<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 13, 2000
REGISTRATION NO. 333-36268
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
ATLAS AIR, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 4731 84-1207329
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
2000 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577-2543
(914) 701-8000
(Address, including Zip Code, and Telephone Number, including Area Code, of
Registrant's Principal Executive Offices)
RICHARD H. SHUYLER
EXECUTIVE VICE PRESIDENT -- STRATEGIC PLANNING AND TREASURER
ATLAS AIR, INC.
538 COMMONS DRIVE
GOLDEN, COLORADO 80401
(303) 526-5050
(Name, Address, including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
with a copy to:
STEPHEN A. GREENE, ESQ.
CAHILL GORDON & REINDEL
80 PINE STREET
NEW YORK, NEW YORK 10005
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ]
---------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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--------------------------------------------------------------------------------
<PAGE> 2
PROSPECTUS
ATLAS LOGO
OFFER TO EXCHANGE PASS THROUGH CERTIFICATES, SERIES 2000-1,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING PASS THROUGH CERTIFICATES, SERIES 2000-1
TERMS OF THE EXCHANGE OFFER:
- The New Certificates are being registered with the Securities and
Exchange Commission (the "SEC") and are being offered in exchange for the
Old Certificates that were previously issued pursuant to an offering
exempt from the SEC's registration requirements. The terms and conditions
of the Exchange Offer are summarized below and more fully described in
this prospectus.
<TABLE>
<S> <C>
Expiration Date....................... 5:00 p.m. (New York City time) July 17, 2000
Withdrawal Rights..................... Expire before 5:00 p.m. (New York City time)
on the Expiration Date
Integral Multiples.................... Old Certificates may only be tendered in
integral multiples of $1,000
Expenses.............................. Paid for by Atlas Air, Inc.
</TABLE>
NEW CERTIFICATES
- The New Certificates will represent the same fractional undivided
interest in the trusts as the Old Certificates they are replacing. The
New Certificates will have the same material financial terms as the Old
Certificates, which are summarized below and described more fully in this
prospectus. The New Certificates will not contain terms with respect to
transfer restrictions or interest rate increases and will only be
available in book-entry form.
---------------------
THE CERTIFICATES AND THE EXCHANGE OFFER INVOLVE RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 15.
---------------------
<TABLE>
<CAPTION>
PASS THROUGH PRINCIPAL INTEREST FINAL EXPECTED
CERTIFICATES AMOUNT RATE DISTRIBUTION DATE
------------ ------------ -------- -----------------
<S> <C> <C> <C>
Class A....................................... $124,639,000 8.707% January 2, 2020
Class B....................................... 44,741,000 9.057 January 2, 2016
Class C....................................... 47,937,000 9.702 January 2, 2010
</TABLE>
---------------------
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------------
The date of this prospectus is June 13, 2000
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS................................................ ii
WHERE YOU CAN FIND MORE INFORMATION......................... ii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. ii
FORWARD-LOOKING STATEMENTS.................................. iii
PROSPECTUS SUMMARY.......................................... 1
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA........... 14
RISK FACTORS................................................ 15
THE EXCHANGE OFFER.......................................... 23
USE OF PROCEEDS............................................. 30
THE COMPANY................................................. 30
DESCRIPTION OF THE CERTIFICATES............................. 31
DESCRIPTION OF THE DEPOSIT AGREEMENTS....................... 48
DESCRIPTION OF THE ESCROW AGREEMENTS........................ 49
DESCRIPTION OF THE LIQUIDITY FACILITIES..................... 49
DESCRIPTION OF THE INTERCREDITOR AGREEMENT.................. 55
DESCRIPTION OF THE AIRCRAFT AND THE APPRAISALS.............. 60
DESCRIPTION OF THE EQUIPMENT NOTES.......................... 61
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES................ 78
ERISA CONSIDERATIONS........................................ 79
PLAN OF DISTRIBUTION........................................ 81
LEGAL MATTERS............................................... 82
EXPERTS..................................................... 82
APPENDIX A -- INDEX OF TERMS................................ 83
APPENDIX B -- APPRAISAL LETTERS............................. 87
PART II INFORMATION NOT REQUIRED IN PROSPECTUS.............. II-1
SIGNATURES.................................................. II-12
</TABLE>
i
<PAGE> 4
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
You should rely only on the information provided in this prospectus
including the information incorporated by reference. We have not authorized
anyone to provide you with different information. We are not offering the
Certificates in any state where the offer is not permitted. We do not claim the
accuracy of the information in this prospectus as of any date other than the
date stated on the cover.
We include cross-references in this prospectus to captions within where you
can find further related discussions. The Table of Contents provides the pages
on which these captions are located. You can find a listing of the pages where
capitalized terms used in this prospectus are defined under the caption "Index
of Terms" in Appendix A of this prospectus.
Market data and certain industry forecasts used throughout this prospectus
were obtained from internal surveys, market research, publicly available
information and industry publications. Industry publications generally state
that the information contained therein has been obtained from sources believed
to be reliable, but that the accuracy and completeness of such information is
not guaranteed. Similarly, internal surveys, industry forecasts and market
research, while believed to be reliable, have not been independently verified,
and Atlas makes no representation as to the accuracy of such information.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a Registration Statement on Form S-4 (together
will all amendments, exhibits and schedules, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act") with respect to
the Certificates offered hereby. This prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the SEC, and to which
reference is hereby made. Statements made in this prospectus as to the contents
of any contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statement, reference is made to the exhibit
for a more complete description of the matter involved.
We are subject to the information requirements of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith file annual, quarterly and special reports, proxy statements and other
information with the SEC. Such reports, proxy statements and other information
can be inspected and copied at the public reference facilities maintained by the
SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the following Regional Offices of the SEC: New York Regional Office, Seven World
Trade Center, 13th Floor, New York, New York 10048; and Chicago Regional Office,
Citicorp Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60601.
Copies of such material can be obtained from the Public Reference Section of the
SEC, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The SEC also maintains an Internet Web Site at
http://www.sec.gov that contains reports and other information. Our Common Stock
is traded on the New York Stock Exchange under the symbol "CGO" and reports,
proxy statements and other information concerning the Company can be inspected
at the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We have incorporated important business and financial information about the
Company that is not included in or delivered with this prospectus. The following
documents have been filed by the Company with the SEC under the Exchange Act,
and are incorporated herein by reference:
- Our Annual Report on Form 10-K for the fiscal year ended December 31,
1999;
- Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
and
- Our Current Report on Form 8-K dated May 25, 2000.
ii
<PAGE> 5
All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this prospectus and prior to the
termination of this Exchange Offer are incorporated by reference and become a
part of this prospectus from their date of filing. Any statement contained in
this prospectus or in a document incorporated by reference is modified or
superseded for purposes of this prospectus to the extent that a statement
contained in any such document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
On request and without charge, we will provide anyone who receives a copy
of this prospectus with a copy of any or all of the documents incorporated in
this prospectus by reference. Written or telephone requests for such copies
should be directed to our principal office: Atlas Air, Inc., 2000 Westchester
Avenue, Purchase, New York 10577-2543 Attention: Chief Financial Officer
(telephone (914) 701-8000).
FORWARD-LOOKING STATEMENTS
This prospectus includes or incorporates forward-looking statements. Atlas
has based these forward-looking statements on its current expectations and
projections about future events. Many of these statements may be identified by
the use of forward-looking words such as "believe," "expect," "anticipate,"
"should," "planned," "estimated," and "potential," among others. These
forward-looking statements are subject to risks, uncertainties and assumptions
including, among other things, those discussed under "Risk Factors," and
elsewhere in this prospectus.
To the extent that any of the statements contained herein relating to
Atlas' expectations, assumptions and other Company matters are forward-looking,
they are made in reliance upon the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements are based on current
expectations that involve a number of uncertainties and risks that could cause
actual results to differ materially from those projected in the forward-looking
statements, including, but not limited to, risks associated with:
- worldwide business and economic conditions;
- product demand and the rate of growth in the air cargo industry;
- the impact of competitors and competitive aircraft and aircraft financing
availability;
- the ability to attract and retain new and existing customers;
- normalized aircraft operating costs and reliability;
- management of growth and complying with FAA policies;
- the continued productivity of our workforce;
- dependence on key personnel; and
- other regulatory requirements.
As a result of the foregoing and other factors, no assurance can be given
as to Atlas' future results and achievements. Neither Atlas nor any other person
assumes responsibility for the accuracy and completeness of these statements.
iii
<PAGE> 6
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus and may
not contain all of the information that is important to you and is qualified in
its entirety by the detailed information and financial statements (including the
notes thereto) appearing elsewhere or incorporated by reference in this
prospectus. For more complete information about the Certificates and Atlas, you
should read this entire prospectus, as well as the other documents to which it
refers to fully understand the terms of the Certificates. Unless otherwise
indicated, "we," "us," "our" and similar terms, as well as references to the
"Company" and "Atlas," refer to Atlas Air, Inc. and its subsidiaries. The term
"you" refers to Certificateholders.
THE EXCHANGE OFFER
The Certificates........... On January 28, 2000, we established three Atlas Air
2000-1 Pass Through Trusts (the "Trusts"). The
three Trusts are referred to as the "Class A
Trust," the "Class B Trust" and the "Class C
Trust." The Class A Trust issued "Class A
Certificates," the Class B Trust issued "Class B
Certificates" and the Class C Trust issued "Class C
Certificates," which represent fractional undivided
interests in the respective Trusts.
On January 28, 2000, we privately placed an
aggregate of $124,639,000 Class A Certificates,
$44,741,000 Class B Certificates and $47,937,000
Class C Certificates, pursuant to exemptions from
the SEC registration requirements. The "Initial
Purchasers" of the Certificates were Morgan Stanley
& Co. Incorporated, Deutsche Bank Securities Inc.
and Salomon Smith Barney Inc.
We have used all of the proceeds of the
Certificates to purchase Equipment Notes relating
to the acquisition of two new Boeing 747-400F
Aircraft.
When we use the term "Old Certificates" in this
prospectus, we mean the Class A, Class B and Class
C Certificates, Series 2000-1 privately placed with
the Initial Purchasers on January 28, 2000 and
which were not registered with the SEC. When we use
the term "New Certificates" in this prospectus, we
mean the Class A, Class B and Class C Certificates
registered with the SEC and offered hereby in
exchange for the Old Certificates.
When we use the term "Certificates" in this
prospectus, the related discussion applies to the
Old Certificates and the New Certificates.
Registration Agreement..... On January 28, 2000, we entered into a Registration
Rights Agreement with the Initial Purchasers and
Trustee providing, among other things, for the
Exchange Offer.
The Exchange Offer......... We are offering New Certificates in exchange for an
equal principal amount of Old Certificates. The New
Certificates will be issued to satisfy our
obligations under the Registration Rights
Agreement. The New Certificates will be entitled to
the benefits of and will be governed by the same
Pass Through Trust Agreements that govern the Old
Certificates. The form and terms of the New
Certificates are the same in all material respects
as the form and terms of the Old Certificates,
except that we registered the New Certificates
under the Securities Act so their transfer is not
restricted like the Old
1
<PAGE> 7
Certificates and the New Certificates are not
entitled to liquidated damages under the
Registration Rights Agreement.
As of the date of this prospectus, the aggregate
principal amount of Old Certificates outstanding is
$217,317,000.
Conditions to the Exchange
Offer.................... The Exchange Offer is not conditioned upon any
minimum principal amount of Old Certificates being
tendered for exchange. However, the Exchange Offer
is subject to certain customary conditions, which
may be waived by us. See "The Exchange
Offer -- Conditions."
Procedures for Tendering
Old Certificates......... If you wish to accept the Exchange Offer you must
deliver your Old Certificates to the Exchange Agent
for exchange no later than 5:00 p.m., New York
time, on July 17, 2000 (the "Expiration Date"). The
Expiration Date may be extended under certain
circumstances.
You must also deliver a completed and signed letter
of transmittal with tender of the Old Certificates
(the "Letter of Transmittal"). A Letter of
Transmittal has been sent to Certificateholders and
a form can be found as an exhibit to the
Registration Statement. Please refer to "The
Exchange Offer -- Procedures for Tendering."
You must deliver the Old Certificates and the
Letter of Transmittal to Wilmington Trust Company
(the "Exchange Agent") as follows:
By Hand:
Wilmington Trust Company
1105 North Market Street, 1st Floor
Wilmington, Delaware 19890
Attn: Corporate Trust Operations -- Atlas
Air -- 2000 EETC Exchange Offer
Telephone: (302) 651-8474 Fax: (302) 651-1079
Mail or Overnight Delivery:
Wilmington Trust Company
1100 North Market Street, 1st Floor
Wilmington, Delaware 19890-0001
Attn: Corporate Trust Operations -- Atlas
Air -- 2000 EETC Exchange Offer
See "The Exchange Offer -- Procedures for
Tendering" and "-- Exchange Agent."
Guaranteed Delivery
Procedures............... If you wish to tender Old Certificates and your Old
Certificates are not immediately available or you
cannot deliver your Old Certificates and a properly
completed Letter of Transmittal or any other
documents required by the Letter of Transmittal to
the Exchange Agent prior to the Expiration Date,
you may tender your Old Certificates according to
the guaranteed delivery procedures set forth in
"The Exchange Offer -- Guaranteed Delivery
Procedures."
2
<PAGE> 8
Denominations.............. You may only tender Old Certificates in integral
multiples of $1,000. Similarly, the New
Certificates will only be issued in integral
multiples of $1,000.
Resale of New
Certificates............. We believe that you can offer for resale, resell
and otherwise transfer the New Certificates without
complying with the registration and prospectus
delivery requirements of the Securities Act if:
- you acquire the New Certificates in the ordinary
course of your business;
- you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate, in
the distribution of the New Certificates; and
- you are not an "affiliate" of ours, as defined in
Rule 405 of the Securities Act.
If any of these conditions is not satisfied and you
transfer any New Certificate without delivering a
proper prospectus or without qualifying for a
registration exemption, you may incur liability
under the Securities Act. We do not assume or
indemnify you against such liability.
Each broker-dealer that is issued New Certificates
in the Exchange Offer for its own account in
exchange for Old Certificates which were acquired
by such broker-dealer as a result of market-making
or other trading activities, must acknowledge that
it will deliver a prospectus meeting the
requirements of the Securities Act in connection
with any resale of the New Certificates issued in
the Exchange Offer. A broker-dealer may use this
prospectus for an offer to resell, resale or other
transfer of the New Certificates issued to it in
the Exchange Offer.
For more information on the resale of New
Certificates see "The Exchange Offer -- Terms of
the Exchange Offer."
Withdrawal Rights.......... You may withdraw a tender of Old Certificates at
any time before 5:00 p.m., New York City time, on
the Expiration Date. To withdraw a tender of Old
Certificates, the Exchange Agent must receive a
written or facsimile transmission notice requesting
such withdrawal at its address set forth under "The
Exchange Offer -- Exchange Agent" prior to 5:00
p.m., New York City time, on the Expiration Date.
See "The Exchange Offer -- Withdrawal of Tenders."
Registration, Clearance and
Settlement............... The New Certificates will be represented by one or
more permanent global certificates, which will be
registered in the name of the nominee of The
Depository Trust Company ("DTC"). The global
certificates (the "Global Certificates") will be
deposited with the Trustee as custodian for DTC.
See "Description of the New Certificates -- Book
Entry; Delivery and Form."
Delivery of New
Certificates............. The Exchange Agent will deliver New Certificates in
exchange for all properly tendered Old Certificates
promptly following the expiration of the Exchange
Offer.
3
<PAGE> 9
Certain United States
Federal Income Tax
Consequences............. The exchange of New Certificates for Old
Certificates will not be considered a taxable event
for U.S. federal income tax purposes. See "Certain
U.S. Federal Income Tax Considerations."
Fees and Expenses.......... We will pay for all expenses of completing the
Exchange Offer and compliance with the Registration
Rights Agreement, except that the Initial
Purchasers will bear any additional expenses caused
by a request by the Initial Purchasers to delay
effectiveness of the Registration Statement and
keeping the Registration Statement effective with
the SEC for more than 180 days after expiration of
the Exchange Offer. See "The Exchange Offer -- Fees
and Expenses."
Failure to Exchange Old
Certificates............. Once the Exchange Offer has been completed, if you
do not exchange your Old Certificates for New
Certificates in the Exchange Offer, you will no
longer be entitled to registration rights and will
not be able to offer or sell your Old Certificates,
unless (i) such Old Certificates are subsequently
registered under the Securities Act (which, subject
to certain exceptions set forth in the Registration
Rights Agreement, we will have no obligation to do)
or (ii) your transaction is exempt from or
otherwise not subject to, the Securities Act and
applicable state securities laws. See "Risk
Factors -- Risk Factors Relating to the New
Certificates and the Exchange Offer -- Consequences
of Failure to Exchange" and "The Exchange Offer."
Use of Proceeds............ We will not receive any cash proceeds from the
exchange of the New Certificates for the Old
Certificates.
SUMMARY OF TERMS OF NEW CERTIFICATES
<TABLE>
<CAPTION>
CLASS A CERTIFICATES CLASS B CERTIFICATES CLASS C CERTIFICATES
-------------------- -------------------- --------------------
<S> <C> <C> <C>
Aggregate Face Amount.................. $124,639,000 $44,741,000 $47,937,000
Ratings:
Moody's.............................. A2 Baa2 Ba2
Standard & Poor's.................... AA A BBB
Duff & Phelps........................ AA- A- BBB-
Initial Loan to Aircraft Value
(cumulative)(1)(2)................... 36.9% 48.4% 60.8%
Expected Principal Distribution Window
(in years)........................... 0.9-19.9 0.9-15.9 0.9-9.9
Initial Average Life from Issuance Date
(in years)........................... 13.5 9.0 4.0
Regular Distribution Dates............. January 2 and July 2 January 2 and July 2 January 2 and July 2
Final Expected Regular Distribution
Date................................. January 2, 2020 January 2, 2016 January 2, 2010
Final Maturity Date.................... July 2, 2021 July 2, 2017 July 2, 2011
Minimum Denomination................... $1,000 $1,000 $1,000
Section 1110 Protection................ Yes Yes Yes
Liquidity Facility Coverage............ 3 semiannual 3 semiannual 3 semiannual
interest payments interest payments interest payments
</TABLE>
4
<PAGE> 10
---------------
(1) These percentages are calculated as of January 2, 2001, the first Regular
Distribution Date after all the Aircraft are scheduled to have been
delivered. In making such calculations, we have assumed that all Aircraft
are delivered prior to such date, the maximum amount of Equipment Notes is
issued, the aggregate appraised base value for the Aircraft is $310,002,300
as of such date and that all principal payments through such date have been
made on the Equipment Notes. The appraised base value is only an estimate
and reflects certain assumptions, which may not reflect current market
conditions. See "Description of the Aircraft and the Appraisals -- The
Appraisals."
(2) See "Summary -- Loan to Aircraft Value Ratios."
EQUIPMENT NOTES AND THE AIRCRAFT
Set forth below is certain information about the Equipment Notes expected
to be held in the Trusts and the Aircraft expected to secure such Equipment
Notes:
<TABLE>
<CAPTION>
MAXIMUM
EXPECTED SCHEDULED PRINCIPAL AMOUNT
MANUFACTURER'S REGISTRATION AIRCRAFT DELIVERY OF EQUIPMENT APPRAISED BASE
AIRCRAFT TYPE SERIAL NUMBER NUMBER MONTH(1) NOTES(2) VALUE(3)
------------- -------------- ------------ ----------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
B747-400F................ 30558 N409MC July 2000 $108,550,667 $159,633,333
B747-400F................ 30559 N412MC August 2000 $108,770,533 $159,956,667
</TABLE>
---------------
(1) The actual delivery month for each Aircraft was April 2000.
(2) The actual principal amount may be less depending on the circumstances of
the financing of such Aircraft. The aggregate principal amount of all of the
Equipment Notes will not exceed the aggregate face amount of the
Certificates.
(3) The appraised base value of each Aircraft set forth above is the lesser of
the average and median values of such Aircraft as appraised by three
independent appraisal and consulting firms, projected as of the scheduled
delivery month of each Aircraft. Such appraisals are based upon varying
assumptions (which may not reflect current market conditions) and upon
varying methodologies. An appraisal is only an estimate of value and should
not be relied upon as a measure of realizable value. See "Risk
Factors -- Risk Factors Relating to the New Certificates and the Exchange
Offer -- Appraisals and Realizable Value of the Aircraft."
5
<PAGE> 11
LOAN TO AIRCRAFT VALUE RATIOS
The following table sets forth loan to Aircraft value ratios ("LTVs") for
each Class of Certificates as of January 2, 2001 (the first Regular Distribution
Date that occurs after all Aircraft are scheduled to be delivered) and each
January 2 Regular Distribution Date thereafter. The LTVs for any Class of
Certificates as of dates prior to January 2, 2001, are not meaningful, since
during such period all of the Equipment Notes expected to be acquired by the
Trusts and the related Aircraft will not be included in the calculation. The
table should not be considered a forecast or prediction of expected or likely
LTVs but simply a mathematical calculation based on one set of assumptions. See
"Risk Factors -- Risk Factors Relating to the New Certificates and the Exchange
Offer -- Appraisals and Realizable Value of the Aircraft."
<TABLE>
<CAPTION>
ASSUMED OUTSTANDING BALANCE(2) LTV(3)
AGGREGATE ------------------------------------------ ------------------------------------------
AIRCRAFT CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
DATE VALUE(1) CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES
---- ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
January 2, 2001...... $310,002,300 $114,254,674 $35,792,800 $38,349,600 36.9% 48.4% 60.8%
January 2, 2002...... 300,414,600 114,254,674 35,792,800 32,562,086 38.0 49.9 60.8
January 2, 2003...... 290,826,900 113,422,491 35,792,800 24,863,957 39.0 51.3 59.9
January 2, 2004...... 281,239,200 109,683,288 35,792,800 19,226,946 39.0 51.7 58.6
January 2, 2005...... 271,651,500 105,944,085 35,792,800 12,672,977 39.0 52.2 56.8
January 2, 2006...... 262,063,800 102,204,882 35,413,251 5,489,388 39.0 52.5 54.6
January 2, 2007...... 252,476,100 98,465,679 28,381,193 5,489,388 39.0 50.2 52.4
January 2, 2008...... 242,888,400 94,726,476 23,387,244 5,489,388 39.0 48.6 50.9
January 2, 2009...... 233,300,700 90,987,273 22,750,965 3,129,380 39.0 48.8 50.1
January 2, 2010...... 223,713,000 87,248,070 22,750,965 0 39.0 49.2 NA
January 2, 2011...... 214,125,300 83,508,867 19,200,472 0 39.0 48.0 NA
January 2, 2012...... 204,537,600 79,769,664 14,888,946 0 39.0 46.3 NA
January 2, 2013...... 194,949,900 76,030,461 10,408,767 0 39.0 44.3 NA
January 2, 2014...... 185,362,200 72,291,258 4,913,484 0 39.0 41.7 NA
January 2, 2015...... 175,774,500 68,552,055 100,000 0 39.0 39.1 NA
January 2, 2016...... 166,186,800 64,812,852 0 0 39.0 NA NA
January 2, 2017...... 156,599,100 61,073,649 0 0 39.0 NA NA
January 2, 2018...... 147,011,400 39,895,667 0 0 27.1 NA NA
January 2, 2019...... 137,423,700 100,000 0 0 0.1 NA NA
January 2, 2020...... 0 0 0 0 NA NA NA
</TABLE>
---------------
(1) We have assumed that the initial appraised value of each Aircraft,
determined as described under "-- Equipment Notes and the Aircraft,"
declines by 3% per year for the first 20 years after the year of delivery of
such Aircraft and by 4% per year thereafter. Different depreciation
assumptions would result in material differences in the LTVs.
(2) In calculating the outstanding balances, we have assumed that the Trusts
will acquire the maximum principal amount of Equipment Notes for all
Aircraft.
(3) The LTVs for each Class of Certificates were obtained for each Regular
Distribution Date by dividing (i) the expected outstanding balance of such
Class together with the expected outstanding balance of all other Classes
equal or senior in right of payment to such Class after giving effect to the
distributions expected to be made on such date, by (ii) the assumed value of
all of the Aircraft on such date based on the assumptions described above.
The outstanding balances and LTVs may change if, among other things, the
aggregate principal amount of the Equipment Notes acquired by the Trusts is
less than the maximum permitted under the terms of the offering or the
amortization of the Equipment Notes differs from the assumed amortization
schedule calculated for purposes of this prospectus.
The above table was compiled on an aggregate basis. However, the Equipment
Notes for an Aircraft will not have a security interest in any other Aircraft.
This means that any excess proceeds realized from the sale of an Aircraft or
other exercise of remedies will not be available to cover any shortfalls on the
6
<PAGE> 12
Equipment Notes relating to any other Aircraft. See "Description of the
Equipment Notes -- Loan to Value Ratios of Equipment Notes" for an example of
LTVs for the Equipment Notes issued in respect of individual Aircraft, which may
be more relevant in a default situation than the aggregate values shown above.
CASH FLOW STRUCTURE
Set forth below is a diagram illustrating the structure for the offering of
the Old Certificates and certain cash flows:
[Atlas Air, Inc. Flow Chart]
---------------
(1) Each Aircraft leased to us will be subject to a separate Lease and a related
Indenture. Each Aircraft owned by us will be subject to a separate
Indenture. We will have the ability to enter into a sale/leaseback
transaction with respect to any Aircraft that we initially own.
(2) The proceeds of the offering of each Class of Old Certificates initially are
held in escrow and were deposited with the Depositary. The Depositary holds
such funds as an interest-bearing Deposit. Each Trust will withdraw funds
from the Deposit relating to such Trust to purchase Equipment Notes from
time to time as each Aircraft is financed. The scheduled payments of
interest on the Equipment Notes and on the Deposit relating to a Trust,
taken together, will be sufficient to pay accrued interest on the
outstanding Certificates of such Trust. The Liquidity Facilities will not
cover interest on the Deposits. On April 5, 2000, $108,548,000 was withdrawn
from escrow to purchase the first Boeing Aircraft and on April 25, 2000,
$108,769,000 was withdrawn from escrow to purchase the second Boeing
Aircraft.
7
<PAGE> 13
THE CERTIFICATES
Certificates Offered for
Exchange................. - Class A Certificates
- Class B Certificates
- Class C Certificates
Each Class of Certificates represents a fractional
undivided interest in a related Trust. The
Certificates represent interests in the Trusts only
and do not represent interests in or obligations of
Atlas or any of our affiliates.
Use of Proceeds............ We have used the proceeds from the sale of the
Class A Certificates, Class B Certificates and
Class C Certificates to purchase Equipment Notes
issued to finance the acquisition by Atlas of two
new Boeing 747-400F aircraft (the "Aircraft").
Subordination Agent,
Trustee, Paying Agent and
Loan Trustee............. Wilmington Trust Company
Escrow Agent............... First Security Bank, National Association
Depositary................. Westdeutsche Landesbank Girozentrale ("WestLB"),
acting through its New York Branch, is the
Depositary under each Deposit Agreement.
Liquidity Providers........ WestLB, acting through its New York Branch, is
providing a liquidity facility for the benefit of
the Class A Trust. Morgan Stanley Capital Services
Inc. ("MSCS") is providing a separate liquidity
facility for the benefit of each of the Class B
Trust and the Class C Trust. The obligations of
MSCS under its liquidity facilities are fully and
unconditionally guaranteed by its parent company,
Morgan Stanley Dean Witter & Co. ("MSDW"), which is
also the parent company of Morgan Stanley & Co.
Incorporated.
Trust Property............. The property of each Trust includes:
- Equipment Notes acquired by such Trust.
- All monies receivable under the liquidity
facility for such Trust.
- Funds from time to time deposited with the Trust
in accounts relating to such Trust.
Regular Distribution
Dates.................... January 2 and July 2, commencing on July 2, 2000.
Record Dates............... The fifteenth day preceding the related
Distribution Date.
Distributions.............. The Trustee will distribute all payments of
principal, premium (if any) and interest received
on the Equipment Notes held in each Trust to the
holders of the Certificates of such Trust, subject
to the subordination provisions applicable to the
Certificates.
Scheduled payments of principal and interest made
on the Equipment Notes will be distributed on the
applicable Regular Distribution Dates.
Payments of principal, premium (if any) and
interest made on the Equipment Notes resulting from
any early redemption or purchase of such Equipment
Notes will be distributed on a Special Distribution
8
<PAGE> 14
Date after not less than 15 days' notice to
Certificateholders. Under certain circumstances,
such special distribution date may be postponed up
to 10 business days. See "Description of the
Equipment Notes -- The Leases and Certain
Provisions of the Owned Aircraft Indentures --
Lease Termination."
Possible Issuance of Series
D Equipment Notes........ Series D Equipment Notes may be issued in
connection with the financing of Owned Aircraft.
Series D Equipment Notes will not be purchased by
any of the Trusts and will be funded from sources
other than the original placement of Old
Certificates.
Subordination.............. Distributions on the Certificates will be made in
the following order:
- First, to holders of the Class A Certificates.
- Second, to the holders of the Class B
Certificates.
- Third, to the holders of the Class C
Certificates.
If we are in bankruptcy or certain other specified
events have occurred but we are continuing to meet
certain of our obligations, the subordination
provisions applicable to the Certificates permit
distributions to be made to junior Certificates
prior to making distributions in full on the senior
Certificates.
Control of Loan Trustee.... The holders of at least a majority of the
outstanding principal amount of Equipment Notes
issued under each Indenture will be entitled to
direct the Loan Trustee under such Indenture in
taking action as long as no Indenture Event of
Default is continuing thereunder. If an Indenture
Event of Default is continuing, subject to certain
conditions, the "Controlling Party" will direct the
Loan Trustee (including in exercising remedies,
such as accelerating such Equipment Notes or
foreclosing the lien on the Aircraft securing such
Equipment Notes).
The Controlling Party will be:
- The Class A Trustee.
- Upon payment of final distributions to the
holders of Class A Certificates, the Class B
Trustee.
- Upon payment of final distributions to the
holders of Class B Certificates, the Class C
Trustee.
- Under certain circumstances, the Liquidity
Provider with the greatest amount of obligations
owed to it.
In exercising remedies during the nine months after
the earlier of (a) the acceleration of the
Equipment Notes issued pursuant to any Indenture or
(b) the bankruptcy of Atlas, the Controlling Party
may not sell such Equipment Notes or the Aircraft
subject to the lien of such Indenture for less than
certain specified minimums or modify lease rental
payments for such Aircraft below a specified
threshold.
9
<PAGE> 15
Right to Buy Other Classes
of Certificates.......... If we are in bankruptcy or certain other specified
events have occurred, the Certificateholders may
have the right to buy certain other Classes of
Certificates on the following basis:
- The Class B Certificateholders will have the
right to purchase all of the Class A
Certificates.
- The Class C Certificateholders will have the
right to purchase all of the Class A and Class B
Certificates.
The purchase price in each case described above
will be the outstanding balance of the applicable
Class or Classes of Certificates plus accrued and
unpaid interest.
Liquidity Facilities....... Under the Liquidity Facility for each Trust, the
Liquidity Provider will, if necessary, make
advances in an aggregate amount sufficient to pay
interest on the applicable Certificates on up to
three successive semiannual Regular Distribution
Dates at the applicable interest rate for such
Certificates. The Liquidity Facilities cannot be
used to pay any other amount in respect of the
Certificates and will not cover interest payable on
amounts held in escrow as Deposits with the
Depositaries.
Notwithstanding the subordination provisions
applicable to the Certificates, the holders of the
Certificates issued by each Trust will be entitled
to receive and retain the proceeds of drawings
under the Liquidity Facility for such Trust.
Upon each drawing under any Liquidity Facility to
pay interest on the Certificates, the Subordination
Agent will reimburse the applicable Liquidity
Provider for the amount of such drawing. Such
reimbursement obligation and all interest, fees and
other amounts owing to the applicable Liquidity
Provider will rank senior to the Certificates in
right of payment.
Escrowed Funds............. Funds paid to the Escrow Agent by the
Certificateholders were deposited with the
Depositary and were held as Deposits pursuant to
separate Deposit Agreements for each Trust. Funds
were withdrawn by the Trustees in April, 2000 to
purchase Equipment Notes to finance the acquisition
of the two Aircraft. On each Regular Distribution
Date, the Depositary will pay interest accrued on
the Deposit relating to such Trust at a rate per
annum equal to the interest rate applicable to the
Certificates issued by such Trust. The Deposits
relating to each Trust and interest paid thereon
will not be subject to the subordination provisions
applicable to the Certificates. The Deposits cannot
be used to pay any other amount in respect of the
Certificates.
Obligation to Purchase
Equipment Notes.......... Pursuant to the Note Purchase Agreement, the Class
A, Class B and Class C Trustees, respectively, are
obligated to purchase any Series A, Series B and
Series C Equipment Notes issued with respect to
each Aircraft. We may enter into a leveraged lease
financing or a secured debt financing with respect
to any of the Aircraft. Each financing will be made
pursuant to forms of financing agreements attached
to the Note Purchase Agreement. We may elect to
convert an Owned
10
<PAGE> 16
Aircraft to a Leased Aircraft at any time by
entering into a sale/ leaseback transaction. In the
case of a Leased Aircraft, the terms of the
financing agreements entered into may differ from
the forms of such agreements described in this
prospectus because a third party -- the Owner
Participant -- will provide a portion of the
financing of the Aircraft and may request changes.
However, under the Note Purchase Agreement, the
terms of such financing agreements must (a) contain
the Mandatory Document Terms set forth in the Note
Purchase Agreement and (b) not vary the Mandatory
Economic Terms set forth in the Note Purchase
Agreement. In addition, we must (a) certify to the
Trustees that any such modifications do not
materially and adversely affect the
Certificateholders and (b) obtain written
confirmation from Moody's Investors Service, Inc.
("Moody's") and Standard & Poor's Rating Services
("Standard & Poor's") (together, the "Rating
Agencies") that the use of versions of such
agreements modified in any material respect will
not result in a withdrawal, suspension or
downgrading of the rating of any Class of
Certificates. The Trustees are not obligated to
purchase Equipment Notes if, at the time of
issuance, we are in bankruptcy or certain other
specified events have occurred. See "Description of
the Certificates -- Obligation to Purchase
Equipment Notes."
PTC Events of Default...... PTC Events of Default under each Pass Through Trust
Agreement are the failure to pay within 10 business
days after it is due:
- the outstanding balance of any Class of
Certificates on the Final Maturity Date therefor;
or
- interest due on any Class of Certificates
Equipment Notes
(a) Issuer............... LEASED AIRCRAFT. If we lease an Aircraft, the
related Equipment Notes will be issued by First
Security Bank, National Association, or another
financial institution acting as Owner Trustee. The
Owner Trustee will not be individually liable for
such Equipment Notes. However, our scheduled rental
obligations under the related Lease will be in
amounts sufficient to pay scheduled payments on
such Equipment Notes.
OWNED AIRCRAFT. If we purchase an Aircraft, the
related Equipment Notes will be issued by us.
(b) Interest............... The Equipment Notes held in each Trust will accrue
interest at the rate per annum for the Certificates
issued by such Trust set forth on the cover page of
this prospectus, subject to certain adjustments
described in "-- The Exchange Offer." Interest will
be payable on January 2 and July 2 of each year,
commencing on July 2, 2000. Interest is calculated
on the basis of a 360-day year consisting of twelve
30-day months.
(c) Principal.............. Principal payments on the Series A, Series B and
Series C Equipment Notes are scheduled to be
payable on January 2 and July 2 in certain years,
commencing on January 2, 2001.
(d) Redemption and
Purchase............... AIRCRAFT EVENT OF LOSS. If an Event of Loss occurs
with respect to an Aircraft, all of the Equipment
Notes issued with respect to such
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<PAGE> 17
Aircraft will be redeemed, unless such Aircraft is
replaced by us under the related financing
agreements. The redemption price in such case will
be the unpaid principal amount of such Equipment
Notes, together with accrued interest, but without
any premium.
OPTIONAL REDEMPTION. The issuer of the Equipment
Notes with respect to an Aircraft may elect to
redeem them prior to maturity. The redemption price
in such case will be the unpaid principal amount of
such Equipment Notes, together with accrued
interest plus a Make-Whole Premium. See
"Description of the Equipment Notes -- Redemption."
PURCHASE BY OWNER. In the case of a Leased
Aircraft, if a Lease Event of Default is
continuing, the applicable Owner Trustee or Owner
Participant may elect to purchase all of the
Equipment Notes with respect to such Aircraft,
subject to the terms of the applicable Leased
Aircraft Indenture. The purchase price in such case
will be the unpaid principal amount of such
Equipment Notes, together with accrued interest,
but without any premium (provided that a Make-Whole
Premium will be payable under certain circumstances
specified in the Leased Aircraft Indenture). In the
case of an Owned Aircraft, we will have no
comparable right to purchase the Equipment Notes
under such circumstances.
(e) Security............... The Equipment Notes issued with respect to each
Aircraft will be secured by a security interest in
such Aircraft and, in the case of each Leased
Aircraft, in the related Owner Trustee's rights
under the Lease with respect to such Aircraft (with
certain exceptions).
The Equipment Notes will not be
cross-collateralized (except in certain cases, if
any, where the related Owner Participant and Atlas
shall agree otherwise). This means that the
Equipment Notes issued in respect of an Aircraft
will not be secured by any other Aircraft or Leases
and that any excess proceeds from the sale of an
Aircraft or other exercise of remedies with respect
to such Aircraft will not be available to cover any
shortfall with respect to any other Aircraft.
By virtue of the Intercreditor Agreement, the
Equipment Notes are cross-subordinated. This means
that payments received on a junior class of
Equipment Notes issued in respect of one Aircraft
may be applied in accordance with the priority of
payment provisions set forth in the Intercreditor
Agreement to make payments in respect of a more
senior Class of Certificates.
There are no cross-default provisions in the
Indentures or in the Leases. This means that if the
Equipment Notes issued with respect to one or more
Aircraft are in default and the Equipment Notes
issued with respect to the remaining Aircraft are
not in default, no remedies will be exercisable
with respect to the remaining Aircraft.
Section 1110 Protection.... As a condition of the acquisition of Aircraft with
the proceeds of Equipment Notes, our outside
counsel will provide its opinion to the Trustees
that the benefits of Section 1110 of the U.S.
Bankruptcy Code are available with respect to the
remedies of the Loan Trustees against such
Aircraft.
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<PAGE> 18
Certain Federal Income Tax
Consequences............. The exchange of the Old Certificates for the New
Certificates will not be a taxable event for U.S.
federal income tax purposes. See "Certain United
States Federal Income Tax Consequences."
Certain ERISA
Considerations........... Each person who acquires a New Certificate will be
deemed to have represented that either (a) no
employee benefit plan assets have been used to
purchase such New Certificate or (b) the purchase
and holding of such New Certificate are exempt from
the prohibited transaction restrictions of the
Employee Retirement Income Security Act of 1974 and
the Internal Revenue Code of 1986 pursuant to one
or more prohibited transaction statutory or
administrative exemptions. See "ERISA
Considerations."
Ratings of the
Certificates............. The Class A, Class B and Class C Certificates are
rated by Moody's, Standard & Poor's and Duff &
Phelps Credit Rating Co. ("Duff & Phelps"), as set
forth below:
<TABLE>
<CAPTION>
STANDARD & DUFF &
CERTIFICATES POOR'S PHELPS MOODY'S
------------ ---------- ------ -------
<S> <C> <C> <C>
Class A........................... AA AA- A2
Class B........................... A A- Baa2
Class C........................... BBB BBB- Ba2
</TABLE>
A rating is not a recommendation to purchase, hold
or sell Certificates, since such rating does not
address market price or suitability for a
particular investor. There can be no assurance that
such ratings will not be lowered or withdrawn by a
rating agency. See "Risk Factors -- Risk Factors
Relating to the New Certificates and the Exchange
Offer -- Ratings of the Certificates" and
"Description of the Equipment Notes -- Remedies."
<TABLE>
<CAPTION>
STANDARD
MOODY'S & POOR'S
-------- --------
<S> <C> <C> <C>
Ratings of the Depositary.... Short Term P-1 A-1+
Threshold Ratings for the
Liquidity Providers........ Short Term
Class A P-1 A-1+
Class B P-1 A-1
Class C P-1 A-1
</TABLE>
Liquidity Providers Ratings
(as guaranteed).......... WestLB, acting through its New York Branch, the
Liquidity Provider for the Class A Trust, and MSDW,
the guarantor of MSCS's obligations as the
Liquidity Provider for the Class B and Class C
Trusts, each meet the applicable threshold rating
requirements for the relevant Classes of
Certificates.
Our principal executive offices are located at 2000 Westchester Avenue,
Purchase, New York 10577-2543 (telephone (914) 701-8000).
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<PAGE> 19
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
A discussion of the consolidated financial and operating data relating to
Atlas is included in our Form 10-K for the year ended December 31, 1999 and our
Form 10-Q for the quarter ended March 31, 2000 which are incorporated herein by
reference.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1995 1996 1997 1998 1999
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1).................. 1.86x 2.11x 1.30x 1.34x 1.57x
</TABLE>
---------------
(1) In calculating the ratio of earnings to fixed charges, earnings consists of
income (loss) prior to income tax benefit (expense), as adjusted to exclude
the "Write-off of capital investment and other" in the second quarter of
1997, and fixed charges (excluding capitalized interest for the period).
Fixed charges consist of interest expense (including amounts capitalized),
amortization of debt issuance costs and one-third of rental payments on
operating leases (such one-third portion having been deemed by us to
represent the interest portion of such payments).
14
<PAGE> 20
RISK FACTORS
You should carefully read the following risk factors before tendering your
Old Certificates in the Exchange Offer. The risk factors set forth below (other
than "Consequences of Failure to Exchange") are generally applicable to Old
Certificates as well as New Certificates.
RISK FACTORS RELATING TO ATLAS
DEPENDENCE ON SIGNIFICANT CUSTOMERS; GEOGRAPHIC CONCENTRATION -- The loss of a
significant customer, or political and economic instability in the markets we
serve, may adversely affect our business.
In 1999, China Airlines accounted for approximately 26% of our total
operating revenues, and no other customer accounted for 10% or more of our total
operating revenues. We believe that our relationships with our customers are
mutually satisfactory, as evidenced by the fact that we have renewed and, in
certain cases, added a significant number of ACMI Contracts with our existing
customers. However, there can be no assurance that any of our ACMI Contracts
will be renewed upon their expiration. The scheduled termination dates for the
current long-term ACMI Contracts range from 2001 to 2004. The failure to renew
any of our ACMI Contracts, or the renewal of any of our ACMI Contracts on less
favorable terms, could have a material adverse effect on our results of
operation. Additionally, we have concentrated a significant percentage of our
resources in routes between the United States and Asia and the Pacific Rim and
between Europe and Asia and the Pacific Rim. Any economic decline or any
military or political disturbance in these areas of the world might prevent or
interfere with our ability to provide service to our Asian and Pacific Rim
destinations and could have a material adverse effect on our results of
operation.
COMPETITION -- The market for air cargo services is highly competitive. If we do
not successfully compete, our profits will suffer.
A number of airlines, including Lufthansa Cargo AG, currently provide
services for themselves and for others, similar to the services we offer and new
airlines may be formed that would also compete with us. Such airlines may have
substantially greater financial resources than we do. In addition, certain
retail air freight companies, such as Evergreen International, compete with us
on a limited, indirect basis, generally outside of the ACMI Contract operating
structure. We believe that the most important elements for competition in the
air cargo business are the range, payload and cubic capacities of the aircraft
and the price, flexibility, quality and reliability of the cargo transportation
service. Our ability to achieve our strategic plan depends upon our success in
convincing major international airlines that outsourcing some portion of their
air cargo business remains more cost-effective than undertaking cargo operations
with their own incremental capacity and resources and upon our ability to
continue to obtain higher ACMI Contract rates in connection with the 747-400
aircraft compared to those currently obtained in connection with existing
747-200 aircraft.
EMPLOYEE LITIGATION -- An adverse ruling in an appeal filed by the union now
representing our pilots may increase our cost of doing business.
In April 1999, we received notification from the National Mediation Board
(the "NMB") that our crew members voted for representation by the Air Line
Pilots Association ("ALPA"). We expect our labor costs to decline initially
since our profit sharing plan (the "Profit Sharing Plan") excludes from the
category of eligible employees, those employees who have been certified by the
NMB for representation. In response to ALPA's claims that such an exclusion
violates the Railway Labor Act, on May 6, 1999, we filed an action in the United
States District Court for the District of Columbia (the "District Court")
seeking a declaratory judgment confirming, inter alia, the enforceability of the
Profit Sharing Plan's exclusion. On May 10, 1999, ALPA filed a counterclaim in
that action, alleging that the exclusion of its members from the Profit Sharing
Plan violates the Railway Labor Act, and seeking restoration of profit sharing
pay. In October 1999, the District Court entered a summary judgment in our favor
ruling that we did not violate the Railway Labor Act when we eliminated crew
members' participation in the Profit
15
<PAGE> 21
Sharing Plan following ALPA's certification as the crew members' collective
bargaining agent. In addition, the District Court dismissed all other claims in
the case. ALPA has subsequently filed an appeal of the District Court's
decision. An adverse outcome in this appeal may increase our cost of doing
business.
OPERATIONS DEPENDENT UPON LIMITED FLEET -- In the event one or more of our
aircraft were to be lost or out of service for an extended period of time, we
may have difficulty fulfilling our obligations under one or more of our ACMI
Contracts.
Each of our aircraft is typically dedicated to the service of one or more
ACMI Contracts. Although we utilize spare aircraft, in the event one or more of
our aircraft were to be lost or out of service for an extended period of time,
we may have difficulty fulfilling our obligations under one or more of our ACMI
Contracts. While we believe that our insurance coverage is sufficient to cover
the replacement cost of an aircraft, there can be no assurance that suitable
replacement aircraft could be located or that, if located, we could contract for
the services of such an aircraft without undertaking substantial costs. While we
carry aircraft hull physical damage and third party liability insurance, any
extended interruption of our operations due to the loss of an aircraft could
have a material adverse effect on our results of operation.
AGING AIRCRAFT -- The maintenance and governmental compliance costs associated
with older aircraft may adversely affect our profitability. The costs of
complying with Directives and Service Bulletins for our Boeing 747-200 aircraft
could be substantial.
Our fleet currently includes 22 Boeing 747-200 aircraft in service, all of
which were manufactured between 1974 and 1986. Manufacturer Service Bulletins
and the Federal Aviation Administration ("FAA") Airworthiness Directives issued
under its "Aging Aircraft" program cause Boeing 747-200 aircraft operators to be
subject to extensive aircraft examinations and require Boeing 747-200 aircraft
to undergo structural inspections and modifications to address problems of
corrosion and structural fatigue at specified times. For instance, in November
1994, Boeing issued Nacelle Strut Modification Service Bulletins which have been
converted into Directives by the FAA. All of our Boeing 747-200 aircraft have
been brought into compliance with such Directives. Other Directives have been
issued that require inspections and minor modifications to Boeing 747-200
aircraft. It is possible that additional Service Bulletins or Directives
applicable to the types of aircraft or engines included in our fleet could be
issued in the future. The cost of compliance with Directives and of following
Service Bulletins cannot currently be estimated, but could be substantial.
UTILIZATION OF FUTURE AIRCRAFT -- If we fail to contract for the use of
additional aircraft as they become available our profitability will be harmed.
We have not yet finalized long-term ACMI Contracts for two of the three
747-300 aircraft scheduled to be delivered in 2000. The failure to generate
adequate revenue from new aircraft pending the commencement of and service under
ACMI Contracts, or the failure to secure ACMI Contracts for such aircraft as
well as the aircraft currently in service in our fleet, could have a material
adverse effect on our results of operation.
REGULATORY MATTERS -- We are subject to continued compliance with governmental
regulations and authorities. Failure to comply with relevant rules and
regulations would adversely affect our business.
Under the Federal Aviation Act of 1958, as amended and recodified at 49
U.S.C. Subtitle VII (the "Aviation Act"), the Department of Transportation
("DOT") and the FAA exercise regulatory authority over us. We have obtained the
necessary authority to conduct flight operations, including a Certificate of
Public Convenience and Necessity from the DOT and an Air Carrier Operating
Certificate from the FAA; however, the continuation of such authority is subject
to our continued compliance with applicable statutes, rules and regulations
pertaining to the airline industry, including any new rules and regulations that
may be adopted in the future. All air carriers are subject to strict scrutiny
and inspection by FAA officials and to the imposition of new regulatory
requirements that can negatively affect their operations. We are considered to
be a high-growth carrier by the FAA and, therefore, receive heightened attention
by
16
<PAGE> 22
the FAA and DOT. FAA approval is required for each of our long-term ACMI
Contracts and DOT approval is required for each of our long-term ACMI Contracts
with foreign air carriers. In addition, FAA approval is required for each of our
short-term seasonal ACMI Contracts. In order to provide service to foreign
points, we must also obtain permission for such operations from the applicable
foreign governments and certain airport authorities. Moreover, in some
instances, ACMI Contracts are subject to prior and/or periodic approvals of
foreign governments, whose decisions can be affected by ongoing negotiations and
relations with the United States. For example, a recent ruling by an aviation
agency of the British government concluded that one of our two long term
wet-leases of a 747-400 freighter aircraft to British Airways no longer meets
the "exceptional circumstances" exception necessary for their operating approval
due to changed market conditions in the United Kingdom. The adoption or
enforcement of similar rules by other countries could adversely affect our
business. Failure to obtain FAA, DOT and/or foreign approvals could have a
material adverse effect on our results of operation. In addition, DOT regulates
the transportation of hazardous materials by air cargo carriers. Although
customers are required to label shipments that contain hazardous materials,
customers may not inform us when their cargo includes hazardous materials.
Although we have never had such an incident, the transportation of unmanifested
hazardous materials could result in fines, penalties, banning hazardous
materials from our aircraft for a period of time, possible damage to our
aircraft or other liability.
CONTROL BY PRINCIPAL SHAREHOLDER -- We have a single shareholder with a
controlling interest in our company, who can determine the outcome of all
matters to be voted upon by the shareholders.
As of June 3, 2000 Michael A. Chowdry, the founder, Chief Executive
Officer, President and Chairman of the Board of Directors of the Company,
beneficially owned approximately 51.1% of our common stock. As a result, Mr.
Chowdry is able to direct and control our policies, including the election of
directors, mergers, sales of assets and other such transactions.
DEPENDENCE UPON KEY MANAGEMENT PERSONNEL -- Our executive officers and key
employees are critical to our business. These officers and key personnel may not
remain with Atlas and their loss may harm our operations.
We believe that our success in acquiring ACMI Contracts and managing our
operations will depend substantially upon the continued services of many of our
present executive officers. The loss of the services of any of such persons
could have a material adverse effect on our business. We have employment
agreements with such officers, which are generally terminable at any time by
either party.
SEASONALITY OF CUSTOMERS' CARGO OPERATIONS -- Seasonal fluctuations in revenue
may result in a reduction of available working capital.
The cargo operations of our airline customers are seasonal in nature, with
peak activity traditionally in the second half of the year, and with a
significant decline occurring in the first quarter. As a result, our revenues
typically decline in the first quarter of the year as our minimum contractual
aircraft utilization level temporarily decreases. Our ACMI Contracts typically
allow our customers to cancel a maximum of 5% of the guaranteed hours of
aircraft utilization over the course of a year. Our customers most often
exercise such cancellation options early in the first quarter of the year, when
the demand for air cargo capacity has been historically low or following the
seasonal holiday peak in the latter part of the fourth quarter.
17
<PAGE> 23
ABILITY TO SERVICE DEBT -- We have substantial indebtedness and may not be able
to service our debt. This indebtedness could harm our competitive position.
We are highly leveraged. As of March 31, 2000, our total long term debt
outstanding, net of current portion, was approximately $1.3 billion. Our high
degree of leverage could have important consequences to prospective investors,
including the following:
- our ability to obtain additional financing for working capital, capital
expenditures, acquisitions or general corporate purposes may be
diminished in the future;
- a substantial portion of our cash flow from operations will be required
for the payment of principal and interest on our indebtedness, thereby
reducing the funds available to us for our operations and other purposes;
- we may be substantially more leveraged than some of our competitors,
which may place us at a competitive disadvantage; and
- our substantial degree of leverage may hinder our ability to adjust
rapidly to changing market conditions and could make us more vulnerable
in the event of a downturn in our business or general economic
conditions.
Our ability to make scheduled payments of the principal of, or to pay
interest on, or to refinance, our indebtedness and to make scheduled payments
under our lease obligations depends on our future performance, which is subject
to economic, financial, competitive and other factors beyond our control. There
can be no assurance, however, that our business will continue to generate
sufficient cash flow from operations in the future to service our debt. If
unable to do so, we may be required to refinance all or a portion of our
existing debt, to sell assets or to obtain additional financing. There can be no
assurance that any such refinancing or that any such sale of assets or
additional financing would be possible on favorable terms.
RESTRICTIONS IMPOSED BY TERMS OF OUR INDEBTEDNESS -- If we do not comply with
the restrictive covenants contained in our debt instruments it may result in an
event of default.
Certain of our debt instruments limit our ability to undertake certain
transactions. These debt instruments restrict our ability to:
- incur additional indebtedness;
- incur liens, pay dividends or make other restricted payments;
- consummate asset sales;
- enter into transactions with affiliates;
- impose restrictions on the ability of a subsidiary to pay dividends or
make certain payments to us;
- merge or consolidate with any other person; or
- sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of our assets.
In addition, certain of our other debt instruments contain other more
restrictive financial and operating covenants. Our ability to meet such
financial ratios and tests may be affected by events beyond our control. We
cannot assure you that we will meet such tests. A breach of any of these
covenants could result in a default under certain debt instruments. In an event
of default under the various debt instruments, the lenders could elect to
declare all amounts outstanding, together with accrued interest, to be
immediately due and payable. If we are unable to repay those amounts, such
lenders could proceed against the collateral granted to them to secure that
indebtedness. If our lenders accelerate the payment of indebtedness, our assets
may not be sufficient to repay in full such indebtedness and our other
indebtedness.
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RISK FACTORS RELATING TO THE NEW CERTIFICATES AND THE EXCHANGE OFFER
CONSEQUENCES OF FAILURE TO EXCHANGE -- Holders of Old Certificates who chose not
to participate in the Exchange Offer will be subject to continued restrictions
on the transfer of such Certificates.
Holders of Old Certificates who do not exchange their Old Certificates for
New Certificates pursuant to the Exchange Offer will continue to be subject to
the restrictions on transfer of such Old Certificates as set forth in the legend
thereon. In general, the Old Certificates may not be offered or sold, unless
registered under the Securities Act, except pursuant to an exemption from, or in
a transaction not subject to, the Securities Act and applicable state securities
laws. We do not currently anticipate that we will register the Old Certificates
under the Securities Act. To the extent that Old Certificates are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Old Certificates could be adversely affected.
APPRAISALS AND REALIZABLE VALUE OF THE AIRCRAFT -- If the realized value of an
Aircraft is not equal to its appraised value, the remedies provided to
Certificateholders under an Indenture would be insufficient to cover the
payments on the Certificates.
Three independent appraisal and consulting firms prepared appraisals of the
Aircraft in connection with the sale of the Old Certificates in January, 2000.
Letters summarizing such appraisals are annexed to this prospectus as Appendix
B. Such appraisals, which are based on the base value of the Aircraft, rely on
certain varying assumptions and methodologies and may not reflect current market
conditions that could affect the fair market value of the Aircraft or the actual
purchase price to be paid by us. Appraisals that are based on different
assumptions and methodologies may result in valuations that are materially
different from those contained in the appraisals. See "Description of the
Aircraft and the Appraisals -- The Appraisals."
An appraisal is only an estimate of value. The proceeds realized upon a
sale of any Aircraft may be less than the appraised value. The value of an
Aircraft if the remedies are exercised under the applicable Indenture will
depend on market and economic conditions, the supply of similar aircraft, the
availability of buyers, the condition of the Aircraft and other factors.
Accordingly, there can be no assurance that the proceeds realized upon any such
exercise of remedies would be sufficient to satisfy in full payments due on the
Certificates.
REPOSSESSION -- The Loan Trustee may encounter difficulty repossessing an
Aircraft due to circumstances beyond its control. As a result, the benefits of
the security interest created in the Equipment Notes could be limited.
There are no general geographic restrictions on our ability to operate the
Aircraft. Although we do not currently intend to do so, we are permitted to
register the Aircraft in foreign jurisdictions, subject to certain conditions.
In addition, we are permitted to lease any Owned Aircraft and sublease any
Leased Aircraft, subject to certain conditions. It may be difficult,
time-consuming and expensive for the Loan Trustee to exercise its repossession
rights if the Aircraft is located outside the United States, is registered in a
foreign location or is subleased to a foreign operator. Additional difficulties
may exist when a permitted sublessee, in the case of a Leased Aircraft, or
lessee, in the case of an Owned Aircraft is the subject of a bankruptcy,
insolvency or similar event. In addition, certain jurisdictions may allow for
certain other liens or other third party rights to have priority over the
security interest in the Aircraft.
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PRIORITY OF DISTRIBUTIONS; SUBORDINATION -- If there is a payment default under
any Equipment Note or a Triggering Event occurs, the holders of one or more
junior Classes of Certificates may not receive the full amount of interest due
them.
Certain Classes of Certificates are subordinated to other Classes in rights
to distributions. See "Description of the Certificates -- Subordination."
Consequently, a payment default under any Equipment Note or a Triggering Event
may cause the distribution to more senior Classes of Certificates of payments
received from payment on one or more junior series of Equipment Notes. If this
should occur, the interest accruing on the remaining Equipment Notes would be
less than the interest accruing on the remaining Certificates. This is because
the remaining Certificates of the junior Classes accrue interest at a higher
rate than the remaining Equipment Notes, which include series applicable to the
senior Classes bearing interest at a lower rate. As a result of this possible
interest shortfall, the holders of one or more junior Classes of Certificates
may not receive the full amount due to them after a payment default under any
Equipment Note even if all Equipment Notes are eventually paid in full.
CONTROL OVER COLLATERAL; SALE OF COLLATERAL -- The ability of a Controlling
Party to direct the Loan Trustee in an Indenture Event of Default may result in
Certificateholders receiving a smaller amount of principal than anticipated.
If an Indenture Event of Default is continuing, subject to certain
conditions, the Loan Trustee under such Indenture will be directed by the
"Controlling Party" in exercising remedies under the Indenture including
accelerating the applicable Equipment Notes, or foreclosing the lien on the
Aircraft securing such Equipment Notes. See "Description of the
Certificates -- Indenture Defaults and Certain Rights Upon an Indenture
Default."
The Controlling Party will be:
- the Trustee of the Class A Trust (the "Class A Trustee");
- upon payment of final distributions to the holders of Class A
Certificates, the Trustee of the Class B Trust ("Class B Trustee");
- upon payment of final distributions to the holders of Class B
Certificates, the Trustee of the Class C Certificates ("Class C
Trustee"); and
- under certain circumstances, the Liquidity Provider with the greatest
amount of obligations owed to it.
During the continuation of any Indenture Event of Default, the Controlling
Party may accelerate and sell the Equipment Notes issued under such Indenture,
subject to certain limitations. See "Description of the Intercreditor
Agreement -- Intercreditor Rights -- Sale of Equipment Notes or Aircraft." The
market for Equipment Notes during any Indenture Event of Default may be very
limited, and there can be no assurance as to the price at which they could be
sold. If the Controlling Party sells any Equipment Notes for less than their
outstanding principal amount, certain Certificateholders will receive a smaller
amount of principal distributions than anticipated and will not have any claim
for the shortfall against us, any Owner Trustee, any Owner Participant or any
Trustee.
OWNER PARTICIPANT; REVISIONS TO AGREEMENTS -- Agreements described in the
prospectus may differ from the descriptions of such agreements contained in the
prospectus.
Atlas may seek commitments of one or more companies to act as the Owner
Participant with respect to leveraged leases for one or more of the Aircraft.
Such Owner Participants may request revisions to the forms of the Participation
Agreement, the Lease and the Leased Aircraft Indenture attached to the Note
Purchase Agreement. As a result, the actual Participation Agreement, Lease and
Leased Aircraft
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Indenture may differ from the description of such agreements contained in this
prospectus. The degree to which such agreements may change is limited because:
- such agreements are required to contain the Mandatory Document Terms and
the Mandatory Economic Terms;
- we are obligated to certify that any changes to the form agreements do
not materially and adversely affect the Certificateholders; and
- we are obligated to obtain written confirmation from each Rating Agency
that the use of versions of such agreements modified in any material
respect will not result in a withdrawal, suspension or downgrading of the
rating of any Class of Certificates.
RATINGS OF THE CERTIFICATES -- Ratings on the Certificates may not remain and
the lowering or withdrawal of a rating by a Rating Agency may negatively impact
the value of the Certificates.
It was a condition to the issuance of the Old Certificates that
- the Class A Certificates be rated not lower than A2 by Moody's, AA- by
Duff & Phelps and AA- by Standard & Poor's;
- the Class B Certificates be rated not lower than Baa2 by Moody's, A- by
Duff & Phelps and A- by Standard & Poor's; and
- the Class C Certificates be rated not lower than Ba2 by Moody's, BBB- by
Duff & Phelps and BBB- by Standard & Poor's.
A rating is not a recommendation to purchase, hold or sell Certificates,
since such rating does not address market price or suitability for a particular
investor. A rating may not remain for any given period of time and may be
lowered or withdrawn entirely by a rating agency if in its judgment
circumstances in the future (including the downgrading of Atlas, the Depositary
or the applicable Liquidity Provider) so warrant. See "Description of the
Equipment Notes -- Remedies."
The rating of the Certificates is based primarily on the default risk of
the Equipment Notes and the Depositary, the availability of the Liquidity
Facility for the benefit of holders of the Certificates, the collateral value
provided by the Aircraft relating to the Equipment Notes and the subordination
provisions applicable to the Certificates. Standard & Poor's has indicated that
its rating applies to a unit consisting of Certificates representing the Trust
Property and Escrow Receipts initially representing undivided interests in
certain rights to $217,317,000 of the Deposits. Amounts deposited under the
Escrow Agreements are not the property of Atlas and are not entitled to the
benefits of Section 1110 of the U.S. Bankruptcy Code. Neither the Certificates
nor the Escrow Receipts may be separately assigned or transferred.
ABSENCE OF AN ESTABLISHED MARKET FOR THE CERTIFICATES -- If an active public
market does not develop or continue, you may have trouble reselling
Certificates.
Prior to the Exchange Offer, there was no public market for the
Certificates and neither Atlas nor any Trust intends to apply for listing of the
Certificates on any securities exchange or otherwise. The Initial Purchasers may
assist in resales of the Certificates, but they are not required to do so. An
active public market for the Certificates may not develop. If an active public
market does develop, it might not continue or it might not be sufficiently
liquid to allow the resale of any particular Certificates.
PROCEDURES FOR TENDER OF OLD CERTIFICATES -- If you fail to deliver the proper
documentation to the Exchange Agent in a timely fashion, your tender of Old
Certificates will be rejected.
The New Certificates will be issued in exchange for the Old Certificates
only after timely receipt by the Exchange Agent of the Old Certificates, a
properly completed and executed Letter of Transmittal and all other required
documentation. Holders of Old Certificates who wish to tender their Old
Certificates in exchange for New Certificates should allow sufficient time to
ensure timely delivery. None of the
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Exchange Agent, the Trustee or the Company is under any duty to give holders of
Old Certificates notification of defects or irregularities with respect to
tenders of Old Certificates for exchange. Old Certificates that are not tendered
or are tendered but not accepted will, following the Exchange Offer, continue to
be subject to the existing transfer restrictions. In addition, holders of Old
Certificates who tender Old Certificates in the Exchange Offer to participate in
a distribution of the New Certificates will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
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THE EXCHANGE OFFER
This summary describes certain provisions of the registration rights
agreement dated as of January 28, 2000 (the "Registration Rights Agreement")
among Atlas, the Initial Purchasers and the Trustee but is not complete. We
encourage you to review the Registration Rights Agreement, which has been filed
as an exhibit to the Registration Statement and a copy of which is available as
set forth under the heading "Where You Can Find More Information."
TERMS OF THE EXCHANGE OFFER
General
In connection with the issuance of the Old Certificates pursuant to a
placement agreement dated as of January 20, 2000, between Atlas and the Initial
Purchasers (the "Placement Agreement"), the Initial Purchasers and their
respective assignees became entitled to the benefits of the Registration Rights
Agreement.
Under the Registration Rights Agreement, we are obligated to use our best
efforts:
- to file the Registration Statement, of which this prospectus is a part,
with the SEC for a registered exchange offer (the "Exchange Offer") with
respect to an issue of New Certificates identical in all material
respects to the Old Certificates (except that the New Certificates would
not contain terms with respect to transfer restrictions or interest rate
increases) within 120 calendar days after January 28, 2000, the date the
Old Certificates were issued (the "Issuance Date");
- to cause the Registration Statement to become effective within 60 days
after filing of the Registration Statement with the SEC;
- to have the Registration Statement remain effective until the closing of
the Exchange Offer; and
- to have the Exchange Offer consummated not later than 60 days after the
effective date of the Registration Statement.
We will keep the Exchange Offer open for a period of not less than 30 calendar
days after the date notice of the Exchange Offer is mailed to the holders of the
Certificates. If the Exchange Offer is commenced and consummated within the time
periods described in this paragraph, we will satisfy these requirements of the
Registration Rights Agreement.
Upon the terms and subject to the conditions set forth in this prospectus
and in the Letter of Transmittal (which together constitute the Exchange Offer),
all Old Certificates validly tendered and not withdrawn prior to 5:00 p.m., New
York City time, on the Expiration Date will be accepted for exchange. New
Certificates of the same class will be issued in exchange for an equal principal
amount of outstanding Old Certificates accepted in the Exchange Offer. Old
Certificates may be tendered only in integral multiples of $1,000. This
prospectus, together with the Letter of Transmittal, is being sent to all
registered holders as of June 15, 2000. The Exchange Offer is not conditioned
upon any minimum principal amount of Old Certificates being tendered for
exchange. However, the obligation to accept Old Certificates for exchange
pursuant to the Exchange Offer is subject to certain conditions as set forth
herein under "-- Conditions."
Old Certificates shall be deemed to have been accepted as validly tendered
when, as and if the Trustee has given oral or written notice thereof to the
Exchange Agent (as defined herein). The Exchange Agent will act as agent for the
tendering holders of Old Certificates for the purposes of receiving the New
Certificates and delivering New Certificates to such holders.
Based on interpretations by the staff of the SEC, as set forth in no-action
letters issued to third parties, we believe that the New Certificates issued
pursuant to the Exchange Offer may be offered for resale, resold or otherwise
transferred by holders thereof (other than a broker-dealer who acquires such New
Certificates directly from the Trustee for resale pursuant to Rule 144A under
the Securities Act or
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any other available exemption under the Securities Act or any holder that is an
"affiliate" of the Company as defined under Rule 405 of the Securities Act),
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such New Certificates are acquired in the
ordinary course of such holders' business and such holders are not engaged in,
and do not intend to engage in, a distribution of such New Certificates and have
no arrangement with any person to participate in a distribution of such New
Certificates. By tendering the Old Certificates in exchange for New
Certificates, each holder, other than a broker-dealer, will represent to the
Company that:
- it is not an affiliate of the Company (as defined under Rule 405 of the
Securities Act) nor a broker-dealer tendering Old Certificates acquired
directly from the Company for its own account;
- any New Certificates to be received by it will be acquired in the
ordinary course of its business; and
- it is not engaged in, and does not intend to engage in, a distribution of
such New Certificates and has no arrangement or understanding to
participate in a distribution of the New Certificates.
If a holder of Old Certificates is engaged in or intends to engage in a
distribution of the New Certificates or has any arrangement or understanding
with respect to the distribution of the New Certificates to be acquired pursuant
to the Exchange Offer, such holder may not rely on the applicable
interpretations of the staff of the SEC and must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any secondary resale transaction. Each Participating Broker-Dealer that receives
New Certificates for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Certificates. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a Participating Broker-Dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of New
Certificates received in exchange for Old Certificates where such Old
Certificates were acquired by such Participating Broker-Dealer as a result of
market-making activities or other trading activities.
In the event that any changes in law or the applicable interpretations of
the staff of the SEC do not permit Atlas to effect the Exchange Offer, if the
Registration Statement is not declared effective within 60 calendar days after
the filing thereof with the SEC under certain circumstances or the Exchange
Offer is not consummated within 30 days after the effectiveness of the
Registration Statement under certain other circumstances, at the request of a
holder not eligible to participate in the Exchange Offer or under certain other
circumstances described in the Registration Rights Agreement, Atlas will, in
lieu of effecting the registration of the New Certificates pursuant to the
Registration Statement and at no cost to the holders of Old Certificates:
- as promptly as practicable, file with the SEC a shelf registration
statement (the "Shelf Registration Statement") covering resales of the
Old Certificates;
- use its best efforts to cause the Shelf Registration Statement to be
declared effective under the Securities Act by the 180th calendar day
after the Issuance Date; and
- use its best efforts to keep effective the Shelf Registration Statement
for a period of two years after its effective date (or for such shorter
period as shall end when all of the Old Certificates covered by the Shelf
Registration Statement have been sold pursuant thereto or may be freely
sold pursuant to Rule 144 under the Securities Act).
In the event that neither the consummation of the Exchange Offer nor the
declaration by the SEC of the Shelf Registration Statement to be effective
(each, a "Registration Event") occurs on or prior to the 210th calendar day
following the Issuance Date, the interest rate per annum borne by the Equipment
Notes and passed through to holders of Old Certificates shall be increased by
0.50% effective from and including August 25, 2000, to but excluding the date on
which a Registration Event occurs. In the event that the Shelf Registration
Statement ceases to be effective at any time, during the period we are required
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to keep such Shelf Registration Statement effective, for more than 60 days,
whether or not consecutive, during any 12-month period, the interest rate per
annum borne by the Equipment Notes shall be increased by 0.50% from the 61st day
of the applicable 12-month period such Shelf Registration Statement ceases to be
effective until such time as the Shelf Registration Statement again becomes
effective.
Upon consummation of the Exchange Offer, subject to certain exceptions,
holders of Old Certificates who do not exchange their Old Certificates for New
Certificates in the Exchange Offer will no longer be entitled to registration
rights and will not be able to offer or sell their Old Certificates, unless such
Old Certificates are subsequently registered under the Securities Act which,
subject to limited exceptions, we will have no obligation to do, except pursuant
to an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. See "Risk Factors -- Risk Factors Relating to
the New Certificates and the Exchange Offer -- Consequences of Failure to
Exchange."
Expiration Date; Extensions; Amendments; Termination
The term "Expiration Date" shall mean July 17, 2000 (30 calendar days
following the commencement of the Exchange Offer), unless we, in our sole
discretion, extend the Exchange Offer, in which case the term "Expiration Date"
shall mean the latest date to which the Exchange Offer is extended.
Notwithstanding any extension of the Exchange Offer, if the Exchange Offer is
not consummated by August 25, 2000, the interest rate borne by the Equipment
Notes and passed through to the Certificateholders is subject to increase. See
"-- General."
In order to extend the Expiration Date, we will notify the Exchange Agent
of any extension by oral or written notice and will mail to the record holders
of Old Certificates an announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date. Such announcement may state that we are extending the Exchange Offer for a
specified period of time.
We reserve the right:
- to delay acceptance of any Old Certificates, to extend the Exchange Offer
or to terminate the Exchange Offer and not permit acceptance of Old
Certificates not previously accepted if any of the conditions set forth
herein under "-- Conditions" shall have occurred and shall not have been
waived by us, by giving oral or written notice of such delay, extension
or termination to the Exchange Agent; or
- to amend the terms of the Exchange Offer in any manner deemed by us to be
advantageous to the holders of the Old Certificates.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
Exchange Agent. If the Exchange Offer is amended in a manner determined by us to
constitute a material change, we will promptly disclose such amendment in a
manner reasonably calculated to inform the holders of the Old Certificates of
such amendment.
Without limiting the manner in which we may choose to make a public
announcement of any delay, extension, amendment or termination of the Exchange
Offer, we shall have no obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
INTEREST ON THE NEW CERTIFICATES
The New Certificates will accrue interest at the applicable per annum rate
for such Trust set forth on the cover page of this prospectus, from the last
date on which interest was paid on the Old Certificates surrendered in exchange
therefor. Interest on the New Certificates is payable on January 2 and July 2 of
each year commencing upon the consummation of the Exchange Offer, subject to the
terms of the Intercreditor Agreement.
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PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with any other
required documents, to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date. In addition, either:
- certificates for such Old Certificates must be received by the Exchange
Agent along with the Letter of Transmittal;
- a timely confirmation of a book-entry transfer (a "Book-Entry
Confirmation") of such Old Certificates, if such procedure is available,
into the Exchange Agent's account at DTC (the "Book-Entry Transfer
Facility") pursuant to the procedure for book-entry transfer described
below, must be received by the Exchange Agent prior to the Expiration
Date; or
- the holder must comply with the guaranteed delivery procedures described
below.
The method of delivery of Old Certificates, Letters of Transmittal and all other
required documents is at the election and risk of the holders. If such delivery
is by mail, it is recommended that registered mail, properly insured, with
return receipt requested, be used. In all cases, sufficient time should be
allowed to assure timely delivery. No Letters of Transmittal or Old Certificates
should be sent to Atlas. Delivery of all documents must be made to the Exchange
Agent at its address set forth below. Holders may also request their respective
brokers, dealers, commercial banks, trust companies or nominees to effect such
tender for such holders.
The tender by a holder of Old Certificates will constitute an agreement
between such holder and the Company in accordance with the terms and subject to
the conditions set forth in this prospectus and in the Letter of Transmittal.
Only a holder of Old Certificates may tender such Old Certificates in the
Exchange Offer. The term "holder" with respect to the Exchange Offer means any
person in whose name Old Certificates are registered on our books or any other
person who has obtained a properly completed bond power from the registered
holder.
Any beneficial owner whose Old Certificates are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing the Letter of Transmittal and delivering his Old Certificates, either
make appropriate arrangements to register ownership of the Old Certificates in
such owner's name or obtain a properly completed bond power from the registered
holder. The transfer of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by any member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor" institution within the meaning of Rule
17Ad-15 under the Exchange Act (each, an "Eligible Institution") unless the Old
Certificates tendered pursuant thereto are tendered (a) by a registered holder
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (b) for the
account of an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Certificates listed therein, such Old Certificates
must be endorsed or accompanied by bond powers and a proxy which authorizes such
person to tender the Old Certificates on behalf of the registered holder, in
each case as the name of the registered holder or holders appears on the Old
Certificates.
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If the Letter of Transmittal or any Old Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived,
evidence satisfactory to us of their authority to so act must be submitted with
the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and withdrawal of the tendered Old Certificates will be determined by
us in our sole discretion, which determination will be final and binding. We
reserve the absolute right to reject any and all Old Certificates not properly
tendered or any Old Certificates which, if accepted, would, in the opinion of
our counsel, be unlawful. We also reserve the absolute right to waive any
irregularities or conditions of tender as to particular Old Certificates. Our
interpretation of the terms and conditions of the Exchange Offer, including the
instructions in the Letter of Transmittal, will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Old Certificates must be cured within such time as we shall determine.
Neither we, the Exchange Agent nor any other person shall be under any duty to
give notification of defects or irregularities with respect to tenders of Old
Certificates, nor shall any of us incur any liability for failure to give such
notification. Tenders of Old Certificates will not be deemed to have been made
until such irregularities have been cured or waived. Any Old Certificates
received by the Exchange Agent that are not properly tendered and as to which
the defects or irregularities have not been cured or waived will be returned
without cost to such holder by the Exchange Agent to the tendering holders of
Old Certificates, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
In addition, we reserve the right in our sole discretion, subject to the
provisions of the Indenture, to (a) purchase or make offers for any Old
Certificates that remain outstanding subsequent to the Expiration Date or, as
set forth under "-- Conditions," to terminate the Exchange Offer in accordance
with the terms of the Registration Rights Agreement and (b) to the extent
permitted by applicable law, purchase Old Certificates in the open market, in
privately negotiated transactions or otherwise. The terms of any such purchases
or offers could differ from the terms of the Exchange Offer.
ACCEPTANCE OF OLD CERTIFICATES FOR EXCHANGE; DELIVERY OF NEW CERTIFICATES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
all Old Certificates properly tendered will be accepted, promptly after the
Expiration Date, and the New Certificates will be issued promptly after
acceptance of the Old Certificates. See "-- Conditions" below. For purposes of
the Exchange Offer, Old Certificates shall be deemed to have been accepted
validly tendered for exchange when, as and if we have given oral or written
notice thereof to the Exchange Agent.
In all cases, issuance of New Certificates for Old Certificates that are
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Old Certificates
or a timely Book-Entry Confirmation of such Old Certificates into the Exchange
Agent's account at the Book-Entry Transfer Facility, a properly completed and
duly executed Letter of Transmittal and all other required documents. If any
tendered Old Certificates are not accepted for any reason set forth in the terms
and conditions of the Exchange Offer or if Old Certificates are submitted for a
greater principal amount than the holder desires to exchange, such unaccepted or
nonexchanged Old Certificates will be returned without expense to the tendering
holder thereof (or, in the case of Old Certificates tendered by book-entry
transfer procedures described below, such nonexchanged Old Certificates will be
credited to an account maintained with such Book-Entry Transfer Facility) as
promptly as practicable after the expiration or termination of the Exchange
Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Old Certificates at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this prospectus. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Certificates by causing
the Book-Entry Transfer Facility to
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<PAGE> 33
transfer such Old Certificates into the Exchange Agent's account at the
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for transfer. However, although delivery of Old
Certificates may be effected through book-entry transfer at the Book-Entry
Transfer Facility, the Letter of Transmittal or facsimile thereof with any
required signature guarantees and any other required documents must, in any
case, be transmitted to and received by the Exchange Agent at one of the
addresses set forth below under "-- Exchange Agent" on or prior to the
Expiration Date or the guaranteed delivery procedures described below must be
complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Old Certificates desires to tender such Old
Certificates, and the Old Certificates are not immediately available, or time
will not permit such holder's Old Certificates or other required documents to
reach the Exchange Agent before the Expiration Date, or the procedures for book-
entry transfer cannot be completed on a timely basis, a tender may be effected
pursuant to the following:
- the tender is made through an Eligible Institution;
- prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and Notice of Guaranteed Delivery,
substantially in the form provided by the Company (by facsimile
transmission, mail or hand delivery), setting forth the name and address
of the holder of Old Certificates and the amount of Old Certificates
tendered, stating that the tender is being made thereby and guaranteeing
that within three New York Stock Exchange ("NYSE") trading days after the
date of execution of the Notice of Guaranteed Delivery, the certificates
for all physically tendered Old Certificates, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent; and
- the certificates for all physically tendered Old Certificates, in proper
form for transfer, or a Book-Entry Confirmation, as the case may be, and
all other documents required by the Letter of Transmittal are received by
the Exchange Agent within three NYSE trading days after the date of
execution of the Notice of Guaranteed Delivery.
WITHDRAWAL OF TENDERS
Tenders of Old Certificates may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date at one of the addresses set forth below under "-- Exchange
Agent." Any such notice of withdrawal must specify the name of the person having
tendered the Old Certificates to be withdrawn, identify the Old Certificates to
be withdrawn, including the principal amount of such Old Certificates, and
(where certificates for Old Certificates have been transmitted) specify the name
in which such Old Certificates are registered, if different from that of the
withdrawing holder. If certificates for Old Certificates have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of such
certificates, the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Old Certificates have been tendered pursuant to the
procedure for book-entry transfer described above, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Old Certificates and otherwise comply with the
procedures of such facility. We will determine all questions as to the validity,
form and eligibility (including time of receipt) of such notices. Our
determination shall be final and binding on all parties. Any Old Certificates so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer. Any Old Certificates which have been tendered
for exchange but which are not exchanged for any reason will be returned to the
holder thereof without cost to such holder (or, in the case of Old
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<PAGE> 34
Certificates tendered by book-entry transfer into the Exchange Agent's account
at the Book-Entry Transfer Facility pursuant to the book-entry transfer
procedures described above, such Old Certificates will be credited to an account
maintained with such Book-Entry Transfer Facility for the Old Certificates) as
soon as practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Certificates may be retendered by
following one of the procedures described under "-- Procedures for Tendering"
and "-- Book-Entry Transfer" above at any time on or prior to the Expiration
Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, Old Certificates will
not be required to be accepted for exchange, nor will New Certificates be issued
in exchange for any Old Certificates and we may terminate or amend the Exchange
Offer before the acceptance of such Old Certificates, if because of any change
in law, or applicable interpretations thereof by the SEC, we determine that we
are not permitted to effect the Exchange Offer. In addition, we have no
obligation to, and will not knowingly, permit acceptance of tenders of Old
Certificates from our affiliates (within the meaning of Rule 405 under the
Securities Act) or from any other holder or holders who are not eligible to
participate in the Exchange Offer under applicable law or interpretations
thereof by the SEC, or if the New Certificates to be received by such holder or
holders of Old Certificates in the Exchange Offer, upon receipt, will not be
tradable by such holder without restriction under the Securities Act and the
Exchange Act and without material restrictions under the "blue sky" or
securities laws of substantially all of the states of the United States.
EXCHANGE AGENT
Wilmington Trust Company has been appointed as Exchange Agent for the
Exchange Offer. Questions and requests for assistance and requests for
additional copies of this prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
By Mail, Overnight Delivery: By Hand:
Wilmington Trust Company Wilmington Trust Company
1100 North Market Street, 1st Floor 1105 North Market Street, 1st Floor
Wilmington, Delaware 19890-0001 Wilmington, Delaware 19890
Attention: Corporate Trust Operations -- Attention: Corporate Trust Operations --
Atlas Air -- 2000 EETC Exchange Offer Atlas Air -- 2000 EETC Exchange Offer
</TABLE>
Facsimile Transmission:
(302) 651-1079
Confirm by Telephone:
(302) 651-8474
Corporate Trust Operations
FEES AND EXPENSES
We will pay the expenses of soliciting tenders pursuant to the Exchange
Offer. The principal solicitation for tenders pursuant to the Exchange Offer is
being made by mail; however, additional solicitations may be made by telegraph,
telephone, telecopy or in person by our officers and regular employees.
We will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. We will, however, pay the Exchange
Agent reasonable and customary fees for its services and will reimburse the
Exchange Agent for its reasonable out-of-pocket expenses in connection with its
services. We may also pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding
copies of the prospectus and related documents to the beneficial owners of the
Old Certificates, and in handling or forwarding tenders for exchange.
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<PAGE> 35
We will pay the expenses to be incurred in connection with the Exchange
Offer, including fees and expenses of the Exchange Agent and Trustee and
accounting, legal, printing and related fees and expenses.
We will pay all transfer taxes, if any, applicable to the exchange of Old
Certificates pursuant to the Exchange Offer. If, however, certificates
representing New Certificates or Old Certificates for principal amounts not
tendered or accepted for exchange are to be delivered to, or are to be
registered or issued in the name of, any person other than the registered holder
of the Old Certificates tendered, or if tendered Old Certificates are registered
in the name of any person other than the person signing the Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Old Certificates pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
USE OF PROCEEDS
There will be no cash proceeds payable to Atlas as a result of the issuance
of New Certificates pursuant to the Exchange Offer. All of the proceeds from the
sale of the Old Certificates were used to purchase Equipment Notes to finance
all or a portion of Atlas' purchase price of the Owned Aircraft, including
reimbursement of amounts paid by Atlas. Prior to utilization of such proceeds to
purchase Equipment Notes, such proceeds from the sale of the Old Certificates of
each Trust were deposited with the Depositary on behalf of the Escrow Agent for
the benefit of the Certificateholders of such Trust.
THE COMPANY
OVERVIEW
We are the world's largest air cargo outsourcer, with an all Stage 3 FAA
noise regulation compliant fleet of Boeing 747 freighter aircraft. We provide
reliable airport-to-airport cargo transportation services throughout the world
to major international air carriers generally under three- to five-year
fixed-rate U.S. dollar denominated contracts which typically require that we
supply aircraft, crew, maintenance and insurance ("ACMI Contracts"). Our
customers currently include some of the world's leading air carriers, including
Alitalia, China Airlines Ltd., China Southern Airlines, Korean Airlines and
Malaysian Airlines. We provide efficient, cost effective service to our
customers primarily as a result of our productive work force, the outsourcing of
a significant part of our regular maintenance work on a long-term, fixed-cost
contractual basis and the advantageous cost economies realized in the operation
of our fleet, comprised solely of Boeing 747 aircraft which are configured for
service in long-haul cargo operations.
Our fleet currently includes 22 Boeing 747-200 and 12 Boeing 747-400
freighter aircraft in service. We acquired the 747-400 aircraft in 1998, 1999
and 2000 pursuant to an agreement with The Boeing Company ("Boeing") to purchase
10 new 747-400 freighter aircraft powered by engines acquired from General
Electric Company, with options to purchase up to 10 additional 747-400 aircraft
(the "Boeing Purchase Agreement"). In February 1999, we exercised options for
two additional aircraft pursuant to the Boeing Purchase Agreement. We placed
five 747-400 aircraft into service in 1998, four 747-400 aircraft into service
in 1999 and three 747-400 aircraft into service in the first half of 2000.
In May 2000, we announced that we entered into a purchase contract to
acquire two Boeing 747-300 combi aircraft from VARIG, S.A. and a long term lease
agreement for a third 747-300 combi aircraft with a third party lessor. Each
747-300 combi aircraft will be converted from combi to full freighter
configuration by Boeing prior to their placement into service, which is
anticipated to occur during the fourth quarter of 2000. After their conversion,
these aircraft will be operationally equivalent to the Boeing 747-200 aircraft
in our fleet.
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<PAGE> 36
DESCRIPTION OF THE CERTIFICATES
The following summary describes material terms of the Certificates. The
summary does not purport to be complete and is qualified in its entirety by
reference to all of the provisions of the Basic Agreement and to all of the
provisions of the Certificates, the Trust Supplements, the Deposit Agreements,
the Escrow Agreements, the Liquidity Facilities and the Intercreditor Agreement,
forms of which were filed as exhibits to the Registration Statement and copies
of which are available as set forth under the heading "Where You Can Find More
Information."
Except as otherwise indicated, the following summary relates to each of the
Trusts and the Certificates issued by each Trust. The terms and conditions
governing each of the Trusts will be substantially the same, except as described
under "-- Subordination" below and except that the principal amount and
scheduled principal repayments of the Equipment Notes held by each Trust and the
interest rate and maturity date of the Equipment Notes held by each Trust will
differ. The references to Sections in parentheses in the following summary are
to the relevant Sections of the Basic Agreement unless otherwise indicated.
GENERAL
On January 28, 2000, Pass Through Certificates were issued representing a
fractional undivided interest in one of the three classes (each, a "Class") of
Atlas Air, Inc. 2000-1 Pass Through Trusts (the "Class A Trust," the "Class B
Trust," and the "Class C Trust," and, collectively, the "Trusts"). The Trusts
were formed pursuant to a pass through trust agreement between Atlas and
Wilmington Trust Company, as trustee (the "Trustee"), dated as of January 28,
2000 (the "Basic Agreement"), and three separate supplements thereto (each, a
"Trust Supplement" and, together with the Basic Agreement, collectively, the
"Pass Through Trust Agreements"). The Certificates were issued by the Class A
Trust, the Class B Trust, and the Class C Trust and are referred to herein as
the "Class A Certificates," the "Class B Certificates" and the "Class C
Certificates." As of the date of this prospectus, $124,639,000 Class A
Certificates, $44,741,000 Class B Certificates and $47,937,000 Class C
Certificates remain outstanding.
The New Certificates will be issued pursuant to the Pass Through Trust
Agreements. The forms and terms of the New Certificates are the same in all
material respects as the form and terms of the Old Certificates, except that:
- we registered the New Certificates under the Securities Act so their
transfer is not restricted like the Old Certificates; and
- the New Certificates are not entitled to liquidated damages under the
Registration Rights Agreement.
Each Certificate represents a fractional undivided interest in the Trust
created by the Pass Through Trust Agreement pursuant to which such Certificate
is issued. (Section 2.01) The Trust Property of each Trust (the "Trust
Property") consists of:
- subject to the Intercreditor Agreement, Equipment Notes acquired under
the Note Purchase Agreement and issued at Atlas' election in connection
with the delivery of each Aircraft during the Delivery Period either (a)
on a nonrecourse basis by an Owner Trustee in each separate leveraged
lease transaction with respect to each Leased Aircraft to finance a
portion of the purchase price of such Leased Aircraft by the Owner
Trustee, in which case the applicable Leased Aircraft will be leased to
Atlas or (b) on a recourse basis by Atlas in connection with each
separate secured loan transaction with respect to each Owned Aircraft to
finance a portion of the purchase price of such Owned Aircraft by Atlas;
- the rights of such Trust under the Intercreditor Agreement (including all
monies receivable in respect of such rights);
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<PAGE> 37
- all monies receivable under the Liquidity Facility for such Trust; and
- funds from time to time deposited with the Trustee in accounts relating
to such Trust.
The Certificates of each Trust have been issued in fully registered form
only and are subject to the provisions described below under "-- Book Entry;
Delivery and Form." New Certificates will be issued in denominations of $1,000
or integral multiples thereof. (Trust Supplement, Section 8.01(a))
The Certificates represent interests in the respective Trusts, and all
payments and distributions thereon will be made only from the Trust Property of
the related Trust. (Section 3.09) The Certificates do not and will not represent
an interest in or obligation of Atlas, the Trustees, any of the Loan Trustees or
Owner Trustees in their individual capacities, any Owner Participant or any
affiliate of any thereof.
Pursuant to the Escrow Agreement applicable to each Trust, the holders of
Certificates of such Trust (each, a "Certificateholder") as holders of the
Escrow Receipts affixed to each Certificate are entitled to certain rights with
respect to the Deposit relating to such Trust. Accordingly, any transfer of a
Certificate will have the effect of transferring the corresponding rights with
respect to the Deposit, and rights with respect to the Deposit may not be
separately transferred by Certificateholders. Rights with respect to the Deposit
and the Escrow Agreement relating to a Trust, except for the right to request
withdrawals for the purchase of Equipment Notes, will not constitute Trust
Property of such Trust. Payments to the Certificateholders in respect of the
Deposit and the Escrow Receipts relating to a Trust will constitute payments to
such Certificateholders solely in their capacity as holders of Escrow Receipts.
SUBORDINATION
The subordination terms of the Certificates vary depending upon whether a
"Triggering Event" has occurred. "Triggering Event" means (x) the occurrence of
an Indenture Event of Default under all Indentures resulting in a PTC Event of
Default with respect to the most senior Class of Certificates then outstanding,
(y) the acceleration of all of the outstanding Equipment Notes (provided that
during the Delivery Period the aggregate principal amount thereof exceeds $100
million) or (z) certain bankruptcy or insolvency events involving Atlas.
Before a Triggering Event
On each Regular Distribution Date or Special Distribution Date (each, a
"Distribution Date"), so long as no Triggering Event shall have occurred
(whether or not continuing), all payments received by the Subordination Agent in
respect of Equipment Notes and certain other payments under the related
Indenture will be distributed under the Intercreditor Agreement in the order
specified under "Description of the Intercreditor Agreement -- Priority of
Distributions -- Before a Triggering Event."
After a Triggering Event
Upon the occurrence of a Triggering Event and at all times thereafter, all
payments received by the Subordination Agent in respect of the Equipment Notes
and certain other payments will be distributed under the Intercreditor Agreement
in the order specified under "Description of the Intercreditor
Agreement -- Priority of Distributions -- After a Triggering Event."
Payments in respect of the Deposit relating to a Trust will not be subject
to the subordination provisions of the Intercreditor Agreement.
PAYMENTS AND DISTRIBUTIONS
Payments of interest on the Deposit with respect to each Trust and payments
of principal, premium (if any) and interest on the Equipment Notes or with
respect to other Trust Property held in each Trust will be distributed by the
Paying Agent (in the case of the Deposit) or by the Trustee (in the case of
Trust Property of such Trust) to Certificateholders of such Trust on the date
receipt of such payment is confirmed, except in the case of certain types of
Special Payments.
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<PAGE> 38
The Deposit held with respect to each Trust and the Equipment Notes held in
each Trust will accrue interest at the applicable rate per annum for
Certificates to be issued by such Trust set forth on the cover page of this
prospectus, payable on January 2 and July 2 of each year, commencing on July 2,
2000 (or, in the case of Equipment Notes issued after such date, commencing with
the first such date to occur after initial issuance thereof). Such interest
payments will be distributed to Certificateholders of such Trust on each such
date until the final Distribution Date for such Trust, subject in the case of
payments on the Equipment Notes to the Intercreditor Agreement. Interest is
calculated on the basis of a 360-day year consisting of twelve 30-day months.
Payments of interest applicable to the Certificates are supported by a
separate Liquidity Facility provided by the applicable Liquidity Provider for
the benefit of the holders of such Certificates in an aggregate amount
sufficient to pay interest thereon at the Stated Interest Rate for such Trust on
up to three successive Regular Distribution Dates (without regard to any future
payments of principal on such Certificates), except that the Liquidity Facility
with respect to such Trust does not cover interest payable by the Depositary on
the Deposit relating to such Trust. The Liquidity Facility for any Class of
Certificates does not provide for drawings thereunder to pay for principal of or
premium on the Certificates of such Class, any interest on the Certificates of
such Class in excess of the Stated Interest Rate, or, notwithstanding the
subordination provisions of the Intercreditor Agreement, principal of or
interest or premium on the Certificates of any other Class. Therefore, only the
holders of the Certificates issued by a particular Trust will be entitled to
receive and retain the proceeds of drawings under the Liquidity Facility for
such Trust. See "Description of the Liquidity Facilities."
Payments of principal of the Series A, Series B and Series C Equipment
Notes are scheduled to be received by the Trustee on January 2 and July 2 in
certain years depending upon the terms of the Equipment Notes held in such Trust
commencing on January 2, 2001 (or, in the case of Equipment Notes issued after
such date, commencing with the first such date to occur after initial issuance
thereof).
Scheduled payments of interest on the Deposits and of interest or principal
on the Equipment Notes are herein referred to as "Scheduled Payments," and
January 2 and July 2 of each year are herein referred to as "Regular
Distribution Dates." See "Description of the Equipment Notes -- Principal and
Interest Payments." The "Final Maturity Date" for the Class A Certificates is
July 2, 2021, for the Class B Certificates is July 2, 2017 and for the Class C
Certificates is July 2, 2011.
The Paying Agent with respect to each Escrow Agreement will distribute on
each Regular Distribution Date to the Certificateholders of the Trust to which
such Escrow Agreement relates all Scheduled Payments received in respect of the
related Deposit, the receipt of which is confirmed by the Paying Agent on such
Regular Distribution Date. The Trustee of each Trust will distribute, subject to
the Intercreditor Agreement, on each Regular Distribution Date to the
Certificateholders of such Trust all Scheduled Payments received in respect of
Equipment Notes held on behalf of such Trust, the receipt of which is confirmed
by the Trustee on such Regular Distribution Date. Each Certificateholder of each
Trust will be entitled to receive its proportionate share, based upon its
fractional interest in such Trust, of any distribution in respect of Scheduled
Payments of interest on the Deposit relating to such Trust and, subject to the
Intercreditor Agreement, of principal or interest on Equipment Notes held on
behalf of such Trust. Each such distribution of Scheduled Payments will be made
by the applicable Paying Agent or Trustee to the Certificateholders of record of
the relevant Trust on the record date applicable to such Scheduled Payment
subject to certain exceptions. (Sections 4.01 and 4.02; Escrow Agreement,
Section 2.03) If a Scheduled Payment is not received by the applicable Paying
Agent or Trustee on a Regular Distribution Date but is received within five days
thereafter, it will be distributed on the date received to such holders of
record. If it is received after such five-day period, it will be treated as a
Special Payment and distributed as described below.
Any payment in respect of, or any proceeds of, any Equipment Note or the
Trust Indenture Estate under (and as defined in) each Leased Aircraft Indenture
or Collateral under (and as defined in) any Owned Aircraft Indenture other than
a Scheduled Payment (each, a "Special Payment") will be distributed on, in the
case of an early redemption or a purchase of any Equipment Note, the date of
such
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<PAGE> 39
early redemption or purchase (which shall be a Business Day), and otherwise on
the Business Day specified for distribution of such Special Payment pursuant to
a notice delivered by each Trustee as soon as practicable after the Trustee has
received funds for such Special Payment (each, a "Special Distribution Date").
Any such distribution will be subject to the Intercreditor Agreement. Any unused
Deposits to be distributed, together with accrued and unpaid interest thereon
and any premium payable by Atlas (each, also a "Special Payment"), will be
distributed on a date 15 days after the Paying Agent has received notice of the
event requiring such distribution (also a "Special Distribution Date"). However,
if such date is within 10 days before a Regular Distribution Date, the Special
Payment shall be made on such Regular Distribution Date.
Each Paying Agent, in the case of the Deposits, and each Trustee, in the
case of Trust Property, will mail a notice to the Certificateholders of the
applicable Trust stating the scheduled Special Distribution Date, the related
record date, the amount of the Special Payment and the reason for the Special
Payment. In the case of a redemption or purchase of the Equipment Notes held in
the related Trust or any distribution of unused Deposits, such notice will be
mailed not less than 15 days prior to the date such Special Payment is scheduled
to be distributed, and in the case of any other Special Payment, such notice
will be mailed as soon as practicable after the Trustee has confirmed that it
has received funds for such Special Payment. (Section 4.02(c); Escrow Agreement,
Section 2.03) Each distribution of a Special Payment, other than a final
distribution, on a Special Distribution Date for any Trust will be made by the
Paying Agent or the Trustee, as applicable, to the Certificateholders of record
of such Trust on the record date applicable to such Special Payment. (Section
4.02(b); Escrow Agreement, Section 2.03) See "-- Indenture Defaults and Certain
Rights Upon an Indenture Default" and "Description of the Equipment
Notes -- Redemption."
Each Pass Through Trust Agreement requires that the Trustee establish and
maintain, for the related Trust and for the benefit of the Certificateholders of
such Trust, one or more non-interest bearing accounts (the "Certificate
Account") for the deposit of payments representing Scheduled Payments received
by such Trustee. Each Pass Through Trust Agreement requires that the Trustee
establish and maintain, for the related Trust and for the benefit of the
Certificateholders of such Trust, one or more accounts (the "Special Payments
Account") for the deposit of payments representing Special Payments received by
such Trustee, which shall be non-interest bearing except in certain
circumstances where the Trustee may invest amounts in such account in certain
permitted investments. Pursuant to the terms of each Pass Through Trust
Agreement, the Trustee is required to deposit any Scheduled Payments relating to
the applicable Trust received by it in the Certificate Account of such Trust and
to deposit any Special Payments so received by it in the Special Payments
Account of such Trust. (Section 4.01) All amounts so deposited will be
distributed by the Trustee on a Regular Distribution Date or a Special
Distribution Date, as appropriate. (Section 4.02)
Each Escrow Agreement requires that the Paying Agent establish and
maintain, for the benefit of the Receiptholders, one or more accounts (the
"Paying Agent Account"), which shall be non-interest bearing. Pursuant to the
terms of the Escrow Agreement, the Paying Agent is required to deposit interest
on the Deposit relating to such Trust and any unused Deposits withdrawn by the
Escrow Agent in the Paying Agent Account. All amounts so deposited will be
distributed by the Paying Agent on a Regular Distribution Date or Special
Distribution Date, as appropriate.
The final distribution for each Trust will be made only upon presentation
and surrender of the Certificates for such Trust at the office or agency of the
Trustee specified in the notice given by the Trustee of such final distribution.
The Trustee will mail such notice of the final distribution to the
Certificateholders of such Trust, specifying the date set for such final
distribution and the amount of such distribution. (Section 11.01) See
"-- Termination of the Trusts" below. Distributions in respect of Certificates
issued in global form will be made as described in "-- Book-Entry; Delivery and
Form" below.
If any Distribution Date is a Saturday, Sunday or other day on which
commercial banks are authorized or required to close in New York, New York,
Wilmington, Delaware, Denver, Colorado, or Salt Lake City, Utah (any other day
being a "Business Day"), distributions scheduled to be made on such
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<PAGE> 40
Regular Distribution Date or Special Distribution Date will be made on the next
succeeding Business Day without additional interest.
POOL FACTORS
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 or in respect of the Deposit relating
to such Trust other than payments made in respect of interest or premium or
reimbursement of any costs and expenses in connection therewith. The Pool
Balance for each Trust or for the Certificates issued by any Trust as of any
Distribution Date will be computed after giving effect to any special
distribution with respect to the unused Deposit, payment of principal of the
Equipment Notes or payment with respect to other Trust Property held in such
Trust and the distribution thereof to be made on that date. (Trust Supplement,
Section 2.01)
The "Pool Factor" for each Trust as of any Distribution Date will be the
quotient (rounded to the seventh decimal place) computed by dividing (i) the
Pool Balance by (ii) the original aggregate face amount of the Certificates of
such Trust. The Pool Factor for each Trust or for the Certificates issued by any
Trust as of any Distribution Date will be computed after giving effect to any
special distribution with respect to the unused Deposit, payment of principal of
the Equipment Notes or payment with respect to other Trust Property held in such
Trust and the distribution thereof to be made on that date. (Trust Supplement,
Section 2.01) The Pool Factor for each Trust was 1.0000000 on the date of
issuance of the Certificates; thereafter, the Pool Factor for each Trust
declines 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 par value of the holder's
Certificate of such Trust by the Pool Factor for such Trust as of the applicable
Distribution Date. Notice of 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. (Trust Supplement, Section 3.02)
The following table sets forth an illustrative aggregate principal
amortization schedule for the Equipment Notes held in each Trust (the "Assumed
Amortization Schedule") and resulting Pool Factors with respect to such Trust.
The actual aggregate principal amortization schedule applicable to the Class A,
Class B or Class C Trust and the resulting Pool Factors with respect to each
such Trust may differ from those set forth below, since the amortization
schedule for the Series A, Series B or Series C Equipment Notes issued with
respect to an Aircraft may vary from such illustrative amortization schedule so
long as it complies with the Mandatory Economic Terms. Moreover, the scheduled
distribution of principal payments for any Trust would be affected if any
Equipment Notes held in such Trust are redeemed or purchased or if a default in
payment on such Equipment Notes occurred. In addition, the table set forth below
assumes that each Aircraft is delivered in the month scheduled for its delivery
(see "Description of the Aircraft and the Appraisals -- The Appraisals" for the
delivery schedule) and that Equipment Notes in the maximum principal amount in
respect of all of the Aircraft are purchased by the Trusts. Actual circumstances
may vary from these assumptions, which would result in differences in the
aggregate principal amortization schedule applicable to a Trust and in the
resulting Pool Factors.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------- ------------------------ ------------------------
SCHEDULED SCHEDULED SCHEDULED
PRINCIPAL EXPECTED PRINCIPAL EXPECTED PRINCIPAL EXPECTED
DATE PAYMENTS POOL FACTOR PAYMENTS POOL FACTOR PAYMENTS POOL FACTOR
---- ----------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
January 2, 2001...... $10,384,326 0.9166848 $8,948,200 0.8000000 $9,587,400 0.8000000
January 2, 2002...... 0 0.9166848 0 0.8000000 5,787,514 0.6792683
January 2, 2003...... 832,183 0.9100080 0 0.8000000 7,698,129 0.5186799
January 2, 2004...... 3,739,203 0.8800078 0 0.8000000 5,637,012 0.4010878
January 2, 2005...... 3,739,203 0.8500075 0 0.8000000 6,553,968 0.2643673
January 2, 2006...... 3,739,203 0.8200072 379,549 0.7915168 7,183,589 0.1145126
January 2, 2007...... 3,739,203 0.7900070 7,032,058 0.6343442 0 0.1145126
</TABLE>
35
<PAGE> 41
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------- ------------------------ ------------------------
SCHEDULED SCHEDULED SCHEDULED
PRINCIPAL EXPECTED PRINCIPAL EXPECTED PRINCIPAL EXPECTED
DATE PAYMENTS POOL FACTOR PAYMENTS POOL FACTOR PAYMENTS POOL FACTOR
---- ----------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
January 2, 2008...... 3,739,203 0.7600067 4,993,949 0.5227251 0 0.1145126
January 2, 2009...... 3,739,203 0.7300064 636,279 0.5085037 2,360,008 0.0652811
January 2, 2010...... 3,739,203 0.7000062 0 0.5085037 3,129,380 0.0000000
January 2, 2011...... 3,739,203 0.6700059 3,550,493 0.4291471 0 0.0000000
January 2, 2012...... 3,739,203 0.6400056 4,311,527 0.3327808 0 0.0000000
January 2, 2013...... 3,739,203 0.6100054 4,480,179 0.2326449 0 0.0000000
January 2, 2014...... 3,739,203 0.5800051 5,495,282 0.1098206 0 0.0000000
January 2, 2015...... 3,739,203 0.5500049 4,813,484 0.0022351 0 0.0000000
January 2, 2016...... 3,739,203 0.5200046 100,000 0.0000000 0 0.0000000
January 2, 2017...... 3,739,203 0.4900043 0 0.0000000 0 0.0000000
January 2, 2018...... 21,177,982 0.3200898 0 0.0000000 0 0.0000000
July 2, 2018......... 20,473,746 0.1558254 0 0.0000000 0 0.0000000
January 2, 2019...... 19,321,921 0.0008023 0 0.0000000 0 0.0000000
January 2, 2020...... 100,000 0.0000000 0 0.0000000 0 0.0000000
</TABLE>
The final schedule of principal payments and the resulting schedule of Pool
Balances and Pool Factors may change from that set forth above as a result of
any reoptimization. Such reoptimization may occur at any time prior to July 2,
2001. In addition, the Pool Factor and Pool Balance of each Trust will be
recomputed if there has been an early redemption, purchase, or default in the
payment of principal or interest in respect of one or more of the Equipment
Notes held in a Trust, as described in "-- Indenture Defaults and Certain Rights
Upon an Indenture Default" and "Description of the Equipment Notes --
Redemption," or a special distribution attributable to unused Deposits, as
described in "Description of the Deposit Agreements." If (i) any such change in
the scheduled repayments or (ii) any such redemption, purchase, default or
special distribution occurs, the Pool Factors and the Pool Balances of each
Trust so affected will be recomputed after giving effect thereto and notice
thereof will be mailed to the Certificateholders of such Trust promptly after
any such change in scheduled repayments or after the occurrence of any event
described in clause (ii), as the case may be.
REPORTS TO CERTIFICATEHOLDERS
On each Distribution Date, the applicable Paying Agent and Trustee will
include with each distribution by it of a Scheduled Payment or Special Payment
to Certificateholders of the related Trust a statement, setting forth the
following information (per $1,000 aggregate principal amount of Certificate for
such Trust, as to (2), (3), (4) and (5) below):
(1) the aggregate amount of such funds distributed on such
Distribution Date under the Pass Through Trust Agreement and the Escrow
Agreement, indicating the amount allocable to each source;
(2) the amount of such distribution under the Pass Through Trust
Agreement allocable to principal and the amount allocable to premium
(including any premium paid by Atlas with respect to unused Deposits), if
any;
(3) the amount of such distribution under the Pass Through Trust
Agreement allocable to interest;
(4) the amount of such distribution under the Escrow Agreement
allocable to interest;
(5) the amount of such distribution under the Escrow Agreement
allocable to unused Deposits (if any); and
(6) the Pool Balance and the Pool Factor for such Trust. (Trust
Supplement, Section 3.02(a))
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<PAGE> 42
So long as the Certificates are registered in the name of DTC or its
nominee, on the record date prior to each Distribution Date, the applicable
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 Distribution Date, the applicable
Paying Agent and 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 holders of interests in the Certificates.
(Trust Supplement, Section 3.02(a))
In addition, after the end of each calendar year, the applicable Trustee
and Paying Agent will furnish to 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 (1), (2), (3), (4) and (5) above with
respect to the Trust for such calendar year or, if 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 such Trustee and which a Certificateholder shall reasonably request
as necessary for the purpose of such Certificateholder's preparation of its U.S.
federal income tax returns. (Trust Supplement, Section 3.02(b)) Such report and
such other items shall be prepared on the basis of information supplied to the
applicable Trustee by the DTC Participants and will be delivered by such Trustee
to such DTC Participants to be available for forwarding by such DTC Participants
to holders of interests in the Certificates in the manner described above.
(Trust Supplement, Section 3.02(b)) At such time, if any, as the Certificates
are issued in the form of definitive certificates, the applicable Paying Agent
and 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 appear on the records of the registrar of the
Certificates.
INDENTURE DEFAULTS AND CERTAIN RIGHTS UPON AN INDENTURE DEFAULT
An event of default under an Indenture (an "Indenture Event of Default")
will, with respect to the Leased Aircraft Indentures, include an event of
default under the related Lease (a "Lease Event of Default"). See "Description
of the Equipment Notes -- Indenture Event of Defaults, Notice and Waiver." Since
the Equipment Notes issued under an Indenture will be held in more than one
Trust, a continuing Indenture Event of Default under such Indenture would affect
the Equipment Notes held by each Trust. There are no cross-default provisions in
the Indentures or in the Leases (unless otherwise agreed between an Owner
Participant and Atlas). Consequently, events resulting in an Indenture Event of
Default under any particular Indenture may or may not result in an Indenture
Event of Default under any other Indenture, and a Lease Event of Default under
any particular Lease may or may not constitute a Lease Event of Default under
any other Lease. If an Indenture Event of Default occurs in fewer than all of
the Indentures, notwithstanding the treatment of Equipment Notes issued under
any Indenture under which an Indenture Event of Default has occurred, payments
of principal and interest on the Equipment Notes will continue to be distributed
to the holders of the Certificates as originally scheduled, subject to the
Intercreditor Agreement. See "Description of the Intercreditor
Agreement -- Priority of Distributions."
With respect to each Leased Aircraft, the applicable Owner Trustee and
Owner Participant, under the related Leased Aircraft Indenture, will have the
right under certain circumstances to cure Indenture defaults that result from
the occurrence of a Lease Event of Default under the related Lease. If the Owner
Trustee or the Owner Participant exercises any such cure right, the Indenture
default will be deemed to have been cured.
In the event that the same institution acts as Trustee of multiple Trusts,
in the absence of instructions from the Certificateholders of any such Trust,
such Trustee could be faced with a potential conflict of interest upon an
Indenture Event of Default. In such event, each 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 applicable Pass Through Trust
Agreement. Wilmington Trust Company will be the initial Trustee under each
Trust.
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<PAGE> 43
Upon the occurrence and continuation of an Indenture Event of Default, the
Controlling Party will direct the Indenture Trustee under such Indenture in the
exercise of remedies thereunder and may accelerate and sell all (but not less
than all) of the Equipment Notes issued under such Indenture to any person,
subject to certain limitations. See "Description of the Intercreditor
Agreement -- Intercreditor Rights -- Sale of Equipment Notes or Aircraft." The
proceeds of such sale will be distributed pursuant to the provisions of the
Intercreditor Agreement. Any such proceeds so distributed to any Trustee upon
any such sale shall be deposited in the applicable Special Payments Account and
shall be distributed to the Certificateholders of the applicable Trust on a
Special Distribution Date. (Sections 4.01 and 4.02) The market for Equipment
Notes at the time of the existence of an Indenture Event of Default may be very
limited and there can be no assurance as to the price at which they could be
sold. If any such Equipment Notes are sold for less than their outstanding
principal amount, certain Certificateholders will receive a smaller amount of
principal distributions than anticipated and will not have any claim for the
shortfall against Atlas, any Liquidity Provider, any Owner Trustee, any Owner
Participant or any Trustee.
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 Subordination Agent on account of any Equipment Note or Trust
Indenture Estate under (and as defined in) any Leased Aircraft Indenture or
Collateral under (and as defined in) any Owned Aircraft Indenture held in such
Trust following an Indenture Event of Default will be deposited in the Special
Payments Account for such Trust and will be distributed to the
Certificateholders of such Trust on a Special Distribution Date. (Sections 4.01
and 4.02) In addition, if, following an Indenture Event of Default under any
Leased Aircraft Indenture, the applicable Owner Participant or Owner Trustee
exercises its option to redeem or purchase the outstanding Equipment Notes
issued under such Leased Aircraft Indenture, the price paid by such Owner
Participant or Owner Trustee for the Equipment Notes issued under such Leased
Aircraft Indenture and distributed to such Trust by the Subordination Agent will
be deposited in the Special Payments Account for such Trust and will be
distributed to the Certificateholders of such Trust on a Special Distribution
Date. (Sections 4.01 and 4.02)
Any funds representing payments received with respect to any defaulted
Equipment Notes, or the proceeds from the sale of any Equipment Notes, held by
the Trustee in the Special Payments Account for such Trust will, to the extent
practicable, be invested and reinvested by such Trustee in certain permitted
investments pending the distribution of such funds on a Special Distribution
Date. (Section 4.04) Such permitted investments will be defined as obligations
of the United States or agencies or instrumentalities thereof for the payment of
which the full faith and credit of the United States is pledged and which mature
in not more than 60 days or such lesser time as is required for the distribution
of any such funds on a Special Distribution Date. (Section 1.01)
Each Pass Through Trust Agreement provides that the Trustee of the related
Trust will, within 90 days after the occurrence of any default known to the
Trustee, give to the Certificateholders of such Trust notice, transmitted by
mail, of such uncured or unwaived defaults with respect to such Trust known to
it, provided that, except in the case of default in a payment of principal,
premium, if any, or interest on any of the Equipment Notes held in such Trust,
the applicable Trustee will be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interests of
such Certificateholders. (Section 7.02) The term "default" as used in this
paragraph only with respect to any Trust means the occurrence of an Indenture
Event of Default under any Indenture pursuant to which Equipment Notes held by
such Trust were issued, as described above, except that in determining whether
any such Indenture Event of Default has occurred, any grace period or notice in
connection therewith will be disregarded.
Each Pass Through Trust Agreement contains a provision entitling the
Trustee of the related Trust, subject to the duty of such Trustee during a
default to act with the required standard of care, to be offered reasonable
security or indemnity by the holders of the Certificates of such Trust before
proceeding to exercise any right or power under such Pass Through Trust
Agreement at the request of such Certificateholders. (Section 7.03(e))
38
<PAGE> 44
Subject to certain qualifications set forth in each Pass Through Trust
Agreement and to the Intercreditor Agreement, the Certificateholders of each
Trust holding Certificates evidencing fractional undivided interests aggregating
not less than a majority in interest in such Trust will 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 the
Intercreditor Agreement, or exercising any trust or power conferred on such
Trustee under such Pass Through Trust Agreement or the Intercreditor Agreement,
including any right of such Trustee as Controlling Party under the Intercreditor
Agreement or as holder of the Equipment Notes. (Section 6.04)
In certain cases, the holders of the Certificates of a Trust evidencing
fractional undivided interests aggregating not less than a majority in interest
of such Trust may on behalf of the holders of all the Certificates of such Trust
waive any past Indenture Event of Default and its consequences under any
Indenture pursuant to which Equipment Notes held by such Trust were issued or,
if the Trustee of such Trust is the Controlling Party, may direct the Trustee to
instruct the applicable Loan Trustee to waive any past Indenture Default and its
consequences, except (i) a default in the deposit of any Scheduled Payment or
Special Payment or in the distribution thereof, (ii) a default in payment of the
principal, premium, if any, or interest with respect to any of the Equipment
Notes and (iii) a default in respect of any covenant or provision of the Pass
Through Trust Agreement that cannot be modified or amended without the consent
of each Certificateholder of such Trust affected thereby. (Section 6.05) Each
Indenture will provide that, with certain exceptions, the holders of the
majority in aggregate unpaid principal amount of the Equipment Notes issued
thereunder may on behalf of all such holders waive any past default or Indenture
Event of Default thereunder. Notwithstanding such provisions of the Indentures,
pursuant to the Intercreditor Agreement only the Controlling Party will be
entitled to waive any such past default or Indenture Event of Default.
PURCHASE RIGHTS OF CERTIFICATEHOLDERS
Upon the occurrence and during the continuation of a Triggering Event, with
10 days' written notice to the Trustee and each Certificateholder of the same
Class:
- the Class B Certificateholders will have the right to purchase all, but
not less than all, of the Class A Certificates;
- the Class C Certificateholders will have the right to purchase all, but
not less than all, of the Class A and Class B Certificates; and
- if the Class D Certificates are issued, the Class D Certificateholders
shall have the right to purchase all, but not less than all, of the Class
A, Class B and Class C Certificates.
In each case the purchase price will be equal to the Pool Balance of the
relevant Class or Classes of Certificates plus accrued and unpaid interest
thereon to the date of purchase, without premium, but including any other
amounts due to the Certificateholders of such Class or Classes. (Trust
Supplement, Section 4.01) In each case, if prior to the end of the 10-day
period, any other Certificateholder of the same Class notifies the purchasing
Certificateholder that the other Certificateholder wants to participate in such
purchase, then such other Certificateholder may join with the purchasing
Certificateholder to purchase the Certificates pro rata based on the interest in
the Trust held by each Certificateholder.
PTC EVENT OF DEFAULT
A Pass Through Certificate Event of Default (a "PTC Event of Default") is
defined under the Pass Through Trust Agreements as the failure to pay:
- the outstanding Pool Balance of the applicable Class of Certificates
within 10 Business Days of the Final Maturity Date for such Class; or
- interest due on such Class of Certificates within 10 Business Days of any
Distribution Date (unless the Subordination Agent shall have made
Interest Drawings, or withdrawals from the Cash
39
<PAGE> 45
Collateral Accounts for such Class of Certificates, with respect thereto
in an aggregate amount sufficient to pay such interest and shall have
distributed such amount to the Trustee entitled thereto).
Any failure to make expected principal distributions with respect to any
Class of Certificates on any Regular Distribution Date (other than the Final
Maturity Date) will not constitute a PTC Event of Default with respect to such
Certificates. A PTC Event of Default with respect to the most senior outstanding
Class of Certificates resulting from an Indenture Event of Default under all
Indentures will constitute a Triggering Event. See "Description of the
Intercreditor Agreement -- Priority of Distributions" for a discussion of the
consequences of the occurrence of a Triggering Event.
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
Atlas is 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:
- the surviving successor or transferee corporation is validly existing
under the laws of the United States or any state thereof;
- the surviving successor or transferee corporation is 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;
- the surviving successor or transferee corporation expressly assumes all
of the obligations of Atlas contained in any Pass Through Trust
Agreement, the Note Purchase Agreement, the Owned Aircraft Indentures,
the Participation Agreements and the Leases, and any other operative
documents; and
- Atlas delivers a certificate and an opinion or opinions of counsel
indicating that such transaction, in effect, complies with such
conditions.
In addition, after giving effect to such transaction, no Lease Event of
Default, in the case of a Leased Aircraft, or Indenture Default, in the case of
an Owned Aircraft, shall have occurred and be continuing. (Section 5.02; Leases,
Section 13.02; Owned Aircraft Indentures, Section 4.07)
The Pass Through Trust Agreements, the Note Purchase Agreement, the
Indentures, the Participation Agreements and the Leases do not contain any
covenants or provisions which may afford the applicable Trustee or
Certificateholders protection in the event of a highly leveraged transaction,
including transactions effected by management or affiliates, which may or may
not result in a change in control of Atlas.
MODIFICATIONS OF THE PASS THROUGH TRUST AGREEMENTS AND CERTAIN OTHER AGREEMENTS
Each Pass Through Trust Agreement contains provisions permitting, at our
request, the execution of amendments or supplements to such Pass Through Trust
Agreement or, if applicable, to the Deposit Agreements, the Escrow Agreements,
the Intercreditor Agreement, the Note Purchase Agreement or any Liquidity
Facility, without the consent of the holders of any of the Certificates of such
Trust:
- to provide for the formation of a Trust to issue additional classes of
certificates and to enter into Trust Supplements setting forth the terms
of any such class of certificates;
- to evidence the succession of another corporation to Atlas and the
assumption by such corporation of Atlas' obligations under such Pass
Through Trust Agreement, Deposit Agreement, Escrow Agreement, Note
Purchase Agreement or Liquidity Facility;
40
<PAGE> 46
- to add to the covenants of Atlas for the benefit of holders of such
Certificates or to surrender any right or power conferred upon Atlas in
such Pass Through Trust Agreement, Deposit Agreement, Escrow Agreement,
Intercreditor Agreement, Note Purchase Agreement or Liquidity Facility;
- to correct or supplement any provision of such Pass Through Trust
Agreement, the Deposit Agreement, Escrow Agreement, Intercreditor
Agreement, Note Purchase Agreement or Liquidity Facility which may be
defective or inconsistent with any other provision in such Pass Through
Trust Agreement, Deposit Agreement, Escrow Agreement, Intercreditor
Agreement, Note Purchase Agreement or Liquidity Facility, as applicable,
or to cure any ambiguity or to modify any other provision with respect to
matters or questions arising under such Pass Through Trust Agreement,
Deposit Agreement, Escrow Agreement, Intercreditor Agreement, Note
Purchase Agreement or Liquidity Facility, provided that such action shall
not materially adversely affect the interests of the holders of such
Certificates;
- to correct any mistake in such Pass Through Trust Agreement, Deposit
Agreement, Escrow Agreement, Intercreditor Agreement, Note Purchase
Agreement or Liquidity Facility; or, as provided in the Intercreditor
Agreement, to give effect to or provide for a Replacement Facility;
- to comply with any requirement of the SEC, any applicable law, rules or
regulations of any exchange or quotation system on which the Certificates
are listed, or any regulatory body;
- to modify, eliminate or add to the provisions of such Pass Through Trust
Agreement, Deposit Agreement, Escrow Agreement, Intercreditor Agreement,
Note Purchase Agreement or Liquidity Facility to such extent as shall be
necessary to continue the qualification of such Pass Through Trust
Agreement (including any supplemental agreement) under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), or any
similar federal statute enacted after the execution of such Pass Through
Trust Agreement, and to add to such Pass Through Trust Agreement, Deposit
Agreement, Escrow Agreement, Intercreditor Agreement, Note Purchase
Agreement or Liquidity Facility such other provisions as may be expressly
permitted by the Trust Indenture Act; and
- to evidence and provide for the acceptance of appointment under such Pass
Through Trust Agreement, Deposit Agreement, Escrow Agreement,
Intercreditor Agreement, Note Purchase Agreement or Liquidity Facility by
a successor Trustee and to add to or change any of the provisions of such
Pass Through Trust Agreement, Deposit Agreement, Escrow Agreement,
Intercreditor Agreement, Note Purchase Agreement or Liquidity Facility as
shall be necessary to provide for or facilitate the administration of the
Trusts by more than one Trustee.
In each case, such modification or supplement may not adversely affect the
status of the 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 (the
"Code"), for U.S. federal income tax purposes. (Section 9.01)
Each Pass Through Trust Agreement also contains provisions permitting the
execution, with the consent of the holders of the Certificates of the related
Trust evidencing fractional undivided interests aggregating not less than a
majority in interest of such Trust, and with the consent of the applicable Owner
Trustee, of amendments or supplements adding any provisions to or changing or
eliminating any of the provisions of such Pass Through Trust Agreement, the
Deposit Agreements, the Escrow Agreements, the Intercreditor Agreement, the Note
Purchase Agreement or any Liquidity Facility to the extent applicable to such
Certificateholders or of modifying the rights and obligations of such
Certificateholders under such Pass Through Trust Agreement, the Deposit
Agreements, the Escrow Agreements, the Intercreditor Agreement, the Note
Purchase Agreement or any Liquidity Facility. However, no such amendment or
supplement may, without the consent of the holder of each Certificate adversely
affected thereby:
- reduce in any manner the amount of, or delay the timing of, any receipt
by the Trustee (or, with respect to the Deposit, the Receiptholders) of
payments with respect to the Deposit, the Equipment
41
<PAGE> 47
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;
- permit the disposition of any Equipment Note held in such Trust, except
as provided in such Pass Through Trust Agreement, or otherwise deprive
such Certificateholder of the benefit of the ownership of the applicable
Equipment Notes;
- alter the priority of distributions specified in the Intercreditor
Agreement in a manner materially adverse to such Certificateholders;
- reduce the percentage of the aggregate fractional undivided interests of
the Trust provided for in such Pass Through Trust Agreement, the consent
of the holders of which is required for any such supplemental trust
agreement or for any waiver provided for in such Pass Through Trust
Agreement; or
- modify any of the provisions relating to the rights of the
Certificateholders in respect of the waiver of events of default or
receipt of payment. (Section 9.02; Trust Supplement, Section 6.02)
In the event that a Trustee, as holder (or beneficial owner through the
Subordination Agent) of any Equipment Note in trust for the benefit of the
Certificateholders of the relevant Trust or as Controlling Party under the
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, any Participation Agreement, any
Lease, any Equipment Note or any other related document, the Trustee shall
forthwith send a notice of such proposed amendment, modification, waiver or
supplement to each Certificateholder of the relevant Trust as of the date of
such notice. The Trustee shall request from the Certificateholders a direction
as to:
- 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 such Equipment Note or the Controlling Party has the option to
take;
- 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 such Equipment Note or as Controlling Party;
and
- how to vote (or direct the Subordination Agent to vote) any Equipment
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):
- other than as Controlling Party, the Trustee shall vote for or give
consent to any such action with respect to such Equipment Note in the
same proportion as that of (x) the aggregate face amount of all
Certificates actually voted in favor of or for giving consent to such
action by such direction of Certificateholders to (y) the aggregate face
amount of all outstanding certificates of the relevant Trust; and
- as the Controlling Party, the Trustee shall vote as directed in such
Certificateholder direction by the Certificateholders evidencing
fractional undivided interests aggregating not less than a majority in
interest in the relevant Trust.
For purposes of the immediately preceding sentence, a Certificate shall
have been "actually voted" if the Certificateholder has delivered to the Trustee
an instrument evidencing such Certificateholder's consent to such direction
prior to one Business Day before the Trustee directs such action or casts such
vote or
42
<PAGE> 48
gives such consent. Notwithstanding the foregoing, but subject to certain rights
of the Certificateholders under the relevant Pass Through Trust Agreement and
subject to the Intercreditor Agreement, the Trustee may, 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 relevant
Loan Trustee of such consent) to any amendment, modification, waiver or
supplement under the relevant Indenture, Participation Agreement or Lease, any
relevant Equipment Note or any other related document, if an Indenture Event of
Default under any Indenture shall have occurred and be continuing, or if such
amendment, modification, waiver or supplement will not materially adversely
affect the interests of the Certificateholders. (Section 10.01)
OBLIGATION TO PURCHASE EQUIPMENT NOTES
The Class A, Class B and Class C Trustees, respectively, are obligated to
purchase the Series A, Series B and Series C Equipment Notes issued with respect
to each Aircraft, subject in each case to the terms and conditions of a note
purchase agreement (the "Note Purchase Agreement"). Under the Note Purchase
Agreement, Atlas agrees to finance each Aircraft in the manner provided therein
and in connection therewith will have the option of entering into a leveraged
lease financing or a secured debt financing with respect to each Aircraft. In
addition, Atlas may elect to convert an Owned Aircraft to a Leased Aircraft at
any time by entering into a sale/leaseback transaction.
- If Atlas chooses to enter into a leveraged lease financing with respect
to an Aircraft (such Aircraft, a "Leased Aircraft"), the Note Purchase
Agreement provides for the relevant parties to enter into a participation
agreement (each, a "Participation Agreement"), a Lease and an indenture
(each, a "Leased Aircraft Indenture") relating to the financing of such
Leased Aircraft.
- If Atlas chooses to enter into a secured debt financing with respect to
an Aircraft (such Aircraft, an "Owned Aircraft"), the Note Purchase
Agreement provides for the relevant parties to enter into a participation
agreement (each, a "Participation Agreement") and an indenture (each an
"Owned Aircraft Indenture" and together with the other Owned Aircraft
Indentures and the Leased Aircraft Indentures, the "Indentures") relating
to the financing of such Owned Aircraft.
The description of such agreements in this prospectus is based on the forms
of such agreements to be utilized pursuant to the Note Purchase Agreement. In
the case of a Leased Aircraft, the terms of the agreements actually entered into
may differ from the forms of such agreements and, consequently, may differ from
the description of such agreements contained in this prospectus. See
"Description of the Equipment Notes." However, under the Note Purchase
Agreement, the terms of such agreements are required to (a) contain the
Mandatory Document Terms and (b) not vary the Mandatory Economic Terms. In
addition, Atlas is obligated (a) to certify to the Trustees that any such
modifications do not materially and adversely affect the Certificateholders and
(b) to obtain written confirmation from each Rating Agency that the use of
versions of such agreements modified in any material respect (other than
modifications affecting only the Owner Participant) will not result in a
withdrawal, suspension or downgrading of the rating of any Class of
Certificates. Further, under the Note Purchase Agreement, it is a condition
precedent to the obligation of each Trustee to purchase the Equipment Notes
related to the financing of an Aircraft that no Triggering Event shall have
occurred. The Trustees will have no right or obligation to purchase Equipment
Notes after the Delivery Period Termination Date.
MANDATORY ECONOMIC TERMS AND MANDATORY DOCUMENT TERMS
The "Mandatory Economic Terms," as defined in the Note Purchase Agreement,
require, among other things, that:
- the aggregate principal amount of all the Equipment Notes issued with
respect to an Aircraft not exceed the maximum principal amount of
Equipment Notes indicated for each such Aircraft as set forth in
"Summary -- Equipment Notes and the Aircraft" under the column "Maximum
Principal Amount of Equipment Notes";
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<PAGE> 49
- the initial LTV with respect to an Aircraft (with the value of any
Aircraft for these purposes to equal the value (the "Assumed Appraised
Value") for such Aircraft set forth in "Summary -- Equipment Notes and
the Aircraft" under the column "Appraised Base Value"), not exceed 39.0%
in the case of Series A Equipment Notes, 53.0% in the case of Series B
Equipment Notes and 68.0% in the case of Series C Equipment Notes;
- the LTV for each series of Equipment Notes issued in respect of each
Aircraft (computed as of the date of issuance thereof on the basis of the
Assumed Appraised Value of such Aircraft and the Depreciation Assumption)
not exceed as of any Regular Distribution Date thereafter (assuming no
default in the payment of the Equipment Notes) 39.0% in the case of the
Series A Equipment Notes, 53.0% in the case of the Series B Equipment
Notes and 68.0% in the case of the Series C Equipment Notes.
- the initial average life of each series of Equipment Notes for any
Aircraft from the Issuance Date shall be as follows:
Series A Equipment Notes: not less than 11.0 years or more than 13.5
years
Series B Equipment Notes: not less than 6.5 years or more than 9.5 years
Series C Equipment Notes: not less than 2.5 years or more than 4.25 years
- as of the Delivery Period Termination Date, the average life of each
Class of Certificates shall be as follows, in each case from the Issuance
Date (computed without regard to the acceleration of any Equipment Notes
and after giving effect to any special distribution on the Certificates
thereafter required in respect of unused Deposits):
Class A Certificates: not less than 11.5 years or more than 13.5 years
Class B Certificates: not less than 7.5 years or more than 9.0 years
Class C Certificates: not less than 3.0 years or more than 4.0 years
- the final expected Distribution Date of each Class of Certificates shall
be as set forth on the cover page of this prospectus;
- the original aggregate principal amount of all of the Equipment Notes of
each Series shall not exceed the original aggregate face amount of the
Certificates issued by the corresponding Trust;
- the interest rate applicable to each Series of Equipment Notes must be
equal to the rate applicable to the Certificates issued by the
corresponding Trust;
- the payment dates for the Equipment Notes and basic rent under the Leases
must be January 2 and July 2; provided however that rent under a Lease
may also be paid at Atlas' election upon the commencement of such Lease
and on any other date agreed between Atlas and the Owner Participant that
occurs after the latest maturity date of the Equipment Notes issued in
connection with the acquisition of the Aircraft to which the Lease
relates;
- rent, stipulated loss values and termination values under the Leases must
be sufficient to pay amounts due with respect to the related Equipment
Notes;
- the amounts payable under the all-risk aircraft hull insurance maintained
with respect to each Aircraft must be sufficient to pay the applicable
stipulated loss value, or, in the case of Owned Aircraft, unpaid
principal amount of the related Equipment Notes, subject to certain
rights of self-insurance; and
- (a) the past due rate in the Indentures and the Leases, (b) the
Make-Whole Premium payable under the Indentures, (c) the provisions
relating to the redemption and purchase of Equipment Notes in the
Indentures, (d) the minimum liability insurance amount on Aircraft in the
Leases subject to certain rights of self-insurance, (e) the interest rate
payable, if any, with respect to stipulated loss value in the Leases, and
(f) the indemnification of the Loan Trustees, Subordination Agent,
Liquidity Providers (including MSDW so long as MSCS is a Liquidity
Provider), Trustees, Escrow Agents and registered holders of the
Equipment Notes (in such capacity, the "Note
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<PAGE> 50
Holders") with respect to certain taxes and expenses, in each case be
provided as set forth in the form of Participation Agreements, Lease and
Indentures (collectively, the "Aircraft Operative Agreements").
The "Mandatory Document Terms" prohibit modifications in any material
adverse respect to certain specified provisions of the Aircraft Operative
Agreements annexed to the Note Purchase Agreement, as follows:
- In the case of the Indentures, the following modifications are
prohibited:
(i) to the Granting Clause of the Indentures so as to deprive the Note
Holders of a first priority security interest in the Aircraft, certain of
Atlas' rights under its purchase agreement with the Aircraft manufacturer
and, in the case of a Leased Aircraft, the Lease or to eliminate the
obligations intended to be secured thereby;
(ii) to certain provisions relating to the issuance, redemption,
purchase, payments, and ranking of the Equipment Notes (including the
obligation to pay the Make-Whole Premium in certain circumstances);
(iii) to certain provisions regarding Indenture Defaults, remedies
relating thereto and rights of the Owner Trustee and Owner Participant in
such circumstances;
(iv) to certain provisions relating to any replaced airframe or
engines with respect to an Aircraft; and
(v) to the provision that New York law will govern the Indentures.
- In the case of the Lease, the following modifications are prohibited:
(i) to certain provisions regarding the obligation of Atlas to pay
basic rent, stipulated loss value and termination value to the Leased
Aircraft Trustee;
(ii) to certain provisions regarding the obligation of Atlas to record
the Leased Aircraft Indenture with the Federal Aviation Administration and
to maintain such Indenture as a first-priority perfected mortgage on the
related Aircraft;
(iii) to certain provisions relating to the obligation of Atlas to
furnish certain opinions with respect to a replacement airframe;
(iv) to certain provisions relating to the obligation of Atlas to
consent to the assignment of the Lease by the Owner Trustee as collateral
under the Leased Aircraft Indenture; and
(v) modifications which would either alter the provision that New York
law will govern the Lease or would deprive the Loan Trustee of rights
expressly granted to it under the Leases.
- In the case of the Participation Agreement, the following modifications
are prohibited:
(i) to certain conditions to the obligations of the Trustees to
purchase the Equipment Notes issued with respect to an Aircraft involving
good title to such Aircraft, obtaining a certificate of airworthiness with
respect to such Aircraft, entitlement to the benefits of Section 1110 with
respect to such Aircraft and filings of certain documents with the Federal
Aviation Administration;
(ii) to the provisions restricting the Note Holder's ability to
transfer such Equipment Notes;
(iii) to certain provisions requiring the delivery of legal opinions;
and
(iv) to the provision that New York law will govern the Participation
Agreement.
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<PAGE> 51
- In the case of all of the Aircraft Operative Agreements, modifications
are prohibited in any material adverse respect as regards the interest of
the Note Holders, the Subordination Agent, the Liquidity Providers or the
Loan Trustees in the definition of Make-Whole Premium.
Notwithstanding the foregoing, any such Mandatory Document Term may be
modified to correct or supplement any such provision which may be defective or
to cure any ambiguity or correct any mistake, provided that any such action
shall not materially adversely affect the interests of the Note Holders, the
Subordination Agent, the Liquidity Providers, the Loan Trustees or the
Certificateholders.
POSSIBLE ISSUANCE OF SERIES D EQUIPMENT NOTES
Atlas may elect to issue Series D Equipment Notes in connection with the
financing of Owned Aircraft, which will be funded from sources other than the
original placement of the Old Certificates. Atlas may elect to fund the sale of
the Series D Equipment Notes through the sale of Pass Through Certificates (the
"Class D Certificates") issued by a Class D Atlas Air 2000-1 Pass Through Trust
(the "Class D Trust"). Atlas will not issue any Series D Equipment Notes at any
time prior to the consummation of the original placement of the Old
Certificates. The Note Purchase Agreement provides that Atlas' ability to issue
any Series D Equipment Notes is contingent upon its obtaining written
confirmation from each Rating Agency that the issuance of such Series D
Equipment Notes will not result in a withdrawal or downgrading of the rating of
any Class of Certificates. If the Class D Certificates are issued, the Class D
Trustee will become a party to the Intercreditor Agreement. See "Description of
the Intercreditor Agreement."
TERMINATION OF THE TRUSTS
The obligations of Atlas and the applicable 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 applicable Pass
Through Trust Agreement and the disposition of all property held in such Trust.
(Trust Supplement, Section 7.01) The applicable Trustee will send to each
Certificateholder 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 applicable
Trustee specified in such notice of termination. (Section 11.01)
THE TRUSTEES
Wilmington Trust Company is the Trustee for each Trust.
BOOK-ENTRY; DELIVERY AND FORM
The New Certificates of each Trust will be represented by one or more
permanent Global Certificates, in definitive, fully registered form without
interest coupons, to be deposited with the Trustee as custodian for DTC and
registered in the name of the nominee of DTC.
DTC has advised Atlas as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC was created to hold securities for its participants
and facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks, trust
companies and clearing corporations and certain other organizations. Indirect
access to the DTC system is available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly ("indirect participants").
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<PAGE> 52
Ownership of beneficial interests in the Global Certificates will be
limited to persons who have accounts with DTC ("DTC Participants") or persons
who hold interests through DTC Participants. Ownership of beneficial interests
in the Global Certificates will be shown on, and the transfer of that ownership
will be effected only through, records maintained by DTC or its nominee (with
respect to interests of DTC Participants) and the records of DTC Participants
(with respect to interests of persons other than DTC Participants). The laws of
some states require that certain purchasers of securities take physical delivery
of such securities. Such limits and such laws may limit the market for
beneficial interests in the Global Certificates.
So long as DTC or its nominee is the registered owner or holder of the
Global Certificates, DTC or such nominee, as the case may be, will be considered
the sole record owner or holder of the New Certificates represented by such
Global Certificates for all purposes under the related Pass Through Trust
Agreements. No beneficial owners of an interest in the Global Certificates will
be able to transfer that interest except in accordance with DTC's applicable
procedures, in addition to those provided for under the Pass Through Trust
Agreements, and, if applicable, the Euroclear System or Cedel Bank Societe
Anonyme.
Payments of the principal of, premium, if any, and interest on the Global
Certificates will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. Neither Atlas, the Trustee, nor any paying agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the Global
Certificates or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Atlas expects that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of the Global Certificates
will credit DTC Participants' accounts with payments in amounts proportionate to
their respective beneficial ownership interests in the principal amount of such
Global Certificates, as shown on the records of DTC or its nominee. Atlas also
expects that payments by DTC Participants to owners of beneficial interests in
such Global Certificates held through such DTC Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
DTC Participants.
Neither Atlas nor the Trustee will have any responsibility for the
performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
DEFINITIVE CERTIFICATES
Interests in Global Certificates of any class will be exchangeable or
transferable, as the case may be, for certificates in definitive, fully
registered form without interest coupons (the "Definitive Certificates") only if
(i) Atlas 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 Atlas is unable to locate a qualified successor within 90 days
of receipt of such notice or, (ii) after the occurrence of certain events of
default or other events specified in the Pass Through Trust Agreement,
Certificateholders with fractional undivided interests aggregating not less than
a majority in interest in such Trust advise the Trustee, Atlas 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 Certificateholders' best
interests.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee will be required to notify through participants all
Certificateholders having a beneficial interest in the Global Certificates of
the availability of Definitive Certificates. Upon surrender by DTC of the
certificates representing the Global Certificates and receipt of instructions
for re-registration, the Trustee will reissue the Certificates as Definitive
Certificates to Certificateholders.
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 Pass Through Trust
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<PAGE> 53
Agreement, 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.
DESCRIPTION OF THE DEPOSIT AGREEMENTS
The following summary describes material terms of the deposit agreements
("Deposit Agreements"). The summary does not purport to be complete and is
qualified in its entirety by reference to all of the provisions of the Deposit
Agreements. The provisions of the Deposit Agreements are substantially identical
except as otherwise indicated.
GENERAL
Under the Escrow Agreements, the Escrow Agent with respect to each Trust
has entered into a separate Deposit Agreement with the Depositary. The
Depositary has established separate accounts into which the proceeds of the
original placement of the Old Certificates attributable to the applicable Trust
were deposited (each, a "Deposit") on the Issuance Date on behalf of such Escrow
Agent. Both Aircraft were delivered in April 2000 and the applicable amounts
were withdrawn from the Deposits to finance the two Aircraft. On each Regular
Distribution Date the Depositary will pay to the Paying Agent on behalf of the
applicable Escrow Agent, for distribution to the holders of Escrow Receipts, an
amount equal to interest accrued on the Deposit relating to such Trust during
the relevant interest period at the rate per annum applicable to the
Certificates issued by such Trust.
Upon each delivery of the Aircraft during the Delivery Period, the Trustee
for each Trust requested the Escrow Agent relating to such Trust to withdraw
from the Deposit relating to such Trust funds sufficient to enable the Trustee
of such Trust to purchase the Equipment Note of the series applicable to such
Trust issued with respect to such Aircraft. Accrued but unpaid interest on such
Deposit (or portion thereof) withdrawn will be paid on the next Regular
Distribution Date. The Deposit relating to each Trust and interest paid thereon
will not be subject to the subordination provisions of the Intercreditor
Agreement and will not be available to pay any amount due in respect of the
Certificates.
DEPOSITARY
Westdeutsche Landesbank Girozentrale, New York Branch, is the depositary
(the "Depositary"). WestLB, a German universal bank, provides commercial and
investment banking services regionally, nationally and internationally to
public, corporate and bank customers. WestLB is the largest of the German state
banks. At December 31, 1998, WestLB had total assets of approximately DM 540.8
billion ($323.2 billion).
WestLB operates its New York Branch (the "Branch") pursuant to a license
granted by the Superintendent of Banks of the State of New York in 1975. It is
also subject to review and supervision by the Federal Reserve Bank. The Branch
offers a range of financial products and advisory services.
WestLB has short-term unsecured debt ratings of P-1 from Moody's and A-1+
from Standard & Poor's.
WestLB's registered head office is located at Herzogstrasse 15, 40217
Dusseldorf, Germany, and its telephone number is 011-49-21-826-01. The Branch is
located at 1211 Avenue of the Americas, New York, N.Y. 10036, and its telephone
number is 212-852-6000. A copy of WestLB's 1998 Annual Report may be obtained
from the Branch by delivery of a written request to the attention of the Branch
Management.
The description of WestLB above has been provided by WestLB. WestLB,
however, has not been involved in the preparation of, nor does it accept
responsibility for, this prospectus.
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Atlas shall have the option to substitute another financial institution
acceptable to the Rating Agencies as Depositary under certain circumstances.
DESCRIPTION OF THE ESCROW AGREEMENTS
The following summary describes material terms of the escrow and paying
agent agreements (the "Escrow Agreements"). The summary does not purport to be
complete and is qualified in its entirety by reference to all of the provisions
of the Escrow Agreements. The provisions of the Escrow Agreements are
substantially identical except as otherwise indicated.
First Security Bank, National Association, as escrow agent in respect of
each Trust (the "Escrow Agent"), Wilmington Trust Company, as paying agent on
behalf of the Escrow Agent in respect of each Trust (the "Paying Agent"), each
Trustee and the Initial Purchasers have entered into a separate Escrow Agreement
for the benefit of the Certificateholders of each Trust as holders of the Escrow
Receipts affixed thereto (in such capacity, a "Receiptholder"). The cash
proceeds of the offering of Old Certificates of each Trust were deposited on
behalf of the Escrow Agent (for the benefit of Receiptholders) with the
Depositary as the Deposit relating to such Trust. Both Aircraft were delivered
in April 2000 and the applicable amount of each Deposit was withdrawn from such
Deposit to finance the Aircraft.
The Escrow Agent shall direct the Depositary to pay interest on the
Deposits accrued in accordance with the Deposit Agreement to the Paying Agent
for distribution to the Receiptholders. Each Escrow Agreement requires that the
Paying Agent establish and maintain, for the benefit of the related
Receiptholders, one or more Paying Agent Account(s), which shall be non-interest
bearing. The Paying Agent shall deposit interest on Deposits in the related
Paying Agent Account. The Paying Agent shall distribute these amounts on a
Regular Distribution Date or Special Distribution Date, as appropriate.
The Escrow Agent has issued one or more escrow receipts (the "Escrow
Receipts") which were affixed by the relevant Trustee to each Certificate. Each
Escrow Receipt evidences a fractional undivided interest in amounts from time to
time deposited into the Paying Agent Account and is limited in recourse to
amounts deposited into such account. An Escrow Receipt may not be assigned or
transferred except in connection with the assignment or transfer of the
Certificate to which it is affixed. In connection with the Exchange Offer, each
Escrow Receipt attached to an Old Certificate (an "Old Escrow Receipt") will be
exchanged for an Escrow Receipt attached to a New Certificate (a "New Escrow
Receipt") that will be identical in all material respects to the Old Escrow
Receipt. Each Escrow Receipt will be registered by the Escrow Agent in the same
name and manner as the Certificate to which it is affixed.
DESCRIPTION OF THE LIQUIDITY FACILITIES
The following summary describes material terms of the Liquidity Facilities
and certain provisions of the Intercreditor Agreement relating to the Liquidity
Facilities. The summary does not purport to be complete and is qualified in its
entirety by reference to all of the provisions of the Liquidity Facilities and
the Intercreditor Agreement. The provisions of the Liquidity Facilities are
substantially identical except as otherwise indicated.
GENERAL
The liquidity provider for each trust (the "Liquidity Provider") has
entered into a separate revolving credit agreement (each, a "Liquidity
Facility") with the Subordination Agent. Under each Liquidity Facility, the
Liquidity Provider will, if necessary, make one or more advances ("Interest
Drawings") to the Subordination Agent in an aggregate amount (the "Required
Amount") sufficient to pay interest on the Certificates on up to three
consecutive semiannual Regular Distribution Dates at the respective interest
rates shown on the cover page of this prospectus for such Certificates of the
related Class (the "Stated Interest Rate"). If interest payment defaults occur
which exceed the amount covered by or available under the Liquidity Facility for
any Trust, the Certificateholders of such Trust will bear their allocable share
of the deficiencies to the extent that there are no other sources of funds.
Although WestLB, New York
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<PAGE> 55
Branch, and MSCS are the initial Liquidity Providers, the Liquidity Provider for
any Trust under certain circumstances may be replaced by one or more other
entities. See "-- Replacement of Liquidity Facilities." The obligations of MSCS
to make advances under the Liquidity Facilities for the Class B Trust and the
Class C Trust will be fully and unconditionally guaranteed by MSDW.
DRAWINGS
The initial amount available under the Liquidity Facilities for each Trust
on the Issuance Date was as follows:
<TABLE>
<CAPTION>
TRUST AVAILABLE AMOUNT
----- ----------------
<S> <C>
Class A............................................. $16,278,477
Class B............................................. $ 6,078,289
Class C............................................. $ 6,976,272
</TABLE>
Except as otherwise provided below, the Liquidity Facility for each Trust
will enable the Subordination Agent to make Interest Drawings thereunder on or
promptly after any Regular Distribution Date to pay interest then due and
payable on the Certificates of such Trust at the Stated Interest Rate for such
Trust to the extent that the amount, if any, available to the Subordination
Agent on such Regular Distribution Date is not sufficient to pay such interest;
provided, however, that the maximum amount available to be drawn under a
Liquidity Facility with respect to any Trust on any Regular Distribution Date to
fund any shortfall of interest on Certificates of such Trust will not exceed the
then Maximum Available Commitment under such Liquidity Facility.
The "Maximum Available Commitment" at any time under each Liquidity
Facility is an amount equal to the then Required Amount of such Liquidity
Facility less the aggregate amount of each Interest Drawing outstanding under
such Liquidity Facility at such time, provided that following a Downgrade
Drawing, a Final Drawing or a Non-Extension Drawing under a Liquidity Facility,
the Maximum Available Commitment under such Liquidity Facility shall be zero.
The Liquidity Facility for any Class of Certificates does not provide for
drawings thereunder to pay for principal of or premium on the Certificates of
such Class or any interest on the Certificates of such Class in excess of the
Stated Interest Rate for such Class or more than three semiannual installments
of interest thereon or principal of or interest or premium on the Certificates
of any other Class. (Liquidity Facilities, Section 2.02; Intercreditor
Agreement, Section 3.6) In addition, the Liquidity Facility with respect to each
Trust does not provide for drawings thereunder to pay any amounts payable with
respect to the Deposits relating to such Trust.
Each payment by the Liquidity Provider reduces by the same amount the
Maximum Available Commitment under the related Liquidity Facility, subject to
reinstatement as hereinafter described. With respect to any Interest Drawings
upon reimbursement of the Liquidity Provider in full for the amount of such
Interest Drawings plus interest thereon, the Maximum Available Commitment under
such Liquidity Facility in respect of interest on the Certificates of such Trust
will be reinstated to an amount not to exceed the then Required Amount of such
Liquidity Facility. However, such Liquidity Facility will not be so reinstated
at any time if (i) a Liquidity Event of Default shall have occurred and be
continuing and (ii) less than 65% of the then aggregate outstanding principal
amount of all Equipment Notes are Performing Equipment Notes. With respect to
any other drawings under such Liquidity Facility, amounts available to be drawn
thereunder are not subject to reinstatement. The Required Amount of the
Liquidity Facility for any Trust will be automatically reduced from time to time
to an amount equal to the next three successive interest payments due on the
Certificates of such Trust (without regard to expected future payment of
principal of such Certificates) at the Stated Interest Rate for such Trust.
(Liquidity Facilities, Section 2.04(a); Intercreditor Agreement, Section 3.6(j))
"Performing Equipment Note" means an Equipment Note with respect to which
no payment default has occurred and is continuing (without giving effect to any
acceleration); provided that in the event of a
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bankruptcy proceeding involving Atlas under the U.S. Bankruptcy Code, (a) any
payment default existing during the 60-day period under Section 1110(a)(1)(A) of
the U.S. Bankruptcy Code (or such longer period as may apply under Section
1110(b) of the U.S. Bankruptcy Code) (the "Section 1110 Period") shall not be
taken into consideration, unless during the Section 1110 Period the trustee in
such proceeding or Atlas refuses to assume or agree to perform its obligations
under the Lease related to such Equipment Note (in the case of a Leased
Aircraft) or under the Owned Aircraft Indenture related to such Equipment Note
(in the case of an Owned Aircraft), and (b) any payment default occurring after
the date of the order of relief in such proceeding will not be taken into
consideration if such payment default is cured under Section 1110(a)(1)(B) of
the U.S. Bankruptcy Code before the later of 30 days after the date of such
default or the expiration of the Section 1110 Period.
REPLACEMENT OF LIQUIDITY FACILITIES
If at any time (i) the short-term unsecured debt rating of any Liquidity
Provider or, if applicable, of any guarantor of the obligations of a Liquidity
Provider then issued by any of the Rating Agencies is lower than the Threshold
Rating for the relevant Class or (ii) any guarantee of a Liquidity Provider's
obligations under the relevant Liquidity Facilities becomes invalid or
unenforceable, then the relevant Liquidity Facility may be replaced by a
Replacement Facility. In the event that such Liquidity Facility is not replaced
with a Replacement Facility, within 10 days after notice of the downgrading or
such guarantee becoming invalid or unenforceable and as otherwise provided in
the Intercreditor Agreement, such Liquidity Facility will be drawn in full up to
the then Maximum Available Commitment under such Liquidity Facility (the
"Downgrade Drawing") and the proceeds will be deposited into a cash collateral
account (the "Cash Collateral Account") for such Class of Certificates and used
for the same purposes and under the same circumstances and subject to the same
conditions as cash payments of Interest Drawings under such Liquidity Facility
would be used. (Liquidity Facilities, Section 2.02(c); Intercreditor Agreement,
Section 3.6(c))
A "Replacement Facility" for any Liquidity Facility means an irrevocable
liquidity facility (or liquidity facilities) in substantially the form of the
replaced Liquidity Facility, including reinstatement provisions, or in such
other form (which may include a letter of credit) as shall permit the Rating
Agencies to confirm in writing their respective ratings then in effect for the
Certificates (before downgrading of such ratings, if any, as a result of the
downgrading of the applicable Liquidity Provider), in a face amount (or in an
aggregate face amount) equal to the applicable Required Amount and issued by a
person having unsecured short-term debt ratings issued by the Rating Agencies
which are equal to or higher than the Threshold Rating for the relevant Class.
(Intercreditor Agreement, Section 1.1) The provider of any Replacement Facility
will have the same rights (including, without limitation, priority distribution
rights and rights as "Controlling Party") under the Intercreditor Agreement as
the initial Liquidity Provider.
"Threshold Rating" means the short-term unsecured debt rating of P-1 by
Moody's and A-1+ by Standard & Poor's, in the case of the Class A Liquidity
Provider, and the short-term unsecured debt rating of P-1 by Moody's and A-1 by
Standard & Poor's, in the case of the Class B and Class C Liquidity Provider.
The Liquidity Facility for each Trust provides that the Liquidity
Provider's obligations thereunder will expire on the earliest of:
- January 26, 2001;
- the date on which the Subordination Agent delivers to such Liquidity
Provider a certification that all of the Certificates of such Trust have
been paid in full;
- the date on which the Subordination Agent delivers to such Liquidity
Provider a certification that a Replacement Facility has been substituted
for such Liquidity Facility;
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- the fifth Business Day following receipt by the Subordination Agent of a
Termination Notice from such Liquidity Provider (see "-- Liquidity Events
of Default"); or
- the date on which no amount is or may (by reason of reinstatement) become
available for drawing under such Liquidity Facility.
Each Liquidity Facility provides that the scheduled expiration date thereof
may be extended for additional 364-day periods by mutual agreement of the
relevant Liquidity Provider and the Subordination Agent. (Liquidity Facilities,
Section 2.10)
The Intercreditor Agreement provides for the replacement of the Liquidity
Facility for any Trust if such Liquidity Facility is scheduled to expire earlier
than 15 days after the Final Maturity Date for the Certificates of such Trust
and such Liquidity Facility is not extended at least 25 days prior to its then
scheduled expiration date. (Intercreditor Agreement, Section 3.6(d)) If such
Liquidity Facility is not so extended or replaced by the 25th day prior to its
then scheduled expiration date, such Liquidity Facility will be drawn in full up
to the then Maximum Available Commitment under such Liquidity Facility (the
"Non-Extension Drawing"). The proceeds of the Non-Extension Drawing will be
deposited in the Cash Collateral Account for the related Class of Certificates
as cash collateral to be used for the same purposes and under the same
circumstances, and subject to the same conditions, as cash payments of Interest
Drawings under such Liquidity Facility would be used. (Liquidity Facilities,
Section 2.02(b))
Subject to certain limitations, Atlas may, at its option, arrange for a
Replacement Facility at any time to replace the liquidity facility for any Trust
(including without limitation any Replacement Facility described in the
following sentence). In addition, if any liquidity provider shall determine not
to extend any liquidity facility, then such liquidity provider may, at its
option, arrange for a Replacement Facility to replace such liquidity facility
during the period no earlier than 40 days and no later than 25 days prior to the
then scheduled expiration date of such liquidity facility. If any Replacement
Facility is provided at any time after a Downgrade Drawing or a Non-Extension
Drawing under any Liquidity Facility, the funds with respect to such liquidity
facility on deposit in the Cash Collateral Account for such Trust will be
returned to the liquidity provider being replaced. (Intercreditor Agreement,
Section 3.6(e))
Upon receipt by the Subordination Agent of a Termination Notice with
respect to any Liquidity Facility from the relevant Liquidity Provider, the
Subordination Agent shall request a final drawing (a "Final Drawing") under such
Liquidity Facility in an amount equal to the then Maximum Available Commitment
thereunder. The Subordination Agent will hold the proceeds of the Final Drawing
in the Cash Collateral Account for the related Trust as cash collateral to be
used for the same purposes and under the same circumstances, and subject to the
same conditions, as cash payments of Interest Drawings under such Liquidity
Facility would be used. (Liquidity Facilities, Section 2.02(d); Intercreditor
Agreement, Section 3.6(i))
REIMBURSEMENT OF DRAWINGS
The Subordination Agent must reimburse amounts drawn under any Liquidity
Facility by reason of an Interest Drawing, Final Drawing, Downgrade Drawing or
Non-Extension Drawing and interest thereon, but only to the extent that the
Subordination Agent has funds available therefor.
Interest Drawings and Final Drawings
Amounts drawn under any Liquidity Facility by reason of an Interest Drawing
or the Final Drawing will be immediately due and payable, together with interest
on the amount of such drawing. From the date of each such drawing to (but
excluding) the third business day following the applicable Liquidity Provider's
receipt of the notice of such drawing, interest will accrue at the Base Rate
plus 2.25% per annum, in the case of the Class A Trust, and 2.00% per annum in
the case of the Class B Trust or the Class C Trust. Thereafter, interest will
accrue at LIBOR for the applicable Interest Period plus 2.25% per annum in the
case of the Class A Trust and 2.00% per annum in the case of the Class B Trust
or the Class C Trust. In the case of a Final Drawing, however, the Subordination
Agent may convert the Final
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<PAGE> 58
Drawing into a drawing bearing interest at the Base Rate plus 2.25% per annum,
in the case of the Class A Trust, and 2.00% per annum, in the case of the Class
B Trust and the Class C Trust, on the last day of an Interest Period for such
Drawing.
"Base Rate" means a fluctuating interest rate per annum in effect from time
to time, which rate per annum shall at all times be equal to (a) the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a business day, for the next preceding business day)
by the Federal Reserve Bank of New York, or if such rate is not so published for
any day that is a business day, the average of the quotations for such day for
such transactions received by the Liquidity Provider from three Federal funds
brokers of recognized standing selected by it, plus (b) one-quarter of one
percent ( 1/4 of 1%).
"LIBOR" means, with respect to any interest period, (i) the rate per annum
appearing on display page 3750 (British Bankers Association -- LIBOR) of the Dow
Jones Markets Service (or any successor or substitute therefor) at approximately
11:00 A.M. (London time) two business days before the first day of such interest
period, as the rate for dollar deposits with a maturity comparable to such
interest period, or (ii) if the rate calculated pursuant to clause (i) above is
not available, the average (rounded upwards, if necessary, to the next 1/16 of
1%) of the rates per annum at which deposits in dollars are offered for the
relevant interest period by three banks of recognized standing selected by the
applicable Liquidity Provider in the London interbank market at approximately
11:00 A.M. (London time) two business days before the first day of such interest
period in an amount approximately equal to the principal amount of the LIBOR
Advance to which such interest period is to apply and for a period comparable to
such interest period.
Downgrade Drawings and Non-Extension Drawings
The amount drawn under any Liquidity Facility for any Trust by reason of a
Downgrade Drawing or a Non-Extension Drawing will be treated as follows:
- such amount will be released on any Distribution Date to the relevant
Liquidity Provider to the extent that such amount exceeds the Required
Amount;
- any portion of such amount withdrawn from the Cash Collateral Account for
such Certificate to pay interest on such Certificates will be treated in
the same way as Interest Drawings; and
- the balance of such amount will be invested in Eligible Investments.
A Downgrade Drawing or a Non-Extension Drawing under the Liquidity Facility
for the Class A Trust (other than any portion thereof applied to the payment of
interest on the Class A Certificates) will bear interest equal to the earnings,
if any, on funds on deposit in the Cash Collateral Account for the Class A
Trust.
A Downgrade Drawing or a Non-Extension Drawing under the Liquidity Facility
for the Class B Trust or the Class C Trust (other than any portion thereof
applied to the payment of interest on the Certificates of Class B or Class C,
respectively) will bear interest at (x) the greater of (A) an amount equal to
the earnings, if any, plus 0.50% per annum on the outstanding amount from time
to time of such Downgrade Drawing or Non-Extension Drawing for the Class B Trust
or the Class C Trust, as applicable, for the relevant interest period and (B)
interest on the outstanding amount from time to time of such Downgrade Drawing
or Non-Extension Drawing, (i) at the Base Rate plus 0.50% per annum with respect
to the period from the date of such drawing to (but excluding) the third
business day following the applicable Liquidity Provider's receipt of the notice
of such drawing, (ii) thereafter subject to clause (y) below, at a rate equal to
LIBOR for the applicable interest period plus 0.50% per annum, and (y) from and
after the date, if any, on which it is converted into a Final Drawing as
described below under "-- Liquidity Events of Default," at a rate equal to LIBOR
for the applicable Interest Period (or, as described in the fourth preceding
paragraph, the Base Rate) plus 2.00% per annum. (Liquidity Facilities, Sections
2.06 and 3.07)
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<PAGE> 59
LIQUIDITY EVENTS OF DEFAULT
Events of Default under each Liquidity Facility (each, a "Liquidity Event
of Default") will consist of:
- the acceleration of all the Equipment Notes; and
- certain bankruptcy or similar events involving Atlas. (Liquidity
Facilities, Section 1.01)
If (i) any Liquidity Event of Default under any Liquidity Facility has
occurred and is continuing and (ii) less than 65% of the aggregate outstanding
principal amount of all Equipment Notes are Performing Equipment Notes, the
applicable Liquidity Provider may, in its discretion, give a notice of
termination of the related Liquidity Facility (a "Termination Notice"). The
Termination Notice will have the following consequences:
- the related Liquidity Facility will expire on the fifth Business Day
after the date on which such Termination Notice is received by the
Subordination Agent;
- the Subordination Agent will promptly request, and the Liquidity Provider
will make, a Final Drawing thereunder in an amount equal to the then
Maximum Available Commitment thereunder;
- any Drawing remaining unreimbursed as of the date of termination will be
automatically converted into a Final Drawing under such Liquidity
Facility; and
- all amounts owing to the applicable Liquidity Provider will be
automatically accelerated.
Notwithstanding the foregoing, the Subordination Agent will be obligated to
pay amounts owing to the applicable Liquidity Provider only to the extent of
funds available therefor after giving effect to the payments in accordance with
the provisions set forth under "Description of the Intercreditor Agreement --
Priority of Distributions." (Liquidity Facilities, Section 6.01) Upon the
circumstances described below under "Description of the Intercreditor
Agreement -- Intercreditor Rights," a Liquidity Provider may become the
Controlling Party with respect to the exercise of remedies under the Indentures.
(Intercreditor Agreement, Section 2.6(c))
INITIAL LIQUIDITY PROVIDERS
The initial Liquidity Provider for the Class A Trust is WestLB, acting
through its New York Branch.
The initial Liquidity Provider for the Class B Trust and the Class C Trust
is MSCS. MSCS, a subsidiary of MSDW, commenced operation in August 1985 and was
established to conduct, primarily as principal, an interest rate, currency and
equity derivatives products business. MSCS also engages in a variety of other
related transactions.
MSDW, the guarantor of MSCS's obligations under its Liquidity Facilities,
is a global financial services firm. MSDW has long-term unsecured debt ratings
of Aa3 from Moody's and A+ from Standard & Poor's and short-term unsecured debt
ratings of P-1 from Moody's and A-1 from Standard & Poor's. MSDW files reports,
proxy statements and other information with the Commission pursuant to the
information requirements of the Exchange Act. Such information can be inspected
and copied at the public reference facilities of the Commission, or
electronically accessed through the Internet.
The descriptions of MSCS and MSDW above have been provided by the
respective parties. None of MSCS or MSDW, however, has been involved in the
preparation of or accepts responsibility for this prospectus Morgan Stanley &
Co. Incorporated, a subsidiary of MSDW and an affiliate of MSCS, acted as an
Initial Purchaser of the Certificates.
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<PAGE> 60
DESCRIPTION OF THE INTERCREDITOR AGREEMENT
The following summary describes material provisions of the intercreditor
agreement (the "Intercreditor Agreement") among the Trustees, the Liquidity
Providers, Wilmington Trust Company, as subordination agent (the "Subordination
Agent") and any holder of Class D Equipment Notes, if issued. The summary does
not purport to be complete and is qualified in its entirety by reference to all
of the provisions of the Intercreditor Agreement.
INTERCREDITOR RIGHTS
Controlling Party
Each Loan Trustee is directed in taking, or refraining from taking, any
action thereunder or with respect to the Equipment Notes issued under the
related Indenture, by the holders of at least a majority of the outstanding
principal amount of the Equipment Notes issued under such Indenture, so long as
no Indenture Event of Default (which, with respect to Leased Aircraft, has not
been cured by the applicable Owner Trustee or Owner Participant) shall have
occurred and be continuing thereunder. For so long as the Subordination Agent is
the registered holder of the Equipment Notes, the Subordination Agent will act
with respect to the preceding sentence in accordance with the directions of the
Trustees for whom the Equipment Notes issued under such Indenture are held as
Trust Property, to the extent constituting, in the aggregate, directions with
respect to the required principal amount of Equipment Notes.
After the occurrence and during the continuance of an Indenture Event of
Default under such Indenture (which, with respect to Leased Aircraft, has not
been cured by the applicable Owner Trustee or Owner Participant), each Loan
Trustee will be directed in taking, or refraining from taking, any action
thereunder or with respect to the Equipment Notes issued under the related
Indenture, including acceleration of such Equipment Notes or foreclosing the
lien on the related Aircraft, by the Controlling Party, subject to the
limitations described below. See "Description of the Certificates -- Indenture
Event of Defaults and Certain Rights Upon an Indenture Event of Default" for a
description of the rights of the Certificateholders of each Trust to direct the
respective Trustees.
The "Controlling Party" will be:
- the Class A Trustee;
- upon payment of Final Distributions to the holders of Class A
Certificates, the Class B Trustee; and
- upon payment of Final Distributions to the holders of Class B
Certificates, the Class C Trustee.
At any time after 18 months from the earlier to occur of (x) the date on
which the entire available amount under any Liquidity Facility shall have been
drawn (for any reason other than a Downgrade Drawing or a Non-Extension Drawing)
and remain unreimbursed, (y) the date on which the entire amount of any
Downgrade Drawing or Non-Extension Drawing has been withdrawn from the relevant
Cash Collateral Account to pay interest on the relevant Class of Certificates
and remains unreimbursed and (z) the date on which all Equipment Notes shall
have been accelerated, the Liquidity Provider with the greatest amount of
unreimbursed Liquidity Obligations shall have the right to become the
Controlling Party with respect to any Indenture.
For purposes of giving effect to the rights of the Controlling Party, the
Trustees (other than the Controlling Party) shall irrevocably agree, and the
Certificateholders (other than the Certificateholders represented by the
Controlling Party) will be deemed to agree by virtue of their purchase of
Certificates, that the Subordination Agent, as record holder of the Equipment
Notes, shall exercise its voting rights in respect of the Equipment Notes as
directed by the Controlling Party. (Intercreditor Agreement, Section 2.6) For a
description of certain limitations on the Controlling Party's rights to exercise
remedies, see "Description of the Equipment Notes -- Remedies."
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<PAGE> 61
"Final Distributions" means, with respect to the Certificates of any Trust
on any Distribution Date, the sum of (x) the aggregate amount of all accrued and
unpaid interest on such Certificates (excluding interest payable on the Deposit
relating to such Trust) and (y) the Pool Balance of such Certificates as of the
immediately preceding Distribution Date (less the amount of the Deposit for such
Class of Certificates as of such preceding Distribution Date other than any
portion of such Deposits thereafter used to acquire Equipment Notes pursuant to
the Note Purchase Agreement). For purposes of calculating Final Distributions
with respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust which has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion thereof
applied to the payment of interest on the Certificates of such Trust or the
reduction of the Pool Balance of such Trust) shall be added to the amount of
such Final Distributions.
Sale of Equipment Notes or Aircraft
Upon the occurrence and during the continuation of any Indenture Event of
Default under any Indenture, the Controlling Party may accelerate and, subject
to the provisions of the immediately following sentence, direct the
Subordination Agent to sell all (but not less than all) of the Equipment Notes
issued under such Indenture to any person. So long as any Certificates are
outstanding, during nine months after the earlier of (x) the acceleration of the
Equipment Notes under any Indenture and (y) the bankruptcy or insolvency of
Atlas, without the consent of each Trustee, no Aircraft subject to the lien of
such Indenture or such Equipment Notes may be sold, if the net proceeds from
such sale would be less than the Minimum Sale Price for such Aircraft or such
Equipment Notes. In addition, with respect to any Leased Aircraft, the amount
and payment dates of rentals payable by Atlas under the related Lease for such
Aircraft may not be adjusted during this nine-month period, if, as a result of
such adjustment, the discounted present value of all such rentals would be less
than 75% of the discounted present value of the rentals payable by Atlas under
such Lease before giving effect to such adjustment. The discounted present value
of all rentals shall be determined using the weighted average interest rate of
the Equipment Notes outstanding under such Indenture as the discount rate.
"Minimum Sale Price" means, with respect to any Aircraft or the Equipment
Notes issued in respect of such Aircraft, at any time, the lesser of (1) 75% of
the Appraised Current Market Value of such Aircraft and (2) the aggregate
outstanding principal amount of such Equipment Notes, plus accrued and unpaid
interest thereon.
PRIORITY OF DISTRIBUTIONS
Before a Triggering Event
So long as no Triggering Event shall have occurred (whether or not
continuing) all payments in respect of the Equipment Notes and certain other
payments received on any Distribution Date will be promptly distributed by the
Subordination Agent on such Distribution Date in the following order of
priority:
- to the Liquidity Providers to the extent required to pay the Liquidity
Expenses;
- to the Liquidity Providers to the extent required to pay interest accrued
on the Liquidity Obligations;
- to the Liquidity Providers to the extent required to pay or reimburse the
Liquidity Providers for the Liquidity Obligations (other than amounts
payable pursuant to the two preceding clauses) and/or, if applicable, to
replenish each Cash Collateral Account up to the applicable Required
Amounts;
- to the Class A Trustee to the extent required to pay Expected
Distributions on the Class A Certificates;
- to the Class B Trustee to the extent required to pay Expected
Distributions on the Class B Certificates;
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<PAGE> 62
- to the Class C Trustee to the extent required to pay Expected
Distributions on the Class C Certificates;
- if Class D Certificates have been issued, to the trustee for the Class D
Trust (the "Class D Trustee") to the extent required to pay "Expected
Distributions" (to be defined in a manner equivalent to the definition
below for other Classes of Certificates) on the Class D Certificates; and
- to the Subordination Agent and each Trustee for the payment of certain
fees and expenses.
"Liquidity Obligations" means the obligations to reimburse or to pay the
Liquidity Providers all principal, interest, fees and other amounts owing to
them under each Liquidity Facility or certain other agreements.
"Liquidity Expenses" means the Liquidity Obligations other than any
interest accrued thereon or the principal amount of any drawing under the
Liquidity Facilities.
"Expected Distributions" means, with respect to the Certificates of any
Trust on any Distribution Date (the "Current Distribution Date"), the sum of (1)
accrued and unpaid interest on such Certificates (excluding interest, if any,
payable with respect to the Deposits relating to such Trust) and (2) the
difference between:
(A) the Pool Balance of such Certificates as of the immediately
preceding Distribution Date (or, if the Current Distribution Date is the
first Distribution Date, the original aggregate face amount of the
Certificates of such Trust); and
(B) the Pool Balance of such Certificates as of the Current
Distribution Date calculated on the basis that (i) the principal of the
Equipment Notes held in such Trust has been paid when due (whether at
stated maturity, upon redemption, prepayment, purchase or acceleration or
otherwise) and such payments have been distributed to the holders of such
Certificates and (ii) the principal of any Equipment Notes formerly held in
such Trust that have been sold pursuant to the Intercreditor Agreement has
been paid in full and such payments have been distributed to the holders of
such Certificates, but without giving effect to any reduction in the Pool
Balance as a result of any distribution attributable to the Deposit
occurring after the immediately preceding Distribution Date (or, if the
Current Distribution Date is the first Distribution Date, occurring after
the initial issuance of the Certificates of such Trust).
For purposes of determining the priority of distributions on account of the
redemption, purchase or prepayment of all of the Equipment Notes issued pursuant
to an Indenture, clause (1) of the definition of Expected Distributions shall be
deemed to read as follows: "(1) accrued, due and unpaid interest on such
Certificates (excluding interest, if any, payable with respect to the Deposits
relating to such Trust) together with (without duplication) accrued and unpaid
interest on a portion of such Certificates equal to the outstanding principal
amount of the Equipment Notes being redeemed, purchased or prepaid (immediately
prior to such redemption, purchase or prepayment)."
After a Triggering Event
Subject to the terms of the Intercreditor Agreement, upon the occurrence of
a Triggering Event and at all times thereafter, all funds received by the
Subordination Agent in respect of the Equipment Notes and certain other payments
will be promptly distributed by the Subordination Agent in the following order
of priority:
- to the Subordination Agent, any Trustee, any Certificateholder and the
Liquidity Providers to the extent required to pay certain out-of-pocket
costs and expenses actually incurred by the Subordination Agent or any
Trustee or to reimburse any Certificateholder or the Liquidity Providers
in respect of payments made to the Subordination Agent or any Trustee in
connection with the protection or realization of the value of the
Equipment Notes, any Trust Indenture Estate under
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(and as defined in) any Leased Aircraft Indenture or Collateral under
(and as defined in) any Owned Aircraft Indenture (collectively, the
"Administration Expenses");
- to the Liquidity Providers to the extent required to pay the Liquidity
Expenses;
- to the Liquidity Providers to the extent required to pay interest accrued
on the Liquidity Obligations;
- to the Liquidity Providers to the extent required to pay the outstanding
amount of all Liquidity Obligations and/or, if applicable, with respect
to any particular Liquidity Facility, unless (x) less than 65% of the
aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes and a Liquidity Event of Default shall have
occurred and is continuing under such Liquidity Facility or (y) a Final
Drawing shall have occurred under such Liquidity Facility, to replenish
the Cash Collateral Account with respect to such Liquidity Facility up to
the Required Amount for the related Class of Certificates (less the
amount of any repayments of Interest Drawings under such Liquidity
Facility while sub-clause (x) of this clause is applicable);
- to the Subordination Agent, any Trustee or any Certificateholder to the
extent required to pay certain fees, taxes, charges and other amounts
payable;
- to the Class A Trustee to the extent required to pay Adjusted Expected
Distributions on the Class A Certificates.
- to the Class B Trustee to the extent required to pay Adjusted Expected
Distributions on the Class B Certificates;
- to the Class C Trustee to the extent required to pay Adjusted Expected
Distributions on the Class C Certificates; and
- if Class D Certificates have been issued, to the Class D Trustee to the
extent required to pay "Adjusted Expected Distributions" (to be defined
in a manner equivalent to the definition below for other Classes of
Certificates) on the Class D Certificates.
"Adjusted Expected Distributions" means, with respect to the Certificates
of any Trust on any Current Distribution Date, the sum of (1) accrued and unpaid
interest on such Certificates (excluding interest, if any, payable with respect
to the Deposits relating to such Trust) and (2) the greater of:
(A) the difference between (x) the Pool Balance of such Certificates
as of the immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, the original aggregate
face amount of the Certificates of such Trust) and (y) the Pool Balance of
such Certificates as of the Current Distribution Date calculated on the
basis that (i) the principal of the Equipment Notes other than Performing
Equipment Notes (the "Non-Performing Equipment Notes") held in such Trust
has been paid in full and such payments have been distributed to the
holders of such Certificates, (ii) the principal of the Performing
Equipment Notes held in such Trust has been paid when due (but without
giving effect to any acceleration of Performing Equipment Notes) and such
payments have been distributed to the holders of such Certificates and
(iii) the principal of any Equipment Notes formerly held in such Trust that
have been sold pursuant to the Intercreditor Agreement has been paid in
full and such payments have been distributed to the holders of such
Certificates, but without giving effect to any reduction in the Pool
Balance as a result of any distribution attributable to the Deposit
occurring after the immediately preceding Distribution Date (or, if the
Current Distribution Date is the first Distribution Date, occurring after
the initial issuance of the Certificates of such Trust), and
(B) the amount of the excess, if any, of (i) the Pool Balance of such
Class of Certificates as of the immediately preceding Distribution Date
(or, if the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust), less the
amount of the Deposits for such Class of Certificates as of such preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate amount of the
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Deposit for such Class of Certificates) other than any portion of such
Deposit thereafter used to acquire Equipment Notes pursuant to the Note
Purchase Agreement (the amount described in this clause (i), the "Current
Pool Balance"), over (ii) the Aggregate LTV Collateral Amount for such
Class of Certificates for the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B) shall
not apply.
For purposes of calculating Expected Distributions or Adjusted Expected
Distributions with respect to the Certificates of any Trust, any premium paid on
the Equipment Notes held in such Trust that has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion thereof
applied to the payment of interest on the Certificates of such Trust or the
reduction of the Pool Balance of such Trust) shall be added to the amount of
Expected Distributions or Adjusted Expected Distributions.
"Aggregate LTV Collateral Amount" for any Class of Certificates for any
Distribution Date means the product of (i) the sum of the applicable LTV
Collateral Amounts for each Aircraft, minus (ii) the Pool Balance for each Class
of Certificates, if any, senior to such Class, after giving effect to any
distribution of principal on such Distribution Date with respect to such senior
Class or Classes.
"LTV Collateral Amount" of any Aircraft for any Class of Certificates
means, as of any Distribution Date, the lesser of (i) the LTV Ratio for such
Class of Certificates multiplied by the Appraised Current Market Value of such
Aircraft (or with respect to any such Aircraft which has suffered an Event of
Loss under and as defined in the relevant Lease, in the case of a Leased
Aircraft, or relevant Indenture, in the case of an Owned Aircraft, the amount of
the insurance proceeds paid to the related Loan Trustee in respect thereof to
the extent then held by such Loan Trustee (and/or on deposit in the Special
Payments Account) or payable to such Loan Trustee in respect thereof) and (ii)
the outstanding principal amount of the Equipment Notes secured by such Aircraft
after giving effect to any principal payments of such Equipment Notes on or
before such Distribution Date.
"LTV Ratio" means for the Class A Certificates 39.0%, for the Class B
Certificates 53.0% and for the Class C Certificates 68.0%.
"Appraised Current Market Value" of any Aircraft means the lower of the
average and the median of the most recent three LTV Appraisals of such Aircraft.
After a Triggering Event occurs and any Equipment Note becomes a
Non-Performing Equipment Note, the Subordination Agent shall obtain LTV
Appraisals of the Aircraft securing such Equipment Note as soon as practicable
and additional LTV Appraisals on or prior to each anniversary of the date of
such initial LTV Appraisals; provided that if the Controlling Party reasonably
objects to the appraised value of the Aircraft shown in such LTV Appraisals, the
Controlling Party shall have the right to obtain or cause to be obtained
substitute LTV Appraisals (including LTV Appraisals based upon physical
inspection of such Aircraft).
"LTV Appraisal" means a current fair market value appraisal (which may be a
"desk-top" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
Interest Drawings under the Liquidity Facility and withdrawals from the
Cash Collateral Account, in each case in respect of interest on the Certificates
of any Trust, will be distributed to the Trustee for such Trust, notwithstanding
the priority of distributions set forth in the Intercreditor Agreement and
otherwise described herein.
ADDITION OF TRUSTEE FOR CLASS D CERTIFICATES
If the Class D Certificates are issued, the Class D Trustee will become a
party to the Intercreditor Agreement.
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THE SUBORDINATION AGENT
Wilmington Trust Company is the Subordination Agent under the Intercreditor
Agreement. Atlas and its affiliates may from time to time enter into banking and
trustee relationships with the Subordination Agent and its affiliates. The
Subordination Agent's address is Wilmington Trust Company, One Rodney Square,
1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
Trust Administration.
The Subordination Agent may resign at any time, in which event a successor
Subordination Agent will be appointed as provided in the Intercreditor
Agreement. The Controlling Party may remove the Subordination Agent for cause as
provided in the Intercreditor Agreement. In such circumstances, a successor
Subordination Agent will be appointed as provided in the Intercreditor
Agreement. Any resignation or removal of the Subordination Agent and appointment
of a successor Subordination Agent does not become effective until acceptance of
the appointment by the successor Subordination Agent. (Intercreditor Agreement,
Section 8.1)
DESCRIPTION OF THE AIRCRAFT AND THE APPRAISALS
THE AIRCRAFT
The Aircraft consist of two new Boeing 747-400F aircraft, both of which
were delivered by the manufacturer to Atlas in April 2000. The Aircraft have
been designed to be in compliance with Stage 3 noise level standards. The Boeing
747-400F aircraft is a long-range aircraft with payload capacity of
approximately 150 tons. The engine type expected to be utilized on each Aircraft
is the General Electric Model CF6-80C2B5FG04.
THE APPRAISALS
The table below sets forth the appraised base values as determined by
AvSolutions, Inc. ("AvS"), Morton Beyer and Agnew, Inc. ("MBA") and Simat
Helliesen & Eichner, Inc. ("SH&E"), independent aircraft appraisal and
consulting firms (the "Appraisers") and certain additional information regarding
the Aircraft.
<TABLE>
<CAPTION>
AIRCRAFT SCHEDULED APPRAISED BASE VALUE
REGISTRATION MANUFACTURER'S DELIVERY ------------------------------------------
NUMBER SERIAL NUMBER MONTH(1) AVS MBA SH&E
------------ -------------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
N409MC................. 30558 July 2000 $164,600,000 $161,100,000 $153,200,000
N412MC................. 30559 August 2000 164,600,000 161,770,000 153,500,000
</TABLE>
---------------
(1) The actual delivery month for each Aircraft was April 2000.
For purposes of the foregoing chart, each Appraiser was asked to provide
its opinion as to the appraised base value of each Aircraft projected as of the
scheduled delivery month of each such Aircraft. As part of this process, all
three Appraisers performed "desk-top" appraisals without any physical inspection
of the Aircraft. The appraisals are based on various assumptions and
methodologies, which vary among the appraisals. The Appraisers have delivered
letters summarizing their respective appraisals, copies of which are annexed to
this prospectus as Appendix B. For a definition of appraised base value and a
discussion of the assumptions and methodologies used in each of the appraisals,
reference is hereby made to such letters.
An appraisal is only an estimate of value. It is not indicative of the
price at which an aircraft may be purchased from the manufacturer and should not
be relied upon as a measure of realizable value. The proceeds realized upon a
sale of any Aircraft may be less than its appraised base value. The value of the
Aircraft in the event of the exercise of remedies under the applicable Indenture
will depend on market and economic conditions, the availability of buyers, the
condition of the Aircraft and other similar factors. Accordingly, there can be
no assurance that the proceeds realized upon any such exercise with respect to
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the Equipment Notes and the Aircraft pursuant to the applicable Indenture would
equal the appraised value of such Aircraft or be sufficient to satisfy in full
payments due on the Equipment Notes issued thereunder or the Certificates.
DELIVERIES OF AIRCRAFT
The Note Purchase Agreement provides that the delivery period (the
"Delivery Period") will expire on December 31, 2000, subject to extension if a
labor strike occurs at Boeing prior to December 31, 2000, by the number of days
that such strike continues in effect (the "Delivery Period Termination Date").
DESCRIPTION OF THE EQUIPMENT NOTES
The statements under this caption describe certain terms of the Equipment
Notes, the Indentures, the Leases, the Participation Agreements, the trust
agreements under which the Owner Trustees act on behalf of the Owner
Participants (the "Trust Agreements") and the Note Purchase Agreement and do not
purport to be complete. The summaries make use of terms defined in and are
qualified in their entirety by reference to all of the provisions of the
Equipment Notes, the Indentures, the Leases, the Participation Agreements, the
Trust Agreements and the Note Purchase Agreement, forms of which were filed as
exhibits to the Registration Statement and copies of which are available as set
forth under the heading "Where You Can Find More Information." Except as
otherwise indicated, the following summaries relate to the Equipment Notes, the
Indenture, the Lease, the Participation Agreement and the Trust Agreement that
may be applicable to each Aircraft.
Under the Note Purchase Agreement, Atlas has the option of entering into a
leveraged lease financing or a secured debt financing with respect to each of
the Aircraft.
- If Atlas chooses to enter into a leveraged lease financing with respect
to an Aircraft, the Note Purchase Agreement provides for the relevant
parties to enter into a Participation Agreement, a Lease and a Leased
Aircraft Indenture (among other documents) relating to the financing of
such Leased Aircraft.
- If Atlas chooses to enter into a secured debt financing with respect to
an Aircraft, the Note Purchase Agreement provides for the relevant
parties to enter into a Participation Agreement and an Owned Aircraft
Indenture relating to the financing of such Owned Aircraft.
The description of such agreements in this prospectus is based on the forms
of such agreements annexed to the Note Purchase Agreement. In the case of Leased
Aircraft, the terms of the agreements actually entered into may differ from the
forms of such agreements and, consequently, may differ from the description of
such agreements contained in this prospectus. This is because a third
party -- the owner participant that will be the beneficial owner of the Leased
Aircraft (the "Owner Participant") -- will provide a portion of the financing of
such Aircraft and may request changes. However, under the Note Purchase
Agreement, the terms of such agreements are required to (i) contain the
Mandatory Documents Terms and (ii) not vary the Mandatory Economic Terms. In
addition, Atlas will be obligated (i) to certify to the Trustees that any such
modifications do not materially and adversely affect the Certificateholders and
(ii) to obtain written confirmation from each Rating Agency that the use of
versions of such agreements modified in any material respect would not result in
a withdrawal, suspension or downgrading of the ratings of any Class of
Certificates. See "Description of the Certificates -- Obligation to Purchase
Equipment Notes." Each Owner Participant will be required to satisfy certain
requirements, including having a minimum combined capital and surplus or net
worth.
GENERAL
The Equipment Notes will be issued in up to three series with respect to
each Aircraft (the "Series A Equipment Notes," the "Series B Equipment Notes,"
the "Series C Equipment Notes," and, collectively, the "Equipment Notes"). Atlas
may elect to issue an additional series with respect to Owned Aircraft (the
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"Series D Equipment Notes"), which will be funded from sources other than the
original placement of the Old Certificates. See "Description of the
Certificates -- Possible Issuance of Series D Equipment Notes." The Equipment
Notes with respect to each Leased Aircraft will be issued under a separate
Leased Aircraft Indenture between First Security Bank, National Association, as
owner trustee of a trust for the benefit of the Owner Participant who will be
the beneficial owner of such Aircraft (each, an "Owner Trustee"), and Wilmington
Trust Company, as an indenture trustee thereunder (each, a "Leased Aircraft
Trustee"). The Equipment Notes with respect to each Owned Aircraft will be
issued under a separate Owned Aircraft Indenture between Atlas and Wilmington
Trust Company, as indenture trustee thereunder (each, an "Owned Aircraft
Trustee" and, together with the other Owned Aircraft Trustees and the Leased
Aircraft Trustees, the "Loan Trustees"). The Indentures will not provide for
defeasance, or discharge upon deposit of cash or certain obligations of the
United States.
The related Owner Trustee will lease each Leased Aircraft to Atlas pursuant
to a separate Lease between such Owner Trustee and Atlas with respect to such
Leased Aircraft. Under each Lease, Atlas will be obligated to make or cause to
be made rental and other payments to the related Leased Aircraft Trustee on
behalf of the related Owner Trustee, which rental and other payments will be at
least sufficient to pay in full when due all payments required to be made on the
Equipment Notes issued with respect to such Leased Aircraft. The Equipment Notes
issued with respect to the Leased Aircraft are not, however, direct obligations
of, or guaranteed by, Atlas. Atlas' rental obligations under each Lease and
Atlas' obligations under the Equipment Notes issued with respect to each Owned
Aircraft will be general obligations of Atlas.
SUBORDINATION
The Indenture provides for the following subordination provisions
applicable to the Equipment Notes:
- Series A Equipment Notes issued in respect of an Aircraft will rank
senior in right of payment to other Equipment Notes issued in respect of
such Aircraft;
- Series B Equipment Notes issued in respect of an Aircraft will rank
junior in right of payment to the Series A Equipment Notes issued in
respect of such Aircraft and will rank senior to the Series C and, if
applicable, Series D Equipment Notes issued in respect of such Aircraft;
- Series C Equipment Notes issued in respect of such Aircraft will rank
junior in right of payment to the Series A and Series B Equipment Notes
issued in respect of such Aircraft and, if Series D Equipment Notes are
issued with respect to such Aircraft, senior to such Series D Equipment
Notes; and
- If Atlas elects to issue Series D Equipment Notes with respect to an
Aircraft, they will be subordinated in right of payment to the Series A,
Series B, and Series C Equipment Notes issued with respect to such
Aircraft.
PRINCIPAL AND INTEREST PAYMENTS
Subject to the provisions of the Intercreditor Agreement, interest paid 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 on the cover page of this prospectus with respect to Certificates issued
by such Trust until the final expected Regular Distribution Date for such Trust.
Subject to the provisions of the Intercreditor Agreement, principal paid 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
herein until the final expected Regular Distribution Date for such Trust.
Interest will be payable on the unpaid principal amount of each Equipment
Note at the rate applicable to such Equipment Note on January 2 and July 2 of
each year, commencing on July 2, 2000. Such interest will be computed on the
basis of a 360-day year of twelve 30-day months.
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Scheduled principal payments on the Equipment Notes will be made on January
2 and July 2 in certain years, commencing on, January 2, 2001 (or, in the case
of Equipment Notes issued after such date, commencing with the first such date
to occur after initial issuance thereof). See "Description of the
Certificates -- Pool Factors" for a discussion of the scheduled payments of
principal of the Equipment Notes and possible revisions thereto.
If any date scheduled for a payment of principal, premium (if any) or
interest with respect to the Equipment Notes is not a Business Day, such payment
will be made on the next succeeding Business Day without any additional
interest.
REDEMPTION
If an Event of Loss occurs with respect to an Aircraft and such Aircraft is
not replaced by Atlas under the related Lease (in the case of a Leased Aircraft)
or under the related Owned Aircraft Indenture (in the case of an Owned
Aircraft), the Equipment Notes issued with respect to such Aircraft will be
redeemed, in whole, in each case at a price equal to the aggregate unpaid
principal amount thereof, together with accrued interest thereon to, but not
including, the date of redemption, but without premium, on a Special
Distribution Date. (Leased Aircraft Indentures, Section 2.10(a)) (Owned Aircraft
Indentures, Section 2.10)
If Atlas exercises its right to terminate a Lease under Section 9 or
Section 17.3.1 of such Lease, the Equipment Notes relating to the applicable
Leased Aircraft will be redeemed, in whole, on a Special Distribution Date at a
price equal to the aggregate unpaid principal amount thereof, together with
accrued and unpaid interest thereon to, but not including, the date of
redemption, plus a Make-Whole Premium, if any. (Leased Aircraft Indentures,
Section 2.10(b)) See "-- The Leases and Certain Provisions of the Owned Aircraft
Indentures -- Lease Termination."
All (but not less than all) of the Equipment Notes issued with respect to a
Leased Aircraft may be redeemed prior to maturity at the option of the issuer
with the prior written consent of Atlas and all of the Equipment Notes issued
with respect to an Owned Aircraft may be redeemed prior to maturity at the
option of Atlas, in each case at a price equal to the aggregate unpaid principal
thereof, together with accrued interest thereon to, but not including, the date
of redemption, plus a Make-Whole Premium, if any. (Indentures, Section 2.11)
Notice of redemption shall be given to each Note Holder by the Loan Trustee
not less than 15 nor more than 60 days prior to the applicable redemption date.
If notice of such a redemption shall have been given (A) in connection with a
refinancing of Equipment Notes with respect to an Aircraft, such notice may be
revoked not later than three days prior to the proposed redemption date and (B)
in connection with the anticipated termination of a Lease as described above,
such notice may be revoked, and shall be deemed revoked, in the event the Lease
does not in fact terminate. In addition, the redemption date may be postponed
for up to 10 Business Days. (Indentures, Section 2.12)
If, with respect to a Leased Aircraft, (x) one or more Lease Events of
Default shall have occurred and are continuing, (y) in the event of a bankruptcy
proceeding involving Atlas, (i) during the Section 1110 Period, the trustee in
such proceeding or Atlas does not assume or agree to perform its obligations
under the related Lease or (ii) at any time after assuming or agreeing to
perform such obligations, such trustee or Atlas ceases to perform such
obligations such that the stay period applicable under the U.S. Bankruptcy Code
comes to an end or (z) the Equipment Notes with respect to such Leased Aircraft
have been accelerated or the Leased Aircraft Trustee with respect to such
Equipment Notes takes action or notifies the applicable Owner Trustee that it
intends to take action to foreclose the lien of the related Leased Aircraft
Indenture or otherwise commence the exercise of any significant remedy under
such Indenture or the related Lease, then in each case all, but not less than
all, of the Equipment Notes issued with respect to such Leased Aircraft may be
purchased by the related Owner Trustee or Owner Participant on the applicable
purchase date at a price equal to the aggregate unpaid principal thereof,
together with accrued and unpaid interest thereon to, but not including, the
date of purchase, but without any premium (provided that a Make-Whole Premium
shall be payable if such
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Equipment Notes are to be purchased pursuant to clause (x) when a Lease Event of
Default shall have occurred and been continuing for less than 180 days). (Leased
Aircraft Indentures, Section 2.13) Atlas as owner of the Owned Aircraft has no
comparable right under the Owned Aircraft Indentures to purchase Equipment Notes
under such circumstances.
"Make-Whole Premium" means, with respect to any Equipment Note, an amount
(as determined by an independent investment bank of national standing) equal to
the excess, if any, of (a) the present value of the remaining scheduled payments
of principal and interest to maturity of such Equipment Note computed by
discounting such payments on a semiannual basis on each payment date under the
applicable Indenture (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield over (b) the outstanding principal
amount of such Equipment Note plus accrued interest to the date of
determination.
For purposes of determining the Make-Whole Premium, "Treasury Yield" means,
at the date of determination with respect to any Equipment Note, the interest
rate (expressed as a decimal and, in the case of United States Treasury bills,
converted to a bond equivalent yield) determined to be the per annum rate equal
to the semiannual yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Equipment Note and trading in the
public securities markets either as determined by interpolation between the most
recent weekly average yield to maturity for two series of United States Treasury
securities trading in the public securities markets, (A) one maturing as close
as possible to, but earlier than, the Average Life Date of such Equipment Note
and (B) the other maturing as close as possible to, but later than, the Average
Life Date of such Equipment Note, in each case as published in the most recent
H.15(519) or, if a weekly average yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Equipment Note is reported
in the most recent H.15(519), such weekly average yield to maturity as published
in such H.15(519). "H.15(519)" means the weekly statistical release designated
as such, or any successor publication, published by the Board of Governors of
the Federal Reserve System. The date of determination of a Make-Whole Premium
shall be the third Business Day prior to the applicable payment or redemption
date and the "most recent H.15(519)" means the H.15(519) published prior to the
close of business on the third Business Day prior to the applicable payment or
redemption date.
"Average Life Date" for any Equipment Note shall be the date which follows
the time of determination by a period equal to the Remaining Weighted Average
Life of such Equipment Note. "Remaining Weighted Average Life" on a given date
with respect to any Equipment Note shall be the number of days equal to the
quotient obtained by dividing (a) the sum of each of the products obtained by
multiplying (i) the amount of each then remaining scheduled payment of principal
of such Equipment Note by (ii) the number of days from and including such
determination date to but excluding the date on which such payment of principal
is scheduled to be made, by (b) the then outstanding principal amount of such
Equipment Note.
SECURITY
Leased Aircraft
The Equipment Notes issued with respect to each Leased Aircraft will be
secured by:
- an assignment by the related Owner Trustee to the related Leased Aircraft
Trustee of such Owner Trustee's rights, except for certain rights, under
the Lease with respect to the related Leased Aircraft, including the
right to receive payments of rent thereunder;
- a mortgage to such Leased Aircraft Trustee of such Aircraft, subject to
the rights of Atlas under such Lease; and
- an assignment to such Leased Aircraft Trustee of certain of such Owner
Trustee's rights under the purchase agreement between Atlas and the
Leased Aircraft manufacturer.
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Unless and until an Indenture Event of Default with respect to a Leased
Aircraft has occurred and is continuing, the Leased Aircraft Trustee may not
exercise the rights of the Owner Trustee under the related Lease, except the
Owner Trustee's right to receive payments of rent due thereunder. The assignment
by the Owner Trustee to the Leased Aircraft Trustee of its rights under the
related Lease will exclude certain rights of such Owner Trustee and the related
Owner Participant, including the rights of the Owner Trustee and the Owner
Participant with respect to indemnification by Atlas for certain matters,
insurance proceeds payable to such Owner Trustee in its individual capacity or
to such Owner Participant under public liability insurance maintained by Atlas
under 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 under such Lease and certain reimbursement
payments made by Atlas to such Owner Trustee. (Leased Aircraft Indenture,
Granting Clause) The Equipment Notes issued in respect of any one Aircraft will
not be secured by any of the other Aircraft or Leases (except in certain cases,
if any, where the related Owner Participant and Atlas shall agree to
cross-collateralization). Accordingly, any excess proceeds from the exercise of
remedies with respect to the Equipment Notes relating to an Aircraft will not be
available to cover any shortfall with respect to any other Aircraft.
Owned Aircraft
The Equipment Notes issued with respect to each Owned Aircraft will be
secured by:
- a mortgage to the Owned Aircraft Trustee of such Aircraft; and
- an assignment to the Owned Aircraft Trustee of certain of Atlas' rights
under its purchase agreement with the Aircraft manufacturer.
Cash
Cash, if any, held from time to time by the Loan Trustee with respect to
any Aircraft, including funds held as the result of an Event of Loss to such
Aircraft or, in the case of a Leased Aircraft, termination of the Lease, if any,
relating thereto, will be invested and reinvested by such Loan Trustee, at the
direction of the related Owner Trustee in the case of the Leased Aircraft or
Atlas in the case of the Owned Aircraft, in investments described in the related
Indenture. (Leased Aircraft Indentures, Section 5.09; Owned Aircraft Indentures,
Section 6.06)
LOAN TO VALUE RATIOS OF EQUIPMENT NOTES
The following table sets forth illustrative loan to Aircraft value ratios
for the Equipment Notes issued in respect of a Leased Aircraft as of each
January 2 Regular Distribution Date occurring after the scheduled date of
original issuance of such Equipment Notes, assuming that Series A, Series B, and
Series C Equipment Notes in the maximum principal amount are issued in respect
of such Aircraft. This example was utilized by Atlas in preparing the Assumed
Amortization Schedule, although the amortization schedule for the Series A,
Series B and Series C Equipment Notes issued with respect to an Aircraft may
vary from such assumed schedule so long as it complies with the Mandatory
Economic Terms. Accordingly, the schedule set forth below may not be applicable
in the case of any particular Leased Aircraft or in the case of any Owned
Aircraft. See "Description of the Certificates -- Pool Factors." The LTV was
obtained by dividing (i) the outstanding balance (assuming no payment default)
of such Equipment Notes determined immediately after giving effect to the
payments scheduled to be made on each such Regular Distribution Date by (ii) the
assumed value (the "Assumed Aircraft Value") of the Aircraft securing such
Equipment Notes.
The following table is based on the assumption (the "Depreciation
Assumption") that the value of the Aircraft set forth opposite the initial
Regular Distribution Date included in the table depreciates by 3% of the initial
appraised value per year for the first 20 years after the year of delivery of
such Aircraft and by 4% of the initial appraised value per year thereafter.
Other rates or methods of depreciation would result in materially different loan
to Aircraft value ratios, and no assurance can be given (i) that the
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depreciation rates and method assumed for the purposes of the table are the ones
most likely to occur or (ii) as to the actual future value of any Aircraft. Thus
the table should not be considered a forecast or prediction of expected or
likely loan to Aircraft value ratios, but simply a mathematical calculation
based on one set of assumptions.
<TABLE>
<CAPTION>
INDICATIVE LEASED AIRCRAFT
----------------------------------------------
B747-400F
----------------------------------------------
ASSUMED
EQUIPMENT NOTE AIRCRAFT LOAN TO
DATE OUTSTANDING BALANCE VALUE VALUE RATIO
---- ------------------- ---------- -----------
(MILLIONS) (MILLIONS)
<S> <C> <C> <C>
January 2, 2001................................ $94.10 $154.84 60.8%
January 2, 2002................................ 91.21 150.06 60.8
January 2, 2003................................ 86.94 145.27 59.8
January 2, 2004................................ 82.25 140.48 58.5
January 2, 2005................................ 77.10 135.69 56.8
January 2, 2006................................ 71.44 130.90 54.6
January 2, 2007................................ 66.07 126.11 52.4
January 2, 2008................................ 61.70 121.32 50.9
January 2, 2009................................ 58.33 116.53 50.1
January 2, 2010................................ 55.03 111.74 49.2
January 2, 2011................................ 51.19 106.95 47.9
January 2, 2012................................ 47.32 102.17 46.3
January 2, 2013................................ 43.37 97.38 44.5
January 2, 2014................................ 38.59 92.59 41.7
January 2, 2015................................ 34.29 87.80 39.1
January 2, 2016................................ 32.37 83.01 39.0
January 2, 2017................................ 30.51 78.22 39.0
January 2, 2018................................ 19.91 73.43 27.1
January 2, 2019................................ 0.05 68.64 0.1
January 2, 2020................................ 0.00 0.00 NA
</TABLE>
LIMITATION OF LIABILITY
The Equipment Notes issued with respect to each Leased Aircraft are not
direct obligations of, or guaranteed by, Atlas, any Owner Participant or the
Leased Aircraft Trustees or the Owner Trustees in their individual capacities.
None of the Owner Trustees, the Owner Participants or the Leased Aircraft
Trustees, or any affiliates thereof, will be personally liable to any holder of
an Equipment Note or, in the case of the Owner Trustees and the Owner
Participants, to the Leased Aircraft Trustees for any amounts payable under the
Equipment Notes or, except as provided in each Leased Aircraft Indenture, for
any liability under such Leased Aircraft Indenture. All payments of principal
of, premium, if any, and interest on the Equipment Notes issued with respect to
any Leased Aircraft (other than payments made in connection with an optional
redemption or purchase of Equipment Notes issued with respect to a Leased
Aircraft by the related Owner Trustee or the related Owner Participant) will be
made only from the assets subject to the lien of the Indenture with respect to
such Leased Aircraft or the income and proceeds received by the related Leased
Aircraft Trustee therefrom (including rent payable by Atlas under the Lease with
respect to such Leased Aircraft).
The Equipment Notes issued with respect to the Owned Aircraft will be
direct obligations of Atlas.
Except as otherwise provided in the Indentures, each Owner Trustee and each
Loan Trustee, in its individual capacity, will not be answerable or accountable
under the Indentures or under the Equipment Notes under any circumstances
except, among other things, for its own willful misconduct or gross negligence.
None of the Owner Participants will have any duty or responsibility under any of
the Leased Aircraft Indentures or the Equipment Notes to the Leased Aircraft
Trustees or to any holder of any Equipment Note. (Owned Aircraft Indenture,
Section 7.01; Leased Aircraft Indenture, Section 6.01)
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INDENTURE DEFAULTS, NOTICE AND WAIVER
Indenture Events of Default under each Indenture will include:
- in the case of a Leased Aircraft Indenture, the occurrence of any Lease
Event of Default under the related Lease (other than the failure to make
certain indemnity payments and other payments to the related Owner
Trustee or Owner Participant unless a notice is given by such Owner
Participant that such failure shall constitute an Indenture Default);
- the failure by the related Owner Trustee (other than as a result of a
Lease Default or Lease Event of Default), in the case of a Leased
Aircraft Indenture, or Atlas, in the case of an Owned Aircraft Indenture,
to pay any interest or principal or premium, if any, under such Indenture
or under any Equipment Note issued thereunder that continues for more
than 10 Business Days, in the case of principal, interest or Make-Whole
Premium, and, in all other cases, 10 Business Days after the relevant
Owner Trustee or Owner Participant, in the case of a Leased Aircraft
Indenture or Atlas, in the case of an Owned Aircraft Indenture, receives
written demand from the related Loan Trustee or holder of an Equipment
Note;
- the failure by the related Owner Participant or the related Owner Trustee
(in its individual capacity), in the case of a Leased Aircraft Indenture,
to discharge certain liens that continue after notice and specified cure
periods;
- any representation or warranty made by the related Owner Trustee or Owner
Participant, in the case of a Leased Aircraft Indenture, or Atlas, in the
case of an Owned Aircraft Indenture, in such Indenture, the related
Participation Agreement, or certain related documents furnished to the
Loan Trustee or any holder of an Equipment Note pursuant thereto being
false or incorrect in any material respect when made that continues to be
material and adverse to the interests of the Loan Trustee or Note Holders
and remains unremedied after notice and specified cure periods;
- failure by Atlas or the related Owner Trustee or Owner Participant to
perform or observe covenants or obligations for the benefit of the Loan
Trustee or holders of Equipment Notes under such Indenture or certain
related documents which continues after notice and specified cure periods
and which is material and adverse to the interests of the Loan Trustee or
the Note Holders;
- the registration of the related Aircraft ceasing to be effective as a
result of the Owner Participant (in the case of a Leased Aircraft) not
being a citizen of the United States, as defined in the Transportation
Code (subject to a cure period);
- with respect to the Owned Aircraft, the lapse or cancellation of
insurance required under the Owned Aircraft Indenture; or
- the occurrence of certain events of bankruptcy, reorganization or
insolvency of the related Owner Trustee or Owner Participant (in the case
of a Leased Aircraft) or Atlas (in the case of an Owned Aircraft).
(Leased Aircraft Indentures, Section 4.02; Owned Aircraft Indentures,
Section 5.01)
There will not be cross-default provisions in the Indentures or in the
Leases (unless otherwise agreed between an Owner Participant and Atlas).
Consequently, events resulting in an Indenture Event of Default under any
particular Indenture may or may not result in an Indenture Event of Default
occurring under any other Indenture, and a Lease Event of Default under any
particular Lease may or may not constitute a Lease Event of Default under any
other Lease.
If Atlas fails to make any semiannual basic rental payment due under any
Lease, within a specified period after such failure the applicable Owner Trustee
may furnish to the Leased Aircraft Trustee the amount due on the Equipment Notes
issued with respect to the related Leased Aircraft, together with any interest
thereon on account of the delayed payment thereof, in which event the Leased
Aircraft Trustee and the holders of outstanding Equipment Notes issued under
such Indenture may not exercise any remedies otherwise available under such
Indenture or such Lease as the result of such failure to make such rental
payment, unless such Owner Trustee has previously cured three or more
immediately
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preceding semiannual basic rental payment defaults or, in total, six or more
previous semiannual basic rental payment defaults. The applicable Owner Trustee
also may cure any other default by Atlas in the performance of its obligations
under any Lease that can be cured with the payment of money. (Leased Aircraft
Indentures, Section 4.03)
The holders of a majority in principal amount of the outstanding Equipment
Notes issued with respect to any Aircraft, by notice to the Loan Trustee, may on
behalf of all the holders waive any existing default and its consequences under
the Indenture with respect to such Aircraft, except a default in the payment of
the principal of, or premium or interest on any such Equipment Notes or a
default in respect of any covenant or provision of such Indenture that cannot be
modified or amended without the consent of each holder of Equipment Notes.
(Leased Aircraft Indentures, Section 4.08; Owned Aircraft Indentures, Section
5.06)
REMEDIES
If an Indenture Event of Default occurs and is continuing under an
Indenture, the related Loan Trustee or the holders of a majority in principal
amount of the Equipment Notes outstanding under such Indenture may, subject to
the applicable Owner Participant's or Owner Trustee's right to cure, as
discussed above, declare the principal of all such Equipment Notes issued
thereunder immediately due and payable, together with all accrued but unpaid
interest thereon, provided that in the event of a reorganization proceeding
involving Atlas instituted under Chapter 11 of the U.S. Bankruptcy Code, if no
other Lease Event of Default and no other Indenture Event of Default (other than
the failure to pay the outstanding amount of the Equipment Notes which by such
declaration shall have become payable) exists at any time after the consummation
of such proceeding, such declaration will be automatically rescinded without any
further action on the part of any holder of Equipment Notes. The holders of a
majority in principal amount of Equipment Notes outstanding under an Indenture
may rescind any declaration of acceleration of such Equipment Notes at any time
before the judgment or decree for the payment of the money so due shall be
entered if (i) there has been paid to the related Loan Trustee an amount
sufficient to pay all principal, interest, and premium, if any, on any such
Equipment Notes, to the extent such amounts have become due otherwise than by
such declaration of acceleration and (ii) all other Indenture Events of Default
and incipient Indenture Events of Default with respect to any covenant or
provision of such Indenture have been cured. (Leased Aircraft Indentures Section
4.04(b); Owned Aircraft Indentures, Section 5.02(b))
Each Indenture provides that if an Indenture Event of Default under such
Indenture has occurred and is continuing, the related Loan Trustee may exercise
certain rights or remedies available to it under such Indenture or under
applicable law, including if, in the case of a Leased Aircraft, the
corresponding Lease has been declared in default one or more of the remedies
under such Lease with respect to the Aircraft subject to such Lease. If an
Indenture Event of Default arises solely by reason of one or more events or
circumstances which constitutes a Lease Event of Default, the related Leased
Aircraft Trustee's right to exercise remedies under a Leased Aircraft Indenture
is subject, with certain exceptions, to its having proceeded to exercise one or
more of the dispossessory remedies under the Lease with respect to such Leased
Aircraft; provided that the requirement to exercise one or more of such remedies
under such Lease shall not apply in circumstances where such exercise has been
involuntarily stayed or prohibited by applicable law or court order for a
continuous period in excess of 60 days or such period as may be specified in
Section 1110(a)(1)(A) of the U.S. Bankruptcy Code, plus an additional period, if
any, resulting from (i) the trustee or debtor-in-possession in such proceeding
agreeing to perform obligations under such Lease with the approval of the
applicable court and its continuous performance of such Lease under Section
1110(a)(1) (A-B) of the U.S. Bankruptcy Code or such Leased Aircraft Trustee's
consent to an extension of such period, (ii) such Leased Aircraft Trustee's
failure to give any requisite notice or (iii) Atlas' assumption of such Lease
with the approval of the relevant court and its continuous performance of the
Lease as so assumed. See "-- The Leases and Certain Provisions of the Owned
Aircraft Indentures -- Events of Default Under the Leases." Such remedies may be
exercised by the related Leased Aircraft Trustee to the exclusion of the related
Owner Trustee, subject to certain conditions
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specified in such Indenture and subject to the terms of such Lease. Any Aircraft
sold in the exercise of such remedies will be free and clear of any rights of
those parties, including the rights of Atlas under the Lease with respect to
such Aircraft; provided that no exercise of any remedies by the related Leased
Aircraft Trustee may affect the rights of Atlas under any Lease unless a Lease
Event of Default has occurred and is continuing. (Leased Aircraft Indentures,
Section 4.04; Leases, Section 15) The Owned Aircraft Indentures will not contain
such limitations on the Owned Aircraft Trustee's ability to exercise remedies
upon an Indenture Event of Default under an Owned Aircraft Indenture.
If a bankruptcy proceeding involving Atlas under the U.S. Bankruptcy Code
occurs, all of the rights of the Owner Trustee as lessor under a particular
Lease will be exercised by the Owner Trustee in accordance with the terms
thereof unless (i) during the Section 1110 Period the trustee in such proceeding
or Atlas does not assume or agree to perform its obligations under such Lease,
(ii) at any time after assuming or agreeing to perform such obligations, such
trustee or Atlas ceases to perform such obligations or (iii) the related Loan
Trustee takes action, or notifies the Owner Trustee that such Loan Trustee
intends to take action, to foreclose the lien of the related Leased Aircraft
Indenture or otherwise commence the exercise of any significant remedy in
accordance with the Leased Aircraft Indenture in connection with any continuing
non-bankruptcy Indenture Event of Default. The Owner Trustee's exercise of such
rights shall be subject to certain limitations and may not, in any event, reduce
the amount or change the time of any payment in respect of the Equipment Notes
or adversely affect the validity or enforceability of the lien under the related
Leased Aircraft Indenture.
If the Equipment Notes issued in respect of one Aircraft are in default,
the Equipment Notes issued in respect of the other Aircraft may not be in
default, and, if not, no remedies will be exercisable under the applicable
Indentures with respect to such other Aircraft.
Section 1110 of the U.S. Bankruptcy Code ("Section 1110") 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) 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:
- the automatic stay provision of the U.S. Bankruptcy Code, which provision
enjoins repossessions by creditors for the duration of the reorganization
period;
- the provision of the U.S. Bankruptcy Code allowing the trustee in
reorganization to use property of the debtor during the reorganization
period;
- Section 1129 of the U.S. Bankruptcy Code (which governs the confirmation
of plans of reorganization in Chapter 11 cases); and
- any power of the bankruptcy court to enjoin a repossession.
Section 1110 provides in relevant part, however, that the right of a
lessor, conditional vendor or holder of a security interest to take possession
of an aircraft in the event of an event of default may not be exercised for 60
days following the date of commencement of the reorganization proceedings
(unless specifically permitted by the bankruptcy court) and may not be exercised
at all if, within such 60-day period (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 cures all existing defaults (other than defaults resulting
solely from the financial condition, bankruptcy, insolvency or reorganization of
the debtor).
"Equipment" is defined in Section 1110, 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 or more of cargo.
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It is a condition to the Trustee's obligation to purchase Equipment Notes
with respect to each Aircraft that outside counsel to Atlas, Cahill Gordon &
Reindel, provide its opinion to the Trustees that (x) if such Aircraft is a
Leased Aircraft, the Owner Trustee, as lessor under the Lease for such Aircraft,
and the Leased Aircraft Trustee, as assignee of such Owner Trustee's rights
under such Lease pursuant to the related Leased Aircraft Indenture, will be
entitled to the benefits of Section 1110 with respect to the airframe and
engines comprising such Aircraft or (y) if such Aircraft is an Owned Aircraft,
the Owned Aircraft Trustee will be entitled to the benefits of Section 1110 with
respect to the airframe and engines comprising such Owned Aircraft, in each
case, assuming that Atlas 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 or more of cargo and assuming that the Aircraft and
Engines constitute "equipment" as defined in Section 1110. For a description of
certain limitations on the Loan Trustee's exercise of rights contained in the
Indenture, see "-- Indenture Defaults, Notice and Waiver."
The opinion of Cahill Gordon & Reindel will not address the possible
replacement of an Aircraft after an Event of Loss in the future, the
consummation of which is conditioned upon the contemporaneous delivery of an
opinion of counsel to the effect that the related Loan Trustee will be entitled
to Section 1110 benefits with respect to such replacement unless there is a
change in law or court interpretation that results in Section 1110 not being
available. See "-- The Leases and Certain Provisions of the Owned Aircraft
Indentures -- Events of Loss." The opinion of Cahill Gordon & Reindel will also
not address the availability of Section 1110 with respect to any possible
sublessee of a Leased Aircraft subleased by Atlas or to any possible lessee of
an Owned Aircraft if it is leased by Atlas.
If an Indenture Default under any Indenture occurs and is continuing, any
sums held or received by the related Loan Trustee may be applied to reimburse
such Loan Trustee for any tax, expense or other loss incurred by it and to pay
any other amounts due to such Loan Trustee prior to any payments to holders of
the Equipment Notes issued under such Indenture. (Indentures, Section 3.03)
In the event of bankruptcy, insolvency, receivership or like proceedings
involving an Owner Participant, it is possible that, notwithstanding that the
applicable Leased Aircraft is owned by the related Owner Trustee in trust, such
Leased Aircraft and the related Lease and Equipment Notes might become part of
such proceeding. In such event, payments under such Lease or on such Equipment
Notes might be interrupted and the ability of the related Leased Aircraft
Trustee to exercise its remedies under the related Leased Aircraft Indenture
might be restricted, although such Leased Aircraft Trustee would retain its
status as a secured creditor in respect of the related Lease and the related
Leased Aircraft.
MODIFICATION OF INDENTURES AND LEASES
Without the consent of holders of a majority in principal amount of the
Equipment Notes outstanding under any Indenture, the provisions of such
Indenture and any related Lease, Participation Agreement or Trust Agreement may
not be amended or modified, except to the extent indicated below.
Subject to certain limitations, certain provisions of any Leased Aircraft
Indenture, and of the Lease, the Participation Agreement, and the Trust
Agreement related thereto, may be amended or modified by the parties thereto
without the consent of any holders of the Equipment Notes outstanding under such
Indenture. In the case of each Lease, such provisions include, among others,
provisions relating to (i) the return to the related Owner Trustee of the
related Leased Aircraft at the end of the term of such Lease (except to the
extent that such amendment would affect the rights or exercise of remedies under
the Lease) and (ii) the renewal of such Lease and the option of Atlas at the end
of the term of such Lease to purchase the related Leased Aircraft so long as the
same would not adversely affect the Note Holders. (Leased Aircraft Indentures,
Section 9.01(a)) In addition, any Indenture may be amended without the consent
of the holders of Equipment Notes to, among other things, cure any defect or
inconsistency in such Indenture or the Equipment Notes issued thereunder,
provided that such change does not adversely
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affect the interests of any such holder. (Leased Aircraft Indentures, Section
9.01(c); Owned Aircraft Indentures, Section 10.01)
Without the consent of each Liquidity Provider and the holder of each
Equipment Note outstanding under any Indenture affected thereby, no amendment or
modification of such Indenture may among other things (a) reduce the principal
amount of, or premium, if any, or interest payable on, any Equipment Notes
issued under such Indenture or change the date on which any principal, premium,
if any, or interest is due and payable, (b) permit the creation of any security
interest with respect to the property subject to the lien of such Indenture,
except as provided in such Indenture, or deprive any holder of an Equipment Note
issued under such Indenture of the benefit of the lien of such Indenture upon
the property subject thereto or (c) reduce the percentage in principal amount of
outstanding Equipment Notes issued under such Indenture required to take or
approve any action under such Indenture. (Leased Aircraft Indentures, Section
9.01(b); Owned Aircraft Indentures, Section 10.01(a))
INDEMNIFICATION
Atlas will be required to indemnify each Loan Trustee, each Owner
Participant, each Owner Trustee, each Liquidity Provider, the Subordination
Agent, the Escrow Agent and each Trustee, but not the holders of Certificates,
for certain losses, claims and other matters. Atlas will be required under
certain circumstances to indemnify each Owner Participant against the loss of
depreciation deductions and certain other benefits allowable for certain income
tax purposes with respect to the related Leased Aircraft.
THE LEASES AND CERTAIN PROVISIONS OF THE OWNED AIRCRAFT INDENTURES
Each Leased Aircraft will be leased to Atlas by the relevant Owner Trustee
under the relevant lease agreement (each, a "Lease"). Each Owned Aircraft will
be owned by Atlas.
Lease Term Rentals and Payments
Each Leased Aircraft will be leased separately by the relevant Owner
Trustee to Atlas for a term commencing on the date on which the Aircraft is
acquired by the Owner Trustee and expiring on a date not earlier than the latest
maturity date of the relevant Equipment Notes, unless terminated prior to the
originally scheduled expiration date as permitted by the applicable Lease. The
semiannual basic rent payment under each Lease is payable by Atlas on each
related Lease Payment Date (or, if such day is not a Business Day, on the next
Business Day), and will be assigned by the Owner Trustee under the corresponding
Leased Aircraft Indenture to provide the funds necessary to make scheduled
payments of principal and interest due from the Owner Trustee on the Equipment
Notes issued under such Indenture. In certain cases, the semiannual basic rent
payments under the Leases may be adjusted, but each Lease provides that under no
circumstances will rent payments by Atlas be less than the scheduled payments on
the related Equipment Notes. Any balance of each such semiannual basic rent
payment under each Lease, after payment of amounts due on the Equipment Notes
issued under the Indenture corresponding to such Lease, will be paid over to the
Owner Trustee. (Leases, Section 3; Leased Aircraft Indentures, Section 3.01)
"Lease Payment Date" means, with respect to each Lease, January 2 or July 2
during the term of such Lease, the commencement date of such Lease or any other
date agreed between Atlas and the Owner Participant that occurs after the latest
maturity date of the Equipment Notes issued in connection with the acquisition
of the Aircraft to which such Lease relates.
Semiannual payments of interest on the Equipment Notes issued by Atlas
under an Owned Aircraft Indenture are payable January 2 and July 2 of each year,
commencing on July 2, 2000. Semiannual payments of principal under the Equipment
Notes issued by Atlas under an Owned Aircraft Indenture are payable on January 2
and July 2 in certain years, commencing on January 2, 2001.
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Net Lease; Maintenance
Under the terms of each Lease, Atlas' obligations in respect of each Leased
Aircraft will be those of a lessee under a "net lease." Accordingly, Atlas is
obligated under each Lease, among other things and at its expense, to keep each
Aircraft duly registered and insured, to pay all costs of operating the Aircraft
and to maintain, service, repair and overhaul the Aircraft so as to keep it in
as good operating condition as when delivered to Atlas, ordinary wear and tear
excepted, and in such condition as required to maintain the airworthiness
certificate for the Aircraft in good standing at all times. (Leases, Sections
7.1, 8.1 and 11.1 and Annexes C and D) The Owned Aircraft Indentures impose
comparable registration, insurance, maintenance, service and repair obligations
on Atlas with respect to the Owned Aircraft. (Owned Aircraft Indentures,
Sections 4.02 and 4.06)
Possession, Sublease and Transfer
Each Aircraft may be operated by Atlas or, subject to certain restrictions,
by certain other persons. Normal interchange and pooling agreements customary in
the commercial airline industry with respect to any Engine are permitted.
Subleases, in the case of the Leased Aircraft, and leases, in the case of Owned
Aircraft, are also permitted to U.S. air carriers, U.S. aircraft manufacturers,
foreign air carriers and foreign aircraft manufacturers that have their
principal executive office in certain specified countries, subject to a
reasonably satisfactory legal opinion that, among other things, such country
would recognize (in the case of the Leased Aircraft) Owner Trustee's title to,
and the Loan Trustee's security interest in respect of, the applicable Aircraft.
In addition, a sublessee may not be subject to insolvency or similar proceedings
at the commencement of such sublease or lease. (Leases, Section 7; Owned
Aircraft Indentures, Section 4.02) Permitted foreign air carriers are not
limited to those based in a country that is a party to the Convention on the
International Recognition of Rights in Aircraft (Geneva 1948) (the
"Convention"). It is uncertain to what extent the relevant Loan Trustee's
security interest would be recognized if an Aircraft is registered or located in
a jurisdiction not a party to the Convention. Moreover, in the case of an
Indenture Event of 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.
Registration
Atlas is required to keep each Aircraft duly registered under the
Transportation Code with the FAA, except (in the case of the Leased Aircraft) if
the relevant Owner Trustee or the relevant Owner Participant fails to meet the
applicable citizenship requirements, and to record each Lease (in the case of
the Leased Aircraft) and Indenture and certain other documents under the
Transportation Code. (Leases, Section 7; Owned Aircraft Indentures, Section
4.02(e)) Such recordation of the Indenture and other documents with respect to
each Aircraft will give the relevant Loan Trustee a first-priority, perfected
security interest in such Aircraft whenever it is located in the United States
or any of its territories and possessions. The Convention provides that such
security interest will also be recognized, with certain limited exceptions, in
those jurisdictions that have ratified or adhere to the Convention.
So long as no Lease Event of Default exists, Atlas has the right to
register the Leased Aircraft subject to such Lease in a country other than the
United States at its own expense in connection with a permitted sublease of the
Aircraft to a permitted foreign air carrier, subject to certain conditions set
forth in the related Participation Agreement. These conditions include a
requirement that the lien of the applicable Indenture continue as a first
priority security interest in the applicable Aircraft. (Leases, Section 7.1.2;
Participation Agreements, Section 7.6.11) The Owned Aircraft Indentures contain
comparable provisions with respect to the registration of the Owned Aircraft in
connection with a permitted lease of the Owned Aircraft. (Owned Aircraft
Indentures, Section 4.02(e))
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Liens
Atlas is required to maintain each Aircraft free of any liens, other than
the rights of the relevant Loan Trustee, the holders of the related Equipment
Notes, Atlas, and, with respect to a Leased Aircraft, the Owner Participant and
Owner Trustee arising under the applicable Indenture, the Lease (in the case of
the Leased Aircraft) or the other operative documents related thereto, and other
than certain limited liens permitted under such documents, including but not
limited to (i) liens for taxes either not yet due or being contested in good
faith by appropriate proceedings; (ii) materialmen's, mechanics' and other
similar liens arising in the ordinary course of business and securing
obligations that either are not yet delinquent for more than 60 days or are
being contested in good faith by appropriate proceedings; (iii) judgment liens
so long as such judgment is discharged or vacated within 60 days or the
execution of such judgment is stayed pending appeal or discharged, vacated or
reversed within 60 days after expiration of such stay; and (iv) any other lien
as to which Atlas has provided a bond or other security adequate in the
reasonable opinion of the Owner Trustee; provided that in the case of each of
the liens described in the foregoing clauses (i), (ii) and (iii), such liens and
proceedings do not involve any material risk of the sale, forfeiture or loss of
such Aircraft or the interest of any Participant therein or impair the lien of
the relevant Indenture. (Leases, Section 6; Owned Aircraft Indentures, Section
4.01)
Replacement of Parts, Alterations
Atlas is obligated to replace all parts at its expense that may from time
to time be incorporated or installed in or attached to any Aircraft and that may
become lost, damaged beyond repair, worn out, stolen, seized, confiscated or
rendered permanently unfit for use. Atlas or any permitted sublessee has the
right, at its own expense, to make such alterations, modifications and additions
with respect to each Aircraft as it deems desirable in the proper conduct of its
business and to remove parts which it deems to be obsolete or no longer suitable
or appropriate for use, so long as such alteration, modification, addition or
removal does not materially diminish the fair market value, utility or useful
life of the related Aircraft or Engine or invalidate the Aircraft's
airworthiness certificate. (Leases, Section 8.1 and Annex C; Owned Aircraft
Indentures, Section 4.04(d))
Insurance
Atlas is required to maintain, at its expense (or at the expense of a
permitted lessee, in the case of the Owned Aircraft, or a permitted sublessee,
in the case of the Leased Aircraft), all-risk aircraft hull insurance covering
each Aircraft, at all times in an amount not less than the stipulated loss value
of such Aircraft (which will exceed the aggregate outstanding principal amount
of the Equipment Notes relating to such Aircraft, together with accrued interest
thereon). However, after giving effect to self-insurance permitted as described
below, the amount payable under such insurance may be less than such amounts
payable with respect to the Equipment Notes. In the event of a loss involving
insurance proceeds in excess of $7.5 million, to be adjusted for inflation, per
occurrence such proceeds up to the stipulated loss value of the relevant
Aircraft will be payable to the applicable Loan Trustee, for so long as the
relevant Indenture shall be in effect. In the event of a loss involving
insurance proceeds of up to $7.5 million, to be adjusted for inflation, per
occurrence such proceeds will be payable directly to Atlas so long as an
Indenture Event of Default does not exist with respect to the Owned Aircraft or
(in the case of the Leased Aircraft) the Owner Trustee has not notified the
insurance underwriters that a Lease Event of Default exists. So long as the loss
does not constitute an Event of Loss, insurance proceeds will be applied to
repair or replace the property. (Leases, Sections 11 and Annex D; Owned Aircraft
Indentures, Section 4.06)
In addition, Atlas is obligated to maintain comprehensive airline liability
insurance at its expense (or at the expense of a permitted lessee, in the case
of the Owned Aircraft, or a permitted sublessee, in the case of the Leased
Aircraft), including without limitation, passenger liability, baggage liability,
cargo and mail liability, hangarkeeper's liability and contractual liability
insurance with respect to each Aircraft. Such liability insurance must be
underwritten by insurers of nationally or internationally recognized
responsibility. The amount of such liability insurance coverage per occurrence
may not be less than the amount of comprehensive airline liability insurance
from time to time applicable to aircraft owned or
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leased and operated by Atlas of the same type and operating on similar routes as
such Aircraft. (Leases, Section 11.1 and Annex D; Owned Aircraft Indentures,
Section 4.06)
Atlas is also required to maintain war-risk, hijacking or allied perils
insurance if it (or any permitted sublessee or lessee) operates any Aircraft,
Airframe or Engine in any area of recognized hostilities or if Atlas (or any
permitted sublessee or lessee) maintains such insurance with respect to other
aircraft operated on the same routes or areas on or in which the Aircraft is
operated. (Leases, Annex D; Owned Aircraft Indentures, Section 4.06)
Atlas may self-insure under a program applicable to all aircraft in its
fleet, but the amount of such self-insurance in the aggregate may not exceed 50%
of the largest replacement value of any single aircraft in Atlas' fleet or
1 1/2% of the average aggregate insurable value (during the preceding policy
year) of all aircraft on which Atlas carries insurance, whichever is less,
unless an insurance broker of national standing shall certify that the standard
among other major U.S. air cargo carriers is a higher level of self-insurance,
in which case Atlas may self-insure the Aircraft to such higher level. In
addition, Atlas may self-insure to the extent of any applicable deductible per
Aircraft that does not exceed industry standards for major U.S. air cargo
carriers. (Leases, Section 11.1 and Annex D; Owned Aircraft Indentures, Section
4.06 and Annex B)
In respect of each Aircraft, Atlas is required to name as additional
insured parties the relevant Loan Trustee and holders of the Equipment Notes and
(in the case of the Leased Aircraft) the relevant Owner Participant and Owner
Trustee, in its individual capacity and as owner of such Aircraft, and the
Liquidity Provider under all liability, hull and property and war risk,
hijacking and allied perils insurance policies required with respect to such
Aircraft. In addition, the insurance policies will be required to provide that,
in respect of the interests of such additional insured persons, the insurance
shall not be invalidated or impaired by any act or omission of Atlas, any
permitted sublessee or any other person. (Leases, Annex D; Owned Aircraft
Indentures, Section 4.06 and Annex B)
Lease Termination
Atlas may terminate any Lease on any Lease Payment Date occurring after the
fifth anniversary of the date on which such Lease commenced, if it makes a good
faith determination that the Leased Aircraft subject to such Lease is
economically obsolete or surplus to its requirements or if it is to be disposed
pursuant to a program of fleet renewal. Atlas is required to give notice of its
intention to exercise its right of termination described in this paragraph at
least 90 days prior to the proposed date of termination, which notice may be
withdrawn up to 10 Business Days prior to such proposed date; provided that
Atlas may with respect to such Lease give only five such termination notices. In
such a situation, unless the Owner Trustee elects to retain title to such
Aircraft, Atlas is required to use commercially reasonable efforts to sell such
Aircraft as an agent for such Owner Trustee. The Owner Trustee will sell such
Aircraft to the highest cash bidder on the date of termination specified in
Atlas' notice or on any other date within 10 Business Days of such date of
termination agreed with the applicable lessor. If such sale occurs, the
Equipment Notes related thereto are required to be prepaid. If the net proceeds
to be received from such sale are less than the termination value for such
Aircraft (which is set forth in a schedule to each Lease), Atlas is required to
pay to the applicable Owner Trustee an amount equal to the excess, if any, of
the applicable termination value for such Aircraft over such net proceeds. Upon
payment of termination value for such Aircraft and an amount equal to the
Make-Whole Premium, if any, payable on such date of payment, together with
certain additional amounts, the lien of the relevant Indenture will be released,
the relevant Lease will terminate, and the obligation of Atlas thereafter to
make scheduled rent payments under such Lease will cease. (Leases, Section 9;
Leased Aircraft Indentures, Section 2.10(b))
The Owner Trustee has the option to retain title to the Leased Aircraft if
Atlas has given a notice of termination under the Lease. In such event, such
Owner Trustee will pay to the applicable Loan Trustee an amount sufficient to
prepay the outstanding Equipment Notes issued with respect to such Aircraft
(including the Make-Whole Premiums), in which case the lien of the relevant
Indenture will be released,
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the relevant Lease will terminate and the obligation of Atlas thereafter to make
scheduled rent payments under such Lease will cease. (Leases, Section 9; Leased
Aircraft Indentures, Sections 2.06 and 2.10(b))
Events of Loss
If an Event of Loss occurs with respect to the Airframe or the Airframe and
Engines of an Aircraft, Atlas must elect within 60 days after such occurrence
either to make payment with respect to such Event of Loss or to replace such
Airframe and any such Engines. If Atlas elects to make payment with respect to
such Event of Loss, then such payment shall be made on or before the earlier of
(i) the Business Day next following the 180th day after the date of occurrence
of such Event of Loss, and (ii) the Business Day specified as the payment date
in an irrevocable notice delivered by Atlas not less than 20 days prior to such
payment date. The amount of such payment shall include the outstanding principal
amount of the Equipment Notes (in the case of an Owned Aircraft) or the
stipulated loss value of such Aircraft (in the case of a Leased Aircraft),
together with certain additional amounts, but shall exclude any Make-Whole
Premium. If Atlas elects to replace such Airframe and any such Engines, Atlas
must, within 180 days after the date of occurrence of such Event of Loss,
substitute an airframe (or airframe and one or more engines, as the case may be)
for the Airframe or Airframe and Engines that suffered such Event of Loss.
Notwithstanding the foregoing, if an Indenture Event of Default or failure to
pay principal or interest under the Owned Aircraft Indenture has occurred and is
continuing or certain bankruptcy defaults have occurred and are continuing,
Atlas shall be required to make payment with respect to such Event of Loss.
(Leases, Sections 10.1.1 and 10.1.2; Leased Aircraft Indentures, Section
2.10(a); Owned Aircraft Indentures, Section 2.10 and 4.05(a))
If Atlas elects to replace an Airframe (or Airframe and one or more
Engines, as the case may be) that suffered such Event of Loss, it shall, in the
case of the Leased Aircraft, convey to the related Owner Trustee title to an
airframe (or airframe and one or more engines, as the case may be) or, in the
case of an Owned Aircraft, subject such an airframe (or airframe and one or more
engines) to the lien of the Owned Aircraft Indenture, and such replacement
airframe or airframe and engines must be the same model as the Airframe or
Airframe and Engines to be replaced or an improved model, with a value, utility
and remaining useful life (without regard to hours or cycles remaining until the
next regular maintenance check) at least equal to the Airframe or Airframe and
Engines to be replaced, assuming that such Airframe and such Engines had been
maintained in accordance with the related Lease or Owned Aircraft Indenture, as
the case may be. Atlas is also required to provide to the relevant Loan Trustee
and (in the case of a Leased Aircraft) the relevant Owner Trustee and Owner
Participant reasonably acceptable opinions of counsel to the effect, among other
things, that (i) certain specified documents have been duly filed under the
Transportation Code and (ii) such Owner Trustee and Leased Aircraft Trustee (as
assignee of lessor's rights and interests under the Lease), in the case of a
Leased Aircraft, or the Owned Aircraft Trustee, in the case of an Owned
Aircraft, will be entitled to receive the benefits of Section 1110 of the U.S.
Bankruptcy Code with respect to any such replacement airframe (unless, as a
result of a change in law or court interpretation, such benefits are not then
available). (Leases, Sections 10.1.3 and 10.3; Owned Aircraft Indentures,
Section 4.05(c))
If Atlas elects not to replace such Airframe, or Airframe and Engine(s),
then upon payment of the outstanding principal amount of the Equipment Notes
issued with respect to such Aircraft (in the case of an Owned Aircraft) or the
stipulated loss value for such Aircraft (in the case of a Leased Aircraft),
together with all additional amounts then due and unpaid with respect to such
Aircraft, which must be at least sufficient to pay in full as of the date of
payment thereof the aggregate unpaid principal amount under such Equipment Notes
together with accrued but unpaid interest thereon and all other amounts due and
owing in respect of such Equipment Notes (but without any Make-Whole Premium),
the lien of the Indenture and (in the case of a Leased Aircraft) the Lease
relating to such Aircraft shall terminate with respect to such Aircraft, the
obligation of Atlas thereafter to make the scheduled rent payments (in the case
of a Leased Aircraft) or interest and principal payments (in the case of an
Owned Aircraft) with respect thereto shall cease and the related Owner Trustee
shall transfer all of its right, title and interest in and to the related
Aircraft to Atlas. The stipulated loss value and other payments made under the
Leases
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or the Owned Aircraft Indenture, as the case may be, by Atlas shall be deposited
with the applicable Loan Trustee. Amounts in excess of the amounts due and owing
under the Equipment Notes issued with respect to such Aircraft will be
distributed by such Loan Trustee to the applicable Owner Trustee or to Atlas, as
the case may be. (Leases, Section 10.1.2; Leased Aircraft Indentures, Sections
2.06 and 3.02; Owned Aircraft Indentures, Section 4.05(a)(ii))
If an Event of Loss occurs with respect to an Engine alone, Atlas will be
required to replace such Engine within 90 days after the occurrence of such
Event of Loss with another engine, free and clear of all liens (other than
certain permitted liens). Such replacement engine shall be the same make and
model as the Engine to be replaced, or an improved model, suitable for
installation and use on the Airframe, and having a value, utility and remaining
useful life (without regard to hours or cycles remaining until overhaul) at
least equal to the Engine to be replaced, assuming that such Engine had been
maintained in accordance with the relevant Lease or the Owned Aircraft
Indenture, as the case may be. (Leases, Section 10.2; Owned Aircraft Indenture,
Section 4.04(e))
An "Event of Loss" with respect to an Aircraft, Airframe or any Engine
means any of the following events with respect to such property:
- the destruction of such property, damage to such property beyond economic
repair or rendition of such property permanently unfit for normal use;
- the actual or constructive total loss of such property or any damage to
such property or requisition of title or use of such property which
results in an insurance settlement with respect to such property on the
basis of a total loss or a constructive or compromised total loss;
- any theft, hijacking or disappearance of such property for a period of
180 consecutive days or more;
- any seizure, condemnation, confiscation, taking or requisition of title
to such property by any governmental entity or purported governmental
entity (other than a U.S. government entity or an entity of the country
of registration of the relevant Aircraft) for a period exceeding 180
consecutive days or, if earlier, at the end of the term of such Lease (in
the case of a Leased Aircraft) or the final maturity of the Equipment
Notes (in the case of an Owned Aircraft);
- in the case of any Leased Aircraft, any seizure, condemnation,
confiscation, taking or requisition of use of such property by any U.S.
government entity (or governmental entity of the country of registration
of the relevant Aircraft) that continues until the 30th day after the
last day of the term of the relevant Lease (unless the Owner Trustee
shall have elected not to treat such event as an Event of Loss);
- as a result of any law, rule, regulation, order or other action by the
FAA or any governmental entity, the use of such property in the normal
course of Atlas' business of air cargo transportation is prohibited for
180 consecutive days, unless Atlas, prior to the expiration of such
180-day period, shall have undertaken and shall be diligently carrying
forward steps which are necessary or desirable to permit the normal use
of such property by Atlas, but in any event if such use shall have been
prohibited for a period of two consecutive years, provided that no Event
of Loss shall be deemed to have occurred if such prohibition has been
applicable to Atlas' entire U.S. registered fleet of similar property and
Atlas, prior to the expiration of such two-year period, shall have
conformed at least one unit of such property in its fleet to the
requirements of any such law, rule, regulation, order or other action and
commenced regular commercial use of the same and shall be diligently
carrying forward, in a manner which does not discriminate against
applicable property in so conforming such property, steps which are
necessary or desirable to permit the normal use of such property by
Atlas, but in any event if such use shall have been prohibited for a
period of three years or, in the case of a Leased Aircraft, such use
shall be prohibited at the expiration of the term of the relevant Lease;
or
- with respect to any Engine, any divestiture of title to such Engine shall
be treated as an Event of Loss. (Leases, Section 7.2.6 and Annex A; Owned
Aircraft Indentures, Annex A)
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Renewal and Purchase Options
At the end of the term of each Lease after final maturity of the related
Equipment Notes and subject to certain conditions, Atlas will have the option to
renew such Lease for additional limited periods (each a "Renewal Term"). Each
Renewal Term shall be for not less than three months and not more than 2 years,
as determined by Atlas. Rent payments during the first Renewal Term shall equal
the lesser of fair market rental and a fixed rate rental as specified in the
Lease. Rent payments during subsequent Renewal Terms shall equal fair market
rental (Leases, Section 17.2).
In addition, Atlas will have the right (i) at the end of the term of each
Lease, (ii) at the end of each Renewal Term, (iii) on specified dates prior to
the end of the term of each Lease and (iv) upon certain tax events, to purchase
the Aircraft from the applicable Owner Trustee and assume as direct obligations
of Atlas, the Equipment Notes with respect to such Aircraft. In such case, the
Leased Aircraft Indenture relating to such Equipment Notes will be amended and
restated to be substantially the same as an Owned Aircraft Indenture. Such
assumption may occur only if, Atlas has (i) indemnified the then existing
beneficial owners of Certificates against any incremental U.S. federal income
taxes that may be imposed on them as a direct consequence of such assumption
(including any taxes that may be imposed as a result of the payment of such
indemnification) and (ii) if such an opinion can be given, provided an opinion
of counsel to the effect that holders of such Equipment Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
assumption and will be subject to U.S. 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
assumption had not occurred. See "Certain U.S. Federal Income Tax
Consequences -- Taxation of Certificateholders Generally" for a discussion of
certain tax consequences of such purchase and assumption under current
regulations.
Events of Default Under the Leases
Lease Events of Default under each Lease include among other things:
- failure by Atlas to make any payment of basic rent, renewal rent,
stipulated loss value or termination value under such Lease within 10
Business Days after the same shall have become due, or failure by Atlas
to pay any other amount due under such Lease or under any other related
operative document (other than excluded payments (as defined in the
Lease)) within 10 Business Days from and after the date of any written
notice from the Owner Trustee or Loan Trustee of the failure to make such
payment when due;
- failure by Atlas to make any excluded payment (as defined in the Lease)
within 10 Business Days after written notice that such failure
constitutes a Lease Event of Default is given by the relevant Owner
Participant to Atlas and the relevant Loan Trustee;
- failure by Atlas to carry and maintain insurance on and in respect of the
Aircraft, Airframe and Engines, in accordance with the provisions of such
Lease;
- failure by Atlas to perform or observe in any material respect any other
covenant or agreement to be performed or observed by it under such Lease
or the related Participation Agreement or any other related operative
document (other than the related tax indemnity agreement between Atlas
and the Owner Participant), and such failure shall continue unremedied
for a period of 30 days after written notice of such failure by the
applicable Owner Trustee or Loan Trustee unless such failure is capable
of being corrected and Atlas shall be diligently proceeding to correct
such failure, in which case there shall be no Lease Event of Default
unless and until such failure shall continue unremedied for a period of
180 days after the receipt of such notice;
- any representation or warranty made by Atlas in such Lease or the related
Participation Agreement or in any other related operative document (other
than in the related tax indemnity agreement between Atlas and the Owner
Participant) shall prove to have been untrue or inaccurate in any
material respect at the time made, such representation or warranty is
material at the time in
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question and the same shall remain uncured (to the extent of the adverse
impact thereof) for more than 30 days after the date of written notice
thereof to Atlas; and
- the occurrence of certain voluntary events of bankruptcy, reorganization
or insolvency of Atlas or the occurrence of involuntary events of
bankruptcy, reorganization or insolvency which shall continue
undismissed, unvacated or unstayed for a period of 90 days. (Leases,
Section 14)
Indenture Events of Default under the Owned Aircraft Indentures are
discussed above under "-- Indenture Defaults, Notice and Waiver."
Remedies Exercisable upon Events of Default Under the Leases
If a Lease Event of Default has occurred and is continuing, the applicable
Owner Trustee may (or, so long as the Indenture shall be in effect, the
applicable Loan Trustee may, subject to the terms of the Indenture) exercise one
or more of the remedies provided in such Lease with respect to the related
Aircraft. These remedies include the right to repossess and use or operate such
Aircraft, to rescind or terminate such Lease, to sell or re-lease such Aircraft
free and clear of Atlas' rights, except as set forth in the Lease, and retain
the proceeds, and to require Atlas to pay, as liquidated damages any due and
unpaid basic rent plus an amount equal to, at such Owner Trustee's (or, subject
to the terms of the relevant Leased Aircraft Indenture, the Leased Aircraft
Trustee's) option, either (i) the excess of the present value of all unpaid rent
during the remainder of the term of such Lease over the present value of the
fair market rental value of such Aircraft for the remainder of the term of such
Lease or, (ii) the excess of the stipulated loss value of such Aircraft over the
fair market sales value of such Aircraft or, if such Aircraft has been sold, the
net sales proceeds from the sale of such Aircraft. (Leases, Section 15; Leased
Aircraft Indentures, Section 4.04) If the Loan Trustee has validly terminated
such Lease, the Loan Trustee may not sell or lease or otherwise afford the use
of such Aircraft to Atlas or any of its affiliates. (Leased Aircraft Indentures,
Sections 4.03 and 4.04(a))
Remedies under the Owned Aircraft Indentures are discussed above under
"Description of the Equipment Notes -- Remedies."
Transfer of Owner Participant Interests
Subject to certain restrictions, each Owner Participant may transfer all or
any part of its interest in the related Leased Aircraft. (Participation
Agreements, Section 10.1.1)
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following summary describes the material U.S. federal income tax
consequences to Certificateholders of the exchange of the Old Certificates for
the New Certificates pursuant to the Exchange Offer. Except as otherwise
specified, the summary is addressed to beneficial owners of Certificates 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, estates the income of which is subject to U.S. federal income
taxation regardless of its source, and trusts that meet the following two tests:
(a) a U.S. court is able to exercise primary supervision over the administration
of the trust and (b) one or more U.S. persons have the authority to control all
substantial decisions of the trust that will hold the Certificates as capital
assets. The summary does not purport to be a comprehensive description of all of
the tax considerations that may be relevant to a decision to exchange the Old
Certificates for the New 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 exchange of the Old Certificates for the New Certificates pursuant to
the Exchange Offer will not be a taxable event for U.S. federal income tax
purposes. The receipt of New Certificates in the
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<PAGE> 84
exchange will be treated as a continuation of the original investment in the Old
Certificates. As a result, no gain or loss will be recognized by a holder of the
Old Certificates upon receipt of the New Certificates. A holder's tax basis in
the New Certificates received pursuant to the Exchange Offer will be the same as
the holder's tax basis in the Old Certificates exchanged therefor. A holder's
holding period for the New Certificates received pursuant to the Exchange Offer
will include its holding period for the Old Certificates exchanged therefor.
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 available on or before such date. All of the foregoing
are subject to change, which change could apply retroactively. Certificate
holders should note that no rulings have been sought from the U.S. Internal
Revenue Service (the "IRS") with respect to the tax consequences described
above, and no assurance can be given that the IRS will not take contrary
positions.
The foregoing summary of U.S. federal tax consequences is for general
information only and is not tax advice. CERTIFICATEHOLDERS ARE ADVISED TO
CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES TO THEM OF EXCHANGING THE OLD CERTIFICATES FOR THE NEW
CERTIFICATES AND THE OWNERSHIP AND DISPOSITION OF THE NEW CERTIFICATES RECEIVED
IN THE EXCHANGE OFFER IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA")
imposes certain requirements on employee benefit plans subject to Title I of
ERISA ("ERISA Plans"), and on those persons who are fiduciaries with respect to
ERISA Plans. Investments by ERISA Plans are subject to ERISA's general fiduciary
requirements, including, but not limited to, the requirement of investment
prudence and diversification and the requirement that an ERISA Plan's
investments be made in accordance with the documents governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit certain
transactions involving the assets of an ERISA Plan (as well as those plans that
are not subject to ERISA but which are subject to Section 4975 of the Code, such
as individual retirement accounts (together with ERISA Plans, "Plans")) and
certain persons (referred to as "parties in interest" or "disqualified persons")
having certain relationships to such Plans, unless a statutory or administrative
exemption is applicable to the transaction. A party in interest or disqualified
person who engages in a prohibited transaction may be subject to excise taxes
and other penalties and liabilities under ERISA and the Code.
The Department of Labor has promulgated a regulation, 29 CFR Section
2510.3-101 (the "Plan Asset Regulation"), describing what constitutes the assets
of a Plan with respect to the Plan's investment in an entity for purposes of
ERISA and Section 4975 of the Code. Under the Plan Asset Regulation, if a Plan
invests (directly or indirectly) in a New Certificate, the Plan's assets will
include both the New Certificate and an undivided interest in each of the
underlying assets of the corresponding Trust, including the Equipment Notes held
by such Trust, unless it is established that equity participation in the Trust
by employee benefit plans (including Plans and entities whose underlying assets
include Plan assets by reason of an employee benefit plan's investment in the
entity) is not "significant" within the meaning of the Plan Asset Regulation. In
this regard, the extent to which there is equity participation in a particular
Trust by, or on behalf of, employee benefit plans will not be monitored. If the
assets of a Trust are deemed to constitute the assets of a Plan, transactions
involving the assets of such Trust could be subject to the prohibited
transaction provisions of ERISA and Section 4975 of the Code unless a statutory
or administrative exemption is applicable to the transaction.
The fiduciary of a Plan that proposes to acquire and hold any New
Certificates should consider, among other things, whether such acquisition and
holding may involve (i) the direct or indirect extension of credit to a party in
interest or a disqualified person, (ii) the sale or exchange of any property
between a Plan and a party in interest or a disqualified person, and (iii) the
transfer to, or use by or for the benefit
79
<PAGE> 85
of, a party in interest or a disqualified person, of any Plan assets. Such
parties in interest or disqualified persons could include, without limitation,
Atlas and its affiliates, the Owner Participants, the Underwriters, the
Trustees, the Escrow Agent, the Depositary, the Owner Trustees and the Liquidity
Provider. In addition, whether or not the assets of a Trust are deemed to be
Plan assets under the Plan Asset Regulation, if New Certificates are acquired by
a Plan and Certificates of another Class are held by a party in interest or a
disqualified person with respect to such Plan, the exercise by the holder of
such other Class of Certificates of its right to purchase another Class of
Certificates upon the occurrence and during the continuation of a Triggering
Event could be considered to constitute a prohibited transaction unless a
statutory or administrative exemption were applicable. Depending on the identity
of the Plan fiduciary making the decision to acquire or hold New Certificates on
behalf of a Plan, Prohibited Transaction Class Exemption ("PTCE") 91-38
(relating to investments by bank collective investment funds), PTCE 84-14
(relating to transactions effected by a "qualified professional asset manager"),
PTCE 95-60 (relating to investments by an insurance company general account),
PTCE 96-23 (relating to transactions directed by an in-house professional asset
manager) or PTCE 90-1 (relating to investments by insurance company pooled
separate accounts) (collectively, the "Class Exemptions") could provide an
exemption from the prohibited transaction provisions of ERISA and Section 4975
of the Code. However, there can be no assurance that any of these Class
Exemptions or any other exemption will be available with respect to any
particular transaction involving the New Certificates.
Governmental plans and certain church plans, while not subject to the
fiduciary responsibility provisions of ERISA or the provisions of Section 4975
of the Code, may nevertheless be subject to state or other federal laws that are
substantially similar to the foregoing provisions of ERISA and the Code.
Fiduciaries of any such plans should consult with their counsel before acquiring
any New Certificates.
Any Plan fiduciary which proposes to cause a Plan to acquire any New
Certificates should consult with its counsel regarding the applicability of the
fiduciary responsibility and prohibited transaction provisions of ERISA and
Section 4975 of the Code to such an investment, and to confirm that such
acquisition and holding will not constitute or result in a non-exempt prohibited
transaction or any other violation of an applicable requirement of ERISA.
In addition to the Class Exemptions referred to above, an individual
exemption may apply to the purchase, holding and secondary market sale of Class
A Certificates by Plans, provided that certain specified conditions are met. In
particular, the Department of Labor has issued individual administrative
exemptions to certain of the Initial Purchasers which are substantially the same
as the administrative exemption issued to Morgan Stanley & Co. Incorporated,
Prohibited Transaction Exemption 90-24 (55 Fed. Reg. 20,548 (1990)), as amended
(the "Underwriter Exemption"). The Underwriter Exemption generally exempts from
the application of certain, but not all, of the prohibited transaction
provisions of Section 406 of ERISA and Section 4975 of the Code certain
transactions relating to the initial purchase, holding and subsequent secondary
market sale of pass through certificates which represent an interest in a trust
that holds secured credit instruments that bear interest or are purchased at a
discount in transactions by or between business entities (including equipment
notes secured by leases) and certain other assets, provided that certain
conditions set forth in the Underwriter Exemption are satisfied.
The Underwriter Exemption sets a number of general and specific conditions
which must be satisfied for a transaction involving the initial purchase,
holding or secondary market sale of Class A Certificates to be eligible for
exemptive relief thereunder. In particular, the acquisition of Class A
Certificates by a Plan must be on terms that are at least as favorable to the
Plan as they would be in an arm's-length transaction with an unrelated party;
the rights and interests evidenced by the Certificates must not be subordinated
to the rights and interests evidenced by other Certificates of the same trust
estate; the Certificates at the time of acquisition by the Plan must be rated in
one of the three highest generic rating categories by Moody's, Standard & Poor's
or Duff & Phelps; and the investing Plan must be (and by its acquisition or
acceptance of a Certificate or an interest therein, would be deemed to have
represented that it is) an accredited investor as defined in Rule 501(a)(1) of
Regulation D of the Commission under the Securities Act.
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In addition, the trust corpus generally must be invested in qualifying
receivables, such as the Equipment Notes, but may not in general include a
pre-funding account (except for a limited amount of pre-funding which is
invested in qualifying receivables within a limited period of time following the
closing not to exceed three months).
With respect to the investment restrictions set forth in the Underwriter
Exemption, an investment in a Certificate will evidence both an interest in the
respective Trust as well as an interest in the Deposits held in escrow by an
Escrow Agent for the benefit of the Certificateholder. Under the terms of the
Escrow Agreement, the proceeds from the offering of the Old Certificates of each
Class were paid over by the Initial Purchasers to the Depositary on behalf of
the Escrow Agent (for the benefit of such Certificateholders as the holders of
the Escrow Receipts) and do not constitute property of the Trusts. Under the
terms of each Escrow Agreement, the Escrow Agent is irrevocably instructed to
enter into the Deposit Agreements with the Depositary and to effect withdrawals
upon the receipt of appropriate notice from the relevant Trustee so as to enable
such Trustee to purchase the identified Equipment Notes on the terms and
conditions set forth in the Note Purchase Agreement. Interest on the Deposits
relating to each Trust will be paid to the Certificateholders of such Trust as
Receiptholders through a Paying Agent appointed by the Escrow Agent. Pending
satisfaction of such conditions and withdrawal of such Deposits, the Escrow
Agent's rights with respect to the Deposits will remain plan assets subject to
the fiduciary responsibility and prohibited transaction provisions of ERISA and
Section 4975 of the Code.
There can be no assurance that the Department of Labor would agree that the
Underwriter Exemption will be applicable to Class A Certificates in these
circumstances. In particular, the Department of Labor might assert that the
escrow arrangement is tantamount to an impermissible pre-funding rendering the
Underwriter Exemption inapplicable. In addition, even if all of the conditions
of the Underwriter Exemption are satisfied with respect to the Class A
Certificates, no assurance can be given that the Underwriter Exemption would
apply with respect to all transactions involving the Class A Certificates or the
assets of the Class A Trust. In particular, it appears that the Underwriter
Exemption would not apply to the purchase by Certificateholders of another Class
of Certificates in connection with the exercise of their rights upon the
occurrence and during the continuance of a Triggering Event. Therefore, the
fiduciary of a Plan considering the purchase of a Class A Certificate should
consider the availability of the exemptive relief provided by the Underwriter
Exemption, as well as the availability of any other exemptions that may be
applicable.
The Underwriter Exemption does not apply to the Class B or Class C
Certificates.
Each person who acquires or accepts a New Certificate or an interest
therein will be deemed by such acquisition or acceptance to have represented and
warranted that either: (i) no Plan assets have been used to purchase such New
Certificate or an interest therein or (ii) the purchase and holding of such New
Certificate or interest therein are exempt from the prohibited transaction
restrictions of ERISA and the Code pursuant to one or more prohibited
transaction statutory or administrative exemptions.
Each Plan fiduciary (and each fiduciary for a governmental or church plan
subject to rules similar to those imposed on Plans under ERISA) should consult
with its legal advisor concerning an investment in any of the New Certificates.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Certificates for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Certificates. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of New Certificates received in
exchange for Old Certificates where such Old Certificates were acquired as a
result of market-making activities or other trading activities. Atlas has agreed
that for a period of one hundred eighty (180) days after the Expiration Date, it
will make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale.
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Atlas will not receive any proceeds from any sale of New Certificates by
broker-dealers. New Certificates received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time on one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Certificates or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Certificates. Any
broker-dealer that resells New Certificates that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Certificates may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of New Certificates and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of one hundred eighty (180) days after the Expiration Date,
Atlas will promptly send additional copies of this prospectus and any amendment
or supplement to this prospectus to any broker-dealer that requests such
documents in the Letter of Transmittal. Atlas has agreed to pay all expenses
incident to the Exchange Offer other than commissions or concessions of any
brokers or dealers and will indemnify the holders of the Certificates (including
any broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the New Certificates is being passed upon for Atlas by
Cahill Gordon & Reindel, New York, New York. Cahill Gordon & Reindel will rely
on the opinion of Morris, James, Hitchens & Williams LLP, counsel for Wilmington
Trust Company, as Trustee, as to matters of Delaware law relating to the
authorization, execution and delivery of the New Certificates under the Pass
Through Trust Agreements.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference in reliance upon the authority of said firm as experts in giving said
report.
The references to AvS, MBA and SH&E and to their respective appraisal
reports, each dated as of December 21, 1999, January 4, 2000 and January 4,
2000, respectively, are included herein in reliance upon the authority of each
such firm as an expert with respect to the matters contained in its appraisal
report.
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APPENDIX A -- INDEX OF TERMS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
ACMI Contracts.............................................. 30
"actually voted"............................................ 42
Adjusted Expected Distributions............................. 58
Administration Expenses..................................... 58
Aggregate LTV Collateral Amount............................. 59
Aircraft.................................................... 8
Aircraft Operative Agreements............................... 45
ALPA........................................................ 15
Appraised Current Market Value.............................. 59
Appraisers.................................................. 60
Assumed Aircraft Value...................................... 65
Assumed Amortization Schedule............................... 35
Assumed Appraised Value..................................... 44
Atlas....................................................... 1
Average Life Date........................................... 64
Aviation Act................................................ 16
AvS......................................................... 60
Base Rate................................................... 53
Basic Agreement............................................. 31
Boeing...................................................... 30
Boeing Purchase Agreement................................... 30
Book-Entry Confirmation..................................... 26
Book-Entry Transfer Facility................................ 26
Branch...................................................... 48
Business Day................................................ 34
Cash Collateral Account..................................... 51
Certificate Account......................................... 34
Certificateholder........................................... 32
Certificates................................................ 1
Class....................................................... 31
Class A Certificates........................................ 1
Class A Trust............................................... 31
Class A Trustee............................................. 20
Class B Certificates........................................ 1
Class B Trust............................................... 31
Class B Trustee............................................. 20
Class C Certificates........................................ 1
Class C Trust............................................... 31
Class C Trustee............................................. 20
Class D Certificates........................................ 46
Class D Trust............................................... 46
Class D Trustee............................................. 57
Class Exemptions............................................ 80
Code........................................................ 41
Company..................................................... 1
Controlling Party........................................... 51
Convention.................................................. 72
Current Distribution Date................................... 57
Current Pool Balance........................................ 59
</TABLE>
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<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
default..................................................... 38
Definitive Certificates..................................... 47
Delivery Period............................................. 61
Delivery Period Termination Date............................ 61
Deposit..................................................... 48
Deposit Agreements.......................................... 48
Depositary.................................................. 48
Depreciation Assumption..................................... 65
disqualified persons........................................ 79
Distribution Date........................................... 32
District Court.............................................. 15
Downgrade Drawing........................................... 51
DOT......................................................... 16
DTC......................................................... 3
DTC Participants............................................ 47
Duff & Phelps............................................... 13
Eligible Institution........................................ 26
Equipment................................................... 69
Equipment Notes............................................. 61
ERISA....................................................... 79
ERISA Plans................................................. 79
Escrow Agent................................................ 49
Escrow Agreements........................................... 49
Escrow Receipts............................................. 49
Event of Loss............................................... 76
Exchange Act................................................ ii
Exchange Agent.............................................. 2
Exchange Offer.............................................. 23
Expected Distributions...................................... 57
Expiration Date............................................. 2
FAA......................................................... 16
Final Distributions......................................... 56
Final Drawing............................................... 52
Final Maturity Date......................................... 33
Global Certificates......................................... 3
holder...................................................... 26
Indenture Event of Default.................................. 37
Indentures.................................................. 43
indirect participants....................................... 46
Initial Purchasers.......................................... 1
Intercreditor Agreement..................................... 55
Interest Drawings........................................... 49
IRS......................................................... 79
Issuance Date............................................... 23
Lease....................................................... 71
Lease Event of Default...................................... 37
Lease Payment Date.......................................... 71
Leased Aircraft............................................. 43
Leased Aircraft Indenture................................... 43
Leased Aircraft Trustee..................................... 62
Letter of Transmittal....................................... 2
</TABLE>
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<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
LIBOR....................................................... 53
Liquidity Event of Default.................................. 54
Liquidity Expenses.......................................... 57
Liquidity Facility.......................................... 49
Liquidity Obligations....................................... 57
Liquidity Provider.......................................... 49
Loan Trustees............................................... 62
LTV Appraisal............................................... 59
LTV Collateral Amount....................................... 59
LTV Ratio................................................... 59
LTVs........................................................ 6
Make-Whole Premium.......................................... 64
Mandatory Document Terms.................................... 45
Mandatory Economic Terms.................................... 43
Maximum Available Commitment................................ 50
MBA......................................................... 60
Minimum Sale Price.......................................... 56
Moody's..................................................... 11
MSDW........................................................ 8
MSCS........................................................ 8
New Certificates............................................ 1
New Escrow Receipt.......................................... 49
NMB......................................................... 15
Non-Extension Drawing....................................... 52
Non-Performing Equipment Notes.............................. 58
Note Holders................................................ 44/45
Note Purchase Agreement..................................... 43
NYSE........................................................ 28
Old Certificates............................................ 1
Old Escrow Receipt.......................................... 49
Owned Aircraft.............................................. 43
Owned Aircraft Indenture.................................... 43
Owned Aircraft Trustee...................................... 62
Owner Participant........................................... 61
Owner Trustee............................................... 62
Participation Agreement..................................... 43
parties in interest......................................... 79
Pass Through Trust Agreements............................... 31
Paying Agent................................................ 49
Paying Agent Account........................................ 34
Performing Equipment Note................................... 50
Placement Agreement......................................... 23
Plan Asset Regulation....................................... 79
Plans....................................................... 79
Pool Balance................................................ 35
Pool Factor................................................. 35
Profit Sharing Plan......................................... 15
PTC Event of Default........................................ 39
PTCE........................................................ 80
Rating Agencies............................................. 11
Receiptholder............................................... 49
</TABLE>
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<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Record Dates................................................ 8
Registration Event.......................................... 24
Registration Rights Agreement............................... 23
Registration Statement...................................... ii
Regular Distribution Dates.................................. 33
Remaining Weighted Average Life............................. 64
Renewal Term................................................ 77
Replacement Facility........................................ 51
Required Amount............................................. 49
Scheduled Payments.......................................... 33
SEC......................................................... Cover
Section 1110................................................ 69
Section 1110 Period......................................... 51
Securities Act.............................................. ii
Series A Equipment Notes.................................... 61
Series B Equipment Notes.................................... 61
Series C Equipment Notes.................................... 61
Series D Equipment Notes.................................... 62
SH&E........................................................ 60
Shelf Registration Statement................................ 24
Special Distribution Date................................... 34
Special Payment............................................. 33
Special Payments Account.................................... 34
Standard & Poor's........................................... 11
Stated Interest Rate........................................ 49
Subordination Agent......................................... 55
Termination Notice.......................................... 54
Threshold Rating............................................ 51
Transportation Code......................................... 40
Treasury Yield.............................................. 64
Triggering Event............................................ 32
Trust Agreements............................................ 61
Trust Indenture Act......................................... 41
Trust Property.............................................. 31
Trustee..................................................... 31
Trusts...................................................... 31
Trust Supplement............................................ 31
Underwriter Exemption....................................... 80
WestLB...................................................... 8
</TABLE>
86
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APPENDIX B -- APPRAISAL LETTERS
87
<PAGE> 93
December 21, 1999
Mr. Fred deLeeuw
Director, Corporate Finance
Atlas Air, Inc.
538 Commons Drive
Golden, Colorado 80401
Dear Mr. deLeeuw:
AvSOLUTIONS is pleased to provide this opinion on the base value, as of
December 1999, of two Boeing 747-400F aircraft (the aircraft). The Boeing
747-400F aircraft are powered by General Electric CF6-80C2B5F engines. The two
aircraft will be delivered new to Atlas Air, Inc. during the third quarter of
2000. A listing of the aircraft is provided as attachment 1 of this document.
Set forth below is a summary of the methodology, considerations and
assumptions utilized in this appraisal.
BASE VALUE
Base value is the appraiser's opinion of the underlying economic value of
an aircraft in an open, unrestricted, stable market environment with a
reasonable balance of supply and demand, and assumes full consideration of its
"highest and best use". An aircraft's base value is founded in the historical
trend of values and in the projection of future value trends and presumes an
arm's length, cash transaction between willing, able and knowledgeable parties,
acting prudently, with an absence of duress and with a reasonable period of time
available for marketing.
CURRENT FAIR MARKET VALUE
According to the International Society of Transport Aircraft Trading's
(ISTAT) definition of Fair Market Value (FMV), to which AvSOLUTIONS subscribes,
the quoted FMV is the appraiser's opinion of the most likely trading price that
may be generated for an aircraft under the market circumstances that are
perceived to exist at the time in question. The fair market value assumes that
the aircraft is valued for its highest and best use, that the parties to the
hypothetical sales transaction are willing, able, prudent and knowledgeable, and
under no unusual pressure for a prompt sale, and that the transaction would be
negotiated in an open and unrestricted market on an arm's length basis, for cash
equivalent consideration, and given an adequate amount of time for effective
market exposure to prospective buyers, which AvSOLUTIONS considers to be ten to
eighteen months.
10687 Gaskins Way, Suite 200, Manassas, Virginia 20109-2371, USA
Telephone: 703-330-0461 Fax: 703-330-0581
Email: [email protected]
<PAGE> 94
APPRAISAL METHODOLOGY
The method employed by AvSOLUTIONS to appraise the current and future
values of aircraft and the associated equipment addresses the factors that
influence the market value of an aircraft, such as its age, condition,
configuration, the population of similar aircraft, similar aircraft on the
market, operating costs, cost to acquire a new aircraft, and the state of demand
for transportation services.
To achieve this objective, cross-sectional data concerning the values of
aircraft in each of several general categories is collected and analyzed.
Cross-sectional data is then postulated and compared with reported market values
at a specified point in time. Such data reflects the effect of deterioration in
aircraft performance due to usage and exposure to the elements, as well as the
effect of obsolescence due to the evolutionary development and implementation of
new designs and materials.
The product of the analysis identifies the relationship between the value
of each aircraft and its characteristics, such as age, model designation,
service configuration and engine type. Once the relationship is identified, one
can then postulate the effects of the difference between the economic
circumstances at the time when the cross-sectional data were collected and the
current situation. Therefore, if one can determine the current value of an
aircraft in one category, it is possible to estimate the current values of all
aircraft in that category.
The manufacturer and size of the aircraft usually determine the specific
category to which it is assigned. Segregating the world airplane fleet in this
manner accommodates the potential effects of different size and different design
philosophies.
The variability of the data used by AvSOLUTIONS to determine the current
and future market values implies that the actual value realized will fall within
a range of values. Therefore, if a contemplated value falls within the specified
confidence range, AvSOLUTIONS cannot reject the hypothesis that it is a
reasonable representation of the current market situation.
LIMITING CONDITIONS AND ASSUMPTIONS
In order to conduct this valuation, AvSOLUTIONS is solely relying on
information as supplied by Atlas Air, Inc., and from data within AvSOLUTIONS'
own database. In determining the base value of the subject Boeing 747-400F
aircraft, the following assumptions have been researched and determined.
1. AvSOLUTIONS has not inspected these aircraft or their maintenance
records; accordingly, AvSOLUTIONS cannot attest to their specific location
or condition.
2. The aircraft will be delivered new to Atlas Air, Inc. during the
third quarter of 2000.
3. The aircraft will be certified, maintained and operated under
United States Federal Aviation Regulation (FAR) part 121.
4. All mandatory inspections and Airworthiness Directives have been
complied with.
5. The aircraft have no damage history.
6. The aircraft are in good condition.
7. AvSOLUTIONS considers the economic useful life of these aircraft to
be at least 37 years.
Based upon the above methodology, considerations and assumptions, it is
AvSOLUTIONS' opinion that the base values of each aircraft are as listed in
attachment 1.
2
<PAGE> 95
STATEMENT OF INDEPENDENCE
This appraisal report represents the opinion of AvSOLUTIONS, and is
intended to be advisory in nature. Therefore, AvSOLUTIONS assumes no
responsibility or legal liability for actions taken or not taken by the Client
or any other party with regard to the subject aircraft. By accepting this
report, the Client agrees that AvSOLUTIONS shall bear no responsibility or legal
liability regarding this report. Further, this report is prepared for the
exclusive use of the Client and shall not be provided to other parties without
the Client's express consent.
AvSOLUTIONS hereby states that this valuation report has been independently
prepared and fairly represents the subject aircraft and AvSOLUTIONS' opinion of
their values. AvSOLUTIONS further states that it has no present or contemplated
future interest or association with the subject aircraft.
Signed,
/s/ BRYANT LYNCH
Bryant Lynch
Manager, Commercial Appraisals
3
<PAGE> 96
ATLAS AIR, INC.
BOEING 747-400F AIRCRAFT BASE VALUES
As of December, 1999
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Engine Type CF6-80C2B5F CF6-80C2B5F
-----------------------------------------------------------------------------------------------
<S> <C> <C>
Aircraft Registration N409MC N412MC
-----------------------------------------------------------------------------------------------
Serial Number 30558 30559
-----------------------------------------------------------------------------------------------
Delivery Date July 2000 August 2000
-----------------------------------------------------------------------------------------------
MTOGW (Estimated) 875,000 lbs 875,000 lbs
-----------------------------------------------------------------------------------------------
BASE VALUE $164,600,000 $164,600,000
-----------------------------------------------------------------------------------------------
</TABLE>
ATTACHMENT 1
<PAGE> 97
MORTEN BEYER & AGNEW
AVIATION CONSULTING FIRM
APPRAISAL OF TWO
BOEING B747-400F AIRCRAFT
SERIAL NUMBERS 30558 & 30559
PREPARED FOR:
ATLAS AIR, INC.
JANUARY 4, 2000
<TABLE>
<S> <C>
Washington, D.C. London
8180 Greensboro Drive Lahinch 62, Lashmere
Suite 1000 Copthorne
McLean, Virginia 22102 West Sussex
Phone +703 847 6598 Phone +44 1342 716248
Fax +703 847 1911 Fax +44 1342 718967
</TABLE>
<PAGE> 98
I. INTRODUCTION AND EXECUTIVE SUMMARY
MORTEN BEYER & AGNEW (MBA) has been retained by Atlas Air, Inc. to
determine the Current Base Value (CBV) of (2) Boeing 747-400 Freighter aircraft,
delivered new. The aircraft are further identified in Section II of this report.
In performing this valuation we did not inspect the aircraft or their
historical maintenance documentation, and we relied solely on information
provided to us by Atlas Air. Based on the information set forth further in this
report, it is our opinion that the CBV of the total value of aircraft in this
portfolio is $322,870,000 with their respective individual values noted in
Section IV.
MBA uses the definition of certain terms, such as CMV and Base Value (BV),
as promulgated by the International Society of Transport Aircraft Trading
(ISTAT), a non-profit association of management personnel from banks, leasing
companies, airlines, manufacturers, appraisers, brokers, and others who have a
vested interest in the commercial aviation industry.
ISTAT defines CMV as the appraiser's opinion of the most likely trading
price that may be generated for an aircraft under market conditions that are
perceived to exist at the time in question. Market Value (MV) assumes that the
aircraft is valued for its highest, best use; that the parties to the
hypothetical sale transaction are willing, able, prudent and knowledgeable and
under no unusual pressure for a prompt sale; and that the transaction would be
negotiated in an open and unrestricted market on an arm's-length basis, for cash
or equivalent consideration, and given an adequate amount of time for effective
exposure to prospective buyers.
The ISTAT definition of Base Value (BV) has, essentially, the same elements
of MV except that the market circumstances are assumed to be in a reasonable
state of equilibrium. Thus, BV pertains to an idealized aircraft and market
combination, but will not necessarily reflect the actual CMV of the aircraft in
question. BV is founded in the historical trend of values and is generally used
to analyze historical values or to project future values.
1
<PAGE> 99
II. AIRCRAFT
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Boeing 747-400 Freighter
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
Serial Number 30558 30559
--------------------------------------------------------------------------------------------------------
Registration N409MC N412MC
--------------------------------------------------------------------------------------------------------
Delivery Date 7/2000 8/2000
--------------------------------------------------------------------------------------------------------
Engine Type CF6-80C2B5F CF6-80C2B5F
--------------------------------------------------------------------------------------------------------
MTOW (lbs.) 875,000 875,000
--------------------------------------------------------------------------------------------------------
</TABLE>
V. COVENANTS
This report has been prepared for the exclusive use of Atlas Air and shall
not be provided to other parties by MBA without the express consent of Atlas
Air.
MBA certifies that this report has been independently prepared and that it
fully and accurately reflects MBA's opinion as to the Current Base Value. MBA
further certifies that it does not have, and does not expect to have, any
financial or other interest in the subject or similar aircraft.
This report represents the opinion of MBA as to the Current Base Value of
the subject aircraft and is intended to be advisory only in nature. Therefore,
MBA assumes no responsibility or legal liability for any actions taken or not
taken by Atlas Air or any other party with regard to the subject aircraft. By
accepting this report, all parties agree that MBA shall bear no such
responsibility or legal liability.
PREPARED BY:
/s/ BRYSON P. MONTELEONE
Bryson P. Monteleone
Director -- Operations
REVIEWED BY:
/s/ MORTEN S. BEYER
Morten S. Beyer
Chairman and CEO
ISTAT Certified Appraiser Fellow
January 4, 2000
Ref# 99408
2
<PAGE> 100
January 4, 2000
Fred L. deLeeuw
Director -- Corporate Finance
Atlas Air, Inc.
538 Commons Drive
Golden, CO 80401
Re: Value Opinion of Two Boeing 747-400 Freighters
Dear Mr. deLeeuw:
Simat, Helliesen & Eichner, Inc ("SH&E") was asked by Atlas Air (the
"Client") to determine the Base Value ("BV") of two Boeing 747-400 Freighter
aircraft operated by Atlas Air (the "Subject Aircraft"). The specifications for
the Subject Aircraft are referenced herein.
SH&E has determined the aggregate Base Value of the Subject Aircraft to be
US$306.7 million.
SUBJECT AIRCRAFT BASE VALUES ($MIL)
<TABLE>
<CAPTION>
AIRCRAFT TYPE ENGINE TYPE SERIAL # DELIVERY DATE BASE VALUE
------------- ----------- -------- ------------- ----------
<S> <C> <C> <C> <C> <C>
1 747-400F CF6-80C2B5F 30558 July 2000 $153.2
2 747-400F CF6-80C2B5F 30559 August 2000 $153.5
Total $306.7
</TABLE>
AIRCRAFT DESCRIPTION
The Boeing 747 was launched in 1966 and first entered passenger service
with Pan Am in January 1970. At an overall length of 231 ft. and 380-passenger
capacity, the 747-100 was the largest commercial aircraft available and
revolutionized the commercial air travel industry.
In 1971 Boeing launched the 747-200, realizing that the 747-100 lacked
sufficient range to serve the Pacific on a nonstop basis without incurring a
significant payload penalty. While similar in appearance to the 747-100, the
747-200 incorporated increased fuel capacity and more powerful engines with
increased fuel efficiency. The Maximum Gross Takeoff Weight ("MTOW") was
initially increased from 730,000 pounds to 775,000 pounds and later to 833,000
pounds. The range was increased to 7,000 nautical miles and, apart from the 747,
the only other aircraft that approach this range capability are 777s, MD-11s and
A340s.
In 1980, Boeing offered the Stretched Upper Deck ("SUD") modification for
the new 747-100 and the existing 747-200 aircraft, bridging the standard 747-200
with the 747-300. The SUD modification involved extending the upper deck area by
23 ft and removing the circular stairway, thereby increasing passenger capacity
by approximately 44 seats. The 747-200 SUD and the 747-300 are nearly identical,
with the exception of minor doorway and window modifications.
Boeing began development of the 747-400 in May of 1985 and Northwest
Airlines took delivery of its first 747-400 aircraft on January 26, 1989.
Compared to previous derivatives, the 747-400 represents a major improvement
over its predecessors through its enhanced technology, economic efficiencies and
performance.
Externally, the 747-400 looks similar to its -300 predecessor, sharing the
-300's Stretched Upper Deck. The most noticeable modifications are the 6-ft
winglets that enhance aerodynamic performance and fuel efficiency. Boeing also
upgraded the cockpit with digital avionics and eliminated the flight engineer
position in the cockpit. The 747-400 cabin is identical in size to the 747-300
with a 416-passenger capacity in a standard configuration. With an increased
fuel capacity of 383,800 pounds and a MTOW of 875,000
<PAGE> 101
pounds, the 747-400 has long distance range capability of approximately 7,400
nautical miles, which is most closely matched by the Airbus A340.
The 747-400F is the freighter version of the 747-400. The aircraft the same
with a shorter upper deck than the passenger version. It has the same MTOW as
the passenger variant, but with a shorter range of 4,400 nm. The maximum landing
weight and maximum zero-fuel weight are both greater for the 747-400F with a
maximum payload of 249,125 lb. A modification of the 747-400F to a passenger
version is being studied by Boeing and is labeled 747-200X. The aircraft can
hold 30 96" by 125" pallets in its upper deck and 32 LD-1 containers in its
lower deck. Currently there is no aircraft that completes with the 747-400F
given its payload/range capabilities.
Foreseeing a requirement for increased range and capacity, Boeing was
developing a new 747 series, numbered -500X and -600X, that would have carried
550 passengers increased the maximum range to approximately 8,700 nm. However,
Boeing suspended development of this series in 1997 citing limited customer
demand. Airbus, on the other hand, has publicly stated that it will continue
development of the A3XX, an aircraft type with similar passenger and range
capabilities and recently began soliciting firm orders from potential launch
customers.
As of October 1999, 35 747-400Fs were operated by six airlines worldwide
and a further 74 are on order.
SUBJECT AIRCRAFT SPECIFICATIONS
<TABLE>
<S> <C>
--------------------------------------------------------------------------------
Engines 4 CF6-80C2B5F
--------------------------------------------------------------------------------
Maximum Takeoff Weight 875,000 lbs
--------------------------------------------------------------------------------
Maximum Payload 284,870 lbs
--------------------------------------------------------------------------------
Maximum Range 4,400 nm (5,120 m)
--------------------------------------------------------------------------------
Total Cargo/Volume 27,467 cubic feet
--------------------------------------------------------------------------------
Main-deck 96- by 125 in Pallets 30 Pallets- 21,347 cubic feet
--------------------------------------------------------------------------------
Lower-hold LD-1 containers 32 containers- 5600 cubic feet
--------------------------------------------------------------------------------
Bulk Cargo Volume 520 cubic feet
--------------------------------------------------------------------------------
</TABLE>
SH&E VALUATION METHODOLOGY
SH&E's appraisal's are performed according to the International Society of
Transport Aircraft Trading ("ISTAT") principles of appraisal practice and code
of ethics.
The SH&E valuation approach starts by determining a half-life value. The
term 'half-life' represents an aircraft whose major components, the airframe,
engines, landing gear and APU have used 50 percent of the time between scheduled
or expected overhauls. If appropriate, this initial appraisal can then be
adjusted, positively or negatively for each individual unit to reflect the
aircraft's maintenance status relative to the next overhaul. In most cases, the
Base Value of an aircraft assumes its physical condition is average for an
aircraft of its type and age, and its maintenance times status is at half-life,
or benefiting from an above-average maintenance status if it is new or nearly
new, as the case may be. SH&E half-life values are determined on an annual basis
by reviewing recent past sales, aircraft availability trends, technological
aspects, environmental constraints and maintenance requirements.
In the case of new aircraft, the above half-life values are automatically
adjusted upwards to reflect the fact that the aircraft has the full span of
maintenance overhaul intervals available. Consequently, SH&E's initial
depreciation of new aircraft is considerably greater than for a used aircraft,
thereby accounting for both the change in its maintenance status and its
intrinsic depreciation.
2
<PAGE> 102
BASE VALUE DEFINITION
The Base Value ("BV") is the appraiser's opinion of the underlying economic
value of an asset in an open, unrestricted and stable market environment with a
reasonable balance of supply and demand, and also assumes full considerations of
its "highest and best use". An asset's BV is founded in the historical trend of
values and in the projection of value trends and presumes an arm's-length, cash
transaction between willing, able and knowledgeable parties, acting prudently,
with an absence of duress and with a reasonable period of time available for
marketing.
Since BV pertains to a somewhat idealized asset and market combination it
may not necessarily reflect the actual value of the asset in question, but is a
nominal starting value to which adjustments may be applied to determine an
actual value. Since BV is related to long-term market trends, the BV definition
is normally applied to analyses of historical values and projections of residual
values and lease rates.
ASSUMPTIONS
SH&E used information supplied by the Client together with in-house data
accumulated through other recent studies of aircraft transactions. SH&E assumed
that the Subject Aircraft will meet all of the specifications and performance
standards for standard 747-400F series aircraft.
SH&E's opinions are based upon historical relationships and expectations
that it believes are reasonable. Some of the underlying assumptions, including
those described above are detailed explicitly or implicitly elsewhere in this
report, and may not materialize because of unanticipated events and
circumstances. SH&E's opinions could, and would, vary materially, should any of
the above assumptions prove to be inaccurate.
QUALIFICATIONS
Founded in 1963 and with offices in New York, Boston, Washington, London
and Amsterdam, SH&E is the world's largest consulting firm specializing in
commercial aviation. Its staff of over 90 personnel encompasses expertise in all
disciplines of the industry and the firm has provided appraisal, consulting,
strategic planning and technical services to airlines, leasing companies,
government agencies, airframe and engine manufacturers, and financial
institutions.
A related service that SH&E offers its clients is Asset Management. Over
the last few years, SH&E has been the principal Asset Manager responsible for
the recovery and subsequent re-marketing of a number of individual aircraft and
some significant portfolios. In addition, we have been the advisors and
re-marketing agents to Bank of New York, NationsCredit, NationsBank, Greyrock
Capital, Potomac, Concorde, Integrated Resources and the First Fidelity Trust.
In the course of those and other similar assignments we have sold, leased or
parted-out over 150 aircraft, a like number of engines and approximately $30
million worth of spare parts.
In addition to the above aircraft valuations, SH&E annually values in
excess of $1 billion worth of aircraft spare parts and spare engines. We have
developed a statistically based methodology for the appraisal of spare parts
that provides accurate valuations with known confidence levels. SH&E has also
valued a number of portfolios of ground equipment, the valuations of which have
been assisted by our recent acquisition, on behalf of a client, of sufficient
ground equipment for the start-up of an eight aircraft airline.
This active participation in the market place provides SH&E with practical
and first hand knowledge of aircraft values and lease rates. SH&E annually
appraises aviation equipment worth over $10 billion. The major U.S. bond rating
agencies have used SH&E's Residual Value model to validate their own
depreciation schedules.
3
<PAGE> 103
LIMITATIONS
The opinions expressed herein are not given as an inducement or endorsement
for any financial transaction. Although they are prepared for the exclusive use
of the addressee, the addressee may provide this report to third parties without
SH&E's written consent.
SH&E accepts no responsibility for damages, if any, that may result from
decisions made or actions taken by third parties that may be based upon this
report. In accepting this report the Client agrees to indemnify and hold SH&E
harmless against all losses, claims and costs arising as a result of this report
except when attributable to SH&E's negligence or willful misconduct.
This report reflects SH&E's expert opinion and best judgment based upon the
information available to it at the time of its preparation. SH&E does not have,
and does not expect to have, any financial interest in the appraised property.
Yours sincerely,
/s/ CLIVE G. MEDLAND
Clive G. Medland, FRAeS
Vice President
Senior Appraiser
International Society of Transport
Aircraft Trading
4
<PAGE> 104
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law and the Restated Certificate of
Incorporation of Atlas Air, Inc. (the "Charter") provide for indemnification of
directors and officers for liabilities and expenses incurred in defending
actions brought against them in such capacities. The Company's Charter provides
that the Company shall indemnify directors of the Company to the maximum extent
now or hereafter permitted by law, and officers, employees and agents of the
Company to the extent required by law and may, as authorized hereafter by the
Board of Directors, provide further indemnification to officers, employees and
agents of the Company to the maximum extent now or hereafter permitted by law.
The Company maintains directors' and officers' liability insurance covering all
directors and officers of the Company against claims arising out of the
performance of their duties.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+3.2 -- Restated Certificate of Incorporation of the Company.
++++3.3 -- Amended and Restated By-Laws of the Company.
++++++++4.1 -- Form of 8.707% Atlas Air Pass Through Certificates Series
2000-1A (included in Exhibit 4.5).
++++++++4.2 -- Form of 9.057% Atlas Air Pass Through Certificates Series
2000-1B (included in Exhibit 4.6).
++++++++4.3 -- Form of 9.702% Atlas Air Pass Through Certificates Series
2000-1C (included in Exhibit 4.7).
++++++++4.4 -- Pass Through Trust Agreement, dated as of January 28,
2000, between Wilmington Trust Company, as Trustee, and
Atlas Air, Inc.
++++++++4.5 -- Trust Supplement No. 2000-1A, dated January 28, 2000,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
January 28, 2000.
++++++++4.6 -- Trust Supplement No. 2000-1B, dated January 28, 2000,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement dated as of
January 28, 2000.
++++++++4.7 -- Trust Supplement No. 2000-1C, dated January 28, 2000,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement dated as of
January 28, 2000.
++++++++4.8 -- Revolving Credit Agreement (2000-1A), dated as of January
28, 2000, between Wilmington Trust Company, not in its
individual capacity but solely as Subordination Agent, as
Borrower, and Westdeutsche Landesbank Girozentrale, as
Liquidity Provider.
++++++++4.9 -- Revolving Credit Agreement (2000-1B), dated as of January
28, 2000, between Wilmington Trust Company, not in its
individual capacity but solely as Subordination Agent, as
Borrower, and Morgan Stanley Capital Services Inc., as
Liquidity Provider.
</TABLE>
II-1
<PAGE> 105
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
++++++++4.10 -- Revolving Credit Agreement (2000-1C), dated as of January
28, 2000, between Wilmington Trust Company, not in its
individual capacity but solely as Subordination Agent, as
Borrower, and Morgan Stanley Capital Services Inc., as
Liquidity Provider.
++++++++4.11 -- Escrow and Paying Agent Agreement (Class A) dated as of
January 28, 2000 among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, Deutsche Bank Securities Inc. and Salomon
Smith Barney Inc., as Placement Agents, Wilmington Trust
Company, as Trustee, and Wilmington Trust Company as
Paying Agent.
++++++++4.12 -- Escrow and Paying Agent Agreement (Class B) dated as of
January 28, 2000 among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, Deutsche Bank Securities Inc. and Salomon
Smith Barney Inc., as Placement Agents, Wilmington Trust
Company, as Trustee, and Wilmington Trust Company as
Paying Agent.
++++++++4.13 -- Escrow and Paying Agent Agreement (Class C) dated as of
January 28, 2000 among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, Deutsche Bank Securities Inc. and Salomon
Smith Barney Inc., as Placement Agents, Wilmington Trust
Company, as Trustee, and Wilmington Trust Company as
Paying Agent.
++++++++4.14 -- Deposit Agreement (Class A), dated as of January 28,
2000, between First Security Bank, National Association,
as Escrow Agent, and Westdeutsche Landesbank
Gironzentrale, as Depositary.
++++++++4.15 -- Deposit Agreement (Class B), dated as of January 28,
2000, between First Security Bank, National Association,
as Escrow Agent, and Westdeutsche Landesbank
Gironzentrale, as Depositary.
++++++++4.16 -- Deposit Agreement (Class C), dated as of January 28,
2000, between First Security Bank, National Association,
as Escrow Agent, and Westdeutsche Landesbank
Gironzentrale, as Depositary.
++++++++4.17 -- Registration Rights Agreement dated January 28, 2000
among Atlas Air, Inc., Wilmington Trust Company, as
Trustee, and Morgan Stanley & Co. Incorporated, Deutsche
Bank Securities Inc. and Salomon Smith Barney Inc., as
Placement Agents.
++++++++4.18 -- Intercreditor Agreement, dated as of January 28, 2000,
among Wilmington Trust Company, as Trustee, Westdeutsche
Landesbank Girozentrale, as Class A Liquidity Provider,
Morgan Stanley Capital Services, Inc., as Class B
Liquidity Provider and Class C Liquidity Provider, and
Wilmington Trust Company, as Subordination Agent and
Trustee.
++++++++4.19 -- Note Purchase Agreement, dated as of January 28, 2000,
among Atlas Air, Inc., Wilmington Trust Company, as
Trustee, Wilmington Trust Company, as Subordination
Agent, First Security Bank, National Association, as
Escrow Agent, and Wilmington Trust Company, as Paying
Agent.
++++++++4.20 -- Form of Leased Aircraft Participation Agreement
(Participation Agreement among Atlas Air, Inc., Lessee,
, Owner Participant, First Security Bank,
National Association, Owner Trustee, and Wilmington Trust
Company, Mortgagee and Loan Participant) (Exhibit A-1 to
Note Purchase Agreement).
++++++++4.21 -- Form of Lease (Lease Agreement between First Security
Bank, National Association, Lessor, and Atlas Air, Inc.,
Lessee) (Exhibit A-2 to Note Purchase Agreement).
</TABLE>
II-2
<PAGE> 106
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
++++++++4.22 -- Form of Leased Aircraft Indenture (Trust Indenture and
Mortgage between First Security Bank, National
Association, Owner Trustee, and Wilmington Trust Company,
Mortgagee) (Exhibit A-3 to Note Purchase Agreement).
++++++++4.23 -- Form of Leased Aircraft Trust Agreement (Trust Agreement
between and First Security Bank, National
Association) (Exhibit A-5 to Note Purchase Agreement).
++++++++4.24 -- Form of Owned Aircraft Participation Agreement
(Participation Agreement between Atlas Air, Inc., Owner,
and Wilmington Trust Company, as Mortgagee, Subordination
Agent and Trustee) (Exhibit C-1 to Note Purchase
Agreement).
++++++++4.25 -- Form of Owned Aircraft Indenture (Trust Indenture and
Mortgage between Atlas Air, Inc., Owner, and Wilmington
Trust Company, as Mortgagee) (Exhibit C-2 to Note
Purchase Agreement).
++++++++5.1 -- Opinion of Cahill Gordon & Reindel as to the legality of
the New Certificates being registered hereby.
+10.14 -- Boeing 747 Maintenance Agreement dated January 1, 1995,
between the Company and KLM Royal Dutch Airlines, as
amended.
+10.15 -- Atlas Air, Inc. 1995 Long Term Incentive and Stock Award
Plan.
+10.16 -- Atlas Air, Inc. Employee Stock Purchase Plan.
++++10.17 -- Atlas Air, Inc. Profit Sharing Plan.
+10.18 -- Atlas Air, Inc. Retirement Plan.
++10.19 -- Employment Agreement between the Company and Michael A.
Chowdry.
++++++++10.20 -- Employment Agreement between the Company and Richard H.
Shuyler.
++10.23 -- Employment Agreement between the Company and James T.
Matheny.
+10.26 -- Maintenance Agreement between the Company and Hong Kong
Aircraft Engineering Company Limited dated April 12,
1995, for the performance of certain maintenance events.
***10.53 -- Secured Loan Agreement by and between the Company and
Finova Capital Corporation dated April 11, 1996.
***/****10.55 -- Engine Maintenance Agreement between the Company and
General Electric Company dated June 6, 1996.
**10.56 -- Employment Agreement dated as of May 1, 1997 between the
Company and Stanley G. Wraight.
+++++10.58 -- Fourth Amended and Restated Credit Agreement among the
Company, the Lenders listed therein, Goldman Sachs Credit
Partners L.P. (as Syndication Agent) and Bankers Trust
Company (as Administrative Agent) dated April 25, 2000.
**10.72 -- Form of Indenture, dated August 13, 1997, between the
Company and State Street Bank and Trust Company, as
Trustee, relating to the 10 3/4% Senior Notes (with form
of Note attached as exhibit thereto).
**/****10.86 -- Purchase Agreement Number 2021 between The Boeing Company
and the Company dated June 6, 1997.
**10.87 -- Aircraft General Terms Agreement between The Boeing
Company and the Company dated June 6, 1997.
</TABLE>
II-3
<PAGE> 107
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
++10.90 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1A-0.
++10.91 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1A-S.
++10.92 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1B-0.
++10.93 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1B-S.
++10.94 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1C-0.
++10.95 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1C-S.
++10.96 -- Deposit Agreement (Class A), dated as of February 9,
1998, between First Security Bank, National Association,
as Escrow Agent, and ABN AMRO Bank N.V., acting through
its Chicago Branch, as Depositary.
++10.97 -- Deposit Agreement (Class B), dated as of February 9,
1998, between First Security Bank, National Association,
as Escrow Agent, and ABN AMRO Bank N.V., acting through
its Chicago Branch, as Depositary.
++10.98 -- Deposit Agreement (Class C), dated as of February 9,
1998, between First Security Bank, National Association,
as Escrow Agent, and ABN AMRO Bank N.V., acting through
its Chicago Branch, as Depositary.
++10.99 -- Indemnity Agreement, dated as of February 9, 1998,
between ABN AMRO Bank N.V., acting through its Chicago
Branch, as Depositary, and the Company.
++10.100 -- Escrow and Paying Agent Agreement (Class A), dated as of
February 9, 1998, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation and Goldman,
Sachs & Co., as Placement Agents, Wilmington Trust
Company, not in its individual capacity, but solely as
Pass Through Trustee, and Wilmington Trust Company, as
Paying Agent.
++10.101 -- Escrow and Paying Agent Agreement (Class B), dated as of
February 9, 1998, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation and Goldman,
Sachs & Co., as Placement Agents, Wilmington Trust
Company, not in its individual capacity, but solely as
Pass Through Trustee, and Wilmington Trust Company, as
Paying Agent.
++10.102 -- Escrow and Paying Agent Agreement (Class C), dated as of
February 9, 1998, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation and Goldman,
Sachs & Co., as Placement Agents, Wilmington Trust
Company, not in its individual capacity, but solely as
Pass Through Trustee, and Wilmington Trust Company, as
Paying Agent.
</TABLE>
II-4
<PAGE> 108
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
++10.103 -- Revolving Credit Agreement (1998-1A), dated as of
February 9, 1998, between Wilmington Trust Company, not
in its individual capacity but solely as Subordination
Agent, as Borrower, and ABN AMRO Bank N.V., acting
through its Chicago Branch as Liquidity Provider.
++10.104 -- Revolving Credit Agreement (1998-1B), dated as of
February 9, 1998, between Wilmington Trust Company, not
in its individual capacity but solely as Subordination
Agent, as Borrower, and Morgan Stanley Capital Services,
Inc., as Liquidity Provider.
++10.105 -- Revolving Credit Agreement (1998-1C), dated as of
February 9, 1998, between Wilmington Trust Company, not
in its individual capacity but solely as Subordination
Agent, as Borrower, and Morgan Stanley Capital Services,
Inc., as Liquidity Provider.
++10.106 -- Guarantee, dated as of February 9, 1998, from Morgan
Stanley, Dean Witter, Discover & Co. to Atlas Air, Inc.
Pass Through Trust 1998-B relating to Class B Liquidity
Facility.
++10.107 -- Guarantee, dated as of February 9, 1998, from Morgan
Stanley, Dean Witter, Discover & Co. to Atlas Air, Inc.
Pass Through Trust 1998-C relating to Class C Liquidity
Facility.
++10.108 -- Intercreditor Agreement, dated as of February 9, 1998,
among Wilmington Trust Company, not in its individual
capacity but solely as Trustee, ABN AMRO Bank N.V.,
acting through its Chicago Branch, as Class A Liquidity
Provider, Morgan Stanley Capital Services, Inc., as Class
B Liquidity Provider and Class C Liquidity Provider, and
Wilmington Trust Company.
++10.109 -- Note Purchase Agreement, dated as of February 9, 1998,
among the Company, Wilmington Trust Company and First
Security Bank, National Association.
*****10.111 -- Form of Indenture, dated April 9, 1998, between the
Company and State Street Bank and Trust company, as
Trustee, relating to the 9 1/4% Senior Notes (with form
of Note attached as exhibit thereto).
****/*****10.114 -- Engine Maintenance Agreement between the Company and GE
Engine Services, Inc.
****/*****10.115 -- Engine Maintenance Agreement between the Company and GE
Engine Services, Inc.
****/*****10.116 -- General Terms Agreement between the Company and General
Electric Company dated June 6, 1997.
******10.117 -- Form of Indenture, dated November 18, 1998, between the
Company and State Street Bank and Trust Company, as
Trustee, relating to the 9 3/8% Senior Notes (with form
of Note attached as exhibit thereto).
++++++10.118 -- Employment Agreement dated June 22, 1998, between the
Company and Thomas G. Scott.
+++10.119 -- Underwriting Agreement, dated April 5, 1999, among Atlas
Air, Inc., Morgan Stanley & Co. Incorporated, BT Alex.
Brown Incorporated, ING Baring Furman Selz LLC and CIBC
Oppenheimer Corp.
+++10.120 -- Revolving Credit Agreement (1999-1A-1), dated as of April
13, 1999, between Wilmington Trust Company, as
Subordination Agent, and ABN AMRO Bank N.V., Chicago
Branch, as Liquidity Provider.
</TABLE>
II-5
<PAGE> 109
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+++10.121 -- Revolving Credit Agreement (1999-1A-2), dated as of April
13, 1999, between Wilmington Trust Company, as
Subordination Agent, and ABN AMRO Bank N.V., Chicago
Branch, as Liquidity Provider.
+++10.122 -- Revolving Credit Agreement (1999-1B), dated as of April
13, 1999, between Wilmington Trust Company, as
Subordination Agent, and Morgan Stanley Capital Services,
Inc., as Liquidity Provider.
+++10.123 -- Revolving Credit Agreement (1999-1C), dated as of April
13 1999, between Wilmington Trust Company, as
Subordination Agent, and Morgan Stanley Capital Services,
Inc., as Liquidity Provider.
+++10.124 -- Guarantee, dated April 13, 1999, by Morgan Stanley Dean
Witter & Co. relating to Revolving Credit Agreement
(1999-1B).
+++10.125 -- Guarantee, dated April 13, 1999, by Morgan Stanley Dean
Witter & Co. relating to Revolving Credit Agreement
(1999-1C).
+++10.126 -- Pass Through Trust Agreement, dated as of April 1, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc.
+++10.127 -- Trust Supplement No. 1999-1A-1, dated April 13, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
April 1, 1999.
+++10.128 -- Trust Supplement No. 1999-1A-2, dated April 13, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
April 1, 1999.
+++10.129 -- Trust Supplement No. 1999-1B, dated April 13, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
April 1, 1999.
+++10.130 -- Trust Supplement No. 1999-1C, dated April 13, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
April 1, 1999.
+++10.131 -- Intercreditor Agreement, dated as of April 13, 1999,
among Wilmington Trust Company, as Trustee, ABN AMRO Bank
N.V., Chicago Branch, as Class A-1 Liquidity Provider and
Class A-2 Liquidity Provider, Morgan Stanley Capital
Services, Inc., as Class B Liquidity Provider and Class C
Liquidity Provider, and Wilmington Trust Company, as
Subordination Agent and Trustee.
+++10.132 -- Deposit Agreement (Class A-1), dated as of April 13,
1999, between First Security Bank, National Association,
as Escrow Agent, and Credit Suisse First Boston, New York
Branch, as Depositary.
+++10.133 -- Deposit Agreement (Class A-2), dated as of April 13,
1999, between First Security Bank, National Association,
as Escrow Agent, and Credit Suisse First Boston, New
York, as Depositary.
+++10.134 -- Deposit Agreement (Class B), dated as of April 13, 1999,
between First Security Bank, National Association, as
Escrow Agent, and Credit Suisse First Boston, New York
Branch, as Depositary.
+++10.135 -- Deposit Agreement (Class C), dated as of April 13, 1999,
between First Security Bank, National Association, as
Escrow Agent, and Credit Suisse First Boston, New York
Branch, as Depositary.
</TABLE>
II-6
<PAGE> 110
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+++10.136 -- Escrow and Paying Agent Agreement (Class A-1), dated as
of April 13, 1999, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, ING Baring
Furman Selz LLC and CIBC Oppenheimer Corp., as
Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent.
+++10.137 -- Escrow and Paying Agent Agreement (Class A-2), dated as
of April 13, 1999, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, ING Baring
Furman Selz LLC and CIBC Oppenheimer Corp., as
Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent.
+++10.138 -- Escrow and Paying Agent Agreement (Class A-B), dated as
of April 13, 1999, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, ING Baring
Furman Selz LLC and CIBC Oppenheimer Corp., as
Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent.
+++10.139 -- Escrow and Paying Agent Agreement (Class A-C), dated as
of April 13, 1999, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, ING Baring
Furman Selz LLC and CIBC Oppenheimer Corp., as
Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent.
+++10.140 -- Note Purchase Agreement, dated as of April 13, 1999,
among Atlas Air Inc., Wilmington Trust Company, as
Trustee, Wilmington Trust Company, as Subordination
Agent, First Security Bank, National Association, as
Escrow Agent, and Wilmington Trust Company, as Paying
Agent.
+++10.141 -- Form of Leased Aircraft Participation Agreement
(Participation Agreement among Atlas Air, Inc., Lessee,
, Owner Participant, First Security Bank,
National Association, Owner Trustee, and Wilmington Trust
Company, Mortgagee and Loan Participant) (Exhibit A-1 to
Note Purchase Agreement).
+++10.142 -- Form of Lease (Lease Agreement between First Security
Bank, National Association, Lessor, and Atlas Air, Inc.,
Lessee) (Exhibit A-2 to Note Purchase Agreement).
+++10.143 -- Form of Leased Aircraft Indenture (Trust Indenture and
Mortgage between First Security Bank, National
Association, Owner Trustee, and Wilmington Trust Company,
Mortgagee) (Exhibit A-3 to Note Purchase Agreement).
+++10.144 -- Form of Leased Aircraft Trust Agreement (Trust Agreement
between and First Security Bank, National
Association) (Exhibit A-5 to Note Purchase Agreement).
+++10.145 -- Form of Owned Aircraft Participation Agreement
(Participation Agreement between Atlas Air, Inc., Owner,
and Wilmington Trust Company, as Mortgagee, Subordination
Agent and Trustee) (Exhibit C-1 to Note Purchase
Agreement).
+++10.146 -- Form of Owned Aircraft Indenture (Trust Indenture and
Mortgage between Atlas Air, Inc., Owner, and Wilmington
Trust Company, as Mortgagee) (Exhibit C-2 to Note
Purchase Agreement).
+++10.147 -- 7.20% Atlas Air Pass Through Certificate 1999-1A-1,
Certificate No. A-1-1.
+++10.148 -- 7.20% Atlas Air Pass Through Certificate 1999-1A-1,
Certificate No. A-1-2.
+++10.149 -- 6.88% Atlas Air Pass Through Certificate 1999-1A-2,
Certificate No. A-2-1.
+++10.150 -- 7.63% Atlas Air Pass Through Certificate 1999-1B-1,
Certificate No. B-1.
</TABLE>
II-7
<PAGE> 111
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+++10.151 -- 8.77% Atlas Air Pass Through Certificate 1999-1C-1,
Certificate No. C-1.
++++10.152 -- Agreement of Lease between Texaco, Inc., Landlord, and
the Company, Tenant, 2000 Westchester Avenue, White
Plains, New York 10650 dated November 9, 1999.
++++10.153 -- Atlas Air, Inc. Annual Incentive Compensation Plan.
++++10.154 -- Atlas Air, Inc. Long-Term Incentive Plan.
++++10.155 -- Amendments to the Atlas Air, Inc. 1995 Long Term
Incentive and Stock Award Plan. (The Atlas Air, Inc. 1995
Long Term Incentive and Stock Award Plan is filed as
Exhibit 10.15, which is incorporated by reference in this
Report.)
+++++10.156 -- Loan Agreement dated as of January 1, 1999 between the
Company and Michael A. Chowdry
+++++10.157 -- Credit Agreement among Atlas Freighter Leasing III, Inc.,
the Lenders listed therein, and Bankers Trust Company, as
administrative agent, dated as of April 25, 2000.
+++++10.158 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N527MC.
+++++10.159 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N516MC.
+++++10.160 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N508MC.
+++++10.161 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N507MC.
+++++10.162 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N509MC.
+++++10.163 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N517MC.
+++++10.164 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N505MC.
+++++10.165 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N523MC.
+++++10.166 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N524MC.
+++++10.167 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N526MC.
+++++10.168 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N528MC.
+++++10.169 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N527MC.
</TABLE>
II-8
<PAGE> 112
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+++++10.170 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N517MC.
+++++10.171 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N507MC.
+++++10.172 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N509MC.
+++++10.173 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N505MC.
+++++10.174 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N508MC.
+++++10.175 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N516MC.
+++++10.176 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N523MC.
+++++10.177 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N524MC.
+++++10.178 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N526MC.
+++++10.179 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N528MC.
+++++10.180 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to three General Electric CF6-80C2
Engines, Manufacturer's Serial Nos. 704699, 704860 and
704918.
+++++10.181 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to nine General Electric CF6-50E2
Engines, Manufacturer's Serial Nos. 530168, 517530,
517790, 517602, 530255, 517547, 517538, 517539 and
455167.
+++++10.182 -- Spare Engine Chattel Mortgage dated as of April 25, 2000
between Atlas Freighter Leasing III, Inc. and Bankers
Trust Company, as agent, relating to the CF6-80C2 Spare
Engine Pool.
+++++10.183 -- Spare Engine Chattel Mortgage dated as of April 25, 2000
between Atlas Freighter Leasing III, Inc. and Bankers
Trust Company, as agent, relating to the CF6-50E2 Spare
Engine Pool.
++21.1 -- Subsidiaries of the Registrant.
++++++++23.1 -- Consent of Arthur Andersen LLP.
++++++++23.2 -- Consent of Cahill Gordon & Reindel (included in Exhibit
5.1).
++++++++24.1 -- Powers of Attorney (set forth on the signature page of
the Registration Statement).
</TABLE>
II-9
<PAGE> 113
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
++++++++25.1 -- Statement of Eligibility of Wilmington Trust Company for
the 2000-1A Pass Through Certificates, on Form T-1.
++++++++25.2 -- Statement of Eligibility of Wilmington Trust Company for
the 2000-1B Pass Through Certificates, on Form T-1.
++++++++25.3 -- Statement of Eligibility of Wilmington Trust Company for
the 2000-1C Pass Through Certificates, on Form T-1.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
99.3 -- Form of Letter to Brokers, Dealers Commercial Banks,
Trust Companies and Other Nominees.
99.4 -- Form of Letter to Clients.
</TABLE>
---------------
++++++++ Previously filed.
+++++ Incorporated by reference to the exhibits to the Company's Current
Report on Form 8-K dated May 25, 2000.
++++ Incorporated by reference to the exhibits to the Company's Annual
Report for 1999 on Form 10-K.
+++ Incorporated by reference to the exhibits to the Company's Current
Report on Form 8-K dated April 13, 1999.
++ Incorporated by reference to the exhibits to the Company's Annual
Report for 1997 on Form 10-K.
+ Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-1 (No. 33-90304).
++ Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-1 (No. 33-97892).
++++ Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-4 (No. 333-51819).
++++++ Incorporated by reference to the exhibits to the Company's Annual
Report for 1998 on Form 10-K.
* Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-1 (No. 333-2810).
** Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-4 (No. 333-36305).
*** Incorporated by reference to the exhibits to the Company's Annual
Report for 1996 on Form 10-K.
**** Portions of this document, for which the Company has been granted
confidential treatment, have been redacted and filed separately with
the Securities and Exchange Commission.
***** Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-4 (No. 333-56391).
****** Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-4 (No. 333-72211).
(b) Schedules.
All schedules are omitted as the required information is presented in the
Registrant's consolidated financial statements or related notes or such
schedules are not applicable.
II-10
<PAGE> 114
ITEM 22. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration statement,
by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
(2) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415, will be
filed as a part of the amendment to the registration statement and will not
be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the SEC under Section 305(b)(2) of the Act.
II-11
<PAGE> 115
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Denver, State of Colorado
on the 13th day of June, 2000.
ATLAS AIR, INC.
By: /s/ RICHARD H. SHUYLER
----------------------------------
Name: Richard H. Shuyler
Title: Executive Vice
President --
Strategic Planning,
Treasurer
and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons, in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board, Chief June 13, 2000
----------------------------------------------------- Executive Officer, President
Michael A. Chowdry and Director
* Executive Vice President -- June 13, 2000
----------------------------------------------------- Strategic Planning, Treasurer
Richard H. Shuyler and Director
* Director June 13, 2000
-----------------------------------------------------
Berl Bernhard
* Director June 13, 2000
-----------------------------------------------------
Lawrence W. Clarkson
* Director June 13, 2000
-----------------------------------------------------
David K.P. Li
* Director June 13, 2000
-----------------------------------------------------
David T. McLaughlin
* Director June 13, 2000
-----------------------------------------------------
Brian Rowe
*By: /s/ RICHARD H. SHUYLER
------------------------------------------------
Richard H. Shuyler
Attorney-in-Fact
</TABLE>
II-12
<PAGE> 116
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+3.2 -- Restated Certificate of Incorporation of the Company.
++++3.3 -- Amended and Restated By-Laws of the Company.
++++++++4.1 -- Form of 8.707% Atlas Air Pass Through Certificates Series
2000-1A (included in Exhibit 4.5).
++++++++4.2 -- Form of 9.057% Atlas Air Pass Through Certificates Series
2000-1B (included in Exhibit 4.6).
++++++++4.3 -- Form of 9.702% Atlas Air Pass Through Certificates Series
2000-1C (included in Exhibit 4.7).
++++++++4.4 -- Pass Through Trust Agreement, dated as of January 28,
2000, between Wilmington Trust Company, as Trustee, and
Atlas Air, Inc.
++++++++4.5 -- Trust Supplement No. 2000-1A, dated January 28, 2000,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
January 28, 2000.
++++++++4.6 -- Trust Supplement No. 2000-1B, dated January 28, 2000,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement dated as of
January 28, 2000.
++++++++4.7 -- Trust Supplement No. 2000-1C, dated January 28, 2000,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement dated as of
January 28, 2000.
++++++++4.8 -- Revolving Credit Agreement (2000-1A), dated as of January
28, 2000, between Wilmington Trust Company, not in its
individual capacity but solely as Subordination Agent, as
Borrower, and Westdeutsche Landesbank Girozentrale, as
Liquidity Provider.
++++++++4.9 -- Revolving Credit Agreement (2000-1B), dated as of January
28, 2000, between Wilmington Trust Company, not in its
individual capacity but solely as Subordination Agent, as
Borrower, and Morgan Stanley Capital Services Inc., as
Liquidity Provider.
++++++++4.10 -- Revolving Credit Agreement (2000-1C), dated as of January
28, 2000, between Wilmington Trust Company, not in its
individual capacity but solely as Subordination Agent, as
Borrower, and Morgan Stanley Capital Services Inc., as
Liquidity Provider.
++++++++4.11 -- Escrow and Paying Agent Agreement (Class A) dated as of
January 28, 2000 among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, Deutsche Bank Securities Inc. and Salomon
Smith Barney Inc., as Placement Agents, Wilmington Trust
Company, as Trustee, and Wilmington Trust Company as
Paying Agent.
++++++++4.12 -- Escrow and Paying Agent Agreement (Class B) dated as of
January 28, 2000 among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, Deutsche Bank Securities Inc. and Salomon
Smith Barney Inc., as Placement Agents, Wilmington Trust
Company, as Trustee, and Wilmington Trust Company as
Paying Agent.
++++++++4.13 -- Escrow and Paying Agent Agreement (Class C) dated as of
January 28, 2000 among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, Deutsche Bank Securities Inc. and Salomon
Smith Barney Inc., as Placement Agents, Wilmington Trust
Company, as Trustee, and Wilmington Trust Company as
Paying Agent.
</TABLE>
<PAGE> 117
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
++++++++4.14 -- Deposit Agreement (Class A), dated as of January 28,
2000, between First Security Bank, National Association,
as Escrow Agent, and Westdeutsche Landesbank
Gironzentrale, as Depositary.
++++++++4.15 -- Deposit Agreement (Class B), dated as of January 28,
2000, between First Security Bank, National Association,
as Escrow Agent, and Westdeutsche Landesbank
Gironzentrale, as Depositary.
++++++++4.16 -- Deposit Agreement (Class C), dated as of January 28,
2000, between First Security Bank, National Association,
as Escrow Agent, and Westdeutsche Landesbank
Gironzentrale, as Depositary.
++++++++4.17 -- Registration Rights Agreement dated January 28, 2000
among Atlas Air, Inc., Wilmington Trust Company, as
Trustee, and Morgan Stanley & Co. Incorporated, Deutsche
Bank Securities Inc. and Salomon Smith Barney Inc., as
Placement Agents.
++++++++4.18 -- Intercreditor Agreement, dated as of January 28, 2000,
among Wilmington Trust Company, as Trustee, Westdeutsche
Landesbank Girozentrale, as Class A Liquidity Provider,
Morgan Stanley Capital Services, Inc., as Class B
Liquidity Provider and Class C Liquidity Provider, and
Wilmington Trust Company, as Subordination Agent and
Trustee.
++++++++4.19 -- Note Purchase Agreement, dated as of January 28, 2000,
among Atlas Air, Inc., Wilmington Trust Company, as
Trustee, Wilmington Trust Company, as Subordination
Agent, First Security Bank, National Association, as
Escrow Agent, and Wilmington Trust Company, as Paying
Agent.
++++++++4.20 -- Form of Leased Aircraft Participation Agreement
(Participation Agreement among Atlas Air, Inc., Lessee,
, Owner Participant, First Security Bank,
National Association, Owner Trustee, and Wilmington Trust
Company, Mortgagee and Loan Participant) (Exhibit A-1 to
Note Purchase Agreement).
++++++++4.21 -- Form of Lease (Lease Agreement between First Security
Bank, National Association, Lessor, and Atlas Air, Inc.,
Lessee) (Exhibit A-2 to Note Purchase Agreement).
++++++++4.22 -- Form of Leased Aircraft Indenture (Trust Indenture and
Mortgage between First Security Bank, National
Association, Owner Trustee, and Wilmington Trust Company,
Mortgagee) (Exhibit A-3 to Note Purchase Agreement).
++++++++4.23 -- Form of Leased Aircraft Trust Agreement (Trust Agreement
between and First Security Bank, National
Association) (Exhibit A-5 to Note Purchase Agreement).
++++++++4.24 -- Form of Owned Aircraft Participation Agreement
(Participation Agreement between Atlas Air, Inc., Owner,
and Wilmington Trust Company, as Mortgagee, Subordination
Agent and Trustee) (Exhibit C-1 to Note Purchase
Agreement).
++++++++4.25 -- Form of Owned Aircraft Indenture (Trust Indenture and
Mortgage between Atlas Air, Inc., Owner, and Wilmington
Trust Company, as Mortgagee) (Exhibit C-2 to Note
Purchase Agreement).
++++++++5.1 -- Opinion of Cahill Gordon & Reindel as to the legality of
the New Certificates being registered hereby.
+10.14 -- Boeing 747 Maintenance Agreement dated January 1, 1995,
between the Company and KLM Royal Dutch Airlines, as
amended.
+10.15 -- Atlas Air, Inc. 1995 Long Term Incentive and Stock Award
Plan.
+10.16 -- Atlas Air, Inc. Employee Stock Purchase Plan.
++++10.17 -- Atlas Air, Inc. Profit Sharing Plan.
</TABLE>
<PAGE> 118
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+10.18 -- Atlas Air, Inc. Retirement Plan.
++10.19 -- Employment Agreement between the Company and Michael A.
Chowdry.
++++++++10.20 -- Employment Agreement between the Company and Richard H.
Shuyler.
++10.23 -- Employment Agreement between the Company and James T.
Matheny.
+10.26 -- Maintenance Agreement between the Company and Hong Kong
Aircraft Engineering Company Limited dated April 12,
1995, for the performance of certain maintenance events.
***10.53 -- Secured Loan Agreement by and between the Company and
Finova Capital Corporation dated April 11, 1996.
***/****10.55 -- Engine Maintenance Agreement between the Company and
General Electric Company dated June 6, 1996.
**10.56 -- Employment Agreement dated as of May 1, 1997 between the
Company and Stanley G. Wraight.
+++++10.58 -- Fourth Amended and Restated Credit Agreement among the
Company, the Lenders listed therein, Goldman Sachs Credit
Partners L.P. (as Syndication Agent) and Bankers Trust
Company (as Administrative Agent) dated April 25, 2000.
**10.72 -- Form of Indenture, dated August 13, 1997, between the
Company and State Street Bank and Trust Company, as
Trustee, relating to the 10 3/4% Senior Notes (with form
of Note attached as exhibit thereto).
**/****10.86 -- Purchase Agreement Number 2021 between The Boeing Company
and the Company dated June 6, 1997.
**10.87 -- Aircraft General Terms Agreement between The Boeing
Company and the Company dated June 6, 1997.
++10.90 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1A-0.
++10.91 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1A-S.
++10.92 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1B-0.
++10.93 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1B-S.
++10.94 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1C-0.
++10.95 -- Pass Through Trust Agreement, dated as of February 9,
1998, between the Company and Wilmington Trust Company,
as Trustee, relating to the Atlas Air Pass Through Trust
1998-1C-S.
++10.96 -- Deposit Agreement (Class A), dated as of February 9,
1998, between First Security Bank, National Association,
as Escrow Agent, and ABN AMRO Bank N.V., acting through
its Chicago Branch, as Depositary.
++10.97 -- Deposit Agreement (Class B), dated as of February 9,
1998, between First Security Bank, National Association,
as Escrow Agent, and ABN AMRO Bank N.V., acting through
its Chicago Branch, as Depositary.
</TABLE>
<PAGE> 119
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
++10.98 -- Deposit Agreement (Class C), dated as of February 9,
1998, between First Security Bank, National Association,
as Escrow Agent, and ABN AMRO Bank N.V., acting through
its Chicago Branch, as Depositary.
++10.99 -- Indemnity Agreement, dated as of February 9, 1998,
between ABN AMRO Bank N.V., acting through its Chicago
Branch, as Depositary, and the Company.
++10.100 -- Escrow and Paying Agent Agreement (Class A), dated as of
February 9, 1998, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation and Goldman,
Sachs & Co., as Placement Agents, Wilmington Trust
Company, not in its individual capacity, but solely as
Pass Through Trustee, and Wilmington Trust Company, as
Paying Agent.
++10.101 -- Escrow and Paying Agent Agreement (Class B), dated as of
February 9, 1998, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation and Goldman,
Sachs & Co., as Placement Agents, Wilmington Trust
Company, not in its individual capacity, but solely as
Pass Through Trustee, and Wilmington Trust Company, as
Paying Agent.
++10.102 -- Escrow and Paying Agent Agreement (Class C), dated as of
February 9, 1998, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation and Goldman,
Sachs & Co., as Placement Agents, Wilmington Trust
Company, not in its individual capacity, but solely as
Pass Through Trustee, and Wilmington Trust Company, as
Paying Agent.
++10.103 -- Revolving Credit Agreement (1998-1A), dated as of
February 9, 1998, between Wilmington Trust Company, not
in its individual capacity but solely as Subordination
Agent, as Borrower, and ABN AMRO Bank N.V., acting
through its Chicago Branch as Liquidity Provider.
++10.104 -- Revolving Credit Agreement (1998-1B), dated as of
February 9, 1998, between Wilmington Trust Company, not
in its individual capacity but solely as Subordination
Agent, as Borrower, and Morgan Stanley Capital Services,
Inc., as Liquidity Provider.
++10.105 -- Revolving Credit Agreement (1998-1C), dated as of
February 9, 1998, between Wilmington Trust Company, not
in its individual capacity but solely as Subordination
Agent, as Borrower, and Morgan Stanley Capital Services,
Inc., as Liquidity Provider.
++10.106 -- Guarantee, dated as of February 9, 1998, from Morgan
Stanley, Dean Witter, Discover & Co. to Atlas Air, Inc.
Pass Through Trust 1998-B relating to Class B Liquidity
Facility.
++10.107 -- Guarantee, dated as of February 9, 1998, from Morgan
Stanley, Dean Witter, Discover & Co. to Atlas Air, Inc.
Pass Through Trust 1998-C relating to Class C Liquidity
Facility.
++10.108 -- Intercreditor Agreement, dated as of February 9, 1998,
among Wilmington Trust Company, not in its individual
capacity but solely as Trustee, ABN AMRO Bank N.V.,
acting through its Chicago Branch, as Class A Liquidity
Provider, Morgan Stanley Capital Services, Inc., as Class
B Liquidity Provider and Class C Liquidity Provider, and
Wilmington Trust Company.
++10.109 -- Note Purchase Agreement, dated as of February 9, 1998,
among the Company, Wilmington Trust Company and First
Security Bank, National Association.
</TABLE>
<PAGE> 120
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*****10.111 -- Form of Indenture, dated April 9, 1998, between the
Company and State Street Bank and Trust company, as
Trustee, relating to the 9 1/4% Senior Notes (with form
of Note attached as exhibit thereto).
****/*****10.114 -- Engine Maintenance Agreement between the Company and GE
Engine Services, Inc.
****/*****10.115 -- Engine Maintenance Agreement between the Company and GE
Engine Services, Inc.
****/*****10.116 -- General Terms Agreement between the Company and General
Electric Company dated June 6, 1997.
******10.117 -- Form of Indenture, dated November 18, 1998, between the
Company and State Street Bank and Trust Company, as
Trustee, relating to the 9 3/8% Senior Notes (with form
of Note attached as exhibit thereto).
++++++10.118 -- Employment Agreement dated June 22, 1998, between the
Company and Thomas G. Scott.
+++10.119 -- Underwriting Agreement, dated April 5, 1999, among Atlas
Air, Inc., Morgan Stanley & Co. Incorporated, BT Alex.
Brown Incorporated, ING Baring Furman Selz LLC and CIBC
Oppenheimer Corp.
+++10.120 -- Revolving Credit Agreement (1999-1A-1), dated as of April
13, 1999, between Wilmington Trust Company, as
Subordination Agent, and ABN AMRO Bank N.V., Chicago
Branch, as Liquidity Provider.
+++10.121 -- Revolving Credit Agreement (1999-1A-2), dated as of April
13, 1999, between Wilmington Trust Company, as
Subordination Agent, and ABN AMRO Bank N.V., Chicago
Branch, as Liquidity Provider.
+++10.122 -- Revolving Credit Agreement (1999-1B), dated as of April
13, 1999, between Wilmington Trust Company, as
Subordination Agent, and Morgan Stanley Capital Services,
Inc., as Liquidity Provider.
+++10.123 -- Revolving Credit Agreement (1999-1C), dated as of April
13 1999, between Wilmington Trust Company, as
Subordination Agent, and Morgan Stanley Capital Services,
Inc., as Liquidity Provider.
+++10.124 -- Guarantee, dated April 13, 1999, by Morgan Stanley Dean
Witter & Co. relating to Revolving Credit Agreement
(1999-1B).
+++10.125 -- Guarantee, dated April 13, 1999, by Morgan Stanley Dean
Witter & Co. relating to Revolving Credit Agreement
(1999-1C).
+++10.126 -- Pass Through Trust Agreement, dated as of April 1, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc.
+++10.127 -- Trust Supplement No. 1999-1A-1, dated April 13, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
April 1, 1999.
+++10.128 -- Trust Supplement No. 1999-1A-2, dated April 13, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
April 1, 1999.
+++10.129 -- Trust Supplement No. 1999-1B, dated April 13, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
April 1, 1999.
+++10.130 -- Trust Supplement No. 1999-1C, dated April 13, 1999,
between Wilmington Trust Company, as Trustee, and Atlas
Air, Inc. to Pass Through Trust Agreement, dated as of
April 1, 1999.
</TABLE>
<PAGE> 121
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+++10.131 -- Intercreditor Agreement, dated as of April 13, 1999,
among Wilmington Trust Company, as Trustee, ABN AMRO Bank
N.V., Chicago Branch, as Class A-1 Liquidity Provider and
Class A-2 Liquidity Provider, Morgan Stanley Capital
Services, Inc., as Class B Liquidity Provider and Class C
Liquidity Provider, and Wilmington Trust Company, as
Subordination Agent and Trustee.
+++10.132 -- Deposit Agreement (Class A-1), dated as of April 13,
1999, between First Security Bank, National Association,
as Escrow Agent, and Credit Suisse First Boston, New York
Branch, as Depositary.
+++10.133 -- Deposit Agreement (Class A-2), dated as of April 13,
1999, between First Security Bank, National Association,
as Escrow Agent, and Credit Suisse First Boston, New
York, as Depositary.
+++10.134 -- Deposit Agreement (Class B), dated as of April 13, 1999,
between First Security Bank, National Association, as
Escrow Agent, and Credit Suisse First Boston, New York
Branch, as Depositary.
+++10.135 -- Deposit Agreement (Class C), dated as of April 13, 1999,
between First Security Bank, National Association, as
Escrow Agent, and Credit Suisse First Boston, New York
Branch, as Depositary.
+++10.136 -- Escrow and Paying Agent Agreement (Class A-1), dated as
of April 13, 1999, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, ING Baring
Furman Selz LLC and CIBC Oppenheimer Corp., as
Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent.
+++10.137 -- Escrow and Paying Agent Agreement (Class A-2), dated as
of April 13, 1999, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, ING Baring
Furman Selz LLC and CIBC Oppenheimer Corp., as
Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent.
+++10.138 -- Escrow and Paying Agent Agreement (Class A-B), dated as
of April 13, 1999, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, ING Baring
Furman Selz LLC and CIBC Oppenheimer Corp., as
Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent.
+++10.139 -- Escrow and Paying Agent Agreement (Class A-C), dated as
of April 13, 1999, among First Security Bank, National
Association, as Escrow Agent, Morgan Stanley & Co.
Incorporated, BT Alex. Brown Incorporated, ING Baring
Furman Selz LLC and CIBC Oppenheimer Corp., as
Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent.
+++10.140 -- Note Purchase Agreement, dated as of April 13, 1999,
among Atlas Air Inc., Wilmington Trust Company, as
Trustee, Wilmington Trust Company, as Subordination
Agent, First Security Bank, National Association, as
Escrow Agent, and Wilmington Trust Company, as Paying
Agent.
+++10.141 -- Form of Leased Aircraft Participation Agreement
(Participation Agreement among Atlas Air, Inc., Lessee,
, Owner Participant, First Security Bank,
National Association, Owner Trustee, and Wilmington Trust
Company, Mortgagee and Loan Participant) (Exhibit A-1 to
Note Purchase Agreement).
+++10.142 -- Form of Lease (Lease Agreement between First Security
Bank, National Association, Lessor, and Atlas Air, Inc.,
Lessee) (Exhibit A-2 to Note Purchase Agreement).
</TABLE>
<PAGE> 122
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+++10.143 -- Form of Leased Aircraft Indenture (Trust Indenture and
Mortgage between First Security Bank, National
Association, Owner Trustee, and Wilmington Trust Company,
Mortgagee) (Exhibit A-3 to Note Purchase Agreement).
+++10.144 -- Form of Leased Aircraft Trust Agreement (Trust Agreement
between and First Security Bank, National
Association) (Exhibit A-5 to Note Purchase Agreement).
+++10.145 -- Form of Owned Aircraft Participation Agreement
(Participation Agreement between Atlas Air, Inc., Owner,
and Wilmington Trust Company, as Mortgagee, Subordination
Agent and Trustee) (Exhibit C-1 to Note Purchase
Agreement).
+++10.146 -- Form of Owned Aircraft Indenture (Trust Indenture and
Mortgage between Atlas Air, Inc., Owner, and Wilmington
Trust Company, as Mortgagee) (Exhibit C-2 to Note
Purchase Agreement).
+++10.147 -- 7.20% Atlas Air Pass Through Certificate 1999-1A-1,
Certificate No. A-1-1.
+++10.148 -- 7.20% Atlas Air Pass Through Certificate 1999-1A-1,
Certificate No. A-1-2.
+++10.149 -- 6.88% Atlas Air Pass Through Certificate 1999-1A-2,
Certificate No. A-2-1.
+++10.150 -- 7.63% Atlas Air Pass Through Certificate 1999-1B-1,
Certificate No. B-1.
+++10.151 -- 8.77% Atlas Air Pass Through Certificate 1999-1C-1,
Certificate No. C-1.
++++10.152 -- Agreement of Lease between Texaco, Inc., Landlord, and
the Company, Tenant, 2000 Westchester Avenue, White
Plains, New York 10650 dated November 9, 1999.
++++10.153 -- Atlas Air, Inc. Annual Incentive Compensation Plan.
++++10.154 -- Atlas Air, Inc. Long-Term Incentive Plan.
++++10.155 -- Amendments to the Atlas Air, Inc. 1995 Long Term
Incentive and Stock Award Plan. (The Atlas Air, Inc. 1995
Long Term Incentive and Stock Award Plan is filed as
Exhibit 10.15, which is incorporated by reference in this
Report.)
+++++10.156 -- Loan Agreement dated as of January 1, 1999 between the
Company and Michael A. Chowdry
+++++10.157 -- Credit Agreement among Atlas Freighter Leasing III, Inc.,
the Lenders listed therein, and Bankers Trust Company, as
administrative agent, dated as of April 25, 2000.
+++++10.158 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N527MC.
+++++10.159 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N516MC.
+++++10.160 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N508MC.
+++++10.161 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N507MC.
+++++10.162 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N509MC.
+++++10.163 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N517MC.
</TABLE>
<PAGE> 123
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+++++10.164 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N505MC.
+++++10.165 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N523MC.
+++++10.166 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N524MC.
+++++10.167 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N526MC.
+++++10.168 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to B747-200 aircraft. U.S.
Registration No. N528MC.
+++++10.169 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N527MC.
+++++10.170 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N517MC.
+++++10.171 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N507MC.
+++++10.172 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N509MC.
+++++10.173 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N505MC.
+++++10.174 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N508MC.
+++++10.175 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N516MC.
+++++10.176 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N523MC.
+++++10.177 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N524MC.
+++++10.178 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N526MC.
+++++10.179 -- Security Agreement and Chattel Mortgage dated as of April
25, 2000 between Atlas Freighter Leasing III, Inc. and
Bankers Trust Company, as agent, relating to B747-200
aircraft. U.S. Registration No. N528MC.
+++++10.180 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to three General Electric CF6-80C2
Engines, Manufacturer's Serial Nos. 704699, 704860 and
704918.
</TABLE>
<PAGE> 124
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+++++10.181 -- Lease Agreement dated as of April 25, 2000 between Atlas
Freighter Leasing III, Inc., as lessor, and the Company,
as lessee, relating to nine General Electric CF6-50E2
Engines, Manufacturer's Serial Nos. 530168, 517530,
517790, 517602, 530255, 517547, 517538, 517539 and
455167.
+++++10.182 -- Spare Engine Chattel Mortgage dated as of April 25, 2000
between Atlas Freighter Leasing III, Inc. and Bankers
Trust Company, as agent, relating to the CF6-80C2 Spare
Engine Pool.
+++++10.183 -- Spare Engine Chattel Mortgage dated as of April 25, 2000
between Atlas Freighter Leasing III, Inc. and Bankers
Trust Company, as agent, relating to the CF6-50E2 Spare
Engine Pool.
++21.1 -- Subsidiaries of the Registrant.
++++++++23.1 -- Consent of Arthur Andersen LLP.
++++++++23.2 -- Consent of Cahill Gordon & Reindel (included in Exhibit
5.1).
++++++++24.1 -- Powers of Attorney (set forth on the signature page of
the Registration Statement).
++++++++25.1 -- Statement of Eligibility of Wilmington Trust Company for
the 2000-1A Pass Through Certificates, on Form T-1.
++++++++25.2 -- Statement of Eligibility of Wilmington Trust Company for
the 2000-1B Pass Through Certificates, on Form T-1.
++++++++25.3 -- Statement of Eligibility of Wilmington Trust Company for
the 2000-1C Pass Through Certificates, on Form T-1.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
99.3 -- Form of Letter to Brokers, Dealers Commercial Banks,
Trust Companies and Other Nominees.
99.4 -- Form of Letter to Clients.
</TABLE>
---------------
++++++++ Previously filed.
+++++ Incorporated by reference to the exhibits to the Company's Current
Report on Form 8-K dated May 25, 2000.
++++ Incorporated by reference to the exhibits to the Company's Annual
Report for 1999 on Form 10-K.
+++ Incorporated by reference to the exhibits to the Company's Current
Report on Form 8-K dated April 13, 1999.
++ Incorporated by reference to the exhibits to the Company's Annual
Report for 1997 on Form 10-K.
+ Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-1 (No. 33-90304).
++ Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-1 (No. 33-97892).
++++ Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-4 (No. 333-51819).
++++++ Incorporated by reference to the exhibits to the Company's Annual
Report for 1998 on Form 10-K.
* Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-1 (No. 333-2810).
** Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-4 (No. 333-36305).
<PAGE> 125
*** Incorporated by reference to the exhibits to the Company's Annual Report
for 1996 on Form 10-K.
**** Portions of this document, for which the Company has been granted
confidential treatment, have been redacted and filed separately with the
Securities and Exchange Commission.
***** Incorporated by reference to the exhibits to the Company's Registration
Statement on Form S-4 (No. 333-56391).
****** Incorporated by reference to the exhibits to the Company's Registration
Statement on Form S-4 (No. 333-72211).
