, any Intercreditor Agreement or any Liquidity
Facility to such extent as shall be necessary to continue the
qualification of this Agreement, any Intercreditor Agreement or
any Liquidity Facility (including any supplemental agreement)
under the Trust Indenture Act or under any similar Federal
statute hereafter enacted, and to add to this Agreement, any
Intercreditor Agreement or any Liquidity Facility such other
provisions as may be expressly permitted by the Trust Indenture
Act, excluding, however, the provisions referred to in Section
316(a)(2) of the Trust Indenture Act as in effect at the date as
of which this Basic Agreement was executed or any corresponding
provision in any similar Federal statute hereafter enacted; or
(7) to evidence and provide for the acceptance of
appointment under this Agreement, any Intercreditor Agreement or
any Liquidity Facility by a successor Trustee with respect to one
or more Trusts and to add to or change any of the provisions of
this Agreement, any Intercreditor Agreement or any Liquidity
Facility as shall be necessary to provide for or facilitate the
administration of the Trust, pursuant to the requirements of
Section 7.10; or
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(8) to provide the information required under
Section 7.12 and Section 12.04 as to the Trustee; or
(9) to make any other amendments or modifications
hereto; PROVIDED, HOWEVER, that such amendments or modifications
shall apply to Certificates of any series to be thereafter
issued;
PROVIDED, HOWEVER, that no such supplemental agreement shall adversely affect
the status of any Trust as a grantor trust under Subpart E, Part I of Subchapter
J of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986, as amended,
for U.S. federal income tax purposes.
Section 9.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
CERTIFICATEHOLDERS. With respect to each separate Trust and the series of
Certificates relating thereto, with the consent of the Certificateholders
holding Certificates of such series (including consents obtained in connection
with a tender offer or exchange offer for the Certificates) evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in such Trust, by Direction of said Certificateholders delivered to the Company
and the Trustee, the Company may (with the consent of the Owner Trustees, if
any, relating to such Certificates, which consent shall not be unreasonably
withheld), but shall not be obligated to, and the Trustee (subject to Section
9.03) shall, enter into an agreement or agreements supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, any Intercreditor Agreement or any
Liquidity Facility to the extent applicable to such Certificateholders or of
modifying in any manner the rights and obligations of such Certificateholders
under this Agreement, any Intercreditor Agreement or any Liquidity Facility;
PROVIDED, HOWEVER, that no such agreement shall, without the consent of the
Certificateholder of each Outstanding Certificate affected thereby:
(1) reduce in any manner the amount of, or delay
the timing of, any receipt by the Trustee of payments on the
Equipment Notes held in such Trust or distributions that are
required to be made herein on any Certificate of such series, or
change any date of payment on any Certificate of such series, or
change the place of payment where, or the coin or currency in
which, any Certificate of such series is payable, or impair the
right to institute suit for the enforcement of any such payment
or distribution on or after the Regular Distribution Date or
Special Distribution Date applicable thereto; or
(2) permit the disposition of any Equipment Note
included in the Trust Property of such Trust except as permitted
by this Agreement, or otherwise deprive such Certificateholder of
the benefit of the ownership of the Equipment Notes in such
Trust; or
(3) alter the priority of distributions specified
in the Intercreditor Agreement in a manner materially adverse to
the interests of the Certificateholders of any series; or
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(4) reduce the specified percentage of the
aggregate Fractional Undivided Interests of such Trust that is
required for any such supplemental agreement, or reduce such
specified percentage required for any waiver (of compliance with
certain provisions of this Agreement or certain defaults
hereunder and their consequences) provided for in this Agreement;
or
(5) modify any of the provisions of this Section
9.02 or Section 6.05, except to increase any such percentage or
to provide that certain other provisions of this Agreement cannot
be modified or waived without the consent of the
Certificateholder of each Certificate of such series affected
thereby; or
(6) adversely affect the status of any Trust as a
grantor trust under Subpart E, Part I of Subchapter J of Chapter
1 of Subtitle A of the Internal Revenue Code of 1986, as amended,
for U.S. federal income tax purposes.
It shall not be necessary for any Direction of such
Certificateholders under this Section 9.02 to approve the particular form of any
proposed supplemental agreement, but it shall be sufficient if such Direction
shall approve the substance thereof.
Section 9.03. DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY. If in
the opinion of the Trustee any document required to be executed by it pursuant
to the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity
or indemnity in favor of the Trustee under this Basic Agreement or any Trust
Supplement, the Trustee may in its discretion decline to execute such document.
Section 9.04. EXECUTION OF SUPPLEMENTAL AGREEMENTS. In executing,
or accepting the additional trusts created by, any supplemental agreement
permitted by this Article or the modifications thereby of the trusts created by
this Agreement, the Trustee 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 9.05. EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the
execution of any agreement supplemental to this Agreement under this Article,
this Basic Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Basic Agreement for all
purposes; and every Certificateholder of each series theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby to the extent
applicable to such series.
Section 9.06. CONFORMITY WITH TRUST INDENTURE ACT. Every
supplemental agreement executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
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Section 9.07. REFERENCE IN CERTIFICATES TO SUPPLEMENTAL
AGREEMENTS. Certificates of each series authenticated and delivered after the
execution of any supplemental agreement applicable to such series pursuant to
this Article may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental agreement; and, in such case, suitable
notation may be made upon Outstanding Certificates of such series after proper
presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. AMENDMENTS AND SUPPLEMENTS TO INDENTURE AND OTHER
NOTE DOCUMENTS. In the event that the Trustee, as holder (or beneficial owner
through the Subordination Agent) of any Equipment Notes (or as a prospective
purchaser of any Postponed Notes) in trust for the benefit of the
Certificateholders of any series or as Controlling Party under an Intercreditor
Agreement, receives (directly or indirectly through the Subordination Agent) a
request for a consent to any amendment, modification, waiver or supplement under
any Indenture, other Note Document or any other related document, the Trustee
shall forthwith send a notice of such proposed amendment, modification, waiver
or supplement to each Certificateholder of such series registered on the
Register as of the date of such notice. The Trustee shall request from the
Certificateholders of such series a Direction as to (a) whether or not to take
or refrain from taking (or direct the Subordination Agent to take or refrain
from taking) any action which a holder of (or, with respect to Postponed Notes,
a prospective purchaser of) such Equipment Note or a Controlling Party has the
option to direct, (b) whether or not to give or execute (or direct the
Subordination Agent to give or execute) any waivers, consents, amendments,
modifications or supplements as a holder of (or, with respect to Postponed
Notes, a prospective purchaser of) such Equipment Note or as Controlling Party
and (c) how to vote (or direct the Subordination Agent to vote) any Equipment
Note (or, with respect to a Postponed Note, its commitment to acquire such
Postponed Note) if a vote has been called for with respect thereto. Provided
such a request for Certificateholder Direction shall have been made, in
directing any action or casting any vote or giving any consent as the holder of
any Equipment Note (or in directing the Subordination Agent in any of the
foregoing), (i) other than as Controlling Party, the Trustee shall vote for or
give consent to any such action with respect to such Equipment Note (or
Postponed Note) in the same proportion as that of (A) the aggregate face amounts
of all Certificates actually voted in favor of or for giving consent to such
action by such Direction of Certificateholders to (B) the aggregate face amount
of all Outstanding Certificates and (ii) as Controlling Party, the Trustee shall
vote as directed in such Certificateholder Direction by the Certificateholders
of such series evidencing a Fractional Undivided Interest aggregating not less
than a majority in interest in the Trust. For purposes of the immediately
preceding sentence, a Certificate shall have been "actually voted" if the Holder
of such Certificate has delivered to the Trustee an instrument evidencing such
Holder's consent to such Direction prior to one Business Day before the Trustee
directs such action or casts such vote or gives such consent. Notwithstanding
the foregoing, but subject to Section 6.04 and any
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<PAGE> 56
Intercreditor Agreement, the Trustee may, with respect to the Certificates of
any series, in its own discretion and at its own direction, consent and notify
the relevant Loan Trustee of such consent (or direct the Subordination Agent to
consent and notify the Loan Trustee of such consent) to any amendment,
modification, waiver or supplement under any related Indenture or any other
related Note Document if an Event of Default hereunder shall have occurred and
be continuing or if such amendment, modification, waiver or supplement will not
materially adversely affect the interests of the Certificateholders of such
series.
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. TERMINATION OF THE TRUSTS. In respect of each
Trust created by the Basic Agreement as supplemented by a related Trust
Supplement, the respective obligations and responsibilities of the Company and
the Trustee with respect to such Trust shall terminate upon the distribution to
all Holders of Certificates of the series of such Trust and the Trustee of all
amounts required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property of such Trust;
PROVIDED, HOWEVER, that in no event shall such Trust continue beyond the final
expiration date determined as provided in such Trust Supplement.
Notice of any termination of a Trust, specifying the applicable
Regular Distribution Date (or applicable Special Distribution Date, as the case
may be) upon which the Certificateholders of any series may surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Certificateholders of
such series not earlier than the minimum number of days and not later than the
maximum number of days specified therefor in the related Trust Supplement
preceding such final distribution specifying (A) the Regular Distribution Date
(or Special Distribution Date, as the case may be) upon which the proposed final
payment of the Certificates of such series will be made upon presentation and
surrender of Certificates of such series at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (C)
that the Record Date otherwise applicable to such Regular Distribution Date (or
Special Distribution Date, as the case may be) is not applicable, payments being
made only upon presentation and surrender of the Certificates of such series at
the office or agency of the Trustee therein specified. The Trustee shall give
such notice to the Registrar at the time such notice is given to
Certificateholders of such series. Upon presentation and surrender of the
Certificates of such series in accordance with such notice, the Trustee shall
cause to be distributed to Certificateholders of such series amounts
distributable on such Regular Distribution Date (or Special Distribution Date,
as the case may be) pursuant to Section 4.02.
In the event that all of the Certificateholders of such series
shall not surrender their Certificates for cancellation within six months after
the date specified in the above-mentioned
- 56 -
<PAGE> 57
written notice, the Trustee shall give a second written notice to the remaining
Certificateholders of such series to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. No
additional interest shall accrue on the Certificates of such series after any
Regular Distribution Date (or Special Distribution Date, as the case may be) of
such series, as specified in the first written notice. In the event that any
money held by the Trustee for the payment of distributions on the Certificates
of such series shall remain unclaimed for two years (or such lesser time as the
Trustee shall be satisfied, after 60 days' notice from the Company, is one month
prior to the escheat period provided under applicable law) after the final
distribution date with respect thereto, the Trustee shall pay to each Loan
Trustee the appropriate amount of money relating to such Loan Trustee and shall
give written notice thereof to the related Owner Trustees and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The
death or incapacity of any Certificateholder of any series shall not operate to
terminate this Agreement or the related Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition or
winding up of the Trust, nor otherwise affect the rights, obligations, and
liabilities of the parties hereto or any of them.
Section 12.02. LIABILITIES OF CERTIFICATEHOLDERS. Neither the
existence of the Trust nor any provision in this Agreement is intended to or
shall limit the liability the Certificateholders would otherwise incur if the
Certificateholders owned Trust Property as co-owners, or incurred any
obligations of the Trust, directly rather than through the Trust.
Section 12.03. REGISTRATION OF EQUIPMENT NOTES IN NAME OF
SUBORDINATION AGENT. If a Trust is party to an Intercreditor Agreement, the
Trustee agrees that all Equipment Notes to be purchased by such Trust shall be
issued in the name of the Subordination Agent under such Intercreditor Agreement
or its nominee and held by such Subordination Agent in trust for the benefit of
the Certificateholders, or, if not so held, such Subordination Agent or its
nominee shall be reflected as the owner of such Equipment Notes in the register
of the issuer of such Equipment Notes.
Section 12.04. NOTICES. (a) Unless otherwise specifically
provided herein or in the applicable Trust Supplement with respect to any Trust,
all notices required under the terms and provisions of this Basic Agreement or
such Trust Supplement with respect to such Trust shall be in English and in
writing, and any such notice may be given by United States mail, courier service
or telecopy, and any such notice shall be effective when delivered or received
or, if mailed, three days after deposit in the United States mail with proper
postage for ordinary mail prepaid,
- 57 -
<PAGE> 58
if to the Company:
Delta Air Lines, Inc.
General Offices
1030 Delta Boulevard
Hartsfield International Airport
Atlanta, Georgia 30320
Attention: Chief Financial Officer and
General Counsel
Facsimile: (404) 715-2233 (Legal)
(404) 715-5440 (Finance)
if to the Trustee:
The Bank of New York
-----------------
-----------------
Attention:
-----------------
Facsimile:
-----------------
Telephone:
-----------------
(b) The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
(c) Any notice or communication to Certificateholders of any
series shall be mailed by first-class mail to the addresses for
Certificateholders of such series shown on the Register kept by the Registrar
and to addresses filed with the Trustee for Certificate Owners of such series.
Failure so to mail a notice or communication or any defect in such notice or
communication shall not affect its sufficiency with respect to other
Certificateholders or Certificate Owners of such series.
(d) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been duly
given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the
Certificateholders of such series, it shall mail a copy to the Trustee and to
each Paying Agent for such series at the same time.
(f) Notwithstanding the foregoing, all communications or notices
to the Trustee shall be deemed to be given only when received by a Responsible
Officer of the Trustee.
- 58 -
<PAGE> 59
(g) The Trustee shall promptly furnish the Company with a copy of
any demand, notice or written communication received by the Trustee hereunder
from any Certificateholder, Owner Trustee or Loan Trustee.
Section 12.05. GOVERNING LAW. THIS BASIC AGREEMENT, TOGETHER
WITH ALL TRUST SUPPLEMENTS AND CERTIFICATES, SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.06. SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or the related Trust,
or of the Certificates of such series or the rights of the Certificateholders
thereof.
Section 12.07. TRUST INDENTURE ACT CONTROLS. This Agreement is
subject to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions. If any provision of this Agreement
limits, qualifies or conflicts with another provision which is required to be
included in this Agreement by the Trust Indenture Act, the required provision
shall control.
Section 12.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 12.09. SUCCESSORS AND ASSIGNS. All covenants, agreements,
representations and warranties in this Agreement by the Trustee and the Company
shall bind and, to the extent permitted hereby, shall inure to the benefit of
and be enforceable by their respective successors and assigns, whether so
expressed or not.
Section 12.10. BENEFITS OF AGREEMENT. Nothing in this Agreement
or in the Certificates of any series, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, and the
Certificateholders of each series, any benefit or any legal or equitable right,
remedy or claim under this Agreement.
Section 12.11. LEGAL HOLIDAYS. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate of
any series shall not be a Business Day with respect to such series, then
(notwithstanding any other provision of this Agreement) payment need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on such Regular Distribution Date or Special
Distribution Date.
- 59 -
<PAGE> 60
Section 12.12. COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 12.13. COMMUNICATION BY CERTIFICATEHOLDERS WITH OTHER
CERTIFICATEHOLDERS. Certificateholders of any series may communicate with other
Certificateholders of such series with respect to their rights under this Basic
Agreement, the related Trust Supplement or the Certificates of such series
pursuant to Section 312(b) of the Trust Indenture Act. The Company, the Trustee
and any and all other persons benefitted by this Agreement shall have the
protection afforded by Section 312(c) of the Trust Indenture Act.
Section 12.14. INTENTION OF PARTIES. The parties hereto intend
that each Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation or
as a partnership. The powers granted and obligations undertaken pursuant to this
Agreement shall be so construed so as to further such intent.
- 60 -
<PAGE> 61
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first written above.
DELTA AIR LINES, INC.
By:
----------------------------------
Name:
Title:
THE BANK OF NEW YORK
As Trustee
By:
---------------------------------
Name:
Title:
- 61 -
<PAGE> 62
EXHIBIT A
FORM OF CERTIFICATE
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to Issuer or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
DELTA AIR LINES, INC. PASS THROUGH TRUST, 199__-__
199__ Pass Through Certificate, Series __________
Final Regular Distribution Date: _____, __
evidencing a fractional undivided interest in a
trust, the property of which includes certain
equipment notes each secured by Aircraft owned by
or leased to Delta Air Lines, Inc.
Certificate
No.____________
$_________ Fractional Undivided Interest representing ._____% of the Trust per
$1,000 face amount
THIS CERTIFIES THAT __________________, for value received, is
the registered owner of a $___________ (________ dollars) Fractional Undivided
Interest in the Delta Air Lines, Inc. Pass Through Trust, 199__-__, Series
[______] (the "Trust") created by __________, as trustee (the "Trustee"),
pursuant to a Pass Through Trust Agreement dated as of __________, 1998 (the
"Basic Agreement"), as supplemented by Trust Supplement No. _______ thereto
dated __________, 199_ (collectively, the "Agreement"), between the Trustee and
Delta Air Lines, Inc., a corporation incorporated under Delaware law (the
"Company"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Agreement. This
Certificate is one of the duly authorized Certificates designated as "199_ Pass
Through Certificate, Series ____" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement. By virtue of its acceptance hereof, the
Certificateholder of this Certificate assents to and agrees to be bound by the
<PAGE> 63
provisions of the Agreement and any related Intercreditor Agreement. The
property of the Trust includes certain Equipment Notes and all rights of the
Trust to receive any payments under any Intercreditor Agreement or Liquidity
Facility (the "Trust Property"). Each issue of the Equipment Notes is or will be
secured by, among other things, a security interest in aircraft leased to or
owned by the Company.
-----------
This legend to appear on Book-Entry Certificates to be deposited
with The Depository Trust Company.
The Certificates represent fractional undivided interests in the
Trust and the Trust Property, and have no rights, benefits or interest in
respect of any other separate trust established pursuant to the terms of the
Basic Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and
any related Intercreditor Agreement, from funds then available to the Trustee,
there will be distributed on each __________ and ___________ (a "Regular
Distribution Date"), commencing on _________, 199_, to the Person in whose name
this Certificate is registered at the close of business on the 15th day
preceding the Regular Distribution Date, an amount in respect of the Scheduled
Payments on the Equipment Notes due on such Regular Distribution Date, the
receipt of which has been confirmed by the Trustee, equal to the product of the
percentage interest in the Trust evidenced by this Certificate and an amount
equal to the sum of such Scheduled Payments. Subject to and in accordance with
the terms of the Agreement and any related Intercreditor Agreement, in the event
that Special Payments on the Equipment Notes are received by the Trustee, from
funds then available to the Trustee, there shall be distributed on the
applicable Special Distribution Date, to the Person in whose name this
Certificate is registered at the close of business on the 15th day preceding the
Special Distribution Date, an amount in respect of such Special Payments on the
Equipment Notes, the receipt of which has been confirmed by the Trustee, equal
to the product of the percentage interest in the Trust evidenced by this
Certificate and an amount equal to the sum of such Special Payments so received.
If a Regular Distribution Date or Special 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 Regular Distribution Date or
Special Distribution Date. The Trustee shall mail notice of each Special Payment
and the Special Distribution Date therefor to the Certificateholder of this
Certificate.
Distributions on this Certificate will be made by the Trustee by
check mailed to the Person entitled thereto, without the presentation or
surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of
A - 2
<PAGE> 64
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
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 Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any 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
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the 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 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 Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $1,000 Fractional Undivided Interest
and integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
A - 3
<PAGE> 65
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the 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 Trustee shall require payment of a sum sufficient
to cover any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES AND CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed
by the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
DELTA AIR LINES, INC.
PASS THROUGH TRUST, SERIES 199__-__
By: THE BANK OF NEW YORK
as Trustee
By:
------------------------------------
Title:
A - 4
<PAGE> 66
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated:
This is one of the Certificates referred to in the
within-mentioned Pass Through Agreement and related Series Supplement.
THE BANK OF NEW YORK
as Trustee
By:
--------------------------------------
Authorized Officer
A - 5
<PAGE> 67
[Reverse of Pass Through Certificate]
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as more
specifically set forth on the face hereof and in the Trust Agreement and related
Series Supplement. All payments or distributions made to Certificateholders
under the Trust Agreement shall be made only from the Trust Property and only to
the extent that the Trust Trustee shall have sufficient income or proceeds from
the Trust Property to make such payments in accordance with the terms of the
Trust Agreement and related Series Supplement. Each Certificateholder of this
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 Trust Agreement and
related Series Supplement. This Certificate does not purport to summarize the
Trust Agreement and related Series Supplement and reference is made to the Trust
Agreement and related Series Supplement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced hereby.
A copy of the Trust Agreement may be examined during normal business hours at
the principal office of the Trust Trustee, and at such other places, if any,
designated by the Trust Trustee, by any Certificateholder upon request.
As of the date of issuance of this Certificate, and assuming that
all proceeds are used to purchase the Equipment Notes on or before
______________, 199_ and that no early redemption, purchase or default in
respect of the Equipment Notes shall occur, the aggregate scheduled repayments
of principal on the Equipment Trust Certificates for the Trust and the resulting
Pool Factors for the Trust after taking into account each such repayment are set
forth below:
A - 6
<PAGE> 68
Trust, 199___-___
<TABLE>
<CAPTION>
Regular Scheduled Principal
Distribution Payments on
Date Equipment Notes Pool Factor
------------ ------------------- -----------
<S> <C> <C>
$ 0.0000000
</TABLE>
A - 7
<PAGE> 1
[LETTERHEAD OF KING & SPALDING] EXHIBIT 5(A)
July 7, 1998
Delta Air Lines, Inc.
Hartsfield Atlanta International
Airport
1030 Delta Boulevard
Atlanta, Georgia 30320-6001
Re: Registration of Debt Securities
Ladies and Gentlemen:
We have acted as counsel for Delta Air Lines, Inc., a Delaware
corporation ("Delta"), in connection with the filing by Delta of its
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, which registration statement, together with the related
registration statement (File No. 33-50175) previously filed by Delta, relates
to up to $1,583,881,000 in aggregate principal amount of certain debt securities
of Delta (the "Debt Securities"). The Debt Securities are to be issued by Delta
in one or more series pursuant to an Indenture, dated as of May 1, 1991 (the
"Indenture"), between Delta and The Bank of New York, successor to the Citizens
and Southern National Bank of Florida (the "Trustee"), a form of which has been
incorporated by reference as an exhibit to the Registration Statement.
In so acting, we have examined and relied upon the accuracy of
original, certified, conformed or photographic copies of such records,
agreements, certificates and other documents as we have deemed necessary or
appropriate to enable us to render the opinions set forth below. In all such
examinations, we have assumed the genuineness of signatures on original
documents and the conformity to such original documents of all copies submitted
to us as certified, conformed or photographic copies and, as to certificates of
public officials and officers of Delta, we have assumed the same to have been
properly given and to be accurate.
Based upon the foregoing, we are of the opinion that the Debt
Securities, when the final terms and provisions thereof have been duly
established and when duly executed on behalf of Delta, authenticated by the
Trustee under the Indenture and sold by Delta, will be validly issued, will
constitute valid and binding obligations of Delta in accordance with their
terms and will be entitled to the benefits of the Indenture in accordance with
their terms and the terms of the Indenture.
The opinions set forth above are subject, as to enforcement, to the
effect of (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights and remedies of creditors generally, (ii)
general principles of equity (whether applied by a court of
<PAGE> 2
Delta Air Lines, Inc.
July 7, 1998
Page 2
law or equity), and (iii) requirements that a claim with respect to any Debt
Securities denominated other than in United States dollars (or a foreign
currency or composite currency judgment in respect of such claim) be converted
into United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law.
The opinions expressed herein are limited in all respects to the laws
of the State of New York, the corporate laws of the State of Delaware and the
federal laws of the United States.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Validity
of the Debt Securities" in the prospectus relating to the Debt Securities that
constitutes a part of the Registration Statement.
Very truly yours,
/s/ KING & SPALDING
<PAGE> 1
[LETTERHEAD OF KING & SPALDING ] EXHIBIT 5 (B)
July 7, 1998
Delta Air Lines, Inc.
Hartsfield Atlanta International
Airport
1030 Delta Boulevard
Atlanta, Georgia 30320-6001
Re: Registration of Pass Through Certificates
Ladies and Gentlemen:
We have acted as counsel for Delta Air Lines, Inc., a Delaware
corporation ("Delta"), in connection with the filing by Delta of its
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, which registration statement, together with the related
registration statement (File No. 33-50175) previously filed by Delta, relates
up to $1,583,881,000 in aggregate principal amount of Pass Through Certificates
of Delta (the "Pass Through Certificates"). The Pass Through Certificates will
be issued pursuant to the provisions of the Pass Through Trust Agreement to be
entered into between Delta and The Bank of New York, as Pass Through Trustee
(the "Pass Through Trustee"), a form of which has been filed as an exhibit to
the Registration Statement (the "Pass Through Agreement"), as supplemented by a
separate Series Supplement for each series of Pass Through Certificates (each, a
"Series Supplement").
In so acting, we have examined and relied upon the accuracy of
original, certified, conformed or photographic copies of such records,
agreements, certificates and other documents as we have deemed necessary or
appropriate to enable us to render the opinions set forth below. In all such
examinations, we have assumed the genuineness of signatures on original
documents and the conformity to such original documents of all copies submitted
to us as certified, conformed or photographic copies and, as to certificates of
public officials and officers of Delta, we have assumed the same to have been
properly given and to be accurate.
Based on the foregoing, we are the opinion that, assuming (i) the due
authorization, execution and delivery of the Pass Through Agreement and each
applicable Series Supplement by each of the parties thereto, and (ii) the due
authorization, execution, issue, delivery and authentication by the Pass
Through Trustee of the Pass Through Certificates to be issued under the Pass
Through Agreement and each applicable Series Supplement, (A) the Pass Through
Agreement constitutes, and each applicable Series Supplement, when duly
executed and delivered, will constitute, a valid and binding agreement of each
of the parties thereto, and (B) the Pass Through Certificates, when duly
executed, delivered and authenticated by the Pass
<PAGE> 2
Delta Air Lines, Inc.
July 7, 1998
Page 2
Through Trustee in accordance with the terms of the Pass Through Agreement and
each applicable Series Supplement and sold in accordance with the related
purchase agreement or underwriting agreement between Delta and the purchasers
or underwriters, as the case may be, named therein, will be validly issued,
will constitute valid and binding obligations of the Pass Through Trustee in
accordance with their terms and will be entitled to the benefits of the Pass
Through Agreement and each applicable Series Supplement in accordance with
their terms and the terms of the Pass Through Agreement and such Series
Supplement.
The opinions set forth above are subject, as to enforcement, to the
effect of (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights and remedies of creditors generally and (ii)
general principles of equity (whether applied by a court of law or equity).
The opinions expressed herein are limited in all respects to the laws
of the State of New York, the corporate laws of the State of Delaware and the
federal laws of the United States.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the captions "Validity
of the Certificates" and "Certain United States Federal Income Tax
Consequences" in the prospectus relating to the Pass Through Certificates that
constitutes a part of the Registration Statement.
Very truly yours.
/s/ KING & SPALDING
<PAGE> 1
EXHIBIT 23(B)
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 (relating to Debt
Securities and Pass Through Certificates) of our reports dated August 15, 1997
included or incorporated by reference in Delta Air Lines, Inc.'s Annual Report
on Form 10-K for the year ended June 30, 1997 and to all references to our firm
included in this Registration Statement.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
June 30, 1998
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Warren C. Jenson and Edward H. West, and
each of them separately, my true and lawful attorneys-in-fact, with full power
of substitution, for me and in my name, in any and all capacities, to sign one
or more Registration Statements on Form S-3 in such form as said attorneys deem
appropriate or advisable, to be filed with the Securities and Exchange
Commission by Delta Air Lines, Inc. (the "Company") in respect of the issuance
of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ LEO F. MULLIN
--------------------------------------
Leo F. Mullin
President and Chief Executive Officer
and Director
Delta Air Lines, Inc.
<PAGE> 2
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Warren C. Jenson and Edward
H. West, and each of them separately, my true and lawful attorneys-in-fact, with
full power of substitution, for me and in my name, in any and all capacities, to
sign one or more Registration Statements on Form S-3 in such form as said
attorneys deem appropriate or advisable, to be filed with the Securities and
Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of the
issuance of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ EDWIN L. ARTZT
--------------------------------------
Edwin L. Artzt
Director
Delta Air Lines, Inc.
<PAGE> 3
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Warren C. Jenson and Edward
H. West, and each of them separately, my true and lawful attorneys-in-fact, with
full power of substitution, for me and in my name, in any and all capacities, to
sign one or more Registration Statements on Form S-3 in such form as said
attorneys deem appropriate or advisable, to be filed with the Securities and
Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of the
issuance of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ HENRY A. BIEDENHARN, III
--------------------------------------
Henry A. Biedenharn, III
Director
Delta Air Lines, Inc.
<PAGE> 4
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Warren C. Jenson and Edward
H. West, and each of them separately, my true and lawful attorneys-in-fact, with
full power of substitution, for me and in my name, in any and all capacities, to
sign one or more Registration Statements on Form S-3 in such form as said
attorneys deem appropriate or advisable, to be filed with the Securities and
Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of the
issuance of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ JAMES L. BROADHEAD
--------------------------------------
James L. Broadhead
Director
Delta Air Lines, Inc.
<PAGE> 5
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Warren C. Jenson and Edward
H. West, and each of them separately, my true and lawful attorneys-in-fact, with
full power of substitution, for me and in my name, in any and all capacities, to
sign one or more Registration Statements on Form S-3 in such form as said
attorneys deem appropriate or advisable, to be filed with the Securities and
Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of the
issuance of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ EDWARD H. BUDD
--------------------------------------
Edward H. Budd
Director
Delta Air Lines, Inc.
<PAGE> 6
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Warren C. Jenson and Edward
H. West, and each of them separately, my true and lawful attorneys-in-fact, with
full power of substitution, for me and in my name, in any and all capacities, to
sign one or more Registration Statements on Form S-3 in such form as said
attorneys deem appropriate or advisable, to be filed with the Securities and
Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of the
issuance of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ R. EUGENE CARTLEDGE
--------------------------------------
R. Eugene Cartledge
Director
Delta Air Lines, Inc.
<PAGE> 7
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Warren C. Jenson and Edward
H. West, and each of them separately, my true and lawful attorneys-in-fact, with
full power of substitution, for me and in my name, in any and all capacities, to
sign one or more Registration Statements on Form S-3 in such form as said
attorneys deem appropriate or advisable, to be filed with the Securities and
Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of the
issuance of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ MARY JOHNSTON EVANS
--------------------------------------
Mary Johnston Evans
Director
Delta Air Lines, Inc.
<PAGE> 8
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Warren C. Jenson and Edward
H. West, and each of them separately, my true and lawful attorneys-in-fact, with
full power of substitution, for me and in my name, in any and all capacities, to
sign one or more Registration Statements on Form S-3 in such form as said
attorneys deem appropriate or advisable, to be filed with the Securities and
Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of the
issuance of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ GERALD GRINSTEIN
--------------------------------------
Gerald Grinstein
Director and Chairman of the Board
of Directors
Delta Air Lines, Inc.
<PAGE> 9
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Warren C. Jenson and Edward
H. West, and each of them separately, my true and lawful attorneys-in-fact, with
full power of substitution, for me and in my name, in any and all capacities, to
sign one or more Registration Statements on Form S-3 in such form as said
attorneys deem appropriate or advisable, to be filed with the Securities and
Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of the
issuance of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ JESSE HILL, JR.
--------------------------------------
Jesse Hill, Jr.
Director
Delta Air Lines, Inc.
<PAGE> 10
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Warren C. Jenson and Edward
H. West, and each of them separately, my true and lawful attorneys-in-fact, with
full power of substitution, for me and in my name, in any and all capacities, to
sign one or more Registration Statements on Form S-3 in such form as said
attorneys deem appropriate or advisable, to be filed with the Securities and
Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of the
issuance of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ ANDREW J. YOUNG
--------------------------------------
Andrew J. Young
Director
Delta Air Lines, Inc.
<PAGE> 11
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin and Edward H. West, and each
of them separately, my true and lawful attorneys-in-fact, with full power of
substitution, for me and in my name, in any and all capacities, to sign one or
more Registration Statements on Form S-3 in such form as said attorneys deem
appropriate or advisable, to be filed with the Securities and Exchange
Commission by Delta Air Lines, Inc. (the "Company") in respect of the issuance
of debt securities of the Company and/or the issuance of pass through
certificates, and all amendments to such Registration Statements (including
post-effective amendments), and to file the same with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney this 29th
day of June, 1998.
/s/ WARREN C. JENSON
--------------------------------------
Warren C. Jenson
Executive Vice President and
Chief Financial Officer
Delta Air Lines, Inc.
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
13-5160382
(I.R.S. employer identification no.)
48 WALL STREET, NEW YORK, NEW YORK 10286
(Address of principal executive offices) (Zip Code)
-------------------
THE BANK OF NEW YORK
10161 CENTURION PARKWAY
TOWERMARC PLAZA, 2ND FLOOR
JACKSONVILLE, FLORIDA 32256
ATTN: MS. SANDRA CARREKER
(904) 998-4716
(Name, address and telephone number of agent for service)
--------------------
DELTA AIR LINES, INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 58-0218548
(State or other (IRS employer
jurisdiction of incorporation identification no.)
or organization)
</TABLE>
--------------------
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
(404) 715-2600
(Address of principal executive offices) (Zip code)
--------------------
<PAGE> 2
COPIES OF CORRESPONDENCE TO:
ROBERT S. HARKEY, ESQ.
SENIOR VICE PRESIDENT
GENERAL COUNSEL & SECRETARY
DELTA AIR LINES, INC.
HARTSFIELD ATLANTA INTERNATIONAL AIRPORT
ATLANTA, GEORGIA 30320
(404) 715-2387
JEFFREY M. STEIN, ESQ.
KING & SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303-1763
(404) 572-4729
--------------------
DEBT SECURITIES AND PASS THROUGH CERTIFICATES
(TITLE OF THE INDENTURE SECURITIES)
<PAGE> 3
1. General Information.
Furnish the following information as to the trustee--
Name and address of each examining or supervising authority to which
it is subject.
SUPERINTENDENT OF BANKS OF THE STATE OF NEW YORK
2 RECTOR STREET
NEW YORK, N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK
33 LIBERTY PLAZA
NEW YORK, N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION
NEW YORK, N.Y.
Whether it is authorized to exercise corporate trust powers.
YES.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
NONE. (SEE NOTE ON PAGE 4.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule
24 of the Commission's Rules of Practice.
(1) A copy of the Organization Certificate of the Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment 1 to Form T-1 filed with Registration Statement No.
33-6215, Exhibits
<PAGE> 4
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
(4) A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
(6) The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration No.
33-44051.)
(7) A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority.
<PAGE> 5
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of
all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment to
this Form T-1.
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City of Jacksonville
and the State of Florida, on the 26th day of June, 1998.
THE BANK OF NEW YORK
By: /s/ Heidi Van Horn-Bash
------------------------------------
Heidi Van Horn-Bash, Agent
<PAGE> 7
EXHIBIT 6 TO FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, in connection with the proposed issuance of Delta Air Lines, Inc.
Debt Securities and Pass Through Certificates, The Bank of New York hereby
consents that reports of examinations by Federal, State, Territorial or District
Authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
THE BANK OF NEW YORK
By: /s/ Heidi Van Horn-Bash
------------------------------------
Heidi Van Horn-Bash, Agent
<PAGE> 8
EXHIBIT 7 TO FORM T-1
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business December 31, 1997, published in accordance with
a call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
ASSETS --------------
- ------
<S> <C> <C>
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin ................................ $ 5,742,986
Interest-bearing balances .............................. 1,342,769
Securities:
Held-to-maturity securities ........................... 1,099,736
Available-for-sale securities ......................... 3,882,686
Federal funds sold and securities
purchased under agreements to resell .................. 2,568,530
Loans and lease financing receivables:
Loans and leases,
net of unearned income ..............35,019,808
LESS: Allowance for loan and
lease losses ...........................627,250
LESS: Allocated transfer
risk reserve .................................0
Loans and leases, net of unearned
income and allowance and reserve .................... 34,392,258
Assets held in trading accounts ............................ 2,521,451
Premises and fixed assets (including
capitalized leases) .................................. 659,209
Other real estate owned .................................... 11,992
Investments in unconsolidated
subsidiaries and associated
companies ............................................ 226,263
Customers' liability to this bank
on acceptances outstanding ........................... 1,187,449
Intangible assets .......................................... 781,684
Other assets ............................................... 1,736,574
-----------
Total assets ............................................... $56,153,587
===========
</TABLE>
<PAGE> 9
<TABLE>
LIABILITIES
- -----------
<S> <C> <C>
Deposits:
In domestic offices .................................... $27,031,362
Noninterest-bearing ..........................11,899,507
Interest-bearing .............................15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ..................... 13,794,449
Noninterest-bearing .............................590,889
Interest-bearing .............................13,203,450
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds purchased ................................ 2,338,881
Demand notes issued to the
U.S. Treasury ......................................... 173,851
Trading liabilities ........................................ 1,695,216
Other borrowed money:
With remaining maturity of one year
or less ............................................ 1,905,330
With remaining maturity of more
than one year through three years .................. 0
With remaining maturity of more
than three years ................................... 25,664
Bank's liability on acceptances
executed and outstanding ........................... 1,195,923
Subordinated notes and debentures .......................... 1,012,940
Other liabilities .......................................... 2,018,960
----------
Total liabilities .......................................... 51,192,576
==========
<CAPTION>
EQUITY CAPITAL
- --------------
<S> <C>
Common stock ............................................... 1,135,284
Surplus .................................................... 731,319
Undivided profits and capital
reserves .............................................. 3,093,726
Net unrealized holding gains (losses)
on available-for-sale securities ...................... 36,866
Cumulative foreign currency
translation adjustments ............................... (36,184)
-----------
Total equity capital ....................................... 4,961,011
-----------
Total liabilities and equity capital ....................... $56,153,587
===========
</TABLE>
<PAGE> 10
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith)
