1
EXHIBIT 10.72
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ATLAS AIR, INC.
as Issuer
and
STATE STREET BANK AND TRUST COMPANY
as Trustee
INDENTURE
Dated as of August 13, 1997
$150,000,000
10 3/4% SENIOR NOTES DUE 2005, SERIES A
10 3/4% SENIOR NOTES DUE 2005, SERIES B
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1)................................. 7.10
(a)(2)................................. 7.10
(a)(3)................................. N.A.
(a)(4)................................. N.A.
(b).................................... 7.8; 7.10
(c).................................... N.A.
311(a).................................... 7.11
(b).................................... 7.11
(c).................................... N.A.
312(a).................................... 2.5
(b).................................... 10.3
(c).................................... 10.3
313(a).................................... 7.6
(b)(1)................................. N.A.
(b)(2)................................. 7.6
(c).................................... 7.6
(d).................................... 7.6
314(a).................................... 4.2; 4.10;
(b).................................... N.A.
(c)(1)................................. 10.4
(c)(2)................................. 10.4
(c)(3)................................. N.A.
(d).................................... N.A.
(e).................................... 10.5
(f).................................... 4.9
315(a).................................... 7.1
(b).................................... 7.5; 10.2
(c).................................... 7.1
(d).................................... 7.1
(e).................................... 6.11
316(a)(last sentence)..................... 10.6
(a)(1)(A).............................. 6.5
(a)(1)(B).............................. 6.4
(a)(2)................................. N.A.
(b).................................... 6.7
317(a)(1)................................. 6.8
(a)(2)................................. 6.9
(b).................................... 2.4
318(a).................................... 12.1
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.....................................1
SECTION 1.2. Other Definitions..............................23
SECTION 1.3. Incorporation by Reference of Trust
Indenture Act ...............................23
SECTION 1.4. Rules of Construction..........................24
ARTICLE II
The Securities
SECTION 2.1. Form and Dating................................25
SECTION 2.2. Execution and Authentication...................26
SECTION 2.3. Registrar and Paying Agent.....................27
SECTION 2.4. Paying Agent to Hold Money in Trust............28
SECTION 2.5. Securityholder Lists...........................28
SECTION 2.6. Transfer and Exchange..........................29
SECTION 2.7. Replacement Securities.........................30
SECTION 2.8. Outstanding Securities.........................30
SECTION 2.9. Treasury Securities............................31
SECTION 2.10. Temporary Securities..........................31
SECTION 2.11. Cancellation...................................31
SECTION 2.12. Defaulted Interest.............................32
SECTION 2.13. CUSIP Number...................................32
SECTION 2.14. Deposit of Moneys..............................32
SECTION 2.15. Restrictive Legends............................32
SECTION 2.16. Book-Entry Provisions for Global
Security ....................................35
SECTION 2.17. Special Transfer Provisions....................36
SECTION 2.18. Persons Deemed Owners..........................39
SECTION 2.19. Record Date....................................40
ARTICLE III
Redemption
SECTION 3.1. Notices to Trustee.............................40
SECTION 3.2. Selection of Securities To Be Redeemed.........40
SECTION 3.3. Notice of Redemption...........................41
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SECTION 3.4. Effect of Notice of Redemption.................42
SECTION 3.5. Deposit of Redemption Price....................42
SECTION 3.6. Securities Redeemed in Part....................43
ARTICLE IV
Covenants
SECTION 4.1. Payment of Securities..........................43
SECTION 4.2. Reports........................................44
SECTION 4.3. Limitation on Incurrence of Additional
Indebtedness ................................44
SECTION 4.4. Limitation on Restricted Payments..............45
SECTION 4.5. Limitation on Issuances and Sales of
Capital Stock of Subsidiaries ...............49
SECTION 4.6. Limitation on Transactions with
Affiliates ..................................49
SECTION 4.7. Limitation on Liens............................50
SECTION 4.8. Limitation on Asset Sales and
Disposition of Proceeds of Asset
Sales .......................................50
SECTION 4.9. Change of Control..............................54
SECTION 4.10. Limitation on Guarantees of
Indebtedness by Subsidiaries ................56
SECTION 4.11. Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries ................................57
SECTION 4.12. Further Instruments and Acts...................57
SECTION 4.13. Use of Proceeds................................57
SECTION 4.14. Compliance Certificates........................58
SECTION 4.15. Maintenance of Office or Agency................59
SECTION 4.16. Taxes..........................................59
SECTION 4.17. Stay, Extension and Usury Laws.................59
SECTION 4.18. Corporate Existence............................60
ARTICLE V
Surviving Entity
SECTION 5.1. Limitations on Consolidations, Mergers
and Sales of Assets .........................60
ARTICLE VI
Defaults and Remedies
SECTION 6.1. Events of Default..............................62
SECTION 6.2. Acceleration...................................64
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SECTION 6.3. Other Remedies.................................65
SECTION 6.4. Waiver of Past Defaults........................65
SECTION 6.5. Control by Majority............................66
SECTION 6.6. Limitation on Suits............................66
SECTION 6.7. Rights of Holders to Receive Payment...........66
SECTION 6.8. Collection Suit by Trustee.....................67
SECTION 6.9. Trustee May File Proofs of Claim...............67
SECTION 6.10. Priorities.....................................67
SECTION 6.11. Undertaking for Costs..........................68
ARTICLE VII
Trustee
SECTION 7.1. Duties of Trustee..............................68
SECTION 7.2. Rights of Trustee..............................70
SECTION 7.3. Individual Rights of Trustee...................71
SECTION 7.4. Trustee's Disclaimer...........................71
SECTION 7.5. Notice of Defaults.............................71
SECTION 7.6. Reports by Trustee to Holders..................72
SECTION 7.7. Compensation and Indemnity.....................72
SECTION 7.8. Replacement of Trustee.........................73
SECTION 7.9. Successor Trustee by Merger....................74
SECTION 7.10. Eligibility; Disqualification..................74
SECTION 7.11. Preferential Collection of Claims
Against Company .............................75
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities;
Defeasance ..................................75
SECTION 8.2. Conditions to Defeasance.......................77
SECTION 8.3. Application of Trust Money.....................79
SECTION 8.4. Repayment to Company...........................79
SECTION 8.5. Indemnity for U.S. Government
Obligations .................................79
SECTION 8.6. Reinstatement..................................79
ARTICLE IX
Amendments
SECTION 9.1. Without Consent of Holders.....................80
SECTION 9.2. With Consent of Holders........................81
SECTION 9.3. Compliance with Trust Indenture Act............83
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SECTION 9.4. Revocation and Effect of Consents and
Waivers .....................................83
SECTION 9.5. Notation on or Exchange of Securities..........84
SECTION 9.6. Trustee To Sign Amendments.....................84
ARTICLE X
Miscellaneous
SECTION 10.1. Trust Indenture Act Controls..................85
SECTION 10.2. Notices.......................................85
SECTION 10.3. Communication by Holders with other
Holders .....................................86
SECTION 10.4. Certificate and Opinion as to
Conditions Precedent ........................86
SECTION 10.5. Statements Required in Certificate or
Opinion .....................................87
SECTION 10.6. When Securities Disregarded...................87
SECTION 10.7. Rules by Trustee, Paying Agent and
Registrar ...................................87
SECTION 10.8. Legal Holidays................................87
SECTION 10.9. Governing Law.................................88
SECTION 10.10. No Recourse Against Others....................88
SECTION 10.11. Successors....................................88
SECTION 10.12. Multiple Originals............................88
SECTION 10.13. Variable Provisions...........................88
SECTION 10.14. Qualification of Indenture....................88
SECTION 10.15. Table of Contents; Headings...................89
SECTION 10.16. Severability..................................89
SECTION 10.17. No Adverse Interpretation of Other
Agreements ..................................89
Exhibit A - Form of Series A Security ..................A-1
Exhibit B - Form of Series B Security ..................B-1
Exhibit C - Form of Certificate To Be Delivered
in Connection with Transfers to Non-
QIB Accredited Investors ...................C-1
Exhibit D - Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S ...................D-1
__________________
Note: This Table of Contents shall not, for any purpose, be
deemed to be part of the Indenture.
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INDENTURE dated as of August 13, 1997, between Atlas
Air, Inc., a Delaware corporation (as further defined below,
the "Company"), and State Street Bank and Trust Company, a Mas-
sachusetts bank and trust company (the "Trustee").
The Company has duly authorized the creation and is-
suance of up to $150,000,000 aggregate principal amount of 10
3/4% Senior Notes due 2005 (the "Initial Securities") and
$150,000,000 aggregate principal amount of 10 3/4% Senior Notes
due 2005 (the "Exchange Securities", and together with the Ini-
tial Securities, the "Securities") and, to provide therefor,
the Company has duly authorized the execution and delivery of
this Indenture. All things necessary to make the Securities
(as defined herein), when duly issued and executed by the Com-
pany, and authenticated and delivered hereunder, the valid ob-
ligations of the Company, and to make this Indenture a valid
and binding agreement of the Company have been done.
The Company and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of
the Holders of the Securities:
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.
"ACMI Contracted Aircraft" means an aircraft acquired
by the Company or its Subsidiaries and dedicated to a new ACMI
Contract entered into within 60 days of the acquisition of such
aircraft (which ACMI Contract shall not represent a renewal or
replacement of a prior ACMI Contract unless the aircraft dedi-
cated to such prior ACMI Contract was operated under an operat-
ing lease and returned to the lessor) which is in effect on the
date of calculation and has a remaining term of three years or
more on the date such aircraft was dedicated to such ACMI Con-
tract provided that in any calendar year two ACMI contracts may
have a term of not less than one year (subject to cancellation
terms, which may include the right to cancel on no less than
six months notice). Pro forma effect shall be given to the ac-
quisition of an ACMI Contracted Aircraft by adding to the ap-
propriate components of the Consolidated Fixed Charge Coverage
Ratio (i) the net projected annualized revenues from the opera-
tion of the ACMI Contracted Aircraft under such ACMI Contract
for that portion of the period for which the Consolidated Fixed
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Charge Coverage Ratio is being calculated prior to the acquisi-
tion of such aircraft, assuming operation for the minimum guar-
anteed number of block hours (less any block hours subject to
cancellation) at the minimum guaranteed rate under such ACMI
Contract less (ii) the projected annualized cash operating ex-
penses from such operation for the same period for which the
related projected revenues are determined in clause (i) above,
provided that such projected cash operating expenses shall not
be less on a per block hour basis than the average historical
per block hour cash operating expenses of the Company for such
aircraft model for the four full fiscal quarters immediately
preceding the date of calculation, and provided, further, that
if such aircraft is of a model not then currently operated by
the Company, such projected cash operating expenses shall in-
clude maintenance costs which shall not be less than the aver-
age for such aircraft type disclosed on the most recently
available DOT Forms 41 with respect to such aircraft type or
any summary of such data as reported in a nationally recognized
industry publication or as provided in a written estimate pre-
pared by a nationally recognized air transportation consulting
group. For purposes of this definition, "ACMI Contract" shall
include contracts pursuant to which the Company does not pay
any crew costs, in which event pro forma effect shall be given
as described above but excluding from the projected annualized
cash operating expenses all crew costs. Cash operating ex-
penses means for purposes of this definition consolidated oper-
ating expenses, less consolidated depreciation and amortization
and consolidated rental expenses, to the extent included in
computing consolidated operating expenses.
"Acquired Indebtedness" means Indebtedness of a Per-
son (a) existing at the time such Person becomes a Subsidiary
or (b) assumed in connection with the acquisition of assets
from such Person.
"AFL II" means a new wholly-owned Unrestricted Sub-
sidiary to be formed for the sole purpose of owning and leasing
four 747-200 aircraft and eight spare engines currently owned
by the Company and financed by the Company's existing revolving
credit facility.
"Affiliate" means, with respect to any specified Per-
son, (i) any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified Person or (ii) any other Person that owns, di-
rectly or indirectly, 5% or more of such specified Person's
Capital Stock or any executive officer or director of any such
specified Person or other Persons or, with respect to any natu-
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ral Person, any Person having a relationship with such Person
by blood, marriage or adoption not more remote than first
cousin. For the purposes of this definition, "control," when
used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-
registrar.
"Applicable Premium" means, with respect to a Secu-
rity at any Redemption Date, the greater of (i) 1.0% of the
principal amount of such Security and (ii) the excess of (A)
the present value at such time of (1) 105.250% of the principal
amount of such Security plus (2) all required interest payments
due on such Security through November 15, 2001, computed using
a discount rate equal to the Treasury Rate plus 100 basis
points, over (B) the principal amount of such Security.
"Appraised Fair Market Value" means the Adjusted Cur-
rent Market Value. Current Market Value is the most likely
trading price that, in the opinion of an appraiser, may be gen-
erated from an aircraft under the market conditions that are
perceived to exist at the time in question. Current Market
Value assumes that the aircraft is valued for its highest, best
use, that the parties to the hypothetical transaction are will-
ing, 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 prospec-
tive buyers. Adjusted Current Market Value, in the opinion of
the appraiser, is the Current Market Value of the aircraft ad-
justed for the actual technical status and maintenance condi-
tion of the aircraft.
"Asset Sale" means any sale, issuance, conveyance,
transfer, lease or other disposition (including, without limi-
tation, by way of merger, consolidation or sale and leaseback
transaction) (collectively, a "transfer"), directly or indi-
rectly, in one or a series of related transactions, of (i) any
Capital Stock of any Subsidiary; (ii) all or substantially all
of the properties and assets of the Company or its Subsidiar-
ies; or (iii) any other properties or assets of the Company or
any Subsidiary, other than in the ordinary course of business.
For the purposes of this definition, the term "Asset Sale"
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shall not include any transfer of properties or assets (A) that
is governed by the provisions of this Indenture, described in
Section 5.1, (B) by the Company to any Subsidiary, or by any
Subsidiary of the Company or any Subsidiary and in accordance
with the terms of the Indenture, (C) of aircraft engines, com-
ponents, parts or spare parts pursuant to customary pooling,
exchange or similar agreements or, (D) asset swaps involving
aircraft engines, components, parts or spare parts (provided
that the assets received by the Company or any Subsidiary have
a Fair Market Value at least equal to the asset transferred
(provided that with respect to any asset swap or series of re-
lated asset swaps involving assets with a Fair Market Value ex-
ceeding $3 million, such determination shall be made by the
Board of Directors)), (E) constituting an Investment that is
permitted under the Indenture in an Unrestricted Subsidiary,
joint venture or other Person in which the Company or a Sub-
sidiary retains an ownership interest, or (F) having a Fair
Market Value per transaction or series of related transactions
of less than $1,000,000.
"Atlas Freighter Leasing Transactions" means the
transactions in which Atlas Freighter Leasing, Inc. and AFL II,
each a wholly-owned Unrestricted Subsidiary of the Company, re-
financed and will refinance six 747-200 aircraft and four 747-
200 aircraft all previously owned by the Company, respectively.
"Aviation Act" means the Federal Aviation Act of
1958, as amended, and the applicable regulations thereunder.
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code,
as amended, or any similar United States federal or state law
relating to bankruptcy, insolvency, receivership, winding-up,
liquidation, reorganization or relief of debtors or any amend-
ment to, succession to or change in any such law.
"Board of Directors" means the Board of Directors of
any Person or any committee thereof duly authorized to act on
behalf of such Board of Directors.
"Board Resolution" means, with respect to any Person,
a copy of a resolution certified by the Secretary or an ▇▇▇▇▇-
▇▇▇▇ Secretary of such Person to have been duly adopted by the
Board of Directors of such Person and to be in full force and
effect on the date of such certification, and delivered to the
Trustee.
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"▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Contract" means the agreement dated
June 9, 1997 between Atlas Air, Inc. and The Boeing Company to
purchase ten new 747-400 aircraft.
"Business Day" means each day which is not a Legal
Holiday.
"Capital Stock" of any Person means any and all
shares, interests, rights to purchase, warrants, options, par-
ticipations, rights in or other equivalents (however desig-
nated) of such Person's capital stock or other equity partici-
pations, including partnership interests, whether general or
limited, in such Person, including any Preferred Stock, and any
rights (other than debt securities convertible into capital
stock), warrants or options exchangeable for or convertible
into such capital stock, whether now outstanding or issued af-
ter the date of this Indenture.
"Capitalized Lease Obligation" of any Person means
any obligation of such Person and its subsidiaries on a con-
solidated basis under a lease of (or other agreement conveying
the right to ▇▇▇) any property (whether real, personal or
mixed) that is required to be classified and accounted for as a
capital lease obligation under GAAP, and, for the purpose of
the Indenture, the amount of such obligation at any date shall
be the capitalized amount thereof at such date, determined in
accordance with GAAP.
"Cash Equivalents" means (i) any evidence of Indebt-
edness with a maturity of one year or less issued or directly
and fully guaranteed or insured by the United States of America
or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or
acceptances and money market deposits with a maturity of one
year or less of any financial institution that is a member of
the Federal Reserve System, in each case having combined capi-
tal and surplus and undivided profits of not less than
$500,000,000; (iii) commercial paper with a maturity of one
year or less issued by a corporation that is not an Affiliate
of the Company and is organized under the laws of any state of
the United States or the District of Columbia and rated at
least A-1 by S&P or at least P-1 by Moody's and (iv) investment
in money market funds substantially all of whose assets are
comprised of Cash Equivalents described in clauses (i) through
(iii).
▇▇
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"▇▇▇▇▇ ▇▇▇▇" has the meaning set forth in Section
2.1.
"Change of Control" means the occurrence of any of
the following events: (a) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange
Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has
the right to acquire, whether such right is exercisable immedi-
ately or only after the passage of time), directly or indi-
rectly, of more than 40% of the total outstanding Voting Stock
of the Company; (b) the Company consolidates with, or merges
with or into, another Person or conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to
any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction
in which the outstanding Voting Stock of the Company is con-
verted into or exchanged for cash, securities or other prop-
erty, other than any such transaction where (i) the outstanding
Voting Stock of the Company is not converted or exchanged at
all (except to the extent necessary to reflect a change in the
jurisdiction of incorporation of the Company) or is converted
into or exchanged for (A) Voting Stock (other than Redeemable
Capital Stock) of the surviving or transferee corporation or
(B) cash, securities and other property (other than Capital
Stock of the Surviving Entity) in an amount that could be paid
by the Company as a Restricted Payment as described in Section
4.4 (or a combination of (A) and (B)) and (ii) immediately af-
ter such transaction, no "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), other
than Permitted Holders, is the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 40% of the total
outstanding Voting Stock of the surviving transferee corpora-
tion; (c) during any consecutive two year period, individuals
who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose
election to such Board of Directors, or whose nomination for
election by the stockholders of the Company was approved by a
vote of 66 2/3% of the directors then still in office who were
either directors at the beginning of such period or whose elec-
tion or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of
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Directors of the Company then in office; or (d) the Company is
liquidated or dissolved or adopts a plan of liquidation or dis-
solution other than in a transaction which complies with the
provisions described in Section 5.1. For purposes of this
definition, a Permitted Holder shall be deemed to beneficially
own Voting Stock that has been pledged to a financial institu-
tion, unless the pledgee has the present right to vote such
Voting Stock in the election of directors or has exercised
remedies with respect to such Voting Stock.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Company" means Atlas Air, Inc., a Delaware corpora-
tion until a successor replaces it and, thereafter, means the
successor.
"Commission" or "SEC" means the U.S. Securities and
Exchange Commission or its successor.
"Consolidated Adjusted Net Income" means, for any pe-
riod, the consolidated net income (or loss) of the Company and
all Subsidiaries for such period as determined in accordance
with GAAP, adjusted by excluding, without duplication, (a) any
net after-tax extraordinary gains or losses (less all fees and
expenses relating thereto), (b) any net after-tax gains or
losses (less, all fees and expenses relating thereto) attribut-
able to asset dispositions other than in the ordinary course of
business, (c) the portion of net income (or loss) of any Person
(other than the Company or a Subsidiary), including Unre-
stricted Subsidiaries, in which the Company or any Subsidiary
has an ownership interest, except to the extent of the amount
of dividends or other distributions actually paid to the Com-
pany or any Subsidiary in cash during such period, (d) for pur-
poses of calculating Consolidated Adjusted Net Income in Sec-
tion 4.4, the net income (or loss) of any Person combined with
the Company or any Subsidiary on a "pooling of interests" basis
attributable to any period prior to the date of combination and
(e) the net income of any Subsidiary, to the extent that the
declaration or payment of dividends or similar distributions by
such Subsidiary is not at the date of determination permitted,
directly or indirectly, by operation of the terms of its char-
ter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such
Subsidiary or its stockholders.
"Consolidated Fixed Charge Coverage Ratio" of the
Company means, for any period, the ratio of (a) the sum of Con-
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solidated Adjusted Net Income, Consolidated Interest Expense,
Consolidated Income Tax Expense and Consolidated Non-Cash
Charges deducted in computing Consolidated Adjusted Net Income,
in each case, for such period, of the Company and all Subsidi-
aries as determined on a consolidated basis in accordance with
GAAP to (b) such Consolidated Interest Expense.
"Consolidated Income Tax Expense" means, for any pe-
riod, the provision for federal, state, local and foreign in-
come taxes of the Company and all Subsidiaries for such period
as determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" of the Company means,
for any period, without duplication, the sum of (a) the inter-
est expense of the Company and its Subsidiaries for such pe-
riod, including, without limitation, (i) amortization of debt
discount, (ii) the net cost of interest rate contracts
(including amortization of discounts), (iii) the interest por-
tion of any deferred payment obligation, (iv) amortization of
debt costs and (v) accrued interest and capitalized interest,
plus (b) the interest component of Capitalized Lease Obliga-
tions of the Company and its Subsidiaries during such period,
plus (c) cash dividends due (whether or not declared) on the
Redeemable Capital Stock by the Company and any Subsidiary (to
any Person other than the Company and any wholly owned Subsidi-
ary), in each case as determined on a consolidated basis in ac-
cordance with GAAP; provided that (x) the Consolidated Interest
Expense attributable to interest on any Indebtedness computed
on a pro forma basis and (A) bearing a floating interest rate
shall be computed as if the rate in effect on the date of com-
putation had been the applicable rate for the entire period and
(B) which was not outstanding during the period for which the
computation is being made but which bears, at the option of the
Company, a fixed or floating rate of interest, shall be com-
puted by applying at the option of the Company, either the
fixed or floating rate, and (y) in making such computation, the
Consolidated Interest Expense attributable to interest on any
Indebtedness under a revolving credit facility computed on a
pro forma basis shall be computed based upon the average daily
balance of such Indebtedness during the applicable period. For
purposes of clause (c) of the preceding sentence, dividends
shall be deemed to be an amount equal to the dividends due
(whether or not declared) divided by one minus the applicable
actual combined federal, state, provincial, local and foreign
income tax rate of the Company and its Subsidiaries (expressed
as a decimal).
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"Consolidated Non-Cash Charges" means, for any pe-
riod, the aggregate depreciation, amortization and other non-
cash items of the Company and any Subsidiary reducing ▇▇▇▇▇▇▇-
dated Adjusted Net Income for such period, determined on a con-
solidated basis in accordance with GAAP (excluding any such
non-cash charge which represents an accrual of or reserve for
cash charges for any future period).
"Corporate Trust Office of the Trustee" shall be at
the address of the Trustee specified in Section 10.2 or such
other address as to which the Trustee may give notice to the
Company.
"Currency Agreements" means any spot or forward for-
eign exchange agreements and currency swap, currency option or
other similar financial agreements or arrangements entered into
by the Company or any of its Subsidiaries in the ordinary
course of business and designed to protect against or manage
exposure to fluctuations in foreign currency exchange rates.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its
nominees and their respective successors and assigns, or such
other depository institution hereinafter appointed by the Com-
pany.
"Disinterested Director" means, with respect to any
transaction or series of transactions in respect of which the
Board of Directors is required to deliver a resolution of the
Board of Directors under the Indenture, a member of the Board
of Directors who does not have any material direct or indirect
financial interest in or with respect to such transaction or
series of transactions.
"Euroclear" has the meaning set forth in Section 2.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Exchange Securities" means the 10 3/4% Senior Notes
due 2005, Series B, to be issued in exchange for the Initial
Securities pursuant to the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset
or property, the sale value that would be obtained in an arm's-
length transaction between an informed and willing seller under
16
-10-
no compulsion to sell and an informed and willing buyer under
no compulsion to buy.
"Generally Accepted Accounting Principles" or "GAAP"
means generally accepted accounting principles in the United
States, consistently applied, that are in effect on the date of
this Indenture.
"guarantee" means, as applied to any obligation, (a)
a guarantee (other than by endorsement of negotiable instru-
ments for collection in the ordinary course of business), di-
rect or indirect, in any manner, of any part or all of such ob-
ligation and (b) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any
way the payment or performance (or payment of damages in the
event of non-performance) of all or any part of such obliga-
tion, including, without limiting the foregoing, the payment of
amounts drawn down by letters of credit.
"Guarantee" means any guarantee of the Securities by
any Subsidiary in accordance with the provisions of Section
4.10 hereof. When used as a verb, "Guarantee" shall have a
corresponding meaning.
"Holder" or "Securityholder" means the Person in
whose name a Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person,
without duplication, (a) all liabilities of such Person for
borrowed money (including overdrafts) or for the deferred pur-
chase price of property or services, excluding any trade pay-
▇▇▇▇▇ and other accrued current liabilities (including out-
standing disbursements owed to trade creditors) incurred in the
ordinary course of business (whether or not evidenced by a
note), but including, without limitation, all obligations, con-
tingent or otherwise, of such Person in connection with any
letters of credit and acceptances issued under letter of credit
facilities, acceptance facilities or other similar facilities,
(b) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments, (c) all indebtedness
of such Person created or arising under any conditional sale or
other title retention agreement with respect to property ac-
quired by such Person (even if the rights and remedies of the
seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), but ex-
cluding trade accounts payable arising in the ordinary course
of business, (d) all Capitalized Lease Obligations of such Per-
son, (e) all Indebtedness referred to in (but not excluded
17
-11-
from) the preceding clauses of other Persons and all dividends
of other Persons, the payment of which is secured by (or for
which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or
with respect to property (including, without limitation, ac-
counts and contract rights) owned by such Person, even though
such Person has not assumed or become liable for the payment of
such Indebtedness (the amount of such obligation being deemed
to be the lesser of the value of such property or asset or the
amount of the obligation so secured), (f) all guarantees by
such Person of Indebtedness referred to in this definition of
any other Person, (g) all Redeemable Capital Stock of such Per-
son valued at the greater of its voluntary or involuntary maxi-
mum fixed repurchase price plus accrued and unpaid dividends
and (h) all obligations of such Person under or in respect of
Interest Rate Agreements or Currency Agreements. For purposes
hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Re-
deemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required
to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such
Redeemable Capital Stock, such Fair Market Value shall be de-
termined in good faith by the board of directors of the issuer
of such Redeemable Capital Stock.
"Indenture" means this Indenture as amended or sup-
plemented from time to time.
"Institutional Accredited Investor" means an institu-
tion that is an "accredited investor" as that term is defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Interest Payment Date" means the stated maturity of
an installment of interest on the Securities.
"Interest Rate Agreements" means any interest rate
protection agreements and other types of interest rate hedging
agreements or arrangements (including, without limitation, in-
terest rate swaps, caps, floors, collars and similar agree-
ments) designed to protect against or manage exposure to fluc-
tuations in interest rates in respect of Indebtedness.
"Investment" means, with respect to any Person, any
direct or indirect advance, loss or other extension of credit
or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or serv-
18
-12-
ices for the account or use of others), or any purchase, acqui-
sition or ownership by such Person of any Capital Stock, bonds,
notes, debentures or other securities or evidences of Indebted-
ness issued or owned by, any other Person and all other items
that would be classified as investments on a balance sheet pre-
pared in accordance with GAAP. In addition, the Fair Market
Value of the net assets of any Subsidiary at the time that such
Subsidiary is designated an Unrestricted Subsidiary shall be
deemed to be an "Investment" made by the Company in such Unre-
stricted Subsidiary at such time. "Investment" shall exclude
extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices.
"Initial Securities" has the meaning set forth in the
preamble to this Indenture.
"Issue Date" means the date of original issuance of
the Securities.
"Legal Holiday" has the meaning ascribed in Section
10.8.
"Lien" means any mortgage, charge, pledge, lien
(statutory or otherwise), privilege, security interest, hy-
pothecation, assignment for security, claims, or preference or
priority or other encumbrance upon or with respect to any prop-
erty of any kind, real or personal, movable or immovable, now
owned or hereafter acquired. A Person shall be deemed to own
subject to a Lien any property which such Person has acquired
or holds subject to the interest of a vendor or lessor under
any conditional sale, agreement, capital lease or other title
retention agreement.
"Maturity" means, with respect to any Security, the
date on which any principal of such Security becomes due and
payable as therein or herein provided, whether at the Stated
Maturity with respect to such principal, by sinking fund pay-
ment or by declaration of acceleration, call for redemption or
purchase or otherwise.
"Maturity Date" means August 1, 2005.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and
its successors.
"Net Cash Proceeds" means (a) with respect to any As-
set Sale, the proceeds thereof in the form of cash or Cash
Equivalents including payments in respect of deferred payment
19
-13-
obligations, but only when received in the form of, or stock or
other assets when disposed for, cash or Cash Equivalents
(except to the extent that such obligations are financed or
sold with recourse to the Company or any Subsidiary), net of
(i) brokerage commissions and other fees and expenses
(including fees and expenses of legal counsel and investment
banks) related to such Asset Sale, (ii) provisions for all
taxes payable as a result of such Asset Sale, (iii) payments
made to retire Indebtedness where payment of such Indebtedness
is secured by the assets or properties the subject of such As-
set Sale, (iv) amounts required to be paid to any Person (other
than the Company or any Subsidiary) owning a beneficial inter-
est in the assets subject to the Asset Sale and (v) appropriate
amounts to be provided by the Company or any Subsidiary, as the
case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Asset Sale and re-
tained by the Company or any Subsidiary, as the case may be,
after such Asset Sale, including, without limitation, pension
and other post-employment benefit liabilities, liabilities re-
lated to environmental matters and liabilities under any indem-
nification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Inden-
ture Trustee and (b) with respect to any issuance or sale of
Capital Stock or options, warrants or rights to purchase Capi-
tal Stock, or debt securities or Redeemable Capital Stock that
have been converted into or exchanged for Qualified Capital
Stock, as referred to in Section 4.4, the proceeds of such is-
suance or sale in the form of cash or Cash Equivalents, includ-
ing payments in respect of deferred payment obligations when
received in the form of, or stock or other assets when disposed
for, cash or Cash Equivalents (except to the extent that such
obligations are financed or sold with recourse to the Company
or any Subsidiary of the Company), net of attorney's fees, ac-
countant's fees and brokerage, consultation, underwriting and
other fees and expenses actually incurred in connection with
such issuance or sale and net of taxes paid or payable as a re-
▇▇▇▇ thereof.
"Offering Memorandum" means the Offering Memorandum
dated August 8, 1997 relating to the Securities;
"Officer" means the Chairman of the Board, the Presi-
dent, any Senior Vice President, any Vice President, the Treas-
urer or the Secretary of, the Company or any other officer des-
ignated by Board of Directors serving in a similar capacity.
"Officers' Certificate" means a certificate signed by
two Officers.
20
-14-
"Opinion of Counsel" means a written opinion from le-
gal counsel who is reasonably acceptable to the Trustee and
which complies, if applicable, with Section 10.5. The counsel
may be an employee of or counsel to the Company.
"Paying Agent" has the meaning provided in Section
2.3.
"Permitted Holders" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the Re-
lated Parties and/or a trustee or other fiduciary holding Vot-
ing Stock under an employee benefit plan of the Company.
"Permitted Indebtedness" means any of the following:
(a) Indebtedness of the Company in an aggregate
principal amount at any one time outstanding not to exceed
$100 million provided that such Indebtedness is incurred
to finance the acquisition of additional aircraft by the
Company and is secured by Liens on such aircraft;
(b) Indebtedness of the Company outstanding on the
Issue Date;
(c) Indebtedness of the Company to any wholly owned
Subsidiary; provided that any Indebtedness of the Company
owing to any such Subsidiary is made pursuant to an inter-
company note and is subordinated in right of payment from
and after such time as the Securities shall become due and
payable (whether at Stated Maturity, upon acceleration or
otherwise) to the payment and performance of the Company's
obligations under the Securities; provided further, that
any disposition, pledge or transfer of any such Indebted-
ness to a Person (other than the Company or another wholly
owned Subsidiary) shall be deemed to be an incurrence of
such Indebtedness by the Company not permitted by this
clause (c);
(d) Indebtedness of the Company under Currency
Agreements and Interest Rate Agreements entered into in
the ordinary course of business, provided that the no-
tional amount of such obligations does not exceed the
amount of the related obligation on Indebtedness outstand-
ing or committed to be incurred on the date such Currency
Agreement or Interest Rate Agreements are entered into;
(e) any renewals, extensions, substitutions, refi-
nancings or replacements (each, for purposes of this
clause, a "refinancing") by the Company of any Indebted-
21
-15-
ness of the Company pursuant to clause (b) of this defini-
tion, including any successive refinancings by the Com-
pany, so long as (i) any such new Indebtedness shall be in
a principal amount that does not exceed the principal
amount (or, if such Indebtedness being refinanced provides
for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration
thereof, such lesser amount as of the date of determina-
tion) so refinanced, plus the amount of any premium re-
quired to be paid in connection with such refinancing pur-
suant to the terms of the Indebtedness refinanced or the
amount of any premium reasonably determined by the Company
as necessary to accomplish such refinancing, plus the
amount of expenses of the Company incurred in connection
with such refinancing, (ii) in the case of any refinancing
of Subordinated Indebtedness, such new Indebtedness is
made subordinate to the Securities at least to the same
extent as the Indebtedness being refinanced and (iii) such
new Indebtedness has no scheduled payment dates prior to
the final Stated Maturity of the Securities;
(f) Indebtedness of the Company in addition to any
amounts listed in clauses (a) through (e) above in an ag-
gregate principal amount at any one time outstanding not
to exceed $20 million less the amount of Permitted Sub-
sidiary Indebtedness then outstanding pursuant to clause
(f) of the definition hereof;
(g) Indebtedness under the Securities and this In-
denture;
(h) Indebtedness arising from the honoring by a bank
or other financial institution of a check, draft or simi-
lar instrument inadvertently (except in the case of day-
light overdrafts) drawn against insufficient funds in the
ordinary course of business; provided, however, that such
Indebtedness is extinguished within two business days of
incurrence; and
(i) Indebtedness of the Company and its Restricted
Subsidiaries incurred in connection with the acquisition
of ten new Boeing 747-400 aircraft pursuant to the Boeing
Purchase Contract provided that Indebtedness shall not ex-
ceed 80% of Appraised Fair Market Value of such aircraft
at the time of borrowing, neither individually nor in the
aggregate.
22
-16-
"Permitted Investments" means any of the following:
(a) Investments in Cash Equivalents;
(b) Investments in the Company or any wholly owned
Subsidiary;
(c) Investments in Subsidiaries and Unrestricted
Subsidiaries in an amount not to exceed $20 million in ag-
gregate which Subsidiaries or Unrestricted Subsidiaries
are in the business of the Company as conducted on the Is-
▇▇▇ Date or, a business reasonably related thereto or in-
volved in outsourcing for the air cargo industry or the
leasing of aircraft to the Company;
(d) Investments by the Company or any Subsidiary in
another Person, if as a result of such Investment (i) such
other Person becomes a wholly owned Subsidiary or (ii)
such other Person is merged or consolidated with or into,
or transfers or conveys all or substantially all of its
assets to, the Company or a wholly owned Subsidiary;
(e) Currency Agreements and Interest Rate Agree-
ments;
(f) Loans and advances to employees and officers of
the Company and its Subsidiaries in the ordinary course of
business not in excess of $2.0 million at any one time
outstanding;
(g) Investments in securities of trade creditors or
customers received pursuant to a plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of
such trade creditors or customers;
(h) Investments existing on the Issue Date; or
(i) Investments by the Company in AFL II.
"Permitted Liens" means the following types of Liens:
(a) Liens existing as of the date of this Indenture;
(b) Liens on any property or assets of a wholly
owned Subsidiary granted in favor of the Company or any
other wholly owned Subsidiary;
23
-17-
(c) Liens on property acquired after the date of
this Indenture that secures Indebtedness permitted to be
incurred pursuant to Section 4.3 and provided further that
such Liens shall not extend to any other property of the
Company or its Subsidiaries;
(d) statutory Liens of landlords and carrier's,
warehouseman's, mechanics, supplier's, materialmen's, re-
pairmen's or other like Liens arising in the ordinary
course of business and with respect to amounts not yet de-
linquent or being contested in good faith by appropriate
proceeding, if a reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall
have been made therefor;
(e) Liens for taxes, assessments, government charges
or claims that are being contested in good faith by appro-
priate proceedings promptly instituted and diligently con-
ducted and if a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall
have been made therefor;
(f) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory obliga-
tions, surety and appeal bonds, government contracts, per-
formance bonds and other obligations of a like nature in-
curred in the ordinary course of business (other than con-
tracts for the payment of money);
(g) easements, rights-of-way, restrictions and other
similar charges or encumbrances not interfering in any ma-
terial respect with the business of the Company or any
Subsidiary incurred in the ordinary course of business;
(h) Liens arising by reason of any judgment, decree
or order of any court so long as such Lien is adequately
bonded and any appropriate legal proceedings that may have
been duly initiated for the review of such judgment, ▇▇-
▇▇▇▇ or order shall not have been finally terminated or
the period within which such proceedings may be initiated
shall not have expired; and
(i) any extension, renewal or replacement, in whole
or in part, of any Lien described in the foregoing clauses
(a) through (i); provided that any such extension, renewal
or replacement shall be no more restrictive in any mate-
rial respect that the Lien so extended, renewed or re-
24
-18-
placed and shall not extend to any additional property or
assets.
"Permitted Subsidiary Indebtedness" means any of the
following:
(a) Indebtedness of Subsidiaries outstanding on the
Issue Date;
(b) Indebtedness of any Subsidiary under Currency
Agreements and Interest Rate Agreements, provided that the
notional principal amount of such obligations does not ex-
ceed the amount of Indebtedness outstanding or committed
to be incurred on the date such Currency Agreements or In-
terest Rate Agreements are entered into;
(c) Indebtedness of any wholly owned Subsidiary to
any other wholly owned Subsidiary or to the Company;
(d) any renewals, extensions, substitutions, refi-
nancings or replacements (each, for purposes of this
clause, a "refinancing") by any Subsidiary of any Indebt-
edness of such Subsidiary pursuant to clause (a) of this
definition, including any successive refinancings by such
Subsidiary, so long as any such new Indebtedness shall be
in a principal amount that does not exceed the principal
amount (or, if such Indebtedness being refinanced provides
for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration
thereof, such lesser amount as of the date of determina-
tion) so refinanced plus the amount of any premium re-
quired to be paid in connection with such refinancing pur-
suant to the terms of the Indebtedness refinanced or the
amount of any premium reasonably determined by such Sub-
sidiary as necessary to accomplish such refinancing, plus
the amount of expenses of such Subsidiary incurred in con-
nection with such refinancing;
(e) guarantees by Subsidiaries of Indebtedness of
the Company entered into in accordance with Section 4.10
and guarantees by Subsidiaries of Permitted Subsidiary In-
debtedness of wholly owned Subsidiaries; and
(f) Indebtedness of Subsidiaries in addition to any
amounts listed in clauses (a) through (e) above in an ag-
gregate principal amount at any one time outstanding not
to exceed $20 million, less the amount of Permitted In-
25
-19-
debtedness then outstanding pursuant to clause (f) of the
definition hereof.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or gov-
ernment or any agency or political subdivision thereof.
"Physical Securities" has the meaning provided in
Section 2.1.
"Preferred Stock", means, with respect to any Person,
any and all shares, interests, participations or other equiva-
▇▇▇▇▇ (however designated) of such person's preferred or pref-
erence stock whether outstanding on the date of this Indenture,
or issued thereafter, and including, without limitation, all
classes and series of preferred or preference stock of such
Person.
"Private Exchange Note" shall have the meaning pro-
vided in the Registration Rights Agreement.
"Private Placement Legend" has the meaning provided
in Section 2.15.
"Proceeds Purchase Date" has the meaning provided in
Section 4.8.
"QIB" means any "qualified institutional buyer" (as
defined under the Securities Act).
"Qualified Capital Stock" of any Person means any and
all Capital Stock of such Person other than Redeemable Capital
Stock.
"Record Date" means the record dates specified in the
Securities, whether or not a Legal Holiday.
"Redeemable Capital Stock" means any class or series
of Capital Stock that, either by its terms, by the terms of any
security into which it is convertible or exchangeable or by
contract or otherwise is, or upon the happening of an event or
passage of time would be, required to be redeemed prior to the
final Stated Maturity of the Securities or is redeemable at the
option of the holder thereof at any time prior to such final
Stated Maturity, or is convertible into or exchangeable for
debt securities at any time prior to such final Stated Matur-
ity.
26
-20-
"Redemption Date" when used with respect to any secu-
rity, means the date fixed for such redemption pursuant to this
Indenture and the Securities delivered pursuant to Section 3.3
as the date on which the Company has elected to redeem all of
the Securities pursuant to paragraph 7 of the Securities after
the occurrence of a Change of Control.
"Registrar" has the meaning provided for in Section
2.3.
"Registration Rights Agreement" means the Exchange
and Registration Rights Agreement, dated August 13, 1997, be-
tween the Company and Initial Purchaser.
"Regulation S" means Regulation S under the Securi-
ties Act.
"Regulation S Global Note" has the meaning set forth
in Section 2.1.
"Related Parties" means (a) the spouse, children or
other descendants (by blood or adoption), stepchildren, sib-
lings, and in-laws of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or the spouse of Mi-
chael ▇. ▇▇▇▇▇▇▇; (b) the heirs, legatees, devisees, distribu-
tees, personal representatives, or the estate of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ or of persons listed in the foregoing clause (a); (c)
any trust primarily for the benefit of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or
any of the persons or entities listed in the foregoing clauses
of this definition; (d) any trust, corporation, limited or gen-
eral partnership, limited liability company or partnership or
other entity of which ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and/or any of the
other persons or entities listed in the foregoing clauses of
this definition are the beneficial owners (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all securi-
ties that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of
time) of a controlling interest in the outstanding voting and
equity securities or interests; (e) a transferee pursuant to a
decree of dissolution of marriage relating to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇-
dry or a Person that has been immediately prior to the disposi-
tion a Related Party under any clause of this definition; or
(f) a transferee by disposition in an involuntary manner with-
out the consent of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or a Person that has been
immediately prior to the disposition a Related Party under any
clause of this definition, including, but not limited to, dis-
position under judicial orders.
27
-21-
"Responsible Officer" when used with respect to the
Trustee, means any officer within the corporate trust depart-
ment of the Trustee (or any successor group of the Trustee)
with direct responsibility for the administration of this In-
denture and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular
subject.
"Restricted Period" means 40 days after the later of
commencement of the offering of the Securities and the Issue
Date.
"Restricted Security" has the meaning assigned to
such term in Rule 144(a)(3) under the Securities Act; provided,
however, that the Trustee shall be entitled to request and con-
clusively rely on an Opinion of Counsel with respect to whether
any Security constitutes a Restricted Security.
"Rule 144A Global Note" has the meaning set forth in
Section 2.1.
"S&P" means Standard and Poor's Ratings Group, a di-
vision of ▇▇▇▇▇▇-▇▇▇▇, Inc., and its successors.
"Securities" means the Initial Securities and the Ex-
change Securities treated as a single class of securities, as
amended or supplemented from time to time in accordance with
the terms hereof, that are issued pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended and the rules and regulations of the Commission promul-
gated thereunder.
"Significant Subsidiary" means any Subsidiary of the
Company that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10%
of the consolidated revenues of the Company and its Subsidiar-
ies or (ii) as of the end of such fiscal year, was the owner of
more than 10% of the consolidated assets of the Company and its
Subsidiaries, all as set forth on the most recently available
consolidated financial statements of the Company for such fis-
cal year.
"Stated Maturity" means, when used with respect to
the Securities or any installment of interest thereon, the date
specified in the Security as the fixed date on which the prin-
cipal of the Security or such installment of interest is due
28
-22-
and payable, and, when used with respect to any other Indebted-
ness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such
Indebtedness, or any installment of interest thereon, is due
and payable.
"Subordinated Indebtedness" means Indebtedness of the
Company that is expressly subordinated in right of payment to
the Securities.
"Subsidiary" means any Person a majority of the eq-
uity ownership or Voting Stock of which is at the time owned,
directly or indirectly, by the Company or by one or more other
Subsidiaries or by the Company and one or more other Subsidiar-
ies. For purposes of this Indenture, the term Subsidiary shall
not include any Unrestricted Subsidiary, except in the defini-
tion of Unrestricted Subsidiary.
"Surviving Entity" has the meaning provided in Sec-
tion 5.1.
"TIA" means the Trust Indenture Act of 1939 (15
U.S.C. SS 77aaa-77bbbb) as in effect on the date of this Inden-
ture; provided, however, that, in the event the Trust Indenture
Act of 1939 is amended after such date, "TIA" means, to the ex-
tent required by any such amendment, the Trust Indenture Act of
1939 as so amended.
"Trustee" means the party named as such in the ▇▇▇▇▇-
ble to this Indenture until a successor replaces it in accor-
dance with the provisions of Article VII of this Indenture and,
thereafter, means the successor.
"Trust Officer" means any officer or assistant offi-
cer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"Unrestricted Subsidiary" means (a) any Subsidiary of
the Company that at the time of determination shall be an Unre-
stricted Subsidiary (as designated by the Board of Directors of
the Company, as provided below) and (b) any Subsidiary of an
Unrestricted Subsidiary and (c) Atlas Freighter Leasing, Inc.
is an Unrestricted Subsidiary as of the Issue Date. Atlas
Freighter Leasing II, Inc. ("AFL II") may be designated an Un-
restricted Subsidiary at any time on or after the Issue Date
(and such designation shall not be deemed a Restricted Payment
for purposes of Section 4.4, provided Investments by the Com-
pany in AFL II since the Issue Date and outstanding on the date
29
-23-
of designation shall not exceed $5 million in the aggregate.
The Board of Directors of the Company may designate any Sub-
sidiary (including any newly acquired or newly formed Subsidi-
ary) to be an Unrestricted Subsidiary so long as (i) neither
the Company nor any Subsidiary is directly or indirectly liable
for any Indebtedness of such Subsidiary, (ii) no default with
respect to any Indebtedness of such Subsidiary would permit
(upon notice, lapse of time or otherwise) any holder of any
other Indebtedness of the Company or any Subsidiary to declare
a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated matur-
ity, (iii) any Investment in such Subsidiary made as a result
of designation of such Subsidiary an Unrestricted Subsidiary or
otherwise was permitted under paragraph (a), clause (iv) of
Section 4.4, (iv) neither the Company nor any Subsidiary has a
contract, agreement, arrangement, understanding or obligation
of any kind, whether written or oral, with such Subsidiary
other than those that might be obtained at the time from Per-
sons who are not affiliates of the Company, and (v) neither the
Company nor any Subsidiary has any obligation (1) to subscribe
for additional shares of Capital Stock or other equity inter-
ests in such Subsidiary, or (2) to maintain or preserve such
Subsidiary's financial condition or to cause such Subsidiary to
achieve certain levels of operating results. Any such designa-
tion by the Board of Directors of the Company shall be evi-
denced to the Indenture Trustee by filing a board resolution
with the Indenture Trustee giving effect to such designation.
The Board of Directors of the Company may designate any Unre-
stricted Subsidiary as a Subsidiary if immediately after giving
effect to such designation, there would be no Default or Event
of Default under this Indenture and the Company could incur
$1.00 of additional Indebtedness (other than Permitted Indebt-
edness) pursuant to Section 4.3.
"U.S. Legal Tender" means such coin or currency of
the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts.
"Voting Stock" means, with respect to any Person, any
class or classes of Capital Stock pursuant to which the holders
thereof have the general voting power under ordinary circum-
stances to elect at least a majority of the board of directors,
managers or trustees of such Person (irrespective of whether or
not, at the time, stock of any other class or classes shall
have, or might have, voting power by reason of the happening of
any contingency).
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SECTION 1.2. Other Definitions.
Defined in
Term Section
"Agent Members" ....................... 2.16
"Change of Control Purchase Date" ..... 4.9
"Change of Control Purchase Price" .... 4.9
"covenant defeasance" ................. 8.1(b)
"Custodian" ........................... 6.1
"Event of Default" .................... 6.1
"Excess Proceeds" ..................... 4.8(b)
"Excess Proceeds Offer" ............... 4.8(c)
"Global Notes" ........................ 2.1
"incur" ............................... 4.3(a)
"legal defeasance" .................... 8.1(b)
"Offered Price" ....................... 4.8(c)
"Replacement Assets" .................. 4.8(b)
"Restricted Payment" .................. 4.4
"Rule 144A" ........................... 2.1
"Surviving Entity ..................... 5.1
SECTION 1.3. Incorporation by Reference of Trust
Indenture Act. This Indenture is subject to the mandatory pro-
visions of the TIA which are incorporated by reference in and
made a part of this Indenture. The following TIA terms used in
this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the Com-
pany, and any other obligor on the securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by the TIA reference to another
statute or defined under rules promulgated by the Commission
have the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the
context otherwise requires:
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(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and
words in the plural include the singular;
(6) references to Article and Section numbers refers
to the corresponding Articles and Sections of this Inden-
ture unless otherwise specified; and
(7) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
ARTICLE II
The Securities
SECTION 2.1. Form and Dating. The Initial Securi-
ties, and the Trustee's certificate of authentication thereon
shall be substantially in the form of Exhibit A hereto. The
Exchange Securities, and the Trustee's certificate of authenti-
cation thereon shall be substantially in the form of Exhibit B
hereto. The Securities may have notations, legends or endorse-
ments required by law, stock exchange rule or Depository rule
or usage. The Company and the Trustee shall approve the form
of the Securities and any notation, legend or endorsement on
them. Each Security shall be dated the date of its authentica-
tion.
The terms and provisions contained in the forms of
the Securities annexed hereto as Exhibits A and B, shall con-
stitute, and are hereby expressly made, a part of this Inden-
ture and, to the extent applicable, the Company and the Trus-
tee, by their execution and delivery of this Indenture, ex-
pressly agree to such terms and provisions and to be bound
thereby.
Securities offered and sold in reliance on Rule 144A
under the Securities Act ("Rule 144A") shall be issued ini-
32
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tially in the form of one or more permanent global notes in
registered form, in substantially the form set forth in Exhibit
A (the "Rule 144A Global Note"), deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The ag-
gregate principal amount of the Rule 144A Global Note may from
time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depositary, as
hereinafter provided. Securities offered and sold in reliance
on Regulation S under the Securities Act shall be issued in the
form of one or more permanent global notes in registered form
in substantially the form set forth in Exhibit A with the leg-
end set forth in Exhibit A-2 (the "Regulation S Global Note"
and together with the 144A Global Note, the "Global Notes").
The Regulation S Global Note, which shall be deposited with the
Trustee, as custodian for the Depositary, and registered in the
name of the Depositary or the nominee of the Depositary for the
accounts of designated agents holding on behalf of the Euro-
clear System ("Euroclear") or Cedel Bank, S.A. ("Cedel Bank").
The aggregate principal amount of the Regulation S Global Note
may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the De-
positary, as hereinafter provided.
Securities issued in exchange for interests in the
Rule 144A Global Note pursuant to Section 2.17 may be issued in
the form of permanent certificated Securities in registered
form in substantially the form set forth in Exhibit A (the
"Physical Securities").
Each of the Global Notes shall represent such amount
of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities repre-
sented thereby may from time to time be reduced or increased,
as appropriate, to reflect exchanges and redemptions. Any en-
dorsement of a Global Note to reflect the amount of any in-
crease or decrease in the amount of outstanding Securities rep-
resented thereby shall be made by the Trustee in accordance
with instructions given by the Holder thereof as required by
Section 2.6 hereof.
The provisions of the "Operating Procedures of the
Euroclear System" and "Terms and Conditions Governing Use of
Euroclear" and the "Management Resolutions" and "Instructions
to Participants" of Cedel Bank shall be applicable to interests
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in the Regulation S Global Notes that are held by the Agent
Members through Euroclear or Cedel Bank.
SECTION 2.2. Execution and Authentication. (a)
Two Officers of the Company, or one Officer shall sign, and one
Officer or an Assistant Secretary (each of whom shall, in each
case, have been duly authorized by all requisite corporate ac-
tions) shall attest to, the Securities for the Company by man-
ual or facsimile signature. If an Officer whose signature is
on a Security no longer holds that office at the time the Secu-
rity is authenticated, the Security shall nevertheless be
valid.
(b) A Security shall not be valid until authenti-
cated by the manual signature of the Trustee. The signature of
the Trustee shall be conclusive evidence that the Security has
been authenticated under this Indenture.
(c) The Trustee shall authenticate (i) Initial Secu-
rities for original issue in the aggregate principal amount not
to exceed $150,000,000, (ii) Private Exchange Notes from time
to time in exchange for a like principal amount of Initial Se-
curities and (iii) Exchange Securities from time to time for
issue only in exchange for a like principal amount of Initial
Securities or Private Exchange Notes, as the case may be, in
each case upon receipt of a written order of the Company. Each
such written order shall specify the amount of Securities to be
authenticated and the date on which the Securities are to be
authenticated, whether the Securities are to be Initial Securi-
ties, Private Exchange Notes or Exchange Securities and whether
the Securities are to be issued as Physical Securities or
Global Notes and such other information as the Trustee may rea-
sonably request. The aggregate principal amount of Securities
outstanding at any time may not exceed $150,000,000.
(d) The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Securities. Unless
limited by the terms of such appointment, an authenticating
agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticat-
ing agent has the same rights as an Agent to deal with the Com-
pany or an Affiliate.
(e) The Securities shall be issuable in fully regis-
tered form only, without coupons, in denominations of $1,000
and any integral multiple thereof.
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SECTION 2.3. Registrar and Paying Agent. (a) The
Company shall maintain an office or agency (which shall be lo-
cated in the Borough of Manhattan in the City of New York,
State of New York) where (i) Securities may be presented for
registration of transfer or for exchange ("Registrar"), (ii)
Securities may be presented for payment ("Paying Agent") and
(iii) notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Registrar
shall keep a register of the Securities and of their transfer
and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent. The
Company may change any Paying Agent, Registrar or co-registrar
without prior notice to any Securityholder. The Company shall
notify the Trustee and the Trustee shall notify the Security-
holders of the name and address of any Agent not a party to
this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall
act as such. The Company may act as Paying Agent, Registrar or
co-registrar. The Company shall enter into an appropriate
agency agreement with any Agent not a party to this Indenture,
which shall incorporate the provisions of the TIA. The agree-
ment shall implement the provisions of this Indenture that re-
late to such Agent. The Company shall notify the Trustee of
the name and address of any such Agent. If the Company fails
to maintain a Registrar or Paying Agent, or fails to give the
foregoing notice, the Trustee shall act as such, and shall be
entitled to appropriate compensation in accordance with Section
7.7.
(b) The Company initially appoints the Trustee as
Registrar, Paying Agent, authenticating agent and agent for
service of notices and demands in connection with the Securi-
ties. The Trustee's address for purposes of Section 2.3(a) is
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(c) Any of the Registrar, the Paying Agent or any
other agent may resign upon 30 days' notice to the Company.
The office of the Paying Agent as Registrar for purposes of
this Section 2.03 shall initially be at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
SECTION 2.4. Paying Agent to Hold Money in Trust.
The Company or any other obligor on the Securities shall re-
quire each Paying Agent other than the Trustee to agree in
writing that the Paying Agent shall hold in trust for the bene-
fit of the Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of, premium, if any,
35
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and interest on the Securities, and shall notify the Trustee of
any Default by the Company or any other obligor on the Securi-
ties in making any such payment. While any such Default con-
tinues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company or any other obligor on
the Securities at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent (if other than the Company) shall
have no further liability for the money delivered to the Trus-
tee. If the Company or any other obligor on the Securities
acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Securityholders all money
held by it as Paying Agent.
SECTION 2.5. Securityholder Lists. The Trustee
shall preserve in as current a form as is reasonably practica-
ble the most recent list available to it of the names and ad-
dresses of Securityholders and shall otherwise comply with TIA
S 312(a). If the Trustee is not the Registrar, the Company or
any other obligor on the Securities shall furnish to the Trus-
tee at least five Business Days before each Interest Payment
Date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Security-
holders, including the aggregate principal amount of the Secu-
rities held by each thereof, and the Company or any other obli-
gor on the Securities shall otherwise comply with TIA S 312(a).
SECTION 2.6. Transfer and Exchange. (a) Subject
to Sections 2.16 and 2.17 where Securities are presented to the
Registrar or a co-registrar with a request to register the
transfer thereof or exchange them for an equal principal amount
of Securities of other denominations, the Registrar shall reg-
ister the transfer or make the exchange if its requirements for
such transactions are met; provided, that any Security pre-
sented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Registrar and the Trus-
tee duly executed by the Securityholder thereof or his attorney
duly authorized in writing. To permit registrations of trans-
fer and exchanges, the Company shall issue and the Trustee
shall authenticate Securities at the Registrar's request.
(b) The Company and the Registrar shall not be re-
quired (i) to issue, to register the transfer of or to exchange
Securities during a period beginning at the opening of business
on a Business Day 15 days before the day of any selection of
Securities for redemption pursuant to Article 3 and ending at
36
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the close of business on the day of selection, (ii) to register
the transfer of or exchange any Security so selected for re-
demption in whole or in part, except the unredeemed portion of
any Security being redeemed in part or (iii) to register the
transfer or exchange of a Security between the Record Date and
the next succeeding Interest Payment Date.
(c) No service charge shall be made for any regis-
tration of a transfer or exchange (except as otherwise ex-
pressly permitted herein), but the Company may require payment
by the Securityholder of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection there-
with (other than such transfer tax or similar governmental
charge payable upon exchanges pursuant to Section 2.10, 3.6 or
9.5).
(d) Any Holder of either of the Global Notes shall,
by acceptance of such Global Note, agree that transfers of
beneficial interests in such Global Note may be effected only
through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial
interest in the Global Note shall be required to be reflected
in a book entry.
SECTION 2.7. Replacement Securities. (a) If any
mutilated Security is surrendered to the Trustee, or the Com-
pany and the Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Security, the Company
shall issue and the Trustee, upon receipt by it of the written
order of the Company signed by two Officers of the Company,
shall authenticate a replacement Security if the Trustee's re-
quirements for replacements of Securities are met. If required
by the Trustee or the Company, an indemnity bond must be sup-
plied by the Holder that is sufficient in the reasonable judg-
ment of the Trustee and the Company to protect the Company, the
Trustee, any Agent or any authenticating agent from any loss
which any of them may suffer if a Security is replaced. The
Company and the Trustee may charge a Securityholder for reason-
able out-of-pocket expenses in replacing a Security, including
fees and expenses of counsel.
(b) Every replacement Security is an additional ob-
ligation of the Company and shall be entitled to the benefits
of this Indenture.
SECTION 2.8. Outstanding Securities. (a) The Se-
curities outstanding at any time are all the Securities authen-
ticated by the Trustee except for those cancelled by the Com-
37
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pany or by the Trustee, those delivered to the Trustee for can-
cellation and those described in this Section as not outstand-
ing.
(b) If a Security is replaced pursuant to Section
2.7, it ceases to be outstanding unless and until the Trustee
receives proof satisfactory to it that the replaced Security is
held by a bona fide purchaser.
(c) If the principal amount of any Security is con-
sidered paid under Section 4.1, it ceases to be outstanding and
interest on it ceases to accrue.
(d) Subject to Section 2.9, a Security does not
cease to be outstanding because the Company or an Affiliate of
the Company holds the Security.
(e) If on a Redemption Date or the Maturity Date the
Paying Agent holds U.S. Legal Tender sufficient to pay all of
the principal, premium, if any, and interest due on the Securi-
ties payable on that date and is not prohibited from paying
such money to the Securityholders thereof pursuant to the terms
of this Indenture, then on and after that date such Securities
cease to be outstanding and interest on them ceases to accrue.
SECTION 2.9. Treasury Securities. In determining
whether the Holders of the required principal amount of Securi-
ties have concurred in any direction, waiver or consent, Secu-
rities owned by the Company, or any of their respective Affili-
ates shall be considered as though not outstanding, except that
for purposes of determining whether the Trustee shall be pro-
tected in relying on any such direction, waiver or consent,
only Securities which a Responsible Officer knows to be so
owned shall be so considered.
SECTION 2.10. Temporary Securities. Until defini-
tive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Tem-
porary Securities shall be substantially in the form of defini-
tive Securities but may have variations that the Company and
the Trustee consider appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the
Trustee, upon receipt of the written order of the Company
signed by two Officers of the Company, or one Officer shall
sign, and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite
corporate actions) shall authenticate, pursuant to Section
2.02, definitive Securities in exchange for temporary Securi-
38
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ties. Until such exchange, temporary Securities shall be enti-
tled to the same rights, benefits and privileges under this In-
denture as definitive Securities.
SECTION 2.11. Cancellation. The Company at any time
may deliver Securities to the Trustee for cancellation. The
Registrar and Paying Agent shall forward to the Trustee any Se-
curities surrendered to them for registration of transfer, ex-
change or payment. The Trustee shall cancel all Securities, if
not already cancelled, surrendered for registration of trans-
fer, exchange, payment, replacement or cancellation and shall
destroy cancelled Securities (subject to the record retention
requirement of the Exchange Act), and deliver certification of
their destruction to the Company, unless by a written order,
signed by two Officers of the Company, or one Officer shall
sign, and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite
corporate actions), the Company shall direct that cancelled Se-
curities be returned to it. Subject to Section 2.07 the Com-
pany may not issue new Securities to replace Securities that it
has redeemed or paid or that have been delivered to the Trustee
for cancellation.
SECTION 2.12. Defaulted Interest. If the Company
defaults in a payment of interest on the Securities, it shall
pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to
the Persons who are Securityholders on a subsequent special re-
cord date, which date shall be at the earliest practicable date
but in all events at least five Business Days prior to the pay-
ment date, in each case at the rate provided in the Securities
and in Section 4.1. The Company shall, with the consent of the
Trustee, fix or cause to be fixed each such special record date
and payment date. At least 15 days before the special record
date, the Company (or the Trustee, in the name of and at the
expense of the Company) shall mail to Securityholders a notice
that states the special record date, the related payment date
and the amount of such interest to be paid.
SECTION 2.13. CUSIP Number. The Company in issuing
the Securities may use a "CUSIP" number, and if so, the Trustee
shall use the CUSIP number in notices of redemption or exchange
as a convenience to Securityholders; provided, that no repre-
sentation shall be deemed to be made by the Trustee as to the
correctness or accuracy of the CUSIP number printed in the no-
▇▇▇▇ or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities.
39
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The Company shall promptly notify the Trustee of any change in
the CUSIP number.
SECTION 2.14. Deposit of Moneys. Prior to 11:00
a.m. New York City time on each Interest Payment Date and Ma-
turity Date, the Company shall have deposited with the Paying
Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date or Ma-
turity Date, as the case may be, in a timely manner which per-
mits the Paying Agent to remit payment to the Securityholders
on such Interest Payment Date or Maturity Date, as the case may
be.
SECTION 2.15. Restrictive Legends. Each Global Note
and Physical Security that constitutes a Restricted Security
shall bear the following legend (the "Private Placement Leg-
end") on the face thereof until August 13, 1999 unless other-
wise agreed by the Company and the Securityholder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW.
BY ITS ACQUISITION HEREOF, THE SECURITYHOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) or (7) UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 OF THE SECURITIES ACT, (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY
A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
40
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PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
APPLICABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE
SECURITYHOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Each Global Note shall also bear the following legend
on the face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY
SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY
OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH
NOMINEE, TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
41
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VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
The Regulation S Global Note shall bear the following
legend on the face thereof:
THIS SECURITY MAY NOT BE OFFERED OR SOLD TO A U.S.
PERSON (AS SUCH TERM IS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT) OR FOR THE ACCOUNT OR BENEFIT OF
A U.S. PERSON PRIOR TO THE EXPIRATION OF THE
RESTRICTED PERIOD (AS DEFINED IN THE INDENTURE), AND
NO TRANSFER OR EXCHANGE OF THIS SECURITY MAY BE MADE
FOR AN INTEREST IN A PHYSICAL SECURITY UNTIL AFTER
THE LATER OF THE DATE OF EXPIRATION OF THE RESTRICTED
PERIOD AND THE DATE ON WHICH THE PROPER REQUIRED
CERTIFICATION RELATING TO SUCH INTEREST HAS BEEN
PROVIDED IN ACCORDANCE WITH THE TERMS OF THE
INDENTURE, TO THE EFFECT THAT THE BENEFICIAL OWNER OR
OWNERS OF SUCH INTEREST ARE NOT U.S. PERSONS.
SECTION 2.16. Book-Entry Provisions for Global Secu-
rity. (a) Each Global Note initially shall (i) be registered
in the name of the Depositary or the nominee of such Deposi-
tary, (ii) be delivered to the Trustee as custodian for such
Depositary and (iii) bear legends as set forth in Section 2.15.
Members of, or participants in, the Depositary
("Agent Members") shall have no rights under this Indenture
with respect to any Global Note held on their behalf by the De-
positary, or the Trustee as its custodian, or under the Global
Note, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the ab-
solute owner of the Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of custom-
ary practices governing the exercise of the rights of a Holder
of any Security.
(b) Transfers of a Global Note shall be limited to
transfers in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interest of benefi-
cial owners in a Global Note may be transferred or exchanged
for Physical Securities in accordance with the rules and proce-
dures of the Depositary, the provisions of Section 2.17 and the
42
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limitation set forth in Section 2.1 with regard to the Regula-
tion S Global Note. In addition, Physical Securities shall be
transferred to all beneficial owners in exchange for their
beneficial interests in a Global Note if (i) the Depositary no-
tifies the Company that it is unwilling or unable to continue
as Depositary for the Global Note and a successor depository is
not appointed by the Company within 90 days of such notice or
(ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depositary to
issue Physical Securities.
(c) In connection with any transfer or exchange of a
portion of the beneficial interest in the Global Notes to bene-
ficial owners pursuant to paragraph (b) above, the Registrar
shall (if one or more Physical Securities are to be issued) re-
flect on its books and records the date and a decrease in the
principal amount of the beneficial interest in the Global Note
to be transferred, and the Company shall execute, and the Trus-
tee shall authenticate and deliver, one or more Physical Secu-
rities of like tenor and amount.
(d) In connection with the transfer of an entire
Global Note to beneficial owners pursuant to paragraph (b)
above, a Global Note shall be deemed to be surrendered to the
Trustee for cancellation, and the Company shall execute, and
the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depositary in exchange for its benefi-
cial interest in such Global Note, an equal aggregate principal
amount of Physical Securities of authorized denominations.
(e) Any Physical Security constituting a Restricted
Security delivered in exchange for an interest in the Global
Note pursuant to paragraph (b) or (c) above shall, except as
otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.17, bear the legend regarding transfer restrictions applica-
ble to the Physical Securities set forth in Section 2.15.
(f) The Holder of a Global Note may grant proxies
and otherwise authorize any Person, including Agent Members and
Persons that may hold interests through Agent Members, to take
any action which a Securityholder is entitled to take under
this Indenture or the Securities.
SECTION 2.17. Special Transfer Provisions.
(a) Transfers of Global Notes; Transfers to Non-QIB
Institutional Accredited Investors and Non-U.S. Persons. The
following provisions shall apply with respect to the registra-
43
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tion of any proposed transfer of a Security constituting of a
Restricted Security to any Institutional Accredited Investor
which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any
Security constituting a Restricted Security, whether or
not such Security bears the Private Placement Legend, if
(x) the requested transfer is after August 13, 1999; pro-
vided, however, that neither the Company nor any Affiliate
of the Company has held any beneficial interest in such
Security, or portion thereof, at any time on or prior to
August 13, 1999 or (y) (1) in the case of a transfer to an
Institutional Accredited Investor which is not a QIB
(excluding Non-U.S.Persons), the proposed transferee has
delivered to the Registrar a certificate substantially in
the form of Exhibit C hereto or (2) in the case of a
transfer to a Non-U.S. Person, the proposed transferor has
delivered to the Registrar a certificate substantially in
the form of Exhibit D hereto; and
(ii) if the proposed transferor is an Agent Member
holding a beneficial interest in the Rule 144A Global
Note, upon receipt by the Registrar of (x) the certifi-
cate, if any, required by paragraph (i) above and (y) in-
structions given in accordance with the Depositary's and
the Registrar's procedures, (a) the Registrar shall re-
flect on its books and records the date and (if the trans-
fer does not involve a transfer of outstanding Physical
Securities) a decrease in the principal amount of the Rule
144A Global Note in an amount equal to the principal
amount of the beneficial interest in the Rule 144A Global
Note to be transferred, and (b)(1) the Company shall exe-
cute and the Trustee shall authenticate and deliver one or
more Physical Securities of like tenor and amount or (2)
the Registrar shall reflect on its books and records the
date and (if the transfer does not involve a transfer of
outstanding Physical Securities) an increase in the prin-
cipal amount of the Regulation S Global Note in an amount
equal to the principal amount of the beneficial interest
in the Rule 144A Global Note to be transferred.
(iii) if the proposed transferor is an Agent Member
holding a beneficial interest in the Regulation S Global
Note, upon receipt by the Registrar of (x) the certifi-
cate, if any, required by paragraph (i) above and (y) in-
structions given in accordance with the Depositary's and
the Registrar's procedures, (a) the Registrar shall re-
flect on its books and records the date and (if the trans-
44
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fer does not involve a transfer of outstanding Physical
Securities) a decrease in the principal amount of the
Regulation S Global Note in an amount equal to the princi-
pal amount of the beneficial interest in the Regulation S
Global Note to be transferred, and (b)(1) the Company
shall execute and the Trustee shall authenticate and de-
liver one or more Physical Securities of like tenor and
amount or (2) the Registrar shall reflect on its books and
records the date and (if the transfer does not involve a
transfer of outstanding Physical Securities) an increase
in the principal amount of the Rule 144A Global Note in an
amount equal to the principal amount of the beneficial in-
terest in the Rule 144A Global Note to be transferred.
(b) Transfers to QIBs. The following provisions
shall apply with respect to the registration of any proposed
transfer of a Security constituting a Restricted Security to a
QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if
such transfer is being made by a proposed transferor who
has advised the Company and the Registrar in writing, that
the sale has been effected in compliance with the provi-
sions of Rule 144A to a transferee who has advised the
Company and the Registrar in writing, that it is purchas-
ing the Security for its own account or an account with
respect to which it exercises sole investment discretion
and that any such account is a QIB within the meaning of
Rule 144A, and it is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the
transferor is relying upon its foregoing representations
in order to claim the exemption from registration provided
by Rule 144A; and
(ii) if the proposed transferee is an Agent Member
and the Securities to be transferred consist of Physical
Securities which after transfer are to be evidenced by an
interest in the Rule 144A Global Note, upon receipt by the
Registrar of instructions given in accordance with the De-
positary's and the Registrar's procedures, the Registrar
shall reflect on its books and records the date and an in-
crease in the principal amount of the Rule 144A Global
Note in an amount equal to principal amount of the Physi-
cal Securities to be transferred, and the Trustee shall
cancel the Physical Securities so transferred.
45
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(c) Transfers to Non-U.S. Persons. The following
provisions shall apply with respect to the registration of any
proposed transfer of a Security constituting a Restricted Secu-
rity to a Non-U.S. Persons:
(i) the Registrar shall register the transfer if
such transfer is being made by a proposed transferor who
has advised the Company and the Registrar in writing, that
the sale has been effected in compliance with the provi-
sions of Regulation S to a transferee who has advised the
Company and the Registrar in writing, that it is purchas-
ing the Security in compliance with Rule 904 under the Se-
curities Act, and it is aware that the sale to it is being
made in reliance on Regulation S and that it is aware that
the transferor is relying upon its foregoing representa-
tions in order to claim the exemption from registration
provided by Regulation S; and
(ii) if the proposed transferee is an Agent Member
and the Securities to be transferred consist of Physical
Securities which after transfer are to be evidenced by an
interest in the Regulation S Global Note, upon receipt by
the Registrar of instructions given in accordance with the
Depositary's and the Registrar's procedures, the Registrar
shall reflect on its books and records the date and an in-
crease in the principal amount of the Regulation S Global
Note in an amount equal to principal amount of the Physi-
cal Securities to be transferred, and the Trustee shall
cancel the Physical Securities so transferred.
(d) Private Placement Legend. Upon the registration
of the transfer, exchange or replacement of Securities not
bearing the Private Placement Legend, the Registrar shall de-
liver Securities that do not bear the Private Placement Legend.
Upon the registration of the transfer, exchange or replacement
of Securities bearing the Private Placement Legend, the Regis-
trar shall deliver only Securities that bear the Private Place-
ment Legend unless (i) the circumstance contemplated by para-
graph (a)(i)(x) of this Section 2.17 exists or (ii) there is
delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer
are required in order to maintain compliance with the provi-
sions of the Securities Act.
(e) General. By its acceptance of any Security
bearing the Private Placement Legend, each Holder of such a Se-
curity acknowledges the restrictions on transfer of such Secu-
46
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rity set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Registrar shall retain for at least two years
copies of all letters, notices and other written communications
received pursuant to Section 2.16 or this Section 2.17. The
Company shall have the right to inspect and make copies of all
such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to
the Registrar.
SECTION 2.18. Persons Deemed Owners. Prior to due
presentment of a Security for registration of transfer and sub-
ject to Section 2.12, the Company, the Trustee, any Paying
Agent, any Registrar and any co-registrar may deem and treat
the Person in whose name any Security shall be registered upon
the register of Securities kept by the Registrar as the abso-
lute owner of such Security (whether or not such Security shall
be overdue and notwithstanding any notation of the ownership or
other writing thereon made by anyone other than the Company,
any Registrar or any co-registrar) for the purpose of receiving
payments of principal of or interest on such Security and for
all other purposes; and none of the Company, the Trustee, any
Paying Agent, any Registrar or any co-registrar shall be af-
fected by any notice to the contrary.
SECTION 2.19. Record Date. The record date for pur-
poses of determining the identity of Securityholders entitled
to vote or consent to any action by vote or consent authorized
or permitted under this Indenture shall be the later of (i) 30
days prior to the first solicitation of such consent or (ii)
the date of the most recent list of Holders furnished to the
Trustee, if applicable, pursuant to Section 2.5.
ARTICLE III
Redemption
SECTION 3.1. Notices to Trustee. If the Company
elects to redeem Securities pursuant to paragraph 5 of the Se-
curities, it shall notify the Trustee in writing of the Redemp-
tion Date and the principal amount of Securities to be re-
deemed.
47
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The Company shall give each notice to the Trustee
provided for in this Section at least 30 days but no more than
60 days before the Redemption Date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an
Officers' Certificate from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.2. Selection of Securities To Be Re-
deemed. If fewer than all the Securities are to be redeemed,
the Trustee shall select the Securities to be redeemed in com-
pliance with the requirements of the principal national securi-
ties exchange, if any, on which such Securities are listed, or
if such Securities are not then listed on a national securities
exchange, on a pro rata basis, by lot or by such other method,
if any, and that the Trustee in its sole discretion considers
fair and appropriate; provided, however, that if a partial re-
demption is made with the proceeds of a Public Equity Offering,
selection of the Securities or portion thereof for redemption
shall be made by the Trustee only on a pro rata basis unless
such method is otherwise prohibited. The Trustee shall make
the selection from outstanding Securities not previously called
for redemption. The Trustee may select for redemption portions
of the principal of Securities that have denominations larger
than $1,000. Securities and portions of them the Trustee se-
lects shall be in amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities
called for redemption. The Trustee shall notify the Company in
writing promptly of the Securities or portions of Securities to
be redeemed.
SECTION 3.3. Notice of Redemption. At least 30
days but not more than 60 days before a date for redemption of
Securities, the Company shall mail a notice of redemption by
first-class mail to each Holder of Securities to be redeemed,
at such Holder's registered address.
The notice shall identify the Securities to be re-
deemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(3) the name and address of the Paying Agent;
48
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(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price;
(5) if fewer than all the Securities are to be re-
deemed, the identification of the particular Securities
(or portion thereof) to be redeemed, as well as the aggre-
gate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities to be outstanding
after such partial redemption;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from
making such payment pursuant to the terms of this Inden-
ture, interest on Securities (or portion thereof) called
for redemption ceases to accrue on and after the redemp-
tion date;
(7) the CUSIP number, if any, printed on the Securi-
ties being redeemed;
(8) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be re-
deemed and that, after the redemption date upon surrender
of such Security, a new Security or Securities in princi-
pal amount equal to the unredeemed portion shall be is-
sued; and
(9) the paragraph of the Securities and/or Section
of this Indenture pursuant to which the Securities called
for redemption are being redeemed.
At the Company's request made in writing to the Trus-
tee at least 45 days (unless a shorter period is acceptable to
the Trustee) prior to the date fixed for redemption, the Trus-
tee shall give the notice of redemption in the name and the ex-
pense of the Company to each Holder whose Securities are to be
redeemed at the last address for such Holder then shown on the
registry books. In such event, the Company shall provide the
Trustee with the information required by this Section.
SECTION 3.4. Effect of Notice of Redemption. Once
notice of redemption is mailed, Securities called for redemp-
tion become due and payable on the redemption date and at the
redemption price stated in the notice. Upon surrender to the
Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the re-
demption date; provided, that if the redemption date is after a
49
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regular Record Date and on or prior to the Interest Payment
Date, the accrued interest shall be payable to the Security-
holder of the redeemed Securities registered on the relevant
Record Date. Failure to give notice or any defect in the no-
▇▇▇▇ to any Holder shall not affect the validity of the notice
to any other Holder.
SECTION 3.5. Deposit of Redemption Price. (a)
Prior to 11:00 a.m., New York City time, on the redemption
date, the Company shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Securities to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to
the Company any money deposited with the Trustee or the Paying
Agent by the Company in excess of the amounts necessary to pay
the redemption price of, and accrued interest on, all Securi-
ties to be redeemed.
(b) Except as set forth in the last sentence of this
paragraph, on and after the redemption date, interest ceases to
accrue on the Securities or the portions of Securities called
for redemption. If a Security is redeemed on or after an in-
terest Record Date but on or prior to the related Interest Pay-
ment Date, then any accrued and unpaid interest shall be paid
to the Person in whose name such Security was registered at the
close of business on such record date. If any Security called
for redemption shall not be so paid upon surrender for redemp-
tion because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid prin-
cipal, from the redemption date until such principal is paid
and, to the extent lawful, on any interest not paid on such un-
paid principal, in each case at the rate provided in the Secu-
rities and in Section 4.1.
SECTION 3.6. Securities Redeemed in Part. Upon
surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for and in the
name of the Holder (at the Company's expense), a new Security
equal in a principal amount to the unredeemed portion of the
Security surrendered.
50
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ARTICLE IV
Covenants
SECTION 4.1. Payment of Securities. The Company
shall promptly pay the principal of, premium, if any, and in-
terest on the Securities on the dates and in the manner pro-
vided in the Securities and in this Indenture. Principal, pre-
mium, if any, and interest shall be considered paid on the date
due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying
Agent, as the case may be, is not prohibited from paying such
money to the Securityholders on that date pursuant to the terms
of this Indenture. Interest will be computed on the basis of a
360 day year comprised of twelve 30 day months.
The Company shall pay interest (including post-
position interest in any proceeding under any Bankruptcy Law)
on overdue principal at the rate specified therefor in the Se-
curities, and it shall pay interest (including post-position
interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable
grace period) at the same rate to the extent lawful.
SECTION 4.2. Reports. (a) The Company will file
on a timely basis with the Commission, to the extent such fil-
ings are accepted by the Commission and whether or not the Com-
pany has a class of securities registered under the Exchange
Act, the annual reports, quarterly reports and other documents
that the Company would be required to file if it were subject
to Section 13 or 15 of the Exchange Act.
(b) The Company will also be required (a) to file
with the Trustee, and provide to each holder of Securities,
without cost to such holder, copies of such reports and docu-
ments within 15 days after the date on which the Company files
such reports and documents with the Commission or the date on
which the Company would be required to file such reports and
documents if the Company were so required, and (b) if the fil-
ing of such reports and documents with the Commission is not
accepted by the Commission or is prohibited under the Exchange
Act, to supply at the Company's cost copies of such reports and
documents to any prospective holder of Securities promptly upon
written request. The Company will also comply with the other
provisions of TIA Section 314(a).
51
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SECTION 4.3. Limitation on Incurrence of Additional
Indebtedness. (a) The Company will not create, issue, assume,
guarantee or in any manner become directly or indirectly liable
for the payment of, or otherwise incur (collectively, "incur"),
any Indebtedness (including any Acquired Indebtedness) other
than Permitted Indebtedness unless, at the time of any such in-
▇▇▇▇▇▇▇▇, the Consolidated Fixed Charge Coverage Ratio would
have been at least equal to 2.75 to 1.0 (after giving pro forma
effect to (i) the incurrence of such Indebtedness and (if ap-
plicable) the application of the net proceeds therefrom, in-
cluding to refinance other Indebtedness, as if such Indebted-
ness was incurred and the application of such proceeds occurred
on the first day of the period for which the Consolidated Fixed
Charge Coverage Ratio is calculated, (ii) the incurrence, re-
payment or retirement of any other Indebtedness by the Company
or any Subsidiary since the first day of such period as if such
Indebtedness was incurred, repaid or retired at the beginning
of such period (except that, in making such computation, the
amount of Indebtedness under any revolving credit facility
shall be computed based upon the average daily balance of such
Indebtedness during such period) and (iii) the acquisition
(whether by purchase, merger or otherwise) or disposition
(whether by sale, merger or otherwise) of any company, entity
or business acquired or disposed of by the Company or any Sub-
sidiary or ACMI Contracted Aircraft acquired by the Company or
any Subsidiary, in any such case, since the first day of such
period, as if such acquisition or disposition of a company, en-
tity or business, or such acquisition of an ACMI Contracted
Aircraft acquired by the Company or any Subsidiary, in any such
case, since the first day of such period, as if such acquisi-
tion or disposition of a company, entity or business, or such
acquisition of an ACMI Contracted Aircraft occurred at the be-
ginning of such period; provided, however, that pro forma ef-
fect shall not be given to a number of ACMI Contracted Aircraft
exceeding five in any four fiscal quarters.
(b) The Company will not permit any Subsidiary to
incur any Indebtedness (including any Acquired Indebtedness)
other than Permitted Subsidiary Indebtedness.
SECTION 4.4. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any Subsidiary
to, directly or indirectly:
(i) declare or pay any dividend on, or make any dis-
tribution to holders of, any shares of the Capital Stock
of the Company (other than dividends or distributions pay-
able solely in shares of its Qualified Capital Stock or in
52
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options, warrants or other rights to acquire such shares
of Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire
for value, directly or indirectly, any shares of Capital
Stock of the Company or any Subsidiary or any Affiliate of
the Company, or any options, warrants or other rights to
acquire such shares of Capital Stock;
(iii) make any principal payment on, or repurchase,
redeem, defease or otherwise acquire or retire for value,
prior to any scheduled principal payment, sinking fund
payment or maturity, any Subordinated Indebtedness; or
(iv) make any Investment (other than any Permitted
Investment) in any Person
(such payments or any other actions described in (but not ex-
cluded from) clauses (i) through (iv) are collectively referred
to as "Restricted Payments"), unless at the time of, and imme-
diately after giving effect on a pro forma basis to, the pro-
posed Restricted Payment (the amount of any such Restricted
Payment, if other than cash, as determined by the Board of Di-
rectors of the Company, whose determination shall be conclusive
and evidenced by a Board Resolution), (1) no Default or Event
of Default shall have occurred and be continuing, (2) the Com-
pany could incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in accordance with the pro-
visions described in Section 4.3 and (3) the aggregate amount
of all Restricted Payments declared or made after the Issue
Date shall not exceed the sum of:
(A) 50% of the aggregate cumulative Consolidated Ad-
justed Net Income of the Company accrued on a cumulative
basis during the period beginning on July 1, 1997 and end-
ing on the last day of the Company's last fiscal quarter
ending prior to the date of such proposed Restricted Pay-
ment (or, if such aggregate cumulative Consolidated Ad-
justed Net Income shall be a loss, minus 100% of such
amount), plus
(B) 100% of the aggregate Net Cash Proceeds received
after the Issue Date by the Company from the issuance or
sale (other than to any Subsidiary) of shares of Qualified
Capital Stock of the Company or warrants, options or
rights to purchase such shares of Qualified Capital Stock
of the Company, plus
53
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(C) 100% of the aggregate Net Cash Proceeds received
after the Issue Date by the Company from the issuance or
sale (other than to any Subsidiary) of debt securities or
Redeemable Capital Stock that have been converted into or
exchanged for Qualified Capital Stock of the Company to
the extent such securities were originally sold for cash,
together with the aggregate Net Cash Proceeds received by
the Company at the time of such conversion or exchange,
plus
(D) to the extent not otherwise included in the Con-
solidated Adjusted Net Income of the Company, an amount
equal to the net reduction in Investments (other than re-
ductions in Permitted Investments) in any Person resulting
from payments in cash of interest on Indebtedness, divi-
dends, repayments of loans or advances, or other returns
of capital, in each case to the Company or a Subsidiary
after the date of the Indenture from any such Person not
to exceed the amount of Investments (other than Permitted
Investments) in such Persons by the Company and its Sub-
sidiaries, plus
(E) $10 million, plus
(F) without duplication, the sum of (1) the aggre-
gate amount returned in cash on or with respect to Invest-
ments (other than Permitted Investments) made subsequent
to the Issue Date whether through interest payments, prin-
cipal payments, dividends or other distributions or pay-
ments, (2) the net cash proceeds received by the Company
or any Subsidiary from the disposition of all or any por-
tion of such Investments (other than to a Subsidiary of
the Company) and (3) upon redesignation of an Unrestricted
Subsidiary as a Subsidiary, the fair market value of such
Subsidiary; provided, however, that with respect to all
Investments made in any Unrestricted Subsidiary or joint
venture, the sum of clauses (1), (2) and (3) above with
respect to such Investment shall not exceed the aggregate
amount of all such Investments made subsequent to the Is-
▇▇▇ Date in such Unrestricted Subsidiary or joint venture.
(b) Notwithstanding paragraph (a) above, the Company
and any Subsidiary may take the following actions so long as
(with respect to clauses (ii), (iii), (iv), (v), (vi) and
(vii), below) no Default or Event of Default shall have oc-
curred and be continuing:
54
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(i) the payment of any dividend within 60 days after
the date of declaration thereof, if at such date of decla-
ration the payment of such dividend would have complied
with the provisions of paragraph (a) above and such pay-
ment shall be deemed to have been paid on such date of
declaration for purposes of the calculation required by
paragraph (a) above;
(ii) the purchase, redemption or other acquisition or
retirement for value of any shares of Capital Stock of the
Company or any warrants, rights or options to acquire
shares of Capital Stock, in exchange for, or out of the
Net Cash Proceeds of a substantially concurrent issuance
and sale (other than to a Subsidiary) of, shares of Quali-
fied Capital Stock of the Company;
(iii) the purchase, redemption, defeasance or other
acquisition or retirement for value of any Subordinated
Indebtedness or Redeemable Capital Stock in exchange for,
or out of the Net Cash Proceeds of a substantially concur-
rent issuance and sale (other than to a Subsidiary) of,
shares of Qualified Capital Stock of the Company;
(iv) the purchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated In-
debtedness of the Company in exchange for, or out of the
Net Cash Proceeds of a substantially concurrent incurrence
or sale (other than to a Subsidiary) of, new Subordinated
Indebtedness of the Company so long as (A) the principal
amount of such new Indebtedness does not exceed the prin-
cipal amount (or, if such Subordinated Indebtedness being
refinanced provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of
determination) of the Subordinated Indebtedness being so
purchased, redeemed, defeased, acquired or retired, (B)
such new Subordinated Indebtedness is subordinated to the
Securities to the same extent as such Subordinated Indebt-
edness so purchased, redeemed, defeased, acquired or re-
tired and (C) such new Subordinated Indebtedness does not
have a scheduled principal payment earlier than the final
maturity of the Securities;
(v) the purchase, redemption or other acquisition or
retirement for value of shares of Capital Stock of the
Company held by any future, present or former employee or
director of the Company or any Subsidiary issued pursuant
to any management equity or stock option plan of the Com-
55
-49-
pany; provided that the aggregate consideration paid by
the Company for such shares so purchased, redeemed or oth-
erwise acquired or retired for value does not exceed $2.5
million in any fiscal year of the Company;
(vi) the making of any Investment (other than a Per-
mitted Investment) out of the Net Cash Proceeds of the
substantially concurrent issuance and sale (other than to
a Subsidiary) of Qualified Capital Stock of the Company;
and
(vii) the making of Investments in an aggregate amount
not to exceed $50,000,000 in wholly-owned Unrestricted
Subsidiaries to own and lease ACMI Contracted Aircraft or
other flight equipment utilized in the normal course of
business of the Company.
The actions described in clauses (i), (ii), (iii), (v) and (vi)
of this paragraph (b) shall be Restricted Payments that shall
be permitted to be taken in accordance with this paragraph (b)
but shall reduce the amount that would otherwise be available
for Restricted Payments under clause (3) of paragraph (a) and
the actions described in clause (iv) and (vii) of this para-
graph (b) shall be Restricted Payments that shall be permitted
to be taken in accordance with this paragraph and shall not re-
duce the amount that would otherwise be available for Re-
stricted Payments under clause (3) of paragraph (a) above.
(c) In computing Consolidated Adjusted Net Income of
the Company under paragraph (a) above, (1) the Company shall
use audited financial statements for the portions of the rele-
vant period for which audited financial statements are avail-
able on the date of determination and unaudited financial
statements and other current financial data based on the books
and records of the Company for the remaining portion of such
period and (2) the Company shall be permitted to rely in good
faith on the financial statements and other financial data de-
rived from the books and records of the Company that are avail-
able on the date of determination. If the Company makes a Re-
stricted Payment which, at the time of the making of such Re-
stricted Payment would in the good faith determination of the
Company be permitted under the requirements of the Indenture,
such Restricted Payment shall be deemed to have been made in
compliance with the Indenture notwithstanding any subsequent
adjustments made in good faith to the Company's financial
statements affecting Consolidated Adjusted Net Income of the
Company for any period.
56
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SECTION 4.5. Limitation on Issuances and Sales of
Capital Stock of Subsidiaries. The Company (a) will not permit
any Subsidiary to issue any Capital Stock (other than to the
Company or a Subsidiary) and (b) will not permit any Person
(other than the Company or a Subsidiary) to own any Capital
Stock of any Subsidiary; provided, however, that this covenant
shall not prohibit (i) the issuance and sale of all, but not
less than all, of the issued and outstanding Capital Stock of
any Subsidiary owned by the Company or any Subsidiary in com-
pliance with the other provisions of the Indenture or (ii) the
ownership by directors of director's qualifying shares or the
ownership by foreign nationals of Capital Stock of any Subsidi-
ary, to the extent mandated by applicable law.
SECTION 4.6. Limitation on Transactions with Af-
filiates. The Company will not, and will not permit any Sub-
sidiary to, directly or indirectly, enter into or suffer to ex-
ist any transaction or series of related transactions
(including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with, or for the benefit
of, any Affiliate of the Company or any Subsidiary unless (i)
such transaction or series of related transactions is between
and among the Company and wholly owned Subsidiaries or (ii)(A)
such transaction or series of related transactions is on terms
that are no less favorable to the Company, or such Subsidiary,
as the case may be, than those that could have been obtained in
an arm's-length transaction with unrelated third parties; (B)
the Company shall have delivered an officer's certificate to
the Trustee certifying that such transaction or series of re-
lated transactions complies with clause (A); (C) if such trans-
action or series of related transactions involves consideration
of more than $3 million the Board of Directors (including a ma-
jority of the Disinterested Directors) has approved such trans-
action or series of transactions or the Company has obtained a
written opinion from a nationally recognized investment banking
firm to the effect set forth in the preceding clause (A); and
(D) if such transaction or series of related transactions in-
volves consideration of more than $10 million the Company has
obtained a written opinion from a nationally recognized invest-
ment banking firm to the effect set forth in the preceding
clause (A). This covenant will not apply to (i) the payment of
reasonable and customary compensation and fees to, and indemni-
fication of, directors of the Company or any Subsidiary who are
not employees of the Company or any Subsidiary or (ii) reason-
able and customary salaries, bonuses and other compensation
paid to employees of the Company or any Subsidiary in accor-
dance with past practice approved by the Compensation Committee
of the Company. Clauses (ii)(C) and (ii)(D) of Section 4.6
57
-51-
will not apply to transactions pursuant to the Atlas Freighter
Leasing Transactions.
SECTION 4.7. Limitation on Liens. The Company will
not, and will not permit any Subsidiary to, directly or indi-
rectly, create, incur, assume or suffer to exist any Lien of
any kind (other then Permitted Liens) on or with respect to any
of its property or assets including any shares of stock or in-
debtedness of any Subsidiary, whether owned at the date of the
Indenture or thereafter acquired, or any income, profits or
proceeds therefrom, or assign or otherwise convey any right to
receive income thereon.
SECTION 4.8. Limitation on Asset Sales and Disposi-
tion of Proceeds of Asset Sales. (a) The Company will not,
and will not permit any Subsidiary to, directly or indirectly
engage in any Asset Sale involving assets unless (i) the con-
sideration received by the Company or such Subsidiary for such
Asset Sale is not less than the Fair Market Value of the assets
sold (as determined by the Board of Directors of the Company,
whose determination shall be conclusive and evidenced by a
Board Resolution) and (ii) the consideration received by the
Company or the relevant Subsidiary in respect of such Asset
Sale consists of at least 75% cash or Cash Equivalents.
(b) If the Company or any Subsidiary engages in an
Asset Sale, the Company may use the Net Cash Proceeds thereof,
within 12 months after such Asset Sale, to (i) repay perma-
nently any then outstanding senior Indebtedness of the Company
or Indebtedness of any Subsidiary, (ii) invest (or enter into a
legally binding agreement to invest) in properties and assets
to replace the properties and assets that were the subject of
the Asset Sale or in properties and assets that will be used in
businesses of the Company or its Subsidiaries, as the case may
be, existing on the Issue Date or reasonably related thereto or
involving outsourcing for the air cargo industry ("Replacement
Assets"), or (iii) a combination of repayment and investment
permitted by the foregoing clauses (b)(i) and (b)(ii). If any
such legally binding agreement to invest such Net Cash Proceeds
is terminated, then the Company may, within 90 days of such
termination or within 12 months of such Asset Sale, whichever
is later, invest such Net Cash Proceeds as provided in clauses
(i), (ii) (without regard to the parenthetical contained in
such clause (ii)) or (iii) above. Pending the final applica-
tion of any such Net Cash Proceeds, the Company or such Sub-
sidiary may temporarily reduce Indebtedness under a revolving
credit facility, if any, or otherwise invest such Net Cash Pro-
58
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ceeds in Cash Equivalents. The amount of such Net Cash Pro-
ceeds not so used as set forth above in this paragraph (b) con-
stitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds ex-
ceeds $10 million, the Company shall, within 25 business days,
make an offer to purchase (an "Excess Proceeds Offer") from the
holders of Securities, on a pro rata basis, in accordance with
the procedures set forth below, the maximum principal amount of
Securities that may be purchased with the Excess Proceeds. The
offer price as to each Note shall be payable in cash in an
amount equal to 100% of the principal amount of such Note (as
adjusted for any prepayment of principal of the Securities),
plus accrued interest, if any (the "Offered Price"), to the
date such Excess Proceeds Offer is consummated. To the extent
that the adjusted aggregate principal amount of Securities ten-
dered pursuant to an Excess Proceeds Offer is less than the Ex-
cess Proceeds, the Company may use such deficiency for general
corporate purposes. If the aggregate principal amount of Secu-
rities validly tendered and not withdrawn by holders thereof
exceeds the Excess Proceeds, Securities to be purchased will be
selected on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset to zero.
(d) Notwithstanding the foregoing, the Company and
its Subsidiaries will be permitted to consummate an Asset Sale
without complying with paragraphs (a) and (b) above to the ex-
tent (i) at least 75% of the consideration for such Asset Sale
constitutes Replacement Assets and/or Cash Equivalents and (ii)
such Asset Sale is for Fair Market Value; provided, however,
that any consideration not constituting Replacement Assets re-
ceived by the Company or any Subsidiary in connection with any
Asset Sale permitted to be consummated under this paragraph
shall constitute Net Cash Proceeds subject to the provisions of
paragraphs (a) and (b) above.
(e) If the Company becomes obligated to make an Of-
fer pursuant to clause (c) above, the Securities shall be pur-
chased by the Company, at the option of the holder thereof, in
whole or in part in integral multiples of $1,000, on a date
that is not earlier than 30 days and not later than 60 days
from the date the notice is given to holders, or such later
date as may be necessary for the Company to comply with the re-
quirements under the Exchange Act, subject to proration in the
event the amount Excess Proceeds is less than the aggregate Of-
fered Price of all Securities tendered.
(f) Any notice pursuant to 4.8 shall contain all in-
structions and materials necessary to enable such Securityhold-
59
-53-
ers to tender Securities pursuant to the Excess Proceeds Offer
and shall state the following terms:
(1) that the Excess Proceeds Offer is being made
pursuant to Section 4.8 of this Indenture and that all Se-
curities tendered will be accepted for payment; provided,
however, that if the aggregate principal amount of Securi-
ties tendered in an Excess Proceeds Offer exceeds the ag-
gregate amount of the Excess Proceeds Offer, the Company
shall select the Securities to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate
by the Company so that only Notes in denominations of
$1,000 or multiples thereof shall be purchased);
(2) the purchase price (including the amount of ac-
crued interest) and the purchase date (which shall be 20
Business Days from the date of mailing of notice of such
Excess Proceeds Offer, or such longer period as required
by law) (the "Proceeds Purchase Date");
(3) that any Securities not tendered will continue
to accrue interest;
(4) that, unless the Company defaults in making pay-
ment therefor, any Security accepted for payment pursuant
to the Excess Proceeds Offer shall cease to accrue inter-
est after the Proceeds Purchase Date;
(5) that Securityholders electing to have a Security
purchased pursuant to an Excess Proceeds Offer will be re-
quired to surrender the Security, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on
the third Business Day prior to the Proceeds Purchase
Date;
(6) that Securityholders will be entitled to with-
draw their election if the Paying Agent receives, not
later than five Business Days prior to the Proceeds Pur-
chase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Securityholder, the
principal amount of the Securities the Securityholder de-
livered for purchase and a statement that such Security-
holder is withdrawing his election to have such Security
purchased; and
60
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(7) that Securityholders whose Securities are pur-
chased only in part will be issued new Securities in a
principal amount equal to the unpurchased portion of the
Securities surrendered; provided that each Security pur-
chased and each new Security issued shall be in an origi-
nal principal amount of $1,000 or integral multiples
thereof;
On or before the Proceeds Purchase Date, the Company
shall (i) accept for payment Securities or portions thereof
tendered pursuant to the Excess Proceeds Offer which are to be
purchased in accordance with item (f)(1) above, (ii) deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price plus accrued interest, if any, of all Securities
to be purchased and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate stating the Se-
curities or portions thereof being purchased by the Company.
The Paying Agent shall promptly mail to the Securityholders of
Securities so accepted payment in an amount equal to the pur-
chase price plus accrued interest, if any. For purposes of
this Section 4.8, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of the Secu-
rities pursuant to an Excess Proceeds Offer shall be returned
by the Trustee to the Company.
(g) The Company will comply with the applicable ten-
der offer rules, including Rule 14e-1 under the Exchange Act,
in connection with an Excess Proceeds Offer and shall not be
deemed in violation of this covenant by reason of any action
required to be taken to effect such compliance. To the extent
that the provisions of any securities laws or regulations con-
flict with this Section 4.8, the Company shall comply with the
applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.8
by virtue thereof.
SECTION 4.9. Change of Control. (a) If a Change
of Control shall occur at any time, then each holder of Securi-
ties shall have the right to require that the Company purchase
such holder's Securities, in whole or in part in integral mul-
tiples of $1,000, at a purchase price (the "Change of Control
Purchase Price") in cash in an amount equal to 101% of the
principal amount of such Securities, plus accrued interest, if
any, to the date of purchase (the "Change of Control Purchase
Date"), pursuant to the offer described in (b) below (the
"Change of Control Offer") and the other procedures set forth
in this Indenture.
61
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(b) Within 30 days following the date upon which a
Change of Control occurs, the Company shall notify the Trustee
thereof and give written notice of such Change of Control to
each holder of Securities by first-class mail, postage prepaid,
at the address of such holder shown on the security register,
which notice shall govern the terms of the Change of Control
Office; such notice shall state:
(i) that the Change of Control Offer is being made
pursuant to Section 4.9 of this Indenture and that all Se-
curities validly tendered and not withdrawn will be ac-
cepted for payment;
(ii) the purchase price and the purchase date, which
shall be a Business Day no earlier than 30 days nor later
than 60 days from the date such notice is mailed, or such
later date as is necessary to comply with requirements un-
der the Exchange Act;
(iii) that any Securities not tendered will continue
to accrue interest;
(iv) that, unless the Company defaults in the payment
of the purchase price, any Securities accepted for payment
pursuant to the Change of Control Offer shall cease to ac-
crue interest after the Change of Control Purchase Date;
and
(v) that Securityholders electing to have a Security
purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled
"Option of Securityholder to Elect Purchase" on the re-
verse of the Security completed, to the Paying Agent and
Registrar for the Securities at the address specified in
the notice prior to the close of business on the third
Business Day prior to the Change of Control Purchase Date;
(vi) that Securityholders will be entitled to with-
draw their election if the Paying Agent receives, not
later than the second Business Day prior to the Change of
Control Purchase Date, a telegram, telex, facsimile trans-
mission or letter setting forth the name of the Security-
holder, the principal amount of the Securities the Securi-
tyholder delivered for purchase and a statement that such
Securityholder is withdrawing his election to have such
Security purchased;
62
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(vii) that Securityholders whose Securities are pur-
chased only in part will be issued new Securities in a
principal amount equal to the unpurchased portion of the
Securities surrendered; provided, however, that each Secu-
rity purchased and each new Security issued shall be in a
principal amount of $1,000 or integral multiples thereof;
and
(viii) the circumstances and relevant facts regarding
such Change of Control.
(c) On or before the Change of Control Purchase
Date, the Company shall (i) accept for payment Securities or
portions thereof tendered pursuant to the Change of Control Of-
fer, (ii) deposit with the Paying Agent U.S. Legal Tender suf-
ficient to pay the purchase price plus accrued interest, if
any, of all Securities so tendered and (iii) deliver to the
Trustee Securities so accepted together with an Officers, Cer-
tificate stating the Securities or portions thereof being pur-
chased by the Company. The Paying Agent shall promptly mail to
the Securityholders of Securities so accepted payment in an
amount equal to the purchase price plus accrued interest, if
any, and the Trustee shall promptly authenticate and mail to
such Securityholders new Securities equal in principal amount
to any unpurchased portion of the Securities surrendered. Any
Securities not so accepted shall be promptly mailed by the Com-
pany to the Securityholder thereof. For purposes of this Sec-
tion 4.9, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Securi-
ties pursuant to a Change of Control Offer shall be returned by
the Trustee to the Company.
(d) The Company will comply with the applicable ten-
der offer rules, including Rule 14e-1 under the Exchange Act,
in connection with a Change of Control Offer and shall not be
deemed in violation of this covenant by reason of any action
required to be taken to effect such compliance. To the extent
that the provisions of any securities laws or regulations con-
flict with the "Change of Control" provisions of this Inden-
ture, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached
its obligations relating to such Change of Control Offer by
virtue thereof.
SECTION 4.10. Limitation on Guarantees of Indebted-
ness by Subsidiaries. (a) The Company will not permit any
Subsidiary, directly or indirectly, to guarantee, assume or in
63
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any other manner become liable for the payment of any Indebted-
ness of the Company or Indebtedness of any other Subsidiary un-
less (i)(A) such Subsidiary simultaneously executes and deliv-
ers a supplemental indenture to the Indenture providing for a
Guarantee of payment of the Securities by such Subsidiary and
(B) with respect to any guarantee of Subordinated Indebtedness
by a Subsidiary, any such guarantee shall be subordinated to
such Subsidiary's Guarantee with respect to the Securities at
least to the same extent as such Subordinated Indebtedness is
subordinated to the Securities and (ii) such Subsidiary waives
and will not in any manner whatsoever claim or take the benefit
or advantage of, any rights of reimbursement, indemnity or sub-
rogation or any other rights against the Company or any other
Subsidiary as a result of any payment by such Subsidiary under
its Guarantee.
(b) Notwithstanding the foregoing, any Guarantee by
a Subsidiary of the Securities shall provide by its terms that
it shall be automatically and unconditionally released and dis-
charged upon (i) any sale, exchange or transfer, to any Person
not an Affiliate of the Company, of all of the Capital Stock of
a Subsidiary owned by the Company or any Subsidiary in, or all
or substantially all the assets of, such Subsidiary (which
sale, exchange or transfer is not prohibited by the Indenture)
or (ii) the release or discharge of the guarantee which re-
sulted in the creation of such Guarantee (and any other guaran-
tees that would have resulted in the creation of such a Guaran-
tee), except a discharge or release by or as a result of pay-
ment under such guarantee.
SECTION 4.11. Limitation on Dividends and Other Pay-
ment Restrictions Affecting Subsidiaries. The Company will
not, and will not permit any Subsidiary to, directly or indi-
rectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction of any kind on the
ability of any Subsidiary to (a) pay dividends, in cash or oth-
erwise, or make any other distributions on or in respect of its
Capital Stock, (b) pay any Indebtedness owed to the Company or
any other Subsidiary, (c) make Investments in the Company or
any other Subsidiary, (d) transfer any of its properties or as-
sets to the Company or any other Subsidiary or (e) guarantee
any Indebtedness of the Company or any other Subsidiary, except
for such encumbrances or restrictions existing under or by rea-
son of (i) any agreement in effect on the date of this Inden-
ture, (ii) this Indenture, (iii) applicable law, (iv) customary
non-assignment provisions, (x) of any lease governing a lease-
hold interest of the Company or any Subsidiary or (y) of In-
debtedness secured by a Lien that is permitted to be incurred
64
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under the Indebtedness that relates to the property subject to
such Lien, (v) any agreement or other instrument of a Person
acquired by the Company or any Subsidiary in existence at the
time of such acquisition (but not created in contemplation
thereof), which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so
acquired, (vi) any restriction with respect to a Subsidiary of
the Company imposed pursuant to an agreement relating to the
sale of all or substantially all of the Capital Stock or as-
sets of such Subsidiary (so long as such restriction, by its
terms, terminates on the earlier of the termination of such
agreement or the consummation of such agreement), and (vii) any
restrictions existing under any agreement that refinances or
replaces any agreement containing restrictions permitted under
clause (i), (ii), (iv) or (v) or (vi), provided that the terms
and conditions of such restriction are not materially less fa-
vorable to the holder of the Securities than those under or
pursuant to the agreement refinanced or replaced.
SECTION 4.12. Further Instruments and Acts. Upon
request of the Trustee, the Company will execute and deliver
such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively
the purpose of this Indenture.
SECTION 4.13. Use of Proceeds. The Company shall
use the net proceeds from the sale of the Securities to consum-
mate the transactions contemplated in the section of the Offer-
ing Memorandum entitled "Use of Proceeds".
SECTION 4.14. Compliance Certificates. (a) The
Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate signed by its
principal executive officer, principal financial officer or
principal accounting officer stating that a review of the ac-
tivities of the Company and its Subsidiaries during the preced-
ing fiscal year has been made under the supervision of the
signing Officers with a view to determining whether each has
kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowl-
edge each has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in de-
fault in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default
or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have
65
-59-
knowledge and what action each is taking or proposes to take
with respect thereto).
(b) So long as not contrary to the then current rec-
ommendations of the American Institute of Certified Public Ac-
countants, the year-end financial statements delivered pursuant
to Section 4.2 above shall be accompanied by a written state-
ment of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making
the examination necessary for certification of such financial
statements nothing has come to their attention which would lead
them to believe that the Company has violated any provisions of
Article 4 or 5 or that there exists a Default or Event of De-
fault under Article 6 of this Indenture insofar as they relate
to accounting matters or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge
of any such violation.
(c) The Company shall, so long as any of the Securi-
ties are outstanding, deliver to the Trustee, within 5 days of
any Officer becoming aware of any Default or Event of Default,
an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to
take with respect thereto.
(d) The Company shall also comply with TIA S
314(a)(4).
SECTION 4.15. Maintenance of Office or Agency. (a)
The Company shall maintain in the Borough of Manhattan, in the
City of New York, an office or agency (which may be an office
of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Securities may be surrendered for registra-
tion of transfer or exchange and where notices and demands to
or upon the Company in respect of the Securities and this In-
denture may be served. The Company shall give prior written
notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee.
(b) The Company may also from time to time designate
one or more other offices or agencies where the Securities may
be presented or surrendered for any or all such purposes and
66
-60-
may from time to time rescind such designations; provided, how-
ever, that no such designation or rescission shall in any man-
ner relieve the Company of its obligation to maintain an office
or agency in the Borough of Manhattan, in the City of New York
for such purposes. The Company shall give prior written notice
to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
(c) The Company hereby designates the Trustee at ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as one such of-
fice or agency of the Company in accordance with Section 2.3.
SECTION 4.16. Taxes. The Company shall pay, prior
to delinquency, all material taxes, assessments, and governmen-
tal levies; provided, however, that there shall not be required
to be paid or discharged any such tax, assessment or charge,
the amount, applicability or validity of which is being con-
tested in good faith by appropriate proceedings and for which
adequate provision has been made or for which adequate re-
serves, to the extent required under GAAP, have been taken.
SECTION 4.17. Stay, Extension and Usury Laws. The
Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or
the performance of this Indenture (including, but not limited
to, the payment of the principal of or interest on the Securi-
ties); and the Company (to the extent that it may lawfully do
so) hereby expressly waive all benefit or advantage of any such
law, and covenant that they shall not, by resort to any such
law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execu-
tion of every such power as though no such law has been en-
acted.
SECTION 4.18. Corporate Existence. Subject to Arti-
cle V, the Company shall do or cause to be done all things nec-
▇▇▇▇▇▇ to preserve and keep in full force and effect its corpo-
rate existence, and the corporate existence of each Subsidiary,
in accordance with the respective organizational documents (as
the same may be amended from time to time) of each Subsidiary
and the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that
the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other
existence of any Subsidiary, if the Board of Directors of the
67
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Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company
and its Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Security-
holders.
ARTICLE V
Surviving Entity
SECTION 5.1. Limitations on Consolidations, Mergers
and Sales of Assets. (a) The Company will not in a single
transaction or a series of related transactions consolidate
with or merge with or into any other Person or sell, assign,
convey, transfer, lease or otherwise dispose of all or substan-
tially all of its properties and assets as an entirety to any
Person or Persons, and the Company will not permit any Subsidi-
ary to enter into any such transaction or series of transac-
tions if such transaction or series of transactions, in the ag-
gregate, would result in the sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially
all of the properties and assets of the Company and its Sub-
sidiaries on a consolidated basis to any Person or Persons, un-
less:
(i) either (a) the Company shall be the surviving
corporation or (b) the Person (if other than the Company)
formed by such consolidation or into which the Company or
such Subsidiary is merged or the Person which acquires by
sale, assignment, conveyance, transfer, lease or other
disposition all or substantially all of the properties and
assets of the Company or such Subsidiary, as the case may
be (the "Surviving Entity"), (1) shall be a corporation
organized and validly existing under the laws of the
United States of America, any state thereof or the Dis-
trict of Columbia that is a "certificated United States
air carrier" under the Aviation Act and (2) shall ex-
pressly assume, by indenture, supplemental to the Inden-
ture, executed and delivered to the Trustee, in form sat-
isfactory to the Trustee, the Company's obligation for the
due and punctual payment of the principal of (or premium,
if any, on) and interest on the Securities and the per-
formance and observance of every covenant of this Inden-
ture on the part of the Company to be performed or ob-
served;
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(ii) immediately before and after giving effect to
such transaction or series of transactions on a pro forma
basis and treating any obligation of the Company or a Sub-
sidiary in connection with or as a result of such transac-
tion as having been incurred at the time of such transac-
tion, no Default or Event of Default shall have occurred
and be continuing;
(iii) immediately before and immediately after giving
effect to such transaction or series of transactions on a
pro forma basis (on the assumption that the transaction or
series of transactions occurred on the first day of the
four-quarter period immediately prior to the consummation
of such transaction or series of transactions with the ap-
propriate adjustments with respect to the transaction or
series of transactions being included in such pro forma
calculation), the Company (or the Surviving Entity if the
Company is not the continuing obligor under the Indenture)
could incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the provisions
of Section 4.3;
(iv) if any of the property or assets of the Company
or any of its Subsidiaries would thereupon become subject
to any Lien, the provisions of Section 4.7 hereof are com-
plied with; and
(v) the Company or the Surviving Entity shall have
delivered to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an officer's certificate and
an opinion of counsel, each stating that such consolida-
tion, merger, conveyance, transfer or lease, and if a sup-
plemental indenture is required in connection with such
transaction, such supplemental indenture, comply with the
terms of this Indenture and that all conditions precedent
therein provided for relating to such transaction have
been complied with.
(b) Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all
or substantially all of the properties and assets of the Com-
pany in accordance with the immediately preceding paragraph in
which the Company is not the continuing obligor under this In-
denture, the Surviving Entity shall succeed to, and be substi-
tuted for, and may exercise every right and power of, the Com-
pany under this Indenture with the same effect as if such suc-
cessor had been named as the Company therein. When a successor
assumes all the obligations of its predecessor under this In-
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denture or the Securities, the predecessor shall be released
from those obligations; provided that in the case of a transfer
by lease, the predecessor shall not be released from the pay-
ment of principal and interest on the Securities.
ARTICLE VI
Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of De-
fault" will occur under this Indenture if:
(i) there shall be a default in the payment of any
interest on the Securities when it becomes due and pay-
able, and continuance of such default for a period of 30
days;
(ii) there shall be a default in the payment of the
principal of (or premium, if any, on) the Securities at
their Maturity;
(iii) (A) there shall be a default in the perform-
ance, or breach, of any covenant or agreement of the Com-
pany contained in this Indenture (other than a default in
the performance, or breach, of a covenant or agreement
which is specifically dealt with in the immediately pre-
ceding clauses (i) or (ii), or in clauses (B), (C) and (D)
of this clause (iii)) and continuance of such default or
breach for a period of 30 days after written notice shall
have been given to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Securities then out-
standing; (B) there shall be a default in the performance,
or breach, of the provisions of Section 4.8; (C) there
shall be a default in the performance or breach of the
provisions of Section 5.1 hereof; or (D) the Company shall
have failed to make or consummate a Change of Control Of-
fer in accordance with the provisions of Section 4.9
hereof;
(iv) (A) there shall have occurred one or more de-
faults in the payment of principal of (or premium, if any,
on) Indebtedness of the Company or any Subsidiary aggre-
gating $10 million or more, when the same becomes due and
payable at the stated maturity thereof, and such default
or defaults shall have continued after any applicable
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grace period and shall not have been cured or waived or
(B) Indebtedness of the Company or any Subsidiary aggre-
gating $10 million or more shall have been accelerated or
otherwise declared due and payable, or required to be pre-
paid or repurchased (other than by regularly scheduled re-
quired prepayment), prior to the stated maturity thereof;
(v) one or more final judgments or orders rendered
against the Company or any Subsidiary which require the
payment of money, either individually or in an aggregate
amount, in excess of $10 million and either (A) an en-
forcement proceeding shall have been commenced by any
creditor upon such judgment or order or (B) there shall
have been a period of 30 days during which a stay of en-
forcement of such judgment or order, by reason of a pend-
ing appeal or otherwise, was not in effect; or
(vi) the Company or a Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against in an involuntary case;
(C) consents to the appointment of a Custodian
of it or for any substantial part of its property;
(D) makes a general assignment for the benefit
of its creditors;
(E) consents to or acquiesces in the institution
of a bankruptcy or an insolvency proceeding against
it, or
(F) takes any corporate action to authorize or
effect any of the foregoing;
or takes any comparable action under any foreign laws re-
lating to insolvency;
(vii) a court of competent jurisdiction enters an or-
der or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
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(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of
the property of the Company or any of its Significant
Subsidiaries; or
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary;
or any similar relief is granted under any foreign laws
and in each case the order, decree or relief remains un-
stayed and in effect for 60 days;
The foregoing will constitute Events of Default what-
ever the reason for any such Event of Default and whether it is
voluntary or involuntary or is effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body.
The term "Custodian" means any receiver, trustee, as-
signee, liquidator, custodian or similar official under any
Bankruptcy Law.
SECTION 6.2. Acceleration. If an Event of Default
(other than an Event of Default specified in Section 6.1(vi) or
(vii)) occurs and is continuing, the Trustee or the holders of
at least 25% in principal amount of the outstanding Securities
by notice to the Company may declare the principal of and ac-
crued and unpaid interest, if any, on all the Securities to be
due and payable. Upon such declaration, such principal and ac-
crued and unpaid interest shall be due and payable immediately.
If an Event of Default specified in Section 6.1(vi) or (vii)
occurs and is continuing, the principal of and accrued and un-
paid interest on all the Securities will become and be immedi-
ately due and payable without any declaration or other act on
the part of the Trustee or any holders. The Holders of a ma-
jority in principal amount of the Securities by notice to the
Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and
if all existing Events of Default have been cured or waived ex-
cept nonpayment of principal or interest that has become due
solely because of acceleration. No such rescission shall af-
fect any subsequent Default or Event of Default or impair any
right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of De-
fault occurs and is continuing, the Trustee and the Security-
holders may pursue any available remedy to collect the payment
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of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Inden-
ture.
The Trustee may maintain a proceeding even if it does
not possess any of the Securities or does not produce any of
them in the proceeding. A delay or omission by the Trustee or
any Securityholder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of De-
fault. No remedy is exclusive of any other remedy. All avail-
able remedies are cumulative to the extent permitted by law.
SECTION 6.4. Waiver of Past Defaults. The Holders
of a majority in principal amount of the outstanding Securities
by notice to the Trustee may waive an existing Default or Event
of Default and its consequences except (i) a Default or Event
of Default in the payment of the principal of, premium, if any,
or interest on a Security or (ii) a Default or Event of Default
in respect of a provision that under Section 9.2 cannot be
amended without the consent of each Securityholder affected.
When a Default or Event of Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any consequent
right.
SECTION 6.5. Control by Majority. Subject to Sec-
tion 2.9, the Holders of a majority in principal amount of the
Securities may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. How-
ever, the Trustee may refuse to follow any direction that con-
flicts with law or this Indenture or, subject to Section 7.1,
that the Trustee determines is unduly prejudicial to the rights
of other Securityholders or would involve the Trustee in per-
▇▇▇▇▇ liability; provided, however, that the Trustee may take
any other action deemed proper by the Trustee that is not in-
consistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. A Securityholder
may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
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(2) the Holders of at least 25% in outstanding prin-
cipal amount of the Securities make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee rea-
sonable security or indemnity against any loss, liability
or expense;
(4) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer
of security or indemnity; and
(5) the Holders of a majority in outstanding princi-
pal amount of the Securities do not give the Trustee a di-
rection that, in the opinion of the Trustee, is inconsis-
tent with the request during such 60-day period.
A Securityholder may not use this Indenture to preju-
dice the rights of another Securityholder or to obtain a pref-
erence or priority over another Securityholder.
SECTION 6.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of and in-
terest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, or to bring
suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an
Event of Default specified in Section 6.1(i) or (ii) or an ac-
celeration pursuant to Section 6.2 occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company or any other obligor of
the Securities for the whole amount then due and owing
(together with interest on any unpaid interest to the extent
lawful) and the amounts provided for in Section 7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The
Trustee may file such proofs of claim and other papers or docu-
ments as may be necessary or advisable in order to have the
claims of the Trustee and the Securityholders allowed in any
judicial proceedings relative to the Company, its Subsidiaries
or their respective creditors or properties and, unless prohib-
ited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any
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such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the rea-
sonable compensation, expenses, disbursements and advances of
the Trustee, its agents and its counsel, and any other amounts
due the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects
any money or property pursuant to this Article VI, it shall pay
out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section
7.7;
SECOND: if the Securityholders are forced to proceed
against the Company directly without the Trustee, to the
Securityholders for their collection costs;
THIRD: to Securityholders for amounts due and unpaid
on the Securities for principal and interest, ratably,
without preference or priority of any kind, according to
the amounts due and payable on the Securities for princi-
pal and interest, respectively; and
FOURTH: to the Company.
The Trustee, upon prior notice to the Company, may
fix a record date and payment date for any payment to Security-
holders pursuant to this Section 6.10. At least 15 days before
such record date, the Company shall mail to each Securityholder
and the Trustee a notice that states the record date, the pay-
ment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit
for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking
to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in the suit, having due regard
to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit
by the Trustee, a suit by a Holder pursuant to Section 6.7 or a
suit by Holders of more than 10% in outstanding principal
amount of the Securities.
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ARTICLE VII
Trustee
SECTION 7.1. Duties of Trustee. (a) If a Default
or an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under
the circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of a Default or an
Event of Default:
(1) yhe Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture or the TIA and no implied covenants or obliga-
tions shall be read into this Indenture against the Trus-
tee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Inden-
ture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act
or its own wilful misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it
is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(3) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in ac-
cordance with a direction received by it pursuant to Sec-
tion 6.5.
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(d) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b)
and (c) of this Section.
(e) The Trustee shall not be liable for interest on
any money received by it except as the Trustee may agree in
writing with the Company.
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by
law.
(g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur fi-
nancial liability in the performance of any of its duties here-
under or in the exercise of any of its rights or powers, if it
shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(h) Every provision of this Indenture relating to
the conduct or affecting the liability of or affording protec-
tion to the Trustee shall be subject to the provisions of this
Section and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. Subject to TIA
Section 315(a) through (d):
(a) The Trustee may rely and shall be protected in
acting or refraining from acting on any document believed
by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate or an Opinion of
Counsel which shall conform to Section 12.5. The Trustee
shall not be liable for any action it takes or omits to
take in good faith in reliance on the Officers' Certifi-
cate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action
it takes or omits to take in good faith that it believes
to be authorized or within its rights or powers; provided,
however, that the Trustee's conduct does not constitute
wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Securities shall be
full and complete authorization and protection from li-
ability in respect to any action taken, omitted or suf-
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however, that the Trustee's conduct does not constitute
wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Securities shall be
full and complete authorization and protection from li-
ability in respect to any action taken, omitted or suf-
fered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to ex-
ercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Secu-
rityholders, unless such Securityholders shall have of-
fered to the Trustee security or indemnity reasonably sat-
isfactory to the Trustee against the losses, expenses and
liabilities that might be incurred by it in compliance
with such request or direction.
(g) The Trustee shall not be liable with respect to
any action taken or omitted to be taken by it good faith
in accordance with the direction of the Securityholders of
a majority in aggregate principal amount of the Securities
at the time outstanding relating to the time, method and
place of conducting any proceeding for any remedy avail-
able to the Trustee or involving the exercise of any
right, duty, trust or power conferred upon the Trustee un-
der the TIA or this Indenture.
SECTION 7.3. Individual Rights of Trustee. The
Trustee, in its individual or any other capacity, may become
the owner or pledgee of Securities and may make loans to, ac-
cept deposits from, perform services for and otherwise deal
with the Company, or their Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Regis-
trar, co-registrar or co-paying agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10
and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee
shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Securities,
it shall not be accountable for the Company's use of the pro-
ceeds from the Securities, and it shall not be responsible for
any statement of the Company in this Indenture or in any docu-
ment issued in connection with the sale of the Securities or in
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the Securities other than the Trustee's certificate of authen-
tication.
SECTION 7.5. Notice of Defaults. If a Default or
Event of Default occurs and is continuing and if a Trust Offi-
cer has knowledge thereof, the Trustee shall mail to each Secu-
rityholder in the manner and to the extent provided in TIA
S 313(a) notice of the Default or Event of Default within 5
days after it occurs, unless such Default or Event of Default
has been cured. Except in the case of a Default or Event of
Default in payment of principal, premium, if any, or interest
on any Security (including payments pursuant to the optional
redemption or required repurchase provisions of such Security,
if any), the Trustee may withhold the notice if and so long as
its board of directors, the executive committee of its board of
directors or a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of
Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As
promptly as practicable and within 60 days after each May 15
beginning with the May 15 following the date of this Indenture,
and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder, if required by TIA S 313(a)
a brief report dated as of such May 15 that complies with TIA S
313(a). The Trustee also shall comply with TIA S 313(b), (c)
and (d).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the Commission if required
by law and each stock exchange (if any) on which the Securities
are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and
of any delisting thereof.
SECTION 7.7. Compensation and Indemnity. The Com-
pany shall pay to the Trustee from time to time reasonable com-
pensation for its services. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses and advances
incurred or made by it, including but not limited to costs of
collection, costs of preparing and reviewing reports, certifi-
▇▇▇▇▇ and other documents, costs of preparation and mailing of
notices to Securityholders and reasonable costs of counsel re-
tained by the Trustee in connection with the delivery of an
Opinion of Counsel or otherwise, in addition to the compensa-
tion for its services. Such expenses shall include the reason-
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able compensation and expenses, disbursements and advances of
the Trustee's agents, counsel, accountants and experts. The
Company shall indemnify the Trustee for, and hold it harmless
against, any and all loss, liability or expense (including rea-
sonable attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties
hereunder and under the Securities, including the costs and ex-
penses of enforcing this Indenture and the Securities
(including this Section 7.7) and of defending itself against
any claims or liabilities (whether asserted by any Security-
holder, the Company or otherwise) and of complying with any
process served upon it or any of its officers in connection
with the exercise or performance of any of its powers or duties
under this Indenture. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure
by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend
the claim and the Trustee may have separate counsel and the
Company shall pay the fees and expenses of such counsel. The
Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the
Trustee's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this
Section 7.7, the Trustee shall have a lien prior to the Securi-
ties on all money or property held or collected by the Trustee
other than money or property held in trust to pay principal of
and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall
not be subordinate to any other liability or indebtedness of
the Company.
The Company's payment obligations pursuant to this
Section shall survive the discharge of this Indenture. When
the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(7) or (8) with respect to the Company,
the expenses are intended to constitute expenses of administra-
tion under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee
may resign at any time by so notifying the Company in writing
at least 30 days in advance of such resignation. The Holders
of a majority in principal amount of the Securities may remove
the Trustee by so notifying the Trustee in writing and may ap-
point a successor Trustee. The Company shall remove the Trus-
tee if:
(1) the Trustee fails to comply with Section 7.10;
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(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge
of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of act-
ing.
If the Trustee resigns or is removed by the Company
or by the Holders of a majority in principal amount of the Se-
curities and such Holders do not reasonably promptly appoint a
successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being re-
ferred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee.
A successor Trustee shall deliver a written accep-
tance of its appointment to the retiring Trustee and to the
Company. Thereupon the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under
this Indenture. The successor Trustee shall mail a notice of
its succession to Securityholders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section
7.7.
A resignation or removal of the Trustee and appoint-
ment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided
in this Section 7.8.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a succes-
sor Trustee.
Notwithstanding the replacement of the Trustee pursu-
ant to this Section, the Company's obligations under Section
7.7 shall continue for the benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the
Trustee consolidates with, merges or converts into, or trans-
fers all or substantially all its corporate trust business or
assets to, another corporation or banking association, the re-
sulting, surviving or transferee corporation without any fur-
ther act shall be the successor Trustee.
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In case at the time such successor or successors by
merger, conversion or consolidation to the Trustee shall suc-
ceed to the trusts created by this Indenture, any of the Secu-
rities shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Se-
curities so authenticated; and in case at that time any of the
Securities shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name
of any predecessor hereunder or in the name of the successor to
the Trustee; and in all such cases such certificates shall have
the full force which it is anywhere in the Securities or in
this Indenture provided that the certificate of the Trustee
shall have.
SECTION 7.10. Eligibility; Disqualification. The
Indenture shall at all times have a Trustee that satisfies the
requirements of TIA S 310(a). The Trustee shall have a com-
bined capital and surplus of at least $100 million as set forth
in its most recent published annual report of condition. The
Trustee shall comply with TIA S 310(b); provided, however, that
there shall be excluded from the operation of TIA S 310(b)(1)
any indenture or indentures under which other securities or
certificates of interest or participation in other securities
of the Company are outstanding if the requirements for such ex-
clusion set forth in TIA S 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims
Against Company. The Trustee shall comply with TIA S 311(a),
excluding any creditor relationship listed in TIA S 311(b). A
Trustee who has resigned or been removed shall be subject to
TIA S 311(a) to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities;
Defeasance. (a) When (i) the Company delivers to the Trustee
all outstanding Securities (other than Securities replaced pur-
suant to Section 2.7) for cancellation or (ii) all outstanding
Securities have become due and payable, whether at maturity or
as a result of the mailing of a notice of redemption pursuant
to Article 3 hereof and the Company irrevocably deposits with
the Trustee funds sufficient to pay at maturity or upon redemp-
tion all outstanding Securities (other than Securities replaced
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pursuant to Section 2.7), including interest thereon to matur-
ity or such redemption date, and if in either case the Company
pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.1(e) and Section 8.6,
cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the
Company (accompanied by an Officers' Certificate and an Opinion
of Counsel stating that all conditions precedent specified
herein relating to the satisfaction and discharge of this In-
denture have been complied with) and at the cost and expense of
the Company.
(b) Defeasance and Discharge. Upon the Company's
exercise under Section 8.1(a) of the option applicable to this
Section 8.1(b), the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstand-
ing Securities on the date the conditions set forth in Section
8.2 are satisfied (hereinafter, "defeasance"). For this pur-
pose, such defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented by
the outstanding Securities, except for the following which
shall survive until otherwise terminated or discharged hereun-
der:
(i) the rights of holders of outstanding Securities
to receive payments in respect of the principal of (and
premium, if any, on) and interest on such Securities when
such payments are due;
(ii) the Company's obligations to issue temporary Se-
curities, register the transfer or exchange of any Securi-
ties, replace mutilated, destroyed, lost or stolen Securi-
ties, maintain an office or agency for payments in respect
of the Securities and segregate and hold such payments in
trust;
(iii) the rights, powers, trusts, duties and immuni-
ties of the Trustee;
(iv) the defeasance provisions of this Article; and
(v) subject to compliance with this Article, the
Company may exercise its option under this Section 8.1(b)
notwithstanding the prior exercise of its options under
Section 8.1(c) with respect to the Securities.
(c) Covenant Defeasance. Upon the Company's exer-
cise under Section 8.1(a) of the option applicable to this Sec-
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tion 8.1(c), the Company shall be released from its obligations
with respect to any covenant contained in Sections 4.2(b), 4.3,
4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.13 and 4.16 and
Sections 5.1(iii), 5.1(iv) and 5.1(v) with respect to the out-
standing Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "covenant defeasance"),
and the Securities shall thereafter be deemed not to be
"outstanding" for the purposes of any direction, waiver, con-
sent or declaration or act of Holders (and the consequences of
any thereof) in connection with such covenants, but shall con-
tinue to be deemed "outstanding" for all other purposes hereun-
der. For this purposes, such covenant defeasance means that,
with respect to the outstanding Securities, the Company may
omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such cove-
nant, whether directly or indirectly, by reason of any refer-
ence elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.1,
but, except as specified above, the remainder of this Indenture
and such Securities shall be unaffected thereby, and any omis-
sion to comply with such obligations shall not constitute a De-
fault or an Event of Default with respect to the Securities.
(d) Upon satisfaction of the conditions set forth
herein and upon request of the Company, the Trustee shall ac-
knowledge in writing the discharge of those obligations that
the Company terminates.
(e) Notwithstanding the provisions of Sections
8.1(b) and (c), the Company's obligations in Sections 2.3, 2.4,
2.5, 2.6, 2.7, 7.7, 8.1(e), 8.4, 8.5 and 8.6 shall survive un-
til the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.7, 8.4, 8.5 and 8.6 shall
survive.
SECTION 8.2. Conditions to Defeasance. In order
for the Company to exercise its legal defeasance option or its
covenant defeasance option:
(i) the Company must irrevocably deposit or cause to
be deposited with the Trustee, in trust, specifically
pledged as security for, and dedicated solely to, the
benefit of the holders of the Securities, money in an
amount, or U.S. Government Obligations which through the
scheduled payment of principal and interest thereon will
provide money in an amount, or a combination thereof, suf-
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ficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay and discharge the
principal of (and premium, if any, on) and interest on the
outstanding Securities at maturity (or upon redemption, if
applicable) of such principal, premium or installment of
interest;
(ii) no Default or Event of Default shall have oc-
curred and be continuing on the date of such deposit or,
insofar as an event of bankruptcy under Section 6.1(vi) or
(vii) above is concerned, at any time during the period
ending on the 91st day after the date of such deposit;
(iii) such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a de-
fault under this Indenture or any material agreement or
instrument to which the Company is a party or by which it
is bound;
(iv) in the case of defeasance, the Company shall
have delivered to the Trustee an Opinion of Counsel stat-
ing that the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or
since the date hereof, there has been a change in applica-
ble federal income tax law, in either case to the effect,
and based thereon such opinion shall confirm that, the
holders of the outstanding Securities will not recognize
income, gain or loss for federal income tax purposes as a
result of such defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at
the same times as would have been the case if such ▇▇▇▇▇-
▇▇▇▇▇ had not occurred;
(v) in the case of covenant defeasance, the Company
shall have delivered to the Trustee an Opinion of Counsel
to the effect that the holders of the Securities outstand-
ing will not recognize income, gain or loss for federal
income tax purposes as a result of such covenant ▇▇▇▇▇-
▇▇▇▇▇ and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had
not occurred;
(vi) in the case of defeasance or covenant ▇▇▇▇▇-
▇▇▇▇▇, the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States to the effect that
after the 91st day following the deposit or after the date
such opinion is delivered, the trust funds will not be
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subject to the effect of any applicable bankruptcy, insol-
vency, reorganization or similar laws affecting creditors'
rights generally;
(vii) the Company shall have delivered to the Trustee
an Officers' Certificate stating that the deposit was not
made by the Company with the intent of preferring the
holders of the Securities over the other creditors of the
Company with the intent of hindering, delaying or defraud-
ing creditors of the Company; and
(viii) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relat-
ing to either the defeasance or the covenant defeasance,
as the case may be, have been complied with.
SECTION 8.3. Application of Trust Money. Subject
to Section 8.6, the Trustee or Paying Agent shall hold in trust
money or U.S. Government Obligations deposited with it pursuant
to this Article VIII. It shall apply the deposited money and
the money from U.S. Government Obligations through the Paying
Agent and in accordance with this Indenture and the Securities
to the payment of principal of and interest on the Securities.
Money and securities so held in trust are not subject to Arti-
cle X.
SECTION 8.4. Repayment to Company. Subject to Sec-
tions 7.7, 8.1 and 8.2, the Trustee and the Paying Agent shall
promptly turn over to the Company upon request set forth in an
Officers' Certificate any excess money or securities held by
them upon payment of all the obligations under this Indenture
and thereupon shall be relieved from all liability with respect
to such money.
Subject to any applicable abandoned property law, the
Trustee and the Paying Agent shall pay to the Company upon re-
quest any money held by them for the payment of principal of or
interest on the Securities that remains unclaimed for two
years; provided, however, that the Company shall have either
caused notice of such payment to be mailed to each Security-
holder entitled thereto no less than 30 days prior to such re-
payment or within such period shall have published such notice
in a financial newspaper of widespread circulation published in
the City of New York and, thereafter, Securityholders entitled
to the money must look to the Company for payment as general
creditors and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
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SECTION 8.5. Indemnity for U.S. Government Obliga-
tions. The Company shall pay and shall indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.
SECTION 8.6. Reinstatement. If the Trustee or Pay-
ing Agent is unable to apply any money or U.S. Government Obli-
gations in accordance with this Article VIII by reason of any
legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or oth-
erwise prohibiting such application, the obligations of the
Company under this Indenture and the Securities shall be re-
vived and reinstated as though no deposit had occurred pursuant
to this Article VIII until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII; provided,
however, that, if the Company has made any payment of interest
on or principal of any Securities because of the reinstatement
of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such pay-
ment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.1. Without Consent of Holders. (a) The
Company and the Trustee may amend this Indenture or the Securi-
ties without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or in-
consistency; provided, that such amendment or supplement
does not, as evidenced by an Opinion of Counsel delivered
to the Trustee, adversely affect the rights of any Securi-
tyholder in any material respect;
(2) to comply with Article V;
(3) to provide for uncertificated Securities in ad-
dition to or in place of certificated Securities; pro-
vided, however, that the uncertificated Securities are is-
sued in registered form for purposes of Section 163(f) of
the Code or in a manner such that the uncertificated Secu-
rities are described in Section 163(f)(2)(B) of the Code;
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(4) to secure the Securities;
(5) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power
herein conferred upon the Company;
(6) to comply with any requirements of the SEC in
connection with qualifying this Indenture under the TIA;
(7) to make any change that does not adversely af-
fect the rights of any Securityholder;
(i) to surrender any right or power conferred
upon the Company;
(ii) to provide for a replacement Trustee under
Section 7.8 hereof; or
(iii) to provide for the issuance of the Exchange
Securities, which will have terms substantially iden-
tical in all material respects to the Initial Securi-
ties (except that the transfer restrictions contained
in the Initial Securities will be modified or elimi-
nated, as appropriate), and which will be treated,
together with any outstanding Initial Securities, as
a single issue of securities;
provided, that the Company has delivered to the Trustee an
Opinion of Counsel stating that any such amendment or supple-
ment complies with the provisions of this Section 9.1.
(b) Upon the request of the Company accompanied by a
Board Resolution of its Board of Directors authorizing the exe-
cution of any such supplemental indenture, and upon receipt by
the Trustee of the documents described in Section 9.6, the
Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements
and stipulations which may be therein contained, but the Trus-
tee shall not be obligated to enter into such supplemental in-
denture which affects its own rights, duties or immunities un-
der this Indenture or otherwise.
(c) After an amendment under this Section becomes
effective, the Company shall mail to Securityholders a notice
briefly describing such amendment. However, the failure to
give such notice to all Securityholders, or any defect therein,
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shall not impair or affect the validity of an amendment under
this Section.
SECTION 9.2. With Consent of Holders. (a) The
Company and the Trustee may amend this Indenture or the Securi-
ties with the consent of the Holders of at least a majority in
outstanding principal amount of the Securities (including con-
sents obtained in connection with a tender offer or exchange
offer for the Securities) and any existing Default and its con-
sequences (including, without limitation, an acceleration of
the Securities) or compliance with any provision of this Inden-
ture or the Securities may be waived with the consent of the
Holders of a majority in principal amount of the then outstand-
ing Securities (including consents obtained in connection with
a tender offer or exchange offer for the Securities). Further-
more, subject to Sections 6.4 and 6.7, the Holders of a major-
ity in aggregate principal amount of the Securities then out-
standing (including consents obtained in connection with a ten-
der offer or exchange offer for the Securities) may waive com-
pliance in a particular instance by the Company with any provi-
sion of this Indenture or the Securities. However, without the
consent of each Holder of a Security then outstanding, an
amendment may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for pay-
ment of interest on any Security;
(3) reduce the principal of or extend the Stated Ma-
turity of any Security;
(4) reduce the premium payable upon the redemption
or repurchase of any Security or change the time at which
any Security may or shall be redeemed or repurchased in
accordance with this Indenture;
(5) make any Security payable in money other than
that stated in the Security;
(6) modify or affect in any manner adverse to the
Holders, the terms and conditions of the obligation of the
Company for the due and punctual payment of the principal
of or interest on Securities or to institute suit for the
enforcement of any payment on or with respect to the Secu-
rities;
89
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(7) waive a Default or Event of Default in the pay-
ment of principal of, premium, if any, or interest on, or
redemption payment with respect to, any Security
(excluding any principal or interest due solely as a re-
▇▇▇▇ of the occurrence of a declaration of an Event of De-
fault); or
(8) make any change in Section 6.4 or 6.7 or the
third sentence of this Section;
(9) amend, change or modify in any material respect
the obligation of the Company to make and consummate a
Change of Control Offer in the event of a Change of Con-
trol or make and consummate an offer with respect to any
Asset Sale that has been consummated or modify any of the
provisions or definitions with respect thereto;
(10) modify or change any provision of the Indenture
or the related definitions affecting the ranking of the
Securities in a manner which adversely affects the Holders
or
(11) make any change in the amendment provisions
which require each holder's consent or in the waiver pro-
visions.
(b) Upon the request of the Company accompanied by a
Board Resolution of its respective Board of Directors authoriz-
ing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Securityholders as aforesaid, and
upon receipt by the Trustee of the documents described in Sec-
tion 9.6, the Trustee shall join with the Company in the execu-
tion of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immuni-
ties under this Indenture or otherwise, in which case the Trus-
tee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
(c) It shall not be necessary for the consent of the
Holders under this Section to approve the particular form of
any proposed amendment, but it shall be sufficient if such con-
sent approves the substance thereof.
(d) After an amendment under this Section becomes
effective, the Company shall mail to Securityholders a notice
briefly describing such amendment. The failure to give such
notice to all Securityholders, or any defect therein, shall not
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impair or affect the validity of an amendment under this Sec-
tion.
SECTION 9.3. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall com-
ply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and
Waivers. A consent to an amendment or a waiver by a Holder of
a Security shall bind the Holder and every subsequent Holder of
that Security or portion of the Security that evidences the
same debt as the consenting Holder's Security, even if notation
of the consent or waiver is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent or
waiver as to such Holder's Security or portion of the Security
if the Trustee receives the notice of revocation before the
date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Se-
curityholder.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Securityholders
entitled to give their consent or take any other action de-
scribed above or required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstand-
ing the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to give
such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to
be Holders after such record date. No such consent shall be-
come valid or effective more than 120 days after such record
date.
SECTION 9.5. Notation on or Exchange of Securities.
If an amendment changes the terms of a Security, the Trustee
may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the
Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so deter-
mines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or to
issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6. Trustee To Sign Amendments. The Trus-
tee shall sign any amendment authorized pursuant to this Arti-
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cle IX if the amendment does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not sign it. In signing such amend-
ment the Trustee shall be entitled to receive indemnity rea-
sonably satisfactory to it and to receive, and (subject to Sec-
tion 7.1) shall be fully protected in relying upon, an Offi-
cers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
ARTICLE X
Miscellaneous
SECTION 10.1. Trust Indenture Act Controls. If any
provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this In-
denture by the TIA, the provision required by the TIA shall
control. If any provision of this Indenture modifies or ex-
cludes any provision of the TIA that may be so modified or ex-
cluded, the latter provision shall be deemed to apply to this
Indenture as so modified or excluded, as the case may be.
SECTION 10.2. Notices. Any notice or communication
shall be in writing and delivered in person or mailed by first-
class mail addressed as follows:
if to the Company:
Atlas Air, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
if to the Trustee:
State Street Bank and Trust Company
▇▇▇▇▇▇▇ Square
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent no-
tices or communications.
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Any notice or communication mailed to a Security-
holder shall be mailed to the Securityholder at the Security-
holder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within
the time prescribed.
All notices and communications (other than those sent
to Securityholders) shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Busi-
ness Days after being deposited in the mail, postage prepaid,
if mailed.
Any notice or communication to a Securityholder shall
be mailed by first class mail, postage prepaid, to its address
shown on the register kept by the Registrar. Any notice or
communication shall also be so mailed to any Person described
in TIA S 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Securityholder or any de-
fect in it shall not affect its sufficiency with respect to
other Securityholders.
If a notice or communication is mailed to any Person
in the manner provided above within the time prescribed, it is
duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Se-
curityholders, it shall mail a copy to the Trustee and each
Agent at the same time.
SECTION 10.3. Communication by Holders with other
Holders. Securityholders may communicate pursuant to TIA S
312(b) with other Securityholders with respect to their rights
under this Indenture or the Securities. The Company, the Trus-
tee, the Registrar and anyone else shall have the protection of
TIA S 312(c).
SECTION 10.4. Certificate and Opinion as to Condi-
tions Precedent. Upon any request or application by the Com-
pany to the Trustee to take or refrain from taking any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall in-
clude the statements set forth in Section 10.5) stating
that, in the opinion of the signers, all conditions ▇▇▇▇▇-
▇▇▇▇, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
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(2) an Opinion of Counsel in form and substance rea-
sonably satisfactory to the Trustee (which shall include
the statements set forth in Section 10.5) stating that, in
the opinion of such counsel, all such conditions precedent
have been complied with.
SECTION 10.5. Statements Required in Certificate or
Opinion. Each certificate or opinion with respect to compli-
ance with a covenant or condition provided for in this Inden-
ture shall include:
(1) a statement that the individual making such cer-
tificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such indi-
vidual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of such individual, such covenant or condition has been
complied with and such other opinions as the Trustee may
reasonably request.
SECTION 10.6. When Securities Disregarded. In de-
termining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or con-
sent, Securities owned by the Company or by any Person directly
or indirectly controlling or controlled by or under direct or
indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose
of determining whether the Trustee shall be protected in rely-
ing on any such direction, waiver or consent, only Securities
which the Trustee knows are so owned shall be so disregarded.
Also, subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.
SECTION 10.7. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by
or at a meeting of Securityholders. The Registrar and the Pay-
ing Agent may make reasonable rules for their functions.
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SECTION 10.8. Legal Holidays. A "Legal Holiday" is
a Saturday, a Sunday or a day on which banking institutions are
not required to be open in the State of New York, or the State
in which the Corporate Trust Office is located. If a payment
date is a Legal Holiday, payment shall be made on the next suc-
ceeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is
a Legal Holiday, the record date shall not be affected.
SECTION 10.9. Governing Law. This Indenture and the
Securities shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving ef-
fect to applicable principles of conflicts of law to the extent
that the application of the laws of another jurisdiction would
be required thereby.
SECTION 10.10. No Recourse Against Others. A past,
present or future director, officer, employee or stockholder,
as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Inden-
ture or for any claim based on, in respect of or by reason of
such obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such liability.
The waiver and release shall be part of the consideration for
the issue of the Securities.
SECTION 10.11. Successors. All agreements of the
Company in this Indenture and the Securities shall bind their
respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 10.12. Multiple Originals. The parties may
sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the
same agreement. One signed copy is enough to prove this Inden-
ture.
SECTION 10.13. Variable Provisions. The Company ini-
tially appoints the Trustee as Paying Agent and Registrar and
custodian with respect to any Global Securities.
SECTION 10.14. Qualification of Indenture. The Com-
pany shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agree-
ment and shall pay all reasonable costs and expenses (including
attorneys' fees for the Company, the Trustee and the Holders)
incurred in connection therewith, including, but not limited
to, costs and expenses of qualification of the Indenture and
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the Securities and printing this Indenture and the Securities.
The Trustee shall be entitled to receive from the Company any
such Officers' Certificates, Opinions of Counsel or other docu-
mentation as it may reasonably request in connection with any
such qualification of this Indenture under the TIA.
SECTION 10.15. Table of Contents; Headings. The ta-
ble of contents, cross-reference sheet and headings of the Ar-
ticles and Sections of this Indenture have been inserted for
convenience of reference only, are not intended to be consid-
ered a part hereof and shall not modify or restrict any of the
terms or provisions hereof.
SECTION 10.16. Severability. In case any provision
in this Indenture or in the Securities shall be invalid, ille-
gal or unenforceable, in any respect for any reason, the valid-
ity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable
to the fullest extent permitted by law.
SECTION 10.17. No Adverse Interpretation of Other
Agreements. This Indenture may not be used to interpret an-
other indenture, loan or debt agreement of the Company or any
of its Subsidiaries. Any such indenture, loan or debt agree-
ment may not be used to interpret this Indenture.
96
IN WITNESS WHEREOF, the parties have caused this In-
denture to be duly executed as of the date first written above.
ATLAS AIR, INC.
By:
------------------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:
------------------------------
Name:
Title:
97
EXHIBIT A
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW.
BY ITS ACQUISITION HEREOF, THE SECURITYHOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) or (7) UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 OF THE SECURITIES ACT, (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY
A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
APPLICABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE
SECURITYHOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
A-1
98
THE TERMS "OFFSHORE TRANSACTION" "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY
SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY
OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH
NOMINEE, TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
A-2
99
CUSIP No:
(Front of Security)
No. 1 $___________
ATLAS AIR, INC.
10 3/4% Senior Notes due 2005
ATLAS AIR, INC., a Delaware corporation, for value received,
promises to pay to Cede & Co., as nominee of the Depository
Trust Company, or its registered assigns, the principal sum of
$150,000,000 on August 1, 2005.
Interest Payment Dates: February 1, and August 1, commencing
February 1, 1998.
Record Dates: January 15 and July 15 (whether or not a Business
Day).
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
ATLAS AIR, INC.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the Securities referred
to in the within-mentioned Indenture
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
----------------------------
Authorized Officer
A-3
100
(Reverse of Security)
ATLAS AIR, INC.
10 3/4% SENIOR NOTE DUE 2005
Capitalized terms used herein have the meanings as-
signed to them in the Indenture (as defined below) unless oth-
erwise indicated.
1. Interest. Atlas Air, Inc., a Delaware corpora-
tion (the "Company"), promises to pay interest on the principal
amount of this Security at the rate and in the manner specified
below. The Company shall pay, in cash, interest on the princi-
pal amount of this Security at the rate per annum of 10 3/4%.
The Company will pay interest semiannually in arrears on Febru-
ary 1 and August 1 of each year (each an "Interest Payment
Date"), commencing February 1, 1998, or if any such day is not
a Business Day on the next succeeding Business Day. Interest
will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Interest shall accrue from the most re-
cent Interest Payment Date to which interest has been paid or,
if no interest has been paid, from the date of the original is-
suance of the Securities. To the extent lawful, the Company
shall pay interest on overdue principal at the rate of 2% per
annum in excess of the then applicable interest rate on the Se-
curities; it shall pay interest on overdue installments of in-
terest (without regard to any applicable grace periods) at the
same rate to the extent lawful.
2. Method of Payment. The Company shall pay inter-
est on the Securities (except defaulted interest) to the Per-
sons who are registered Holders of Securities at the close of
business on the Record Date immediately preceding the Interest
Payment Date, even if such Securities are cancelled after such
Record Date and on or before such Interest Payment Date. Secu-
rityholders must surrender Securities to a Paying Agent to col-
lect principal payments. The Company shall pay principal, pre-
mium, if any, and interest in money of the United States that
at the time of payment is legal tender for payment of public
and private debts ("U.S. Legal Tender"). However, the Company
may pay principal, premium, if any, and interest by its check
payable in such U.S. Legal Tender. The Company may deliver any
such interest payment to the Paying Agent or to a Security-
holder at the Securityholder's registered address.
A-4
101
3. Paying Agent and Registrar. Initially, the Trus-
tee will act as Paying Agent and Registrar. The Company may
change any Paying Agent, Registrar or co-registrar without
prior notice to any Securityholder. The Company may act in any
such capacity.
4. Indenture. The Company issued the Securities un-
der an Indenture, dated as of August 13, 1997 (the
"Indenture"), among the Company and the Trustee. The terms of
the Securities include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture
Act of 1939 (15 U.S. Code SS 77aaa-77bbbb) (the "TIA") as in
effect on the date the Indenture is qualified. The Securities
are subject to all such terms, and Securityholders are referred
to the Indenture and the TIA for a statement of such terms.
The terms of the Indenture shall govern any inconsistencies be-
tween the Indenture and the Securities. The Securities include
the Initial Securities and the Exchange Securities issued in
exchange for the Initial Securities pursuant to the Indenture.
The Initial Securities and the Exchange Securities are treated
as a single class of securities under the Indenture. Capital-
ized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include
those stated in the Indenture and those made part of the Inden-
ture by reference to the TIA, as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein,
the Securities are subject to all such terms, and Securityhold-
ers of Securities are referred to the Indenture and said Act
for a statement of them. The Securities are unsecured senior
obligations of the Company limited to $150,000,000 in aggregate
principal amount.
5. (a) Optional Redemption. Except as set forth
below, the Securities will not be redeemable at the option of
the Company prior to August 1, 2001. On and after such date,
the Securities will be redeemable, at the Company's option, in
whole or in part, at any time upon not less than 30 nor more
than 60 days' prior notice mailed by first-class mail to each
holder's registered address, at the following redemption prices
(expressed in percentages of principal amount), if redeemed
during the 12-month period commencing on August 1 of the years
set forth below, plus accrued and unpaid interest to the re-
demption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant
interest payment date):
A-5
102
Redemption
Year Price
---- ----------
2001 ....................... 105.375%
2002 ....................... 102.688%
2003 and thereafter ........ 100.000%
(b) Optional Redemption Upon Public Offerings. In
addition, at any time on or prior to August 1, 2000, the Com-
pany, at its option, may redeem up to 35% of the aggregate
principal amount of the Securities originally issued with the
net cash proceeds of one or more Public Equity Offerings at a
redemption price equal to 110.75% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to
the date of redemption; provided, however, that after any such
redemption the aggregate principal amount of the Securities
outstanding must equal at least 65% of the aggregate principal
amount of the Securities originally issued. In order to effect
the foregoing redemption with the proceeds of any Public Equity
Offering, the Company shall make such redemption not more than
90 days after the consummation of any such Public Equity Offer-
ing.
As used in the preceding paragraph, "Public Equity
Offering" means an underwritten primary public offering of
Qualified Capital Stock of the Company pursuant to a registra-
tion statement filed with the Commission in accordance with the
Securities Act.
6. Mandatory Redemption. The Securities are not
subject to mandatory redemption or sinking fund payments.
7. Repurchase at Option of Securityholder. Sections
4.8 and 4.9 of the Indenture provide that, after certain Asset
Sales (as defined in the Indenture) and upon the occurrence of
a Change of Control (as defined in the Indenture), and subject
to the further limitations contained therein, the Company will
make an offer to purchase certain amounts of the Securities in
accordance with procedures set forth in the Indenture.
8. Selection and Notice of Redemption. In the case
of any partial redemption, selection of the Securities for re-
demption will be made by the Trustee in compliance with the re-
quirements of the principal national securities exchange, if
any, on which such Securities are listed, or if such Securities
are not then listed on a national securities exchange, on a pro
rata basis, by lot or by such other method as the Trustee in
its sole discretion shall deem to be fair and appropriate; pro-
A-6
103
vided, however, that if a partial redemption is made with the
proceeds of a Public Equity Offering, selection of the Securi-
ties or portion thereof for redemption shall be made by the
Trustee only on a pro rata basis, unless such method is other-
wise prohibited. Securities may be redeemed in part in multi-
ples of $1,000 principal amount only. Notice of redemption
will be sent, by first class mail, postage prepaid, at least 45
days (unless a shorter period is acceptable to the Trustee)
prior to the date fixed for redemption to each holder whose Se-
curities are to be redeemed at the last address for such holder
then shown on the registry books. If any Security is to be re-
deemed in part only, the notice of redemption that relates to
such Security shall state the portion of the principal amount
thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the
name of the holder thereof upon cancellation of the original
Security. On and after any redemption date, interest will
cease to accrue on the Securities or part thereof called for
redemption as long as the Company has deposited with the Paying
Agent funds in satisfaction of the redemption price pursuant to
the Indenture.
9. Registration Rights. Pursuant to the Registra-
tion Rights Agreement, and subject to certain terms and condi-
tions stated therein, the Company will be obligated to consum-
mate an Exchange Offer pursuant to which the Holders of the
Initial Securities shall have the right to exchange this Secu-
rity for Exchange Securities, which have been registered under
the Securities Act, in like principal amount and having terms
identical in all material respect to the Initial Security. In
certain circumstances, and subject to certain terms and condi-
tions, Holders of the Initial Securities shall have the right
to receive liquidated damages if the Company shall have failed
to fulfill its obligations under the Registration Rights Agree-
ment.
10. Denominations, Transfer, Exchange. The Securi-
ties are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. The transfer of Secu-
rities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar and the Trustee may
require a Securityholder among other things, to furnish appro-
priate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Se-
curity or portion of a Security selected for redemption. Also,
it need not exchange or register the transfer of any Securities
during a period beginning at the opening of business on a Busi-
A-7
104
ness Day 15 days before the day of any selection of Securities to be redeemed
and ending at the close of business on the day of selection or during the
period between a Record Date and the corresponding Interest Payment Date.
11. Persons Deemed Owners. Prior to due presentment to
the Trustee for registration of the transfer of this Security, the Trustee, any
Agent and the Company may deem and treat the Person in whose name this Security
is registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Security and for all other
purposes whatsoever, whether or not this Security is overdue, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the contrary.
The registered Securityholder shall be treated as its owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions
provided in the Indenture, the Indenture or the Securities may be amended with
the written consent of the Holders of a majority in principal amount of the
then outstanding Securities, and any existing Default or Event of Default
(except a payment default) may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Securities. Without the
consent of any Securityholder, the Indenture or the Securities may be amended
to, among other things, cure any ambiguity, defect or inconsistency, to comply
with the requirements of the Commission in order to effect or maintain
qualification of the Indenture under the TIA or to make any change that does
not adversely affect in any material respect the rights of any Securityholder.
13. Defaults and Remedies. If an Event of Default occurs
and is continuing, the Trustee or the holders of at least 25% in principal
amount of the outstanding Securities by notice to the Company may declare the
principal of and accrued and unpaid interest, if any, on all the Securities to
be due and payable. Upon such a declaration, such principal and accrued and
unpaid interest shall be due and payable immediately, if an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company occurs and is continuing, the principal of and accrued and unpaid
interest on all the Securities will become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any holders.
Under certain circumstances, the holders of a majority in principal amount of
the outstanding Securities may rescind any such acceleration with respect to
the Securities and its consequences.
▇-▇
▇▇▇
▇▇. Trustee Dealings with the Company. The Trustee under
the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or any Affiliate of
the Company and may otherwise deal with the Company and their respective
Affiliates as if it were not Trustee.
15. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among other
things, incur additional Indebtedness, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates, incur liens, create restrictions on the ability
of a subsidiary to pay dividends or make certain payments, sell or issue
preferred stock of subsidiaries to third parties, merge or consolidate with any
other person or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the assets of the Company. Such limitations are
subject to a number of important qualifications and exceptions provided for in
the Indenture. The Company must annually report to the Trustee on compliance
with such limitations.
16. Authentication. This Security shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Defeasance. Subject to certain conditions provided
for in the Indenture, the Company at any time may terminate some or all of its
obligations under the Securities and the Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of principal,
premium (if any) and interest on the Securities to redemption or maturity, as
the case may be.
18. Governing Law. The Laws of the State of New York
shall govern this Security and the Indenture, without regard to principles of
conflict of laws.
19. Unclaimed Money. If money for the payment of
principal or interest remains unclaimed for two years, the Trustee and the
Paying Agent will pay the money back to the Company. After that, all liability
of the Trustee and such Paying Agent with respect to such money shall cease.
20. Successors. When a successor assumes, in accordance
with the Indenture, all the obligations of its predecessors under the
Securities and the Indenture, the predecessor will be released from those
obligations.
▇-▇
▇▇▇
▇▇. No Recourse Against Others. No stockholder, director,
officer, employee or incorporator, as such, of the Company shall have any
liability for any obligation of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Securityholder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
22. Abbreviations. Customary abbreviations may be used in
the name of a Securityholder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A Uniform Gifts to Minors Act).
23. CUSIP Numbers. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Securities and has
directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Securityholders. No representation is made as to the accuracy of
such numbers either as printed on the Securities or as contained in any notice
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The Company will furnish to any Securityholder upon written
request and without charge a copy of the Indenture. Request may he made to:
Atlas Air, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
A-10
107
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to
--------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date:
---------------
Your Signature:
----------------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
--------------------
A-11
108
OPTION OF SECURITYHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security
purchased by the Company pursuant to Section 4.8 or Section 4.9 of the
Indenture check the appropriate box:
[ ] Section 4.8 [ ] Section 4.9
If you want to have only part of the Security purchased by the
Company pursuant to Section 4.8 or Section 4.9 of the Indenture, state the
amount you elect to have purchased:
$
------------------
Date:
-------------
Your Signature:
-------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee:
--------------------
A-12
109
EXHIBIT B
THIS SECURITY MAY NOT BE OFFERED OR SOLD TO A U.S. PERSON (AS SUCH TERM IS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT) OR FOR THE ACCOUNT OR BENEFIT
OF A U.S. PERSON PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD (AS DEFINED
IN THE INDENTURE), AND NO TRANSFER OR EXCHANGE OF THIS SECURITY MAY BE MADE FOR
AN INTEREST IN A PHYSICAL SECURITY UNTIL AFTER THE LATER OF THE DATE OF
EXPIRATION OF THE RESTRICTED PERIOD AND THE DATE ON WHICH THE PROPER REQUIRED
CERTIFICATION RELATING TO SUCH INTEREST HAS BEEN PROVIDED IN ACCORDANCE WITH
THE TERMS OF THE INDENTURE, TO THE EFFECT THAT THE BENEFICIAL OWNER OR OWNERS
OF SUCH INTEREST ARE NOT U.S. PERSONS.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.17 OF THE INDENTURE.
B-1
110
CUSIP No:
(Front of Security)
No.1 $
ATLAS AIR, INC. -----------
10 3/4% Senior Notes due 2005
ATLAS AIR, INC., a Delaware corporation, for value received, promises to pay to
Cede & Co., as nominee of the Depository Trust Company, or its registered
assigns, the principal sum of $150,000,000 on August 1, 2005.
Interest Payment Dates: February 1, and August 1, commencing February 1, 1998.
Record Dates: January 15 and July 15 (whether or not a Business Day).
Additional provisions of this Security are set forth on the other side of this
Security.
Dated:
ATLAS AIR, INC.
By:
-------------------------
Name:
Title:
By:
-------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the Securities referred to in the within-mentioned Indenture
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
--------------------
Authorized Officer
B-2
111
(Reverse of Security)
ATLAS AIR, INC.
10 3/4% SENIOR NOTE DUE 2005
Capitalized terms used herein have the meanings assigned to
them in the Indenture (as defined below) unless otherwise indicated.
1. Interest. Atlas Air, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate and in the manner specified below. The Company shall pay,
in cash, interest on the principal amount of this Security at the rate per
annum of 10 3/4%. The Company will pay interest semiannually in arrears on
February 1 and August I of each year (each an "Interest Payment Date"),
commencing February 1, 1998, or if any such day is not a Business Day on the
next succeeding Business Day. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Interest shall accrue from the
most recent Interest Payment Date to which interest has been paid or, if no
interest has been paid, from the date of the original issuance of the
Securities. To the extent lawful, the Company shall pay interest on overdue
principal at the rate of 2% per annum in excess of the then applicable interest
rate on the Securities; it shall pay interest on overdue installments of
interest (without regard to any applicable grace periods) at the same rate to
the extent lawful.
2. Method of Payment. The Company shall pay interest on
the Securities (except defaulted interest) to the Persons who are registered
Holders of Securities at the close of business on the Record Date immediately
preceding the Interest Payment Date, even if such Securities are cancelled
after such Record Date and on or before such Interest Payment Date.
Securityholders must surrender Securities to a Paying Agent to collect
principal payments. The Company shall pay principal, premium, if any, and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal, premium, if any, and interest by its check
payable in such U.S. Legal Tender. The Company may deliver any such interest
payment to the Paying Agent or to a Securityholder at the Securityholder's
registered address.
B-3
112
3. Paying Agent and Registrar. Initially, the Trustee
will act as Paying Agent and Registrar. The Company may change any Paying
Agent, Registrar or co-registrar without prior notice to any Securityholder.
The Company may act in any such capacity.
4. Indenture. The Company issued the Securities under an
Indenture, dated as of August 13, 1997 (the "Indenture"), among the Company and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the TIA as in effect on
the date the Indenture is qualified. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the TIA for a
statement of such terms. The terms of the Indenture shall govern any
inconsistencies between the Indenture and the Securities. The Securities
include the Initial Securities and the Exchange Securities issued in exchange
for the Initial Securities pursuant to the Indenture. The Initial Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Securities are subject to all such terms, and
Securityholders of Securities are referred to the Indenture and said Act for a
statement of them. The Securities are unsecured senior obligations of the
Company limited to $150,000,000 in aggregate principal amount.
5. (a) Optional Redemption. Except as set forth below,
the Securities will not be redeemable at the option of the Company prior to
August 1, 2001. On and after such date, the Securities will be redeemable,
at the Company's option, in whole or in part, at any time upon not less than 30
nor more than 60 days' prior notice mailed by first-class mail to each holder's
registered address, at the following redemption prices (expressed in
percentages of principal amount), if redeemed during the 12-month period
commencing on August 1 of the years set forth below, plus accrued and unpaid
interest to the redemption date (subject to the right of holders of record on
the relevant record date to receive interest due on the relevant interest
payment date):
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Redemption
Year Price
2001 . . . . . . . . . . . . . 105.375%
2002 . . . . . . . . . . . . . 102.688%
2003 and thereafter . . . . . . 100.000%
(b) Optional Redemption Upon Public Offerings. In
addition, at any time on or prior to August 1, 2000, the Company, at its
option, may redeem up to 35% of the aggregate principal amount of the
Securities originally issued with the net cash proceeds of one or more Public
Equity Offerings at a redemption price equal to 110.75% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the date of
redemption; provided, however, that after any such redemption the aggregate
principal amount of the Securities outstanding must equal at least 65% of the
aggregate principal amount of the Securities originally issued. in order to
effect the foregoing redemption with the proceeds of any Public Equity
Offering, the Company shall make such redemption not more than 90 days after
the consummation of any such Public Equity Offering.
As used in the preceding paragraph, "Public Equity Offering"
means an underwritten primary public offering of Qualified Capital Stock of the
Company pursuant to a registration statement filed with the Commission in
accordance with the Securities Act.
6. Mandatory Redemption. The Securities are not subject to
mandatory redemption or sinking fund payments.
7. Repurchase at Option of Securityholder. Sections 4.8 and
4.9 of the Indenture provide that, after certain Asset Sales (as defined in the
Indenture) and upon the occurrence of a Change of Control (as defined in the
Indenture), and subject to the further limitations contained therein, the
Company will make an offer to purchase certain amounts of the Securities in
accordance with procedures set forth in the Indenture.
8. Selection and Notice of Redemption. In the case of any
partial redemption, selection of the Securities for redemption will be made by
the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which such Securities are listed, or if such
Securities are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such other method as the Trustee in its sole discretion
shall deem to be fair and appropriate; pro-.
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vided, however, that if a partial redemption is made with the proceeds of a
Public Equity Offering, selection of the Securities or portion thereof for
redemption shall be made by the Trustee only on a pro rata basis, unless such
method is otherwise prohibited. Securities may be redeemed in part in multiples
of $1,000 principal amount only. Notice of redemption will be sent, by first
class mail, postage prepaid, at least 45 days (unless a shorter period is
acceptable to the Trustee) prior to the date fixed for redemption to each
holder whose Securities are to be redeemed at the last address for such holder
then shown on the registry books. If any Security is to be redeemed in part
only, the notice of redemption that relates to such Security shall state the
portion of the principal amount thereof to be redeemed. A new Security in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the holder thereof upon cancellation of the original Security. On and
after any redemption date, interest will cease to accrue on the Securities or
part thereof called for redemption as long as the Company has deposited with
the Paying Agent funds in satisfaction of the redemption price pursuant to the
Indenture.
9. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Securityholder among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of any Security or portion of a Security selected for redemption.
Also, it need not exchange or register the transfer of any Securities during a
period beginning at the opening of business on a Business Day 15 days before
the day of any selection of Securities to be redeemed and ending at the
close of business on the day of selection or during the period between a Record
Date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. Prior to due presentment to the
Trustee for registration of the transfer of this Security, the Trustee, any
Agent and the company may deem and treat the Person in whose name this Security
is registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Security and for all other
purposes whatsoever, whether or not this Security is overdue, and neither the
Trustee, any Agent nor the Company
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shall be affected by notice to the contrary. The registered Securityholder
shall be treated as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions
provided in the Indenture, the Indenture or the Securities may be amended with
the written consent of the Holders of a majority in principal amount of the
then outstanding Securities, and any existing Default or Event of Default
(except a payment default) may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Securities. Without the
consent of any Securityholder, the Indenture or the Securities may be amended
to, among other things, cure any ambiguity, defect or inconsistency, to comply
with the requirements of the Commission in order to effect or maintain
qualification of the Indenture under the TIA or to make any change that does
not adversely affect in any material respect the rights of any Securityholder.
12. Defaults and Remedies. If an Event of Default occurs and
is continuing, the Trustee or the holders of at least 25% in principal amount
of the outstanding Securities by notice to the Company may declare the
principal of and accrued and unpaid interest, if any, on all the Securities to
be due and payable. Upon such a declaration, such principal and accrued and
unpaid interest shall be due and payable immediately, if an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company occurs and is continuing, the principal of and accrued and unpaid
interest on all the Securities will become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any holders.
Under certain circumstances, the holders of a majority in principal amount of
the outstanding Securities may rescind any such acceleration with respect to
the Securities and its consequences.
13. Trustee Dealings with the Company. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or any Affiliate of the
Company and may otherwise deal with the Company and their respective Affiliates
as if it were not Trustee.
14. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among other
things, incur additional indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, pay dividends or make certain other restricted
payments, consummate certain asset sales, enter into certain
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transactions with affiliates, incur liens, create restrictions on the ability
of a subsidiary to pay dividends or make certain payments, sell or issue
preferred stock of subsidiaries to third parties, merge or consolidate with any
other person or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the assets of the Company. Such limitations are
subject to a number of important qualifications and exceptions provided for in
the Indenture. The Company must annually report to the Trustee on compliance
with such limitations.
15. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
16. Defeasance. Subject to certain conditions provided for in
the Indenture, the Company at any time may terminate some or all of its
obligations under the Securities and the Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of principal,
premium (if any) and interest on the Securities to redemption or maturity, as
the case may be.
17. Governing Law. The Laws of the State of New York shall
govern this Security and the Indenture, without regard to principles of
conflict of laws.
18. Abbreviations. Customary abbreviations may be used in the
name of a Securityholder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
19. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
20. Successors. When a successor assumes, in accordance with
the Indenture, all the obligations of its predecessors under the Securities and
the Indenture, the predecessor will be released from those obligations.
21. No Recourse Against Others. No stockholder, director,
officer, employee or incorporator, as such, of the Company shall have any
liability for any obligation of the Company
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under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Note by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
22. CUSIP Numbers. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Securities and has
directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Securityholders. No representation is made as to the accuracy of
such numbers either as printed on the Securities or as contained in any notice
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The Company will furnish to any Securityholder upon written
request and without charge a copy of the Indenture. Request may be made to:
Atlas Air, Inc
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: Chief Financial officer
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ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date:
---------------
Your Signature:
----------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
---------------------
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OPTION OF SECURITYHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security
purchased by the Company pursuant to Section 4.8 or Section 4.9 of the
Indenture check the appropriate box:
[ ] Section 4.8 [ ] Section 4.9
If you want to have only part of the Security purchased by the
Company pursuant to Section 4.8 or Section 4.9 of the Indenture, state the
amount you elect to have purchase:
$
------------------
Date:
--------------
Your Signature:
-------------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
--------------------
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EXHIBIT D
Form Of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
State Street Bank and Trust Company
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Attention: Corporate Trust Department
Re: Atlas Air, Inc.
10 3/4% Senior Notes due 2005
Ladies and Gentlemen:
In connection with our proposed purchase of 10 3/4% Senior
Securities due 2005 (the "Securities") of Atlas Air, Inc. (the "Company"), we
confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated August 8, 1997 relating to the Securities and
such other information as we deem necessary in order to make our investment
decision. We acknowledge that we have read and agreed to the matters stated on
pages (i) and (ii) of the Offering Memorandum and in the section entitled
"Transfer Restrictions" of the Offering Memorandum including the restrictions
on duplication and circulation of the offering Memorandum.
2. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth in the
indenture relating to the Securities (as described in the Offering Memorandum)
and the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Securities except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended (the "Securities
Act").
3. We understand that the offer and sale of the Securities
have not been registered under the Securities Act, and that the Securities may
not be offered or sold except as permitted in the following sentence. We agree,
on our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell or otherwise transfer any Securities
prior to the date which is two years after the
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original issuance of the Securities, we will do so only (i) to the Company or
any of its subsidiaries, (ii) inside the United States in accordance with Rule
144A under the Securities Act to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act), (iii) inside the United States to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
the Trustee (as defined in the Indenture relating to the Securities), a signed
letter containing certain representations and agreements relating to the
restrictions on transfer of the Securities, (iv) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (v) pursuant
to the exemption from registration provided by Rule 144 under the Securities
Act (if available), or (vi) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Securities from us a notice advising such purchaser that
resales of the Securities are restricted as stated herein.
4. We are not acquiring the Securities for or on behalf of,
and will not transfer the Securities to, any pension or welfare plan (as
defined in Section 3 of the Employee Retirement Income Security Act of 1974),
except as permitted in the section entitled "Transfer Restrictions" of the
Offering Memorandum.
5. We understand that, on any proposed resale of any
Securities, we will be required to furnish to the Trustee and the Company such
certification, legal opinions and other information as the Trustee and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Securities purchased
by us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
and have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
7. We are acquiring the Securities purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
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You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
By:
-----------------------------------
Name:
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EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
State Street Bank and Trust Company
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Attention: Corporate Trust Department
Re: Atlas Air, Inc.
(the "Company") 10 3/4% Senior
Notes due 2005 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the U.S. Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a Person
in the United States;
(2) either (a) at the time the buy offer was originated,
the transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was
outside the United States, or (b) the transaction was executed in, on
or through the facilities of a designated off-shore securities market
and neither we nor any person acting on our behalf knows that the
transaction has been prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903(b) or
Rule 904(d) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act; and
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(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
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Authorized Signature
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